Bombay High Court
Gyoki Masajuki Maeda vs Aisha Constructions And Ors. on 2 September, 1998
Equivalent citations: (1999)101BOMLR533
Author: R.M.S. Khandeparkar
Bench: R.M.S. Khandeparkar
JUDGMENT R.M.S. Khandeparkar, J.
1. This is a Revision Application against the Order dated 12th November, 1997, passed by Civil Judge, Senior Division, Mapusa, in Regular Civil Suit No. 155/96/D. By the impugned Order, the Trial Court has rejected the plaint under Order 7, Rule 11 of C.P.C., on two grounds namely the suit is barred under Section 4 of Benami Transactions Act, 1988 (hereinafter called the said Act) and that the Plaintiff has violated the provisions of Section 31 of the Foreign Exchange Regulation Act, 1973 (hereinafter called FERA).
2. At the outset, the learned Advocate appearing for the Respondents fairly conceded that the plaint could not have been rejected in exercise of powers under Order 7, Rule 11 of C.P.C. in the case in hand on the ground of violation of provisions of Section 31 of FERA and that the point regarding such violation of the provisions of FERA can be considered only at the final disposal of the suit. Therefore, as far as the order pertains to the rejection of the plaint on the ground of violation of provisions of FERA, the same can be safely set aside by consent of the parties, apart from the fact that the question of violation of provisions contained in Section 31 of FERA can be decided only on the basis of evidence produced by the parties and not merely on the basis of pleadings in the plaint. Being so, the impugned Order, so far as it relates to the rejection of the plaint on the ground of violation of Section 31 of FERA, cannot be sustained and is liable to be set aside.
3. The point for consideration which remains, therefore, is whether the Trial Court was justified in rejecting the plaint on the ground that the suit was not maintainable in terms of Section 4 of the said Act.
4. The Petitioner had filed the said suit for declaration that the Sale Deed dated 13th December, 1995, executed by the Responded No. 2 claiming to represent the Indo-Japan Education Society as the vendors in favour of Defendant No. 1 and registered under No. 220/26 on 31st January, 1996, in the Office of Sub-Registrar of Bardez at Mapusa to be declared null and void and further for direction to the Sub-Registrar not to register the same, as well as for injunction against the Respondents to restrain them from carrying out any construction and from interfering in any manner in the suit property including the residential bungalow, garage and compound wall of the Petitioner situated in the suit property.
5. The subject-matter of the dispute is a property having therein residential house with a garage and compound wall and surveyed under No. 76, Sub-Division 58 and 59 and registered in the Land Revenue Office under No. 550 and situated at "Livramento" wado, Sangolda, Goa.
6. As per the case pleaded in the plaint, the property originally belonged to one Jaimes D'Silva and his wife Julin D'Silva. Sometimes in 1977 the Petitioner desired to purchase the suit property for himself. However, for the sake of convenience, it was decided to purchase the same in the name of Indo-Japan Education Society. Consequently, the suit property was purchased by Deed dated 2nd April, 1977 in the name of the said Society represented by its Chief Secretary, the Respondent No. 3 herein. The Deed was duly registered in the Office of Sub-Registrar, Mapusa. The total amount of Rs. 1,12,988-95 was raised by the Petitioner out of his personal funds. The said Society became defunct and stopped functioning since 1979. Under the instructions of the Petitioner, the Respondent No. 3 transferred the survey records from the suit property in the name of Defendant No. 3 and accordingly, in the record of rights, the suit property was shown in favour of Defendant No. 3. In February, 1988, it was decided to convey the suit property in the name of the Petitioner to set the records straight and accordingly the Respondent No. 3 jointly with his wife transferred the ownership rights to the Petitioner by Deed of Conveyance dated 23rd February, 1988, which has been registered under No. 1098 of Book II, Vol. 39 on 1st September. 1988. Thereafter, one Donald Coutto who was entrusted with the management of the suit property by the Petitioner constructed a compound wall after obtaining necessary permission from the local authority and also got the house tax-records in respect of building in the suit property transferred in the name of Donald Coutto on behalf of the Petitioner. The Petitioner paid the house tax for the year 1991 and also obtained electricity supply connection by depositing a sum of Rs. 300/- on 31st October, 1990. Thereafter, one Renato Silva from Vasco was engaged to look after the maintenance and up keep of the house. On 14th August, 1996, when said Renato Silva approached the Office of Village Panchayat of Sangolda to pay house tax, he was informed that Respondent No. 1 herein had applied for permission for construction in the suit property. The said information was immediately transmitted to the Petitioner. Further enquiries in the matter revealed to the Petitioner that the Respondents Nos. 2 to 9 posing to be the members of the said Society had executed a Sale Deed in favour of Respondent No. 1 in respect of the suit property being Sale Deed dated 13th December, 1995, and had presented the same for registration before the Sub-Registrar of Bardez under No. 220/26 dated 31st January, 1996. The Sale Deed is liable to be declared as null and void since the Respondents Nos. 2 to 9 had no authority or power to sell the same as the Petitioner is the absolute owner in possession of the suit property by virtue of the Sale Deed dated 23rd February, 1988, though the title of the Petitioner dates back from 2nd April, 1977.
