K. SREEDHAR RAO, J. ( 1 ) THE appeal filed against the judgment and decree passed in RA 95/ 89 on the file of District Judge, Shimoga arising out of the judgment and decree passed in O. S. No. 118/81 on the file of Additional civil Judge, Shimoga. The appellant is the third defendant in the suit. The first respondent plaintiff filed a suit for declaration of title and for possession of the properties from the defendants 1 and 2 in the suit. The respondent-2 is the legal representative of deceased first defendant and respondent-3 is the second defendant. The suit relates to a house property bearing No. 1417/1427/2648 situate in Shimoga city. The suit property was sold by the appellant in favour of the plaintiff under registered sale deed. The defendants 1 and 3 were in occupation of the house. The defendant No. 1 is the sister of the appellant. After purchase, the plaintiff filed a suit for declaration of title and for possession. The defendants 1 and 2 took up a contention that the third defendant appellant was only an ostensible owner, their mother Smt. Madamma had paid the sale consideration for purchase but the property was nominally purchased in the name of the third defendant. The purchase was intended for the benefit of the first defendant. At the time of purchase, it is said that the first defendant, her husband were financially in a bad shape. Their mother was a widow she was doing milk vending business and had lucrative earnings, she feared that if the property is purchased in her name, the relatives of her husband may lay claim over the property. Further their mother did not intend to purchase directly in the name of the first defendant because she feared that the creditors of the first defendant may lay claim over the property for recovery of their debts. Therefore, in order to secure the property for the benefit of first defendant, the strategy of ostensible purchase in the name of third defendant was revised, however, with a clear intention to benefit the first defendant from the purchase. Thus the defendants 1 and 2 set up the plea of benami. It is also contended that the third defendant had no right to sell the property in favour of the plaintiff. Thus the defendants 1 and 2 set up the plea of benami. It is also contended that the third defendant had no right to sell the property in favour of the plaintiff. ( 2 ) THE trial Court upheld the contention of defendants 1 and 2 that first defendants mother had paid the consideration for the purpose of purchase, third defendant was only an ostensible owner and the purchase was for the benefit of the first defendant. The reasons for such benami purchase offered by the defendants 1 and 2 has been accepted by the trial Court. Ultimately found that the third defendant had no real legal title to convey the property in favour of the plaintiff dismissed the suit for declaration of title but granted the alternative equitable relief by directing the third defendant to refund the sale consideration to the plaintiff. The appellate Court concurred with the findings of the trial Court and confirmed the judgment end decree. The plaintiff had also filed an appeal against the judgment and decree in ra 93/89. The appeal of the plaintiff came to be dismissed. The third defendant has now preferred this second appeal. There is no appeal preferred by the plaintiff-first defendant. ( 3 ) IN this appeal, the following question of law is formulated for consideration in this appeal. (1) Whether or not the Courts below were right in holding that the sale deed Ex. P. 10 under which the appellant purchased the property is a benami transaction, when even according to defendant Nos. 1 and 2 the alleged sale consideration was paid by the mother of the first defendant and the appellant? apart from the point of law framed, an interesting question of law would also arise for consideration: "whether the facts and nature of transaction narrated by defendants 1 and 2 would amount to a plea of benami and whether the plea of benami is a heritable plea by the heirs of the real owner? If so, as a fact whether the benami character of the transaction is established?" ( 4 ) THE mother of the first defendant the alleged real owner had died at the time of the suit and she had not asserted in her title over the claim pver the property as a real owner. If so, as a fact whether the benami character of the transaction is established?" ( 4 ) THE mother of the first defendant the alleged real owner had died at the time of the suit and she had not asserted in her title over the claim pver the property as a real owner. For the first time after the demise of real owner, the first defendant set up a plea of benami that the third defendant is not the real owner and only an ostensible owner. ( 5 ) THE Supreme Court in Bhim Singh (Dead) By L Rs. v. Kan Singh, AIR 1980 SC 727 in paras 14, 18, 24 and 25 has made the following relevant observations about the legal character and incidents of the benami transaction as vogue of in India. "14. Under the English law, when real personal property is purchased in the name of a stranger a resulting trust will be presumed in favour of the person who is proved to have paid the purchase money in the character of the purchaser. It is, however, open to the transferee to rebut that presumption by showing that the