1992 (1) TMI 359 - SC - Benami Property

Summary

Issues:
- Dispute over ownership of land purchased through sale deeds.
- Applicability of Benami Transactions (Prohibition) Act, 1988.
- Interpretation of Section 4 of the Benami Act.
- Effect of legislative changes on pending appeals.

Analysis:
1. The plaintiff filed a suit claiming sole ownership of land purchased through sale deeds, alleging the defendants were benamidars. The trial court dismissed the suit, but the first appellate court decreed it in favor of the plaintiff. The High Court upheld the decree, leading the defendants to file a special leave petition before the Supreme Court challenging the judgment.

2. During the pendency of the special leave petition, the Benami Transactions (Prohibition) Act, 1988 came into force. The defendants sought to raise additional grounds based on this Act. The Supreme Court deemed the application to raise additional grounds allowed and permitted the defendants to argue based on the Benami Act.

3. The defendants contended that the suit was not maintainable under Section 49 of the U.P. Consolidation of Holdings Act, as the plaintiff did not raise the benami issue during consolidation proceedings. The Supreme Court held that the defendants could not raise this objection as it was not part of the pleadings.

4. The crucial issue was the interpretation of the Benami Act. The Court referred to a previous case and noted that the Act's provisions were prospective, applying to future suits. The Act prohibited suits or claims related to benami properties, and the Court held that the plaintiff could not obtain a decree under the Act.

5. The Court rejected the plaintiff's argument that the Act's provisions were not applicable as no appeal was pending when the Act came into force. The Court clarified that the special leave petition was a continuation of the appeal process, and since the defendants had challenged the High Court's judgment, the Act applied, leading to the dismissal of the suit.

6. Consequently, the Supreme Court allowed the appeal, set aside the High Court's judgment, and dismissed the suit due to the legislative changes during the appeal. No costs were awarded due to the circumstances of the case.