Gujarat High Court
Heirs Of Vrajlal J. Ganatra And Ors. vs Heirs Of Parshottam S. Shah And Ors. on 2 August, 1995
Equivalent citations: AIR1996GUJ147, (1996)2GLR361, AIR 1996 GUJARAT 147
Author: S.K. Keshote
Bench: S.K. Keshote
JUDGMENT Mehta, J.
1. The appellant-plaintiff filed Special Civil Suit No. 60 of 1981 in the Court of learned Civil Judge, Senior Division, Junagadh praying for a declaration that he is the real owner of the suit land and that the defendant is merely a benamidar of the plaintiff and that the defendant does not have the right of ownership in the suit property. The trial court raised 14 issues. All of them were decided against the plaintiff. It was held that the defendant is the real owner and the plaintiff had failed to prove that the defendant was merely a benamidar and that the plaintiff was the real owner. The trial court also held that the suit was time barred. The trial court also held that the plaintiff has failed to prove that he has made a legal and valid declaration at the relevant time before the income-tax authorities under Section 281-A of the Income-tax Act.
2. The crucial questions arising in this appeal are:
(i) Whether the suit transaction was benami and whether the plaintiff has been the real owner and defendant a mere benamidar?
(ii) Whether the suit is, in time?
(iii) Whether the plaintiff is in possession of the suit land?
3. Ex.66 dated 16-12-1963 is a registered sale deed in favour of and in the name of the defendant. It is executed by Vithalji Jivan for a sum of Rs. 13,000/-. The present plaintiff is one of the attesting witnesses, but the document is clearly and admittedly a registered sale deed by third party in the name of the defendant. The case of the defendant (plaintiff?) is that he is dealing in land and the defendant was dealing in lending money and whenever he wanted money for purchasing the land, the defendant would advance money to the plaintiff and the plaintiff would purchase the property and the sale deed would be executed and registered in the name of the defendant and the defendant would retain the property as a security and as and when the amount of the defendant is paid up, the defendant would reconvey the property to the plaintiff or execute conveyance in favour of any nominee of the plaintiff.
4. Reliance is placed on Ex. 79 dated 21-12-1962 showing the nature of the relationship between the parties and the nature of transactions between the parties. This writing dated 21-12-1962 prior to the suit is in respect of another land. By the said document, property belonging to one Taramati Bhagwandas was purchased. The plaintiff had paid a sum of Rs. 19,000/- and the remaining amount of Rs. 14,500/- and Rs. 2000/- towards expenses and stamps etc. were also paid. This amount was paid by the defendant and the sale deed was executed in the name of the defendant. This writing executed by the defendant further states that the land shall remain with him as security (Jamingiri Badal) for the aforesaid amount of Rs. 16,500/-and/or for any other transaction which may take place thereafter and as and when the plaintiff pays back all the outstanding amounts with interest, the defendant would give back the property by executing a registered sale deed at the cost of the plaintiff. The writing further states that the outstanding amount should be paid within three years and till then, the land will remain with the defendant as "Anamat".
5. There is no dispute about this writing. After this writing, on 15-2-1963, the plaintiff had an occasion to borrow a sum of Rs. 10,000/- from the defendant and, therefore, he had executed a writing for the same and agreed to mortgage a land to the defendant and that mortgage deed dated 23-2-1963 is Ex.70 and the term for repayment was three years.
6. On 16-12-1963, the suit document is executed and registered by Vithalji Jivan in favour of the defendant. This sale deed is in the name and in favour of the defendant. The defendant had provided money to the plaintiff and the plaintiff had paid that amount to the vendor Vithalji Jivan. The plaintiff was to pay interest on this amount of Rs. 13,000/-and also to repay this amount to the defendant and on such repayment, the property was to be reconveyed to the plaintiff. The conveyance deed was executed in favour of the plaintiff. A letter dated 12-12-1963 Ex. 102 by the lawyer on the letter head of the plaintiff addressed to the defendant states that the suit land has been purchased in the name of the defendant and stamp papers were also purchased and the amount of consideration of Rs. 13,000/- has been paid by Vrajlal, the plaintiff and receipt is collected by the lawyer. There is no dispute about this transaction and the arrangement. The question is whether this transaction can be said to be a benami transaction and whether the plaintiff can be said to be the real owner and the defendant a merely benamidar having no beneficial interest in the suit property. We will examine this a little later. We will complete the narration of facts.
