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TMI Blog2020 (5) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... ner attended the registration of the sale of the subject property as a proxy for the 5th respondent. T herefore the instant case falls within Sec.4 (3) (b) of the Benami Transactions (Prohibitions) Act,1988 and is not hit by Sec.3 thereof. I t is settled law that Section 54 of the Transfer of Property Act does not lay down a law as to whether in all situations an apparent state of affairs as contained in a deed of sale would be treated to be the real state of affairs. It does not bar a benami transaction. There is no embargo in getting a property registered in the name of one person; although the real beneficiary thereof would be another. [see Jai Narain Parasrampuria v. Pushpa Devi Saraf - [ 2006 (8) TMI 527 - SUPREME COURT ] Though the regd. sale deed dt.5.3.2016 stands in the name of the 5th respondent, he has no title to it and the actual owner is the petitioner and his wife. Petition is disposed of declaring that the 5th respondent was only the ostensible owner of the subject property and the real owner was the petitioner who financed the purchase of the subject property; and respondent nos.1 to 4 and 7 are directed to transfer the subject property to the petitioner by private ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... short the builder ), paid him by cheques dt.16.11.2015 and 20.11.2015, ₹ 5,00,000/- and ₹ 4,00,000/- respectively; and that thereafter loan was sanctioned to him on 14.2.2016 by the Bank. 8. Though the 5th respondent signed all the loan documents with the Bank, it is not in dispute that the petitioner acted as 5th respondent s agent and attended the registration work in connection with the sale deed which was executed on 5.3.2016 in favor of 5th respondent by the builder of the flat as proxy of the 5th respondent. According to the petitioner, 5th respondent authorized him to get the registration done. 9. It is undisputed that the loan was released by 2nd respondent by two cheques both dt. 20.3.2016, one for ₹ 23,80,000/- and ₹ 26,20,000/- in favor of the builder and that the monthly EMI was ₹ 43,859/-. The inter-se disputes between 5th respondent and his wife 10. Disputes the arose between the 5th respondent and his wife since December, 2016. 11. Wife of 5th respondent filed OP.No.1260 of 2017 in Family Court, Hyderabad to dissolve their marriage and also a DVC.No.206/2018. She also filed CC No.607 of 2017 before the PDM Court, Srikakulam under Sec.498 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a Non Performing Asset , (ii) not replying to his objections made to the Notice dt.16.10.2018 issued under Sec.13(2) of the Act, (iii) and to set aside the said notice. 19. On 2-1-2019, a symbolic possession notice under rule 8 (i) of the Security Interest Enforcement Rules, was issued by the 3rd respondent on behalf of the Bank. The interim order dt. 4.2.2019 in IA.No. 1 of 2018 in WP.No.46380 of 2018 20. A Division Bench of this Court presided over by Justice V.Ramasubramanian and Justice Keshav Rao on 4.1.2019 noted that a notice under sec.13(4) of the Act was issued on that day and adjourned the matter to 22-1-2019 and granted status quo till then, but permitted the petitioner to make payment of loan installments . 21. On 22-1-2019, the said interim order was directed to continue and the matter was adjourned by 2 weeks. 22. Pursuant to the said liberty given to petitioner, he paid ₹ 5,10,000/- to the Home loan account of 5th respondent with the Bank till April,2019. 23. IA.No.2 of 2019 is filed by the Bank/respondents 1-4 and 7 to vacate the said order. 24. IA No.3 of 2019 is filed by the 5th respondent also to vacate the said order. IA No.4 of 2019 25. IA No.4 of 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2020 34. In November, 2019, the Bank filed Crl.M.P.No.104 of 2019 before the Chief Metropolitan Magistrate, Hyderabad invoking Sec.14 of the Act to take possession of the subject property without impleading the petitioner and on 29.11.2019, an order was granted in it s favor. 35. Petitioner therefore filed IA No.1 of 2020 to stay the operation of the said order. 36. On 28.1.2020, there was interim stay of the order dt.29.11.2019 in Crl.M.P.No. 104 of 2019 granted in IA No.1 of 2020. 37. This completes the narration of the facts in the case. The contentions raised will be considered as under. Consideration by the Court 38. According to the petitioner, Banks are reluctant to grant loans to advocates, and he was an advocate, he persuaded the 5th respondent, whose wife (the 8th respondent) and petitioner s wife are sisters, to take the loan from the State Bank of India in 5th respondent s name and buy the subject property; that petitioner is the beneficiary of the loan granted by the Bank to the 5th respondent ; that petitioner financed the purchase of the property and 5th respondent was only a nominal owner under a family arrangement, even though the sale deed for the subject prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able in all situations can be laid. After saying so, this Court spelt out the following six circumstances which can be taken as a guide to determine the nature of the transaction: (1) the source from which the purchase money came; (2) the nature and possession of the property, after the purchase; (3) motive, if any, for giving