TaxTMI 
TaxTMI 
2021 (3) TMI 367
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....d that on 27.07.2012 her husband i.e. the respondent herein, had entered into second marriage and drove her out from her matrimonial home. [3] At the time of institution of the suit, she had been residing at her parental house with great hardship having no source of income. The plaintiff had approached the husband-defendant to partition the suit land in equal share i.e. 50:50 ratio, but, the respondent did not pay any heed to it. Hence, she had claimed partition of the suit land described in the schedule of the plaint. [4] The appellant-defendant, who is the husband of the plaintiff, refuting the reliefs claimed by the plaintiff had raised the plea of maintainability in his written statement, and all the averments made by the plaintiff therein were denied. The defendant specifically denied that the suit land was jointly purchased by the plaintiff and the defendant. Rather, the defendant stated that he purchased the suit land for his own benefit, and out of their relation, he included plaintiff's name in the registered sale deed. The defendant further stated that since 2010, he filed a divorce suit against the plaintiff being number T.S (Divorce) 268 of 2012 on the ground of c....
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....ied wife of the defendant-appellant had any source of income on or before the purchase of the suit property. (IV) Whether the defendant-appellant is entitled to get a decree as prayed for in his written statement?" [9] While deciding the aforesaid points, the learned First Appellate Court on appreciation of the definition of Section-3(2) (a) of the Benami Transactions (Prohibition) Act, 1988, held that admittedly the plaintiff-wife had no source of income prior or after her marriage and on that consideration the husband-defendant had purchased the suit property and mentioned his wife (plaintiff) as one of the purchasers only for the benefit and welfare of the wife and children. [10] The learned First Appellate Court rejected the theory of fiduciary relationship as urged by the learned counsel appearing on behalf of the defendant-husband in absence of pleading in the written statement. Accordingly, the appeal preferred by the defendant-husband was dismissed with affirmation of the judgment and decree passed by the learned trial court whereby and whereunder, the Courts below declared the right title and interest of the plaintiff over the half portion of the suit land a....
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....he learned counsel appearing for the defendant-appellant strongly relied upon the findings returned by both the courts below on points of law and facts. [17] Mr. Roy, learned counsel appearing for the respondent-wife contended that the land was purchased for the benefit of the wife and children of the defendant and the plaintiff. He argued that the plaintiff had contributed a substantial amount along with the defendant from her 'Stridhan' to pay the total consideration money. Learned counsel further argued that the plaintiff had no source of income and she was driven out by the defendant leading her to institute the present suit for partition of the suit land since she was entitled to get her share equal to that of the defendant. [18] Before adverting to the merits of the instant case, let me have a look at the relevant provisions of the Benami Transactions (Prohibition) Act, 1988 as it appears necessary to decide the instant second appeal. [19] A plain reading of Section-3(2)(a) shows that the purchase of property by any person in the name of his wife or unmarried daughter shall not be treated as benami transaction and it shall be presumed, unless the contrary is proved, ....
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....ity, and has been held to apply to all persons who occupy a position of peculiar confidence toward others, and to include those informal relations which exist whenever one party trusts and relies on another, as well as technical fiduciary relations. The word 'fiduciary', as a noun, means one who holds a thing in trust for another, a trustee, a person holding the character of a trustee, or a character analogous to that of a trustee with respect to the trust and confidence involved in it and the scrupulous good faith and condor which it requires; a person having the duty, created by his undertaking, to act primarily for another's benefit in matters connected with such undertaking. Also more specifically, in a statute, a guardian, trustee, executor, administrator, receiver, conservator or any person acting in any fiduciary capacity for any person, trust or estate." 17. Words and Phrases, Permanent Edition (Vol. 16-A p. 41) defines "Fiducial Relation" as under: "There is a technical distinction between a 'fiducial relation' which is more correctly applicable to legal relationships between parties, such as guardian and ward, administrator and heirs, and other ....
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..... Bouvier's Law Dictionary defines "fiduciary capacity" as under: "What constitutes a fiduciary relationship is often a subject of controversy. It has been held to apply to all persons who occupy a position of peculiar confidence towards others, such as a trustee, executor, or administrator, director of a corporation of society. Medical or religious adviser, husband and wife, an agent who appropriates money put into his hands for a specific purpose of investment, collector of city taxes who retains money officially collected, one who receives a note or other security for collection. In the following cases debt has been held not a fiduciary one; a factor who retains the money of his principal, an agent under an agreement to account and pay over monthly, one with whom a general deposit of money is made." 21. We may at this stage refer to a recent decision of this Court in Central Board of Secondary Education and Anr. v. Adiya Bandopadhyay and Ors. (2011) 8 SCC 497, where Ravindeeran, J. speaking for the Court in that case explained the term 'fiduciary' and 'fiduciary relationship' in the following words: "39. The term "fiduciary" refers to a person having a....
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....such term also refers to a person who holds a thing in trust for another. [23] In the facts and circumstances, as surfaced in the case, that the suit property was purchased in the joint names of the plaintiff-wife and the defendant-husband. On careful scrutiny of the depositions, it has come to light that the plaintiff-wife in her cross-examination has admitted that she had no source of income before or after the transactions. She has nowhere pleaded in her plaint or in her chief-examination that the suit property was purchased for her benefit albeit, under the statue presumption was in her favour, according to me, the party claiming such presumption, at least, is to plead and say that the questioned property was purchased for her benefit and, only then, burden lies upon the party to rebut such presumption. Contesting the suit, it is the specific pleaded case of the defendant-husband that after marriage, he purchased the suit property paying entire consideration from his own source of income for his own benefit. His further plea is that he has included the plaintiff's name, only on consideration that she was his wife. In this circumstance, a critical question lies whether Sub-se....
