Allahabad High Court
Rajesh Kumar Agrawal vs Virendra Kumar Agrawal And Others on 17 May, 1993
Equivalent citations: AIR1994ALL135, AIR 1994 ALLAHABAD 135, (1994) MATLR 69, (1993) 3 CURCC 10, (1993) 2 DMC 398, 1994 (1) ALL CJ 79, (1993) 3 CURCC 434, (1994) 2 ALL WC 961, (1994) 1 CIVLJ 455, (1994) 1 BANKCLR 213
JUDGMENT
1. This is a plaintiff's appeal against the judgment and decree of IV Additional Civil Judge, Allahabad dated 31-5-1989 in Partition Suit No. 527 of 1986.
2. The plaintiff had filed a suit for partition claiming one-third share in house No. 124, K. P. Kaekar Road, Allahabad, which is the property in suit. A declaration is also sought that the defendants Nos. 3 to 5 and late Aditya Prakash Agarwal had no right, title interest or share in house No. 124 aforesaid and inclusion of their names in the sale deed was simply Benami by their father surreptitiously and dishonestly. However, the expression 'Benami' was later on deleted by amending the plaint with the leave of the court. Cross-objection is filed by respondent Basant Kumar. He also challenged the decree and judgment of the court below and claims that the suit property is liable to be partitioned in three shares and not in seven shares as declared by the court below.
3. The plaintiff's claim in the suit was that on 27-2-1985 the defendant No. 1 acting for himself as well as for the plaintiff and defendant No. 2 with the funds of the plaintiff and defendants Nos. 1 and 2, lying at their credit in the said firm, purchased the suit property from its owner Smt. Saran Kumari Verma for a sum of Rs. 1,80,000/- as the personal property of the plaintiff and defendants Nos. 1 and 2. The purchase was not by the firm or for any purpose of the firm. In purchasing the property the defendant No. 1 with dishonest motive and surreptitiously got the names of defendants Nos. 3 to 5 and late Aditya Prakash Agarwal also entered in the sale deed as co-purchasers of the property along with the plaintiff and defendants 1 and 2. The said defendants did not contribute even a single paise towards the purchase money and for that reason they have no right, title, interest or share in the house. Defendant No. 1's action of including his sons in the sale deed as co-purchasers has given a reasonable apprehension to the plaintiff that the house cannot be kept joint any more. Accordingly the plaintiff is said to have asked the defendants Nos. 1 and 2 to partition the house in three shares.
4. Written statement was filed by the defendants Nos. 1, 3, 4 and 5 jointly. It is contended by the defendants that the property was purchased in the names of all the vendees jointly. The allegation of dishonest and surreptitious in the sale deed is denied. The plaintiffs claim that he is entitled to one-third share is also denied. It is also stated that the plaintiff is entitled to get one-seventh share of the property. After seeking leave to amend the written statement the defendannts had raised a further plea that the plaintiffs suit as regards share of the defendants and of late Aditya Prakash Agarwal is barred by Benami Transaction (Prohibition) Act of 1988.
5. Defendant No. 2 has also filed written statement. He seems to support the plaintiff. He has also stated that the suit property was purchased with the funds of the plaintiffs and defendants Nos. 1 and 2 lying at their credit in the firm but the defendant No. 1 had got the names of the defendants Nos. 3 to 5 and late Aditya Prakash Agarwal entered in the deed dishonestly. They are not the owners of the suit property nor had paid the consideration for sale. Therefore, they have no right, title or interest in the property. It is admitted that the plaintiff and defenndants Nos. 1 and 2 are partners of M/s. Bombay Furnishing Company.
6. After framing the necessary issues the trial Court dismissed the claim of the plaintiff and held that he was entitled to one-seventh share in the property as the sale deed was executed in favour of seven persons, which includes late Aditya Prakash Agarwal, who is already dead. The parties appear to have led evidence before the court below and the court below has after appreciation of their evidence come to the conclusion that the plaintiff cannot be granted relief as claimed by him in the plaint. However, he was declared owner of I/7th share of the suit property. The parties seem to have produced account books which are not denied by the appellant-plaintiff. They have adduced evidence also in support of their respective claims.
7. The appellant has again applied for amendment of the plaint and seeks to delete the following sentence from para 3 of his plaint:
"and the purchase was not by the firm or for the firm or for any of the purposes of the firm."
