Full Judgment Text
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PETITIONER:
OM PRAKASH AND ANR.
Vs.
RESPONDENT:
JAI PRAKASH
DATE OF JUDGMENT09/01/1992
BENCH:
KASLIWAL, N.M. (J)
BENCH:
KASLIWAL, N.M. (J)
JEEVAN REDDY, B.P. (J)
CITATION:
1992 AIR 885 1992 SCR (1) 15
1992 SCC (1) 710 JT 1992 (1) 81
1992 SCALE (1)4
ACT:
Benami Transaction (Prohibition) Act, 1988-Section 4
read with Article 136, Constitution of India, 1950-SLP
pending before the Supreme Court, Whether amounts to appeal
pending-Suit based on benami transaction instituted prior to
the coming into force of the Act, whether barred.
Benami Transaction (Prohibition) Act, 1988-section 4-"
Shall lie", "Shall allow" and "any property held benami"-
Construction of.
Code of Civil Procedure, 1908-order 6, Rules 1, 2, 7-
Pleading-Written statement-Question of applicability of
section 49 of the U.P. Consolidation of Holdings Act not
averred-Whether such plea can be taken later on appeal.
HEADNOTE:
The defendant-appellant No. 1 and plaintiff-respondent
were brothers and defendant-appellant No. 2 was the wife of
appellant No. 1.
The appellant No. 1 was in Government service ever
since 1953. The plaintiff-respondent was looking after the
entire agricultural property in the village.
Partition was effected during consolidation proceedings
and entered in the revenue records and chaks were carved out
in accordance with the share of the parties in the
consolidation proceedings.
During the consolidation operation, the plaintiff-
respondent did not raise any dispute that he was owner of
the entire property and the names of defendants-appellants
were wrongly mentioned as benami.
Later, the plaintiff-respondent filed a suit on the
ground that the suit-land was purchased by him alone through
4 sale deeds dated 10.6.1968, 21.6.1968,17.1.1976, and
23.6.1977 wherein the names of the defendants-appellants
were included only as benamidar and he was the real owner of
the land.
The defendants-appellants contended that they had paid
their part
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of the sale consideration and the land was jointly purchased
in the name of both the parties.
The trial court dismissed the suit holding that the
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names of the defendants-appellants in the sale deeds were
not mentioned as benamidars and that the plaintiff-
respondent did not take any objection in the consolidation
proceedings.
When the plaintiff-respondent filed an appeal before
the first appellate court, it reversed the judgment and
decree of the trial court and decreed the suit in favour of
the plaintiff-respondent.
The second appeal filed by the defendants-appellants
was dismissed by the High Court. The defendants filed a
special leave petition before this Court on 15th March 1988.
During the pendency of the special leave petition the
Benami Transactions (Prohibition of the Right to Recover
Property) Ordinance,1988 was promulgated on 19.5.1988.
The ordinance was replaced by the Benami Transactions
(Prohibition) Act, 1988, which received the President’s
assent on 5.9.1988.
The defendants filed an application on 1.5.1989 for
allowing them to take additional grounds made available on
the basis of the aforesaid ‘Benami Act’.
Thereafter special leave was granted by order dated
21.8.1989 and the parties were given liberty to file
additional documents, if any, within four weeks.
The defendants-appellants contended that the suit filed
by the plaintiff-respondent was not maintainable and barred
under Section 49 of the U.P. Consolidation of Holdings Act,
1954 as the point regarding the land in question being
benami was never raised by the plaintiff-respondent during
consolidation proceedings and the chaks were allowed to be
recorded in the name of the defendant-appellants.
The plaintiff-respondent contended that if the ratio of
Mithilesh Kumari’s case, JT. 1989(1) SC 275, was applied, it
could be made available only in a case where appeal was
pending before the higher Court and that no advantage could
be taken by the defendants-appellants, of Section 4 of the
Benami Act, as no appeal was pending on the date when the
Benami Act came into force.
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On the question, whether any suit relating to benami
transactions can be decreed after the coming into force of
the Benami Act, this Court, allowing the appeal of the
defendants,
HELD : 1.01. In a suit for recovery of benami
property if any appeal is pending on the date of coming into
force of Section 4, the appellate court can take into
account the subsequent legislative changes. [20C]
1.02. The Law Commission’s view was that the
legislation replacing the ordinance should be retrospective
in operation and that no locus penitentia need be given to
the persons who had entered in the benami transaction in the
past. [20G]
1.03. In the present case the defendants, having lost
in High Court, could have approached this Court only through
a special leave petition under Art. 136 of the Constitution
and it is only after the grant of such special leave that
the appeal could be heard. Though the special leave might
have been granted subsequently on 21.8.89 but it is a fact
that the Judgment and decree of the High Court had already
been challenged by the defendant-appellants, and it cannot
be said that no appeal was pending before this Court simply
on the ground that only special leave petition was pending
when the Benami Act came into force. [21C-E]
1.04. An appeal is a continuation of suit and in the
present case, the appeal was pending before this Court. The
suit had been filed by the plaintiff-respondent claiming
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that he was the real owner of the property and the names of
the defendants-appellants were mentioned in the saledeeds as
benami. [21E-F]
1.05. Section 4 of the Benami Act is a total
prohibition against any suit based on benami transaction and
the plaintiff-respondent is not entitled to get any decree
in such suit or in appeal. [21F]
Mithilesh Kumari and Anr. v Prem behari Khare, J.T.
