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PETITIONER: PAWAN KUMAR GUPTA

       Vs.

RESPONDENT: ROCHIRAM NAGDEO

DATE OF JUDGMENT:       20/04/1999

BENCH: K.T. Thomas, & D.P. Mohapatra.,

JUDGMENT:

--------

       Leave granted.

       The enviable position to which the tenant of a  shop building  has ensconced himself as corollary to the judgment of the High Court (under appeal now) is  that  he  need  not thenceforth be accountable to any landlord.  On the one side when  the  claim  of  appellant  to be the landlord has been dis-countenanced by the High Court, at the  other  side  the person  whom  the  tenant  proclaimed  as  his  landlord has disclaimed the credential.  If  the  judgment  of  the  High Court  remains in force the tenant stands elevated virtually to the status of owner of the suit building.  But  appellant is  not  prepared to concede defeat and hence he has come up with this appeal by special leave.

       Facts  which  led  to  the aforesaid position can be summarised thus:  Respondent was  the  tenant  of  the  suit building  (consisting  of  a  shop room and godown premises) which belonged to one Narain Prasad.  As  per  a  sale  deed executed  on  23.1.1989 (Ext.P.11) Narain Prasad transferred his rights in the suit building to the appellant.    On  its footing  appellant  filed  Civil  Suit  No.75-A  of 1990 for eviction of the respondent under  Section  12(1)(a)  of  the M.P.   Accommodation  Act, 1961 (for short "the Act") on the ground that respondent has not paid rent to  the  appellant. That  suit  was  contested  by  the  respondent  raising the contention that  the  building  was  actually  purchased  by Pyarelal  (father of the appellant) as per Ext.P11-sale deed and appellant is  only  a  name-lender  therein,  and  hence appellant  is  not entitled to get the eviction order or the rent of the building.  In that suit  the  court  found  that appellant  is  the  real  owner  of the building pursuant to Ext.P.11-sale-deed and that he was entitled to receive  rent of the  building.    However,  the suit was dismissed as the respondent deposited the arrears of  rent  in  court  during pendency of the suit but appellant was permitted to withdraw the  arrears  of  rent so deposited by the respondent as per the judgment rendered in that suit.

       Appellant filed the present  suit  (No.    304-A  of 1994) under Section 12(1) (f) of the Act for eviction of the respondent   on  the  ground  that  appellant  requires  the building bona fide for the purpose of starting a business of his own.  Respondent contested the suit and in  the  written statement  be  contended, inter alia, that appellant is only

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benami to his father Pyarelal in Ext.P.11-sale deed and  the real transferee  was Pyarelal.  Respondent further contended that the sale in favour of the appellant is void  as  it  is forbidden   under   Section  3  of  the  Benami  Transaction (Prohibition) Act, 1988, (for short the "the Benami Act").

       One of the issues raised by the trial court  in  the present suit is whether respondent is precluded from raising the issue regarding benami nature of Ext.P.11-sale deed, due to the  bar  of res judicata.  The trial court held that the finding in the previous suit (No.75-A of 1990)  against  the respondent  would  not  operate  as res judicata as the said suit was  ultimately  dismissed.    The  trial  court   then proceeded  to consider whether appellant is only a benamidar under the aforesaid sale deed.   The  court  concluded  that appellant  is the real transferee under the sale deed and is entitled to institute the suit.  It was further  found  that appellant  bona  fide  requires  the  building  for  his own business purpose.  On the strength of such findings a decree was  granted  by  the  trial  court  for  eviction  of   the respondent.

       The  District Court in the first appeal filed by the respondent upheld all the findings arrived at by  the  trial court and  dismissed  the  appeal.    A  second  appeal  was preferred by the respondent before the High Court of  Madhya Pradesh.   During  arguments  learned single judge permitted the appellant to  raise  the  plea  of  res  judicata  while supporting the decree for eviction.

       However, learned single judge of the High Court held that there is no bar of res judicata for the  respondent  in raising  the contention regarding the title of the appellant over  the  building.  Learned  single  judge  reversed   the findings  of the two courts regarding benami transaction and held that Ext. P.11 was executed in favour of  Pyarelal  and that  transaction  is hit by Section 3 of the Benami Act and consequently the transaction is void. Learned  single  judge dismissed the suit filed by the appellant.

       Shri  G.L.  Sanghi, learned senior counsel contended that the plea of the respondent based on Section  3  of  the Benami  Act  is  barred  by  res  judicata. Alternatively he contended that respondent has failed to show that Ext.  P.11 is  a  benami  transaction  Learned  senior  counsel further contended that the High Court went wrong  in  fastening  the appellant  with  the burden of proof to prove that Ext. P.11 is not a benami transaction. Even otherwise,  appellant  has proved  that  Ext.P.11  was executed in his favour and he is the  real  transferee,  according  to  the  learned   Senior Counsel.

