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TMI Blog1989 (2) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... er Kumar, Surinder Kumar and Vijander Kumar, sons of R. S. Jogi Dass Jain. On a portion of the land, a rice mill was constructed as the partnership was to run the business of rice mill, On some portion of the remaining land, rice was to be dried. After some time, finding that the partnership business was not being run harmoniously, it was decided to dissolve the partnership. An agreement in this respect was entered into on November 23, 1964. Faqir Chand and Phool Chand were to go out of the partnership business. The land under the rice mill, the building and the machinery and the land used for drying paddy were to be sold to Narinder Kumar and other partners. The land under the building was to be sold on instalments to be paid within five years whereas the land used for drying paddy was to be sold on instalments to be paid within ten years. Some price was also fixed. Thereafter, another agreement was entered into on December 26, 1965. Vide this agreement, the partnership firm was to be dissolved with effect from March 31, 1966, and thereafter Narinder Kumar and others were to become owners of the building, etc. The land under the building and the land used for drying paddy were to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them. It was stipulated in, the agreement that the sale deed would be executed in favour of the nominees of M. D. Jain and he had given affidavits on July 25, 1969, and January 25, 1971, undertaking to get the sale deed executed in favour of Narinder Kumar and others. Several issues having been framed, ultimately, the suit was dismissed. On February 15, 1978, Narinder Kumar, Surinder Kumar and Vijander Kumar filed a suit for declaration against M. D. Jain and others claiming decree of declaration that they were owners in possession of the land by virtue of sale deed dated October 13, 1976, executed by Phool Chand Jain in pursuance of an agreement dated September 7, 1967, in which M. D. Jain was a benamidar vendee for the plaintiffs who claimed to be the, real purchasers. By the said sale deed, M. D. Jain, his wife and children did not acquire any title, right or interest in the land by virtue of sale deed dated October 13, 1976. According to Narinder Kumar and others, they had agreed to purchase the land from Phool Chand, etc., and a formal agreement dated September 7, 1967, was executed. This suit was contested, by M. D. Jain and others, defendants , inter alia, alleging that u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Prohibition) Act, 1988, is retrospective and would be applicable to the suits and the appeals pending, it is not necessary to refer to points argued in the appeals, on this subject. The Supreme Court in Mithilesh Kumari's case [1989] 177 ITR 97, 108, while dealing with the scope of the Benami Transactions (Prohibition) Act, 1988, held as under: "As defined in section 2(a) of the Act 'benami transaction' means any transaction in which property is transferred to one person for a consideration paid or provided by any other person. A transaction must, therefore, be benami irrespective of its date or duration. Section 3, subject to the exceptions, states that no person shall enter into any benami transaction. This section obviously cannot have retrospective operation. However, section 4 clearly provides that no suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie, by or on behalf of a person claiming to be the real owner of such property. This naturally relates to past transactions as well. The expression 'any property held benami' is not limited to any particul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'shall lie' in section 4(1) and 'shall be allowed' in section 4(2) are prospective and shall apply to present (future stages) and future suits, claims or actions only. This leads us to the question whether there was a present suit between the plaintiff-respondent and the defendant-appellant on the date of the law coming into force. We have noted the dates of filing the suit and judgments of the courts below. On the date of the coming into force of section 4 of the Act, that is, May 19, 1988, this appeal was pending and, of course, is still pending; Can the suit itself be said to be pending?" As already noticed above, in the suit brought by Narinder Kumar and others, their allegations are that they are entitled to specific performance of the agreement dated September 7, 1967, read with previous agreements to purchase the land and M. D. Jain was merely introduced as a benamidar. In the other suit also, their claim is likewise where they claim declaration. Their claim cannot be decreed now in view of the decision of the Supreme Court referred to above as, by enforcement of the Benami Transactions (Prohibition) Act, 1988, they are debarred from making claims on the ground that M. D. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, there is no question of lease of this land to Narinder Kumar and others. Since the agreement dated September 7, 1967, was finalised when the suit was pending and M. D. Jain and others purchased the land under the rice mill, the previous agreements between Phool Chand and Faqir Chand on the one side and Narinder Kumar and others on the other side were extinguished. Now, Narinder Kumar and others cannot claim any right of lease of land under the rice mill on the ground that, in fact, M. D. Jain was acting for their benefit under the agreement. Further, reference has been made to the affidavit of M. D. Jain dated July 25, 1969 (exhibit P-28), that he had undertaken to get the sale deed executed in favour of Narinder Kumar and others, is of no consequence as subsequently this undertaking was withdrawn, dispute having arisen. M. D. Jain never agreed to sell the property to Narinder Kumar and others in this affidavit, Furthermore, even if Narinder Kumar and others were to be lessees of the land under the rice mill and the plot of land towards the north, as allowed by Faqir Chand Phool Chand at the rate of Rs. 150 per bigha, the same ceased when Narinder Kumar and others vacated the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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