7. On 17-1-1964, by Ex.89, the defendant intimated the plaintiff that a sum of Rs. 29,000/- was outstanding and he had mentioned that Rs. 20,000/- were due on the previous Diwali and Rs. 3000/- was the amount of share and, therefore, the amount was Rs. 23,000/-. As against that, an amount of Rs. 17,000/- was credited on account of sale realisation and an amount of Rs. 3000/-assuming to be difference in price, Rs. 3000/-remained outstanding. The defendant further stated that a hundi of Rs. 3000/ - and a cheque of Rs. 10,000/- were sent and a security of Rs. 15,000/- was given to the Vithalji Jadavji and, thus, an amount of Rs. 31,000/- was outstanding. As against that, three properties valued Rs. 29,000/- were remaining with him and this was his understanding and if there was any difference, then the plaintiff may write.
8. Relying on this document, the learned counsel for the appellant has submitted that as on 17-1-1964, the total amount due was Rs. 31,000/-. Exs.64 and 65, both dated 9-1-1965 are executed by the defendant and the plaintiff respectively. It is stated that the defendant had to take a sum of Rs. 44,000/-and the plaintiff had to pay that amount and as against that, the land named therein including the suit land were remaining as security with the defendant.
9. The learned counsel for the appellant submits that this amount of Rs. 44,000/- has been fully paid and nothing remained due from the plaintiff to the defendant after 1966 and the plaintiff was entitled to have the encumbrance or the security or the charge removed and the defendant was bound to execute the document in favour of the plaintiff or his nominee whenever the plaintiff asked for the same. As against that, the contention of the defendant is that on 8-6-1968, there was full and final settlement between the parties and an amount of Rs. 17,000/- had remained outstanding and, therefore, the suit property was allowed to remain with the plaintiff as the owner and all other transactions were carried out and documents were returned and conveyance deed executed. The plaintiff has denied and seriously disputed this writing Ex. 163/166 (14/29). The trial Court has come, to the conclusion that the entire writing was written and executed by the plaintiff himself.
10. Ex.67 dt. 11-6-69 is a receipt executed by the plaintiff acknowledging the return of three registered documents including the mortgage deed of Rs. 10,000/-. This list and receipt does not include the suit transaction and the suit registered sale deed.
11. From 1969 till the suit notice dated 1-2-1980 and the plaint dated 20-4-1981, there is no action taken by the plaintiff. In the plaint para 2, it is stated that after the year 1975, the plaintiff had asked the defendant to transfer the suit land in his name. However, he alleged to have been given a promise that as and when the plaintiff wanted to sell the property, the defendant would execute the deed. In plaint para 5, it is stated that the cause of suit arose at the end of the year 1975 and thereafter by notice of 1980 and telegram dated 14-4-1981.
