1999 (4) TMI 647 - SC - Benami Property

Summary

Issues Involved:
1. Whether the respondent is precluded from raising the issue regarding the benami nature of Ext.P.11-sale deed due to the bar of res judicata.
2. Whether Ext.P.11-sale deed is a benami transaction under Section 3 of the Benami Transaction (Prohibition) Act, 1988.
3. Whether the appellant bona fide requires the building for his own business purpose under Section 12(1)(f) of the M.P. Accommodation Act, 1961.

Issue-wise Detailed Analysis:

1. 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. However, the Supreme Court disagreed, stating that the rule of res judicata prohibits the court from trying an issue which "has been directly and substantially in issue in a former suit between the same parties," and has been heard and finally decided by that court. The court found that the dismissal of the first suit was due to the respondent depositing the arrears of rent during the pendency of the suit, and not on account of any defect in the appellant's claim. Therefore, the finding that the appellant was the real owner of the building as per Ext.P.11-sale deed became final, and the respondent should have filed an appeal if he disputed that finding.

2. Benami Transaction:
The trial court and the first appellate court found that Ext.P.11 was not a benami transaction, but the High Court reversed this finding, holding that the transaction was void under Section 3 of the Benami Act. The Supreme Court, however, found that the burden of proof to establish that the transaction was benami was on the respondent. The court noted that Ext.P.11-sale deed contained the recital that the sale consideration was paid by the appellant to Narain Prasad, and the respondent failed to prove otherwise. The court also clarified that the word "provided" in Section 2(a) of the Benami Act should be understood in the context of whether the consideration was paid or not. The court concluded that even if the appellant had availed himself of the help rendered by his father Pyarelal for making up the sale consideration, it would not make the sale deed a benami transaction.

3. Bona Fide Requirement for Eviction:
The trial court and the first appellate court found that the appellant bona fide required the building for his own business purpose under Section 12(1)(f) of the Act. The High Court did not address this issue as it dismissed the suit on the grounds of the benami transaction. The Supreme Court noted that there was a concurrent finding by two courts on this aspect and found no reason to remand the case to the High Court for reconsideration.

Conclusion:
The Supreme Court allowed the appeal, set aside the impugned judgment of the High Court, and restored the decree passed by the trial court as confirmed by the first appellate court. The court found that the respondent was barred by res judicata from re-agitating the issue regarding the appellant's title to the building and that Ext.P.11 was not a benami transaction. The court also upheld the finding that the appellant bona fide required the building for his own business purpose.