2020 (9) TMI 755 - HC - Benami Property

Transaction under the Benami Transactions (Prohibition) Act - plaint schedule land and building were attempted to be taken forcible physical possession by the CPI Indian Communist Party on the allegation that they are the owners of the same - land and the building described in the plaint schedule, were purchased and constructed by their members, though it was registered in the name of the CPI - HELD THAT - Ext.A2 cash book shows various amounts stated to have been collected by certain individuals in the year 1993-1994; however, this book contains a docket showing the name of the appellant Union, which limpidly can only mean that they took possession of the same after they were formed in the year 2004. The persons mentioned in the said cash book have not been identified nor is there anything to show that they are members of the appellant Union. No different is the case of the receipt books, namely Exts.A4 to A25, wherein again various persons and institutions have shown to be the subscribers and contributors to the construction, but without any evidence being led by the appellant Union that they are their members or in any manner connected with them. Therefore, a case under the Benami Prohibition Act can never be maintained by the appellant on the afore factual foundations because, if they have to do so, they would have to first establish expressly that they had contributed the entire consideration and that the purchase of the land and the construction of the building were intended for their use immediately or in future. As already seen above, when the land was purchased or when the building was constructed, the appellant Union had not come into being and it can, therefore, never be taken that they had made any contribution, either for the purchase or construction, which is ineluctable because they themselves admit that it is allegedly their members who had made the contribution but not them. However, this would not be of any avail to them, because neither is their membership register brought on record nor is there anything to establish, even in a whispering note, that the persons shown in Ext.A2 cash book or Exts.A4 to A25 receipt books are their members or in any manner even remotely connected with them. Members of the Union have not been made parties, either as appellants or as respondents, and in their absence on the party array, the allegations made in the plaint can certainly never be proved. CPI seeking recovery of possession of the plaint schedule land and building based on title - Appellant Union does not assert any rights over the property as a trespasser or as an interloper, but solely as the title holder, invoking the provisions of the Benami Prohibition Act. They do not even say that they have a licence to remain in the property or that there is any other interest created in their favour by the CPI. Obviously, therefore, the plea of the CPI to seek recovery of the property becomes manifestly justified.

Summary

Issues Involved:
1. Ownership of the plaint schedule property.
2. Application of the Benami Transactions (Prohibition) Act, 1988.
3. Validity of the Trial Court's judgment.
4. Entitlement to recovery of possession and damages.

Detailed Analysis:

1. Ownership of the Plaints Schedule Property:
The primary issue revolves around the ownership of the plaint schedule property and the building thereon. The appellant (Union) claimed that the property was purchased and constructed by their members, although it was registered in the name of the CPI. They sought a decree of declaration that the property belongs exclusively to them and their members, asserting that the CPI holds the title in a fiduciary capacity. Conversely, the CPI claimed ownership based on the title documents and sought recovery of possession and damages for illegal use and occupation.

2. Application of the Benami Transactions (Prohibition) Act, 1988:
The appellant contended that the transaction falls under the Benami Transactions (Prohibition) Act, 1988, as the property was allegedly purchased with their members' contributions but registered in the CPI's name. They argued that the property should be considered a benami transaction, with the CPI holding it for the benefit of the appellant's members. The CPI countered that the land and building were purchased and constructed by their affiliated Trade Union members, and thus the Benami Act does not apply.

3. Validity of the Trial Court's Judgment:
The Trial Court dismissed O.S.No.668 of 2005 filed by the Union and allowed O.S.No.771 of 2006 filed by the CPI, granting them a decree for recovery of possession. The appellant challenged this judgment, asserting that substantial evidence was provided to support their claim. However, the High Court found that the appellant Union, which came into existence in 2004, could not establish ownership or contributions made by its members for the purchase and construction of the property. It was noted that the Union's claims were based on hearsay and lacked concrete evidence, such as membership records or explicit agreements from contributors.

4. Entitlement to Recovery of Possession and Damages:
The CPI sought recovery of possession and damages, asserting that the property was legally theirs based on title documents. The High Court upheld the CPI's claim, noting that the appellant Union admitted the title was in the CPI's name and failed to prove their case under the Benami Act. The CPI's plea for recovery was justified as the appellant Union could not establish any legal right to remain in possession of the property.

Conclusion:
The High Court dismissed both appeals, confirming the Trial Court's judgment. It was concluded that the appellant Union could not substantiate their claims of ownership or contributions towards the property. The CPI's title and right to recovery were upheld, and the appellant's plea under the Benami Act was found untenable. The Court directed the parties to bear their respective costs.