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PETITIONER: SMT. REBTI DEVI

       Vs.

RESPONDENT: RAM DUTT & ANR. ETC.

DATE OF JUDGMENT:       19/11/1997

BENCH: S.B. MAJMUDAR, M. JAGANNADHA RAO

ACT:

HEADNOTE:

JUDGMENT:                THE 19TH DAY OF NOVEMBER, 1997 Present:               Hon’ble Mr.Justice S.B.Majmudar               Hon’ble Mr.Justice M.Jagannadha Rao Arvind Kumar  and Mrs.Laxmi  Arvind  Kumar  and  Mrs.  Laxmi Arvind, Advs for the appellant. Mrs. S.Janani, Adv. for the Respondents.                       J U D G M E N T      The following Judgment of the Court was delivered: WITH IA NO. 1 OF 1996 IN SLP (C) NO. 17883 OF 1997 M. JAGANNADHA RAO, J.      Civil Appeal  No. 6486  of 1983  is filed by Smt. Rebti Devi (since  deceased) and is being continued by her son Sri Mahesh Dutt  Gupta, claiming  to be her sole legatee under a registered will  dated 18.12.1972.  This appeal is preferred against the  judgment of the Allahabad High Court in Regular Second Appeal  No. 1001/1973  dated 29.2.1980 arising out of Suit No.  1263 of 1968.  In the Civil Appeal the respondents are the  legal heirs  of the  brother of  Mahesh Dutt Gupta, i.e. late Ram Dutt Gupta.      Special Leave  Petition No.  17883/1997 is filed by the legal representatives  of Ram  Dutt Gupta (brother of Mahesh Gupta) impleading  Mahesh Gupta  and  other  family  members against the  judgment of  the Allahabad  High Court in First Appeal No.  378 of  1996 dated 30.5.1997 allowing the appeal of Mahesh  Dutt Gupta and granting probate in respect of the will date  18.12.1972 of  Rebti Devi in his favour.  Learned counsel for  the petitioners in S.L.P has fairly stated that the S.L.P  and IA  1 of  1996 therein are not being pressed. Therefore, we  are left  only with  Civil Appeal No. 8486 of 1983 and  in view  of the  dismissal of  S.L.P., Mahesh Dutt Gupta can continue the said Civil Appeal in the place of his deceased mother  Rebti Devi.  The result also is that Mahesh dutt can  also claim  as heir  to such  interest which Rebti has; even if her case of being real owner of the property is rejected once again in this Court.      The Suit  No.1263 of 1968 out of which the Civil Appeal arises was  filed by  Smt.  Rebti  Devi  for  possession  of property from  the occupation  of one  of her  sons Ram Dutt Gupta.   The plaintiff  has impleaded  Ram Dutt Gupta as 1st

