Benami property bar is prospective; pre-1988 suit remained maintainable and the plaintiff's decree was upheld.

Section 4(1) of the Benami Transactions (Prohibition) Act, 1988 was held to be prospective and not applicable to a suit instituted before the Act commenced on 19 May 1988. Because the suit had been filed in 1974, the statutory bar could not defeat the plaintiff's pre-existing claim in respect of benami property. The earlier contrary view was displaced by the later Supreme Court authority, and the decree in favour of the plaintiff was upheld.

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Issues: Whether section 4(1) of the Benami Transactions (Prohibition) Act, 1988 applied to a suit instituted before the Act came into force, so as to bar enforcement of the plaintiff's claim in respect of benami property.

Analysis: The statutory bar in section 4(1) was construed in light of the later binding view of the Supreme Court that the provision is prospective and does not govern suits filed before its commencement. Since the suit had been instituted in 1974, long before the Act came into force on 19 May 1988, the statutory prohibition could not defeat the plaintiff's pre-existing cause of action. The earlier contrary view stood displaced by the larger Bench decision.

Conclusion: Section 4(1) of the Benami Transactions (Prohibition) Act, 1988 did not apply to the suit, and the decree in favour of the plaintiff was justified. The appeal failed.

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