       Shri S.S.    Khanduja,  learned  counsel   for   the respondent  supported  every  finding  of the High Court and further  contended  that  even  if  the  burden  is  on  the respondent  to  prove  the  benami nature of the transaction respondent  has  succeeded  in   discharging   the   burden. Regarding the plea of res judicata learned counsel submitted that it is not available to the appellant.  Alternatively he pleaded that even if ownership of the building is found with the  appellant  he  has  not  made out a ground for eviction under Section 12(1)(f) of the Act.

       The reasoning adopted by the  learned  single  judge for rejecting the plea of res judicata is the following:

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       "Since  the suit itself was dismissed, the appellant         was not aggrieved and he had  no  right  of  appeal.         Under  such circumstances there could be no question         of application of principles of  res  judicata.    A         successful  defendant  is  not  bound by any adverse         finding against him in a suit, for  the  reason,  it         cannot  file  an  appeal  against that finding. This         principle is firmly in the saddle."

       To reach the said conclusion  learned  single  judge relied   on   the   decisions  in  Waris  Khan  &  ors.  vs. Admadullakhan  &  ors.  (AIR  1952  Nagpur  238)  and   Firm Manhaiyalal  Mohanlal  Somani vs. Paramsukh (AIR 1956 Nagpur 273).

       The earlier suit (75-A/90) was contested on the main issue that appellant was only a benamidar and hence  he  has no  right  in  the  suit  property.  The  main  plea  of the respondent in that suit has been extracted in  the  judgment as follows:

       "The  defendant  has  specifically  denied  that the         plaintiff has purchased  the  suit  premises.    His         contention   is  that  disputed  premises  has  been         purchased by Pyarelal, father of  the  plaintiff  in         his  name and it is a benami transaction and on that         basis the plaintiff has not acquired any right."

       Issues No. 1 and 2 in that suit were  formulated  in the following words:

       "1.  Whether  the  plaintiff  is  owner  of the suit         premises?

       2.   Whether the defendant is tenant of plaintiff of         disputed premises @ Rs.210/- p.m.?"

       The decision of the court in that suit, on the above issues, was  this:   "I find that the plaintiff is the owner on the basis of sale-deed dated 23.1.1989 under section 2(b) of MP Accommodation Control Act; and when plaintiff is owner of  the  suit  premises  the  defendant  is  definitely  his tenant."  The  court in that suit then proceeded to consider the question of arrears of rent and held that "the plaintiff is entitled to obtain Rs.1400/- from the  defendant  towards arrears  of  rent;  this  rent  has  been  deposited  by the defendant in CCD  which  the  plaintiff  can  withdraw."  of course  in the last para of the judgment the Court said that suit is "dismissed" and both parties were directed  to  bear their own costs.

       Though the word "dismissed" has been employed in the last paragraph of the judgment a reading of it, as a  whole, would show  that  the plaintiff had won the suit.  The court found against the plea of the defendant that  plaintiff  was not the  rightful  owner  of the building.  Dismissal of the suit was not on account of any  defect  in  the  plaintiff’s claim nor in the frame of the suit nor even on any technical reason,  but  solely  because  the  amount  claimed  by  the

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plaintiff from the  defendant  has  been  deposited  by  the defendant in  the court during pendency of the suit.  As the plaintiff  was  permitted  to  withdraw  that   amount   his grievance  in the suit would necessarily have been redressed fully.

       The  rule of res judicata incorporated in section 11 of the Code of Civil Procedure  (CPC)  prohibits  the  court from   trying   an   issue  which  "has  been  directly  and substantially in issue in issue in a former suit between the same parties", and has been heard  and  finally  decided  by that court.   It is the decision on an issue, and not a mere finding on any incidental question to reach  such  decision, which operates  as  res  judicata.  It is not correct to say that the party  has  no  right  of  appeal  against  such  a decision on an issue though the suit was ultimately recorded as dismissed.    The  decree  was  not  in  fact against the plaintiff in that first suit, but was in his favour as shown above.  There was no hurdel in law for the defendant to file an appeal against the judgment and decree in that first suit as he still  disputed  those  decisions  on  such  contested issues.

