2020 (9) TMI 719 - HC - Benami Property

Benami transaction - Burden to prove the question of possession - suit for declaration and injunction - Possession of the original title deeds - suit property originally belonged to the plaintiff's husband one Durairaj, who was the Zamindar of Pappanadu Village. He has settled the property in the name of the plaintiff on 13.11.1959 and she was put in possession of the property. The first defendant was very closely associated with the husband of the plaintiff. He was trusted by the plaintiff's husband Durairaj.In the year 1972, during the month of September, at the instructions of her husband, she has executed a nominal sale deed dated 19.09.1972 in favour of the first defendant - as contented said sale deed was not acted upon and it is only sham and nominal HELD THAT - As prior to the sale, there was an agreement of sale between the plaintiff and the first defendant. When the recitals clearly show that there was an agreement between the parties with regard to the sale of property, the parties cannot go beyond the terms of the contract, which was reduced and registered as per law. Once transaction is entered between the parties, heavy burden lies on the party to show that the transaction is sham and nominal. Apex Court in the judgment in Vimal Chand Ghevarchand Jain v. Ramakant Eknath Jadoo 2009 (3) TMI 997 - SUPREME COURT has held that the registered sale deed carries presumption that the transaction was a genuine one and if the execution of sale deed is proved, onus lies on the party to prove that the sale deed was not executed and it was a sham and nominal. Except contending that before the sale by the first defendant in favour of the second and third defendants, the plaintiff perfected title by adverse possession in Paragraph No. 8(A) of the plaint, there is no pleading as to when possession has become hostile, what was the nature of possession, whether possession was hostile to the first defendant and continuous adverse to the knowledge of the first defendant. In the absence of any pleadings and evidence, the finding of the Courts below that the plaintiff perfected title by adverse possession also cannot be countenanced, when the possession itself has not been properly established. Whereas, the Courts below wrongly shifted the burden on the defendants to prove the question of possession. The documents of the plaintiff, namely, Exs. A.20 and A.21-certified copies of the telegrams show that the defendants, in fact, are in possession and making an attempt to change the service connection. To contend that only the plaintiff was in possession and put up construction, no material whatsoever filed on record to show that the plan was approved to put up construction. Therefore, merely on the basis of the receipts, part of the receipts obtained after the suit, one cannot establish adverse possession. The Courts below have, in fact, not analysed the facts properly and shifted the burden wrongly on the defendants and simply carried away by the after suit documents without deciding the plea of benami transaction. No declaration sought to cancel the documents either Ex. A.1 or Exs. B.1 and B.2, within the period of limitation as per Article 59 of the Limitation Act, 1963. Such being the position, the plaintiff cannot succeed in the suit for declaration and injunction. Accordingly, all the substantial questions of law are answered in favour of the appellants.

Issues Involved:
1. Declaration of ownership and permanent injunction.
2. Validity of sale deeds and consideration.
3. Adverse possession claim.
4. Burden of proof regarding possession.
5. Evaluation of evidence and documents.
6. Limitation period for filing the suit.

Detailed Analysis:

1. Declaration of Ownership and Permanent Injunction:
The plaintiff filed the suit seeking a declaration of ownership and a permanent injunction, asserting that the suit property was settled in her favor by her husband in 1959. She claimed that a sale deed executed in 1972 in favor of the first defendant was sham and nominal, intended only to safeguard her interests against third-party claims and tax authorities. The trial court and the first appellate court found in favor of the plaintiff, but the second appeal was filed challenging these findings.

2. Validity of Sale Deeds and Consideration:
The plaintiff contended that the sale deed to the first defendant was not acted upon, as no consideration was paid, and she remained in possession of the property. The first defendant supported this claim, stating the transaction was benami. However, the second and third defendants argued that the sale deed was genuine and supported by consideration, evidenced by subsequent sale deeds in 1985. The court noted that the plaintiff did not seek to cancel the sale deeds within the limitation period, and the evidence suggested the sale consideration was paid by the plaintiff's husband.

3. Adverse Possession Claim:
The plaintiff claimed adverse possession, asserting continuous and hostile possession of the property since 1972. However, the court found no sufficient evidence to support this claim. The plaintiff's documents, including tax receipts and electricity bills, were obtained after the suit was filed, and there was no proof of continuous and hostile possession to the knowledge of the first defendant.

4. Burden of Proof Regarding Possession:
The court criticized the lower courts for wrongly shifting the burden of proof to the defendants to establish their possession. The plaintiff failed to provide substantial evidence of her possession and control over the property. The defendants, on the other hand, presented tenancy agreements and tax receipts indicating their possession.

5. Evaluation of Evidence and Documents:
The court found that the plaintiff's evidence, including tax receipts and electricity bills, was insufficient to prove her possession. The first defendant's inconsistent statements and the plaintiff's failure to testify weakened their case. The defendants' documents, including tenancy agreements and tax receipts, were more credible, indicating their possession of the property.

6. Limitation Period for Filing the Suit:
The court noted that the suit was filed in 1992, 20 years after the sale deed was executed in 1972, without seeking to cancel the sale deed within the three-year limitation period as per Article 59 of the Limitation Act, 1963. This delay barred the plaintiff's claim for declaration and injunction.

Conclusion:
The second appeal was allowed, setting aside the judgments of the lower courts. The suit for declaration and permanent injunction was dismissed, as the plaintiff failed to prove her claims and the suit was barred by limitation. The court emphasized the importance of timely action and credible evidence in property disputes.

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