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TMI Blog2025 (1) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... nt gave the following relevant details of the case as follows: - Beneficial Owner: Sri Rachakonda Srinivas Rao Benamidar: i. Ponnaganti Karunakara ii. B. Krishna Kumari iii. B.V Manikateshwar iv. S. Madhusudan Reddy v. B. Sree Hari Babu vi. B.V. Ashwini Priya vii. B.V. Gauthami Priyanka viii. Smt. G. Sai Easwari Interested Party: M/s ICON Constructions Transaction Amount: Rs. 1,73,00,000/- was the total consideration paid by the alleged Benamidars to M/s ICON Constructions out of the total sale consideration of Rs. 4,26,49,000/-. Ld. Counsel for the Appellant further informed that the aforementioned eight Benamidars, the Beneficial Owner and the Interested Party are the Respondents to the Appeal. 3. Ld. Counsel for the Appellant summarized the background of the case. The IO had received information from Anti-Corruption Bureau, Central Investigation Unit, Hyderabad (ACB) that Sh. Rachakonda Srinivas Rao acquired certain immovable properties in the name of 8 alleged Benamidars. It was also gathered that Sh. Rachakonda Srinivas Rao along with all the alleged Benamidars entered into an agreement with M/s ICON Construction. After negotiations, agreements were exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Unit bearing Shop No.5 in the First Floor admeasuring 1032 sq. ft. of built-up area with 2 car parking along with an undivided share of 41 sq. yards, bearing H.N.1- 7-392 to 394, in the building named as "CVK PARK SQUARE" situated at Sarojini Devi Road, Secunderabad Ponnaganti Karunakara Rs.18,50,000 (Out of the total Sale Consideration of Rs.51,60,000). 2. Commercial Unit bearing Shop No.5 in the Ground Floor admeasuring 1011 sq. ft. of built-up area with 2 car parking along with an undivided share of 43 sq. yards, out of total extent of 2608 sq. yards, bearing H.N.1-7-392 to 394, in the building named as "CVK PARK SQUARE" situated at Sarojini Devi Road, Secunderabad. B. Krishna Kumari Rs.20,50,000 (Out of the total Sale Consideration of Rs.70, 77,000). 3. Commercial Unit bearing Shop No.4 in the Ground Floor admeasuring 945 sq. ft. of built-up area with 2 car parking along with an undivided share of 40 sq. yards, out of total extent of 2608 sq. yards, bearing H.N.1-7-392 to 394, in the building named as "CVK PARK SQUARE" situated at Sarojini Devi Road, Secunderabad. B.V. Manikanteshwar Rs.21, 50,000 (Out of the total Sale Consideration of Rs.66, 15,000). 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicating Authority failed to consider that there were huge cash deposits in the bank accounts of the Benamidars, just a few days before the transfer of the consideration by them to M/s ICON Construction. The Benamidars have failed to explain the sources of the cash deposits. 6. Ld. Counsel for the Appellant argued that the Benami Transaction covers not only the completed transactions but also an arrangement as specified under Section 2 (9) (A) of the PBPTA. The procedural part of registration of Sale Deed could not be completed because of the ACB raid. Ld. Counsel contended that the Ld. Adjudicating Authority ignored the provisions of Sections 26 (4) and (5) of the PBPTA which provides as under: - "(4) Where the Adjudicating Authority is satisfied that some part of the properties in respect of which reference has been made to him is benami property, but is not able to specifically identify such part, he shall record a finding to the best of his judgment as to which part of the properties is held benami. (5) Where in the course of proceedings before it, the Adjudicating Authority has reason to believe that a property, other than a property referred to it by the Initiating Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale deed. Moreover, payment of substantial amount of Rs. 300 lakhs were still remaining to be done. Thus, the Benamidars are not the owners of the properties and the properties continue to be with M/s ICON Constructions. Therefore, the essential condition regarding the benami transaction was not fulfilled in as much as the alleged benami properties were not transferred to the named Benamidars. The condition regarding the transfer was not fulfilled. Ld. Counsels submitted that the Ld. Adjudicating Authority has further stated that on one hand there is nothing to show that the property was held for the immediate or future benefit of the Beneficial Owner, and on the other hand, it was shown that the rental income was received by M/s ICON Constructions. Ld. Counsels therefore pleaded that the Appeal may be dismissed. 10. We have considered the rival submissions and the material on record. It is an admitted fact that only partial payments have been made by the alleged Benamidars to the interested party M/s ICON Constructions. These partial payments were made on signing of Agreement of Sale. Section 54 of the Transfer of Property Act, 1882 is reproduced below: - Section 54. "Sale" de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continued to vest in Narayan Bapuji Dhotra (original plaintiff) and remain in his ownership. This point was examined in detail by this Court in State of U.P. v. District Judge [(1997) 1 SCC 496] and it was held thus : (SCC pp. 499-500, para 7) "7. Having given our anxious consideration to the rival contentions we find that the High Court with respect had patently erred in taking the view that because of Section 53-A of the Transfer of Property Act the proposed transferees of the land had acquired an interest in the lands which would result in exclusion of these lands from the computation of the holding of the tenure-holder transferor on the appointed day. It is obvious that an agreement to sell creates no interest in land. As per Section 54 of the Transfer of Property Act, the property in the land gets conveyed only by registered sale deed. It is not in dispute that the lands sought to be covered were having value of more than Rs 100. Therefore, unless there was a registered document of sale in favour of the proposed transferee agreement-holders, the title of the lands would not get divested from the vendor and would remain in his ownership. There is no dispute on this aspect. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement of sale by Devi Prasad with the appellant in the year 1969 and that sale deed was executed in 1974, it dates back to the date of agreement and, therefore, the Act is inapplicable. We find no force in the contention. An agreement of sale does not convey any right, title or interest. It would create only an enforceable right in a court of law and parties could act thereon. The right, title and interest in the land of Devi Prasad stood extinguished only on execution and registration of the sale deed and admittedly it was done in 1974. Therefore, the sale deeds are within the prohibited period." 13. Reference to Sections 26 (4) and 26 (5) of the PBPTA clearly shows that the Sub-Sections are applicable during the proceedings of Adjudication of Benami Property. The Sub-Sections cannot help to bring about corrective at the stage of the Appeal against the Impugned Order. On perusal of the Impugned Order, it is obvious that the Ld. Adjudicating Authority has not held the impugned property as Benami as the title therein was yet to be transferred to the alleged Benamidars in view of sale having not been completed due to partial payments made by the alleged Benamidars. In fact, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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