Vijay Kumar Vs.
Dharam Pal & Ors.  INSC 269 (10 February 2009)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.854 OF 2009 (Arising out
of S.L.P.(C) No.20192 Of 2006) VIJAY KUMAR & ANR. ... Appellants DHARAM PAL
& ORS. ...
appeal has been listed after notice had been served on the Respondent No.1 and
learned counsel has entered appearance and has filed counter affidavit on his
Dharam Pal, Respondent No.1 herein, filed a suit for possession by claiming
that he had purchased two properties situated at Nakodar by two conveyances
dated 24th April, 1959 and 12th June, 1959. It is his further case that having
raised constructions in the said properties after obtaining sanction from the
Municipality and having recorded his name in the House Tax Records as an
assessee of the local body, he proceeded to the United Kingdom in 1964 and at
the time of leaving, he had handed over possession of the said properties to
his father, who was living along with his other son, Mr. Ram Aggarwal.
Subsequently, the father of the Respondent No.1 also left for England and died
there in 1970. The brother of the Respondent No.1/plaintiff, Mr. Ram Aggarwal,
thereafter started a business in the said premises under the name and style of
Vijay Agencies and remained in possession thereof as licencees of the
Respondent No.1. On being asked to hand over possession of the suit properties
by the Respondent No.1, Mr. Ram Aggarwal, refused to do so, which resulted in
the filing of the civil suit, after revocation of the licence.
claim of the Respondent No.1 was denied by the defendant/appellant, Mr. Ram
Aggarwal, who claimed that an old shop had been purchased by a sale deed dated
24th April, 1959 in the name of the Respondent No.1 on account of their love
and affection for him. Similarly, a second shop was also purchased by them on
12th June, 1959, in the name of the Respondent No.1 on the same ground. The
claim of the appellants is that they had subsequently demolished the old
structure and had raised the new structure, of which they were in possession
and were, in fact, the real and ostensible owners. It was also asserted by the
appellants that a large sum of money had been spent by them on the new
constructions and that they had been depositing local taxes in respect thereof,
though the bills were issued in the name of the Respondent No.l whose name was
recorded in the local records as the owner thereof. It was also admitted 4 by
the appellants that the electric connection and water connection were in the
name of the Respondent No.1. In this context a plea of benami was raised by the
appellants which was negated by the trial Court on the ground that such plea
was not available after the enactment of the Benami Transactions (Prevention)
Act, 1988, which had been held to have retrospective effect.
the case made out by the respective parties and the evidence led by them, the
Trial Court upon holding that the Respondent No.1 was the owner of the suit
properties, decreed the suit in favour of the Respondent No.1 by a judgment and
decree dated 9th August, 1991. The appeal preferred by the appellants from the
said judgment and decree was dismissed by the lower Appellate Court by its
judgment dated 5th September, 1997, confirming the reasoning of the trial
Court, which gave rise to a second appeal filed before the High Court. Having
regard to the fact that both the sale deeds were in the name of the Respondent No.1,
but the appellants 5 claimed that the properties had been purchased benami in
the name of the Respondent No.1 and the appellants were the real owners
thereof, the question of ownership was remanded to the First Appellate Court.
Upon reconsideration of the evidence, the First Appellate Court re-affirmed its
earlier decision holding the Respondent No.1 to be the owner of the property.
appellants filed a fresh Second Appeal against the order of the First Appellate
Court which was again dismissed by the High Court upon holding that in view of
the specific bar under Section 4 of the Benami Transactions (Prohibition) Act,
1988, the appellants could not take up the plea of the properties being benami.
present appeal is directed against the judgment of the High Court dismissing
the appellants' Second Appeal.
Second Appeal was once again dismissed by the High Court on the ground that the
defence taken in the suit by the defendants was barred in view of Section 4 of
the Benami Transactions (Prohibition) Act, 1988 which had come into force. The
High Court held that since the aforesaid Act and its provisions were
retrospective, the appellants were not entitled to take the plea that the
properties were benami in character in view of such specific bar.
