Karnataka High Court
Nimbanna vs Shivananda Kinnal on 7 February, 2017
Author: S.Sujatha
Bench: S.Sujatha
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 7TH DAY OF FEBRUARY, 2017
BEFORE
THE HON'BLE MRS.JUSTICE S.SUJATHA
R.F.A.No.100023/2016
BETWEEN :
SRI NIMBANNA
S/O LATE CHANDRAPPA
AGE: 59 YEARS,
OCC: AGRICULTURIST
R/O HAGARIBOMMANAHALLI
DIST.: BALLARI-583224. ...APPELLANT
(BY SRI HANUMANTHAREDDY SAHUKAR, ADV.)
AND :
1. SRI SHIVANANDA KINNAL
S/O THOTAPPA KINNAL
AGE: 61 YEARS, OCC: ADVOCATE
R/O BASAVESHWARA LAYOUT,
NEAR COLLEGE ROAD,
HOSAPETE
DIST: BALLARI-583201.
2. SRI S.DODDA NINGAPPA
S/O LATE CHANDRAPPA
AGE: 40 YEARS, OCC: TRADER
R/O DOOR NO.77, WARD NO.2,
BLOCK-I, HAGARIBOMMANAHALLI
DIST: BALLARI - 583224. ...RESPONDENTS
(BY SRI NAGARAJ J. APPANNANAVAR & SRI L.T.MANTAGANI,
ADVS. FOR R-1; R-2 SERVED.)
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THIS R.F.A. IS FILED UNDER SECTION 96 R/W ORDER 41
RULE 1 OF CPC, AGAINST THE JUDGMENT AND DECREE
DATED 16.11.2015 PASSED IN O.S.NO.556/2014 ON THE FILE
OF THE PRINCIPAL SENIOR CIVIL JUDGE AND JUDICIAL
MAGISTRATE FIRST CLASS, HOSAPETE, ALLOWING I.A.NO.5
FILED UNDER ORDER 7 RULE 11 OF CPC.
THIS APPEAL HAVING BEEN RESERVED FOR ORDERS ON
12.01.2017, COMING ON FOR PRONOUNCEMENT OF
JUDGMENT, THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
JUDGMENT
This appeal is directed against the Judgment and decree passed by the Prl. Senior Civil Judge and JMFC, Hospet on IA-V in O.S.No.556/2014 whereby the plaint is rejected as barred by law.
2. For the sake of convenience, the parties are referred to as per their ranking in the trial Court.
3. Briefly stated the facts are, the plaintiff filed a suit in O.S.No.556/2014 before the trial court against the respondents for declaration, declaring that the joint, right and possession of defendant No.1 in the schedule mentioned properties as null and void and restraining the defendants, their men, agents, servants, assignees -3- and all such other persons claiming under or through them from in any manner interfering with the exclusive sole ownership of the plaintiff and his joint family of the schedule properties and any dealings with them in the capacity as the sole owner. In the said proceedings, defendant No.1 filed IA-V under Order VII Rule 11 r/w Section 151 of Code of Civil Procedure seeking rejection of plaint alleging that the suit is hit by the provisions of the Benami Transaction (Prohibition) Act, 1988, ('Act' for short). The plaintiff had filed objections to the said application. The trial Court after considering the arguments advanced by the learned counsel for the parties and appreciating the material on record, allowed IA-V rejecting the plaint. Aggrieved by the same, the plaintiff is in appeal.
