2005 (8) TMI 688 - SC - Indian Laws

Benami transaction - Prohibition of the right to recover property held benami - Scope of Section 4(1) of the Benami Transaction Act 1988 - Litigation between a father and his married daughter on the right of ownership of a house - Whether the appellant was entitled to raise the plea of benami in view of introduction of the Benami Transaction (Prohibition) Act 1988 ( Act ) - Act was retrospective in operation Or Not ? - HELD THAT - 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 herein earlier 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 respondent 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 ( Act ). 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. 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. 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 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. 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 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. Thus 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.

Issues Involved:
1. Ownership of the suit property.
2. Entitlement to possession of the suit property.
3. Claim for damages.
4. Nature of the transaction (benami or not).
5. Applicability of the Benami Transaction (Prohibition) Act, 1988.

Detailed Analysis:

1. Ownership of the Suit Property:
The primary issue was whether the respondent (daughter) was the rightful owner of the suit property. The property was purchased by the appellant (father) in the name of the respondent when she was a minor. The appellant claimed that the property was bought with his funds and was intended to be held benami in the respondent's name. Both the trial court and the appellate court found that the appellant had paid for the property, retained the original title deeds, mortgaged the property for improvements, paid taxes, and collected rents, indicating that the transaction was benami. The High Court, however, reversed these findings, concluding that the property was intended for the benefit of the respondent based on the appellant's execution of a Will bequeathing the property to his children.

2. Entitlement to Possession of the Suit Property:
The respondent sought possession of the suit property, arguing that it was purchased for her benefit and as security for her marriage. The trial and appellate courts dismissed her claim, finding that the appellant was the real owner and she was merely a benamidar. The High Court, however, decreed in favor of the respondent, which was later overturned by the Supreme Court, reaffirming the trial and appellate courts' findings.

3. Claim for Damages:
The respondent also claimed damages for the appellant and tenants' refusal to vacate the property and pay rent. This claim was dismissed by the trial and appellate courts, which was not specifically addressed in the Supreme Court's judgment but impliedly dismissed along with the suit.

4. Nature of the Transaction (Benami or Not):
The trial and appellate courts concluded that the transaction was benami, based on several factors:
- The appellant paid the purchase money.
- The original title deeds were with the appellant.
- The appellant mortgaged the property for raising loans.
- The appellant paid taxes and collected rents.
- The property was purchased in the respondent's name due to her auspicious birth nakshatra, with the belief that it would bring prosperity to the appellant.
The High Court's contrary finding was deemed erroneous by the Supreme Court, which reinstated the lower courts' conclusion that the transaction was benami.

5. Applicability of the Benami Transaction (Prohibition) Act, 1988:
The Supreme Court considered whether the appellant could raise the plea of benami in light of the Benami Transaction (Prohibition) Act, 1988. The Act prohibits benami transactions and bars claims or defenses based on such transactions. However, the Supreme Court, referencing previous judgments, held that the Act is prospective and does not apply retrospectively to transactions and suits initiated before the Act came into force. Since the transaction and the suit predated the Act, the appellant was entitled to raise the benami defense.

Conclusion:
The Supreme Court allowed the appeal, setting aside the High Court's judgment and affirming the trial and appellate courts' decisions. The suit filed by the respondent was dismissed, concluding that the appellant was the real owner of the suit property and that the respondent was merely a benamidar. The Supreme Court emphasized that the High Court had erred in interfering with the concurrent findings of fact without sufficient justification. The judgment reaffirmed that the Benami Transaction (Prohibition) Act, 1988, does not have retrospective application in this case.

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