Karnataka High Court
Sameena Tahseen @ Haseena Begum W/O ... vs Babu Saheb S/O Khalifa Sab Tengli on 26 July, 2024
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IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 26TH DAY OF JULY, 2024
BEFORE
THE HON'BLE MRS JUSTICE K S HEMALEKHA
REGULAR SECOND APPEAL NO.7322 OF 2009
(DEC/INJ/ROR)
BETWEEN:
1. SAMEENA TAHSEEN
@ HASEENA BEGUM
W/O KHALEEL PASHA,
AGE: ABOUT 29 YEARS,
OCC: AGRICULTURE
R/O. KALHIPPARGA-585322
TQ. CHITTAPUR DIST. GULBARGA.
2. CHAND PASHA
S/O BASHU MIYAN INAMDAR
AGE: ABOUT 53 YEARS,
OCC: AGRICULTURE
R/O. KALHIPPARGA-585322
TQ. CHITTAPUR, DIST. GULBARGA.
...APPELLANTS
(BY SRI G.G. CHAGASHETTI, ADVOCATE)
AND:
1. BABU SAHEB S/O KHALIFA SAB TENGLI
DECEASED BY LR'S.
1a. RASHEEDA BEGUM
W/O LATE BABUSHAHEB
SINCE DECEASED, R1(b) AND R2 ARE TREATED AS
LRs OF R1(A)
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1b. HASEENA BEGUM W/O MOHAMED RASOOL
AGE: ABOUT 41 YEARS, OCC: TEACHER,
(DAUGHTER OF DECEASED R1)
R/O. KHAJA COLONY, KALABURAGI.
2. KHALEEL PASHA S/O BABU SAHEB TENGLI
AGE: ABOUT 32 YEARS, OCC: AGRICULTURE
R/O. KALHIPPARGA-585322
TQ. CHITTAPUR, DIST. GULBARGA
NOW RESIDING IN GULBARGA
H.NO.E-7-2084,
NEAR JAWAHAR HIND SCHOOL,
NAYA MOHALLA, GULABARGA.
...RESPONDENTS
(BY SRI ABDUL MUQHTADIR, ADV. FOR R1(b);
NOTICE TO R2-SERVED BUT, UNREPRESENTED;
R-1(b) AND R-2 ARE TREATED AS LR's OF DECEASED R-1(a)
V/O. DATED 22.06.2023)
THIS RSA IS FILED U/S. 100 OF CPC, PRAYING TO CALL
FOR THE RECORDS IN R.A. NO.140/2007 ON THE FILE OF III
ADDL. DISTRICT JUDGE AT GULBARGA AND O.S. NO.30/2005
ON THE FILE OF CIVIL JUDGE (SR.DN.) AT SEDAM FOR
EXAMINING THE SAME AND TO SET ASIDE THE JUDGMENT
AND DECREE DATED 28.08.2009 PASSED IN R.A. NO.140/2007
BY THE III ADDL. DISTRICT JUDGE AT GULBARGA BY
ALLOWING THE ABOVE APPEAL. CONSEQUENTLY CONFIRM THE
JUDGMENT AND DECREE OF THE TRIAL COURT DISMISSING
THE SUIT OF THE PLAINTIFF/RESPONDENT.
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
25.07.2024, COMING FOR PRONOUNCEMENT THIS DAY, THE
COURT PRONOUNCED THE FOLLOWING:
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CORAM: HON'BLE MRS JUSTICE K S HEMALEKHA
CAV JUDGMENT
(PER: HON'BLE MRS JUSTICE K S HEMALEKHA) Defendants are before this Court in the Regular Second Appeal assailing the judgment and decree passed by the First Appellate Court, whereby, the First Appellate Court reversed the judgment and decree of the Trial Court decreeing the suit of the plaintiff seeking declaration and possession, and permanent injunction.
2. This Court, while admitting the appeal, framed the following substantial questions of law:
"Whether the suit was maintainable in respect of the sale transaction which is claimed to be prior to the Act coming into force in terms of Section 4 of the Act?"
3. During the course of the argument, this Court framed the following additional substantial questions of law:
"1. Whether the suit is hit by the provisions of Section 4(1) of the Benami Transactions (Prohibition) Act, 1988?
