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1961 Supreme(AP) 59
Andhra Pradesh High Court
Judges : ANANTA NARAYANA AYYAR, P.CHANDRA REDDY, SATYANARAYANA RAJU
Chilakamarti Kotaiah - Appellant
Versus
Addanki Venkata Subbaiah - Respondent
Decided On : 04-10-61
Section 66 of the Civil Procedure Code bars any suit on the ground that a purchase at a Court auction was made on behalf of the plaintiff or on behalf of someone through whom the plaintiff claims.
Headnote:
CIVIL PROCEDURE CODE, SECTION 66 - BENAMI PURCHASE - SCOPE AND APPLICABILITY - PURCHASE BY AGENT OF PLAINTIFF AT COURT AUCTION - WHETHER BARRED BY SECTION 66.
Fact of the Case:
The plaintiff's father died in 1931 leaving debts and some immovable property. The plaintiff was a minor at that time. His mother, who was illiterate, found herself unequal to the task of managing the properties and sought the assistance of the defendant to manage the properties and to discharge the debts. He assumed management in 1931 which continued till 1940. The defendant persuaded all the creditors except one to give remission and also arranged for the sale of some of the properties to discharge the debts so settled with the creditors. But one creditor by name Lakshmamma, who was not willing to give up any part of her claim filed O. S. NO. 798 of 1932, obtained a decree and brought the properties in dispute to sale in execution of the decree. They were purchased by the defendant in his own name for the benefit of the plaintiff and with the funds furnished by the plaintiff’s mother.
Finding of the Court:
The Court held that the suit was barred by section 66 of the Civil Procedure Code, which provides that no suit shall be maintained against any person claiming title under a purchase certified by the Court in such manner as may be prescribed on the ground that the purchase was made on behalf of the plaintiff or on behalf of someone through whom the plaintiff claims.
Issues: Whether a suit on the allegation that the defendant had purchased property in his own name at a Court-auction for the benefit of the plaintiff at a time when he was acting as the agent of the plaintiff would fall within the scope and ambit of section 66, Civil Procedure Code.
Ratio Decidendi: The Court interpreted section 66 of the Civil Procedure Code and held that it was widely worded and would take in every claim based on benami purchase. The Court further held that the section did not exclude from its purview benami purchases made for the benefit of a plaintiff by a defendant in his own name who was already acting as the agent of the plaintiff. The Court also held that the section was intended to include all categories of benami transactions unless they were saved by sub-section (2).
Final Decision: The Court allowed the appeal and dismissed the suit.
( 1 ) THE question to be answered by the Full Bench is whether a suit on the allegation that the defendant had purchased property in his own name at a Court-auction for the benefit of the plaintiff at a time when he was acting as the agent of the plaintiff would fall within the scope and ambit of section 66, Civil Procedure Code.
( 2 ) THE facts necessary for the purpose of this enquiry may be briefly narrated. The plaintiff s father died in the year 1931 leaving debts and some immoveable property. The plaintiff was at that time a minor. His mother who was illiterate found herself unequal to the task of managing the properties and sought the assistance of the defendant to manage the properties and to discharge the debts. He assumed management in 1931 which continued till 1940. The defendant persuaded all the creditors except one to give remission and also arranged for the sale of some of the properties to discharge the debts so settled with the creditors. But one creditor by name Lakshmamma, who was not willing to give up any part of her claim filed O. S. NO. 798 of 1932, obtained a decree and brought the properties in dispute to sale in execution of the decree. They were purchased by the defendant in his own name for the benefit of the plaintiff and with the funds furnished by the plaintiff s mother. The suit was resisted mainly on the defence that section, 66, Civil Procedure code, was a bar to it. It was decreed by the trial Court and was affirmed on appeal by the District Judge. The Second Appeal carried by the defendant was heard by ramaswamy Gounder, J. He passed an order of remand directing the appellate judge to record fresh findings on certain points and, while doing so, he observed :" Of course, if it is proved by the plaintiff that in purchasing these properties in court sale the defendant functioned as his manager or agent and also employed his moneys for that purpose, then subject to a decision of the question arising under section 66, Civil Procedure Code, the plaintiff would be entitled to succeed. "
( 3 ) ON remand, the District Judge, who heard the appeal, decided all the points in favour of the respondent and confirmed the judgment of the trial Court. A second Appeal was again filed against the judgment.
( 4 ) THIS was heard by Bhimasankaram, J. , who dismissed the appeal accepting the contention of the respondent that section 66, Civil Procedure Code, did not stand in the way of the plaintiff s suit. He was of the opinion that the instant case was governed by the rulings of the Madras High Court reported in sankunni Nayar v. Narayanan Nambudri, (1893) 4 M. L. J. 64 : I. L. R. 17 Mad. 282 and Patrachariar v. Ramaswami Chettiar , (1919) 9 L. W. 276. which, under similar circumstances, decided that the suit was not opposed to section 66, Civil Procedure code. However, the learned Judge granted leave under clause (15) of the Letters patent. When the appeal came up for hearing before a Bench of this Court, it was referred to a Full Bench, as it was represented by counsel on either side that there was a conflict between the rulings relied on by Bhimasankaram, J. and isome bench decisions of the Madras High Court and other Courts.
( 5 ) AS the principal controversy centers round section 66, Civil Procedure Code, it is convenient to quote it here. It consists of two parts and the first part declares :" No suit shall be maintained against any person claiming title under a purchase certified by the Court in such manner as may be prescribed on the ground that the purchase was made on behalf of the plaintiff or on behalf of someone through whom the plaintiff claims. "sub-section 2 recites :" Nothing in this section shall bar a suit to obtain a declaration that the name of any purchaser certified as aforesaid was inserted in the certificate fradulently or without the consent of the real purchaser, or interfere with the right of a third person to proceed against that property though ostensibly sold to th
