2019 (5) TMI 1086 - SC - Indian Laws

Benami transaction or not - claim of share in the properties - family dispute - inheritance - purchase of property in the name of wife by the deceased husband - the case on behalf of the plaintiffs that the suit properties were purchased in the name of defendant no.1 out of the funds raised on selling the ancestral properties - whether the transactions/Sale Deeds in favour of defendant no.1 can be said to be benami transactions or not? HELD THAT - the payment of part sale consideration cannot be the sole criteria to hold the sale/transaction as benami. While considering a particular transaction as benami, the intention of the person who contributed the purchase money is determinative of the nature of transaction. The intention of the person, who contributed the purchase money, has to be decided on the basis of the surrounding circumstances; the relationship of the parties; the motives governing their action in bringing about the transaction and their subsequent conduct etc. In the case of JAYDAYAL PODDAR (DECEASED) THROUGH HIS L. RS AND ANOTHER VERSUS MST. BIBI HAZRA AND ORS. 1973 (10) TMI 55 - SUPREME COURT it is specifically observed and held by this Court that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be sold. It is further observed that this burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of the benami transaction or establish circumstances unerringly and reasonably raising an interference of that fact. It is required to be noted that the benami transaction came to be amended in the year 2016. As per Section 3 of the Benami Transaction (Prohibition) Act 1988, there was a presumption that the transaction made in the name of the wife and children is for their benefit. By Benami Amendment Act, 2016, Section 3 (2) of the Benami Transaction Act, 1988 the statutory presumption, which was rebuttable, has been omitted. It is the case on behalf of the respondents that therefore in view of omission of Section 3(2) of the Benami Transaction Act, the plea of statutory transaction that the purchase made in the name of wife or children is for their benefit would not be available in the present case. Once it is held that the Sale Deeds in favour of defendant no.1 were not benami transactions, in that case, suit properties, except property nos. 1 and 3, which were purchased in her name and the same can be said to be her selfacquired properties and therefore cannot be said to be Joint Family Properties, the plaintiffs cannot be said to have any share in the suit properties (except property nos. 1 and 3). At this stage, it is required to be noted that the learned Counsel appearing on behalf of defendant no.1 has specifically stated and admitted that the suit property Item nos. 1 and 3 can be said to be the ancestral properties and according to him even before the High Court also it was the case on behalf of the defendant no.1 that item nos. 1 and 3 of the suit properties are ancestral properties. Appeal allowed in part.

Summary

Issues Involved:

1. Whether the suit schedule properties are ancestral properties of Narayanasamy Mudaliar.
2. Whether the first defendant managed the suit schedule properties as the Manager of the Family.
3. Whether the suit schedule properties are jointly enjoyed by all the family members as Joint Family Property.
4. Whether the plaintiffs are entitled to claim partition in view of the Release Deed dated 24.04.1990 executed by Nagabooshanam Ammal.
5. Whether the first defendant executed a Will on 11.2.87 in favor of plaintiffs and revoked it on 11.6.90.
6. Whether the plaintiffs are in joint possession of the suit schedule properties.
7. Whether the plaintiffs are entitled to get 3/4th share over the suit schedule properties.
8. Whether the present suit is valued properly.
9. To what relief the plaintiffs are entitled.

Issue-wise Analysis:

1. Ancestral Properties:
The plaintiffs claimed that the suit properties were ancestral properties purchased by Narayanasamy Mudaliar in the name of his wife (defendant no.1) using funds from selling ancestral properties. The defendants argued that the properties were self-acquired by defendant no.1 using her stridhana and gold jewelry. The Trial Court and High Court held that the properties were ancestral, but the Supreme Court found that the plaintiffs failed to prove this claim and that the properties were purchased before the sale of ancestral properties.

2. Management of Properties:
The first defendant denied managing the suit properties as the family manager. The Supreme Court did not find sufficient evidence to establish that the first defendant acted as the manager of the joint family.

3. Joint Family Property:
The plaintiffs asserted that the properties were jointly enjoyed by all family members as Joint Family Property. The defendants contended that the properties were self-acquired by the first defendant. The Supreme Court concluded that the properties, except items 1 and 3, were self-acquired by the first defendant and not joint family properties.

4. Release Deed:
The plaintiffs argued that they were entitled to claim partition despite the Release Deed executed by Nagabooshanam Ammal. The Supreme Court found that the Release Deed was executed to avoid future litigation and did not imply that the properties were joint family properties.

5. Will Execution and Revocation:
The first defendant executed a Will in favor of the plaintiffs but later revoked it. The Supreme Court noted that the Will and its revocation indicated that the first defendant treated the properties as her self-acquired assets.

6. Joint Possession:
The plaintiffs claimed joint possession of the suit properties, which was disputed by the defendants. The Supreme Court found no sufficient evidence to support the plaintiffs' claim of joint possession.

7. Entitlement to 3/4th Share:
The Trial Court and High Court awarded the plaintiffs a 3/4th share in the suit properties. The Supreme Court, however, held that the plaintiffs were not entitled to any share in the properties except items 1 and 3, which were acknowledged as ancestral properties.

8. Suit Valuation:
The issue of whether the suit was valued properly was not a significant point of contention in the Supreme Court's analysis.

9. Relief to Plaintiffs:
The Supreme Court modified the relief granted by the lower courts, holding that the plaintiffs were not entitled to any share in the suit properties except for items 1 and 3. The preliminary decree was modified accordingly.

Conclusion:
The Supreme Court partly allowed the appeal, quashing the lower courts' judgments that awarded the plaintiffs a 3/4th share in the suit properties. It held that, except for items 1 and 3, the suit properties were self-acquired by the first defendant and not subject to partition. The plaintiffs were entitled only to a share in items 1 and 3.