2007 (4) TMI 752 - SC - Benami Property

Supreme Court Upholds Property Ownership, Rules Transaction Was Not Benami; Intention and Evidence Key Factors.

The SC set aside the HC's judgment and restored the trial court's decision, concluding that the property purchased in the name of Suprovabala was not a ... Benami Transactions or not - Suit for Partition - Claiming 3/7th share of the property - Onus of proof - family dispute - inheritance - Power-of attorney executed before a Magistrate at Rangoon - Dr. Ghosh was an attesting witness therein - Interestingly, Suprovabala described herself as daughter of Babu Rangalal Ghosh and not the wife of Dr. Ghosh therein - registered indenture was executed by the Administrator General of Bengal to the estate of Edwin St. Clair Vallentine in favour of Suprovabala for a sum - during the life time of Dr. Ghosh, the name of Suprovabala was mutated - The learned trial Judge that, it is not to be a case of benami transaction. HELD THAT:- The fact that Amal allowed the order of mutation to attain finality, thus, would also be a pointer to suggest that despite such bitter relationship between the parties he accepted the same ; more so, when mutation of one's name in the Municipal Corporation confers upon him a variety of rights and obligations. He had rights and obligations in relation thereto because, according to him, in relation to the said property vis-a-vis Calcutta Municipal Corporation, he was residing with his wife, he allegedly inducted tenants and had been realizing rent from them. We have seen hereinbefore that the Appellant examined herself as a witness. The wife of Amal even did not do so. An adverse inference should be drawn against her. Daughter of Respondent No. 1 (Respondent No. 2) who was born in 1954 examined herself as DW-1. She evidently had no knowledge about the transaction. She could not have any. At least it was expected that Respondent No. 1 might have gathered some knowledge keeping in view the conduct of her husband vis-a-vis the sisters in relation to the property. Even otherwise, she was a party to the suit. No evidence, worth the name, therefore, had been adduced on behalf of Respondent No. 1. Interestingly, Amal pleaded ouster. If ouster is to be pleaded, the title has to be acknowledged. Once such a plea is taken, irrespective of the fact that as to whether any other plea is raised or not, conduct of the parties would be material. If, therefore, plea of ouster is not established, a' fortiori the title of other co-sharers must be held to have been accepted. P.W. 4 Chandi Charan Ghosh is a common relation. According to him, Dr. Ghosh acknowledged the title of his wife before him. We may not rely on his evidence in its entirety but we intend to emphasise that at least some evidence has been adduced on behalf of the Appellant whereas no evidence, worth the name, has been adduced on behalf of the Defendants-Respondents. D.W. 1, as noticed hereinbefore, having born in 1954, could not have any personal knowledge either in regard to the transaction or in regard to the management of the property by Suprovabala whatsoever. She was even only four years old when the name of all co-sharers was mutated in the records of the Calcutta Municipal Corporation. She, however, admitted that there are two other houses standing in the name of Dr. Ghosh. She even could not say anything about the power-of-attorney. She accepted that the suit house was in the name of Suprovabala till 1958. She accepted that her father objected to the mutation but the same was granted and no further step had been taken. Although she claimed that she had been looking after the affairs, she could not give any details about the purported litigations as against the tenants initiated by her father. Burden of proof as regards the benami nature of transaction was also on the Respondent. This aspect of the matter has been considered by this Court in Valliammal (D.) by L.Rs. v. Subramaniam and Ors.[2004 (8) TMI 725 - SUPREME COURT]. It is well-settled that intention of the parties is the essence of the benami transaction and the money must have been provided by the party invoking the doctrine of benami. The evidence shows clearly that the original Plaintiff did not have any justification for purchasing the property in the name of Ramayee Ammal. The reason given by him is not at all acceptable. The source of money is not at all traceable to the Plaintiff. No person named in the plaint or anyone else was examined as a witness. The failure of the Plaintiff to examine the relevant witnesses completely demolishes his case. Thus, the impugned judgment cannot be sustained which is set aside accordingly. The judgment of the trial court is restored. The appeal is allowed. Issues Involved:1. Whether the property purchased in the name of Suprovabala Ghosh was a benami transaction.2. The burden of proof regarding the nature of the transaction.3. The implications of mutation of names and possession of the property.4. The application of the Hindu Women's Right to Property Act, 1937.5. The role of the power-of-attorney and its execution.6. The relevance of the source of purchase money.7. The conduct of the parties and their subsequent actions.Detailed Analysis:1. Benami Transaction:The primary issue was whether the property purchased in Suprovabala Ghosh's name was a benami transaction. The trial court found that Dr. Ghosh intended to purchase the property for the benefit of his wife, Suprovabala, and not as a benami transaction. This conclusion was based on the execution of a power-of-attorney by Suprovabala, attested by Dr. Ghosh, indicating his intention to benefit his wife. The High Court, however, opined that the purchase by Suprovabala through an attorney did not negate the benami nature of the transaction and that the mutation of names of all heirs was inconsequential.2. Burden of Proof:The High Court placed the burden of proof on the Plaintiff to demonstrate that Dr. Ghosh purchased the property for his wife's benefit. The Supreme Court noted that the essence of a benami transaction is the intention of the party providing the purchase money. The burden of proving that a transaction is benami lies on the person alleging it. The Supreme Court held that the Defendants-Respondents failed to provide cogent evidence to rebut the presumption that the apparent state of affairs was the real state of affairs.3. Mutation of Names and Possession:The mutation of names in the municipal records and possession of the property were significant. The Supreme Court observed that Suprovabala's name was mutated during Dr. Ghosh's lifetime, and she continued to possess the property. This supported the conclusion that the property was intended for her benefit. The High Court's view that the mutation was of no consequence was rejected by the Supreme Court, which emphasized the importance of the conduct of the parties and the surrounding circumstances.4. Hindu Women's Right to Property Act, 1937:The High Court's reliance on the Hindu Women's Right to Property Act, 1937, was misplaced. The property was purchased in 1935, before the Act came into force. Therefore, the Act had no application to this case. The Supreme Court clarified that the property was not subject to the limited interest provisions under the Act as it was acquired before its enactment.5. Power-of-Attorney:The execution of the power-of-attorney by Suprovabala and its attestation by Dr. Ghosh played a crucial role. The Supreme Court noted that the power-of-attorney indicated Dr. Ghosh's intention to purchase the property for his wife's benefit. The unusual step of describing Suprovabala as the daughter of Babu Rangalal Ghosh rather than as Dr. Ghosh's wife was significant and pointed to the intention behind the transaction.6. Source of Purchase Money:While the source of the purchase money is an important factor, it is not determinative. The Supreme Court emphasized that the intention behind providing the funds is crucial. Dr. Ghosh's intention, as evidenced by his actions and the surrounding circumstances, was to benefit his wife. The High Court's focus on the source of money without considering the intention and surrounding circumstances was incorrect.7. Conduct of the Parties:The conduct of the parties, including the mutation of names, possession, and subsequent actions, was critical. The Supreme Court noted that despite the bitter relationship between the parties, the mutation was allowed to attain finality, indicating acceptance of Suprovabala's title. The adverse inference drawn from the failure of Respondent No. 1 to examine herself as a witness further supported the Plaintiff's case.Conclusion:The Supreme Court set aside the High Court's judgment and restored the trial court's judgment, concluding that the property was intended for the benefit of Suprovabala and was not a benami transaction. The appeal was allowed without any order as to costs.