7. Upon service of summons in the said suit, the Respondents herein filed the application under Order 7, Rule 11 of Code of Civil Procedure contending that the claim of the Petitioner in the plaint is that the suit property was purchased for him under benami transactions vide Deed dated 2nd April, 1977, and Section 4 of the said Act clearly prohibits any suit or claim or action to enforce any right in respect of any such property and, therefore, in terms of Order 7, Rule 11(d) of Code of Civil Procedure the plaint is liable to be rejected.
8. The Trial Court by the impugned Order held that the Petitioner had actually purchased the suit property in the name of Indo-Japan Education Society in the year 1977. Further, placing reliance upon the Judgment of the Apex Court in the matter of R. Rajagopal Reddy and Ors. v. Padmini Chandrasekharan and Ors. , the Trial Court held that the transaction disclosed in the plaint is in the nature of benami transaction and, therefore, the Petitioner is barred from enforcing any right in respect of such property and, therefore, the plaint was liable to be rejected.
9. While assailing the impugned Order, Shri S.S. Kantak, the learned Advocate appearing for the Petitioner submitted that on plain reading of the plaint, it is apparent that the Petitioner had not set up any claim of benami transaction. Drawing my attention to para 26 of the plaint, he submitted that the claim of the Petitioner is that of a clear title holder to the suit property and that is apparent from the contents of para 26 of the plaint as well as other contents of the plaint. He further submitted that there is no doubt that initially in the year 1977, the property was purchased in the name of Society, However, the records were set right by execution of Deed of Conveyance dated 23rd February, 1988, and, therefore, on the face of the pleadings, the Petitioner acquired full-fledged ownership right to the suit property prior to 19th May, 1988, the day on which the said Act came into force and, therefore, applying the law laid down by the Apex Court in the matter of Rebti Devi v. Ram Dutt and Anr. , the suit cannot be held as barred by the provisions of Section 4 of the said Act. Shri Kantak placing reliance upon the Judgment of the Apex Court in the matter of Sankara Hali and Sankara Institute of Philosophy and Culture v. Kishorilal Goenka and Anr. submitted that the facts of the said case are almost identical to the facts of the case in hand and considering the decision of the Supreme Court in the said case it can safely be concluded that the suit in question cannot be considered to be hit by the provisions contained in Section 4 of the said Act.
10. Shri N. Veljee, the learned Advocate appearing for the Respondents on the other hand submitted that on proper reading of the plaint along with the annexure thereto, it is evident that the property was originally purchased in the name of Indo-Japan Education Society. However, the pleadings do not disclose that at any time the property was transferred from the name of the Society to the name of the Petitioner. The averment in paras 11 and 26 which speak about the Deed of Conveyance by the Respondent No. 3 along with his wife in favour of the Petitioner on the basis of which the Petitioner seems to claim his right of ownership to the suit property in no way entitles the Petitioner to claim full-fledge right to the suit property. The suit property as far as the pleadings in the plaint are concerned continues to be the benami property for the Petitioner. He further submitted that the Deed of 23rd February, 1988 read with other contents of the pleadings do not disclose any valuable consideration having been paid by the Petitioner to claim right in or to the suit property and that itself shows that the said Deed of 23rd February, 1988, is of no assistance to the Petitioner to claim right of ownership to the suit property. Placing reliance upon the decision of the Rajasthan High Court in the matter of Bhagwan Das v. Goswami Brijesh Kumarji and Ors. , the learned Advocate submitted that when the documents are annexed to the plaint, they form part of the plaint and, therefore, while considering the maintainability' of the suit and while exercising the powers under Order 7, Rule 11 of C.P.C. it is permissible for the Court to peruse the contents of the documents annexed to the plaint as if they form part of the pleadings in the plaint. According to the learned Advocate, the contents of the documents annexed to the plaint disclose that the claim of the Petitioner to the suit property is of benami nature and, therefore, the suit is barred under Section 4 of the said Act. Therefore, considering the various decisions of the Apex Court including the one in the matter of Rebti Devi (supra) relied upon by the petitioner and another decision of the Apex Court in R. Rajagopal Reddy and Ors. v. Padmini Chandrasekharan (supra) he submitted that no fault can be found with the Order of the Trial Court in rejecting the plaint by the impugned Order. He further submitted that the pleadings in the plaint read along with the contents of the documents ex-facie disclose that there was no Deed of Sale executed by Indo-Japan Education Society having the title of the property in favour of the Petitioner prior to the date of enforcement of the said Act.
