Gujarat High Court
Vipra Cabharubhai Bhanji vs Sanghavi Harilal Chhaganlal on 12 December, 1995
Equivalent citations: (1996)2GLR338
JUDGMENT S.D. Shah, J.
1. This Second Appeal under Section 100 of C.P. Code is directed against the judgment and decree passed by Civil Judge (J.D.), Rajula dated 10th September 1979 in Regular Civil Suit No. 55 of 1971 and further confirmed in Regular Civil Appeal No. 99 of 1979 by the Assistant Judge at Amreli by judgment and decree dated October 23, 1981.
At the time of admitting this appeal the learned single Judge of this Court formulated following two substantial questions of law which in his opinion are involved in this Second Appeal
1. Whether the agreement dated 6-2-1988 is specifically enforceable?
2. Whether the plaintiff (respondent No. 1) is entitled to any of the reliefs prayed for in the suit?
2. At the final hearing of this Second Appeal, Mr. P.M. Raval, learned Counsel appearing for the appellant-defendant No. 1 has also raised additional substantial question of law to the effect that in view of the provisions of Benami Transactions (Prohibition) Act, 1988, the suit of the respondent No. 1 plaintiff was liable to be dismissed as he prayed for declaration that the defendant No. 1 was a benamidar and that the plaintiff was the real owner of the property and such declaration cannot be granted. Since it was a substantial question of law based on the subsequent event, namely, coming into force of Benami Transactions (Prohibition) Act, 1988, same was permitted to be agitated.
3. Before this Court proceeds to decide the aforesaid two questions, it would be necessary to set out brief facts and the findings recorded by the two Courts below based on which the aforesaid substantial questions of law are required to be considered and answered.
4. In the plaint of the suit filed by respondent No. 1 Sanghavi Harilal Chhaganlal, he described the suit as one for specific performance of agreement and also for declaration and permanent injunction. He, inter alia, averred in the plaint that the defendant No. 1 - Gabharubhai Bhanji and defendant No. 3 - Harishanker Bhanji are the real brothers. Defendant No. 2 - Koli Tapu Kuka was a convict undergoing imprisonment and he-required money and therefore, he agreed to sell his suit properties, i.e., House with Falia, Vada land and agricultural land for an amount of Rs. 20,000/- to the plaintiff and defendant No. 1 - Gabharubhai Bhanji by an agreement to sell, dated 20-9-1967. It was averred in the plaint that an amount of Rs. 10,000/- was paid to the vendor Koli Tapu Kuka - the respondent No. 2 herein and that the possession of properties governed by the agreement to sell was given to the plaintiff and the defendant No. 1. The balance amount of consideration was to be paid in instalments, and thereafter, defendant Not 2 Koli Tapu Kuka was to execute the sale deed in favour of plaintiff and defendant No. 1. It was his further case in the plaint that thereafter there was some understanding in writing between plaintiff and defendant No. 1 to the effect that the defendant No. I should pay Rs. 3,000/- to the plaintiff, and the plaintiff shall execute sale deed in connection with properties consisting of house, Vada land and Bheni land. That writing alleged to have been executed between the parties on 6-2-1968 is admitted into evidence and exhibited at Exh. 51. However, it appears that thereafter the defendant No. 1 alone got the sale deed executed in his favour on 26th May, 1970 by the defendant No. 2, and in so doing the defendant No. 1 committed breach of the earlier agreement, dated 20th June, 1967 as well as subsequent understanding dated 6-2-1968 Exh. 51. The plaintiff further pleaded that he called upon the defendant No. 1 to act as per agreement, dated 6-2-1968 and to execute sale deed in connection with the house in favour to plaintiff since the plaintiff his already received Rs. 3,000/- from defendant No. 1 under the aforesaid at Exh. 51. The defendant No. 1, however, did not pay any heed and since he tried to disturb the possession of the plaintiff, he has filed the suit essentially for specific performance of agreement, dated 6-2-1968 and secondly for declaration that in any case the defendant No. I was simply a benamidar and that the plaintiff was the real owner of the suit properties in question, and he also applied for permanent injunction.