intention of the person who contributed the purchase money was that the transferee should himself acquire the beneficial interest in the property. There is, however, an exception to the above rule of presumption made by the English law when the person who gets the legal title under the conveyance is either a child or the wife of the person who contributes the purchase money or his grand child, whose father is dead. The rule applicable in such cases is known as the doctrine of advancement which requires the Court to presume that the purchase is for the benefit of the person in whose favour the legal title is transferred even though the purchase money may have been contributed by the father or the husband or the grandfather, as the case may be, unless such presumption is rebutted by evidence showing that it was the intention of the person who paid the purchase money that the transferee should not become the real owner of the property in question. The doctrine of advancement is not in vogue in India. The counterpart of the English law of resulting trust referred to above is the Indian law of benami transactions. Two kinds of benami transactions are generally recognized in India. The doctrine of advancement is not in vogue in India. The counterpart of the English law of resulting trust referred to above is the Indian law of benami transactions. Two kinds of benami transactions are generally recognized in India. Where a person buys a property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami. In that case, the transferee holds the property for the benefit of the person who has contributed the purchase money, and he is the real owner. The second case which is loosely termed as a benami transaction is a case where a person who is the owner of the property executes a conveyance in favour of another without the intention of transferring the title to the property thereunder. In this case, the transferor continues to be the real owner. The difference between the two kinds of benami transactions referred to above lies in the fact that whereas in the former case there is an operative transfer from the transferor to the transferee though the transferee holds the property for the benefit of the person who has contributed the purchase money, in the latter case, there is no operative transfer at all and the title rests with the transferor notwithstanding the execution of the conveyance. One common feature, however, in both these cases is that the real title is divorced from the ostensible title and they are vested in different persons. The question whether a transaction is a benami transaction or not mainly depends upon the intention of the person who has contributed the purchase money in the former case and upon the intention of the person who has executed the conveyance in the latter case. The principle underlying the former case is also statutorily recognized in Section 82 of the indian Trusts Act, 1882 which provides that where property is transferred to one person for a consideration paid or provided by another person and it appears that such other person did not intend to pay or provide such consideration for the benefit of the transferee, the transferee must hold the property for the benefit of the person paying or providing the consideration. This view is accord with the following observations made by this Court in Meenakshi Mills, Madurai v. the Commissioner of Income-Tax, Madras, 1956 SCR 691 : ( AIR 1957 SC 49 } at P. 722 "in this connection, it is necessary to note that the word benami is used to denote, two classes of transactions which differ from each other in their legal character and incidences. In one sense, it signifies a transaction which is real, as for example when A sells properties to B but the sale deed mentions X as the purchaser. There the sale itself is genuine, but the real purchaser is B, X being his benamidar. This is the class of transactions which is usually termed as benami. But the word benami is also occasionally used perhaps not quite accurately, refer to a sham transaction, for example, when A purports to sell his property to B without intending that, his title should cease or pass to B. The fundamental difference between these two classes of transactions is that whereas in the former there is an operative transfer resulting in the vesting of title in the transferee, in the latter there is one such, the transferor continuing to retain the title notwithstanding the execution of the transfer deed. It is only in the former class of cases that it would be necessary, when a dispute arises as to whether the person named in the deed is the real transferee or B, to enquire into the question as to who paid the consideration for the transfer, X or B. But in the latter class of cases, when the question is whether the transfer is genuine or sham, the point for decision would be, not who paid the consideration but whether any consideration was paid". 18. 