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TMI Blog2023 (8) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... R.Rajagopal Reddy [ 1995 (1) TMI 67 - SUPREME COURT] and in the case of Dattaram Govindrao Kale . [ 2023 (8) TMI 2 - BOMBAY HIGH COURT] the defence of benami transaction taken prior to the Act coming into force is available and the Benami Transactions [Prohibition] Act is not retroactive to that extent. - Second Appeal No. 267 of 1993 - - - Dated:- 14-7-2023 - Arun R. Pedneker, J. Mr. H. V. Tungar Advocate holding for Mr. C. R. Deshpande , Advocate for the appellant Mr. S. V. Chandole , Advocate holding for Mr. V. G. Sakolkar , Advocate for the respondent nos. 1B to 1E JUDGMENT 1. By way of the present Second Appeal, the appellant is challenging the judgment and order dated 01.03.1993 passed by the appellate Court i.e. 3rd Additional District Judge, Latur in Regular Civil Appeal No. 110 of 1988, so also, judgment and order dated 18th June, 1988 passed by the Civil Judge Junior Division, Nilanga in Regular Civil Suit No. 7 of 1975, whereby the suit filed by the plaintiff for partition and possession of the suit property, is concurrently dismissed. Brief facts leading to filing the present Second Appeal is as under : 2. The appellant-plaintiff filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er contended by defendant No.1 that defendant No.2 had to repay a loan amount and he was in need of money and thus sold the suit land in favour of the defendant No.1 for consideration of Rs. 4800/- and executed registered sale deed dated 29.04.1966. Thus, the defendant No.1 is claiming his ownership and possession over the suit land since then. According to him, the plaintiff has no right or concern with the suit land. The mother of plaintiff and defendant No.2 was alive on the date of filing of the suit and she was not party to the suit. The suit of the plaintiff is time barred. The same is filed in collusion with defendant No.2. 6. On the basis of the pleadings of the parties, the trial Court formulated the following issues : ISSUES FINDINGS 1. Does the plaintiff prove that he and deft. no.2 are the members of the joint Hindu family ? Yes 2. Does plaintiff prove that the suit property is joint family property and it is purchased by deft. no.2? No. 3. Does t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2 and that the plaintiff was minor and he was mentioned as nominal owner in the sale deed but the defendant No.2 is the real owner of the suit property. The trial Court held that the plaintiff was minor at the time of purchase of suit property and that there was no question of providing the amount by the plaintiff and it is only for love and affection, his name is entered in the sale deed. Thus, the trial Court held that defendant No.1 has proved that the suit land was exclusively purchased by the defendant No.2. The trial Court further held that defendant No.1 has proved his possession over the suit property on the basis of the sale deed executed by the defendant No.2 and that he is in lawful possession of the suit land. The trial Court further held that since the suit property was self acquired property of the defendant No.2, there was no issue of selling the suit property for legal necessity, thus, dismissed the suit. 8. The plaintiff challenged the order passed by the trial Court before the Appellate Court. The Appellate Court on consideration of the material framed following points for consideration : Points Findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defendant No. 1. VIII-A] It is the contention of defendant No.1 that, the suit land has been purchased by defendant No.2 Yeshwant from Tulshiram in the year 1965. The defendant No.1 had supplied the amount of consideration to purchase the suit land and he obtained the money decree from Yeshwant for the said amount. Thus the transaction as claimed by the defendant No.1 is a Benami transaction. VIII-B] That, it is the case of the defendant No.1 that the entire amount of consideration that was paid to Vendor namely Tulshiram by defendant No. 2 Yeshwant only. But the name of plaintiff has been written in the sale deed as nominal one, and it was written only due to the insistence by the mother of the plaintiff. Actually the plaintiff was having no concern with the transaction, similar averments are in the written statement of the defendant No.1. Thus the contention of the defendant No.1 is that the plaintiff is not the real purchaser. In view of these averments in the written statement and in the evidence of the defendant No.1, the transactions in question appear to be benami. VIII-C] That as per the provisions of sec.4 of the Benami Transactions [Prohibition] Act, 1988. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of R.Rajagopal Reddy it is being held that defence of Benami Transactions [Prohibition] Act, 1988 is prohibited only after the said Act came into force. 14. The Hon'ble Supreme Court in the case of R.Rajagopal Reddy [Dead] by Lrs and others Vs. Padmini Chandrasekharan [Dead] by LRS reported in [1995] 2 SCC 630 at paragraph Nos. 10, 11 and 12 has held that as under: 10...Section 3 which is the heart of the Act imposes the required prohibition of benami transactions. It reads as under: 3. Prohibition of benami transactions.-(1) No person shall enter into any benami transaction. (2) Nothing in sub-section (1) shall apply to the purchase of property by any person in the name of his wife or unmarried daughter and it shall be presumed, unless the contrary is proved, that the said property had been purchased for the benefit of the wife or the unmarried daughter. (3) Whoever enters into any benami transaction shall be punishable with imprisonment for a term which may extend to three years or with fine or with both. (4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), an offence under this section shall be non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therewith or incidental thereto. Thus it was enacted to efface the then existing right 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. Plaintiff's right to that effect is sought to be taken away and any suit to enforce such a right after coming into operation of Section 4(1) that is 19-1988, shall not lie. The legislature in its wisdom has nowhere provided in Section 4(1) that no such suit, claim or action pending on the date when Section 4 came into force shall not be proceeded with and shall stand abated. On the contrary, clear legislative intention is seen from the words no such claim, suit or action shall lie , meaning thereby no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roactive by necessary implication. It is also pertinent to note that Section 4(2) does not expressly seek to apply retrospectively. So far as such a suit which is covered by the sweep of Section 4(2) is concerned, the prohibition of Section 4(1) cannot apply to it as it is not a claim or action filed by the plaintiff to enforce right in respect of any property held benami. On the contrary, it is a suit, claim or action flowing from the sale deed or title deed in the name of the plaintiff. Even though such a suit might have been filed prior to 19-5-1988, if before the stage of filing of defence by the real owner is reached, Section 4(2) becomes operative from 19-5-1988, then such a defence, as laid down by Section 4(2) will not be allowed to such a defendant. However, that would not mean that Section 4(1) and Section 4(2) only on that score can be treated to be impliedly retrospective so as to cover all the pending litigations in connection with enforcement of such rights of real owners who are parties to benami transactions entered into prior to the coming into operation of the Act and specially Section 4 thereof. It is also pertinent to note that Section 4(2) enjoins that no such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of R. Rajagopal Reddy (supra), cannot be retrospective or retroactive by necessary implication. However, what is prohibited is the defence to be taken on that day when the act came into force. Thus, even if the transaction is prior in point of time, defence based by the owner of the property who holds the property benami in the name of some other person is not permissible under section 4(2) of the Benami Transactions (Prohibition) Act after the Act comes into force. 11. In the instant case, the defence of benami transaction by defendant No.2 in favour of plaintiff is taken by the person (defendant No.1), who has purchased the property before the act came into force. On the date of the act coming into force there was no property in the name of the plaintiff, as such, whether a plea of declaration of ownership on the basis of sale deed in its favour prior to the coming into force of the Benami Transactions (Prohibition) Act can be maintained by the plaintiff against the purchaser of the property from the real owner who purchased the property benami in the name of the plaintiff, is itself doubtful. However, I have not entered into a full discussion on this issue as the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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