2021 (6) TMI 552 - HC - Benami Property

Benami transaction - real owner of the property - continuation of the joint Hindu family - Whether items No. 1 of the plaint A schedule was purchased by the deceased 1st appellant in the name of the 1st respondent benami and if the claim so set up by the appellants in respect of this property is hit by the provisions of the Prohibition of Benami Property Transactions Act 1988? - HELD THAT - A suit or claim or action basing on a plea of benami in respect of its subject matter shall not lie against the person who claims being the real owner of this property. The 1st respondent is the owner who purchased this property in terms of Ex. A1 and Ex. A2 title deeds. It should be noted that execution of Ex. A1 and Ex. A2 sale deeds by the erstwhile owners is not disputed and the fact that they stand in the name of the 1st respondent. The prohibition envisaged in terms of Section 4(1) of the Act is absolute and imperative in its effect. There is a different version in the written statement of the 1st respondent that when there was a notice issued by Registration Department after registration of these sale deeds when he sought an advice from his father these sale deeds were retained by him. Nonetheless these circumstances are indicative of the fact that these brothers were given to keeping these records with their father and in his custody. Further to note in this context is that they were all living and staying in the same premises during that time. Therefore there is nothing unusual either for the 1st respondent or the 2nd appellant to hand over these title deeds or documents to their father. Even otherwise participation of the 1st appellant in bargaining to acquire this house or the site which the 2nd appellant purchased from the very same vendors cannot be an unusual factor. When the burden is on the appellants to establish the nature of these sale transactions of such tainted nature to call the 1st respondent an ostensible owner who held them benami for the joint family it is for them to place cogent and convincing material of acceptable nature. The material on record indicates that the appellants failed to discharge this burden in terms of Section 104 of the Evidence Act. In these circumstances any deficiency in the evidence of the 1st respondent is not a factor by itself to assist them. Trial Judge held that the 1st respondent failed to produce satisfactory evidence to show that he himself has contributed funds to purchase this house. When Ex. A1 and Ex. A2 themselves are the title deeds by which the 1st respondent had acquired this house as per their recitals they bear a presumption in his favour. This presumption is not discharged by the evidence adduced by the appellants. Failure of the 1st respondent to examine any of the attestors or scribe to these sale deeds as pointed out by the learned trial Judge is not sufficient to accept the version of the appellants. In fact it was for the appellants to have had examined them to support their contention that the funds had flown from the 1st appellant to acquire this property to prove and demonstrate that he had taken active role in those circumstances including at the time of registration of the documents. One of the contentions of the appellants is that Ex. A1 and Ex. A2 sale deeds were obtained in the name of the 1st respondent on account of an astrologer s advice. This reason is obviously false. If contents of Ex. X1 Will and testimony of the 2nd appellant as P.W. 2 are considered for argument sake it is clear that it was with a view and intention to get over and avoid any difficulty or liability in terms of Income Tax Act these sale deeds were obtained in the name of the 1st respondent. Thus one of the strong circumstances sought to rely on by the appellants and to explain the purpose behind in obtaining Ex. A1 and Ex. A2 in the name of the 1st appellant falls to ground on their own showing. One of the contentions advanced in this appeal for the appellants is that there is sufficient proof of continuation of the joint Hindu family of these parties and retention of certain property for the benefit of this joint family is a strong indicator. There is nothing on record to indicate that this erstwhile joint Hindu family continued and leaving aside certain properties was for common benefit and enjoyment. Apparently items 2 and 3 of the plaint A schedule were retained where the firewood business was continuing even when the 1st appellant was attending to it after the partition in the year 1979. Beneficial enjoyment of certain items of the property of the erstwhile joint Hindu family after partition and division in status mind and kind cannot clothe the entire set up to call an unity in right possession and enjoyment as joint tenants. On twin grounds that the suit as such could not have been maintained in respect of item 1 of the plaint A schedule viz. on the ground of benami set up by the appellants and on another ground that the evidence adduced by them at the trial is not sufficient to support their stand in respect of this house qua the 1st respondent all the contentions of the appellants should be rejected. Findings