12. Ex. 160 (14/25) is a letter written by the defendant dated 23-12-1975 by registered post A.D. The defendant does not admit to have received this letter, but he has admitted the signature on the registered on slip. He has also admitted that he had received some such letter in December, 1975 from the defendant, but he has avoided, admitting receipt of this letter. This is a carbon copy of the letter. In this letter, the defendant has made a grievance that the plaintiff was not attending to the request of the defendant. The defendant wanted to sell away the Veraval land, the suit land. It is further stated that as per the personal understanding and arrangement between the parties, the suit land is in the name of the defendant and the defendant was to sell that land and the plaintiff was to be given brokerage. The defendant, therefore, asked the plaintiff to make attempts for selling the land and to send the offers and if no reply was given within 15 days, the defendant was to get the land sold through any other broker and the plaintiff would lose even the right to get brokerage. Thus, the defendant has clearly and unequivocally asserted that the suit land is the land of his ownership and he was entitled to sell the land and he wanted to sell it and he was prepared to offer brokerage to the plaintiff and the plaintiff had no other right or claim in the suit land. However, the plaintiff has tried to get away from any knowledge of this letter. He has admitted that he had received some letter at this time from, the defendant and he has not produced the same. The defendant has produced this letter with the list at Ex. 14/25, the registered AD slip and under postal certificate slip at Exs. 14/26 and 14/27 and the acknowledgment at Ex. 14/28. At that time, the defendant had no reason to believe that the plaintiff had misplaced the letter received by him. In fact, the plaintiff has admitted in his affidavit Ex. 28 that the plaintiff had given a reply to the defendant's letter dated 23-12.1975 to the effect that the land belonged to the plaintiff. It is, thus, clear that the plaintiff has received this letter dt. 23-12-1975 Ex. 160. In that letter, the defendant has clearly asserted that he was the owner of the land and the plaintiff was not the owner. This is consistent with the understanding reached between the parties vide Ex. 166, which document is in the handwriting of one person and this handwriting is satisfactorily proved to be that of the plaintiff. Though the plaintiff has denied this, his word does not carry any conviction. He was shown many signatures including his signatures on his affidavit, V.P. etc. and he has refused to admit even those signatures. His demeanour in the witness box as recorded by the learned trial Judge also shows that he is not truthful and reliable witness.
13. It is submitted by the learned Counsel for the appellant that this writing Ex. 166 even if it is held to have been executed by the plaintiff, it was not admissible in evidence for want of registration. It is submitted that by this document, the plaintiff is purported to have sold the suit land to the defendant and from that time onwards, the plaintiff had given up all his claims on the suit land. It is true that the plaintiff had any right in the suit property and he had relinquished his right in the suit property registration question may arise. However, this is not a document creating or declaring any such transaction. By a registered document, the suit land is sold by Vithalji Jivan to the defendant and that fact is known to both the parties. The writing is in continuation of the earlier arrangement that if within three years, the amount outstanding is paid, the defendant would reconvey the property to the plaintiff, but it was open to the parties to settle the account and to say that as against the outstanding amount of Rupees 17,000/-, the sale deed in favour of the defendant is acknowledged and accepted. Therefore, this writing does not require any registration and it is admissible in evidence.
14. Even if it is assumed that this writing required registration and it may not be admissible in evidence for the transactions but for the collateral purpose of settlement of accounts, it would certainly be admissible. It also shows that an amount of Rs. 17,000/-was outstanding even on that date from the plaintiff to the defendant.
15. From the aforesaid narration of facts and evidence, it is clear and not in dispute that the parties were having a peculiar arrangement. According to the plaintiff, the defendant was merely a benamidar and for the name sake of the plaintiff and the plaintiff was the real owner and the defendant had no right, title or interest in the suit property. It is not possible to uphold this contention. The intention of the parties is very clear. The parties are seasoned persons and dealing in land and money. They are the experienced persons and it is impossible to attribute any intention to the defendant that though he is insisting on a registered sale deed in his favour, he had no intention to have the real ownership till his amount is paid. The plaintiff also did not have any objection to the plaintiff (defendant?) being the real owner and having the registered sale deed in his own name. He only wanted that as and when the amount is paid, the defendant should reconvey the property. If the transaction was of benami nature and the plaintiff was the real owner, there would not have been any need to have this kind of arrangement and this kind of subsequent transfers by registered deed even when it was to be transferred to the plaintiff. There cannot be any transfer by plaintiff himself to himself when he is the real owner and other person is a mere benami. It is impossible to attribute any intention to either of the parties to have the benami transaction which would not give any title or beneficial interest to the defendant.
16. The Supreme Court had an occasion to deal with benami transaction the case of Bhim Singh v. Kan Singh, AIR 1980 SC 727, It is held that the question whether a transaction is a benami transaction or not mainly depends on the intention of a person who contributed the purchase money or executed the conveyance and it is further observed that when a person buys a property of his own money, but in the name of another person without any intention to benefit another person, then the transaction is benami and the Supreme Court laid down the following principle at page 734:
"The principle governing the determination of the question whether a transfer is a benami transaction or not may be summed up thus: (1) The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money and (4) the question as to what his intention was has to be decided on the basis of the sorrpunding circumstances, the relationship of the parties, the motive governing their action in bringing about the transaction and their subsequent conduct etc."