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defendant and  his son Surendra Nath Gupta as 2nd defendant. She claimed that she purchased the suit property on 1.6.1995 under a  registered sale  deed for  Rs. 5000/-  out  of  the income derived  by her  by lending her money regularly.  She also pleaded  that her  husband Ujagar Lal had no movable or immovable property.   Apart  from Ram  Dutt, she  has  other children Brahm  Dutt, Ramesh Dutt, Mahesh Dutt and daughters Prem Devi, Chandrakanta.  She claims that the sons separated and that in 1960 she permitted Ram Dutt to occupy the ground floor of  the suit property for his business and as Ram Dutt did not  vacate, she  was suing for possession.  The defence of Ram  Dutt and his son was that the property was purchased by his  father Ujagar  Lal in  the name of Ram Dutt’s mother Rebti  Devi   benami  on   1.6.1995  and   that  the  entire consideration was  paid by  his father,  that his father was the real  owner and  that after  his death, the property has devolved on  his wife  (plaintiff)  and  other  children  in accordance with law.      Both sides  led evidence.  The trial Court accepted the plaintiff’s case  in its  judgment dated 18.11.1971 and held that the  plaintiff was  not a benamidar and her husband was not the  real owner.  But on appeal, the appellate Court, in a well considered judgment, reversed the judgment and decree and dismissed  the suit  on 9.3.1973.    That  judgment  was affirmed by  the High  Court in  Second Appeal  on 29.2.1980 Plaintiff preferred this Civil Appeal in this Court.      Learned  counsel  for  the  plaintiff-appellant  (legal representative of  Rebti Devi)  submitted that  the property was standing  in  the  name  of  Rebti  Devi  and  that  the defendants who  had come  us with  a plea  of benami had not discharged  the  onus  that  was  on  them.    It  was  also contended, referring  to Benami  Transactions  (Prohibition) Act, 1988  that the plea of benami raised in defence was not open to  the defendants  and that  in Nand Kishore Mehra Vs. Sushila Mehra  [1995 (4)  SCC 5723  (which is  a three judge Judgment), the principles decided in R. Rajagopala Reddy Vs. Padmini Chandrasekharan  [1995 (2)  SCC 630] V(which is also decision of  three learned  Judges) have  been  doubted  and hence the  said Act  is applicable  to the facts of the case even though  the defence  of benami  was raised  long before 19.5.1988 when  the act came into force. Learned counsel for the respondent contended that the finding of fact arrived it by the first appellate court was not rightly interfered with by the  High Court,  and  that  it  did  not  call  for  any interference under Article 136 of the Constitution of India. It was  also submitted that R. Rajagopala Reddy’s case holds good and has not been doubted in Nand Kishore Mehras case.      So far  as the  first  submission  of  the  appellant’s counsel is  concerned, we  are of  the view  that it is true that the  respondent-defendats who  have raised a defence of benami in  their written  statement have  to  discharge  the initial burden  of proof  and establish  the plea of benami. Parties adduced  oral and  documentary evidence.   The lower appellate Court  had considered the evidence adduced by both sides and  arrived at  a conclusion  that the defendants had discharged the  said burden.   When  both sides  had adduced evidence,  the  question  of  burden  of  proof  pales  into insignificance.   The High  Court was therefore right in not interfering with the said finding.  The said finding of fact cannot be convassed in this Civil Appeal by the plaintiff or her legal representative.      In order  to appreciate  the second submission, we have to start  here with  Rajagopala Reddy’s  case [1995  (2) SCC 630] and  find out what it actually decided in regard to the Benami Transactions  (prohibition)  Act,  1988  (hereinafter

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called the  ’Act’).  Sections 3,5 and B of the Act came into force at  once i.e.  w.e.f.  5.9.1988  while  the  remaining provisions  were   deemed  to  have  come  into  force  from 19.5.1988.   The principles  decided  in  that  case,  while overruling Mithilesh Kumari Vs. Prem, Behari Khare [1989 (2) SCC 95], can be summarised as follows:      (1)  "Firstly  while  section  4(1)      prohibited a  plea of  benami to be      raised in  a suit,  claim or action      and again  section 4(2) precluded a      defence of these two provisions did      not come  in the  way of a decision      on such pleas in matters pending as      on 19.5.1988  if  such  pleas  were      already raised  before 19.5.1988 by      one  party  or  other.    This  was      because  such   pleas  which   were      already  raised   before  19.5.1989      were not intended to be affected by      the act,  if they  were  raised  in      suits, claims or actions pending as      on 19.5.1988.  The repeal provision      in Section  7 repealed S. 82 of the      Trust Act  only in  that manner and      to that extent.      (2)   Secondly   on   the   express      language of Section 4(1), any right      inhering  in   the  real  owner  in      respect of any property held benami      would  be   not  enforceable   once      Section 4(1) operated, even if such      transaction had  been entered  into      prior  to  19.5.1988  and  no  suit      could be filed on the basis of such      a plea  after 19.5.1988.   The same      prohibition  applied   in  case  of      Section 4(2)  to  a  defence  taken      after 19.5.1988  pleading benami in      respect of  a transaction  prior to      19.5.99. The  Act could  be said to      be  retrospective   only  to   that      extent.   But from  this it did not      follow that  where such  a plea was      already taken  before 19.5.1988  to      the effect  that the  property  was      held benami,  such a pleas got shut      out merely  because the  proceeding      in which  such the  plea was raised      before  19.5.1988  was  pending  on      19.5.1988.      (3) Thirdly,  where a suit had been      filed before  19.5.1988, and in any      written statement filed on or after      19.5.1988, a  plea  of  benami  was      raised, then  such a plea of benami      could not  also be  gone into.   If      however such  a plea  in  deference      had been  raised before  19.5.1988,      the  act   did  not  preclude  that      question   to    be   decided    in      proceedings which  were pending  on      19.5.1988.   Mithlesh Kumari’s case      was wrong  in holding  that such  a      deference  could   not  be  decided      after  19.5.1988  even  though  the