8. I shall advert to the question of amendment a little later. Assuming that the aforesaid line is deleted from para 3 of the plaint the plaintiff had to prove that the purchase was made from the funds of the firm or it was made by the partners from their own funds, which were standing to their credit in the partnership firm. The respondents Nos. I and 2 and the plaintiff alone are the partners of the firm. Respondents Nos. 3 to 5 and late Aditya Prakash Agarwal are not partners of the firm M/s. Bombay Furnishing Company. It is not disputed that the consideration amount was paid from the amount which was lying to the credit of the vendees. Apart from partners their family members also seem to have deposited some money from time to time with the firm and the said amount was lying to their credit and consideration was paid from the said amount. The deposit made by the family members of the plaintff is still with the firm and that is entered in the books also.
9. Mr. Ravi Kant arguing for the appellant has submitted that any amount which was deposited by the non-partners would become the partnership funds or the property of the firm and if the property is purchased from that fund the property will belong to the firm and not to the non-partners of the firm even though any amount to their credit was paid as consideration amount. It is submitted that at best the creditors are entitled to recover their amount and the amount depo-sited by them will be deemed to be belonging to the patnership because it was acquired by the partnership "otherwise". Reliance is placed by the learned Counsel for the appellant on Section 14 of the Partnership Act, which reads as under:
"14. The Property of the Firm -- Subjet to contract between the partners, the property of the firm includes all property and rights and interests in property, originally brought into the stock of the firm, or acquired, by purchase or otherwise, by or for the firm, or for the purposes and in the course of the business of the firm and includes also the goodwill of the business. Unless the contrary intention appears, property and rights and interests in property acquired with money belonging to the firm are deemed to have been acquired for the firm."
10. From the reading of the aforesaid provision it is clear that the property of the firm includes -
(i) All property and rights and interests in property originally brought into the stocks of the firm;
(ii) acquired, by purchase or otherwise, by or for the firm;
(iii) or for the purposes and in the course of the business of the firm and includes also the goodwill of the business.
11. If the property of the firm is shown to have been acquired in any of the aforesaid manners, it will be deemed to have been acquired by the firm unless the contrary intention appears. It is submitted that the expression 'or acquired by purchase or otherwise' would mean that the deposit made by the non-partners was acquired by the partnership firm otherwise than by purchase. So this will become the propery of the firm and if the firm has purchased any property with the funds so acquired the property will be deemed to be the firm's property and not the property of the non-partners whose names are entered in the sale deed. Since they have not paid any consideration for the property, therefore the property will not vest in the non-partners who are 4 in number, but it will vest in only three partners of the firm and will b liable to be partitioned in three shares only. The appellant has also urged that the property was purchased from the joint funds of the firm. The partners' interest in the property is identical and they will be presumed to be equally interested.
12. It was next contended that the defendants 3 to 5 and late Aditya Prakash Agarwal would not be deemed Benamidars of the partners of the firm who are real vendees of the property. On amendment the defendants were permitted to raise the plea of 'Benami' transaction, which is now prohibited under the Benami Transactions (Prohibition) Act, 1988, hereinafter referred to as 'the Act of 1988'. Under Section 2 of the Act of 1988 'Benami transaction' means any transaction in which property is transferred to one person for a consideration paid or provided by another person. Section 3 of the Act of 1988 prohibits Benami transaction. It is provided that no person shall enter into any Benami transaction. However, the purchase of property by any person in the name of his wife or unmarried daughter is presumed to be purchased for the benefit of the wife of the unmarried daughter. In all other cases any person entering in the Benami transaction is liable to be punished. Under Section 4 of the Act of 1988, no suit or claim or action to enforce any right in respect of any property held Benami against a person in whose name the property is held against any other person shall be allowed by or on behalf of a person claiming to be the real owner of the said property. Under Section 5 of the Act of 1988 the property held Benami is liable to be subject to acquisition. This is in nutshell scheme of the Act.