18. The principle governing the determination of the question whether a transfer is a benami transaction or not may be summed up thus (1) the burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money and (4) the question as to what his intention was has to be decided on the basis of the surrounding circumstances, the relationship of the parties, the motives governing their action in bringing about the transaction and their subsequent conduct, etc. "24. It must then be asked by what evidence can the presumption be rebutted, and it would, I think be very unfortunate if any doubts were cast (as I think it has been by certain passages in the judgments under review) on the well settled law on this subject. It is, I think, correctly stated in substantially the same terms in every text book that I have consulted and supported by authority extending over a long period of time. I will take, as an example, a passage from Snells Equity, 24th ed P. 153 which is as follows : "the acts and declarations of the parties before or at the time of the purchase, or so immediately after it as to constitute a part of the transaction, are admissible in evidence either for or against the party who did the act or made the declaration. But subsequent declarations are admissible as evidence only against the party who made them, and not in his favour. 25. The above passage, we are of the view, does not really assist the defendant in this case. But subsequent declarations are admissible as evidence only against the party who made them, and not in his favour. 25. The above passage, we are of the view, does not really assist the defendant in this case. What was held by the House of Lords in the case of Shephard (supra) was that the presumption of advancement could be displaced only by a statement or conduct anterior to or contemporaneous to the purchase nor could any conduct of the children operate against them as admissions against their interest as they acted without the knowledge of the facts. In the instant case, we are concerned with the conduct and declarations of Bharat Singh subsequent to the transaction which were against his interest. The evidence regarding such conduct and declarations is not being used in his favour but against the legal representative of Bharat singh i. e. the defendant who would have become entitled to claim a share in the suit house if it had formed part of his estate. Such conduct or declaration would be admissible even according to the above decision of the house of Lords in which the statement of law in Snells Equity to the effect but subsequent declarations are admissible as evidence only against the party who made them, and not in his favour is quoted with approval. The declarations made by Bharat Singh would be admissible as admissions under the provisions of the Indian Evidence Act being statements made by him against his proprietary interest under Section 21 and Section 32 (3) of the Indian Evidence Act. " ( 6 ) IN Controller of Estate Duty v. Aloke mitra, AIR 1981 SC 102 . The following observations are made in paras 30 to 32: "30 The law in this matter is not in doubt and is authoritatively stated by a long line of decisions of the Privy Council starting from the well known case of Gopeekrist Gosain v. Gungapersaud Gosain, (1854) 6 Moo Ind App 53 to Sura Lakshmiah Chetty v. Kothandarama Piliai, 52 Ind App 286 : AIR 1925 PC 181 and of this Court in Shree meenakshi Mills Ltd. V C IT, 31 ITR 28 : AIR 1957 SC 49 . As observed by Knight Bruce lj in Gopeekrist Gosains case the doctrine of advancement is not applicable in India, so as to raise the question of a resulting trust. As observed by Knight Bruce lj in Gopeekrist Gosains case the doctrine of advancement is not applicable in India, so as to raise the question of a resulting trust. When a property is purchased by a husband in the name of his wife, or by a father in the name of his son, it must be presumed that they are benamidars, and if they claim it as their own by alleging that the husband or the father intended to make a gift of the property to them, the onus rests upon them to establish such a gift. In Sura Lakshmiah chettys case, the law was stated with clarity by Sir John Edge in these words : there can be no doubt that a purchase in India by a native of India of property in india in the name of his wife unexplained by other proved or admitted facts is to be regarded as a benami transaction by which the beneficial interest in the property is in the husband, although the ostensible title is in the wife. " 31. It is but axiomatic that a benami transaction does not vest any title in the benamidar but vests it in the real owner. When the benamidar is in possession of the property standing in his name, he is in a sense the trustee for the real owner, he is only a name lender or an alias for the real owner. In Petheperumal Chetty v. Muniandy servai, (1908) 35 Ind App 98, the Judicial committee quoted with approval the following passage from Maynes Hindu Law 7th ed para 446: "where a transaction is once made out to be a mere benami, it is evident that the benamidar absolutely disappears from the title. His name is simply an alias for that of the person beneficially interested. The cardinal distinction between a trustee known to English Law and a benamidar lies in the fact that a trustee is the legal owner of the property standing in his name and cestui que trust is only a beneficial, whereas in the case of a benami transaction the real owner has got the legal title though the property is in the name of the benamidar. It is well settled that the real owner can deal with the property without reference to the latter. It is well settled that the real owner can deal with