       The two decisions of the Nagpur High Court relied on by  the learned single judge (in the impugned judgment) have followed the rule set by  the  Privy  Council  in  an  early decision in  Midhanpur Zamindari Company vs.  Naresh Narayan Roy (AIR 1922 PC 241).  It seems that  the  legal  principle formulated  by  the  Privy Council in the aforesaid decision regarding this facet of res judicata has since been approved and followed by the courts in India as the correct position. The said rule was founded on the following facts:    When  a zaminder  sued  for possession against the tenant the latter contested the  suit  on  two  alternative  grounds,  one  by claiming  occupancy  right  and the other by contending that the suit was premature.  The court had recalled the plea  of the tenant regarding occupancy right, but dismissed the suit as premature.   In the subsequent suit filed by the zamindar against the same tenant their Lordships of the Privy Council did not agree that the finding regarding occupancy right  in the first suit would operate as res judicata "for the tenant having  succeeded  on  the other plea, had no occasion to go further as to the findings against him." The reason is  that such  adverse  finding  in  the aforesaid suit would only be obiter dicta.

       However, the Madras High Court in Veeraswamy  Mudali vs.  Palaniyappan  and  ors.  (AIR  1924 Madras 626) and the Calcutta High Court in Fulbash Sheikh vs. Emperor (AIR  1929 Cal 449) distinguished the said principle in cases where the first  suit  was  dismissed  due  to want of valid notice to quit, and findings on disputed issues  on  title  were  held sufficient  to  operate  as  res judicata in subsequent suit between the same parties.

       Thus the sound legal position is this:  If dismissal of  the  prior  suit  was  on   a   ground   affecting   the maintainability  of  the  suit  any  finding in the judgment adverse to the defendant would not operate as  res  judicata in a  subsequent  suit.  But if dismissal of the suit was on account of extinguishment of the  cause  of  action  or  any other  similar  cause a decision made in the suit on a vital issue involved therein would operate as res  judicata  in  a subsequent suit  between  the  same  parties.  It is for the defendant in such a suit  to  choose  whether  the  judgment

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should be appealed against or not.  If he does not choose to file  the  appeal  he  cannot  thereby  avert the bar of res judicata in the subsequent suit.

       In this case the position is still stronger for  the appellant.   Dismissal of the first suit was only on account of what the respondent did during the pendency of  the  suit i.e.    depositing  the  arrears  of  rent  claimed  by  the appellant.  The court permitted the  plaintiff  to  withdraw that amount  under deposit for satisfying his claim.  Such a degree cannot be equated with a  case  where  the  suit  was dismissed as not maintainable because any adverse finding in such a suit would only be obiter dicta.  The finding made in OS 75-A/90 that appellant was the real owner of the building as per Ext.  P.11-sale deed became final.  If the respondent disputed  that  finding  he  should  have filed an appeal in challenge of it.

       We therefore agree with the plea  of  the  appellant that  there  is  bar  of res judicata in re-agitating on the issue regarding appellant’s title to the building.

       Alternatively,  assuming  that  the  finding  in the first suit would not operate as res judicata, the contention of the respondent that Ext.   P.11  is  a  void  transaction being  hit  by  Section  3(1)  of  the benami Act can now be considered.  The  trial  court  and  first  appellate  court concurrently  found  that it is not a benami transaction but the High Court interfered with the said  concurrent  finding and held that the transaction is void.  Learned single judge of  the  High  Court  observed  that  finding  of  the first appellate  court  is  contrary  to  the  pleadings  of   the plaintiff  and  that burden of proof had been wrongly placed on the defendant, and  that  the  conclusion  was  based  on considerations   which   are   not  germane  to  the  issue. According to the learned single  judge  "it  is  clear  from section  106  of the Evidence Act that is was the respondent to prove that the money was advanced by him because  he  had the special knowledge of the transaction between him and his vendor".  The High Court held that appellant sailed to prove that  the  suit  building was purchased by him on payment of sale price.

       All  the above three premise adverted to by the High Court are  unsupportable.    The  clear  pleading   of   the plaintiff  is  that  he  purchased  the suit property as per Ext.P.11-sale deed.  Burden of proof cannot be cast  on  the plaintiff  to prove that the transaction was consistent with the apparent tenor of  the  document.    Ext.P.11-sale  deed contains the recital that sale consideration was paid by the plaintiff to Narain Prasad the transferor.  Why should there be  a  further burden of proof to substantiate that recitals in the document are true?.  The party  who  wants  to  prove that  the  recitals are untrue must bear the burden to prove it.

       In this context reference to Section 91  and  92  of the Evidence  Act will be useful.  As per the former, in all cases in which any matter is required by law to  be  reduced to  the  form  of  a  document no evidence shall be given in proof of the  terms  of  such  matter  except  the  document itself.   Section  92  forbids admission of any evidence for the  purpose  of  contradicting,  varying,  adding  to,   or subtracting from  the  terms  of  such document.  One of the

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exceptions to the said rule is that  any  fact  which  would invalidate  the  instrument  can be proved by adducing other evidence.