High Court also took notice of Exhibit PW3/3 which was signed by Mr. Ram
Aggarwal and the Respondent No.1. In the said document, the appellants had
admitted the ownership of the Respondent No.1 over the disputed properties and
had agreed to transfer some properties in Chandigarh to the Respondent No.1 in
lieu of the shops in question. In the course of his deposition in the Trial
Court, Mr. Ram Aggarwal admitted his signatures on Exhibit PW3/3 and it was
further observed that the said agreement was presumably as a 7 consequence of
the notice issued by the Respondent No.1 on 30th August, 1986 (Exhibit PW3).
High Court came to a finding that there could be no escape from the conclusion
that the Respondent No.1 was the owner of the suit properties and that the
appellants had been permitted to use the same as licencees when the Respondent
No.1 had gone abroad.
view of the aforesaid finding, the High Court dismissed the Second appeal,
which had been filed by the defendants who are the appellants herein.
R.K. Dhawan, learned Counsel, who appeared for the appellants, submitted that
the High Court had erroneously held that the provisions of the Benami
Transactions (Prohibition) Act, 1988, had been given retrospective effect and
would, therefore, apply to the instant case. He urged that since the suit had
been filed on 5.1.87 and the Act had come into force thereafter on 5.9.1988,
the same 8 would have no application to the suit and the parties were entitled
to prove their ownership of the suit properties on leading evidence, such as
payment of rates and taxes, in support thereof. Mr. Dhawan submitted that the
very fact that the Respondent No.1 herein had not taken any steps to claim
title over the properties in question for about 30 years, clearly indicated
that the suit had been filed as an after-thought and with the intention of
taking a chance to take possession of the suit properties.
support of his submission that the bar of Section 4 of the Benami Transactions
Act would not apply retrospectively, Mr. Dhawan referred to and relied on the
decision of a Three Judge Bench of this Court in the case of R. Rajagopal Reddy
(dead) by L.Rs. [AIR 1996 SC 238], wherein the same proposition was considered
and accepted. Mr. Dhawan submitted that the High Court had committed a serious
error in applying the provisions of the 9 above Act and also relying on the
Agreement (Exhibit PW 3/3), which was said to have been executed by Mr. Ram
Aggarwal and Dharam Pal. It was submitted that the judgment and order of the
High Court was not sustainable and was liable to be set aside.
behalf of Respondent No.1, it was conceded by Mr. Dhruv Mehta, learned
Advocate, that since the suit had been filed on 5th January, 1987 and the Benami
Transactions (Prohibition) Act, 1988, came into force subsequently on 5th
September, 1988, the provisions of the Act would have no application to the
Mehta urged that even if the bar of Section 4 of the 1988 Act was not available
in the instant case, the Respondent No.1 had been able to prove his ownership
of the suit properties on the basis of the evidence adduced by him. Mr. Mehta
submitted that once Exhibit PW3/3, which contained an admission of Ram Aggarwal
acknowledging the ownership of the Respondent No.1 in the suit premises, was
accepted, 10 the courts below had rightly relied on the same along with other
documents such as Municipal records, the receipts, electric and water
connection in support thereof in holding that the Respondent No.1 was the owner
of the suit properties and decreeing the suit of the Respondent No.1 and
dismissing the appeal preferred by the appellants.
the two points urged by Mr. Dhawan, since the first point regarding the
applicability of the Benami Transactions (Prohibition) Act, 1988, to the suit
has been conceded on behalf of the Respondent No.1 in favour of the appellants,
the same need not detain us, except to state that the trial Court, the first
appellate Court and the High Court had erred in applying the provisions of the
Act to the suit, since it had been filed prior to the coming into effect of the
on the second question, we are inclined to agree with Mr. Mehta that de hors
the question of the applicability of the Benami Transactions 11 (Prohibition)
Act, 1988, the Courts below had rightly held that the Respondent No.1 was the
owner of the suit properties relying on the documentary and oral evidence
adduced by him, including Exhibit PW3/3 executed by the appellants and the
Respondent No.1 which was proved by Audhiya Parshad as mentioned in the
judgment of the trial Court.
even while holding that the Courts below, including the High Court, had erred
in applying the provisions of the Benami Transactions (Prohibition) Act, 1988,
to the suit of the Respondent No.1, the Appeal must fail on the ground that in
addition to the above, the Courts had found the Respondent No.1 to be the owner
of the suit properties on the basis of the evidence adduced by him, which
finding was not disturbed by any of the Courts below.
appeal is, therefore, dismissed.
will be no order as to costs.