the property without reference to the latter. In Gur Narayan v. Sheo Lal Singh, 40 Ind app 1 : AIR 1918 PC 140 the Judicial Committee referred to the judgment of Sir George farwell in Mst. Bilas Kunwar v. Dasraj Ranjit singh, 42 Ind App 202 : AIR 1915 PC 96 where it was observed that a benami transaction had a curious resemblance to the doctrine of English law that the trust of the legal estate results to the man who pays the purchase money, and went on to say: "the benamidar has no beneficial interest in the property or business that stands in his name, he represents in fact, the real owner and so far as their relative legal position is concerned he is a mere trustee for him. " in Guran Ditta v. Ram Ditta, 55 Ind App 235 : AIR 1928 PC 172 the Judicial Commit- tee reiterated the principle laid down to gopeekrist Gosains case (1854) 6 Moo Ind app 53 (PC) and observed that in case of a benami transaction, there is a resulting trust in favour of the person providing the purchase money. 32. A benamidar has no interest at all in the property standing in his name. Where the transaction is once made out to be benami, the Court must give effect to the real and not to the nominal title subject to certain exceptions. In Mullas Hindu Law, 14th edn. P. 638, four exceptions to the normal rule are brought out. But these exceptions are not material in this case. One of the exceptions enumerated therein is that where a benamidar sells, mortgages or otherwise transfers for value property held by him without the knowledge of the real owner, the real owner is not entitled to have the transfer set aside unless the transferee had notice, actual or constructive that the transferor was merely a benamidar. The principle is embodied in Section 41 of the Transfer of Property act. The section makes an exception to the rule that a person cannot confer a better title than he has. The section is based on the well known passage from the judgment of the judicial Committee in Ramcoomar Koondoo v. Macqueen, (1872) Ind App Supp Vol. The principle is embodied in Section 41 of the Transfer of Property act. The section makes an exception to the rule that a person cannot confer a better title than he has. The section is based on the well known passage from the judgment of the judicial Committee in Ramcoomar Koondoo v. Macqueen, (1872) Ind App Supp Vol. 40 at p. 43: "it is a principle of natural equity, which must be universally applicable, that where one man allows another to hold himself out as the owner of an estate, and a third person purchases it for value from the apparent owner in the belief that he is the real owner, the man who so allows the other to hold himself out shall not be permitted to recover upon his secret title unless he can other throw that of the purchaser by showing, either that he had direct notice, or something which amounts to constructive notice, of the real title, or that there existed circumstances which ought to have put him upon an inquiry that, if prosecuted, would have led to a discovery of it. A benamidar is an ostensible owner and if a person purchases from a benamidar, the real owner cannot recover unless he shows that the purchaser had actual or constructive notice of the real title. But from this it does not follow that the benamidar has real title to the property, he is merely an ostensible owner thereof ( 7 ) THE defendants contend that the fund was supplied by Smt. Madamma for the benefit of first defendant but ostensibly purchased in the name of the third defendant cannot be in legal sense be construed as benami transaction and the first defendant cannot get any title nor can be construed as real owner. Therefore the facts stated in defence cannot fit into the concept of benami. ( 8 ) IN view of the law laid down by the supreme Court, it is clear that an ostensible owner does not hold any interest or title over the property in a benami transaction. The title lies with the real owner. Upon his death, necessarily the property remains as an estate of real owner and becomes liable for inheritance according to law of succession governing the parties. The title lies with the real owner. Upon his death, necessarily the property remains as an estate of real owner and becomes liable for inheritance according to law of succession governing the parties. Therefore a legal heir of a real owner is permitted in law to contend that the property standing in the name of ostensible owner is only a benami transaction and can set up the title of real owner to claim succession. The ambit and amplitude of the operational area of benami transactions is by and large curtailed by passing of the Benami Transaction Prohibition Act of 1988 (in short Benami Prohibition Act) a legal and valid plea of benami has to conform to the qualified conditions envisaged under the Benami Prohibition Act to permit the plea of benami to be raised as a defence or for prosecuting the suit. In all such cases, the heirs of benamidar do have a legal right to set up a plea of benami and to claim the property from the ostensible owners if they otherwise fulfil the necessary requirements of law of limitation. ( 9 ) THE provisions of Benami Transaction prohibition Act of 1988 do not apply since the transaction in question is prior to the passing of the Act. In the present case D. W. 1 one of the attesting