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1992 DIGILAW 404 (KER)

Sasindran v. Jayasree

1992-10-26

BALASUBRAMANYAN

body1992
Judgment :- The plaintiff is the appellant. The respondent-defendant is his wife. 2. The appellant filed the suit O.S.No.27 of 1990 on the file of the Subordinate: Judge's Court, Badagara originally for a declaration that two deeds of assignment taken by the respondent were benami for him and to injunct the respondent from alienating the suit property by executing any deed of transfer in respect of the properties. With the coming into force of the Benami Transactions (Prohibition) Act the appellant sought an amendment of the plaint contending this the Benami Act does not affect his right to the relief claimed by him and that it was open to him to raise the plea of benami notwithstanding the Act. He also included an alternative claim for value of improvements to the tune of Rs.30,000/- on the averment that he has effected improvements in the property and in case it is found that he is not entitled to the declaration sought for by him, he is in any event, entitled to the value of improvements claimed. The respondent-wife resisted the suit. She denied the plea of the appellant that the sale deeds obtained by her are benami for him. She also contended that the suit is barred by the Benami Transactions (Prohibition) Act, She also denied that the appellant has effected any improvements in the property with his funds. She denied the appellant's claim that he is entitled to claim value of improvements in the suit. She prayed for a dismissal of the suit. 3. The trial court relying on the decision reported in Mithilesh Kumari v. Prem BehariKhare (AIR 1989 SC 1247) held that the relief of declaration sought for by the appellant is barred by the Benami Transactions (Prohibition) Act. It therefore found that substantive prayers made by the appellant cannot be granted. The trial court thereafter dealt with the claim for value of improvements made by the appellant After exhaustively dealing with the oral evidence in that behalf and noticing the inconsistencies in the claim made and the absence of particulars furnished by the appellant, the trial court came to the conclusion that the appellant has failed to prove his entitlement to claim value of improvements. The trial court also held that there is no evidence to show that the appellant was entitled to claim Rs.30,000/- towards the value of improvements. The trial court also held that there is no evidence to show that the appellant was entitled to claim Rs.30,000/- towards the value of improvements. It also observed that since the improvements are effected in the property alleged to be acquired benami, the appellant may not be entitled to claim the value of improvements. The trial court dismissed the suit. The plaintiff has come up with this appeal. 4. It is contended by the learned counsel for the appellant that the Benami Act has no application to this case since this is a case of the husband purchasing the property in the name of his wife and that S.3(1) of the Act which prohibits benami transactions has no application. Alternatively, he contends that the respondent, the wife, was standing in a fiduciary capacity to the appellant, her husband and that therefore S.4 of the Act cannot be applied to this case in view of S.4(3) (b) of the Act. He therefore submits that the trial court was in error in holding that the substantive reliefs claimed by him are hit by the Benami Transactions (Prohibition) Act. 5. The properties were acquired in this case under Ext.A1 and Ext.A2 both in March 1982. Ss.3, 5 and 8 of the Act came into force on 5-9-1988. The other sections of the Act came into force on 19-5-1988 (See S. I (3) of the act). S.3 of the Act prohibits Benami Transactions. S.5 provides for confiscation of property held benami. S.8 of the Act confers the Rule making power. S.4 of the Act which is also relevant for the purpose of this case and which came into force on 19-5-1988 prohibits the right to recover the property held benami. It has been held by this court in Velayudhan v. Rajeev (1988 (2) KLT 369) and by the Supreme Court in Mithilesh Kumari's case that S.4 of the Act is retrospective in operation and affects pending proceedings. It cannot therefore be contended that the respondent cannot plead the bar created by S.4 of the Act in this case. 6. The learned counsel contends that the property purchased in this case is purchased in the name of the wife and hence the transaction is not hit by the Act. It cannot therefore be contended that the respondent cannot plead the bar created by S.4 of the Act in this case. 6. The learned counsel contends that the property purchased in this case is purchased in the name of the wife and hence the transaction is not hit by the Act. According to counsel, S.3 of the Act which prohibits a benami transaction specifically excludes a transaction of purchase in the name of the wife from within the purview of that section and therefore a benami transaction in the name of the wife is not prohibited and if so, S.4 of the Act could not have any operation in this case. 7. Section 3 of the Act reads: "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-cognizable and bailable". Section 3(1) of the Act by its very wording indicate that it is prospective in operation. It creates a bar to any one entering into a benami transaction. Sub-section (2) exempts or excludes purchases in the name of wife or unmarried daughter from the operation of sub-section (1). Sub-section (3) makes punishable the transgression of sub-section (1). Sub-section (4) makes the offence non-cognizable and bailable. The Section having provided for penal consequences for its transgression is to be presumed to be prospective. I need not labour this point much in view of the observations of the Supreme Court in Mithilesh Kumari's case. Their Lordships have