Calcutta High Court
Rabindra Nath Biswas And Ors. vs Nalin Chandra Sarkar And Ors. on 19 August, 1987
Equivalent citations: (1987)0CALLT573(HC), 92CWN563
JUDGMENT Sukumar Chakravarty, J.
1. This second Appeal is directed against the judgment and decree passed by Sri A. N. Sana, learned Additional Subordinate Judge, Nadia, in Title Appeal No. 110 of 1972 reversing those passed by Sri Sukhendu Bikash Dasgupta, learned Munsif, Ranaghat, in Title Suit No. 124 of 1967/132 of 1968 and dismissing the same.
2. The plaintiffs filed the aforesaid Title Suit for a declaration that the sale deeds, executed by the plaintiffs in favour of the defendant No. 1 on 5-4-65 in respect of 'ka' and 'kha' schedule properties were sham/benami sale deeds and that the said sale deeds and other subsequent sale deeds executed by the defendant No. 1 in favour of the defendants Nos. 2 to 5 on the basis of the sale deeds dated 5-4-G5 did not affect the plaintiffs' title and interest in any way in the suit properties and for injunction.
3. The plaintiffs' case in brief, was that in Chaitra, 1356 B.S. pursuant to an agreement for exchange of the lands with one Asgar Mondal, the plaintiffs who hailed from the then East Pakistan, got possession in 24.53 acres of land. Asgar Mondal, however, subsequently refused to execute the deed of exchange and the plaintiffs filed the Title Suit No. 50 of 1953 against Asgar Mondal for specific performance of the contract for exchange of the aforesaid lands. During the pendency of the suit Asgar Mondal died and his heirs were substituted. The plaintiffs got the ex parte decree in the aforesaid Title Suit and got the deed of exchange executed through the Court in pursuance of the said ex parte decree, Asgar Mondal, filed a petition for setting aside the said ex parte decree and succeeded. The plaintiffs then got the contested decree in the said Title Suit No. 50 of 1953 and on appeal in Title Appeal No. 9 of 1964 the said decree was confirmed on 27th May, 1965. During the pendency of the appeal the heirs of Asgar Mondal threatened to forcibly oust the plaintiffs from the lands agreed to be exchanged. The plaintiffs sought the help of others including the defendant No. 1, who was the retired Military Officer, to resist the threat of the heirs of Asgar Mondal. The defendant No. 1 being a resident of the neighbouring village came forward to render help to the plaintiffs and asked the plaintiff to execute a benami sale deed in favour of the defendant No. 1 in respect of some land out of the alleged exchanged lands so that the defendant No. 1 could give a legal fight against the heirs of Asgar Mondal under the colour of the said sale deed. It was also decided that the defendant No. 1 would execute a Nadabi deed subsequently in favour of the plaintiffs. A and A1, on 5-4-65 during the pendency of the Title Appeal No. 9 of 1964 in respect of the Ka and Kha schedule properties in favour of the defendant No. 1 without any consideration. The plaintiffs had to execute two sale deeds instead of one with his own expense as the stamp paper of high denomination for one sale deed was not available. The said two sale deeds after their registration were taken and kept by the defendant No. 1 in his custody so that he might resist the threat of the heirs of Asgar Mondal to dispossess the plaintiffs from the alleged exchanged land, being armed with the aforesaid sale deeds. The defendant No. 1 subsequently did not execute the Nadabi deed in favour of the plaintiffs nor did he return the said sale deeds, Exbts. A and A-1, to the plaintiffs. The defendant No. 1 on the other hand sold the Ka and Kha schedule properties to the defendants Nos. 2 to 5 and thereby clouded the title of the plaintiffs over the suit property with the threat of dispossession from the side of the defendants. Accordingly, the present suit was filed for the relief, as already indicated.
