JUDGMENT : D.M. Chandrashekhar, J. This appeal has been referred to a Division Bench by K.S. Verma, J., who felt that having regard to the importance of the point involved in the case it was desirable that it should be decided by a larger Bench. 2. In his order of reference the learned single Judge has set out elaborately the facts of the case and it is unnecessary to re-state them. Suffice it to state that the Appellant-Plaintiff had prayed in the suit for cancellation of the sale deed executed by Respondent-3 (Defendant 3) in favour of Respondent-1 (Defendant 1) on the ground that Respondent-3 was only a Benamidar for him (the Appellant) in respect of the suit lands. He had also claimed the crops standing on those lands. In the registered sale deed dated 2-7-1959, the purchaser was shown as Respondent-3, a minor, by the guardian, the Appellant. Subsequent to the execution of that sale deed, consolidation proceedings started in the village in which the suit lands are situate. The impugned sale deed dated 9-2-1968, is subsequent to the completion of the consolidation proceedings. 3. The learned Munsif framed a number of issues, but he tried issues Nos. 1 and 2 as preliminary issues. Those issues read: 1. Whether the court has jurisdiction to try the suit in view of the provisions of the U.P. Z.A. & L.R. Act? 2. Whether the suit is barred u/s 49 of the U.P. Consolidation of Holdings Act? 4. On the first issue, the learned Munsif held that the suit was not barred u/s 331 of the U.P. Z.A. and L.R. Act. On the second issue, he held that the suit was barred u/s 49 of the U.P. Consolidation of Holdings Act, 1953, (hereinafter called the Act). 5. fn the first appeal preferred by the Plaintiff, the learned District Judge held that it was not necessary to decide the first issue framed by the learned Munsif. However, he agreed with the finding of the learned Munsif that the suit was barred by Section 49 of the Act. The learned District Judge remanded the suit to the learned Munsif to try the suit in regard to the Plaintiff's claim to the standing crops on the suit lands. 6. The Plaintiff has preferred this second appeal.
However, he agreed with the finding of the learned Munsif that the suit was barred by Section 49 of the Act. The learned District Judge remanded the suit to the learned Munsif to try the suit in regard to the Plaintiff's claim to the standing crops on the suit lands. 6. The Plaintiff has preferred this second appeal. The learned single Judge has stated in his referring order that he was inclined to doubt the correctness of the view taken by the courts below on the second issue. His Lordship observed thus in his referring order: As stated earlier, it cannot be disputed that Benami transactions are recognised in this country and if that is so, the principle would also apply to transfer of Bhumidhari holdings. If it is held that Respondent No. 3 is the Benamidar, the real owner, namely, the Appellant was justified, if there was no threat to his rights, in not filing any objections before the consolidation courts. He could file objections only when there was a threat to his rights. That threat came to light when Respondent No. 3 transferred the plots in dispute to Respondent No. 1. It was the execution of the sale deed which gave rise to the cause of action to challenge the status of Sheo Bahadur Singh (Respondent No. 3). 7. Before us, Sri, U.C. Srivastava, learned Counsel for the Appellant, contended that the consolidation authorities had no jurisdiction to go into the question whether Defendant-3 was a Benamidar for the Plaintiff, that at the time when the consolidation proceedings took place there was no dispute between the Plaintiff and Defendant 3, in regard to the suit lands, that hence there was no necessity for the Plaintiff to put forth his claim to the suit lands before the consolidation authorities and that Section 49 of the Act did not bar the present suit. 8. On the other hand, Sri K.N. Misra, learned Counsel for Respondent-1, the purchaser under the impugned sale deed, argued in support of the view taken by the courts below that the suit is barred u/s 49 of the Act. 9. In order to appreciate the rival contentions of the learned Counsel, it is necessary to set out certain provisions of the Act and the object of the Act. 10.
9. In order to appreciate the rival contentions of the learned Counsel, it is necessary to set out certain provisions of the Act and the object of the Act. 10. The preamble to the Act states that the Act is to provide for the consolidation of agricultural holdings in Uttar Pradesh for the development of agriculture. 11. The word 'consolidation' is defined in Sub-section (2) of Section 3 of the Act as re-arrangement of holdings in a unit amongst the several tenure-holders in such a way as to make their holdings more compact. 12. Sub-section (1-A) of Section 3 of the Act defines 'chak' as the parcel of land allotted to a tenure-holder on consolidation. 13. Sub-section (4-C) of Section 3 of the Act defines 'holding' as a parcel or parcels of land held under one tenure by a tenure-holder singly or jointly with other tenure-holders. 14. Section 4 of the Act provides, inter alia, that where the State Government is of the opinion that a district or part thereof may be brought under consolidation operations, it may make a declaration to that effect in the Gazette and that where the Government decides to start consolidation operations in any area, it may issue a notification to that effect and that every such notification shall be published in the official Gazette and in each unit of such area. 15. Sub-section (1) of Section 9 of the Act provides, inter alia, that the Assistant Consolidation Officer shall send or cause to be sent to the tenure-holders concerned and other persons interested, notices containing relevant extracts from the current annual registers and such other records as may be prescribed showing their rights in and liabilities in relation to the land and publish the current khasra and the current annual register or any other records that may be prescribed to show, inter alia, the particulars of the aforesaid rights and liabilities in relation to the land. 16. Sub-section (2) of Section 9 of the Act provides that any person to whom a notice under Sub-section (1) of that section has been sent, or any other person interested may, within 21 days of receipt of notice or of the publication under Sub-section (1), as the case may be, file before the Assistant Consolidation Officer, objections in respect thereof disputing the correctness or nature of the entries in the records or in the extracts furnished therefrom.