5. The defendant No. 1 appeared and by written statement at Exh. 23 contested the suit, inter alia, contending that in fact the plaintiff and the defendant No. 1 had to pay the full consideration for the sale but since the plaintiff did not act as per the agreement, he agreed to relieve the plaintiff from the agreement by paying amount to Rs. 3,000/-, and that thereby he get the right to get the sale deed executed with respect to the properties from the defendant No. 2. He denied that either he or the defendant No. 2 have committed breach of the agreement. The defendant No. 2 though served did not appear. On the aforesaid pleadings the trial Court framed issues at Exh. 47 and recorded its finding that the plaintiff has proved that he was in actual possession of the suit property. The trial Court also held that the plaintiff has also proved the two agreements, dated 26-9-1967 and the subsequent agreement, dated 6-2-1968. The trial Court further held that the plaintiff was, therefore, entitled to a decree of specific performance, and that he was also entitled to a declaration that the defendant No. 1 was only a benamidar of the suit property and that the plaintiff was the real owner.
6. On reaching the aforesaid findings, the trial Court decreed the suit of the plaintiff declaring that the defendant No. 1 was a benamidar purchaser of the suit property and that he was directed to execute the sale deed of the suit house with Vada land and Bheni land in favour of the plaintiff. The defendant No. 1 was also directed to hand over the suit house with Vada land and Bheni land to the plaintiff. The trial Court also granted permanent injunction restraining the defendant No. 1 from disturbing the possession of the plaintiff over the suit house, Vada land and Bheni land.
7. As stated hereabove, in Regular Civil Appeal the appellate Court held that the plaintiff has proved that the defendant No. 1 has executed agreement, dated 6-2-1968 and it was also proved that said agreement was specifically enforceable. The Court also held that the defendant No. 1 was only a benamidar of the suit property and that the plaintiff was the real owner. In view of the aforesaid findings decree passed by the trial Court is confirmed by the lower appellate Court.
8. Turning now to the substantial questions of law, which are formulated at the time of admission and the additional substantial question of law raised by Mr. P.M. Raval, this Court would deal with the additional question of law first, and thereunder would deal with the aforesaid two substantial questions of law.
9. Mr. P.M, Raval has submitted that in fact the respondent No. 1 was a benamidar of the suit properties and that the plaintiff was the real owner thereof. He, therefore, submitted that in view of enactment and coming into force of Benami Transactions (Prohibition) Act, 1988, the suit filed by the plaintiff for such declaration would not be maintainable. He submitted that though the transaction in question is of the year 1967 and 1968, and though the said Act is of the year 1988, the said Act has retroactive operation, and therefore, it would even apply to the pending suit as well as appeals in the High Court or in the Supreme Court. He has in this connection invited the attention of this Court to the decision of the Apex Court in the case of Mithilesh Kumar v. Prem Behari Khare . It may be stated that the said decision is rendered by the Bench of two Honourable Judges of the Supreme Court speaking through His Lordship Justice Mr. K.N. Saikia. In the said case before the Supreme Court, the respondent-plaintiff instituted a suit No. 42 of 1971 inter alia claiming relief that he be declared the sole and real owner of the suit house and that the defendant-appellant was a mere benamidar and for permanent injunction restraining the defendant from transferring the suit house. The trial Court decreed the suit and granted injunction. The lower appellate Court confirmed the decree of the trial Court holding that the plaintiff was the real owner and that the defendant was benamidar. The Second Appeal which was preferred to the High Court of Allahabad also came to the dismissed, and thereafter on Special Leave being granted the Supreme Court was called upon to decide the question of applicability of Benami Transactions (Prohibition) Act, 1988 to the decree in question. The aforesaid Division Bench of the Supreme Court took the view that the Act in question was retroactive and that since the Act has come into force during the pendency of the appeal before the Supreme Court the appellate Court can take notice of even subsequent event. The Court held that the Act would apply even to pending suits which would include the pendency of appeal also. The Court, therefore, declared that the suit of the respondent-plaintiff was not maintainable in view of retroactive operation of the Act.
10. In the subsequent decision in the case of Omprakash v. Jaiprakash another Bench of two Honourable Judges of the Supreme Court speaking through Mr. Justice N.M. Kasliwala followed the aforesaid decision of the Supreme Court and took the view that since the plaintiff in subsequent case was claiming to be the real owner of the property and was further claiming that the names of the defendants were simply as benamidars, suit -of such nature was totally prohibited by Section 4 of the said Act, and therefore, the plaintiff was not entitled to get any decree. The Court in terms foilpwed and applied the ratio of the decision of the earlier Division Bench in the case of Mithilesh Kumar (supra). Thereafter, once again, in the case of Duvvuru Jaimohan Reddy v. Alluru Nagi Reddy another bench of the Supreme Court consisting of two Honourable Judges followed the decision in the case of Mithtlesh Kumar (supra) and held that the said Act was applicable to the pending proceedings on the date of commencement of the Act.