4. The defendant No. 1 alone entered appearance and contested the suit after filing the written statement. The other defendants did not appear to contest the suit in spite of the service of summons upon them. The defendant No. 1 denied the plaintiffs' allegation that the two sale deeds, Exts. A and A-1, executed in favour of the defendant No. 1 were sham/benami deeds. According to the defendant No. 1, the plaintiffs being in litigation with the heirs of Asgar Mondal, were in need of money and sold the Ka and Kha schedule properties to the defendant No. 1 for a total consideration of Rs. 5,000, Rs. 2,500 each being the consideration in each of the sale deeds. It was further contended by the defendant No. 1 that the two sale deeds had got to be executed as the stamp paper of high denomination for the total consideration of Rs. 5,000 was not available at the relevant time. The defendant No. 1 paid the total consideration of Rs. 5000 and got the two sale deeds, Exbts. A and A-1, executed and registered. The defendant No. 1 subsequently sold the Ka and Kha schedule properties to the defendants No. 2 to 5 by different sale deeds. The defendant No. 1 denied all other allegations of the plaintiffs. According to the defendant No. 1, the plaintiffs were not entitled to get any relief in the suit.
5. The learned Munsif on consideration of the materials in the record found that the disputed sale deeds, Exts. A and A-1, were sham sale deeds as no consideration was passed and that both the plaintiffs and the defendant No. 1 with their knowledge of such sham transaction got the said sale deeds executed and registered for the purpose and motive as pleaded by the plaintiffs. The learned Munsif found also that the plaintiffs had no saleable interest and title in the 'Ka' and 'Kha' schedule properties when the plaintiffs sold the same to the defendant No. 1 by virtune of the sale deeds, Exbt. A and A-1. The learned Munsif, accordingly, decreed the suit in favour of the plaintiffs for the reliefs as claimed.
6. On appeal, the learned Additional Subordinate Judge reversed the judgment and decree passed by the learned Munsif and dismissed the suit on the finding that the sale deeds in question were not sham/benami deeds and that the consideration of the said sale deeds was paid by the defendant No. 1 to the plaintiffs and that, accordingly, the plaintiffs were not entitled to the reliefs as claimed although, according to the learned Additional Subordinate Judge, the decree in the suit for specific performance of the agreement for exchange against Asgar Mondal of his heirs, which has under appeal, did not create any title of the plaintiffs in the alleged exchanged land including the 'Ka' and 'Kha' schedule properties.
7. The plaintiffs being dissatisfied with the judgment and decree passed by the learned Additional Subordinate Judge have preferred the Second Appeal.
8. Mr. Roy Chowdhury, appearing for the appellants-plaintiffs, has first submitted that the learned Additional Subordinate Judge has committed the mistake in law in arriving at the finding of fact that the sale deeds, Exbts. A and A-1, were not the Sham/benami deeds as he has not considered all the material evidence On record in this respect and as he has based his finding partly on conjectures and partly on evidence. In support of his such submission, Mr. Roy Chowdhury has relied on the decision in the case of C.I.T. v. Doulatmal Rowatmal and also in the case of Budhwanti and Anr. v. Golapchand Prosad reported in 1987(2) S.C.C. Mr. Roy Chowdhury's second line of submission is that even if it be assumed for the sake of argument that it was found that the sale deeds, Exts. A and A-1, are genuine sale deeds and not the sham/benami deeds, still the said sale deeds executed on 5-4-65 did not confer any title of the 'Ka' and 'Kha' schedule properties upon the defendant No. 1 when the plaintiffs' suit for specific performance of the contract for exchange was sub-judice in appeal and when the plaintiffs did not legally acquire title to the alleged exchanged land covered by the deed of agreement for exchange and when the plaintiffs acquired title to the said alleged exchanged land only on 10.1.67 in pursuance of the court's execution of the decree for specific performance of the contract for exchange. Mr. Roy Chowdhury has further submitted that in the facts and circumstances of the present case, Section 43 of the Transfer of Property Act postulating the principle of "Feeding the estoppel" will not be applicable as the defendant No. 1 as transferee was not misled by any fraudulent or erroneous representation by the plaintiffs as transferors inasmuch as the very recitals of the sale deeds in question disclosed the real fact about the position of the land under sale, being the subject matter of the suit for specific performance of the contract for exchange. Mr. Roy Chowdhury has further submitted that in the case of transfer coming under the mischief of Section 43 of the Transfer of Property Act, like the English law of equity and estoppel, the interest and title to the property subsequently acquired by the transferor do not automatically go to the transferee but at the option of the transferee if so exercised, the same go to the transferee after compelling the transferor to make good the contract out of such interest in accordance with the law enjoined in the Specific Relief Act.