witness to the sale deed has supported the case of the third defendant and the plaintiff D. W. 4 is the husband of the first defendant. D. W. 5 is the first defendant. D. W. 6 is one Satswantiamma who had acquaintance with Madamma has deposed in favour of defendants 1 and 2. D. W. 7 is one of the attesting witness has supported the case of the first defendant thereby out of the attesting witnesses, one supports the case of the plaintiff and third defendant and the other attesting witness supports the case of defendants 1 and 2. I find the appreciation of evidence made by the Courts below is thoroughly erroneous and misguided by unwarranted surmises. It is the contention of first defendant her mother after the demise of her father was living in Shimoga and she was doing milk vending business and selling around 20 litres of milk every day. D. W. 4 and D. W. 5 by their evidence have failed to establish that late Madamma was capable of having a cash of Rs. It is the contention of first defendant her mother after the demise of her father was living in Shimoga and she was doing milk vending business and selling around 20 litres of milk every day. D. W. 4 and D. W. 5 by their evidence have failed to establish that late Madamma was capable of having a cash of Rs. 5000/- for the purpose of the house. The assumption of the trial Court that Madamma was able to earn around Rs. 300/- by milk vending appears to be the exaggerated assumption. In early part of 1960s, the money value was very high, the income of the present milk vendor under the inflationary rates should not be a factor in notionally assuming the income from milk vending during 1960s. An earning of Rs. 300/- per month during 1960s was something a salary of a gazetted officer. There is no evidence placed to show that she was capable of having a lump sum amount of rs. 5000/ -. DWs. 4 and 5 say that she was keeping the cash in the house. Such an evdence appears to be artificial, no bank account was maintained by deceased madamma. It is in the evidence of the plaintiffs that Madamma had taken old age pension under the scheme which was introduced during the emergency period in the year 1976-77 and she was getting an old age pension of Rs. 40/ -. The reasons given by the defendants for benami purchase are artificial and untenable. The Courts below have placed heavy reliance on Ex. D1, a letter written by husband of the third respondent. The meticulous repeated reading of the letter does not indicate any where that the money was paid by Madamma for the purchase. Under the letter, the husband of the third defendant only informs Madamma to make arrangements for early registration of the sale by informing the parties. By the contents of the letter, it is impermissible to read and infer more than what it states. The sufficient evidence is placed by third defendant to show that her husband had sufficient funds and capable of purchasing the property. In the context of such evidence it was improper for the Courts below to come to conclusion that it was only a benami transaction and third defendant was an ostensible owner. The sufficient evidence is placed by third defendant to show that her husband had sufficient funds and capable of purchasing the property. In the context of such evidence it was improper for the Courts below to come to conclusion that it was only a benami transaction and third defendant was an ostensible owner. The said findings are perverse and contrary to evidence on record and liable to be set aside. ( 10 ) IN the result, I answer point No. 1 in negative. As a consequence of this order, the findings of the Courts below on the question of benami is to be set aside. The title of the third defendant in respect of the suit property is to be upheld. At this stage Sri D. L. N. Rao arguing for the appellant contends that the decree granted by the Courts below in favour of plaintiff to receive the sale consideration be confirmed and the title of the third defendant upheld by this order be kept intact because the plaintiff has not preferred a second appeal against the dismissal of his appeal RA 95/89 and that the findings thereon have become final and binding on the plaintiff. I am unable to agree with the submissions. If the title of the third defendant is upheld as a natural consequence, the sale made in favour of the plaintiff gets validated. The present appeal prosecuted by the third defendant has inescapable bearing on the claim of the plaintiff. If the request of the third defendant in this appeal is upheld it would result in anomalous position of impliedly setting aside the sale deed executed by third defendant in favour of plaintiff and there would be no legal basis to take such view. As a natural unimpeded legal consequence the sale made by the third defendant in favour of the plaintiff has to be upheld. To answer cynical question of third defendant for what benefit the third defendant had to file this appeal could be well replied that the third defendant avoids the liability to refund the sale consideration to the plaintiff as directed by the Courts below. The judgment and decree made against the appellant herein by the Court below is set aside and as a natural corollary the suit of the plaintiff is deemed to be allowed declaring the title and possession. Order accordingly. --- *** --- .