1989 (1) S.C. 275, referred to .
2.01. The expression "shall lie" in Section 4(1) and
"shall allow" in Section 4(2) of the Benami Act are
prospective and shall apply to present (future stages) and
future suits, claims or actions only. [20B]
2.02. The expression "any property held benami" is not
limited to any particular time, date or duration. [20C]
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3. No foundations were laid in the written statement
nor any issue was raised by the defendants-appellants, on
the question of applicability of Section 49 or th U.P.
Consolidation of Holdings Act. The defendants-appellants
cannot be allowed to take such plea. [19H-20A]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal no. 3552 of
1989.
From the Judgment and order dated 24.11.87 of the
Allahabad High Court in Second Appeal No. 2719 of 1987.
J.P. Goyal, R.C. Verma, M.R. Bidsar and K.K. Gupta (NP)
for the Appellants.
O.P. Rana and Girish Chandra for the Respondent.
The Judgment of the Court was delivered by
KASLIWAL, J. This appeal by special leave is directed
against the Judgment of Allahabad High Court dated
24.11.1987. The plaintiff-respondent filed a suit on the
ground that the land purchased through 4 sale deeds dated
10.6.1968, 21.6.1968, 17.1.1976 and 23.6.1977 were purchased
by him alone and he was the real owner of said land. The
name of the defendants/appellants were included in the said
sale deeds only as benamidar. The defendants-appellants
took the plea that they had paid their part of the sale
consideration and the land was jointly purchased in the name
of both the parties. It may be noted that the defendant-
appellant Om Prakash and plaintiff-respondent Jai Prakash
are brothers and defendant-appellant NO. 2 Smt. Satyawati is
the wife of appellant Om Prakash. It has come on record
that the appellant NO. 1 Om Prakash was in Government
service ever since 1953 and the plaintiff-respondent was
looking after the entire agricultural property in the
village. Consolidation proceedings also took place in the
village and during the consolidation operation partition had
been effected in the revenue records and chaks had been
carved out in accordance with the share of the parties.
At that time no dispute was raised by the plaintiff-
respondent that he was owner of the entire property and the
names of defendants-appellants were wrongly mentioned as
benami.
The learned trial court arrived at the conclusion that
the names of the defendants-appellants in the sale deeds
were not mentioned as benamidars and further held that the
claim of the plaintiff-respondent could not be accepted as
no objection had been taken by him even during the
consolidation proceedings. The suit as such was dismissed
by the trial court by Judgment dated 24.1.1987. The
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plaintiff aggrieved against the judgment of
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the trial court, filed an appeal. The first appellate court
reversed the Judgment and decree of the trial court and
decreed the suit in favour of the plaintiff. The second
appeal filed by the defendants was dismissed by the High
Court. The defendants aggrieved against the Judgment and
decree of the High Court filed special leave petition before
this Court on 15th March, 1988. During the pendency of the
special leave petition, the Benami Transactions (Prohibition
of the right to recover property) Ordinance, 1988 was
promulgated by the President of India on 19.5.1988. The
said ordinance was replaced by the Benami Transactions
(Prohibition) ACt, 1988 (Hereinafter called the ‘Benami
Act’). The Act received the assent of the President of India
on 5.9.1988. The defendants filed an application on
1.5.1989 for allowing them to take additional grounds made
available on the basis of the aforesaid ‘Benami Act’.
Thereafter special leave was granted by this court by order
dated 21.8.1989 and it was directed that printing of record
is dispensed with and appeal will be heard on the special
leave petition paper books. The parties were given liberty
to file additional documents if any within four weeks and
the appeal was directed to be listed on 13.12.1989 for
hearing. Pending disposal of the appeal, the parties were
directed to maintain status quo as existing on that day.
In the above circumstances, the matter came up for
hearing before us.
