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CASE NO.: Appeal (civil)  2867 of 2000

PETITIONER: G.Mahalingappa                                                   

RESPONDENT: G.M. Savitha                                                      

DATE OF JUDGMENT: 09/08/2005

BENCH: D.M. DHARMADHIKARI & TARUN CHATTERJEE

JUDGMENT: J U D G M E N T TARUN CHATTERJEE, J.             

       This is an unfortunate litigation between a father and his married  daughter on the right of ownership of a house measuring about 40 feet  by 30 feet in Khata No.54 of Garehatty Village in Chitradurga Taluk  in the State of Karnataka (hereinafter referred to as the "suit  property").         The appellant, who suffered defeat in second appeal before the  High Court at Bangalore (Karnataka), filed  a Special Leave Petition  which on admission got registered as a regular appeal being Civil  Appeal No. 2867/2000  in this Court.

       The appellant is the father of the respondent.  The suit property  was purchased by the appellant in the name of the respondent by a  registered sale deed dated 24th of August, 1970 when the respondent  was a minor of seven years of age.   Subsequently, her marriage was  settled and at that point of time she was assured that the respondent  shall not be disturbed as she was given to understand that the suit  property was her own property.  She was married to one Shri  C.Thippeswamy on 4th of December, 1980.  Relationship between the   appellant and the  respondent was cordial till 8th of October, 1983, and  only thereafter relationship became strained.  At that stage she asked  for vacation of the suit property not only from the appellant and his  family but also from the tenants who were defendants 2 to 5 in the  suit and for payment of rent to her.  The appellant and the tenants had,  however,  refused to vacate their  respective portions of the suit  property in their possession or to pay rent to her.  Accordingly, the   respondent was constrained to file the suit for declaration of title and  recovery of possession in respect of the suit property on the averment  that since the suit property stood in her name,  and the same was  purchased for the benefit of the respondent and as a security for her  marriage she was entitled to a decree for declaration and possession.   The suit was however filed on 5th of July, 1984.

       The appellant resisted the claim of the respondent on various  grounds by filing a written statement.  According to the appellant, the  suit property was purchased by his own funds in the benami of her  daughter.  He also denied the allegation that the suit property was  purchased for and on behalf of the respondent under the sale deed  dated 24th August, 1970 nor it was purchased as a security for her  marriage.  According to him, the respondent was born on 5th  November, 1963 and immediately after the birth an astrologer was  contacted from whom the appellant ascertained that she was born on  an auspicious nakshatra and immediately thereafter he made up his  mind to purchase a site with a view to construct a house for his  residence.  Accordingly, he  purchased the suit property for a sum of  Rs.500/-.  It was not the intention of the appellant to create any  benefit, any right in the suit property to the respondent.   However, in

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the year 1984, the suit property was bequeathed by a Will in favour of  the  respondent and two sons. After the suit property was purchased in  the benami of the respondent, he made improvement of the suit  property and in doing so he mortgaged the suit property in favour of  one Srinivasa Setty and obtained a loan of Rs.3,000/- on 15th  September, 1972.  Thereafter, he purchased another site adjacent to  the suit property under a sale deed dated 23rd May, 1972.   That sale  deed was also obtained in the name of the respondent out of love and  affection.  At that time the  respondent was about nine years old.  The  rest of the mortgaged amount  was utilized for construction of the  back portions of the house after spending his own money.  After  improving the same he constructed four portions which were in  occupation of the tenants, and he himself discharged the mortgaged  loan and other loans incurred for construction of the suit property.  He  also obtained permission of the Deputy Commissioner for alienation  of the suit property for non-agricultural purposes.  He paid taxes  levied by the Revenue Authorities in respect of construction of the  house.  He also paid alienation charges and Kandayam of  the suit  property from time to time.  Accordingly, the appellant sought for  dismissal of the suit inter alia on the ground that he was the real  owner and in possession of the suit property and the  respondent was  merely a benamidar in respect of the same.  Parties went into trial   with the  following issues:

1)      Does the plaintiff prove that she is the owner of the suit  property? 2)      Is she entitled to possession of the suit property as contended  by her? 3)      Is she entitled for damages as claimed by her? 4)      To what relief the plaintiff was entitled, if any?

An additional issue was framed which is of the following effect:

       Does defendant No.1 prove that the suit was purchased  nominally in the name of the plaintiff under the circumstances  pleaded in the written statement, the plaintiff is a benamidar and he is  the real owner of the suit property, as contended?