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    plea was raised before 19.5.1988.      (4)   Fourthly,    if    such    an      interpretation as  stated in  (1 to      (3) was  given,  it  could  not  be      validly contended  that a  question      of  invalid   discrimination  arose      between  cases   where  suits  were      filed on  or before  19.5.1988  and      those filed after 19.5.1988.      (5) Fifthly,  even though  the word      ’suit’  might   include  appeal  or      further appeals, Section 4(1) and 4      (2) could not be made applicable to      these subsequent stages.      (6) Sikthly  pleas by plaintiffs or      applicants   and   defences   after      19.5.1988 of  real  owners  against      benamidars   were    barred   under      section 4(1) and section 4(2), only      to the extent indicated above.      This is  substance is what was decided in R. Rajagopala Reddy’s case.      We shall  now take  up Nand  Kishore Mehra’s case [1995 (4) SCC  572].   As we  shall presently  show, that case was concerned with  a different  factual situation and different legal principles.   We have sent for the record in that case and find  that there  the suit  was filed on 24.1.1991 (i.e. after 19.5.1988) by the appellant pleading that he purchased the property  on 24.4.1964  in trust  for himself but in the name of  hi wife.  (the defendant).   The wife relied on the Act and  filed an  I.A. for  rejection of  the plaint  under Order 7  Rule 11  C.P.C. The  Delhi High  Court (on Original Side)  in   its  order   dated  18.11.1993   dismissed   the application under  Order 7  Rule 11  filed by  the wife  for rejection of the plaint.  On appeal by the defendant - wife, a Division  Bench  of  the  High  Court  by  judgment  dated 21.4.1994 allowed the (wife’s) appeal and directed rejection of the  plaint as  the Division Bench felt that Section 3(1) of the  Act applied.   On  further appeal  by the  plaintiff husband, this  Court allowed  the appeal and the application under Order  7 Rule  11 filed  by  the  defendant  wife  was dismissed and  the suit  was directed  to be  disposed of on merits, taking  into account the statutory presumption under Section 3(2)  and holding  that Section  3(1) did  not apply because the  case fell  under  the  exception  contained  in Section 3(2).      The Court  referred to R. Rajagopala Reddy’s case [1995 (2) SCC 630].  The plaint being subsequent to 17.5.1988, the principle that  the act  was not  retrospective as stated in R.Rajagopala  Reddy’s   case  was  no  doubt  initially  not attracted to  that case.   That would mean that Section 4(1) applied unless  of course the case fell within the exception stated either in Section 3(2) or in Section 4(3) of the act. In that  case, this  Court permitted the plea of benami in a post 19.5.88  suit because  the Court was concerned with the exception in  Section 3(2).   The  Court  also  incidentally referred to the other exceptions falling under Section 4(3). This Court  in that  case noticed  that the  purchase was on 24.4.1964 and  was in  the name  of the  wife.  That was why this Court  proceeded to  refer to  the exception in Section 3(2) which  concerns benami  purchases in the name of a wife or unmarried  daughters.   This Court  also referred  to the presumption contained  under the  same exception  in section 3(2) to  the effect  that unless the contrary was proved, in the cases  of purchases  in the  name of  wife or  unmarried

