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TMI Blog2022 (6) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... and it was not a benami purchase. Of-course, the presumption is rebuttable. To rebut the statutory presumption, there must be firm foundation in pleadings as well as evidence. In the pleadings, there is no averment that (Mrs. A) held the property for the benefit of the joint family members. (Mrs. A) examined herself as D.W.3 and not even a suggestion has been put in this regard. This is a clear case of complete lack of pleadings and lack of proofs. The very purpose of enacting the Central Act 45 of 1988 is to prohibit the benami transactions. Of-course, the statute carved out certain exceptions. But then, every benami transaction cannot be allowed to be sustained by bringing it within the scope of the exceptions. A careful reading of the statutory scheme as applied to the factual matrix leads me to the conclusion that the purchase of the suit property was very much for the benefit of (Mrs. A) and therefore, the appellant did acquire valid title under Ex.A5. The fourth substantial question of law is answered in favour of the appellant. The impugned judgment and decree passed by the first Appellate Court is set aside. The decision of the Trial Court is restored. As per t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int family acquisition? 4.What is the scope and effect of the various provisions of the Benami Prohibition Act 7 of 1998 on the suit transaction ? 5.Is the plaintiff not estopped from making claim against the bonafide purchaser for value, by 5th defendant from the apparent title-holder? 4. Even before the commencement of the argument, the learned counsel for the appellant submitted that the appellant shall deposit a sum of Rs.1.00 lakh to the credit of the suit so that the plaintiff Arunachalam can withdraw the same on certain conditions. This undertaking given by the appellant is recorded. 5 .The learned counsel appearing for the appellant reiterated the contentions set out in the memorandum of grounds and called upon this Court to answer the substantial questions of law in favour of the appellant and set aside the decision of the first Appellate Court and restore the judgment and decree passed by the Trial Court. 6 .Per contra, the learned counsel appearing for the plaintiff / contesting respondent submitted that no substantial question of law arises for consideration. 7. I carefully considered the rival contentions and went through the evidence on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pending proceedings, howsoever earlier they might have been filed, if they were pending at different stages in the hierarchy of the proceedings even upto this Court, when Section 4 came into operation, it would be apposite to recapitulate the salient feature of the Act. As seen earlier, the preamble of the Act itself states that it is an act to prohibit benami transactions and the right to recover property held benami, for matters connected therewith or incidental thereto. Thus it was enacted to efface the then existing rights of the real owners of properties held by others benami. Such an act was not given any retrospective effect by the legislature. Even when we come to Section 4, it is easy to visualise that Sub-section (1). of Section 4 states 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 shall lie by or on behalf of a person claiming to be the real owner of such property. As per Section 4(1) no such suit shall thenceforth lie to recover the possession of the property held benami by the defendant. Plaintiffs right to that effect is sought to be taken away and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any property held benami would get effaced once Section 4(1) operated, even if such transaction had been entered into prior to the coming into operation of Section 4(1), and hence-after Section 4(1) applied no suit can lie in respect to such a past benami transaction. To that extent the Section may be retroactive. To highlight this aspect we may take an illustration. If a benami transaction has taken place in 1980 and suit is filed in June 1988 by the plaintiff claiming that he is the real owner of the property and defendant is merely a benamidar and the consideration has flown from him then such a suit would not lie on account of the provisions of Section 4(1). Bar against filing, entertaining and admission of such suits would have become operative by June, 1988 and to that extent Section 4(1) would take in its sweep even past benami transactions which are sought to be litigated upon after coming into force of the prohibitory provision of Section 4(1); but that is the only effect of the retroactivity of Section 4(1) and nothing more than that. From the conclusion that Section 4(1) shall apply even to past benami transactions to the aforesaid extent, the next step taken by the Divi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. (2) No defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property. (3) Nothing in this section shall apply- (a) Where the person in whose name the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of the coparceners in the family or (b) where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity, and the property is held for the benefit of another person for whom he is a trustee or towards whom he stands in such capacity. 15 .Since Umayal Ammal could not have been a member of the coparcenary, Section 4(3)(a) of the Act will not apply. The only question that arises for consideration is whether the case on hand will f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhavnani (2013 SCC ONLINE DEL 2397) observed as follows:- 25. Even otherwise I am unable to see as to how the case built by the plaintiff does not fall in the trap of benami. The case in nutshell of the plaintiff is of the shares (which are property within the meaning of Section 2(c) of the Benami Act) though in the name of the defendant, being owned by the plaintiff and the present suit has been filed by the plaintiff to enforce rights in the said shares held benami by the defendant and which is clearly within the bar of Section 4 of the Benami Act. 26. The plaintiff even otherwise has been unable to plead a case of trust . The defendant did not stand in the position of a trustee with the plaintiff and merely because the word trust is used does not allow a transaction to be taken out of Benami Act. Section 4(3)(b) of the Benami Act while carving out an exception in this regard, is applicable only where the person in whose name the property is held is a trustee or stands in a fiduciary capacity qua the beneficiary. 30. I find the aforesaid view to have been followed in D.N. Kalia v. R.N. Kalia 178 (2011) DLT 294 where also, the defence of the plaintiff being onl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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