2020 (1) TMI 797 - SC - Benami Property

Benami Transactions or not - Dishonor of Cheque - Suit for recovery - Lending of advance to the accused - The trial court was of the opinion that the evidence clearly showed that the amount had been deposited by Plaintiff in his bank account and that this circumstance, supported Accused plea that the amount was returned immediately. - HC decreed the order of trial court. HELD THAT - The defendant/appellants arguments are two-fold one, that the document on which the High Court returned its findings was a photocopy and was therefore, inadmissible; and two, that the question whether the sale consideration was ₹ 2,30,000/- or ₹ 1,30,000/- could not have been gone into, since that argument was based on a prohibited transaction, outlawed by the Benami Act. As far as the first question goes, this court notices that the plaintiff had put the matter, during the course of cross examination, to the appellant/defendant. The latter, unsurprisingly, admitted the document, despite the fact that it was a photocopy. The plaintiff had argued that the original of that document was with the purchaser this was not denied. the argument that the plaintiff s plea regarding the real consideration being barred, has no merit. The plaintiff did not claim return of any amount from the buyer; the suit is not based on any plea involving examination of a benami transaction. Besides, the plaintiff is not asserting any claim as benami owner, nor urging a defense that any property or the amount claimed by him is a benami transaction. Therefore, the defendant appellant s argument is clearly insubstantial. In the present case, the appellants did not prove that the transaction (to which they were not parties) was benami; on the contrary, the appellant s argument was merely that the transaction could not be said to be for a consideration in excess of ₹ 1,30,000/- in the context of a defense in a suit for money decree. The defendant/appellants never said that the plaintiff or someone other than the purchaser was the real owner; nor was the interest in the property, the subject matter of the recovery suit - Therefore, in the opinion of this court, the conclusions and the findings in the impugned judgment are justified. Appeal dismissed.

Issues Involved:
1. Legitimacy of the loan of ?80,000/- from Surendra to Sanjay.
2. Admissibility and relevance of documentary evidence.
3. Alleged benami transaction and its implications under the Benami Transactions (Prohibition) Act, 1988.
4. Appreciation of evidence and findings of the trial court versus the High Court.

Issue-wise Detailed Analysis:

1. Legitimacy of the loan of ?80,000/- from Surendra to Sanjay:
The plaintiff, Surendra, claimed that he lent ?80,000/- to Sanjay, who issued three post-dated cheques as repayment. Sanjay admitted to taking the loan but contended that he returned the amount the next day, a claim supported by the trial court based on the deposit of ?80,000/- in Surendra's bank account. The High Court, however, found that Surendra had sufficient funds to lend ?80,000/- and that the deposited amount did not negate the loan claim. The High Court concluded that Sanjay did not take back the cheques or provide a receipt for the alleged repayment, thereby supporting Surendra's claim.

2. Admissibility and relevance of documentary evidence:
The High Court considered a photocopy of an agreement showing a sale consideration of ?2,30,000/- instead of ?1,30,000/-. Sanjay admitted his signature on the document during cross-examination, making it admissible. The High Court reasoned that the real consideration was ?2,30,000/-, and the amount deposited in Surendra's account was unrelated to the loan to Sanjay. The Supreme Court upheld this view, stating that the photocopy was admissible since the original was with the purchaser, and the plaintiff's amendment to the pleadings was justified.

3. Alleged benami transaction and its implications under the Benami Transactions (Prohibition) Act, 1988:
The appellants argued that the claim of a higher sale consideration was barred by the Benami Act, which prohibits benami transactions. The Supreme Court rejected this argument, clarifying that the plaintiff did not claim any amount from the buyer or assert any benami ownership. The suit was for the recovery of a loan, not based on a benami transaction. The court emphasized that the Benami Act's provisions did not apply as the case did not involve asserting a benami transaction.

4. Appreciation of evidence and findings of the trial court versus the High Court:
The trial court dismissed Surendra's suit, finding that the deposited amount indicated repayment of the loan. The High Court, however, re-evaluated the evidence, including the cheques and the receipt issued by Sanjay, and concluded that the loan was not repaid. The Supreme Court supported the High Court's findings, noting that the evidence, including the cheques and the lack of a repayment receipt, substantiated Surendra's claim. The Supreme Court found no merit in the appellants' arguments and upheld the High Court's judgment.

Conclusion:
The Supreme Court dismissed the appeal, affirming the High Court's decision that Surendra had lent ?80,000/- to Sanjay, which was not repaid. The court found that the documentary evidence was admissible and relevant, and the Benami Act did not bar the plaintiff's claim. The trial court's findings were overturned, and the High Court's judgment was deemed justified. The appellants were directed to pay ?80,000/- with interest and costs.

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