the transaction a benami colour; (4) the position of the parties and the relationship, if any, between the claimant and the alleged benamidar; (5) the custody of the title deeds after the sale; and (6) the conduct of the parties concerned in dealing with the property after the sale. ( Jaydayal Poddar v. Bibi Hazra (1974) 1 SCC 3 , SCC p. 7, para 6) 14. The above indicia are not exhaustive and their efficacy varies according to the facts of each case. Nevertheless, the source from where the purchase money came and the motive why the property was purchased benami are by far the most important tests for determining whether the sale standing in the name of one person, is in reality for the benefit of another. (emphasis supplied) 45. Section 3(1) of the said Act contains the interdict that no person shall enter into any benami transaction . 46. Section 4 of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order to satisfy the Corporation s demand of sale consideration of ₹ 48,636/-, according to the respondents, each of the 3 children contributed ₹ 5,000/- while C contributed ₹ 35,636/- and a sale deed was executed in favor of the appellant in 1987. But appellant claimed that it belonged to him exclusively and that he alone paid entire sale consideration. The respondents/plaintiffs filed a suit to declare that they are co-owners of the house to the extent of their contribution and for an injunction restraining the appellant/defendant from interfering with their possession of the same. The trial court dismissed the suit, but the High Court decreed it in favor of the respondents. The Supreme Court dismissed the appeal filed by the appellant. It held that Sec. 4 (3) (b) of the Benami Transactions (Prohibition) Act,1988 specifically saves a transaction where the property is held by the person who stands in a fiduciary capacity for the benefit of the person towards whom he stands in such a capacity. It held: 37. It is manifest that while the expression fiduciary capacity may not be capable of a precise definition, it implies a relationship that is analogous to the relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent is ₹ 35,20,000/- . Admittedly this amount was arranged by 5th respondent by paying the builder ₹ 26,20,000/- out of the Home loan granted by the Bank, and the balance of ₹ 9,00,000/- was paid to the vendor/builder vide chq.059766 dt.16.11.2015 for ₹ 5,00,000/- and another chq.no.059767 dt.20-11-2015 for ₹ 4,00,000/-. 51. The Bank statements filed by the petitioner along with IA No.6 of 2019 indicates that ₹ 10,00,000/- was transferred by Prameela Rani, the wife of the petitioner, through a bank transfer from her Indian Overseas bank account at Chikkadpally, Hyderabad to her sister Padmaja Rani ( respondent no.8), wife of 5th respondent on 10-11-2015. 52. On 16-11-2015, respondent no.8, in turn transferred ₹ 9,00,000/- out of it to SB a/c 31186759226 of 5th respondent with the SBI; the 5th respondent then paid the builder ₹ 5,00,000/- on 18-11-2015 by chq.no.59766 and ₹ 4,00,000/- on 23-11-2015 by chq.no.59767. 53. So the sum of ₹ 5,00,000/- and ₹ 4,00,000 mentioned in the sale deed was not actually paid by the 5th respondent from out of his own monies and he utilized the amounts paid by petitioner s wife. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the 8th respondent then transferred to him. 61. On 4-3-2016, the wife of the petitioner, through RTGS, transferred from her SB a/c in Indian Overseas Bank, ₹ 2,11,250/- to the builder. Another payment of ₹ 40,000/- was also made by the petitioner to the builder by Chq.645149 on 25-1-2017. The Bank statements filed by petitioner along with IA No.6 of 2019 corroborate this fact. 62. Along with the Writ Petition, petitioner filed photocopy of receipt dt.23-1-2017 for ₹ 8,00,000/- (by cheque) issued by the builder in the name of the 5th respondent. Even for this payment, the said amount was paid by petitioner vide Chq.645147 dt.23-1-2017 drawn on the SB a/c of the petitioner and his wife in Indian Overseas Bank, Chikkadpally , though the builder gave receipt in the name of the 5th respondent. This is clear from the Bank Statement for the joint account of petitioner and his wife relating to their SB a/c 067801000029754 in Indian Overseas Bank, Chikkadpally filed with IA 6 of 2019 by petitioner. 63. Two other payments of ₹ 40,000/- on 25-1-2017 and ₹ 1,25,000/- on 23-2-2017 were also made from the same account to the builder by petitioner and his wife and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.06.2017 Cheque 682457 SBI 50,000 Paid to I. Shanti Srujan s SB account 04.07.2017 Direct through Green Card issued by SBI 50,000 Directly paid to home loan account 24.07.2017 Direct through Green Card issued by SBI 40,000 Directly paid to home loan account 12.09.2018 Cash SBI High Court Branch 30,000 Directly paid to home loan account 18.09.2018 Cash SBI High Court Branch 30,000 Directly paid to home loan account 04.01.2019 Cheque 810140 SBI Account of G. Tuhin Kumar High Court Branch 3,10,000 Directly paid to home loan account 05.01.2019 Joint account of G. Tuhin Kumar and Prameela Rani 645145 2,00,000 Directly paid to home loan account 19.03.2019 Cash Deposit 45,000/- Directly paid to home loan account 20.05.2019 NEFT / RTGS IOB account Joint Account of G. Tuhin Kumar and Prameela Rani 1,00,000 Directly paid to home loan account 05.07.2019 NEFT / RTGS IOB