2. Whether it is saved by the provisions of Section 2(9)(A)(b)(iii) of the Benami Transactions -4- (Prohibition) Amendment Act, 2016 (43 of 2016)
3. Whether the suit of the plaintiff is barred under Section 58 of the Limitation Act?"
4. Suit for declaration to declare that the plaintiff is the absolute owner and possessor of agriculture land bearing Sy.No.80/A measuring 9 acres 21 guntas and land bearing Sy.No.80/Aa measuring 9 acres 20 guntas of Kalhipparga village (hereinafter referred to as the 'suit properties' for the sake of convenience), to declare the ROR entries in the name of the defendant No.1 is null and void and for permanent injunction. The case brought by the plaintiff is that the plaintiff purchased the suit properties in the name of defendant No.3 under registered sale deed dated 22.06.1981, during the purchase, defendant No.3 was minor and the plaintiff was the minor guardian of defendant No.3.
5. On notice, the defendants appeared and defendant Nos.1 and 2 filed written statement and defendant No.3 filed separate written statement. -5-
6. Defendant Nos.1 and 2 denied that plaintiff was the owner of the suit property and the property was purchased by the plaintiff in the name of defendant No.3. Defendant Nos.1 and 2 averred that defendant Nos.1 and 3 are in actual possession and enjoyment of the suit property as absolute owners and the plaintiff has no right and that the suit is not maintainable in view of the Benami Property Transactions (Prohibition) Act, 1988.
7. Defendant No.3 filed written statement, inter alia, admitting the claim of the plaintiff contending that the plaintiff is the absolute owner and possessor of the suit property.
8. On basis of the pleadings, the Trial Court framed the following issues:
1. Whether the plaintiff proves his lawful title to the suit properties?
2. Whether plaintiff proves his lawful possession to suit properties until and on the date of suit?
3. Whether plaintiff proves that entry of defendants name in ROR are null and void?-6-
4. Whether plaintiff proves that defendants have denied his titled and caused interference into his possession of suit properties?
5. Whether defendants prove that suit is not maintainable under provisions of Benami Transaction (Prohibition) Act, 1988?
6. To what order or decree?
9. Issue No.5 was "whether the defendants prove that the suit is not maintainable under the provisions of Benami Property Transactions (Prohibition) Act, 1988?. The said issue was answered against the plaintiff holding that the suit is not maintainable under Section 4(1) of the Act and Section 4(3)(b) of the Benami Transactions (Prohibition) Act, 1988 (hereinafter referred to as 'Principal Act') is not attracted and the suit does not fall under this exception clause and accordingly, dismissed the suit of the plaintiff.
10. Aggrieved, the plaintiff preferred appeal before the First Appellate Court. The First Appellate Court framed the following points for consideration:
1. Whether the plaintiff/appellant proved that the suit is very much maintainable as per the -7- provisions of section 4(3)(b) of Benami Transactions (Prohibition) Act, 1988?
2. Whether the plaintiff/appellant proved that the findings recorded by trial Court on all issues is erroneous, illegal, so the impugned judgment and decree passed by trial Court is not sustainable in law, same is liable to be set aside and suit filed by plaintiff is deserved to be decreed as prayed for?
3. What order?
11. Point No.1 framed by the First Appellate Court was regarding the maintainability of the suit as per provisions of Section 4(3)(b) of the Benami Transactions (Prohibition) Act, 1988. The First Appellate Court arrived at a conclusion that the plaintiff's case falls within the exception of Section 4(3)(b) of the Act and the suit filed by the plaintiff is maintainable and accordingly, allowed the appeal setting aside the judgment and decree of the Trial Court, suit of the plaintiff was decreed holding that the plaintiff is the owner and possessor of the suit land and defendant Nos.1 and 2 were permanently restrained -8- from interfering with the peaceful possession and enjoyment of the plaintiff over the suit land.
12. During the pendency of this appeal, Amended Act, 2016 called the Benami Transactions (Prohibition) Amendment Act, 2016 (Act No.43 of 2016) was enacted and by way of amendment, this Act was called as the Prohibition of Benami Property Transactions Act, 1988. Sub-clause (2) of Section 3 of the Principal Act was omitted and Sub-clause (3) was renumbered as Sub- clause (2) thereof and after Sub-clause (2) as so renumbered, the following Sub-clause was inserted, namely, "Sub-clause (3), whoever enters into any Benami transaction on and after the date of commencement of the Benami Transactions (Prohibition) Amendment Act, 2016, shall, notwithstanding anything contained in Sub- Section (2), be punishable in accordance with the provisions contained in Chapter VII".