13. It is argued that the transaction of sale showing the names of the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal as vendee is sham to the extent it evidences title in favour of respondents Nos. 3 to 5 and late Aditya Prakash Agarwal. If the transaction is sham it may not be Benami as alleged by the defendants in their written statement. For this proposition the judgment of the Supreme Court in the case of Sree Meenakshi Wills Ltd., Madurai v. Commr. of Income-tax, Madras, reported in AIR 1957 SC 49 is relied upon. The following observations from this judgment are said to be useful for considering the question (at pp. 66-67):
"Now, the assumption underlying this argument is that the Tribunal had found in its order that the intermediaries were bnamidars for the appellant, but there is no basis for this in the order. In this connection it is necessary to note that the word 'benami' is used to denote two classes of transactions which differ from each other in their legal character and incidents. In one sense, it signifies a transaction which is real, as for example, when A sells properties to B but the sale deed mentions X as the purchaser. Here the sale itself is genuine, but the real purchaser is B, X being his benamidar. This is the class of transactions which is usually termed as benami. But the word 'benami' is also occasionally used, perhaps not quite accurately, to refer to a sham transaction, as for example, when A purports to sell his property to B without intending that his title should cease or pass to B. The fundamental difference between these two classes of transactions is that whereas in the former there is an operative transfer resulting in the vesting of the title in the transferee, in the latter there is none such, the transferor continuing to retain the title notwithstanding the execution of the transfer deed. It is only in the former class of cases that it would be necessary, when a dispute arises as to whether the person named in the deed is the real transferee or B, to enquire into the question as to who paid the consideration for the transfer, X or B. But in the latter class of cases, when the question is whether the transfer is genuine or sham, the point for decision would be, not who paid the consideration but whether any consideration was paid. Therefore, there will be force in the contention of the appellant, that a finding as to who furnished the capital for the intermediaries was requisite before they could be held to be benamidars, if the Tribunal had held them to be benamidars in the former sense but not in the latter."
14. An observation from the case of Bibi Siddiqi Fatima v. Saiyed Mohammad Mahmood, reported in AIR 1978 SC 1362, is also relied upon by the learned Counsel for the appellant. The said observation reads as under:
"The most important test for determining whether the sale standing in the name of one person was in reality for the benefit of another which was the source whence the purchase money came had been established in this case. The nature and possession of the property after the acquisition was such that it did not lead to the conclusion that it was not a waqf property and was a property in exclusive possession of the plaintiff-appellant through her tenants. The position of the parties, namely, the Raja and the plaintiff, was such that one could be inclined to believe that in all probability the Raja could provide funds for acquisition of the property not only in the name of his wife but for her and her alone provided the funds expended were his personal funds. But no such inference was possible on the unmistakable position of this case that the funds came from the coffer of the wakf estate. The custody of the title deed and other papers, except a few, were not with the plaintiff. The conduct of the parties concerned in dealing with the property after acquisition also went in favour of the defendant and against the plaintiff.
Held that even on the application of the salutary principles of law enunciated in AIR 1974 SC 171 the appellant could not succeed. In a case of this nature, all the aspects of the benami law including the question burden of proof could not justifiably be applied fully. Once it was found that the property was acquired with the money of the wakf, a presumption would arise that the property was a wakf property irrespective of the fact as to in whose name it was acquired. The Mutawalli by transgressing the limits of his power and showing undue favour to one of the beneficiaries in disregard to a large number of other beneficiaries could not be and should not be permitted to gain advantage by this method for one beneficiary which in substance would be gaining advantage for himself. In such a situation it would not be unreasonable to say1 that it was for the plaintiff to establish that the property acquired was her personal property and not the property of the wakf."
15. In the case of Bhim Singh v. Kan Singh, reported in AIR 1980 SC 727, the Supreme Court has laid down the principle governing the determination of the question whether a transfer is a benami transaction or not. The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction. Secondly, 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. Thirdly, the true character of the transaction is governed by the intention of the person who has contributed the purchase money and fourthly, the question as to what was the intention has to be decided on the basis of the surrounding circumstances, the relationship of the parties, the motive governing their action in bringing about the transaction and their subsequent conduct etc.
16. It was further held that two kinds of benami transactions are generally recognised in India. Where a person buys a property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami. The second case which is termed as a benami transaction, is a case where a person, who is the owner of the property, executes a con-
veyance in favour of another without the intention of transfer, title to the property thereunder. In this case the transferor continue to be the real owner.
