Karnataka High Court
Chandrashekharappa @ Chandrashekhar ... vs Dyawamma W/O Late Girimallappa ... on 28 August, 2024
-1-
NC: 2024:KHC-K:6350
RSA No. 200392 of 2022
IN THE HIGH COURT OF KARNATAKA,
KALABURAGI BENCH
DATED THIS THE 28TH DAY OF AUGUST, 2024
BEFORE
THE HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE
REGULAR SECOND APPEAL NO.200392 OF 2022
(PAR/DEC)
BETWEEN:
1. CHANDRASHEKHARAPPA @ CHANDRASHEKHAR
S/O BASANNA HONNALLI,
AGE: 57 YEARS, OCC: GOVERNMENT TEACHER,
R/O. AT WADAGERA VILLAGE, TQ. JEWARGI,
NOW YADRAMI, DIST. KALABURAGI,
NOW R/O MALALLI VILLAGE, POST KEMBHAVI,
TQ. SHORAPUR, DIST. YADGIRI-585216.
2. JAGADEVI
W/O CHANDRASHEKHARAPPA @ CHANDRASHEKHAR,
AGE: 49 YEARS, OCC: HOUSEHOLD,
Digitally signed R/O. WADAGERA VILLAGE, TQ. JEWARGI,
by RENUKA NOW YADRAMI, DIST. KALABURAGI-585225,
Location: HIGH NOW R/O. MALALLI VILLAGE, POST. KEMBHAVI,
COURT OF
KARNATAKA TQ. SHORAPUR, DIST. YADGIRI-585216.
...APPELLANTS
(BY SRI SHIVAKUMAR KALLOOR, ADVOCATE)
AND:
1. SMT. DYAWAMMA
W/O LATE GIRIMALLAPPA HONNALLI,
AGE: 54 YEARS, OCC: AGRICULTURE,
-2-
NC: 2024:KHC-K:6350
RSA No. 200392 of 2022
R/O. WADAGERA VILLAGE, TQ. JEWARGI,
NOW YADRAMI, DIST. KALABURAGI-585225.
2. SHIVARAJ S/O NAGAPPA HONOORU,
AGE: 32 YEARS, OCC: AGRICULTURE,
R/O. HERE RAYANKUNTI VILLAGE,
TQ. DEODURGA, DIST. RAICHUR-584111.
3. SMT. SHARANAMMA W/O BHIMARAYA
BHAIRAMADAGI,
AGE: 54 YEARS, OCC: HOUSEHOLD,
R/O. BADADAL VILLAGE, TQ. AFZALPUR,
DIST. KALABURAGI-585301.
...RESPONDENTS
(BY SRI B. BHIMASHANKAR, ADVOCATE FOR R1;
R2 AND R3 ARE SERVED)
THIS RSA IS FILED UNDER SECTION 100 OF THE CPC,
PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE
IMPUGNED JUDGMENT AND DECREE DATED:20.08.2022
PASSED BY I ADDITIONAL DISTRICT JUDGE, KALABURAGI IN
R.A.NO.44/2021 PARTLY ALLOWING THE APPEAL THEREBY
MODIFYING THE JUDGMENT AND DECREE IN O.S.NO.82/2018
DATED 26.02.2021 ON THE FILE OF SENIOR CIVIL JUDGE AND
JMFC JEWARGI, AND DISMISS THE SUIT OF THE PLAINTIFF IN
O.S.NO.82/2018.
-3-
NC: 2024:KHC-K:6350
RSA No. 200392 of 2022
THIS APPEAL, COMING ON FOR DICTATING JUDGMENT,
THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE) This appeal is against the divergent findings in a suit for partition. The plaintiff's suit for partition is decreed in respect of two residential houses and dismissed in respect of two agricultural lands.
2. The plaintiff filed an appeal before the First Appellate Court. The First Appellate Court allowed the appeal in part, and the suit is decreed awarding 1/3rd share in suit A, C and D schedule properties. The suit in respect of the 'B' schedule property is dismissed.
3. The cross-objection filed by defendants No.1, 2 and 4 challenging decree for partition in respect of C and D properties is dismissed.
