Devi Vs. Ram Dutt & ANR  INSC 834 (19 November 1997)
MAJMUDAR, M. JAGANNADHA RAO
19TH DAY OF NOVEMBER, 1997 Present:
Mr.Justice S.B.Majmudar Hon'ble Mr.Justice M.Jagannadha Rao Arvind Kumar and Mrs.Laxmi
Arvind Kumar and Mrs. Laxmi Arvind, Advs for the appellant.
Adv. for the Respondents.
following Judgment of the Court was delivered:
IA NO. 1 OF 1996 IN SLP (C) NO. 17883 OF 1997 M. JAGANNADHA RAO, J.
Appeal No. 6486 of 1983 is filed by Smt. Rebti Devi (since deceased) and is
being continued by her son Sri Mahesh Dutt Gupta, claiming to be her sole
legatee under a registered will dated 18.12.1972. This appeal is preferred
against the judgment of the Allahabad High
Court in Regular Second Appeal No. 1001/1973 dated 29.2.1980 arising out of
Suit No. 1263 of 1968. In the Civil Appeal the respondents are the legal heirs
of the brother of Mahesh Dutt Gupta, i.e. late Ram Dutt Gupta.
Leave Petition No. 17883/1997 is filed by the legal representatives of Ram Dutt
Gupta (brother of Mahesh Gupta) impleading Mahesh Gupta and other family
members against the judgment of the Allahabad High Court in First Appeal No.
378 of 1996 dated 30.5.1997 allowing the appeal of Mahesh Dutt Gupta and
granting probate in respect of the will date 18.12.1972 of Rebti Devi in his favour.
Learned counsel for the petitioners in S.L.P has fairly stated that the S.L.P
and IA 1 of 1996 therein are not being pressed.
we are left only with Civil Appeal No. 8486 of 1983 and in view of the
dismissal of S.L.P., Mahesh Dutt Gupta can continue the said Civil Appeal in
the place of his deceased mother Rebti Devi. The result also is that Mahesh dutt
can also claim as heir to such interest which Rebti has; even if her case of
being real owner of the property is rejected once again in this Court.
Suit No.1263 of 1968 out of which the Civil Appeal arises was filed by Smt. Rebti
Devi for possession of property from the occupation of one of her sons Ram Dutt
Gupta. The plaintiff has impleaded Ram Dutt Gupta as 1st defendant and his son Surendra
Nath Gupta as 2nd defendant.
claimed that she purchased the suit property on 1.6.1995 under a registered
sale deed for Rs. 5000/- out of the income derived by her by lending her money
regularly. She also pleaded that her husband Ujagar Lal had no movable or
immovable property. Apart from Ram Dutt, she has other children Brahm Dutt, Ramesh
Dutt, Mahesh Dutt and daughters Prem Devi, Chandrakanta. She claims that the sons
separated and that in 1960 she permitted Ram Dutt to occupy the ground floor of
the suit property for his business and as Ram Dutt did not vacate, she was
suing for possession. The defence of Ram Dutt and his son was that the property
was purchased by his father Ujagar Lal in the name of Ram Dutt's mother Rebti Devi
benami on 1.6.1995 and that the entire consideration was paid by his father,
that his father was the real owner and that after his death, the property has
devolved on his wife (plaintiff) and other children in accordance with law.
sides led evidence. The trial Court accepted the plaintiff's case in its
judgment dated 18.11.1971 and held that the plaintiff was not a benamidar and
her husband was not the real owner. But on appeal, the appellate Court, in a
well considered judgment, reversed the judgment and decree and dismissed the
suit on 9.3.1973. That judgment was affirmed by the High Court in Second Appeal
on 29.2.1980 Plaintiff preferred this Civil Appeal in this Court.
counsel for the plaintiff-appellant (legal representative of Rebti Devi)
submitted that the property was standing in the name of Rebti Devi and that the
defendants who had come us with a plea of benami had not discharged the onus
that was on them. It was also contended, referring to Benami Transactions
(Prohibition) Act, 1988 that the plea of benami raised in defence was not Sushila
Mehra [1995 (4) SCC 5723 (which is a three judge Padmini Chandrasekharan [1995
(2) SCC 630] V(which is also decision of three learned Judges) have been
doubted and hence the said Act is applicable to the facts of the case even
though the defence of benami was raised long before 19.5.1988 when the act came
into force. Learned counsel for the respondent contended that the finding of
fact arrived it by the first appellate court was not rightly interfered with by
the High Court, and that it did not call for any interference under Article 136
of the Constitution of India.
also submitted that R. Rajagopala Reddy's case holds good and has not been
doubted in Nand Kishore Mehras case.
as the first submission of the appellant's counsel is concerned, we are of the
view that it is true that the respondent-defendats who have raised a defence of
benami in their written statement have to discharge the initial burden of proof
and establish the plea of benami.
adduced oral and documentary evidence. The lower appellate Court had considered
the evidence adduced by both sides and arrived at a conclusion that the
defendants had discharged the said burden. When both sides had adduced
evidence, the question of burden of proof pales into insignificance. The High
Court was therefore right in not interfering with the said finding. The said
finding of fact cannot be convassed in this Civil Appeal by the plaintiff or
her legal representative.
order to appreciate the second submission, we have to start here with Rajagopala
Reddy's case [1995 (2) SCC 630] and find out what it actually decided in regard
to the Benami Transactions (prohibition) Act, 1988 (hereinafter called the
'Act'). Sections 3,5 and B of the Act came into force at once i.e. w.e.f.