9. Mr. Mukherjee appearing for the respondent-defendant No. 1 has, however, supported the impugned judgment and decree in his submission. Mr. Mukherjee has submitted that in a Second Appeal this court cannot interfere with the finding of fact of the learned 1st Appellate Court with regard to the question of benami when the question of benami is purely one of fact. In support of his such submission Mr. Mukherjee has relied on the decisions in the case of Mahalaxmi Mills Ltd., Madurai v. Commissioner of Income Tax , Bhim Singh v. Kan Singh , Lal Kameshwari Singh v. Sarju Singh and Ors. and the other decision . According to Mr. Mukherjee the plaintiffs had title to the suit land when they sold the same to the defendant No. 1 on 5.4.65 by the sale deeds in question, Exts A and A-1. Mr. Mukherjee has, however, submitted that even if it be found that the plaintiffs had no title at the time of the execution of the sale deeds, Exts. A and A-1, the plaintiffs' subsequent acquisition of title had entitled the defendant No. 1 as transferee to acquire title to the purchased land. Mr. Mukherjee has, however, submitted that it does claim the benefit of Section 43 of the Transfer of Property Act for his client in this case but he claims the benefit of Section 41 and 52 of the Transfer of Property Act.
10. It is the settled principle of law that "A Judge of the High Court has no jurisdiction to interfere in Second Appeal with the findings of fact given by the 1st Appellate Court based upon an appreciation of the relevant evidence. "The decision in the case of Deity Pattabhi Ramaswami v. Hanymayya and Ors. reported in A.I.R. 1959 S.C. 57 is relied on. There is no dispute to the principle of law as enunciated in the case Supra based upon some Income Tax case, is relied on by Mr. Mukherjee, by saying that the question of benami is purely one of fact. But in the said case it has also been held that a finding on a question of fact is open to attack under Section 66(1) of the Income Tax Act as erroneous in law when there is no evidence to support it or if it is perverse. In the case the same principle, as enunciated in the decision mentioned earlier, has been followed. The decisions in the cases and are the pointer to the tests for determination of the benami character of a particular deed in dispute. So the aforesaid decisions which no doubt guide us with regard to the said tests do not actually help us very much with regard to the High Court's jurisdiction and scope of consideration in the matter of interference with the finding of fact arrived at by the 1st appellate court.
11. In the case Supra, as relied on by Mr. Roy Chowdhury, it has been held that "If the Court of fact bases its decision partly on conjectures, surmises and suspicions and partly on evidence, in such a situation an issue of law arises. "In the case Supra, it has been held as follows :
"It is true that in a Second Appeal a finding of fact even if erroneous will generally not be disturbed but where it is found that the finding is vitiated by application of wrong tests or on the basis of conjectures and suspicions then a High Court will be well within its rights in setting aside in a Second Appeal a patently erroneous finding in order to render justice to the party affected by the erroneous finding."
12. Before we go into the discussion whether in the facts and circumstances of the present case, the finding of the 1st appellate court on the question of benami can be interfered with in this Second Appeal keeping in view the principle of law as enunciated in the cases discussed above, let us see what is meant by the word 'benami'. The word 'benami' and the nature of transaction involved therein have been very lucidly explained in Supra as relied on by Mr. Mukherjee. It has been held therein as follows :
"The word 'benami' is used to denote two classes of transactions which differ from each other in their legal character and incidents. In one sense, it signifies a transaction which is real, as for example, when 'A' sells properties to 'B' but the sale deed mentions 'X' as the purchaser. Here the sale itself is genuine but the real purchaser is 'B', 'X' being his benamdar. This is the class of transaction which is usually termed as benami. But the word 'benami' is also occasionally used, perhaps not quite accurately, to refer to a sham transaction, as for example, when 'A' purports to sell his property to 'B' without intending that his title should cease or pass to 'B'. The fundamental difference between these two classes of transaction is that whereas in the former there is an operative transfer resulting in the vesting of title in the transferee, in the later there is none such, the transferor continuing to retain the title notwithstanding the execution of the transfer deed. It is only in the former class of cases that it would be necessary, when a dispute arises as to whether the person named in the deed is the real transferee or 'B', to acquire into the question as to who paid the consideration for the transfer, 'X' or 'B'. But in the later class of cases, when the question is whether transfer is genuine or sham, the point for decision would be, not who paid the consideration but whether any consideration was paid."
