2021 (3) TMI 367 - HC - Benami Property

Benami Transaction entered into between spouses - plaintiff being the wife of the appellant-husband - acquasition of substantive right - payment of consideration money to effectuate the sale transaction - HELD THAT - This Court in exercise of its jurisdiction under Article-100 of the CPC 1908, should not disturb the concurrent finding decreeing the suit in favour of the plaintiff as passed by both the courts below - This submission of the learned counsel appearing for the plaintiff merits no consideration, since both the courts below have misinterpreted and misconstrued the legal issues involved in the facts and circumstances of the present case. It is well- settled that when the courts below had returned a finding which is contrary to law and arrived at a perverse finding both on points of law and facts, this Court in exercise of its powers under Section-100 of CPC would have the solemn duty to set the law in its proper perspective. Plaintiff being the wife of the appellant-husband has not acquired any substantive right, and as a de facto owner, she has not accrued any substantive right. She cannot claim any right over the suit property against the title of the de jure owner/husband/defendant. Defendant has not taken the plea of fiduciary relationship in his written statement which debars the defendant-appellant to take the advantage of Section-4(3)(b) of the old Act. In my opinion, this finding of the learned First Appellate Court suffers from misinterpretation of the provision for the reason that the question involving fiduciary relationship in the context of the present case constitutes a substantial question of law and being the same is a legal question, it is immaterial whether any plea was taken in his pleadings in the written statement. It is settled proposition of law that a statute has to be read in whole. On conjoint reading of both the old and new Act, the object and intent of the legislature is manifestly clear and unambiguous where it prohibits benami transactions and the right to such property held benami with penal provisions for such benami transactions. However, while enacting the Act, the legislatures have kept in mind the practical scenario of the society where a spouse can purchase a property in the name of another spouse and also in the name of their child and consciously have exempted those individuals who were/are the participants of such transactions and such transactions were kept outside the purview of the Act and the Act is not intended to give banami colour to the transactions entered into between spouses. The instant appeal filed by the husband-defendant/appellant must succeed and accordingly, the present second appeal stands allowed.

Issues Involved:
1. Maintainability of the suit.
2. Legal status of the plaintiff as the wife of the defendant.
3. Entitlement of the plaintiff to a decree as prayed for in her plaint.
4. Entitlement of the parties to any other reliefs.
5. Interpretation of Section-3(2)(a) and Section-4(3)(b) of the Benami Transactions (Prohibition) Act, 1988.
6. Substantive rights acquired by the plaintiff-wife from the sale deed.
7. Applicability of the Benami Transactions (Prohibition) Act, 1988, and its amendments.

Issue-wise Detailed Analysis:

1. Maintainability of the Suit:
The defendant-husband challenged the maintainability of the suit, denying the plaintiff’s claims and asserting that the suit land was purchased solely for his benefit. The trial court framed this as an issue and ultimately found the suit maintainable, leading to a decree in favor of the plaintiff.

2. Legal Status of the Plaintiff as the Wife of the Defendant:
The trial court affirmed that the plaintiff was the legally married wife of the defendant, a fact that was not heavily contested by the defendant. This status was crucial as it influenced the interpretation of the Benami Transactions (Prohibition) Act, 1988, particularly Section-3(2)(a).

3. Entitlement of the Plaintiff to a Decree:
The plaintiff sought partition of the suit land, claiming a 50% share. The trial court decreed in favor of the plaintiff, recognizing her as a co-owner of the property based on the registered sale deed. The appellate court upheld this decision, interpreting the Benami Transactions (Prohibition) Act, 1988, to support the plaintiff's claim.

4. Entitlement to Other Reliefs:
The courts below did not grant any additional reliefs beyond the partition of the suit land, focusing primarily on the plaintiff's claim for a 50% share.

5. Interpretation of Section-3(2)(a) and Section-4(3)(b) of the Benami Transactions (Prohibition) Act, 1988:
The trial and appellate courts interpreted Section-3(2)(a) to mean that a property purchased by a husband in the name of his wife is presumed to be for her benefit, unless proven otherwise. They dismissed the defendant's claim of a fiduciary relationship, which would have exempted the transaction from being considered benami under Section-4(3)(b).

6. Substantive Rights Acquired by the Plaintiff-Wife from the Sale Deed:
The trial court and the first appellate court found that the plaintiff-wife had acquired substantive rights from the sale deed, entitling her to a 50% share of the property. However, this interpretation was challenged in the second appeal.

7. Applicability of the Benami Transactions (Prohibition) Act, 1988, and its Amendments:
The second appeal raised the question of whether the courts below correctly applied the Benami Transactions (Prohibition) Act, 1988, and its amendments. The High Court noted that the new Act, effective from 01.11.2016, included exceptions for transactions between spouses, which were not adequately considered by the lower courts.

Final Judgment:
The High Court found that the lower courts had misinterpreted the provisions of the Benami Transactions (Prohibition) Act, 1988. The High Court emphasized that the plaintiff-wife did not contribute to the purchase consideration and that the property was bought by the defendant-husband for his benefit. The High Court also noted that the new Act, which came into force during the pendency of the first appeal, provided exceptions for transactions between spouses, thereby excluding such transactions from being considered benami. Consequently, the High Court set aside the judgments of the lower courts, ruling that the plaintiff-wife did not acquire any substantive rights over the property, and dismissed her suit for partition.

← Previous Next →