-4-
NC: 2024:KHC-K:6350 RSA No. 200392 of 2022
4. Aggrieved by the judgment and decree passed by the First Appellate Court allowing the appeal in part, and dismissing the cross-objection, defendants No.1 and 2 are before this Court in the second appeal.
5. This Court vide order dated 14.08.2024 has framed the following substantial questions of law:
(i) Whether the first Appellate Court is justified in setting aside the judgment and decree passed by the Trial Court and granting a decree in respect of item No.1 of the suit property for partition in favour of the plaintiff despite the property being purchased by defendant No.1/appellant No.1 in the name of his father?
(ii) Whether the transaction in the name of the father of defendant No.1 is hit by the provisions of the Prohibition of Benami Property Transactions Act, 1988?
(iii) Whether the contentions regarding Prohibition of Benami Property Transactions Act, 1988 can be entertained in the light of the pleadings placed before the Trial Court?-5-
NC: 2024:KHC-K:6350 RSA No. 200392 of 2022
6. The certain facts borne out from the pleadings can be summarized as under:
One Basanna son of Girimallappa Honnalli was the propositus. He had a wife by name Bhagamma. The couple had two sons namely, Girimallappa and Chandrashekharappa. Girimallappa is no more and the plaintiff is the widow of Girimallappa.
Chandrashekharappa, the son of the propositus is defendant No.1. Jagadevi, the wife of Chandrashekharappa is defendant No.2.
7. The suit is filed in respect of two agricultural lands and two residential houses. The plaintiff claims that all the properties are the properties inherited after the demise of propositus Basanna and his wife Bhagamma. Thus, the plaintiff claimed half share in the suit schedule properties on the premise that she inherited half share through her husband Girimallappa.
8. The defendants contested the suit. As far as item No.A property is concerned, defendant No.1 raised a -6- NC: 2024:KHC-K:6350 RSA No. 200392 of 2022 contention that he being a teacher in a Government school, has purchased the property by investing his income from his employment and the property was purchased in the name of his father Basanna. Thus, he would contend that the property did not belong to Basanna and he is the exclusive owner of the said property. As far as item No.B property is concerned, it is stated that the said property belongs to the wife of defendant No.1 Chandrashekharappa, and said property is stridhana property of his wife Jagadevi/defendant No.2. As far as item No.C and D properties are concerned, there is no serious dispute that these properties originally belonged to Basanna the propositus and the properties are ancestral properties.
9. Before the Trial Court, the evidence was led in support of the respective contentions of the parties.
10. The Trial Court has decreed the suit in respect of two residential houses and dismissed the suit in respect of items No.A property i.e., survey No.43/D measuring 4 -7- NC: 2024:KHC-K:6350 RSA No. 200392 of 2022 acres 4 guntas in Wadagera village, Jewargi Taluk, Kalaburagi District. The Trial Court has held that the said property is the property purchased by defendant No.1 from his income as a teacher. As far as Item No.B schedule property i.e., property bearing survey No.72/3 measuring 4 acres at Rayakumpi village, Deodurga Taluk, is concerned, the Trial Court held that the said property is the self-acquired property of defendant No.2, the wife of defendant No.1.
11. Aggrieved by the aforementioned judgment and decree, the plaintiff filed an appeal seeking share in all the properties. Defendants No.1, 2 and 4 filed cross-objection praying to dismiss the suit in its entirety.
12. The First Appellate Court allowed the appeal in part granting decree for partition in respect of item No.A property, dismissed the appeal in respect of item No.B property and confirmed the judgment and decree passed by the Trial Court in respect of items No.C and D. The -8- NC: 2024:KHC-K:6350 RSA No. 200392 of 2022 cross-objection filed by defendants No.1, 2 and 4 is dismissed.
13. Learned counsel appearing for the appellants/defendants would contend that there is a clear admission in the cross-examination of the plaintiff who admitted that her father-in-law had no independent source of income. In addition defendant No.1 being a government teacher had independent source of income from his salary. Thus, the purchase of the property by defendant No.1 in the name of his father is established and the First Appellate Court could not have decreed the suit in respect of item No.A schedule property.