13. In the case before us the plaintiffs have come with the allegation of sham transaction under the sale deeds, Exbts. A and A-1 in question and, accordingly, they have termed the sale deeds as the benami deeds.
14. Some undisputed facts as emerged at the time of trial of the suit are as follows. Plaintiffs' suit Title Suit No. 50 of 1953 against Asgar for specific performance of the contract for exchange was first decreed exparte on 11th January, 1957 and the deed of exchange was got executed through the court in pursuance of the said exparte decree in the year 1957 and subsequently on Asgar Mondal's application or setting aside the exparte decree, the said exparte decree was set aside on 13th August, 1957 and the suit was subsequently decreed on contest on 14th May, 1962 and the suit which decreed on contest on 14th May 1962 remained pending for final disposal before the appellate court on appeal. The appellate court, however, confirmed the decree on 27.5.65. The disputed sale deeds, Exts. A and A-l, were admittedly executed On 5.4.65 before the plaintiffs got the exchange deed executed through the court in pursuance or the contested decree for specific performance on 10.1.67.
15. The learned Munsif as the trial court accepted the motive behind the creation of the disputed benami deeds like the Exbts. A and A-1, as pleaded and proved by the plaintiffs, laying stress upon the facts that the sale deeds in question were executed at a time when both the plaintiffs as transferor and defendant No. 1 as transferee knew full well that the plaintiffs' decree for specific performance of the contract for exchange being under appeal was not mature to be enforce against the heirs of Asgar Mondal and the plaintiffs did not acquire title to the land which was the subject matter of the agreement for exchange. On consideration of the materials in the record, the learned Munsif found also that no consideration of the transfer in question under the sale deeds, Exbts. A and A-1, was paid by the defendant No. 1 to the plaintiffs and that was the plaintiff who bore all the expenses including the purchase of stamp paper for creation of the sale deeds in question and that the subsequent conduct in the act of possession by payment of rents, etc., was also found by the learned Munsif in favour of the plaintiffs. The learned Munsif, however, did not discuss the point about the custody of the deeds in question, although at the outset of the judgment he mentioned that the custody of the document was one of the tests to be looked into for determination of the benami character in the transaction. The learned Munsif arrived at the finding that the said deeds, Exts. A and A-1, were sham deeds and, accordingly, they were benami deeds involving a sham transaction.
16. It is an undisputed fact that the sale deeds, Exts. A and A-1, were produced from the custody of the defendant No. 1. The specific case made out in the plaint was that in spite of the decree for specific performance of the contract for exchange obtained by the plaintiffs in the Trial Court against the heirs of Asgar Mondal, the heirs of Asgar Mondal preferred an appeal and threatened to forcibly dispossess the plaintiffs from the exchanged land and that the plaintiffs sought the help of the retired military officer, the defendant No. 1, to resist that threat and that on the suggestion of the defendant No. 1 to arm him with some document for the purpose, the plaintiffs executed the sham deeds, exbts. A and A-1, without any consideration and allowed the said deeds to remain with the defendant No. 1. If it was found that the said deeds in question were executed without any consideration for the motive as alleged by the plaintiffs, then no doubt the custody of the document looses its importance in such circumstances normally the documents would lie with the defendant No. 1 so that he could resist the threat of dispossession from the side of the heirs of Asgar Mondal as pleaded and proved by the plaintiffs.