of the learned trial Judge in this context with reference to application of Section 4(1) of the Prohibition of Benami Property Transactions Act 1988 should be upheld and that item No. 1 of the plaint A schedule thus be held that it is the property of the 1st appellant who has right title and interest to it by virtue of Ex. A1 and Ex. A2 sale deeds. Thus this point is answered. Whether Ex. A24 Will is true valid and binding on the respondents? - 1st appellant died during pendency of the suit - HELD THAT - While considering issue No. 2 and additional issues 1 and 2 framed on 15.03.1996 and issues 1 and 2 framed on 20.02.1997 the learned trial Judge accepted this Will. The entire process of acceptance of Ex. X1 by the learned trial Judge is bereft of any reasons. The requirements of law as discussed above in the context of application of Section 68 of the Evidence Act and Section 63 of the Indian Succession Act more importantly to dispel such serious suspicious circumstances surrounding execution of Ex. X1 were not at all considered or discussed. The learned trial Judge jumped to the conclusion that it was executed by the deceased 1st appellant in a sound and disposing state of mind basing on the evidence of P.W. 3 alone. Therefore the findings so recorded on these issues in Para-81 of the Judgment of the trial Court require interference holding that the appellants failed to establish and prove the original of Ex. X1-Will. Therefore the testamentary disposition of the property claimed by the appellants as if by the deceased 1st appellant cannot stand. Consequently it has to be held that there is no proof offered by the appellants that the original of Ex. X1 Will is true or valid nor it binds the respondents 1 to 4. Therefore the cross-objections of the 1st respondent stand accepted. Whether the plaint A and B schedule properties are amenable for partition among the appellants 1 and 2 and respondents 1 and 2? - HELD THAT - There is no reference to these two items in Ex. A11 legal notice issued by the 1st and 2nd appellants to the 1st respondent claiming that they are the properties of the then joint family. It is an undisputed fact that prior to the partition of 1979 all other movable properties of the family were divided among all the members of this erstwhile joint family. Either acquisition or retention of these two items was never an issue among these parties and of their enjoyment later. The material on record also established that these two items were always enjoyed by the 1st respondent himself. Considering the reasons assigned by the learned trial Judge and on re-appraisal of the evidence on record these findings have to be confirmed. Thus these two items in plaint B schedule and item 1 of the plaint A schedule are not available or amenable for partition among the appellants and the respondents. Thus this point is answered. Whether the judgment and decree of the trial Court are proper and if require interference? - HELD THAT - As a consequence the ultimate relief granted by the learned trial Judge in substance did not get altered since preliminary decree passed is confined only with reference to items 2 and 3 of plaint A schedule. The findings relating to devolvement or distribution of 1/4th share allottable to the deceased 1st appellant gets altered. In the sense in terms of Section 6 of the Hindu Succession Act prior to amendment in the year 2005 1/4th share of the 1st appellant in items 2 and 3 of the plaint A schedule shall be divided among the 1st appellant the 2nd appellant 1st respondent and 2nd respondent notionally. Since the 2nd appellant and 2nd respondent are no more their respective legal heirs are entitled to the share allottable to them in respective proportions. Therefore items 1 and 2 of plaint A schedule be divided into three (03) equal shares and the 1st respondent is entitled for one such share legal heirs of the 2nd appellant viz. the appellants 3 and 4 and respondents 7 and 8 are entitled for one such share and whereas the legal heirs of the 2nd respondent are entitled for one such share. Accordingly there shall be modification of the preliminary decree granted by the trial Court. Appeal is dismissed and cross objections are allowed. Consequently the preliminary decree passed by the trial Court is modified as follows (1) items 2 and 3 of the plaint A schedule shall be divided into three (03) equal shares. One such share shall be allotted to the 1st respondent and whereas one such share shall be allotted to the legal heirs of the 2nd appellant viz. the appellants 3, 4 and respondents 7 and 8 together. Similarly legal heirs of the 2nd respondent including respondents 4 and 5 are entitled for one such share. (2) The decree and judgment of the trial Court in respect of item 1 of plaint A schedule and items 1 and 2 of plaint B schedule stand confirmed. (3) The parties including all the legal heirs whether on record or not of the deceased 2nd appellant and 2nd respondent are at liberty to file separate applications for passing of final decree in terms of this preliminary decree. (4) In the circumstances the parties are directed to bear their own costs throughout