14. It is also his contention that the transaction is not hit by the provisions of the Benami Transactions (Prohibition) Act, 1988 (for short 'the Act of 1988'). He would contend that even if it is held to be a Benami Transaction under clause (b) of Sub-section (4) of Section 4 of the Act of 1988, the transaction is saved as defendant No.1 and his father are standing in fiduciary capacity. He -9- NC: 2024:KHC-K:6350 RSA No. 200392 of 2022 would also contend that the plaintiff has not raised any contention relating to the benami transaction and the said contention cannot be considered at this stage. Thus, he would urge that the appeal is to be allowed and the suit is to be dismissed in respect of item No.A property.
15. Learned counsel appearing for the respondents would urge that there is no recital in the sale deed in the name of the propositus Basanna to hold that the said transaction is a benami transaction. The recital in the sale deed would reveal that Basanna purchased the property and there is nothing in the sale deed to hold that defendant No.1/Chandrashekharappa has invested his money to purchase the property. It is also his contention that the admission in the cross-examination of P.W.1 that her father-in-law was not having income to purchase the property is not conclusive admission to hold that the property was purchased defendant No.1. He would contend that the sale deed in the name of Basanna in respect of 'A' schedule property prevails over the so called
- 10 -
NC: 2024:KHC-K:6350 RSA No. 200392 of 2022 admission in the cross-examination and thus he would contend the properties are the joint family properties.
16. This Court has considered the contentions raised at the bar and perused the records.
17. As far as contention of learned counsel Sri Shivakumar Kalloor that there is no plea relating to benami transaction in the plaint or written statement, it is to be noticed that it is defendant No.1 who has raised a contention that the property was purchased in the name of his father from his income. At this juncture, it is necessary to refer to the definition of benami transaction as defined in Section 2(a) of the Act of 1988.
"2(a) Benami Transaction means "A transaction in which property is transferred to one person for a consideration paid or provided by another person".
18. Though the word benami transaction is not used in the written-statement, the contention that defendant No.1 has purchased the property in the name of the father by using his income would attract the definition of the
- 11 -
NC: 2024:KHC-K:6350 RSA No. 200392 of 2022 'benami transaction' as defined under Section 2(a) of the Act of 1988.
19. Section 3 of the Act of 1988 deals with prohibition of certain benami transactions. Under Section 3 of the Act of 1988, the property can be purchased in the name of the wife or unmarried daughter and that transaction is not prohibited under the Act of 1988.
20. Section 4 of the Act of 1988 deals with the prohibition in respect of certain defences or the plea in respect of the benami transaction. Under Section 4 of the Act of 1988, a person cannot make a claim over a property which is covered by the Act of 1988, as his property or in case, the suit is launched against him, he cannot raise a defence that the property is his property and it was purchased benami. However two exceptions are provided in Section 4(3)(a) and 4(3)(b) of the Act of 1988, which read as under:
- 12 -
NC: 2024:KHC-K:6350 RSA No. 200392 of 2022 (3) Nothing in this section shall apply,--
(a) 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;
(b) Where 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 stands in such capacity.
21. Under Section 4(3) (a) of the Act of 1988, the property purchased by coparcener in a Hindu undivided family does not attract the prohibition under the Act of 1988. Likewise, under Section 4(3)(b) of the Act of 1988, the property is purchased by a trustee, then the said transaction is also not hit by the Act of 1988. Section 4(3)(b) of the Act of 1988 also recognizes that the purchase of the property by a person standing in fiduciary capacity.
22. It is the contention of the learned counsel for the appellant that the son and the father namely, defendant No.1 and Basanna are standing in fiduciary capacity, as such, the transaction is saved. In support of
- 13 -
NC: 2024:KHC-K:6350 RSA No. 200392 of 2022 his contention, he would placed reliance on the judgment of the Hon'ble Apex court in the case of SRI MARCEL MARTINS VS M.PRINTER & OTHERS reported in AIR 2012 SUPREME COURT 1987, 2012 (5) SCC 342.
