An agent and trustee have a fiduciary duty to act in the best interest of the principal, and fraudulent actions in obtaining property rights will not be upheld by the court.

1. The petitioner-defendant impugns the judgment and decree dated March 2,1994 of the Kerala High Court in Second Appeal No. 564 of 1989. The courts below concurrently found that the petitioner was an agent of Power-of-Attorney holder of the respondent-plaintiff and was looking after her thavazhy properties. The property in question lies in the midst of thavazhy properties. It was outstanding on a lease. In execution a court auction for recovery of the arrears of rent, the suit-property was purchased by the petitioner in his name. The expenses incurred for the litigation till obtaining the sale certificate were all credited to the account of respondent-plaintiff. For laying coconut grove the expenses incurred were credited to the account of the respondent. Thus the consideration for the purchase as well as the improvements of the property were met with the funds of the respondent for whom the petitioner was acting as an agent and Power-of-Attorney. He, thereby, obviously had acted in a fiduciary capacity as agent of the respondent. The sale-certificate though ostensibly stands in his name but obviously he obtained it while acting as an agent and Power-of-Attorney of the respondent. The sale-certificate thus was obtained without her knowledge and consent playing fraud on her. The facts manifest that the petitioner had purchased the property for the benefit of the estate of the respondent.

2. From these facts the substantial question of law, therefore, are whether the title to the suit-property vests in the petitioner or his principal-respondent, and whether she is entitled to the declaration and recovery of possession sought in that behalf. The High Court has rightly considered these substantial question of raw. Obviously, at the time of the sale, S.66 of C.P.C. was on the statute which was deleted by the Benami Transactions (Prohibition) Act, 1988. It is true that sub-s.(1) of S.66 prohibits the maintainability of a suit against any person claiming title under the purchase-certificate issued on the ground that the purchase was made on behalf of the plaintiff or on behalf of some one through whom the plaintiff claims and that the defendant also is enjoined not to plead that the purchase was made on his behalf or on behalf of some one to whom the defendant claims. The public policy behind S.66(1), as it then , stood, was to prevent fraud on purchase and to prohibit benami purchase at execution sale enabling genuine participants in the bid to secure the best price for the property sold in the court auction and highest bidder secures clear title of it. It, therefore, prohibits a suit by beneficial owner or one Claiming through him. Sub-s.(2) mitigates against the rigour and embargo and creates an exception which provides that "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 fraudulently 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 the certified purchaser, on the ground that "it is liable to satisfy a claim of such third person against the real owner". Therefore, if a real owner purchases the property but the name of a third person was fraudulently and without consent of the real purchaser is entitled to obtain a declaration to that effect.

3. In the light of the facts recorded earlier, it is clear that a real purchaser is the respondent, the petitioner as an agent and Power-of-Attorney, had purchased the property but ostensibly had his name entered in the sale certificate, fraudulently and without her consent. That apart under S.88 of the Indian Trust Act, an agent or other person bound in a fiduciary character to protect the interests of the principal and the former would hold the property for the benefit of the principal or the person on whose behalf he acted as an agent. The question of benami, therefor, does no