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daughters, it  shall be  presumed that the property had been purchased for  the benefit  of the  wife  or  the  unmarried daughters.   In view  of the  exception in Section 3(2), the prohibition under  Section 3(1)  was held  not to apply.  It was held  that -  even though  the plaint  was  filed  after 19.5.1988 such a plea of benami was not shut out. This Court directed that the suit to be disposed of  course by applying the statutory presumption contained in Section 3(2) which is to be  mandatorily drawn  but  which  is  rebuttable.    The plaintiff in  a suit filed after 19.5.1988 could still prove that the  property had  not bee  purchased by  him  for  the benefit of  his wife and he could rebut the presumption, and claim that he was the real owner.      Therefore, to  the six  principles hereinbefore  culled out from  R.Rajagopala Reddy’s  case, the  following further principles decided  in Nand  Kishore  Mehra’s  case  can  be added:      "(7) Seventhly, if in a suit, claim      or action  a plea  or defence based      on  benami  is  raised  even  after      19.5.1988 and  the purchase  is  in      the name  of a  wife  or  unmarried      daughter, such  a plea of benami is      permissible    and     R.Rajagopala      Reddy’s case  will not  come in the      way  merely  because  the  plea  is      raised after  19.5.88.  Such a plea      if raised,  will however have to be      decided  taking  into  account  the      statutory presumption  laid down in      section 3(2).   This is because the      act says that if the purchase is in      the name  of the  wife or unmarried      daughter,   the    prohibition   in      section  3(1)   will   not   apply.      Section  3(2)   is  enacted  as  an      exception to  the provisions in the      act and  does not  depend  for  its      interpretation on  the question  as      to what  extent  section  4(1)  and      4(2) are retrospective.      (8) Eighthly,  if  the  case  falls      within  the  exception  in  section      4(3)(a) i.e.  where the  person  in      whose name  the property is held is      a coparcener  in a  Hindu Undivided      Family and the property is held for      the benefit  of the  coparceners in      the family,  or where  as stated in      section 4(3)(b) the person in whose      name the  property  is  held  is  a      trustee or other person standing in      a  fiduciary   capacity   and   the      property is held for the benefit of      another person  for whom  he  is  a      trustee or  towards whom  he stanos      in  such  capacity,  then  in  both      situations  if   such  a   plea  or      defence is  raised in  a suit filed      after  19.5.88,  the  same  can  be      decided      by      the      Court      notwithstanding  sections  4(1)  or      4(2) and  notwithstanding  what  is      decided  in   R.Rajagopala  Reddy’s      case."

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    For the  above reasons,  we are unable to find how Nand Kishore  Mehra’s   case  can   be  said   to  have   doubted R.Rajagopala Reddy’s case.  In fact far from doubting it, it proceeds to  accept the said judgment and then considers the case of  exceptions provided  in Section  3(2).    It  holds incidentally that  there is  another exception  contained in Section 4(3)  of the  act.   These exceptions  apply even to suits filed  after 19.5.1988 and are not affected by what is decided in R.Rajagopala Reddy’s case      In order to complete discussion, we shall also refer to two subsequent  cases.  The case in Heirs of Vrajlal Ganatra Vs. Heirs  of Parshottam  S. Shah  1996 (4)  SCC 490 was one where the suit was filed in 1981 claiming that the defendant in whose  name the  deed dated  16.12.1963 stood was benami. The plaintiff’s  heirs filed appeal in Gujarat High Court in 1990 against the judgment of the trial Court.  No contention based on  the Act of 1988 was raised in the High Court.  For the first  time it  was argued  in this High Court.  For the first time  it was  argued in  this Court  that the plea was prohibited by  the Act.   This  Court, followed R.Rajagopala Reddy’s case  and held  that the  plea was  raised in a suit filed before  19.5.1988,   and it  was not  barred under the act.   This Court  then proceeded  to  decide  the  case  on merits, dismissing the plaintiff’s appeal.      Sankana Hali & Sankana Institute Vs. Kishori Lal Goenka [1996 (7)  SCC 55]  decided on 6.12.1994 is by a three judge Bench.   It was decided before R.Rajagopala Reddy’s case but is reported  later.   In a  way it  took the same view as in R.Rajagopala Reddy’s case.  It noticed that Section 3, 3 and 8 of  the Act  came into  force at one i.e. 5.9.1988 and the remaining provisions came into force from 19.5.1988 and that the objection  that the  deed of  release dated 24.2.1964 by the benamidar  in favour  of the firm was invalid because of the  Act,   could  not  be  permitted  to  be  raised  after 19,5,1988.   In that  case,  the  rent  control  proceedings started around  1970 and  the plea  of benami was raised and was also  proved by  the firm, the real owner, by relying on the release deed dated 24.12.64 executed by the benamidar in favour of the firm.  The objection that the deed was invalid because of  the provisions  of  the  Act  was  raised  after 19.5.88, relying  upon Mithilesh Kumari’s case [1989 (2) SCC 95] which held the Act was retrospective.  That judgment has since been  reversed in  R.Rajagopala Reddy’s  case.  It  is clear that  the conclusion arrived at in Sankana Hali’s case can now  be easily  justified by  R. Rajagopala Reddy’s case overruling Mithilesh  Kumari’s case  and on the basis of the principles laid down in the said case.      For the  aforesaid reasons we hold that the decision in R. Rajagopala  Reddy is not in any manner snaken by anything said in  Nand Kishore  Mehra’s case and that both cases deal with different  aspects of  the Act as stated above and each of the cases continues to govern different provisions of the act.      Civil Appeal and Special Leave Petition are dismissed