5.9.1988 while the remaining provisions were deemed to have come into force
from 19.5.1988. The principles decided in that case, while SCC 95], can be summarised
"Firstly while section 4(1) prohibited a plea of benami to be raised in a
suit, claim or action and again section 4(2) precluded a defence of these two
provisions did not come in the way of a decision on such pleas in matters pending
as on 19.5.1988 if such pleas were already raised before 19.5.1988 by one party
or other. This was because such pleas which were already raised before
19.5.1989 were not intended to be affected by the act, if they were raised in
suits, claims or actions pending as on 19.5.1988. The repeal provision in
Section 7 repealed S. 82 of the Trust Act only in that manner and to that
Secondly on the express language of Section 4(1), any right inhering in the
real owner in respect of any property held benami would be not enforceable once
Section 4(1) operated, even if such transaction had been entered into prior to
19.5.1988 and no suit could be filed on the basis of such a plea after
19.5.1988. The same prohibition applied in case of Section 4(2) to a defence
taken after 19.5.1988 pleading benami in respect of a transaction prior to
19.5.99. The Act could be said to be retrospective only to that extent. But
from this it did not follow that where such a plea was already taken before
19.5.1988 to the effect that the property was held benami, such a pleas got
shut out merely because the proceeding in which such the plea was raised before
19.5.1988 was pending on 19.5.1988.
Thirdly, where a suit had been filed before 19.5.1988, and in any written
statement filed on or after 19.5.1988, a plea of benami was raised, then such a
plea of benami could not also be gone into. If however such a plea in deference
had been raised before 19.5.1988, the act did not preclude that question to be
decided in proceedings which were pending on 19.5.1988. Mithlesh Kumari's case
was wrong in holding that such a deference could not be decided after 19.5.1988
even though the plea was raised before 19.5.1988.
Fourthly, if such an interpretation as stated in (1 to (3) was given, it could
not be validly contended that a question of invalid discrimination arose
between cases where suits were filed on or before 19.5.1988 and those filed
Fifthly, even though the word 'suit' might include appeal or further appeals,
Section 4(1) and 4 (2) could not be made applicable to these subsequent stages.
pleas by plaintiffs or applicants and defences after 19.5.1988 of real owners
against benamidars were barred under section 4(1) and section 4(2), only to the
extent indicated above.
is substance is what was decided in R. Rajagopala Reddy's case.
shall now take up Nand Kishore Mehra's case [1995 (4) SCC 572]. As we shall
presently show, that case was concerned with a different factual situation and
different legal principles. We have sent for the record in that case and find
that there the suit was filed on 24.1.1991 (i.e.
19.5.1988) by the appellant pleading that he purchased the property on
24.4.1964 in trust for himself but in the name of hi wife. (the defendant). The
wife relied on the Act and filed an I.A. for rejection of the plaint under
Order 7 Rule 11 C.P.C. The Delhi High Court (on Original Side) in its order
dated 18.11.1993 dismissed the application under Order 7 Rule 11 filed by the
wife for rejection of the plaint. On appeal by the defendant - wife, a Division
Bench of the High Court by judgment dated 21.4.1994 allowed the (wife's) appeal
and directed rejection of the plaint as the Division Bench felt that Section
3(1) of the Act applied. On further appeal by the plaintiff husband, this Court
allowed the appeal and the application under Order 7 Rule 11 filed by the
defendant wife was dismissed and the suit was directed to be disposed of on
merits, taking into account the statutory presumption under Section 3(2) and
holding that Section 3(1) did not apply because the case fell under the
exception contained in Section 3(2).
Court referred to R. Rajagopala Reddy's case [1995 (2) SCC 630]. The plaint
being subsequent to 17.5.1988, the principle that the act was not retrospective
as stated in R.Rajagopala Reddy's case was no doubt initially not attracted to
that case. That would mean that Section 4(1) applied unless of course the case
fell within the exception stated either in Section 3(2) or in Section 4(3) of
that case, this Court permitted the plea of benami in a post 19.5.88 suit
because the Court was concerned with the exception in Section 3(2). The Court
also incidentally referred to the other exceptions falling under Section 4(3).