17. In the case of Controller of Estate Duty, Lucknow v. Aloke Mitra, reported in AIR 1981 SC 102,'the Supreme Court has approved the meaning of benami transaction as given by Mayne in this Treatise on Hindu Law, 11 th Edition, ai page 953 and has said as follows:
"A benami transaction is one where one buys property in the name of another or gratuitously transfers his propert to another, without indicating an intention to benefit the oter. 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 a mere trustee for him. In other words, a benami purchase or conveyance leads to a resulting trust in India, just as a purchase or transfer under similar circumstances leads to a resulting trust in England. The general rule and principle of the Indian law as to resulting trusts differs but little if at all, from the genral rule of English law upon the same subject."
18. In the case of Mohan Lal v. Board of Revenue, reported in AIR 1982 All 273, it was held that if as a matter of fact it is proved that the plaintiff had contributed to the extent of one-half of the sale consideration, he is entitled to one-half share in the disputed property in view of the provisions of Section 45 of the Transfer of Property Act. The recitals in the sale deed did show that the plaintiff had continued one-half of the sale consideration of the suit property but his share was shown 1/21 in the property. On the basis of the recitals in the sale deed in respect of payment of one-half of the consideration, he would be entitled to one-half share on the basis of Section 45 of the Transfer of Property Act.
19. The Benami Transactions (Prohibition) Act of 1988 would come into play only when it is proved tht the entire consideration as shown in the sale deed was paid by the plaintiff and defendants Nos. 1 and 2 and the sale deed was executed in the name of respondents Nos. 3 to 5 and late AtiityaPrakash Agarwal without their contributing any consideration amount. Therefore, this question shall have to be considered with the question whether the consideration was paid from the partnership funds or by the vendees individually. If consideration is paid by the vendees individually then the sale cannot be held to. be benami.
20. Mr. Ravi Kani submits that the sale deed is not benami so far as non-partners of the firm are concerned, but it will be treated to be sham as against them and they will not get any share for non-payment of consideration amount. There is no dispute about the meaning of benami transaction or about the sham transaction. Benami transaction is one in which the real owner pays the consideration and purchases the property in the name of another. That another person is known as benamidar. In the sham transaction the executor of the sale deed has no intention to convey the property. The title in the property of the executor remains with the vendor as the same is not transferred to the vendee in a sham transaction. In sham transaction there is no intention to convey the property whereas in the benami transaction there is intention to convey the property and the property is conveyed not to the real vendee but to his benamidar. This is the distinction between the sham transaction and benami transaction.
21. The learned Counsel for the respondents Mr. V.K.S. Chaudhary has relied on the suit of the plaintiff which expressly mentions that the property was purchased within the funds of the plaintiff and the defendants Nos. f and 2 lying at their credit in the said firm and the property was not purchased by the firm or for the firm or for any of the purposes of the firm. According to Mr. Chaudhary the plaintiffs own case is that the property is not purchased by the firm or for the firm or for any of the purposes of the firm. The appellant nowhere states that the funds for purchase of the property belonged to the firm and the consideration was paid from the partnership firm. Therefore, the trial Court has rightly relied on the sale deed and declared the plaintiff's ownership to the extent of I / 7th share. It is contended that the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal had paid the consideration amount. The consideration amount for their share was paid from the amount, which was deposited by the said persons with the firm. The plaintiffs family members also had deposited the amount with the firm. So there was a practice that the family members of the partners could deposit their funds with the firm and these funds would lie with the firm and are lying at the credit of the non-partners. This deposit is not blended with the partnership propety or with the partnership firm but it is a separate amount which is separately accounted for in the account books. He read the extract of the account books thoroughly to show that this fund was entererd and maintained in the account books, Basant Kumar Agarwal had no money at this credit at the relevant time. However, funds are said to have been arranged for him by the other partners of the firm. But so far as the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal are concerned, consideration for purchase of the property was paid from the amount which they had deposited with the firm. So the sale deed was neither sham nor ineffective as regards the said non-partners. There is no allegation of fraud or misrepresentation or undue influence levelled by the plaintiff against the said respondents and the sale deed cannot be said to have been brought in existence on any of these grounds for which there is no pleading. Statements of the witnesses were read and it was argued that on the basis of the material on record along with the averments in the plaintiff the plaintiffs suit cannot be decreed for one-third share. It has rightly been decreed for I/7th share. It is submitted that after the sale deed is registered the property immediately vests in the vendees and if any of the vendees had not paid the consideration amount the other vendees can recover the consideration amount from him but the vesting of the property in him by transfer under Section 54 of the T. P. Act is not postponed or deferred. On the registration of the sale deed the vendee at once becomes the owner of the property conveyed and vesting takes place irrespective of pay-
ment of consideration by such vendee.- However, in the present case all the vendees have paid their share of consideration from the funds which were lying with the firm at their credit. Even the partners had not paid the consideration amount from the partnership amount or from the partnership firm but they had paid the amount which was lying at their credit Mr. Chaudhary also referred to Section 54 of the T.P. Act and argued that the transfer of ownership of the property in question was complete with the registration of the instrument.
