Patna High Court
Vijoy Kumar Sanan vs Gurdayal Chand Sunda on 19 November, 1986
Equivalent citations: [1989]177ITR279(PATNA)
JUDGMENT Satyeshwar Roy, J.
1. On the facts and in the circumstances of this case and with the consent of the parties, this application is being disposed of at this stage itself on the merits.
2. Title, Suit No. 67 of 1986, was filed by the respondent for declaration of his title in respect of schedule C property and also for confirmation of possession. Relief was also prayed for permanently restraining the appellant from disturbing the peaceful possession of the respondent over the suit property.
3. The averments, inter alia, on the basis of which the reliefs were prayed were as follows :
In 1972, the respondent purchased from Binod Bihari Mahto and others 26 bighas odd decimals of land described in schedule A to the plaint for a total consideration of more than Rs. 50,000. As the value of the property at schedule A was more than Rs. 50,000, the respondent (sic) was required to obtain income-tax clearance certificate and also to pay income-tax on the value of the land. To avoid this, the respondent obtained two sale deeds from the Mahtos, one in his name which is described in schedule B to the plaint and the other in the name of the appellant, his nephew, which is described in schedule C to the plaint. The value of the schedule C property was Rs. 19,751, After the purchase, the respondent exercised various acts of possession. The appellant had undertaken to transfer the land to the respondent. Instead of doing that, as the appellant along with his brothers were trying to dispose of the property, the suit was filed. It was asserted in the plaint that consideration was paid by the respondent and that the original sale deed was with him.
4. In the suit, application for temporary injunction was filed by the respondent. In reply to the notice, the appellant filed his show-cause. In the show-cause, the appellant, inter alia, asserted that he was the actual owner of the property and that it was not purchased in his name by the respondent as alleged in the plaint. He claimed to be in possession of the property. It was also asserted in the show-cause that consideration was paid by the appellant. So far as the possession of the original document by the respondent was concerned, that also the appellant tried to explain in the show-cause. Prayer for temporary injunction was also resisted with reference to Section 52 of the Transfer of Property Act, 1882.
5. During the course of hearing of the injunction matter, some documents were brought on record by the parties. The court below, after hearing the parties, held that the respondent has a prima facie case, that the balance of convenience was in his favour and that he would suffer irreparable injury, if injunction was refused. The prayer for temporary injunction made by the respondent was allowed by the court below. That order has been challenged in this appeal.
6. Mr. Sinha, learned counsel for the appellant, submitted that although the court below noticed some of the documents filed by the appellant in support of his case, it did not record any finding about the effect of those documents. He also urged that the documents filed by the appellant were not noticed by the court below. With regard to the finding of prima facie case in favour of the respondent, Mr. Sinha urged that the court below recorded that in a case of benami transaction, custody of documents is one of the most important ingredients and without recording any further reasons, the court below held that the respondent had a prima facie case.
7. According to the respondent, after he purchased the property, he filed an application for mutation of his name as well as the name of the appellant and after mutation of their names, the rent was paid by the respondent. The respondent produced in the court below the certified copy of the order of the mutation, rent receipts, correction slips and also a cutting from a local newspaper published on April 22, 1985, in which the respondent asserted that he was the real owner of the property. In order to show that the original sale deed was with him and was given to the respondent at his request, the appellant produced a letter dated December 15, 1972, alleged to have been written by the firm to him while the latter was at Batala. That is annexure 3 to this memorandum of appeal. It is the case of the parties that they constituted a partnership firm known as G.S. Refractories. He also filed an affidavit alleged to have been shown by Santhosh Mahto, one of the transferors, in support of the fact that the property was not purchased benami by the respondent. The court below did not notice the effect of the letter and the affidavit.
8. The most important fact which is required to be considered in the case of benami is the source of consideration, besides other factors, namely, custody of the original sale deed, motive for benami purchase, possession of the property, relationship between the parties and the conduct of the parties. The court below was impressed by the fact that the original sale deed was produced by the respondent without considering the value of the letter dated December 15, 1972. No prima facie finding was recorded by it about the source of consideration. The court below was also required to see the effect of other documents filed by the respondent and the appellant for recording a finding on the question of prima facie case. As that has not been done, the finding on that point cannot be sustained. It appears from the impugned order that the court below held the other two points in favour of the respondent as it found a prima facie case in his favour. For these reasons, the order of the court below cannot be sustained.
9. Section 281A of the Income-tax Act, 1961 ("the Act" for short), as amended with effect from April 1, 1984, and as it stood on the date the suit was filed has a very significant bearing on this case. That section puts a bar the institution of a suit by a claimant on the ground of benami, except a suit of a value not exceeding rupees two thousand triable by the Presidency Small Cause Court or the Provincial Small Cause Court, unless the provisions of the section are complied with. It provides for giving notice in the prescribed form and containing the prescribed particulars in respect of the benami property to the Commissioner of Income-tax by the person claiming to be the real owner. With regard to the property acquired by a claimant benami before March 1, 1984, notice is required to be given within one year from that date. The statute prohibits institution of a suit by the alleged real owner of the property unless something is done in the manner prescribed before the institution of the suit. The language used in the section is absolute and a suit may be instituted only after the requirement of the section has been complied with. Compliance with the section is a condition precedent to the institution of a suit by a claimant. There is no averment in the plaint that the respondent complied with Section 281A of the Act before the institution of the suit. Prima facie, therefore, as the respondent was not entitled to institute the suit, no injunction could have been granted in favour of the respondent.
10. For the aforesaid reasons, this appeal is allowed and the order impugned is set aside. There shall be no order as to costs.
11. After I had dictated the order, Mr. Dey, learned counsel for the respondent, submitted that he has no instruction whether notice as required under Section 281A of the Act was given before the institution of the suit. He, therefore, submitted that if notice had been given, the respondent shall file an application for amendment of the plaint. If any such application for amendment is filed, the court below shall dispose of the same in accordance with law.
12. In view of the submission of Mr. Dey, I am not dismissing the suit as not maintainable but am giving an opportunity to the respondent to file an application in the court below regarding the facts which are required to be pleaded as provided under Section 281A of the Act. If no such application for amendment of the plaint is filed by the respondent within a reasonable time to be granted by the court below, the suit shall be dismissed by it by holding that it is not maintainable. If such an application for amendment is made by the respondent and if the court below is satisfied that there has been compliance with Section 281A of the Act before the institution of the suit, it shall allow the amendment. It shall, if such prayer is made on behalf of the respondent, thereafter hear the injunction matter again. In that case, it shall keep in view the observations made above and shall also consider the effect of Section 52 of the Transfer of Property Act.