13. Further, in Section 4 of the Principal Act, Sub- clause (3) was omitted. Section 4 of the Principal Act, which earlier read as under:
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"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 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."
(Emphasis supplied) -10- By the Amendment Act of 2016, Sub-clause (3) stated supra was omitted and in Section 2 of the Principal Act, the following Sub-section (9) was substituted:
"2. Definitions.-
xxx xxx xxx
(9) "benami transaction" means,-
(A) a transaction or an arrangement-
(a) where the property is transferred to, or is
held by, a person, and the consideration of such property has been provided, or paid by, another person; and
(b) the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration, except when the property is held by-
(i) a kartha, or a member of a Hindu Undivided Family, as the case may be, and the property is held for his benefit or benefit of other members in the family and the consideration for such property has been provided or paid out of the known sources of the Hindu undivided family;
(ii) a person standing in a fiduciary capacity for the benefit of another person towards whom he stands in such capacity and includes a trustee, executor, partner, director of a company, a depository or a particular participant as an agent of a depository under -11- the Depositories Act, 1996 (22 of 1996) and any other person as may be notified by the Central Government for this purpose;
(iii) any person being an individual in the name of his spouse or in the name of any child of such individual and the consideration for such property has been provided or paid out of the known sources of the individual;
xxx xxx xxx"
(emphasis supplied)
Earlier in the Principal Act an exception to the benami transaction was only in respect of Sub-clause 3(a) and (b) of Section 4. Now by the Amended Act, 2016, exception carved is in respect of the individual purchased in the name of his spouse or in the name of his child and this amendment came into effect during the pendency of this appeal.
14. Before the Apex Court in the case of Union of India and another vs. Ganpati Dealcom Private Limited,1 (Ganpati Dealcom) the question fell for consideration regarding the constitutional validity of 1 (2023) 3 SCC 315 -12- Section 3 of the Prohibition of the Benami Transactions Act, 1988 (Amendment) Act, 2016, the Apex Court held at paragraph No.127 as under:
"127. In view of the above discussion, we hold as under:
127.1. Section 3(2) (sic Section 3) of the unamended 1988 Act is declared as unconstitutional for being manifestly arbitrary.
Accordingly, Section 3(2) of the 2016 Act is also unconstitutional as it is violative of Article 20(1) of the Constitution.
127.2. In rem forfeiture provision under Section 5 of the unamended 1988 Act, prior to the 2016 Amendment Act, was unconstitutional for being manifestly arbitrary.
127.3. The 2016 Amendment Act was not merely procedural, rather, prescribed substantive provisions.
127.4. In rem forfeiture provision under Section 5 of the 2016 Act, being punitive in nature, can only be applied prospectively and not retroactively.
127.5. The authorities concerned cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, -13- viz., 25-10-2016. As a consequence of the above declaration, all such prosecutions or confiscation proceedings shall stand quashed.
127.6. As this Court is not concerned with the constitutionality of such independent forfeiture proceedings contemplated under the 2016 Amendment Act on the other grounds, the aforesaid questions are left open to be adjudicated in appropriate proceedings."
15. The Apex Court held that Section 4 remains the same as under 1988, Act, barring the fact that Sections 4(3) has integrated the exceptions provided under the definition of Benami transaction in terms of Section 2 Sub clause (9). The civil consequences provided under Section 4 continue to apply even post the 2016 Act. The interpretation of the aforesaid Section, as given in the case of R. Rajagopal Reddy (dead) by Lrs. and others vs. Padmini Chandrasekharan (dead) by Lrs.,2 continues to apply.
16. The Apex Court, in the case of R. Rajagopal Reddy, at paragraph No.10 has held as under: 2
AIR 1996 SC 238 -14- "10. It is thereafter that the Act came to be passed by both the Houses of Parliament and came into force as stated above. It might be appreciated that though the Law "Commission recommended retrospective applicability of the proposed legislation, the Parliament did not make the Act or any of its Sections expressly retrospective in its wisdom. A bird's eye view of the Act clearly establishes this position. The Act being Act No. 45 of 1988 in its preamble states that it is an act to prohibit benami transactions and the right to recover property held benami, for matters connected therewith or incidental thereto. Section 3 which is the heart of the Act imposes the required prohibition of benami transactions. It reads as under:-
"3. Prohibition of benami transactions.- (1) No person shall enter into any benami transaction.
