2020 (9) TMI 753 - HC - Benami Property

Benami Transaction - suit filed by the plaintiff seeking declaration of title on the basis that the suit property - decree for declaration of title - HELD THAT - Section 4 of the Act provides for prohibition of the right to recover property held benami. Section 4 (1) of the Act provides that no suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property. The Supreme Court, in the matter of Om Prakash v. Jai Prakash 1992 (1) TMI 359 - SUPREME COURT has held that by virtue of Section 4 of the Act, there is a total prohibition against any suit based on benami transaction and the plaintiff/respondent is not entitled to get any decree in such a suit or in appeal. Suit filed by the plaintiff seeking declaration of title on the basis that the suit property was purchased by his father on 08/05/1981 in the name of defendant No. 1 by making payment of the consideration amount to the seller Ameena Bai is totally barred by Section 4(1) of the Act of 1988. In view of that, find no illegality or perversity in the finding recorded by both the Courts below that plaintiff has failed to prove that his father purchased the suit property on 08/05/1981 in the name of defendant No. 1 and therefore, he is not entitled for decree for declaration of title.

Summary

Issues involved:
- Formulation of substantial question of law in a second appeal under Section 100 of the CPC
- Dismissal of the suit for declaration of title
- Interpretation and application of the Benami Transaction (Prohibition) Act, 1988

Analysis:
1. The judgment pertains to a second appeal filed by the appellant/plaintiff under Section 100 of the CPC against the impugned judgment and decree passed by the first appellate Court, which affirmed the trial Court's decision to dismiss the suit for declaration of title. The appellant argued that both lower Courts erred in dismissing the suit, claiming that the plaintiff's father had purchased the property in the name of defendant No. 1. The appellant contended that the sale deed contained recitals showing the payment of consideration by the plaintiff's father, contradicting the lower Courts' findings.

2. The plaintiff's case revolved around the assertion that the suit property was purchased by his father and later came into his possession. However, both the trial Court and the first appellate Court found that the plaintiff failed to prove the purchase of the property in the name of defendant No. 1. The lower Courts' decisions were based on the lack of evidence supporting the plaintiff's claim regarding the transaction.

3. The crucial aspect of this judgment lies in the interpretation and application of the Benami Transaction (Prohibition) Act, 1988. Section 4 of the Act prohibits the right to recover property held benami. The Act explicitly states that no suit or claim can be made to enforce any right in respect of property held benami against the person in whose name the property is held. Citing the Supreme Court's decision in Om Prakash v. Jai Prakash, the Court emphasized the total prohibition against suits based on benami transactions.

4. Ultimately, the Court concluded that the suit filed by the plaintiff seeking a declaration of title was barred by Section 4(1) of the Benami Transaction (Prohibition) Act, 1988. As a result, the plaintiff's failure to prove the purchase of the property in the name of defendant No. 1 led to the dismissal of the suit. The judgment highlighted the legal implications of benami transactions and upheld the lower Courts' decisions, dismissing the second appeal without notice to the other side.