1991 (7) TMI 19 - HC - Benami Property

Summary

Issues Involved:
1. Whether the plaintiff is entitled to any share in the suit schedule property and, if so, entitled to what share?
2. What is the impact of the provisions of section 4 of the Benami Transactions (Prohibition) Act, 1988, with reference to the suit claim and the defence taken in that behalf?
3. What order?

Issue-wise Detailed Analysis:

1. Entitlement to Share in the Suit Schedule Property:
The plaintiff filed a suit seeking a partition of the property and claimed that she had purchased it with her own money, intending to leave half to the defendant, her son, after her death. The defendant contended that he was the absolute owner, having purchased the property with his own earnings, and that the plaintiff's name was included in the sale deed merely to satisfy her ego.

The lower court found that the plaintiff did not prove the property was purchased with her money, noting that the loan purportedly used for the purchase was repaid by the defendant. The plaintiff's evidence, including her testimony and documents like exhibits P-2 and P-3, was found to be inconsistent and unreliable. The court observed that the evidence of PW-2, who allegedly loaned the money to the plaintiff, was contradictory and not credible.

Upon reappraisal, the appellate court concurred with the lower court's findings. It held that the loan was indeed given to and repaid by the defendant, thus the plaintiff did not have a financial interest in the property.

2. Impact of Section 4 of the Benami Transactions (Prohibition) Act, 1988:
The appellate court examined whether the transaction was benami, meaning a property purchased in one person's name with funds provided by another. The court referred to the Supreme Court's definition of benami transactions, emphasizing the intention behind the purchase and the source of funds.

The court found that the entire consideration for the property came from the defendant, making the transaction benami to the extent of the plaintiff's name being included in the sale deed. Section 4(2) of the Act prohibits any defence based on a right in respect of property held benami, thus the defendant could not claim the plaintiff had no share in the property.

The court rejected the argument that Section 4(3)(b) of the Act applied, as the plaintiff did not hold the property in a fiduciary capacity for the defendant.

3. Order:
Given the findings, the court held that both the plaintiff and the defendant each had a half share in the property. With the defendant's death during the appeal, his half share devolved equally to his legal heirs, the plaintiff and the respondent, Smt. Thangam Bhashyam. Consequently, the plaintiff was entitled to a 3/4th share and the respondent to a 1/4th share of the property.

The court set aside the lower court's judgment and decree, ordering the property to be divided by metes and bounds accordingly. A preliminary decree was to be drawn up, and each party was directed to bear their own costs.

Conclusion:
The appeal was allowed, the lower court's judgment and decree were set aside, and the plaintiff was declared entitled to 3/4ths share in the suit property, with the defendant's legal heir entitled to 1/4th share.