observed in para.2 of the judgment as follows: "As defined in S.2(a) of the Act "benami transaction" means any transaction in which property is transferred to one person for a consideration paid or provided by any other person. A transaction must, therefore, be benami irrespective of its date or duration. Their Lordships have observed in para.2 of the judgment as follows: "As defined in S.2(a) of the Act "benami transaction" means any transaction in which property is transferred to one person for a consideration paid or provided by any other person. A transaction must, therefore, be benami irrespective of its date or duration. S.3, subject to the exceptions, states that no person shall enter into any benami transaction. This section obviously cannot have retrospective operation...". (emphasis supplied); If S.3 cannot have retrospective operation the effect in this case would be that S.3 couldn't apply to the transaction involved in the case, which are of the year 1982 long prior to the coming into force of the Act. I cannot therefore accept the contention of the learned counsel for the appellant that the transaction involved in this case is not benami by virtue of the operation of S.3(2) of the Act. I therefore overrule that contention. 8. The next submission made by the learned counsel for the appellant is that the wife in this case is standing in a fiduciary capacity and is holding the property for his benefit and that by virtue of S.4(3)(b) of the Act the operation of the bar created by S.4 of the Act is removed. Unfortunately for the appellant though he amended the plaint; after the coming into force of the Act, he did not lay any foundation in the pleading based on the fiduciary capacity of the respondent-wife in the plaint. In fact he had no case at any stage that his wife was holding the property in a fiduciary capacity or that she was in the position of a trustee. Assuming therefore that this is a case to which S.4(3)(b) could be invoked, I find that the appellant has laid no foundation in the pleadings for invoking S.4(3)(b) of the Act. There is also no evidence in the case to satisfy the requirements of S.4 (3) (b) of the Act. I therefore hold that S.4(3)(b) of the Act is not attracted by to this case. If that be so the substantive reliefs claimed the appellant are squarely hit by, S.4(1) of the Act and therefore the trial court was perfectly right in holding that the appellant is not entitled to all the substantive reliefs claimed by him. I therefore hold that S.4(3)(b) of the Act is not attracted by to this case. If that be so the substantive reliefs claimed the appellant are squarely hit by, S.4(1) of the Act and therefore the trial court was perfectly right in holding that the appellant is not entitled to all the substantive reliefs claimed by him. The alternate claim] of the appellant that he is entitled to value of improvements is really not supported by anyl legal basis though a claim was made that the appellant has effected improvements by expending Rs.30,000/-. The court below has found that the appellant has not proved that he has expended his own money for effecting improvements in the property and that there is nothing to show that Rs.30,000/- was, as a matter of fact, spent by him in that behalf. No legal basis having been laid for claiming value of improvements in the suit instituted by the appellant himself, on scrutiny of the evidence I agree with the trial court that the appellant has not made out his claim for value of improvements in this case. The evidence of PWs. 2 and 3 is totally insufficient to enable the appellant to claim that he has as a matter of fact expended the sum of Rs.30,000/- in improving the plaint schedule property. Confronted with this situation in fact the learned counsel for the appellant; submitted that he could not legally establish' the right to claim value of improvements in this case. I therefore agree with the trial court that the appellant has not established the claim for value of improvements. 9. The learned counsel for the appellant submits that the finding of the trial court that the suit is barred by limitation in any event is not sustainable. The suit being one for declaration, Art.58 of the Limitation Act is attracted to the case. The starting point of limitation is the time when the right to sue accrues. The appellant in para. 13 of the plaint has clearly stated that the cause of action arose on 20-3-1988. Referring to the decision reported in Sunitibala Debi v. Manindra Chandra (AIR 1930 P.C. 217) the learned counsel submitted that the suit filed on 5-4-1988 is clearly within time. In the written statement the respondent has not controverted the claims regarding the arising of the cause of action as set out in the plaint. Referring to the decision reported in Sunitibala Debi v. Manindra Chandra (AIR 1930 P.C. 217) the learned counsel submitted that the suit filed on 5-4-1988 is clearly within time. In the written statement the respondent has not controverted the claims regarding the arising of the cause of action as set out in the plaint. It is not contended that the right to sue accrued to the appellant on any earlier point of time than the one shown in the plaint. Under those circumstances I accept the submission of the learned counsel for the appellant and hold that the suit is not barred by limitation. The finding of the trial court in that regard is therefore liable to be set aside. 10. But this finding on the question of limitation is of no avail to the appellant since I have agreed with the trial court that the. Suit is hit by the Benami Transactions (Prohibition) Act and that the appellant has not established any claim for value of improvements. The result is that I agree with the dismissal of the suit by the trial court and dismiss the appeal. Considering the relationship between the parties and the circumstances of the case I make no order as to costs.