TaxTMI 
TaxTMI 
2020 (1) TMI 797
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.... his education at Indore. He was an Engineer employed at Nashik and owned some land and a flat (MIG Scheme No. 54, Indore). As Surendra wished to settle eventually in Nashik, he appointed Sanjay who used to reside in Indore as Power of Attorney and executed a deed of General Power of Attorney (GPA) in favour of Sanjay on 30.09.1989 for that purpose. Sanjay entered into an agreement to sell the property to one Niranjan Singh Nagra ("buyer") on 30.11.1989 and received a sum of Rs. 50,000/- as earnest money. Surendra alleged that Sanjay called him to Indore on 29.01.1990 and requested that the agreement to sell ought to be executed in favour of the buyer directly and that at the time of executing the agreement, the buyer had paid 80,000/-. This amount was returned Rs. by Sanjay. Surendra also alleged that the buyer requested for cancellation of the Power of Attorney which was given to Sanjay. Sanjay requested Surendra for an advance in the sum of Rs. 80,000/- for the expansion of his business, which he was carrying on under the style of the first respondent proprietorship concern. Sanjay assured the plaintiff that he would return the amount shortly. Accordingly, Rs. 80,000/- was given....
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....g first with the applications, and then the merits: they were firstly, the consideration of the sale of the suit property - if it was for Rs. 2,30,000/- and not Rs. 1,30,000/- ; secondly, whether such fact had to be pleaded by the plaintiff in the suit and lastly, whether in the absence of such pleading, it was necessary to allow the application for amendment. The High Court after analyzing the nature of evidence led, concluded that since Sanjay had admitted the signature on the agreement to sell, as well as the plaintiff's GPA, even though the document was a photocopy, it could not be ignored. 7. The impugned judgment also reasoned that there was no dispute that another agreement to sell was executed on 30.01.1990 by the plaintiff (Surendra) in favour of Niranjan Singh Nagra, where the sale consideration was showed to be Rs. 1,30,000/-. The sale was also undisputedly completed on 31.01.1990. It was held that in these circumstances, the plaintiff had Rs. 1,80,000/- as on 30.01.1990, which clearly showed that the real consideration for the transaction was Rs. 2,30,000/-, though the document subsequently executed showed a lesser value as Rs. 1,30,000/-. The court noted that Surend....
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.... of two months, failing which the respondents shall be liable to pay the interest on the aforesaid amount @ 12% per annum. Respondents shall also be liable for the costs through out." 9. It is argued by Mr. Santosh Kumar, learned counsel for the appellant that the high court committed an error in appreciation of the evidence and that the plaintiff had come forward with an entirely new case, in the cross-examination which was not backed by the pleadings. He further submitted that the impugned judgment was in error because it placed reliance on inadmissible documents and rendered findings exclusively based upon their appreciation. It was highlighted, that the impugned judgment was conjectural inasmuch as the court connected the receipt issued by Sanjay with the agreement, showing the sale consideration to be 2,30,000/-. It Rs. was emphasized that the original agreement was never produced or made part of the record. 10. Mr. Santosh Kumar next submitted that being a prohibited transaction, the story put forward by the plaintiff that the real value of the sale of Rs. 2,30,000/- as against the declared value of Rs. 1,30,000/- could not be countenanced by the court as it was contrar....
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....lant admitted his signature on the said document in his cross-examination; thus, clearly, the fact was established. The original of the document was with the buyer of the property and this fact was admitted by the appellant in his statement; therefore, its photocopy was produced. The document was relevant only to show that the plaintiff had the funds to advance to Sanjay and when extension of the loan to the appellant was admitted, the document is of no consequence. 14. What can be gleaned from the above narrative and submissions is that the plaintiff wished to dispose of his property at Indore, where the second defendant, nephew resided and carried on business. Since the parties were related, the plaintiff relied on the defendant and constituted him as his attorney. An agreement to sell was entered into for the sale of the said property (a flat) on 03.07.1989: this fact is not disputed; equally, it is undisputed that the consideration for the flat in terms of this agreement was Rs. 2,30,000/-. This was admitted by Sanjay, the defendant in his deposition. It is also not disputed that the original agreement with the purchaser (who ultimately finalized the transaction), is dated i....
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....dgment cannot be faulted on this aspect. 17. Now as to the second argument by the appellant, which is that the plaintiff's plea that the real consideration for the sale was Rs. 2,30,000/- entails returning findings that would uphold a plea based on a benami transaction, this court is of the opinion that the argument is unmerited. Benami is defined by the Act as a transaction where (a) where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and (b) the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration. Benami transactions are forbidden by reason of Section 3; no action lies, nor can any defense in a suit be taken, based on any benami transaction: in terms of Section 4 of the Act. 18. In the opinion of this court, the argument that the plaintiff's plea regarding the real consideration being barred, has no merit. The plaintiff did not claim return of any amount from the buyer; the suit is not based on any plea involving examination of a benami transaction. Besides, the plaintiff is not asserting ....
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....Kan Singh, Pratap Singh v. Sarojini Devi and Heirs of Vrajlal J. Ganatra v. Heirs of Parshottam S. Shah. It has been held in the judgments referred to above that the question whether a particular sale is a benami or not, is largely one of fact, and for determining the question no absolute formulas or acid test, uniformly applicable in all situations can be laid. After saying so, this Court spelt out the following six circumstances which can be taken as a guide to determine the nature of the transaction : (1) the source from which the purchase money came ; (2) the nature and possession of the property, after the purchase ; (3) motive, if any, for giving the transaction a benami colour ; (4) the position of the parties and the relationship, if any, between the claimant and the alleged benamidar ; (5) the custody of the title deeds after the sale ; and (6) the conduct of the parties concerned in dealing with the property after the sale. (Jaydayal Poddar v. Bibi Hazra1, SCC p 7, para 6). 14. The above indicia are not exhaustive and their efficacy varies according to the facts of each case. Nevertheless, the source from wher....