       Parties went to trial after adducing evidence to support their  respective claims as made out in the pleadings.         Both the courts found on consideration of the oral and  documentary evidence on record as well as the pleadings that \026

1)      the appellant had paid the purchase money. 2)      the original title deeds were with the appellant. 3)      the appellant had mortgaged the suit property for raising loan  to improve the same. 4)      he paid taxes for the suit property. 5)      he had let out the suit property to defendant Nos. 2 to 5 and  collecting rents from them. 6)      the motive for purchasing the suit property in the name of  plaintiff was that the plaintiff was born on an auspicious  nakshatra and the appellant believed that if the property was  purchased in the name of plaintiff/respondent, the appellant  would prosper. 7)      the circumstances surrounding the transaction, relationship of  the parties and subsequent conduct of the appellant tend to  show that the transaction was benami in nature.   

               On the aforesaid concurrent findings of fact it was held that  the respondent had failed to prove that she was the real owner of the  suit property and that the appellant was however the real owner of the  same and the respondent  was only a benamidar of the appellant.

                Accordingly,  the appellate court as well as the trial court

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dismissed the suit of the respondent.

               Feeling aggrieved by the concurrent decisions of the  appellate court as well as the trial court, a second appeal was filed  before the High Court at Bangalore, which, however, had set aside the  concurrent decisions and decreed the suit of the respondent only on  the ground that the purchase by the appellant in the name of the  respondent was intended for the benefit of the respondent.   While  coming to this conclusion, the High Court had taken into  consideration the fact that since the appellant had already executed a  Will bequeathing his property to the  respondent and two other sons,  which would, according to the High Court, amply show that the  intention of the  appellant to purchase the suit property in the name of  the respondent was to benefit the respondent.  In our view, this  finding on the face of the record is erroneous and perverse.   This  finding, according to us, was arrived at by the High Court in the  second appeal without any material on record to support such finding  nor it was based after considering the oral and documentary evidence  as well as the findings of fact arrived at by the trial court and appellate  court.  On the other hand,  in our view,  the findings of the appellate  court as well as the trial court were based on due consideration of oral  and documentary evidence on record and pleadings of the parties.      To consider the intention to purchase the suit property for the benefit  of the respondent, in our view,  the  fact of bequeathing the suit  property by executing a Will by the appellant in favour of respondent  and two sons could not at all be a factor for consideration.  The  execution of the Will by the appellant in favour of his sons and the  respondent would only indicate that the suit property was treated as  the property of his own and the respondent was never accepted by him  to be a real owner of the same.  The other ground on which the  concurrent findings of fact were set aside and suit was decreed is to  the following effect:

"Even otherwise, as could be gathered from the  evidence and representation made at the Bar, her father  used to purchase the property in the name of all his sons  and daughters on auspicious days.  It can be clearly  gathered that the intention of the father was to benefit his  children to avoid any possible conflict or dispute that may  arise between them with reference to sharing of the  properties after his life time.  Therefore, taking the view on  equity as well, and the cumulative circumstances, I am  inclined to hold that the plaintiff is entitled to be held as  the owner of the property."

       We are unable to agree with this conclusion of the High Court.   It is difficult to rely on the representation from the Bar that the  appellant used to purchase properties in the names of his children on  auspicious days and for that the intention of the appellant to purchase  the suit property for the benefit of the daughter only must be  presumed without having any material to support this conclusion from  the record.  We must not forget that the High Court was dealing with  a second appeal which was filed against the concurrent findings of  fact  based on consideration of oral and documentary evidence  adduced by the parties and such findings were on sound reasoning.   Even otherwise, we are of the view that the presumption that the suit  property was purchased for the benefit of the respondent  only was  amply rebutted by the appellant by adducing evidence that the suit  property, though purchased in the name of the respondent, was so  purchased for the benefit of the appellant and his family.         As noted hereinearlier,  the appellate court as well as the trial  court on consideration of all the materials including oral and  documentary evidence and on a sound reasoning  after considering the  pleadings of the parties came to concurrent findings of fact that    purchase of the suit property by the appellant in the name of the

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respondent was benami in nature.    As noted herein earlier, the  following findings of fact were arrived at by the appellate court and  the trial court  to conclude that the transaction in question was benami  in nature :-