11. The Section 4 of the said Act reads thus:
4. Prohibition of the right to recover property held benami. - (1) No suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property.
(2) No defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property.
(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; or
(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.
12. The said Section has been subject-matter of interpretation by the Apex Court in various decisions including the decision in the matter of R. Rajagopal Reddy and Ors. v. Padmini Chandrasekharan (supra) and Heirs of Vrajlal J. Ganatra v. Heirs of Parshottam S. Shah , Sankara Hali and Sankara Institute of Philosophy and Culture v. Kishorilal Goenka and Anr. (supra) and lastly in Rebti Devi v. Ram Dutta (supra). In fact, the Apex Court in (he matter of Rebti Devi (supra) after taking into consideration all the earlier decisions of the Apex Court in the matter of interpretation of Section 4 of the said Act, and the effect thereof has summarized the law on the point as follows:
(1) 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 benami in suits, claims or actions,-
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 19.5.1988 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 Section 82 of the Trust Act only in that manner and to that extent.
(2) Secondly, on the express language of Section 4(1), any right inheriting 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 19.5.1988. 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 plea got shut out merely because the proceeding in which such plea was raised before 19.5.1988 was pending on 19.5.1988.
(3) Thirdly, where a suit had been filed before 19.5.1988 and in any written statement filed on or after 19.5.1988 plea of benami was raised, then such a plea of benami could not also be gone into. If however such a plea in defence had been raised before 19.5.1988, the Act did not preclude that question from being decided in proceedings which were pending on 19.5.1988. Mithilesh Kumari case was wrong in holding that such a defence could not be decided after 19.5.1988 even though the plea was raised before 19.5.1988.
(4) 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 after 19.5.1988.
(5) Fifthly, even though the word "suit" might include appeal or further appeals, Sections 4(1) and 4(2) could not be made applicable to these subsequent stages.
(6) Sixthly, 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.
(7) 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. Rnjagopal Reddy case will not come in the way merely because the plea is raised after 19.5.1988. 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. Section 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 Sections 4(1) and 4(2) are retrospective.
(8) Eightly, 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 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 stands in such capacity, then in both situations If such a plea or defence is raised in a suit filed after 19.5.1988, the same can be decided by the Court notwithstanding Section 4(1) or 4(2) and notwithstanding what is decided in R. Rqjagopal Reddy case.
13. Considering the law on the point in question as laid down by the Apex Court, it is clear that Section 4(1) of the said Act bars the suit with effect from 19th May, 1988 to enforce any right by the real owner in respect of a property held by benamidar, eventhough such a transaction had been entered into prior to 19th May, 1988. In other words, if the property continues to be in the name of benamidar on 19th May, 1988, the real owner of the property cannot enforce his right in respect of such property by instituting a suit. However, this does not debar the real owner from enforcing any right in respect of a property which was once upon a time held benami but the records in respect of which were set right and the ownership of the property was duly recorded in favour of the real owner prior to 19th May, 1988. Bearing this in mind, we will have to analyse the pleadings in the plaint in the case in hand in order to decide about objections sought to be raised by the Respondents regarding the non maintainability of the suit on account of Section 4 of the said Act.
14. The pleadings in the plaint disclose that the Petitioner some times in the year 1977 desired to purchase the suit property however, for the sake of convenience, it was decided to purchase the same in the name of Indo-Japan Education Society represented by the Respondent No. 3. The purchase price is stated to have been raised from the personal funds of the Petitioner. The said Indo-Japan Education Society is stated to have become defunct from 1979. In February, 1988, in order to set the records straight, it was decided to transfer the ownership rights in the suit property in favour of the Petitioner by executing a Deed of Conveyance and accordingly, the Deed of Conveyance was executed by the Respondent No. 3 along with his wife since the suit property was found registered in the name of Respondent No. 3. Such a Deed dated 23rd February, 1988 was duly executed and registered.