17. Admittedly, P. Ws. 1 and 2 are the attesting to the sale deeds in question, Exbts. A and A-1, and P.W. 3 is the scribe. They all have stated in evidence that no consideration was paid in connection with the deeds, P.W. 3 has further stated that he wrote the deeds of his own accord and fixed the price in both the deeds himself and wrote the same. It is an undisputed fact and the stamp papers of the deeds in question would show that the stamp papers were not purchased by the transferee, defendant No. 1 but by the plaintiffs against the provisions of the Indian Stamp Act when evidence does not show that there was agreement enabling the plaintiffs to purchase the stamp papers.
18. The learned Additional Subordinate Judge has not considered the impact of the evidence of the attesting witnesses like P.Ws. 1 and 2 who are the normal witnesses to say about the passing of the consideration and the evidence of the scriber, P.W. 3, who has said on oath that he himself wrote the amount of consideration in the deeds in question of his own accord and on his own fixation. The learned first appellate Court also did not consider the fact that the defendant No. 1 did not bear the costs of stamp papers and purchased the same in his own name when there is no agreement otherwise between the parties. The learned Additional Subordinate Judge did not consider also whether in the facts and circumstances as made out by the plaintiffs it was normally expected that the plaintiffs would hear all such costs. The learned Additional Subordinate Judge did not properly consider also whether the defendant No. 1 would be inclined to pay the total consideration of Rs. 5,000 when he knew at the time of the execution of the sale deeds in question that the plaintiff had not yet acquired the ownership in the lands in question lands in question in pursuance of the decree for specific performance which was still under appeal. It may be mentioned here that the sale deeds, Exts. A and A-1, in question were executed on 5.4.65 and the plaintiffs got the deed of exchange executed through Court on 10.1.67 pursuant to the decree for specific performance of the contract for exchange.
18a. According to D. W. 5 (Defendant No. 1) he paid the consideration money to the plaintiffs in plaintiffs' house in presence of witnesses D.W. 1 and D.W. 3 who, however, did not figure as attesting witnesses to the sale deeds in question. The learned Munsif has commented upon this fact but the learned Additional Subordinate Judge has not considered this aspect at all.
19. According to the defendant No. 1, he got the receipt from the plaintiffs on payment of the total consideration of Rs. 5,000. Non-production of that receipt by the defendant No. 1 has been commented upon by the learned Munsif on disbelieving the defence evidence that the defendant No. 1 returned the receipt to the plaintiffs. The learned Additional Subordinate Judge believed the evidence of the defence about the return of the receipt to the plaintiffs on the surmise that the defence evidence in this respect was consistent with the probability. The learned Additional Subordinate Judge missed also to consider the material discrepancy in the defence evidence when D.W. 5 (Defendant No. 1) said that only plaintiff No. 3 signed and granted the receipt whereas D.W. 3 said that all the plaintiffs signed the receipt.
20. In view of what has been stated and discussed above, it appears that the learned Additional Subordinate Judge while arriving at the finding of fact about the non-benami character of the transaction in question in disagreement with that of the learned Munsif, has not considered some material evidence at all and has based his such finding partly on evidence and partly on surmise and thereby his finding in this respect has become erroneous and perverse. Such finding of fact is required to be interfered with in the Second Appeal to render justice to the party affected by such erroneous and perverse finding.
21. On due consideration of the entire materials in the record and the facts and circumstances as revealed in this case through the materials, we accept and confirm the finding of the learned Munsif that no consideration passed for the sham transfer under the sale deeds in question and that those sale deeds were sham/benami deeds, after setting aside the finding of the learned Additional Subordinate Judge about the non-benami character of the deeds in question. The deeds in question therefore have not cast any cloud over the title of the plaintiffs in the suitland which they acquired subsequently on 10.1.67 in execution of the decree for specific performance of the contract for exchange.