1)      the appellant had paid the purchase money. 2)      the original title deed was with the appellant. And 3)      the appellant had mortgaged the suit property for raising loan to  improve the same. 4)      he paid taxes for the suit property. 5)      he had let out the suit property to defendant Nos. 2 to 5 and  collecting rents from them. 6)      the motive for purchasing the suit property in the name of  plaintiff was that the plaintiff was born on an auspicious  nakshatra and the appellant believed that if the property was  purchased in the name of plaintiff/respondent, the appellant  would prosper. 7)      the circumstances surrounding the transaction, relationship of  the parties and subsequent conduct of the appellant tend to show  that the transaction was benami in nature.   

               Keeping these concurrent findings of fact in our mind   which would conclusively  prove that the transaction in question was  benami in nature, let  us now consider whether the appellant was  entitled to raise the plea of benami in view of introduction of the  Benami Transaction (Prohibition) Act, 1988 (In short "Act") and  whether the Act was retrospective in operation.  If so, in view of   Section 4(2) of the Act, plea of benami in the defence of the appellant  was not available to him.                 Before a  two Judges Bench decision of this Court,  in the  case of Mithilesh Kumari  and another Vs. Prem Behari Khare   1989(2) SCC 95 this question had cropped  up.   In that decision, it  was  held that the question of benami cannot be taken as a plea either  in the plaint or in the written statement even when the sale deed was  executed and registered before the introduction of the Act and  when  the suit was filed before the Act had come into force.  Before we  proceed further, we may remind ourselves of certain provisions of the  Act.  Section 2 (a) defines ’benami transactions’  which means any  transaction in which property is transferred to one person for a  consideration paid or provided by another person.  Section 3  (1) and  (2) reads as under:                  3(1) "No person shall enter into any benami  transactions.          (2) Nothing in sub-section(1) shall apply to the  purchase of property by any person in the name of his wife  or unmarried daughter and it shall be presumed, unless the  contrary is proved, that the said property had been  purchased for the benefit of wife or the unmarried  daughter."                              (Underlining is ours)

       Section 4  of the Act prohibits the right to recover property held  benami. It reads  as under:

4(1) "No suit, claim or action to enforce any right in  respect of any property held benami against the person in  whose name the property is held or against any other  person shall lie by or on behalf of a person claiming to be  the real owner of such property.

(2) No defence based on any right in respect of any  property held benami, whether against the person in whose  name the property is held or against any other person, shall  be allowed in any suit, claim or action by or on behalf of a  person claiming to be the real owner of such property."

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(underlining is ours)          Since in this case, we are concerned with the question whether the  appellant was entitled to raise the plea of benami in his defence in  view of the bar imposed in Section 4(2) of the Act,  let us now confine  ourselves to the bar imposed in Section 4(2) of the Act of taking this  plea in his defence and to the question of retrospective operation of  this section or this provision is prospective in operation.         Now, therefore, the question arises is whether under section 4(2)  of the Act,  defence can be allowed to be raised on any right in respect  of any property held benami, whether against the person in whose  name the property is held or against any other person, shall be  allowed in any suit, claim or action or on behalf of a person claiming  to be real owner of such property.  As noted already, this question  cropped up for decision before this Court in the case of Mithilesh  Kumari and Another  Vs.  Prem Behari Khare 1989 (2) SCC 95.   In  fact, the retrospective operation of this provision, as noted herein  earlier, was answered in the affirmative in the aforesaid decision.    However, the correctness of that decision was doubted and an order  was passed by this Court subsequently referring this question of  retrospectivity for decision to a 3-Judges Bench of this Court.  In the  case of R.Rajagopal Reddy (Dead) by LRs.  And Ors.  Vs.  Padmini  Chandrasekharan (Dead) by LRs.  1995 (2) SCC 630,  S.B.  Majmudar, J. (As His Lordship then was) writing the judgment  for  the Three Judges Bench could not agree with the views expressed in  Mithilesh Kumari’s case and held that the Act was prospective in  nature and it has no retrospective operation excepting certain  observations made in respect of some cases which would be  mentioned hereinafter.   In paragraph 10 it was observed as follows:-    "though the Law Commission recommended retrospective  applicability of the proposed legislation, Parliament did not make the  Act or any of its sections retrospective in its wisdom.".   Thereafter on  a careful consideration of the provisions made under sections 3 and 4  of the Act, it was observed:          "A mere look at the above provisions shows that the  prohibition under Section 3(1) is against persons who are  to enter into benami transactions and it has laid down that  no person shall enter into any benami transaction which  obviously means from the date on which this prohibition  comes into operation i.e. w.e.f. 5/9/1988.  That takes care  of future benami transactions.  We are not concerned with  sub-section (2) but sub-section (3) of Section 3 also throws  light on this aspect.  As seen above, it states that whoever  enters into any benami transaction shall be punishable with  imprisonment for a term which may extend to three years  or with find or with both.  Therefore, the provision creates  a new offence of entering into such benami transaction.  It  is made non-cognizable and bailable as laid down under  sub-section (4)  It is obvious that when a statutory  provision creates new liability and new offence, it would  naturally have prospective operation and would cover only  those offences which take place after Section 3(1) comes  into operation."           (Underlining is ours).