23. This Court has considered the said judgment. The expressions "Fiduciary" "Fiduciary capacity" and "Fiduciary relationship" have been exhaustively considered in the said judgment. The relevant paragraphs in the said judgment are as under:
"15) The expression "fiduciary capacity" has not been defined in the 1988 Act or any other Statute for that matter. And yet there is no gainsaying that the same is an expression of known legal significance, the import whereof may be briefly examined at this stage.
(16) The term "Fiduciary" has been explained by Corpus Juris Secundum as under:
"A general definition of the word which is sufficiently comprehensive to embrace all cases cannot well be given. The term is derived from the civil, or Roman Law. It connotes the idea of trust or confidence, contemplates good faith, rather than legal obligation, as the basis of the transaction, refers to the integrity, the fidelity, of the party trusted, rather than his credit or ability, 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
- 14 -
NC: 2024:KHC-K:6350 RSA No. 200392 of 2022 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 similar relationships, and 'confidential relation' which includes the legal relationships, and also every other relationship wherein confidence is rightly reposed and is exercised.
Generally, the term 'fiduciary' applies to any person who occupies a position of peculiar confidence towards another. It refers to integrity and fidelity. It contemplates fair dealing and good faith, rather than legal obligation, as the basis of the transaction. The term includes those informal relations which exist whenever one party trusts and relies upon another, a well as technical fiduciary relations."
18. Black's Law Dictionary (7th Edn. Page 640) defines "fiduciary relationship" thus:
- 15 -
NC: 2024:KHC-K:6350 RSA No. 200392 of 2022 "Fiduciary relationship- A relationship in which one person is under a duty to act for the benefit of the other on matters within the scope of the relationship. Fiduciary relationships- such as trustee- beneficiary, guardian-ward, agent-principal, and attorney- client - require the highest duty of care. Fiduciary relationship usually arise in one of four situations: (1) when one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first, (2) when one person assumes control and responsibility over another, (3) when one person ha a duty to act for give advice to another on matters falling within the scope of the relationship, or (4) when there is a specific relationship that has traditionally been recognised as involving fiduciary duties, as with a lawyer and a clinet or a stockbroker and a customer."
19. Stroud's Judicial Dictionary explains the expression "fiduciary capacity" as under:
"Fiduciary Capacity - An administrator who had received money under letters of administration and who is ordered to pay it over in a suit for the recall of the grant, holds it "in a fiduciary capacity" within Debtors Act 1869 so, of the debt due from an executor who is indebted to his testator's estate which he is able to pay but will not, so of moneys in the hands of a receiver, or agent, or Manager, or moneys due to an account from the London agent of a country solicitor, or proceeds of sale in the hands of an auctioneer, or moneys which in the compromise of an action have been ordered to be held on certain trusts or partnership moneys received by a partner."
20. 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
- 16 -
NC: 2024:KHC-K:6350 RSA No. 200392 of 2022 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 duty to act for the benefit of another, showing good faith and candour, where such other person reposes trust and special confidence in the person owing or discharging the duty. The term "fiduciary relationship" is used to describe a situation or transaction where one person (beneficiary) places complete confidence in another person (fiduciary) in regard to his affairs, business or transaction(s). The term also refers to a person who holds a thing in trust for another (beneficiary). The fiduciary is expected to act in confidence and for the benefit and advantage of the beneficiary, and use good faith and fairness in dealing with the beneficiary or the things belonging to the beneficiary. If the beneficiary has entrusted anything to the fiduciary, to hold the thing in trust or to execute certain acts in regard to or with reference to the entrusted thing, the fiduciary has to act in confidence and is expected not to disclose the thing or information to any third party."
- 17 -
NC: 2024:KHC-K:6350 RSA No. 200392 of 2022
22. It is manifest that while the expression "fiduciary capacity" may not be capable of a precise definition, it implies a relationship that is analogous to the relationship between a trustee and the beneficiaries of the trust. The expression is in fact wider in its import for it extends to all such situations as place the parties in positions that are founded on confidence and trust on the one part and good faith on the other".