Summary

Issues Involved:
1. Whether item No. 1 of the plaint 'A' schedule property is the separate property of the 1st defendant.
2. Whether the plaintiffs are entitled to partition and separate possession of their shares as mentioned in the plaint.
3. What are all the properties available for partition.
4. Whether the Will executed by late Narayana Murthy is genuine, true, and valid.
5. Whether the plaintiffs 3 and 4 are entitled to any share in the properties of late Narayana Murthy.
6. Whether the 1st plaintiff bequeathed 1/4th share in items 2 and 3 of the plaint 'B' schedule property under a Will dated 02.02.1988.
7. Whether the 6th defendant is entitled to 1/4th share in items 2 and 3 of the plaint 'B' schedule property.
8. Whether the judgment and decree of the trial Court are proper and if they require interference.
9. To what relief the parties are entitled.

Issue-wise Analysis:

1. Whether item No. 1 of the plaint 'A' schedule property is the separate property of the 1st defendant:
The property in question was purchased under Ex. A1 and Ex. A2 sale deeds. The appellants contended that these were benami transactions, with the 1st appellant providing the funds. The 1st respondent claimed the property was bought with his own funds. The trial court held that the property was purchased by the 1st appellant but dismissed the claim due to Section 4(1) of the Prohibition of Benami Property Transactions Act, 1988, which prohibits suits based on benami transactions. The court found no evidence of a coparcenary or Hindu undivided family by the time of the transactions, thus rejecting the appellants' claim.

2. Whether the plaintiffs are entitled to partition and separate possession of their shares as mentioned in the plaint:
The court found that the appellants did not have a right to promote a case of benami regarding item No. 1 of the plaint 'A' schedule. The evidence did not support the appellants' claim that the funds for the property came from the 1st appellant. The trial court's findings were upheld, confirming that item No. 1 of the plaint 'A' schedule is the property of the 1st respondent.

3. What are all the properties available for partition:
The trial court held that items 2 and 3 of the plaint 'A' schedule were available for partition, while item 1 of the plaint 'A' schedule and items 1 and 2 of the plaint 'B' schedule were not. The appellate court confirmed these findings, noting that the tractor trailer and saw machine (items 1 and 2 of the plaint 'B' schedule) were sold by the 1st respondent and were never part of the joint family property.

4. Whether the Will executed by late Narayana Murthy is genuine, true, and valid:
The appellants claimed that the 1st appellant left a Will dated 02.02.1988 bequeathing his properties to the appellants 2 to 4 and respondent No. 6. The 1st respondent disputed the Will, alleging it was manipulated by the 2nd appellant. The trial court accepted the Will, but the appellate court found the evidence insufficient to prove its validity, noting the failure to examine other attestors and the scribe. The Will was deemed not genuine, true, or valid.

5. Whether the plaintiffs 3 and 4 are entitled to any share in the properties of late Narayana Murthy:
Given the invalidity of the Will, plaintiffs 3 and 4 were not entitled to any share in the properties of late Narayana Murthy based on the Will.

6. Whether the 1st plaintiff bequeathed 1/4th share in items 2 and 3 of the plaint 'B' schedule property under a Will dated 02.02.1988:
The court found the Will invalid, thus the 1st plaintiff did not bequeath a 1/4th share in items 2 and 3 of the plaint 'B' schedule property.

7. Whether the 6th defendant is entitled to 1/4th share in items 2 and 3 of the plaint 'B' schedule property:
The 6th defendant's claim based on the Will was rejected due to the Will's invalidity.

8. Whether the judgment and decree of the trial Court are proper and if they require interference:
The appellate court confirmed the trial court's judgment and decree regarding the non-availability of item 1 of the plaint 'A' schedule and items 1 and 2 of the plaint 'B' schedule for partition. However, the findings on the Will were reversed, affecting the distribution of the 1st appellant's share.

9. To what relief the parties are entitled:
The appellate court modified the preliminary decree to divide items 2 and 3 of the plaint 'A' schedule into three equal shares: one for the 1st respondent, one for the legal heirs of the 2nd appellant, and one for the legal heirs of the 2nd respondent. The parties were directed to bear their own costs, and pending miscellaneous petitions were closed.

Conclusion:
The appeal was dismissed, and the cross-objections were allowed. The preliminary decree was modified to reflect the proper distribution of the 1st appellant's share among the legal heirs. The findings of the trial court regarding the non-availability of certain properties for partition were confirmed, and the parties were directed to bear their own costs.