1989 (7) TMI 29 - HC - Benami Property

Issues Involved:
1. Extent and nature of the right, interest, and title of an ostensible owner vis-a-vis the real owner of benami property.
2. Allegations of fraud and misrepresentation in the execution of a relinquishment deed.
3. Bar of limitation under Article 59 of the Limitation Act.
4. Applicability of res judicata.
5. Legality and effect of a relinquishment deed executed by a benamidar.

Detailed Analysis:

1. Extent and Nature of the Right, Interest, and Title of an Ostensible Owner vis-a-vis the Real Owner of Benami Property:

The judgment discusses the nature of the right of a benamidar, who holds the property as an ostensible owner without any beneficial interest. The real owner, who provides the consideration, retains the beneficial interest. The court examined various precedents, including the Madras High Court's decision in Rangaswami v. Krishnan, which held that a benamidar can recognize the title of the real owner through a release deed. The court concluded that the relinquishment deed executed by Satyabhamabai in favor of Pandurang effectively transferred her ostensible title to him, making him the legal owner.

2. Allegations of Fraud and Misrepresentation in the Execution of a Relinquishment Deed:

The plaintiff, Satyabhamabai, alleged that the defendant, Pandurang, obtained her thumb impression on the relinquishment deed dated June 21, 1966, by fraud and misrepresentation. However, the trial court and the appellate court found that she failed to prove these allegations. The courts conducted a close scrutiny of the evidence and concluded that there was no fraud or misrepresentation involved in the execution of the deed. The High Court upheld these findings, stating that there was no material illegality in the lower courts' judgments.

3. Bar of Limitation under Article 59 of the Limitation Act:

The trial court held that the suit for cancellation of the relinquishment deed filed by Satyabhamabai on April 29, 1978, was barred by limitation under Article 59 of the Limitation Act. The courts found that she had knowledge of the relinquishment deed during the mutation proceedings in 1967, making her suit beyond the prescribed three-year period. The High Court agreed with this finding and dismissed the appeal on this ground as well.

4. Applicability of Res Judicata:

Kamlakar argued that the finding in the earlier suit, which identified Yeshwantrao as the real owner and Satyabhamabai as the benamidar, should operate as res judicata in the subsequent suit filed by Pandurang for possession. However, the High Court held that the issue of benami purchase was neither raised nor framed in the earlier suit. Additionally, the parties in the subsequent suit were not the same as those in the earlier suit, thus negating the applicability of res judicata under Section 11 of the Code of Civil Procedure.

5. Legality and Effect of a Relinquishment Deed Executed by a Benamidar:

The court examined the nature of the relinquishment deed executed by Satyabhamabai in favor of Pandurang. It held that the deed effectively relinquished her ostensible title and right to hold the property, merging these rights with those of the real owner, Yeshwantrao, and subsequently, Pandurang. The court referenced the Madras High Court's decision in Mariyam Bivi v. Natharsa Rowther Trust, which recognized that a benamidar's relinquishment deed constitutes a valid transfer of title. The court rejected the argument that the relinquishment deed required a formal conveyance, distinguishing the case from the Patna High Court ruling cited by the appellant.

Conclusion:

The High Court dismissed both Second Appeal No. 135 of 1989 and Second Appeal No. 136 of 1989, upholding the lower courts' judgments. The court found no material illegality or legal infirmity in the judgments and decrees, confirming Pandurang's right to recover possession of the suit house from Kamlakar. The court also held that the Benami Transactions (Prohibition) Act, 1988, did not bar Pandurang's suit as the property ceased to be benami following the execution of the relinquishment deed in 1966.

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