24. On a careful reading of the above said paragraphs, it is evident that the 'fidicuary capacity' cannot be assumed merely bacause parties stand in a certain relationship. The 'fidicuary capacity' must be pleaded. If a person is to raise a defence that the property has purchased in the name of a person standing in fiduciary capacity, the person must plead that the person had agreed to hold the property for the benefit of other. In addition, he must establish that the person holding the property for the benefit of other had the legal obligation to hold such property. Merely because Basanna happened to be the father of defendant No.1, it cannot be construed that the father had a duty to hold the property in the name his son who had already attained the age of majority and working as a teacher. No such pleading and evidence
- 18 -
NC: 2024:KHC-K:6350 RSA No. 200392 of 2022 is found. This being the position, this Court is of the view that the contention of defendant No.1 that father was holding that the property in a fiduciary capacity, as such, the transaction is saved under Section 4(3)(b) Act of 1988 cannot be accepted.
25. Now the question is whether defendant No.1 can raise a defence that the property is a benami property and he can defend the suit for partition filed by the plaintiff. Section 4(2) of the Act of 1988 prohibits such defence being raised by the persons who claim that he has purchased the property in the name of another person. When such defence is barred, it is not permissible for defendant No.1 to raise a contention that he has purchased the property in the name of his father. In addition to that, it is also relevant to note that the recital in the sale deed in the name of Basanna does not reveal that the property is purchased by defendant No.1 in the name of his father Basanna. Hence, there are no
- 19 -
NC: 2024:KHC-K:6350 RSA No. 200392 of 2022 materials to hold that defendant No.1 has contributed to purchase the property.
26. It is also relevant to note that defendant No.1 who is the Government teacher has taken a stand that he has purchased the property in the name of his father. The Government employee if he wants to purchase the property, has to obtain permission from the competent authority before purchasing the property. No such permission is obtained by defendant No.1. Thus, logically, it flows that defendant No.1 has not invested any money to purchase the property.
27. This being the position, this Court is of the view that the purchase of the property in the name of the propositus Basanna is to be treated as the purchase by Basanna. In law, defendant No.1 is prohibited to raise a defence that he has purchased the property in the name of his father. Thus, Basanna was the owner. When Basanna died intestate, the property devolved upon his two sons who are the only class-I heirs at the time of his death. The
- 20 -
NC: 2024:KHC-K:6350 RSA No. 200392 of 2022 plaintiff being the sole class-I heir of elder son of propositus Basanna, is entitled to half share in the said property.
28. As far as Item No.B property is concerned, both the Courts have concluded that the property belonged to defendant No.2, the wife of defendant No.1. It is forthcoming from the evidence on record that the property was purchased by defendant No.2 from her independent source of income and that becomes the stridhana property of defendant No.2 over which, the plaintiff cannot claim any share. As far as Items No.C and D properties are concerned, there is no dispute that these properties belonged to Basanna.
29. For the reasons recorded the substantial question of law is answered against the appellant and in favour of the respondents.
30. At this juncture, the learned counsel for the appellant submitted that the holding is small, and the
- 21 -
NC: 2024:KHC-K:6350 RSA No. 200392 of 2022 plaintiff will alienate the property allotted to her share, thus, appellant/defendant No.1 will purchase the property allotted to the share of the plaintiff. Learned counsel for the plaintiff submits that plaintiff has no such intention and in case plaintiff intends to sell the same, the plaintiff may offer sell the same to the appellant, if the appellant offers the highest price among the purchasers.
31. Considering the fact that the holding is small and that there are only two sons to the propositus Basanna, and plaintiff and defendant No.1 will share 4 acres 4 equally, and that plaintiff No.1 has agreed to sell the same to defendant No.1, subject to the condition that defendant No.1 offers the highest market price (not guidance value) among the prospective buyers, the plaintiff shall give first preference to defendant No.1 to purchase the property. In case defendant No.1 is willing to offer highest market price than any other person, then the plaintiff will have an obligation to sell the property to defendant No.1.
- 22 -
NC: 2024:KHC-K:6350 RSA No. 200392 of 2022
32. Hence, the Regular Second Appeal is dismissed.
Sd/-
(ANANT RAMANATH HEGDE) JUDGE KBM,RSP List No.: 1 Sl No.: 52