17. Sub-section (1) of Section 9A of the Act provides that where objections in respect of claims to land are filed, the Asstt. Consolidation Officer shall settle the disputes between the parties appearing before him after hearing them. 18. Sub-section (3) of Section 9A of the Act provides that the Assistant Consolidation Officer, while acting under Sub-section (1) shall be deemed to be a court of competent jurisdiction notwithstanding anything to the contrary contained in any other law for the time being in force. 19. Section 11 of the Act provides for appeals from the orders of the Assistant Consolidation Officer to the Settlement Officer, Consolidation, who shall be deemed to be a court of competent jurisdiction notwithstanding anything to the contrary contained in any other law for the time being in force. 20. Section 19 of the Act sets out the conditions to be fulfilled by a Consolidation Scheme. Clause (e) of Sub-section (1) of that section reads: (e) every tenure-holder is, as far as possible, allotted a compact area at the place where he holds the largest part of his holding: Provided that no tenure-holder may be allotted more chaks than three, except with the approval in writing of the Deputy Director of Consolidation: Provided further, that no consolidation made shall be invalid for the reason merely that the number of chaks allotted to a tenure-holder exceeds three; 21. Section 30 of the Act provides, inter alia, that with effect from the date on which a tenure-holder enters, or is deemed to have entered into possession of the chak allotted to him in accordance with the provisions of the Act, the rights, title, interests and liabilities of the former tenure-holder of the plots comprised in the chak in their respective original holdings shall cease and that the encumbrances, if any, upon the original holding of the tenure-holder entering or deemed to have entered into possession, whether by way of lease, mortgage or otherwise, shall, in respect of that holding cease, and, be created on the holdings, or on such parts thereof, as may be specified in the final Consolidation Scheme. Section 49 of the Act reads: * * * * * 22.
Section 49 of the Act reads: * * * * * 22. In Attar Singh v. State of U.P. 1959 AWR 300 SC, the object of the Act was explained thus by the Supreme Court: The object of the Act is to allot a compact area in lieu of scattered plots to tenure-holders so that large scale cultivation may be possible with all its attendant advantages.... These advantages resulting from consolidation of holdings are intended to encourage the development of agriculture and larger production of food grains, which is the necessity of the day. 23. A Benami holding of property or a Benami transaction is not necessarily illegal and the Court may recognise the Benami nature of an ownership or transaction and give effect to the real position unless such recognition is prohibited by any particular enactment for any particular purpose. In Kumar Harish Chandra Singh v. Bansidhar Mohanty AIR 1965 SC 1738 , the Supreme Court quoted with approval the following observations of the Privy Council in Mst. Bilas Kunwar v. Desraj Ranjit Singh AIR 1915 PC 96 at page 97: It (the Benami transaction) is quite unobjectionable and has a curious resemblance to the doctrine of our English law, that the trust of the legal estate results to the man who pays the purchase money,.... 24. In Ch. Gur Narayan v. Sheolal Singh AIR 1918 PC 140 , the Privy Council observed thus at page 143: The system of acquiring and holding property...other considerations arise with which their Lordships are not concerned in the present case. 25. Certain statues, however, expressly bar recognition of Benami nature of a transaction or Benami ownership. One such illustration is found in Section 153 of the Companies Act, 1956, which provides that no notice of any trust, express, implied or constructive, shall be entered on the register of members or of debenture holders. 26. Even so, the High Court of Bombay held in Dharwar Bank Ltd. Vs. Mahomed Hayat, AIR 1931 Bom 269, that though a company is not bound to recognise a trust in respect of its shares, yet that would not prevent a court from recognising such trust in a suit and from considering the rights between the parties. 27. Another instance of express statutory prohibition against recognition of Benami transactions is found in Rule 285-M of the U.P. Zamindari Abolition and Land Reforms Rules, 1952.
