1996 (4) TMI 116 - SC - Benami Property

Whether a particular sale is benami or not? Held that - The presumption is that possession would follow title. That presumption is stronger in this case as we noted that the property remained as a bare land. No particular act of possession could normally be pointed to establish possession. Non-consideration of the question of possession in such a situation is inconsequential though we are in agreement with the finding that the plaintiff had failed to establish his possession on the land. Appeal dismissed.

Summary

Issues:
- Declaration of title to property
- Injunction for possession
- Suit barred by limitation
- Benami transaction
- Burden of proof
- Presumption of benami transaction
- Evidence of intention
- Possession of land

Declaration of Title to Property:
The plaintiff filed a suit in 1981 seeking a declaration of title to a property covered by a sale deed from 1963. The trial court and the High Court held that the plaintiff failed to prove his title to the property, with the High Court additionally ruling that the suit was barred by limitation. The plaintiff's case was based on a pattern where he borrowed money from the defendant, took sale deeds in the defendant's name as security, and expected the property to be reconveyed upon loan repayment.

Benami Transaction and Burden of Proof:
The High Court determined that the sale deed in question intended to make the defendant the owner of the property, even though the plaintiff believed the property should be reconveyed upon repayment of the loan. The court discussed the Benami Transactions (Prohibition) Act, stating that whether a sale is benami depends on the intention of the person who paid the purchase money. The burden of proof lies with the party asserting a benami transaction, and if the purchase money came from someone other than the recorded owner, a presumption may arise that the purchase was for the benefit of the payer.

Evidence of Intention and Possession of Land:
The plaintiff attempted to establish a benami transaction through various circumstances, including a prior sale deed executed by the defendant as a benamidar. However, the court found that the absence of safeguards in the disputed sale deed indicated a different intention. The plaintiff's letter to the defendant acknowledging the sale and settlement of accounts further weakened his claim. The High Court's non-consideration of possession was deemed inconsequential, as the plaintiff failed to prove possession, which is presumed to follow title.

Conclusion:
The Supreme Court dismissed the appeal, upholding the lower courts' decisions. The plaintiff failed to prove his title to the property, and the suit was deemed barred by limitation. The court found insufficient evidence to establish a benami transaction, emphasizing the importance of intention and burden of proof in such cases. The plaintiff's lack of possession further weakened his claim, leading to the dismissal of the appeal without costs.