15. The pleadings in the plaint, therefore, apparently disclose that as on the date of 30th May, 1988, the Petitioner claimed to have acquired full-fledge title to the suit property in his own name consequent to the Deed of Conveyance dated 23rd February, 1988. There is no double that prior to 23rd February, 1988, the Petitioner claimed to be the real owner of the suit property by virtue of benami transaction dated 2nd April, 1977. Though it is stated in the plaint at one stage that the Petitioner decided to purchase the suit property in the name of Indo-Japan Education Society for the sake of convenience, it has also been stated in the plaint that in the year 1988, the suit property was found registered in the name of the Respondent No. 3 and the said registered owner transferred the suit property in the name of the Petitioner by Deed which has been duly registered under No. 1098 of Book II Volume 39 on 1st September, 1988. Being so, as per the pleadings in the plaint apparently the suit property ceased to be the benami property from 23rd February, 1988 and the suit property since then stood transferred to the name of the real owner i.e. the Petitioner herein. Thus, the transaction conveying the suit property in the name of the real owner i.e. the Petitioner as per the pleadings in the plaint was completed prior to the date 19th May, 1988, the date on which the said Act came into force. It is to be noted that the person who executed the Deed dated 23rd February, 1988 is a party Respondent/Defendant to the suit. Considering the law laid down by the Apex Court in the matter of Rebti Devi (supra) read with the decision of the Apex Court in the matter of Sankara Hall and Sankara Institute of Philosophy and Culture v. Kishorilal Goenka and Anr. (supra) it is clear that the Respondent No. 3 in whose name the suit property was registered till 1988 (prior to 19th May, 1988) transferred the suit property in favour of the Petitioner who since then became the real owner of the suit property. Being so, it cannot be said that the claim on the suit of the Petitioner as disclosed from the pleadings is barred by Section 4(1) of the said Act.
16. The contention of the learned Advocate for the Respondents that the pleadings in the plaint are to be read along with the documents annexed thereto and that, therefore, upon such reading, the case of the Petitioner would apparently appear to be hit by Section 4 of the said Act is devoid of substance. There is no doubt that the documents annexed to the plaint form part of the plaint and the contents of the said documents can be considered while exercising powers under Order 7, Rule 11 of C.P.C. But as observed, by the learned Single Judge of the Rajasthan High Court in the decision relied upon by the Advocate for the Respondents, it is to be remembered that the averments made in the plaint as well as in the documents which may constitute part of the claim may be certainly looked into, but the veracity of the contents of any such document cannot be considered at the stage of deciding an application under Order 7, Rule 11. In other words, the contents of the pleadings and the document are to be accepted on its face value and nothing beyond that. Once, the pleadings disclose that the property was in the name of the Respondent No. 3 in the year 1988 and the Respondent No. 3 by proper Deed of Conveyance transferred the same to the name of the Petitioner, it is not permissible for the Court to analyse the documents to find out whether the Defendant No. 3 was duly empowered to have such title conveyed in favour of the Petitioner or not, while exercising powers of Order 7, Rule 11 of C.P.C. Such an exercise would be permissible only after the pleadings are completed and parties complete their evidence in the matter. In this regard, the contents of paras 9 and 10 of the Judgment of the Rajasthan High Court are worth reproducing. They read thus:
Their Lordships of the Supreme Court in T. Arivandandam v. T.V. Satyapal , held that (para 5):
If on a meaning - not formal reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under Order VIII, Rule 11 of C.P.C. taking care to see that the ground mentioned therein is fulfilled. And if clear (clever) drafting has created the illusion of a cause of action, nip it in the bud at the first hearing by examining the party searchingly under Order X of C.P.C.
The observations made by their Lordships of the Supreme Court in the aforesaid case were, made in the context that mere vexatious actions should not be entertained merely because of clever drafting of the plaint or merely because of camouflage. A person who has no claim whatsoever should not be allowed to harass the opposite parties by dragging them into a fruitless litigation.
17. On plain reading of the impugned Order, it is apparent that the Trial Court without application of mind and without considering as to how the Claim of the Petitioner can be said to be of benami nature has jumped to the conclusion that the suit is hit by Section 4 of the said Act. There is neither discussion nor any reasoning disclosed in the impugned Order to arrive at any such conclusion. In fact, as rightly submitted by the Advocate for the Petitioner, the impugned Order is totally non speaking order. At any rate, for the reasons disclosed above, the impugned Order cannot be sustained and is liable to be set aside.
18. In the result, therefore, the Petition succeeds. The impugned Order is quashed and set aside. The plaint is restored. Rule is made absolute in above terms. The Respondents to pay costs of Rs. 2000/- to the Petitioner.