22. Mr. V.K.S. Chaudhary has also argued that if the consideration amount was not paid by the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal, the vendor could agitate this matter and not the co-vendees. In the present case the vendor has received the entire consideration. The property is conveyed and it is conveyed to the persons who are shown in the sale deed as vendees. Therefore, as a co-vendee the plaintiff cannot say that the sale made in favour of the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal was sham. The question of sale being sham does not arise because the consdieration was received by the vendor and the vendor had intended to convey the property to the vendees. Mr. Chaudhary also submits that there is no basis for holding that the sale deed is fraudulent or the outcome of undue influence or opposed to law. Il cannot be avoided by using the term that the defendant No. 2 had dishonest motive and he had surreptitiously got the names of non-partners entered as co-vendees. Mr. Chaudhary has relied on some authorities, which are being discussed.
23. In the case of Sheikh Tajammul Hussain v. Sheikh Ahmad All, reported in AIR 1937 Oudh 438, it was held tht a Mohomedan family carrying on business acquired property with the income of the firm but not acquired in the name of the firm, such property having nothing to do with the business of the firm is not partnership property. Heirs of such Mahomedan hold it as tenants-in-common.
24. In the case of Sudhansu Kanta v. Manindra Nath, reported in AIR 1965 Pat 144, it has been held that before applying the principle of Section 14 of the Partnership Act there must be evidence that the property was brought into stocks of the firm through any of the methods mentioned in the said section. Persons may be mere co-owners of the property and may yet be partners in the profits made from its use. Evidence of mere user of property by the firm for its business does not make it partnership property.
25. In the case of Lachman Das v. Mt. Gulab Devi, reported in AIR 1936 All 270, it was held that presumption that the partners jointly owning immovable property, using it for business, property is not necessarily that of partnership.
26. It was argued that in order to prove the plea of fraud on the part of the defendant No. I, it was necessary that specific allegations were mentioned in the plaint. Reliance is placed on the case of Balgangadhar Tilak v. Shrinivas Pandit, reported in AIR 1915 PC 7.
27. In the case of Bishundeo Narain v. Seogeni Rai, reported in AIR 1951 SC 280, after discussing the import or Order 6, Rule 4, C.P.C. it was observed by the Supreme Court that in a case of fraud, undue influence and coercion, the parties pleading it must set forth full particulars and the case can only be decided on the particulars as laid. There can be no departure from them in evidence. General allegations are insufficient even to amount to an averment of fraud of which any Court ought to take no notice however strong the language in which they are couched may be and the same applies to undue influence and coercion.
28. It is urged by the defendant No. 1 that the transaction is benami according to the plaintiff, therefore, no suit can lie to recover the possession of the suit property. The Act of 1988 is not propspective but it applies to all benami transactions, which have taken place before the framing of the Act. Reliance is placed on the case of Mithilesh Kumari v. Prem Behari Khare, reported in AIR 1989 SC 1247.
29. Mr. Ravi Kant has pressed the appli cation for amendment also by which he wants to delete the last line of para 3 of the plaint. He refers to some authorities to show that such amendment can be granted. He has referred to the case of Mahendra Radio and Tele vision, Meerut v. State Bank of India, re ported in AIR 1988 All 257, it was held that admission in pleadings can be withdrawn by amendment but such an amendment cannot be allowd if opposite party would be deprived of right accrued to it. In the case of Jai Jai Ram Manohar Lal v. National Building Material Supply, Gurgaon, reported in AIR 1969 SC 1267, the Supreme Court has held as under:
"Party cannot be refused just relief merely because of some mistake, negligence, inadvertence or even infraction of the rules of procedure. The court always gives leave to amend the pleading of a party, unless it is satisfied that the party applying was acting mala fide, or that by his blunder, he had caused injury to his opponent which may not be compensated for by an order of costs. However, negligent or careless may have been the first omission, and, however, late the proposed amendment, the amendment may be allowed if it can be made without injustice to the other side.
