2020 (9) TMI 753 - HC - Benami Property

Court dismisses second appeal under Section 100 CPC, affirming lower Courts' decisions on benami property suit

The Court dismissed the second appeal under Section 100 of the CPC, affirming the lower Courts' decisions to dismiss the suit for declaration of title. ... Prohibition on suit to enforce rights in respect of property held benami under Section 4(1) of the Benami Transactions (Prohibition) Act, 1988 - benami transaction - perversity in concurrent findingsProhibition on suit to enforce rights in respect of property held benami under Section 4(1) of the Benami Transactions (Prohibition) Act, 1988 - benami transaction - Suit for declaration of title based on alleged purchase in the name of another is barred by Section 4(1) of the Benami Transactions (Prohibition) Act, 1988. - HELD THAT: - The Court held that the plaintiff's claim that his father purchased the suit property on 08/05/1981 in the name of defendant No.1 and paid consideration to the seller, if it amounts to a benami transaction, is prohibited from being the basis of a suit. By reason of Section 4(1) of the 1988 Act there is a statutory bar against any suit, claim or action to enforce rights in respect of property held benami. The Court relied on the principle laid down by the Supreme Court in Om Prakash v. Jai Prakash that Section 4 operates as a total prohibition against suits seeking relief on the basis of benami transactions, and accordingly concluded that the plaintiff's suit seeking a declaration of title on that basis is barred. [Paras 6, 7, 8]The suit is barred by Section 4(1) of the Benami Transactions (Prohibition) Act, 1988 and plaintiff is not entitled to a decree on the pleaded factual basis.Perversity in concurrent findings - Whether the concurrent findings of the trial and first appellate Courts that the plaintiff failed to prove payment of consideration and purchase in the name of defendant No.1 are perverse. - HELD THAT: - The High Court examined the lower Courts' concurrent conclusion that the plaintiff failed to prove that his father purchased the suit property in the name of defendant No.1 by making payment of the consideration to the seller. Having regard to the statutory bar under Section 4(1) and the record, the Court found no illegality or perversity in those findings. The judgment records that the trial Court had appreciated oral and documentary evidence and dismissed the suit for want of proof, a conclusion which was affirmed on appeal and which the High Court did not find to be perverse or contrary to the material on record. [Paras 4, 8]Concurrent findings that the plaintiff failed to prove the alleged purchase and payment are not perverse and require no interference.Final Conclusion: The second appeal is dismissed in limine; the suit is held to be barred by Section 4(1) of the Benami Transactions (Prohibition) Act, 1988 and the concurrent factual findings of the Courts below are not perverse. Issues involved:- Formulation of substantial question of law in a second appeal under Section 100 of the CPC- Dismissal of the suit for declaration of title- Interpretation and application of the Benami Transaction (Prohibition) Act, 1988Analysis:1. The judgment pertains to a second appeal filed by the appellant/plaintiff under Section 100 of the CPC against the impugned judgment and decree passed by the first appellate Court, which affirmed the trial Court's decision to dismiss the suit for declaration of title. The appellant argued that both lower Courts erred in dismissing the suit, claiming that the plaintiff's father had purchased the property in the name of defendant No. 1. The appellant contended that the sale deed contained recitals showing the payment of consideration by the plaintiff's father, contradicting the lower Courts' findings.2. The plaintiff's case revolved around the assertion that the suit property was purchased by his father and later came into his possession. However, both the trial Court and the first appellate Court found that the plaintiff failed to prove the purchase of the property in the name of defendant No. 1. The lower Courts' decisions were based on the lack of evidence supporting the plaintiff's claim regarding the transaction.3. The crucial aspect of this judgment lies in the interpretation and application of the Benami Transaction (Prohibition) Act, 1988. Section 4 of the Act prohibits the right to recover property held benami. The Act explicitly states that no suit or claim can be made to enforce any right in respect of property held benami against the person in whose name the property is held. Citing the Supreme Court's decision in Om Prakash v. Jai Prakash, the Court emphasized the total prohibition against suits based on benami transactions.4. Ultimately, the Court concluded that the suit filed by the plaintiff seeking a declaration of title was barred by Section 4(1) of the Benami Transaction (Prohibition) Act, 1988. As a result, the plaintiff's failure to prove the purchase of the property in the name of defendant No. 1 led to the dismissal of the suit. The judgment highlighted the legal implications of benami transactions and upheld the lower Courts' decisions, dismissing the second appeal without notice to the other side.