Benami prohibition bars pending appeals as a continuation of suit, while unpleaded consolidation objections cannot be raised later.

A statutory plea under Section 49 of the U.P. Consolidation of Holdings Act, 1954 could not be raised without a foundation in the written statement or a framed issue, so the consolidation bar was unavailable. Section 4 of the Benami Transactions (Prohibition) Act, 1988, however, prohibited both the suit and the pending appeal because an appeal is a continuation of the suit and the statutory bar extends to pending proceedings. The pending special leave stage did not prevent the prohibition from operating once the matter was heard as an appeal. The plaintiff's benami-based claim could not be sustained and the decree in its favour could not survive.

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Issues: (i) Whether the suit was barred by Section 49 of the U.P. Consolidation of Holdings Act, 1954 in the absence of a foundation in the pleadings. (ii) Whether Section 4 of the Benami Transactions (Prohibition) Act, 1988 barred the suit and the pending appeal.

Issue (i): Whether the suit was barred by Section 49 of the U.P. Consolidation of Holdings Act, 1954 in the absence of a foundation in the pleadings.

Analysis: The objection based on consolidation proceedings had not been laid in the written statement and no issue had been framed on that basis. In the absence of pleadings and an evidentiary foundation, the statutory bar could not be invoked. The consolidation record did not alter the fact that the defendants could not raise the plea at the appellate stage without having set up the necessary foundation earlier.

Conclusion: The bar under Section 49 of the U.P. Consolidation of Holdings Act, 1954 was not available to the defendants.

Issue (ii): Whether Section 4 of the Benami Transactions (Prohibition) Act, 1988 barred the suit and the pending appeal.

Analysis: Section 4 prohibits the institution and continuation of claims based on benami ownership and applies prospectively to future stages and future suits. The appeal was pending when the statute came into force, and an appeal is a continuation of the suit. Once the legislative prohibition operated, no decree could be sustained in a suit asserting benami ownership. The pendency of the special leave proceeding did not prevent the statutory bar from applying after leave was granted and the matter was heard as an appeal.

Conclusion: Section 4 of the Benami Transactions (Prohibition) Act, 1988 barred the plaintiff's claim and the suit could not be decreed.

Final Conclusion: The decree in favour of the plaintiff could not survive in view of the statutory prohibition against benami claims, and the defendants succeeded in having the suit dismissed.

Ratio Decidendi: A benami suit or appeal pending when Section 4 of the Benami Transactions (Prohibition) Act, 1988 became operative cannot be maintained, because the statutory bar extends to pending appellate proceedings and an appeal is a continuation of the suit.

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