27. Another instance of express statutory prohibition against recognition of Benami transactions is found in Rule 285-M of the U.P. Zamindari Abolition and Land Reforms Rules, 1952. That Rule provides that where a sale of a holding or other immovable property under the Act has been confirmed, the Collector shall grant a certificate to that effect to the person declared as the purchaser at the time of such sale and that any suit brought or application made against such purchaser on the ground that the purchase was made on behalf of another person, not the certified purchaser, though by agreement the name of the certified purchaser was used, shall be dismissed with costs. 28. There is no express provision contained in the Act prohibiting recognition of Benami nature of a holding or transaction. 29. Sri Srivastava contended that in the light of the above quoted observations of the Privy Council and the Supreme Court to the effect that in a suit a Benamidar can effectively represent the real owner, it must be held that an entry of certain lands in the revenue registers in the name of a person who is a Benamidar, should be regarded as an entry in the name of the real owner, that there is no need for the real owner to put forth his claim before the consolidation officer as against the Benamidar and that it was only where a Benamidar had denied the title of the real owner or acted in a manner adverse to the interests of the real owner, the real owner had to put forth his claim to title before the Consolidation Officer. Sri Srivastava added that in the present case such adverse act on the part of the Benamidar, namely, the sale of the suit lands to Respondent-1 (Defendant-1), took place subsequent to the completion of the consolidation proceedings and that hence the mere fact that the Plaintiff did not put forth his claim to the title of the suit lands before the Consolidation Officer, did not bar the present suit which was based upon a cause of action subsequent to the completion of consolidation proceedings. 30.
30. On the other hand, Sri Misra contended that the Plaintiff who claimed that Defendant-3, in whose name the entries in the revenue records stood, was not the real owner of the suit lands, in substance, disputed the correctness of the entries in the revenue records showing Defendant-3 as the owner or Bhumidhar of those lands and that hence the Plaintiff's claim could have and should have been put forward before the Consolidation Officer u/s 9 of the Act and as such claim was not so put forward, a suit based on such claim was barred u/s 49 of the Act. 31. In the absence of any express prohibition in the Act against recognition of Benami holdings and Benami transactions, the civil courts could recognise them and treat the Benamidar as the trustee for the real owner provided that such recognition did not affect the scheme of consolidation of holdings under the Act. But Section 19 of the Act provides that every tenure holder be allotted, as far as possible, a compact area at the place where he holds the largest part of his holding that no tenure-holder should be allotted more than three chaks. If Benami holding of lands is recognised and it is not made incumbent on the real owner of lands to put forward his claim to title thereto u/s 9 of the Act and to get his name entered in the revenue records as the owner of such lands, such Benami holding will come in the way of carrying out the scheme of consolidation of holdings in accordance with Clause (e) of Section 19(1) of the Act. A person may hold some of his lands in his own name and others in the name or names of a Benamidar or Benamidars in which case the Consolidation Authorities will not be able to ascertain where he holds the largest part of his total holding.
A person may hold some of his lands in his own name and others in the name or names of a Benamidar or Benamidars in which case the Consolidation Authorities will not be able to ascertain where he holds the largest part of his total holding. Further, if a person holds some lands in his own name and some in the name or names of Benamidar or Benamidars or holds all his lands in the name or names of Benamidar or Benamidars, it will be possible to defeat the requirement of the proviso to Clause (e) of Section 19(1) of the Act that no tenure-holder may be allotted more than three chaks, because the Consolidation Authorities will not know that he is the real owner of more than three chaks. 32. However, Sri Srivastava argued that even if more than three chaks should come into the hands of the same real holder on account of all or some of those chaks being allotted to his Benamidar or Benamidars, the consolidation scheme will not be invalid in view of the further proviso to Clause (e) and that hence permitting the real owner of lands to establish in a civil suit the Benami character of his holdings, will not affect the consolidation scheme under the Act. 33. We are unable to accept the above contention of Sri Srivastava. Merely because the further proviso to Clause (e) of Section 19(1) of the Act saves a consolidation scheme from being rendered invalid on account of more than three chaks being allotted to the same real tenure-holder, it does not follow that a practice which gives scope for such contravention of the requirement of the first proviso, should be recognised as legal. 34. Thus, even though there is no specific prohibition in the Act against Benami holding of lands and Benami transfers of holdings, such prohibition is implied in the scheme of the Act, since permitting a person to establish in civil court the Benami character of his holding, would materially affect carrying out a proper consolidation scheme under the Act.
34. Thus, even though there is no specific prohibition in the Act against Benami holding of lands and Benami transfers of holdings, such prohibition is implied in the scheme of the Act, since permitting a person to establish in civil court the Benami character of his holding, would materially affect carrying out a proper consolidation scheme under the Act. Hence it follows that all claims of a real owner of a land should be put forward before the consolidation authorities u/s 9 of the Act so that they may determine who is the true owner of the land and if he fails to do so, he will be debarred from establishing the Benami character of such holding, in a civil court. 35. In the present case the purchase of the suit land in the name of Defendant-3, was prior to the commencement of the cosolidation proceedings in respect of those lands. As the Plaintiff did not put forward before the consolidation authorities his claim that he was the real owner of those lands and Defendant-3 was only a Benamidar, he is debarred u/s 49 of the Act from establishing his claim in the present suit. 36. We agree with the view taken by the courts below that the Plaintiff's claim for setting aside the sale dated 9-2-1968, executed by Defendant-3 in favour of Defendant-1 is barred u/s 49 of the Act. The order of the learned District Judge remanding the case to the learned Munsif for trying only the Plaintiff's claim to the standing crops, should stand undisturbed. 37. In the result this appeal fails and is dismissed. 38. In the circumstances of the case we direct the parties to bear their own costs.