Though there is no specific order of this Court
allowing the application dated 1.5.1989 filed by the
appellants for raising additional grounds, the same shall be
deemed to have been allowed as the special leave petition
was granted subsequently on 21.8.1989 after hearing both the
parties. In any case, we further make it clear that we had
permitted the defendants/appellants to argue additional
grounds made available to them under the ‘Benami Act’, which
admittedly came into force after the filing of the special
leave petition in this Court.
Learned counsel appearing on behalf of the defendants-
appellants had contended that the suit filed by the
plaintiff-respondent was not maintainable and barred under
Section 49 of the U.P. Consolidation of Holdings Act, 1954
as the point regarding the land in question being benami was
never raised by the plaintiff-respondent during
consolidation proceedings and the chaks were allowed to be
recorded in the name of the defendants-appellants. So far
as this objection under Section 49 of the U.P. Consolidation
of Holdings Act is concerned, no foundations were laid in
the written statement nor any issue was raised. The High
Court was thus right in holding that in the facts of this
case, no foundation had been laid for the applicability of
Section 49 of U.P. Consolidation of Holdings Act. We see no
error in the order of the High Court in taking the aforesaid
view and we also hold that the defendants-
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appellants cannot be allowed to take such plea for which no
foundation was laid in the pleadings.
The next important and formidable question which arises
for consideration is whether any suit relating to benami
transactions can be decreed after the coming into force of
the Benami Act. This Court in Mithilesh Kumari and Anr. v.
Prem Behari Khare, J.T. 1989 (1) SC 275, has already held
that the expression "shall lie" in Section 4 (1) and "shall
allow" in Section 4 (2) of the Benami Act are prospective
and shall apply to present (future stages) and future suits,
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claims or actions only. The expression "any property held
benami" is not limited to any particular time, date or
duration. In a suit for recovery of benami property if any
appeal is pending on the date of coming into force of
Section 4, the appellate court can take into account the
subsequent legislative changes. Section 4 of the Benami Act
reads as under:-
"(1) 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.
(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."
In the case of Mithilesh Kumar this Court considered
the 1/30th report of the Law Commission submitted to the
Government on August 14, 1988. Benami Transaction
(Prohibition) Bill, 1988 was drafted after getting the
report and the Bill was introduced in the Rajya Sabha on
31st August, 1988 and then the Bill was passed. The Law
Commission devoted several pages to justify retrospective
legislation and its view was that the legislation replacing
the Ordinance should be retrospective in operation and
that no locus penitentia need be given to the persons who
had entered in the benami transaction in the past. Learned
counsel appearing for the respondent was unable to convince
us to take a different view from that already taken by this
Court in Mithiledsh kumari’s case.
It was vehemently contended by the learned counsel for
the plaintiff-respondent that even if the ratio of Mithilesh
Kumari’s case is applied, it can be made available only in a
case where appeal was pending before the higher Court. It
was contended that in the present case, only special leave
petition
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filed on 15th March, 1988 was pending at the time when the
Benami Act came into force. It was pointed out that the
Ordinance was promulgated on 19.5.1988 and the Benami Act
received the assent of the President on 5.9.1988. It was
thus contended that no appeal was pending on 19.5.1988 or
5.9.1988 as the special leave was granted much after on
21.8.1989 and thus no advantage can be taken by the
defendants-appellants of Section 4 of the Benami Act as no
appeal was pending on the date when the benami Act came into
force.
We find no force in the above contention of the learned
counsel for the plaintiff-respondent. Special leave
petition was filed against the Judgment of the High Court on
15.3.1988 and special leave was granted on 21.8.1989 after
hearing both the parties. In the present case the
defendants having lost in High Court could have approached
this Court only through a special leave petition under Art.
136 of the Constitution and it is only after the grant of
such special leave that the appeal could be heard. Though
the special leave might have been granted subsequently on
21.8.1989 but it is a fact that the Judgment and decree of
the High Court had already been challenged by the defendant-
appellants and it cannot be said that no appeal was pending
before this Court simply on the ground that only special
leave petition was pending when the Benami Act came into
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force. There is a clear prohibition under Section 4 of the
benami Act 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. It is well settled
that an appeal is a continuation of suit and in the present
case the appeal was pending before this Court. There is no
manner of dispute that the present suit had been filed by
the plaintiff-respondent claiming that he was the real
owner of the property and the names of the defendants-
appellants were mentioned in the sale deeds as benami. In
our view, Section 4 of the Benami Act is a total prohibition
against any suit based on benami transaction and the
plaintiff-respondent is not entitled to get any decree in
such suit or in appeal.
As a result of the above discussion, we allow this
appeal, set aside the Judgment and decree of the High Court
and dismiss the suit. In view of the fact that the suit is
dismissed on account of legislative change brought about
during the pendency of the appeal in this Court, there would
be no order as to cost.
V.P.R. Appeal allowed.
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