17. The burden is on the plaintiff to prove that the transaction is benami. In the present case, even though the consideration money came from the plaintiff, the entire consideration to the plaintiff was provided by the defendant. It is true that the said amount was advanced by the defendant to the plaintiff on interest and the defendant could have the money claim against the plaintiff, but the fact remains that the entire amount of consideration came from the defendant to the plaintiff and was paid to the vendor by the plaintiff and the sale deed was executed in the name of the defendant. This is not a case where the consideration has come from the real owner and the said benami owner has no connection whatsoever with the transaction. As observed by the Supreme Court, the true character of the transaction is governed by the intention of the person who contributed the purchase money. In the present case, it cannot be said that the defendant had not contributed for the purchase money. In any case, even the intention of the plaintiff cannot be said to be that of the real owner while purchasing the property in the name of the defendant who had substantially invested his money. The facts and circumstances and the relations between the parties clearly show that the arrangement was that the defendant in whose name the sale deed was executed was intended to be the owner of the land and the plaintiff was given right or option to have the land reconvened. It is true that the defendant was interested in his money and securing repayment of his money, but the security and the repayment of money can be provided in numerous ways; it could be provided by way of mortgage, charge or it could be provided by arrangement of hire purchase or in any number of ways. In the hire purchase agreement of a house, a flat, a truck or a motor vehicle, the financier is interested in securing the payment of his dues. However, till the full payment is made, the hirer remains the hirer and does not become the owner. Similarly, the parties had devised a method that the defendant who had advanced the entire amount of consideration should have the registered sale deed executed in his favour as the real owner and that on repayment of the amount of consideration by the plaintiff, the defendant would re-execute the conveyance. The very requirement of this re-execution shows that the defendant was intended to be the real owner.
18. The aforesaid Supreme Court judgment was reaffirmed in the case of Controller of Estate Duty, Lucknow v. Aloke Mitra, AIR 1981 SC 102 : (1980 Tax LR 1316). The quotation from the main Hindu Law was referred to and it was held as under at Page 111 of AIR;
"33. xxx xxx xxx xxx A benami transaction is one where one buys property in the name of another or gratuitously transfers his property to another, without indicating an intention to benefit the other. The benamidar, therefore, has no beneficial interest in the property or business that stands in his name; he represents in fact the real owner and so far as their relative legal position is concerned, he is mere trustee for him."
19. In the present case, it is clear that while making internal arrangement and getting the sale deed executed in favour of the defendant, there was no intention of either of the parties to have benami transaction or that the defendant should not have any beneficial interest in the property. For almost 18 years, there was no thought of benami transaction and it is only at the time of filing of the suit that a legal brain wave came and an idea was struck for invoking the benami element. There is no substance in this contention. The intention and evidence are strongly to the contrary and the plaintiff has utterly failed to discharge the heavy burden.
20. Since the suit transaction is not benami, the declaration sought by the plaintiff cannot be given and the decree of dismissal of the suit requires to be confirmed on merits,
21. Even on the question of limitation, the suit is hopelessly time barred. The cause of action, if any, could be said to have arisen in 1963 when the sale deed is executed and within three years of which the payment had to be made. In 1975, by Ex. 160, the plaintiff had clearly and unequivocally asserted his absolute title and denied any right, title or interest of the plaintiff and he threatened to sell the land himself. It is, thus, clear that when the plaintiff filed the suit in 1081, it was hopelessly time barred and, therefore, it is liable to be dismissed on the ground of limitation also.
22. In view of finding that the suit transaction is not a benami transaction, it is not necessary for us to go into the question of declaration under Section 281A of the I.T. Act as to whether it was really made before the suit or after the suit.
In the result, the appeal fails and is dismissed with costs.
The learned Counsel for the appellant prays that the implementation of this judgment and order be stayed for a period of six weeks. Request granted. The operation of this judgment and order is stayed for a period of six weeks from today.