11. The aforesaid three decisions were pressed into service by Mr. P.M. Raval to bring home the point that the suit of the present nature filed by the respondent No. 1 - plaintiff was not maintainable.
12. However, when the attention of Mr. Raval was drawn to the subsequent decision of the Supreme Court in the case of R. Rajgopala Reddy v. Padmini Chandrasekharan reported in 1995(2) JT 667 which is rendered by the Bench of three Honourable Judges (larger Bench) of the Supreme Court, after going through the said judgment Mr. Raval has to agree that in view of subsequent decision of the larger Bench of the Supreme Court the earlier view of the Supreme Court in the case of Mithilesh Kumar (supra) and other cases would not hold the field and that subsequent decision will apply. The 3-Judge Bench of the Supreme Court in subsequent case speaking through His Lordship Mr. Justice S.B. Majmudar, once again, considered the question as to whether Section 4(1) of the Benami Transactions (Prohibition) Act, 1988 would apply to enforce any right in property held benami, if such proceedings were initiated by the person claiming to be the real owner prior to coming into force of Section 4(1). After considering the decision of the Apex Court in the case of Mithilesh Kumar (supra) and other two decisions, the larger Bench comprising of three Honourable Judges of the Supreme Court took the view that the earlier Division Bench in the case of Mithilesh Kumar erred in holding that Section 4(1) could be pressed into service in connection with suits filed prior to the said enactment. Firstly, the larger Bench having given anxious consideration to the rival contentions, reached the conclusion that Section 4(1) of Benami Transactions (Prohibition) Act cannot be applied to suit, claim or action to enforce any right in property held benami against person in whose name such property is held or any other person, if such proceeding is initiated by or on behalf of a person claiming to be real owner thereof, prior to coming into force of Section 4(1) of the Act. Secondly, the larger Bench held that the decision of the Division Bench in the case of Mithilesh Kumar taking contrary view does not lay down the correct law. Thirdly, it stated that under various legal provisions holding the field, prior to the coming into force of the said Act, benami transactions were a recognised specie of legal transactions pertaining to immovable properties. Fourthly, it noticed that though the Law Commission recommended that retrospective operation should be given to the said Act, the Parliament did not make the Act or any of its sections expressly retrospective in its wisdom. Fifthly, after examining the Preamble of the said Act as well as Sec, 3 of the said Act, the larger Bench noticed that prohibition under Section 3(1) is against persons who are to enter into benami transactions and it has laid down that no person shall enter into any benami transaction which obviously means from the date on which this prohibition came into force, i.e., w.e.f. 5-9-1988. That takes care of further benami transactions. Sixthly, the larger Bench also noticed that when a statutory provision creates new liability and new offence, it would naturally have prospective operation and would cover only those offences which take place after Section 3(1) comes into operation. The larger Bench also noticed that His Lordship Mr. Justice Saikia in Mithilesh Kumar's case (supra) has in terms observed at page 635 of the report that Section 3 obviously cannot have retrospective operation and the larger Bench has concurred with this part of the view of the Division Bench. Seventhly, the Court also noticed that sub-se. (i) of Section 4 provides that 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 any other person shall lie by or on behalf of a person claiming to be real owner of such property. This would mean that no such suit shall henceforth lie to recover possession of property held benami by the defendant. The larger Bench, therefore, noticed that the Legislature in its wisdom has not expressly made Section 4 retrospective, and therefore, to hold that Section 4 would have retrospective or retroactive operation so as to cover pending litigation filed prior to coming into force of the said section would amount to taking the view which run counter to the legislative scheme and intent projected by various provisions of the Act. Eighthly, the Court also noticed that Section 82 of the Indian Trusts Act which almost for a period of a century or more, legal right to the real owner to claim against the purported owner that the consideration paid was by the real owner and the transferee held the property for the benefit of the person paying consideration for supporting the transaction. It is this right which got destroyed by Section 7 of the Act w.e.f. 19-5-1988, In view of the aforesaid, it shall have to be held that earlier decisions of the Supreme Court in the cases of Mithilesh Kumar (supra), Omprakash (supra) and Duvvuru Jaimohan Reddy (supra) do not lay down correct law.
13. In view of the aforesaid legal position the 3rd additional submission or substantial question of law raised by Mr. Raval must fail.
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14. In view of the aforesaid, I do not find any substance in any of the submissions made.
15. the result, appeal fails and same is dismissed. No costs. Ad-interim relief, if any, stands vacated.