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.... "fiduciary relationship", then, no room is left for this Court to arrive at a finding that the plaintiff-wife was a trustee and she was occupying the position of peculiar confidence towards her husband i.e. the defendant-appellant. In this circumstance, in my considered view, the property purchased will not be treated as a benami property, qua the transaction shall not be considered as benami transaction and further, in such a transaction, the wife will not acquire any substantive right to claim any share as a co-owner of such a property merely because of the fact that her name was included in the transfer deed. [27] Another noticeable feature in the instant case, I find, though not was noticed by the learned First Appellate Court that while the first appeal was pending, the "Prohibition of Benami Property Transactions Act, 1988 [hereinafter referred to as the "New" Act] came into force and became applicable w.e.f. 01.11.2016 with the repeal of the Benami Transactions (Prohibition) Act, 1988 [hereinafter referred to as the "Old" Act]. The impugned judgment was passed on 27.04.2018 under the "Old" Act when Sub-section-2 of Section-3 and Sub-section-3 of Section-4 of the old Act ....
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....(26) "property" means assets of any kind, whether movable or immovable, tangible or intangible, corporeal or incorporeal and includes any right or interest or legal documents or instruments evidencing title to or interest in the property and where the property is capable of conversion into some other form, then the property in the converted form and also includes the proceeds from the property;" [28] On conjoint reading of old Act and Section-2 (9)(a) and Exception (ii) and (iii) beneath Section-2(9)(b) under the New Act, we find the legislature in its own wisdom intended to insert Exception clause to give the new Act more meaningful by way of widening the scope of transaction or agreement entered into between near relations regarding "property" as encapsulated under Sub-section-2(b) of Section-2 of the New Act. Firstly, exception (iii) of Sub-section-9 of Section-2 of the new Act, the legislature used the term 'spouse' or 'child' instead of wife or unmarried daughter as was used under the old Act. Secondly, the presumption part that unless contrary is proved, the said property was purchased for the benefit of the wife or the unmarried daughter has been omitted. [29] So....
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.... it is largely one of fact, and for determining the question no absolute formulas or acid test, can be laid which would uniformly applicable in all situations. Having said so, the Apex Court spelt out the following six circumstances which can be taken as a guide to determine the nature of 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 of 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.(Jayadayal Poddar v. Bibi Hazra, 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 where the purchase money came and the motive why the property was purchased benami are by far the most important tests for determining whether the sale standing in the name of one person, is in reality for the benefit....
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....deration money assumes paramount importance and the material enquiry seems to be as to who supplied the money for the acquisition of the disputed land. [36] Creation of record of right in joint names immediately after sale transaction is a mere consequence of such transactions, which, alone cannot be the determinative factor to decipher the intention of the husband that wife's name had been included in the sale deed for her benefit, if an overview of the entire circumstances does not meet the other factors/essentialities for giving the transaction a benami colour. [37] In view of the aforesaid legal discussions, I can un- hesitantly arrive at a finding that the wife-plaintiff, in the instant case, has not acquired any substantive right since she had no role to pay the consideration money to effectuate the sale transaction and no clear motive has been surfaced for inclusion plaintiff's name in the questioned sale deed (Exbt.6 series). [38] The question, whether the transaction which was entered into in the year 2007 would be governed by the New Act which came into force w.e.f.01.11.2016. The answer, I find in Sub-section-3 of Section-1 of Chapter-I of the new Act which read....
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....us, the questioned transaction (Exbt.6 series) in the present case, would be governed by the New Act as it falls within the purview of Exception Clause as contemplated under Section 9(A)(iii) of the New Act and is thus saved by the mischief of Section-3 of Chapter-II of the New Act and other penal provisions as envisaged under the New Act . [Emphasis supplied] [40] In the instant case, as I have already held, the plaintiff being the wife of the appellant-husband has not acquired any substantive right, and as a de facto owner, she has not accrued any substantive right. She cannot claim any right over the suit property against the title of the de jure owner/husband/defendant. [41] I have also carefully read over the statement of Objects and Reasons amending the Act 43 of 2016 which are necessary to be reproduced herein: "Statement of Objects and Reasons amending Act 43 of 2016-The Benami Transactions (Prohibition) Act, 1988 was enacted to prohibit benami transactions and the right to recovery property held benami. The said Act, inter alia, provides that (a) all the properties held benami shall be subject to acquisition by such authority in such manner an....
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....owledge of such ownership; (iv) A transaction or an arrangement where the person providing the consideration is not traceable or fictitious. (b) Benami property is defined as any property which is the subject matter a benami transaction. (c) Properties excluded from the definition of benami transaction are- (i) Properties acquired out of the known sources of income of the Hindu undivided family which are held by a coparecener in a Hindu Undivided family; (ii) Properties held by a person in fiduciary capacity; (iii) Properties acquired out of the known sources of income by an individual in the name of spouse or in the name of any child of such individual; (iv) Properties acquired out of the known sources of income in joint ownership with the brother or sister or any lineal ascendant or descendant. The above transactions shall not be treated as benami transactions and accordingly shall not be subjected to any penal consequences. (2) It provides the consequences of entering into a prohibited benami transactions which are- (a) Where any person enters into a benami transaction in order to defeat the provisi....