2020 (9) TMI 754 - HC - Benami Property

Court upholds plaintiffs' property share, dismisses appeal. Benami Act not applicable.

The court dismissed the second appeal, upholding the concurrent findings that the plaintiffs were entitled to a 3/4 share in the suit property. The court ... Benami transaction - prohibition of the right to recover property held benami - retrospectivity of statute - presumption of ownership in favour of the registered owner and burden to rebut - concurrent findings of fact in second appealBenami transaction - presumption of ownership in favour of the registered owner and burden to rebut - The transaction was benami and the plaintiffs are entitled to the declared share in the suit property. - HELD THAT: - The trial court and the first appellate court concurrently found on oral and documentary evidence, notably the vendor's testimony (P.W.2) and supporting documents, that the sale consideration was paid by the husband of the first plaintiff and the property was purchased in the name of the husband of the first defendant as a benami. The High Court declined to disturb these concurrent findings of fact because they were rendered on consideration of pleadings and evidence and were neither perverse nor based on non-consideration of material evidence. The defendants did not successfully rebut the presumption in favour of the registered owner by adducing satisfactory evidence as to source, motive and possession to displace the vendor's categorical evidence. Consequently the courts below were correct in holding the transaction to be benami and in decreeing the plaintiffs' share. [Paras 12, 13, 19, 20]Concurrent findings that the transaction was benami are upheld and the plaintiffs are entitled to the declared share in the suit property.Prohibition of the right to recover property held benami - retrospectivity of statute - The Prohibition of Benami Property Transactions Act, 1988 (Section 4(2)) does not bar the plaintiffs' suit in the facts of this case. - HELD THAT: - The suit was filed in 1986 and taken on file after pauper application in 1989; the challenge that Section 4(2) of the 1988 Act precludes the plaintiffs' claim was considered in light of binding Supreme Court precedents. The Court accepted that the Act is not to be given retrospective effect so as to defeat rights arising from proceedings commenced before the Act came into force; where the suit and the plea of benami (or its contest) predate the Act, Section 4(2) does not operate to bar the claim. Applying those principles to the present facts, the High Court held that Section 4(2) is not applicable so as to defeat the plaintiffs' case. [Paras 15, 16, 17, 18, 19]Section 4(2) of the Prohibition of Benami Property Transactions Act, 1988 does not operate to bar the plaintiffs' suit in the present case.Concurrent findings of fact in second appeal - The High Court will not interfere with concurrent findings of fact of the trial and first appellate courts unless they are perverse or unsupported by evidence; no such perversity was found here. - HELD THAT: - The second appeal raised substantial questions including whether the lower appellate court erred procedurally (e.g., framing points under Order 41 Rule 31 CPC) and whether earlier remand directions were exceeded. The High Court reviewed the record and concluded that the concurrent factual findings were based on evidence and reason and were not perverse. The Court therefore found no warrant to disturb the conclusions reached below and answered the substantial questions in favour of the plaintiffs. [Paras 7, 20, 21]No interference with the concurrent findings of fact; the appellate judgments are sustainable and the second appeal is dismissed.Final Conclusion: The High Court dismissed the second appeal, upholding the concurrent findings that the transaction was benami and that the Prohibition of Benami Property Transactions Act, 1988 does not defeat the plaintiffs' claim in the circumstances of this case; no interference with the factual conclusions reached by the courts below. Issues Involved:1. Benami Transaction2. Partition and Injunction3. Legal Heirship and Share Entitlement4. Applicability of Prohibition of Benami Property Transactions Act, 19885. Bar under Order 2 Rule 2 of CPC6. Limitation and Maintainability of the Suit7. Concurrent Findings of FactDetailed Analysis:1. Benami Transaction:The plaintiffs claimed that the suit property was purchased by the first plaintiff’s husband, Panchacharam, in the name of their son, Viswanathan, as a benami transaction. The defendants countered that Viswanathan purchased the property with his own funds. The court evaluated the oral and documentary evidence, including the testimony of the vendor (P.W.2), who confirmed that Panchacharam paid the sale consideration. The court concluded that the transaction was indeed benami, with the property being purchased by Panchacharam in Viswanathan’s name.2. Partition and Injunction:The plaintiffs sought partition and injunction, asserting their entitlement to the suit property. The trial court initially granted the first plaintiff a 1/5 share, but upon remand, it was determined that the plaintiffs collectively were entitled to a 3/4 share. The court dismissed the injunction request. The appellate court upheld the trial court’s decision, confirming the plaintiffs' entitlement based on their legal heirship.3. Legal Heirship and Share Entitlement:The plaintiffs, being the mother and sisters of the deceased Viswanathan, claimed shares in the suit property. The defendants argued that the property belonged solely to Viswanathan and thus to his immediate family (defendants 1 to 4). The court recognized the plaintiffs as legal heirs of Panchacharam, thereby entitling them to a share in the property.4. Applicability of Prohibition of Benami Property Transactions Act, 1988:The defendants contended that the suit was barred by the Prohibition of Benami Property Transactions Act, 1988. However, the court noted that the suit was filed before the Act came into force, making the Act inapplicable. The court cited relevant Supreme Court judgments (C.Gangacharan Vs. C.Narayanan and G.Mahalingappa Vs. G.M.Savitha) to support this conclusion.5. Bar under Order 2 Rule 2 of CPC:The defendants argued that the suit was barred under Order 2 Rule 2 of CPC, as the first plaintiff had previously filed a suit (O.S.No.2735 of 1986) regarding the terminal benefits of Viswanathan. The court found that the earlier suit did not preclude the current suit for partition and share entitlement, as the issues were distinct.6. Limitation and Maintainability of the Suit:The defendants asserted that the suit was barred by limitation, given the timeline of events. The court dismissed this argument, noting that the suit was filed within a reasonable period after the deaths of Panchacharam and Viswanathan. The court also addressed the maintainability of the suit, confirming that it was properly filed and pursued.7. Concurrent Findings of Fact:The appellate court emphasized that the concurrent findings of fact by the trial court and the first appellate court were based on sound reasoning and evidence. The court reiterated that it is not permissible for the High Court to overturn these findings in a second appeal unless they are perverse or unsupported by evidence, which was not the case here.Conclusion:The court dismissed the second appeal, upholding the concurrent findings of the lower courts that the plaintiffs were entitled to a 3/4 share in the suit property. The court affirmed that the suit was not barred by the Prohibition of Benami Property Transactions Act, 1988, or Order 2 Rule 2 of CPC, and was filed within the limitation period. The court found no substantial questions of law warranting interference with the lower courts' decisions.