22. Even if it be assumed for the sake of argument that the sale deeds, Exts. A and A-1, were not benami deeds covering the sham transactions, we find that those deeds being executed on 5.4.65 when the plaintiffs had not required any title or interest in the alleged exchanged property including the suit property, namely, 'Ka' and 'Kha' schedule property, did not affect the plaintiffs' title subsequently acquired and did not confer title upon the defendant No. 1 in respect of the suit property. It has already been stated that the plaintiffs acquired title only on 10.1.87 when they got the decree executed through the Court in pursuance of the decree for specific performance. It is the settled principle of law that the decree for specific performance of the contract for transfer, namely, sale of immovable property does not create any interent in the property. The decision in the case of Gobinda Chandra Ghose v. Prabhabati Ghose reported in 59 C.W.N. 886 is relied on in this respect. It has been held therein as follows :
"Section 54 of the Transfer of Property Act lays down that a contract for sale of immovable property does not by itself create any interest in such property. If that is so, it is difficult to see how a decree passed on the basis of such a contract creates that interest. The decree merely superadds the sanction of the Court to the contract entered into by the parties and makes it enforceable through the medium of the Court."
23. The facts and circumstances of the present case also do not attract the provisions of Section 43 of the Transfer of Property Act involving the equitable principle "Feeding the Estoppel". It has already been stated that Mr. Mukherjee does not claim the benefit of Section 43 of the Transfer of Property Act for his client. But we cannot avoid the discussion thereof in order to show whether Section 43 is attracted in this case so that the defendant No. 1 can acquire title because of the plaintiffs' acquisition of title subsequent to the execution of the deeds in question. The materials in the records and the very recitals of the sale deeds in question, Exts. A and A-1, establish that the plaintiffs in this case did not fraudulently or erroneously represented before the defendant that he was authorised to transfer the suit land and professing to transfer the same for consideration. The recitals in the saledeeds in question rather indicate that the defendant No. 1 knew the real position about the suit land about the decree for specific performance which was pending for final disposal. So Section 43 of the Transfer of Property Act does not apply in this case. Further even if there be such fraudulent or erroneous representation and such profession to transfer for consideration, still under Section 43 of the Transfer of Property Act such transfer shall, at the option of the transferee, operate on the interest which the transfer may acquire in such property at any time during which the contract of transfer subsists. There is nothing in this case to show that the defendant No. 1 as transferee exercised his option as required under Section 43 of the Transfer of Property Act after the plaintiffs acquired title on 10.1.67 following the deeds of exchange executed in pursuance of the decree for specific performance.
24. "By the English law of estoppel, when a grantor has purported to grant an interest in land which he did not at the time possess, but subsequently acquires, the benefit of his subsequent acquisition goes automatically to the earlier grantee, or as it usually expressed, feeds the estoppel. "The Indian law under Section 43 of the Transfer of Property Act in this respect is not exactly so. "Under the Indian system as soon as the property is afterwards acquired, no estate passes, an obligation is annexed to the property and the transferor become trustee of it for the transferee who may at his option may compel the transferor to make good the contract out of such interest." In accordance with the law under the Specific Relief Act. It may be mentioned here that Section 43 of the Transfer of Property Act has got its foundation on the definition of 'estoppel' as ambodied in Section 115 of the Indian Evidence Act which Mr. Mukherjee has brought to our attention.
25. In the circumstances and the discussions as mentioned above the plaintiffs' title to the property which is subsequently acquired did not pass to the defendant No. 1 by invoking the provisions of Section 43 of the Transfer of Property Act. In the facts and circumstances of the present case, there is no scope for application of the provisions of Section 41 and Section 52 of the Transfer of Property Act, the scope of which has been elucidated by Mr. Mukherjee in his submission. Section 41 of the Transfer of Property Act deals with transfer by ostensible owner. Plaintiffs while executing the sale deeds in question, Exts. A and A-1, were not the ostensible owners by any valid deed. The principle of 'lis pendens' as embodied in Section 52 of the Transfer of Property Act does not at all apply in the facts and circumstances of the present case.
26. In view of what has been stated above, we find that the plaintiffs are entitled to the reliefs as claimed and the learned Munsif rightly passed the judgment and decree in favour of the plaintiffs.
27. In the result, the appeal is allowed. The judgment and decree passed by the learned Additional Subordinate Judge reversing those of the learned Munsif and dismissing the suit are set aside and the judgment and decree of the learned Munsif are restored and confirmed. We make no order as to costs in this appeal.
Gobinda Chandra Chatterjee, J.
28. I agree.