30. In this regard reliance is placed also on the case of Ishwardas v. State of Madhya Pradesh, reported in AIR 1979 SC 551.
31. There is no dispute that the Courts generally allow the amendment which is necessary for the just decision of the case. Amendment cannot be refused even at the appellate stage if it is necessary for the effective decision of the case. However, there are certain riders which are laid down in AIR 1969 SC 1267 (supra) and AIR 1988 All 257 (supra). If the amendment is allowed it should not cause injustice to the other side or it should not affect the right already accrued to the other side. In the present case on the basis of the plaint in general and the averment made in para 3 of the plaint in particular, the court below has heard and decided the case against the plaintiff. Plaintiffs own case was that the propety was not purchased by the partnership firm or for the use of the firm or purpose of the firm. This averment has been accepted by the court below and in fact para 3 of the plaint has also been made the basis by the court below for dismissing the plaintiffs claim with regard to one-third share in the suit property. Now as a consequence of finding of the court below the defendant No. 1 and defendants Nos. 3 to 5 have-acquired certain right and that right canot be taken away because it will cause injustice to them which cannot be compensated in terms of money. Even otherwise para 3 of the plaim does not mention that the suit property was purchased from the funds of the firm, for the use and purpose of the firm, by the firm. It is expressly stated that the property was purchased with the funds lying at the credit of the plaintiff and defendants Nos. 1 and 2 in the said firm. Wherefrom the amount, which was credited to the partners of the firm was obtained is not mentioned. Therefore, it cannot be presumed that the funds were lying from out of the partnership funds to the credit of the partners. The plaintiff in view of para 3 of the plaint and in view of the issues which the paarties have joined, has not been able to canvass that the property was purchased from the partnership firm and from the money belonging to the firm. A positive assertion is made by the plaintiff in the plaint with regard to the purchase having been made not by the firm or for the firm or for the purpose of the firm, cannot be withdrawn by him at this stage as it would cause serious injustice to the other side and it may have the effect of rendering the judgment of the court below redundant and the consideration of this appeal may also become futile Therefore, 1 am not inclined to allow the amendment as prayed for by the plaintiff.
32. The most fundamental and important question, which is yet to be decided, is with regard to the funds from which the suit property has been purchased. The appellant claims that the deposit made by the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal will be deemed to be the property of the firm, and, therefore, the property will be deemed to be purchased from the funds of the firm and the respondents Nos. 1 and 3 to 5 contend that the funds were paid by the partners as also by non-partners individually for the purchase of their respective share, therefore, the property will be deemed to be purchased by the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal also to the extent of the shares indicated in the sale deed.
33. There is no dispute that the respondents Nos. 3 to 5 and 'late Aditya Prakash Agarwal had deposited the amount with the firm of which the plaintiff and defendants Nos. 1 and 2 are panders. The deposit of funds with the firm is made by the son and wife of the plaintif. Also the said deposit is of the non-partners of the firm. It is not a deposit made out of the profits of the firm because the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal or even the son and wife of the plaintiff would not be entitled to receive the profits from the firm. Therefore, it appears that the amount which is lying at the credit of the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal was their amount and it was only deposited with the firm and , the firm has separately, in normal and ordinary course, entered these deposits like many other deposits, in their account books and properly maintained the accounts of the deposits. It is not correct to suggest that the deposits made by the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal with the firm would be deemed to be the property of the firm. This is a far-fetched inference which could not be drawn either under the provisions of the Partnership Act or under any law in force. With regard to the deposit of the funds which are at the credit of the non-partners the firm is only a trustee. It has no right on the said deposit because it is not acquired by the firm under Section 14 of the Partnership Act. Acquiring otherwise would mean that it should have been acquired by any means which is just akin to purchase. The expression 'purchase or otherwise' would mean that the property is to be purchased or it is to be obtained by gift, by surrender or by any other means, which resembles the expression 'purchase'. The term 'otherwise' used in Section 14 of the Act is to be read ejusdem generis with the term 'purchase'. A deposit made by the non-partners who are strangers to the firm in respect of any amount without giving any authority to the firm to appropriate the said amount for the benefit of the firm cannot be blended with the partnership funds. The deposit made by the strangers with the firm is a fund which is 10 be kept apart and is not to be mixed up with the partnership funds, which exclusively belongs to the partnership firm.