       In paragraph 11 of the said decision of this Court, the Supreme  Court further observed "On the contrary, clear legislative intention is  seen from the words "no such claim, suit or action shall lie", meaning  thereby no such suit, claim or action shall be permitted to be filed or  entertained or admitted to the portals of any court for seeking such a  relief after coming into force of Section 4(1)."  (underline is ours).

In the same paragraph the Supreme Court observed:

" With respect, the view taken that Section 4(1) would

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apply even to such pending suits which were already filed  and entertained prior to the date when the section came  into force and which has the effect of destroying the then  existing right of plaintiff in connection with the suit  property cannot be sustained in the face of the clear  language of Section 4(1).  It has to be visualized that the  legislature in its wisdom has not expressly made Section 4  retrospective.  Then to imply by necessary implication that  Section 4 would have retrospective effect and would cover  pending litigations filed prior to coming into force of the  section would amount to taking a view which would run  counter to the legislative scheme and intent projected by  various provisions of the Act to which we have referred  earlier.  It is, however, true as held by the Division Bench  that on the express language of Section 4(1) any right   inhering in the real owner in respect of any property held  benami would get effaced once Section 4(1) operated,  even if such transaction had been entered into prior to the  coming into operation of Section 4(1), and henceafter  Section 4(1) applied no suit can lie in respect to such a  past benami transaction.  To that extent the section may be  retroactive."

               In our view, similar is the position in law on the question  of retrospectivity  of section 4(2) of the Act.                                                  Finally, this Court in the aforesaid decision held that the  decision in Mithilesh Kumari & Anr. Vs. Prem Behari Khare erred in  taking the view that under Section 4(2),  in all suits filed by persons in  whose names properties are held no defence can be allowed at any  future stage of the proceedings that the properties are held benami  cannot be sustained.  It was also held that Section 4(2) will have a  limited operation even in cases of pending suits after Section 4(2) had  come into force, if such defences are not already allowed.    The  decision in R. Rajagopal Reddy (Dead) by LRs. And Ors.  Vs.  Padmini Chandrasekharan (Dead) by LRs. 1995 (2) SCC 630 which  overruled the decision of two Judges Bench in the case of Mithilesh  Kumari and Anr.  Vs.  Prem Behari Khare 1989 (2) SCC 95 was also  approved by this Court in the  cases  of  Prabodh Chandra Ghosh  Vs.   Urmila Dassi AIR 2000 SC 2534 and  C. Gangacharan  Vs.   C.Narayanan  AIR 2000 SC 589.     In view of the aforesaid, this  question is, therefore, no longer res integra.                                                           Therefore, we are now to consider in this case whether the  facts disclosed would indicate that even after coming into force of the  Act the defence under Secion 4 can be available.  Admittedly, the  transaction in question was registered on  24th August, 1970.  The suit  was filed on 5th of July 1984 which was long before coming into force  of the Act.  It is an admitted position that the written statement in the  suit taking plea of benami was also filed by the appellant long before  the Act had come into force.  Therefore, it was not a case where  Section 4(2) of the Act will have a limited operation in the pending  suit after Section 4(2) of the Act had come into operation.    It is true  that the judgment of the trial court was delivered after the Act had  come into force but that could not fetter the right of the appellant to  take the plea of benami in his defence.  Since the Act cannot have any  retrospective operation in the facts and circumstances of the present  case, as held by this Court in the aforesaid decision, we are therefore  of the view that the appellant was entitled to raise the plea of benami  in the written statement and to show and prove  that he was the real  owner of the suit property and that the respondent was only his  benamidar.   