       In this case, Ext.P.11  is  the  document  by  which transfer of ownership from Narain Prasad was effected.  When any  party  proposes  to show something which is at variance with the terms of Ext.P.11 the burden of proof  is  on  him. When  respondent  asserted  that the real transaction is not what is apparently mentioned in Ext.P.11 the  burden  is  on the respondent to establish the transaction which he asserts to be the real one.

       We  do  understand  that  respondent  made  a bid to discharge his burden by examining Pyarelal  (father  of  the appellant) and  Narain  Prasad (the executant of Ext.  P.11) as witnesses for the defendant.  But it was a  risky  course of  action  which  he  undertook  and  the risk proved to be costly for him as both witnesses stood by the apparent terms of Ext.P.11 regarding consideration.  In other  words,  both witnesses  of  the  respondent  stuck  to  the  version that consideration for the sale was paid by the appellant.

       It  is true that respondent adduced evidence to show that Ext.P.11 was preceded  by  an  agreement  entered  into between  Pyarelal and Narain Prasad for the sale of the suit building.  The High Court adverted to  the  said  agreement. But  even  with  that  agreement  the  respondent  has  only succeeded in showing that  Pyarelal  had  enough  money  and appellant  was  not  having  so  much  of  funds  to pay the purchase money for Ext.P.11.  Perhaps the said  circumstance may  lead  to  an inference that Pyarelal, the father of the appellant, gave money to his son to  pay  the  consideration for buying the property.

       Section   3(1)   of  the  Benami  Act  contains  the interdict  that  no  person  shall  enter  into  any  benami transaction.   The aforesaid prohibition has been judicially pronounced as prospective only, (vide R.Rajagopal  Reddy  v. Padmini Chandrasekharan (1995 2 SCC 630).  As the Benami Act was passed  on  5.9.1988  it would apply to Ext.  P.11 which was executed subsequently.  A contention was bolsteced up in the High Court on behalf of the tenant that since  the  sale consideration  was  provided by Pyarelal the sale deed would be a benami transaction.

       Section  2(a)  of  the  Benami  Act  defines  benami transaction   as  "any  transaction  in  which  property  is transferred to  one  person  for  a  consideration  paid  or provided by another person." The word "provided" in the said clause  cannot  be  construed  in  relation to the source or sources from which the real transferee  made  up  funds  for buying the sale consideration.  The words "paid or provided" are  disjunctively employed in the clause and each has to be tagged with  the  word   "consideration".      The   correct interpretation would be to read it as "consideration paid or consideration provided".    If consideration was paid to the transferor then the word provided has no application as  for the said  sale.    Only if the consideration was not paid in regard to a sale transaction the question of  providing  the consideration would   arise.      In   some  cases  of  sale transaction ready payment of consideration  might  not  have been  effected  and  the  provision  would  be made for such consideration.  The  word  "provided"  in  Section  2(a)  of Benami Act  cannot  be understood in a different sense.  Any

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other interpretation is  likely  to  harm  the  interest  of persons  involved in genuine transactions, e.g., a purchaser of land might have availed himself of loan  facilities  from banks to  make  up  purchase  money.   Could it be said that since the money was provided  by  the  bank  it  was  benami transaction?.

2       We are, therefore, not inclined to accept the narrow construction of the word "provided" in Section 2(a)  of  the Benami  Act. So even if appellant had availed himself of the help rendered by his father Pyarelal for making up the  sale consideration  that  would  not  make the sale deed a benami transaction so  as  to  push  it  into  the  forbidden  area envisaged in Section 3(1) of the Benami Act.

       Thus,  looking  from  either angle the contention of the respondent that appellant  had  no  title  to  the  suit property  could  not  stand  legal  scrutiny. The High Court erred grossly in adopting such a view which is  in  conflict with  law  and  is in reversal of the concurrent findings of the two fact finding courts.

       Shri  S.S.  Khanduja,  learned   counsel   for   the respondent  lastly pleaded that if ultimately the respondent is found to be the transferee under the Ext. P.11-sale  deed the  case  may be remitted to the High Court for considering the question whether appellant’s claim for eviction  on  the ground  that  he  needs the building for his own use in bona fide. Shri G.L. Sanghi, learned senior counsel  pointed  out that  there  is  concurrent  finding  by  two courts on that aspect. We have noticed that the High Court  which  admitted the  second  appeal had formulated certain questions of law, and  none  of  such  questions  pertained  to  the   finding regarding  the bona fides of appellant’s claim for eviction. Hence no purpose would be served by remanding  the  case  to High Court.

       In  the  result,  we allow this appeal and set aside the impugned judgment. The decree passed by the trial  court as  confirmed  by  the  first  appellate  court  will  stand restored. We pass no order as to costs.