(2) Nothing in Sub-section (1) shall apply to the purchase of property by any person in the name of his wife or unmarried daughter and it shall be presumed, unless the contrary is proved, that the said property had been purchased for the benefit of the wife or the unmarried daughter.
(3) Whoever enters into any benami transaction shall be punishable with imprisonment for a term which may extend to three years or with fine or with both.-15-
(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), an offence under this section shall be non-
cognizable and bailable."
17. The Apex Court in Rajagopal Reddy's case held that if a Benami transaction has taken place in 1980 and the suit is filed in June, 1988 by the plaintiff claiming that he is the real owner of the property and defendant is merely a Benamidar and the consideration had flown from him then such a suit would not lie on account of the provisions of Section 4 Sub clause (1). Bar against filing, entertaining and admission of such suits would have become operative by June, 1988 and to that extent, Section 4(1) would take in its sweep even past Benami transactions which were sought to be litigated upon after coming into force of the prohibitory provisions of Section 4(1); but this is the only effect of the retrospectivity of Section 4(1) and nothing more than that. In conclusion, the Apex Court held that Section 4(1) shall apply even to past Benami transactions to the aforesaid extent, the next step taken by the Division Bench that therefore, the then -16- existing rights got destroyed and even though suits by real owners were filed prior to coming into operation of Section 4(1) they would not survive, does not logically follow.
18. In Ganpati Dealcom's case, the question that fell for consideration before the Apex Court was regarding the constitutional validity of Sections 3 and 5 of the Amendment Act, declaring that said Sections 3 and 5 are constitutionally invalid and further held that Prohibition of Benami Property Transaction Act, 1988, Section 3 and Section 5 as they stood after 2016 amendment held may only be applied prospectively.
19. The definition of Benami transaction in terms of Section 2(9) did not fall for consideration and the Apex Court clearly held that the civil consequences provided under Section 4(3) in terms of Section 2 sub-clause (9) continue to apply even post the 2016, Act.
20. Learned counsel for the appellant would urge before this Court that the suit of the plaintiff is hit by Section 4(1) of the Benami Act and the suit is neither -17- saved by Section 4 Sub clause (3)(a) and 3(b) of the Benami Act as defendant No.3 cannot be said to be in a fiduciary capacity as he was the minor and neither a minor can act as a trustee.
21. Learned counsel placing reliance on the Ganpati Dealcom's case would contend that as on the date of the suit, Section 2(9) was not available and the Apex Court has clearly held that the Amendment Act, 2016 is prospective. As stated supra Section 2(9) came into force during the pendency of this appeal. The question before the Apex Court was not pertaining to the Section 2(9)(3) for consideration. The Apex Court regarding the penal provision applied under the Amended Act 2016 held to be applied prospectively. Thus, the contention of the defendant-appellant that the exception made under Section 2(9) of the Act is not available to the plaintiff is unsustainable. The judgments relied by the learned counsel for the appellant in the case of Smt. Rebti Devi Vs. Ram Dutt and another3 the Apex Court held that if a 3 AIR 1998 SC 310 -18- transaction had been entered into prior to 19.05.1988 no suit could be filed on the basis of such plea after 19.05.1988 in light of Section 4 Sub-Section (1), this Court has absolutely no quarrel that the suit of the plaintiff was not maintainable by raising a plea of Benami after 19.05.1988 even when the transaction was before 19.05.1988 but the suit of the plaintiff falls under the exception of Section 2(9)(A)(b)(iii) as the plaintiff purchased the property in the name of his minor child and the consideration for the purchase of the property was provided and paid by the known sources of the individual, that is, the plaintiff which is not in dispute.
22. The plaintiff's suit is maintainable in light of the exceptions provided in Section 2(9)(A)(b)(iii) of the Prohibition of Benami Property Transactions Act, 1988 and accordingly, the substantial questions of law framed by this Court are answered in favour of the plaintiff and against the appellants/defendants and this Court pass the following:
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ORDER i. The Regular Second Appeal is hereby dismissed.
ii. The judgment and decree of the First Appellate Court is confirmed, the suit of the plaintiff is decreed, the plaintiff is declared as the owner and defendants are restrained from interfering in the peaceful possession and enjoyment over the suit property.
Sd/-
(K.S. HEMALEKHA) JUDGE MBM/SWK CT-VD