Court in that case noticed that the purchase was on 24.4.1964 and was in the
name of the wife. That was why this Court proceeded to refer to the exception
in Section 3(2) which concerns benami purchases in the name of a wife or
unmarried daughters. This Court also referred to the presumption contained
under the same exception in section 3(2) to the effect that unless the contrary
was proved, in the cases of purchases in the name of wife or unmarried
daughters, it shall be presumed that the property had been purchased for the
benefit of the wife or the unmarried daughters. In view of the exception in
Section 3(2), the prohibition under Section 3(1) was held not to apply. It was
held that - even though the plaint was filed after 19.5.1988 such a plea of benami
was not shut out. This Court directed that the suit to be disposed of course by
applying the statutory presumption contained in Section 3(2) which is to be mandatorily
drawn but which is rebuttable. The plaintiff in a suit filed after 19.5.1988
could still prove that the property had not bee purchased by him for the
benefit of his wife and he could rebut the presumption, and claim that he was
the real owner.
to the six principles hereinbefore culled out from R.Rajagopala Reddy's case,
the following further principles decided in Nand Kishore Mehra's case can be
Seventhly, if in a suit, claim or action a plea or defence based on benami is
raised even after 19.5.1988 and the purchase is in the name of a wife or
unmarried daughter, such a plea of benami is permissible and R.Rajagopala
Reddy's case will not come in the way merely because the plea is raised after
19.5.88. Such a plea if raised, will however have to be decided taking into
account the statutory presumption laid down in section 3(2). This is because
the act says that if the purchase is in the name of the wife or unmarried
daughter, the prohibition in section 3(1) will not apply.
3(2) is enacted as an exception to the provisions in the act and does not
depend for its interpretation on the question as to what extent section 4(1)
and 4(2) are retrospective.
Eighthly, if the case falls within the exception in section 4(3)(a) i.e. where
the person in whose name the property is held is a coparcener in a Hindu Undivided
Family and the property is held for the benefit of the coparceners in the
family, or where as stated in section 4(3)(b) the person in whose name the
property is held is a trustee or other person standing in a fiduciary capacity
and the property is held for the benefit of another person for whom he is a
trustee or towards whom he stanos in such capacity, then in both situations if
such a plea or defence is raised in a suit filed after 19.5.88, the same can be
decided by the Court notwithstanding sections 4(1) or 4(2) and notwithstanding
what is decided in R.Rajagopala Reddy's case." For the above reasons, we
are unable to find how Nand Kishore Mehra's case can be said to have doubted R.Rajagopala
Reddy's case. In fact far from doubting it, it proceeds to accept the said
judgment and then considers the case of exceptions provided in Section 3(2). It
holds incidentally that there is another exception contained in Section 4(3) of
the act. These exceptions apply even to suits filed after 19.5.1988 and are not
affected by what is decided in R.Rajagopala Reddy's case In order to complete
discussion, we shall also refer to two subsequent cases. The case in Heirs of Vrajlal
Ganatra where the suit was filed in 1981 claiming that the defendant in whose
name the deed dated 16.12.1963 stood was benami.
plaintiff's heirs filed appeal in Gujarat High Court in 1990 against the
judgment of the trial Court. No contention based on the Act of 1988 was raised
in the High Court. For the first time it was argued in this High Court. For the
first time it was argued in this Court that the plea was prohibited by the Act.
This Court, followed R.Rajagopala Reddy's case and held that the plea was
raised in a suit filed before 19.5.1988, and it was not barred under the act.
This Court then proceeded to decide the case on merits, dismissing the
(7) SCC 55] decided on 6.12.1994 is by a three judge Bench. It was decided
before R.Rajagopala Reddy's case but is reported later. In a way it took the
same view as in R.Rajagopala Reddy's case. It noticed that Section 3, 3 and 8
of the Act came into force at one i.e. 5.9.1988 and the remaining provisions
came into force from 19.5.1988 and that the objection that the deed of release
dated 24.2.1964 by the benamidar in favour of the firm was invalid because of
the Act, could not be permitted to be raised after 19,5,1988. In that case, the
rent control proceedings started around 1970 and the plea of benami was raised
and was also proved by the firm, the real owner, by relying on the release deed
dated 24.12.64 executed by the benamidar in favour of the firm. The objection
that the deed was invalid because of the provisions of the Act was raised after
19.5.88, relying upon Mithilesh Kumari's case [1989 (2) SCC 95] which held the
Act was retrospective. That judgment has since been reversed in R.Rajagopala
Reddy's case. It is clear that the conclusion arrived at in Sankana Hali's case
can now be easily justified by R. Rajagopala Reddy's case overruling Mithilesh Kumari's
case and on the basis of the principles laid down in the said case.
the aforesaid reasons we hold that the decision in R. Rajagopala Reddy is not
in any manner snaken by anything said in Nand Kishore Mehra's case and that
both cases deal with different aspects of the Act as stated above and each of
the cases continues to govern different provisions of the act.