Sham and nominal transactions if hit by the provisions of the Act.

The two defendants against whom the suit has been decreed is the appellants. The plaintiffs-Indian Overseas Bank, Pondicherry, got a money decree against the second defendant-Ramaswamy Mudaliar on 19. 1975 by a Judgment of the High Court, for a sum of Rs.33,893. In execution of that decree in E.P.No.45 of 1976 the plaintiff attached the suit property-a house belonging to the second defendant on 210. 1976. In the meanwhile, after filing of the suit on 111. 1964, the second defendant on 211. 1964 executed a sale deed in respect of the suit property in favour of the first defendant-his brother in law. First defendant filed a claim petition on the basis of the said sale deed, the certified copy of which is Ex.B-1 and claim petition was allowed on 111. 1977. The plain tiff filed the present suit for setting aside that claim order, pleading that the alleged sale deed executed by the second defendant in favour of the first defendant is a benami transaction and only’ the second defendant was the owner in spile of the sale deed.

2 The suit was resisted by the defendants contending inter alia that the sale deed is true and genuine one and not a benami transaction as alleged and the suit is barred by limitation.

3. The learned trial Subordinate Judge who tried the suit accepted the plea of the plaintiff that the sale deed Ex.B-1 is benami and the title vests with the second defendant in spite of the sale deed. He further held that the suit is not barred by limitation. He answered the other issues raised in the suit also in favour of the plaintiff. In the result he decreed the suit as prayed for.

4. Mr.K.Yamunan, learned counsel for the appellant-defendants argued that

.(i) the finding of the trial court that Ex.B-1 sale deed is a benami one and no title has passed under it contrary to the evidence and erroneous;

.(ii) the sale deed in question comes within the mischief of Benami Transactions (Prohibition) Act, 1988 and therefore, the plaintiff cannot plead that the sale deed is a benami one; and

(iii) the finding of the trial Court that the suit is not barred by limitation is incorrect.

5. Though the plaintiff has pleaded that Ex.B-1 sale deed is a benami transaction, on a careful reading of the case in the plaint, the real case appears to be that Ex.B-1 sale deed is a sham and nominal one executed for the purpose of defeating the plaintiff from recovery of the amount due by the second defendant to them. As stated above, Ex.B-1 sale deed is executed by the second defendant in favour of the first defendant, which according to the plaintiff is not a valid one but fictitious with an anterior motive. Therefore the transaction according to the plaintiff is sham and nominal and not a benami transaction since in the case of a benami transaction one person passes consideration for the sale and gets the sale deed in the name of another person. Be that as it may, the question is, did the second defendant execute the sale deed Ex.B-1 in favour of the first defendant without any intention of passing title to the first defendant and with ulterior motive of secreting the property from the creditors (plaintiff). [After discussing the facts His Lordship proceeded:]

6. As regards the plea of limitation, it is contended that in view of Art.2265 of the French Civil Code, the suit is barred by limitation. The said Art.2265 reads thus:

“A person who acquires an immovable in good faith and under an instrument which is on the face of it capable of giving a title, obtains a title by prescription to the land in ten years and district of the Court of Appeal, in which the owner lives is the same district as that in which the land lies, and in 20 years if the true owner lives outside such district.”

A close reading of the Article shows that the condition prescribed for application of the Limitation in this Article is that the person must acquire the properly in good faith. But as found above, Ex.B-1 sale deed is a sham ad nominal, and therefore th