       Before parting with this judgment, we may take into  consideration of a short submission of the learned counsel for the  respondent.   The submission is that since the suit property was  purchased by the appellant in the  name of the respondent, the suit

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property must be held to have been purchased by him for the benefit  of the respondent.  Section 3 deals with Prohibition of benami  transaction.  Sub-section (1) clearly prohibits that no person shall  enter into benami transaction.  However,  sub-section (2) of Section 3  clearly says that nothing in sub-section (1) shall apply to purchase of  property of any person in the name of his wife, unmarried daughter  and it shall be presumed, unless the contrary is proved, that suit  property had been purchased for the benefit of the unmarried  daughter.                

       Section 3(2) makes it abundantly clear that if a property is  purchased in the name of an unmarried daughter for her benefit, that  would only be a presumption but the presumption can be rebutted by  the person who is alleging to be the real owner of the property by  production of evidences or other materials before the court.  In this  case,  the trial court as well as the appellate court concurrently found  that although the suit property was purchased in the name of the  respondent but the same was purchased for the interest of the  appellant.    We are therefore of the opinion that even if the  presumption under section 3(2) of the Act  arose because of purchase  of the suit  property by the father ( in this case appellant ) in the name  of his daughter ( in this case respondent ), that presumption got  rebutted as the appellant had successfully succeeded by production of  cogent evidence to prove that the suit property was purchased in the  benami of the respondent for his own benefit.

       Let us now consider whether the  concurrent findings of fact  could be set aside by the High Court in the second appeal.  It is well  settled by diverse decisions of this Court that the High Court in  second appeal is entitled to interfere with the concurrent findings of  fact if the said concurrent findings of fact are based on non- consideration of an important piece of evidence in the nature of  admission of one of the party to the suit,  which is overlooked by the  two courts below ( See [2003 (7) SCC 481, Deva (Dead) Through  LRs Vs. Sajjan Kumar (Dead) by LRs] ).  It is equally well settled  that under section 100 of the Code of Civil Procedure, High Court  cannot interfere with concurrent findings of facts of the courts below  without insufficient and just reasons. (See [2003(7)SCC 52, Sayeda  Akhtar Vs. Abdul Ahad]).     In second appeal, High Court is also not  entitled to set aside concurrent findings of fact by giving its own  findings contrary to the evidence on record.   (See  [ 2001 (4) SCC  694, Saraswathi & Anr.  Vs.  S.Ganapathy & Anr.] ).

       As held herein earlier the High Court had set aside the  concurrent findings of fact not on consideration of the evidence  adduced by the parties but set aside the concurrent findings of  fact on  the basis of findings contrary to the evidence on record and without  considering the findings of fact arrived at by the appellate court and  the trial court.     From the judgment of the High Court we further find  that the concurrent findings of fact were set aside not on consideration  of the findings of fact arrived at by the courts below but only on the  basis of the arguments of the  learned Advocate of the respondent.   This was also not permissible to the High Court in Second Appeal to  come to a contrary findings of its own only on the basis of the  arguments of the learned counsel for the respondent without  considering the findings of the trial court as well as the appellate  court. (See [2002(9) SCC 735, Gangajal Kunwar (Smt.) and Ors. Vs.  Sarju Pandey (Dead) by LRs & Ors.] ).  It is equally settled that High  Court in second appeal is not entitled to interfere with the concurrent  findings of fact arrived at by the courts below  until and unless it is  found that the concurrent findings of fact were perverse and not based  on sound reasoning.  We ourselves considered the evidence on record  as well as the findings of fact arrived at by the two courts below.   From such consideration we do not find that the concurrent findings  of fact arrived at by the appellate court as well as the trial court were

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either perverse or without any reason or based on non-consideration  of important piece of evidence or admission of some of the parties.   We are therefore of the view that the High Court was not justified in  interfering with the concurrent findings of fact arrived at by the  appellate court as well as the trial court which findings were rendered  on consideration of the pleadings as well as the material ( oral and  documentary )  evidence on record.           For the reasons aforesaid this appeal is allowed.  The judgment  of the High Court impugned in this Court is set aside and the  judgments of the trial court as well as the appellate court are affirmed.   The suit filed by the respondent shall stand dismissed.         There will be no order as to costs.