2023 (7) TMI 600 - SC - Benami Property

Use of joint nucleus funds for the purchase of the suit property - Whether the Lower Appellate Court is correct in law in relying upon Patta Ex.B4 for concluding that the property belonged to Rangaraj totally overlooking the fact that patta is not a document of title? - HELD THAT - The impugned judgment, however, does not deal with and answer the substantial questions of law, but relies upon Section 4 of the Benami Transactions (Prohibition) Act, 1988 a plea and contention which was never raised by the respondents, to dismiss the appeal. Our attention is drawn to the exceptions carved out to Section 4 of the 1988 Act. According to the appellants, the exceptions are applicable in the present case. As per the appellants, applicability or bar under the 1988 Act would be a mixed question of law and facts. Looking at the nature of controversy, including the contentions raised, and the impugned judgment, we are of the opinion that the same cannot be sustained being devoid of in-depth examination and considerations of the issues involved, including whether or not bar of Section 4 of the 1988 Act would be attracted. We, accordingly, pass an order of remit restoring the second appeal for fresh consideration by the High Court. The impugned judgment is set aside and the appeal is allowed with an order of remand to the High Court to decide the second appeal afresh, and expeditiously in accordance with law.

Summary

Issues:
- Interpretation of substantial questions of law in a second appeal
- Application of Section 4 of the Benami Transactions (Prohibition) Act, 1988
- Remand of the case for fresh consideration by the High Court

Analysis:
The Supreme Court examined an impugned judgment in a second appeal that raised two substantial questions of law. The first issue was whether the Lower Appellate Court erred in reversing a judgment based on concrete evidence of joint nucleus funds used for purchasing the property. The second issue questioned the Lower Appellate Court's reliance on a patta document as conclusive evidence of ownership, disregarding the fact that a patta is not a title document. However, the impugned judgment did not address these questions but instead relied on Section 4 of the Benami Transactions (Prohibition) Act, 1988, which was not raised by the respondents, leading to the dismissal of the appeal.

The appellants argued that exceptions to Section 4 of the 1988 Act were applicable in their case and that the Act's applicability involved a mixed question of law and facts. The Supreme Court, after considering the nature of the controversy and the lack of detailed examination in the impugned judgment, concluded that it could not be sustained. Therefore, the Court ordered a remand, directing the High Court to reconsider the second appeal thoroughly, especially regarding the potential application of Section 4 of the 1988 Act.

Consequently, the Supreme Court set aside the impugned judgment, allowing the appeal with an order of remand to the High Court for a fresh decision on the second appeal. The Court clarified that its observations and the remand order should not be construed as findings on the case's merits for either party. All questions and issues were left open for further consideration by the High Court. The parties were instructed to appear before the High Court on a specified date for further proceedings, and the appeal was allowed under the mentioned terms, with any pending applications being disposed of accordingly.