account Joint Account of G. Tuhin Kumar and Prameela Rani 50,000/- Directly paid to home loan account 05.08.2019 NEFT / RTGS IOB account Joint Account of G. Tuhin Kumar and Prameela Rani 50,000/- Directly paid to home loan account 71. The Bank statements filed by the petitioner of his SB a/c and that of his wife and 8th respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner, petitioner s wife, her sister (the 8th respondent) and the 5th respondent whom she married, created a position of confidence and trust on the first three persons and of good faith in the 5th respondent; and the ostensible title of the 5th respondent is being held by him in a fiduciary capacity for the benefit of petitioner and his wife. Also the possession of the property is with the petitioner admittedly. Admittedly the petitioner attended the registration of the sale of the subject property as a proxy for the 5th respondent. 79. Therefore the instant case clearly, as in the case of Marcel Martins (3 supra), falls within Sec.4 (3) (b) of the Benami Transactions (Prohibitions) Act,1988 and is not hit by Sec.3 thereof. 80. Moreover it is settled law that Section 54 of the Transfer of Property Act does not lay down a law as to whether in all situations an apparent state of affairs as contained in a deed of sale would be treated to be the real state of affairs. It does not bar a benami transaction. There is no embargo in getting a property registered in the name of one person; although the real beneficiary thereof would be another. (see Jai Narain Parasrampuria v. Pushpa D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be justified in requiring the party to seek relief by the somewhat lengthy, dilatory and expensive process by a Civil Suit against a Public Body. This decision was reiterated recently in Popatrao Vyankatrao Patil Vs. State of Maharshtra and others (Civil Appeal No.1600 of 2020 decided on 14.02.2020 by a Three Judge Bench headed by Chief Justice of India, Justice B.R.Gavai and Justice Suryakant) . The Supreme Court held therein that when a petition involves disputed questions of fact and law, the High Court would be slow in entertaining the petition under Article 226 of the Constitution of India; however it is only a rule of self-restraint and not a hard and fast rule; even if there are disputed questions of fact which fall for consideration but if they do not require elaborate evidence to be adduced, the High Court is not precluded from entertaining a petition under Article 226 of the Constitution . It observed that such power is to be exercised in exceptional circumstances where the High Court finds that the action of the State or its instrumentality is arbitrary and unreasonable and as such violative of Article 14 of the Constitution of India. It applied the decision in ABL Inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 2002 cannot be found fault with. In our considered opinion, it was necessary for the Bank to take note of petitioner s objections dt.10.11.2018 and his offer to pay the installments and affect a private sale under rule 8 (5) (d) to him, by taking note of the facts narrated by him therein. 88. Lastly it is contended that petitioner should have availed the remedy under Sec.17 of the SARFAESI Act, 2002 if he was aggrieved by the actions of the Bank. The existence of an alternative remedy is not an absolute bar to entertaining of a Writ Petition by the High Court as held in a plethora of cases. When the Bank chose to ignore the petitioner s objections dt.10.11.2018 and proceeded under the Act to declare the loan as an NPA, to sell the subject property, and also sought to dispossess him after filing the Writ Petition, by securing an order from the Chief Metropolitan Magistrate invoking Sec 14 of the Act without impleading him as a party before the said Magistrate, it cannot harp on the plea of alternative remedy. It s actions are arbitrary, illegal and violative of Art.14 and 300A of the Constitution of India. 89. Anyway if the loan account is being serviced regularly from January,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not providing access to the 5th respondent to his children. The 5th respondent can approach the Family Court and seek appropriate relief against the 8th respondent in regard to visitation rights for his children and the said issue cannot be gone into in this Writ Petition. There is nothing before us to show that the petitioner has acted in collusion with the 8th respondent. His plea that he has a life threat from the petitioner is also not substantiated by him. 95. The 5th respondent admits in para no.12 that he authorized the petitioner to represent him at the time of registration of the subject flat by the builder because the petitioner happened to be a close and thick relative of his. This indicates that at the time when the loan transaction and the sale transaction took place, the relationship between the parties was cordial and close and makes it probable that the 5th respondent, at the request of the petitioner, acted to obtain the loan from the Bank for purchase of the subject property by creating confidence and trust in the petitioner. 96. In para no.13, the 5th respondent alleges that he gave a hand loan of ₹ 12 lakhs to one M.V. Ramana Rao, at Hyderabad on 01.03.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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