34. The respondents Nos. 3 to 5 and late Aditya Prakash who had deposited the amount with the firm had a right to withdraw the deposit or ask the partners of the firm to apply the said deposit in any manner as might be chosen by the respondents Nos. 3 to 5 and late Aditya Prakash. If the deposit was to be blended with the partnership firm there should have been evidence to the effect adduced by the plaintiff that the deposit of the strangers was to be mixed up with the funds of partnership firm or there was some contract arrived at by the firm with the strangers in this regard. In the absence of evidence or in the absence of any covenant, it cannot be presumed that the non-partners' deposit will become the property of the firm. The firm is only a trustee and it cannot refuse to discharge the trust if the respondents Nos. 3 to 5 and late Aditya Prakash desired to withdraw the fund at any time or wanted to apply the fund for any transaction unconnected with the business of the firm. The property in question was purchased not by the firm. It was not purchased for the firm. It was not purchased for any other purpose of the firm. Therefore the purchase of the property cannot be said to be in connection with the-business transaction of the firm. The said property was not originally brought in the stock of the firm nor was it purchased in course of the business of the firm. It was not also acquired by purchase or otherwise. Therefore, the deposits made by the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal with the firm cannot at all be termed as partnership property and Section 14 of the Partnership Act will have no application to such deposits because it is not the property of the firm.
35. Another test for determining as to 1994 AH./10 V G-16 whether it is the property of the firm is to judge the deposits from the authority of the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal over the said funds. By depositing the fund with the firm they had not lost the right or title to the said deposit and it did not detract from their authority to use the fund of the deposits or apply the fund (deposit) in any manner they liked. At the time of dissolution of the partnership the deposit of respondents Nos. 3 to 5 and late Ad itya Prakash Agarwal cannot be shared by the partners of the firm because they are only trustees of these deposits and they have to return the amount. In the event of death of a partner or in the event of dissolution of partnership the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal have a right to recover this amount either from the partners of the firm or from their properties. Their right to recover the amount is not lost in any manner.
36. If the deposit made by the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal is misapplied or misappropriated, the firm itself is liable for such acts. It is a joint and several liability of the partners of the firm to protect the deposits from being wasted and to return the same as and when the depositors want it to be returned. The creditors or depositors of the firm, respondents Nos. 3 to 5 or anybody claiming through late Aditya Prakash Agarwal might not have a right to take the accounts from the firm but they have the right to withdraw the deposits or issue directions with respect to the application of their deposits in a manner they like. As creditors and depositors the respondents Nos. 3 to 5 and late Aditya Prakash had an authority to permit blending of their deposits with the partnership firm but such an authority is not set up by the plaintiff nor is there any material or proof of. pleading in this regard. If there was a change in the constitution of the firm, as creditors the res-podents Nos. 3 to 5 and late Aditya Prakash had an option to keep the deposits with the new firm, if reconstituted.
37. Section 20 of the English Partnership Act explains as to what is the partnership property. Section 20 is couched in the same language in which Section 14 of our Partnership Act is couched. Proviso added to Section 14 is contained in Section 21 of the English Partnership Act. If the property is purchased from the funds of the firm it is immaterial if it was purchased by all the partners or by one partner. The sine qua non of making such partnership property would be as to whether the property was purchased from the funds of the partnership. If it is not so purchased it cannot be said to be the property of the firm.
38. The respondents Nos. 3 to 5 and late Aditya Prakash Agarwal as depositors and the same position as is given to the creditors of the firm because to their credit some amount stood entered in the firm which the firm was to hold in trust for them. As creditors they might have no lien on the property of the firm but they had definite a lien on their deposits which could not be appropriated by the firm without authority of the depositors.
39. As regards the creditors, according to Lindley on Partnership Fifteenth Edition, it has been seen that dissolution of the partnership whether general or partial does not discharge any other partners from liability incurred by them previously to the time of dissolution. That in order that a part of firm is wholly or partially dissolved may be free from liability to a person who was a creditor of the firm, at the time of its dissolution. Such creditor must either have been paid or satisfied or must have released or discharged the late partner or have accepted some fresh obligation in lieu of that which existed when the firm was dissolved.
40. Lindley in his Treatise on Partnership (Fifteenth Edition) has said the following in respect of trust money.
"Although firm is not liable to make good trust money applied to its use by one of its members in breach of the trust reposed in him, unless the firm can be implicated in the breach of trust, this doctrine will not preclude a cestui que trust from following his own money into the hands of the firm, and demanding it back if he can show that the firm still has it, and the firm did not come by it by purchase for value without notice. The true owner of money traced to the possession of another has a right to have it restored, not because it is a debt but because it is his money His right is incidental to his ownership, and whether the money is traced to the hands of a single individual or to the hands of a firm is wholly immaterial"
41. If the money of the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal is accepted by the firm as deposit it has im-pliedly accepted their right to apply the said deposit at their discretion and withdraw the said deposit by the said persons at their option. If the partners of the firm use their money in any manner or appropriate this amount for their own use that may render them liable criminally also. The partners being the trustees of the said amount cannot apply the amount in disregard of the directions and the wishes of the depositors, who are the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal.
42. When the property was purchased, admittedly the vendor was paid the entire amount of consideration. Therefore, the sale cannot be said to be a sham transaction. On facts it cannot be said to be benami because it is not purchased with the money of the firm in the name of benamidars. On the other hand, it is proved that it is purchased by the deposits made by the respondents Nos. 3 to 5 and tate Aditya Prakash Agarwal. They having paid the consideration from their own deposits, which were lying in the firm, cannot be treated as benamidars. For benami transaction consideration for the sale should have been paid by the partners of the firm and not by the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal. Therefore the learned counsel for the parties are not right in saying that the property was purchased benami or it was a sham transaction. Both sides have some misconception about this aspect of the case. On facts it is established that the funds which were paid as consideration amount far the share of the respondents Nos, 3 to 5 and late Aditya Prakash Agarwal belonged to them and it was a deposit lying with the firm. From that deposit consideration amount was paid and not from any amount of the firm. Therefore, if the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal have paid the consideration amount, they cannot be termed as benamidars. For being benamidar consideration is to be paid by the real owner. In this case the consideration is paid by the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal from their own funds which were in deposit with the firm. Therefore, they cannot be termed as benamidars for the partners of firm in respect of the suit property. So far as the respondents Nos. 1 and 2 and the plaintiff is concerned, they have paid the consideration from the amount which was lying at their credit. They can say that the amount lying in credit for the partners of the firm was partnership fund but the same is not true with regard to the amount which was deposited by the respondents Nos, 3 to 5 and late Aditya Prakash Agarwal.
43. It was also argued that Smt. Saran Kumari had a chain of litigation with the partners of the firm which was later on compromised and agreement of sale was executed in respect of the part of the property in favour of the defendant No. 1 and thereafter the litigation was compromised and Smt. Saran Kumari transferred the entire property to the seven vendees, to which the plaintiff and respondents and late Aditya Prakash Agarwal have become owners in equal shares. She has received the full consideration of Rs. 1,80,000/- and the parties have also spent Rs. 26,000/- on the registration and stamps on the sale deed. The total cost incurred by them (vendees) comes to little over Rs. 2,06,000/-. There is no dispute about these facts, between the parties. The only dispute between the parties was with regard to the source of payment of consideration amount to the vendor.
44. Since I have already held that the consideration amount was paid by each vendee individually from their own fund i.e. the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal had paid the consideration amount from the deposit which they had made with the firm and the partners of the firm are also said to have paid the consideration from the fund lying at their credit in the partnership account. Therefore, the share of the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal was not purchased from the partnership fund nor was the consideration amount paid by the firm for the purchase of the share of the said respondents. Therefore, the sale deed cannot be treated as sham or benarai so far as the respondents Nos. 3 to 5 and late Aditya Prakash Agarwal is concerned. The conclusions drawn by the court below are confirmed as the said conclusions are sound in law and based on facts. There is no error in the judgment and decree of the court below. The plaintiff is not entitled to get more than 1/7th share from the suit property, of course late Aditya Prakash Agarwal's share is to fall on his legal representatives who are the respondents Nos. 3 to 5 and respondent No. 1.
45. For the reasons discussed above I do not see any force in this appeal, which is hereby dismissed. However, there will be no order as to costs. The interim order, if any, shall stand vacated.
46. Appeal dismissed.