4. Sri Hanumanthareddy Sahukar, learned counsel appearing for the appellant would contend that the trial court without properly considering the entire -4- averments in the plaint only relying upon paragraphs 8, 11 and 13 of the plaint had wrongly come to the conclusion that plaint averments are hit by the provisions of the Act. The trial Court failed to observe that IA-V filed by defendant No.1 for rejection of plaint is not maintainable. The contention raised in the application requires to be considered on the merits of the suit which requires evidence. The trial Court ought not to have allowed the application IA-V and proceeded with the suit as the same required full-fledged trial and it is settled principle that to reject the plaint under Order VII Rule 11 of CPC, it is only the plaint averments which are required to be looked into and not the defence taken in the written statement. The entire averments in the plaint does not disclose the alleged benami transaction, in the absence of the same, it was not proper for the trial Court to reject the plaint on assumptions and presumptions to hold that it was hit by the provisions of the Act. It was contended that the -5- status of defendant No.1 was only in the nature of legal advisor and in the said clear position he stands only in the fiduciary capacity and however, he being only a trustee, such position exempts the applicability of the Act, which was not properly appreciated by the trial Court. In support of his contention, learned counsel placed reliance on the following Judgments:
1. Vaish Aggarwal Panchayat -v- Inder Kumar and others reported in 2015 SAR (CIVIL) 1151;
2. Smt.M.Printer and others -v- Marcel Martins reported in ILR 2002 KAR 3757;
3. R.K.Roja -v- U.S.Rayudu and another in Civil Appeal No.5540/2016 DD 4.7.2016
5. Per contra, learned counsel appearing for respondent No.1/defendant No.1 supports the impugned Judgment and decree. Learned counsel submits that plaintiff has filed the suit against defendants for declaration of joint possession of -6- defendant No.1 in the plaint schedule properties are null and void. It is the claim of the plaintiff that suit properties belongs exclusively to him and his family. It is the contention of the plaintiff that the suit property has been purchased by him in the name of defendants which amounts to benami transaction, prohibited in law. The claim of the plaintiff is prohibited by the Act and plaint is liable to be rejected.
6. Learned counsel placing reliance on Order VII Rule 11(1)(d) of CPC submits that the plaint averment being clear, discloses the benami transactions of the plaintiff, that the 1st defendant was the legal advisor and only a name lender, establishes the factum of benami transaction which is bad in law. These aspects were considered by the trial court in a right perspective while allowing IA-V, rejecting the plaint. Thus, he seeks for dismissal of the appeal.-7-
7. Heard the learned counsel for the parties and perused the material on record. The only point that arises for consideration in this appeal is, whether the trial Court was justified in rejecting the plaint for the reason that the suit is barred by the Benami Transaction (Prohibition) Act, 1988 ?
8. It is trite law that plaint under Order VII Rule 11 can be rejected only on the basis of the plaint averments and not on allegations made by the defendant in his written statement or on the basis of the allegations in the application for rejection of the plaint.
Keeping the said well settled legal propositions in mind, the plaint averments are examined which is part of the appeal papers.
9. Para 3 of the plaint discloses that the plaintiff has earned the money with his hard labour and being the eldest son of the joint family, taken care of his brothers and sisters in bringing them up by providing -8- education and performing marriage of his sister. He had worked in different capacities including as a conductor in KSRTC. He was compelled to resign from the said job to materialize the sale deed of the schedule property. It was at that stage the 1st defendant approached as being an advocate financing for MVC and LAC cases proposed to finance sale transaction also with respect to the suit properties; paragraph 4 of the plaint discloses that the 1st defendant was acquainted with the family of the plaintiff as legal advisor since the time of engaging him as a counsel to the plaintiff's uncle in a litigation; paragraph 5 of the plaint averments are, the plaintiff was a sole earning member of the joint family. The plaintiff's family was totally poverty striken and was making the living just on meager income generated in soda business carried on by the plaintiff; paragraph 6 of the plaint averments are, the plaintiff approached the defendant No.1 who was a family legal advisor for legal advise and his services being fixed for a -9- fat fee payable to him; in paragraph 7, it is averred that initially conversion and layout proposals were moved, which did not materialize and at that stage, the plaintiff suggested that he could augment funds and accordingly, he invested his hard earned money in the schedule property, no part of the investment for improvement flowed from the 1st defendant; in paragraph 8 of the plaint, it is averred that the 1st defendant prevailed upon the plaintiff to enter his name in the relevant sale deeds. On his advise, the plaintiff got the sale deeds registered jointly in the name of the 2nd defendant, a minor at that time, who is none other than his brother and defendant No.1. Thus, it was only a security for his service that led to implead the 1st defendant in the sale deeds relating to schedule properties jointly with the 2nd defendant; Similarly in paragraphs 9 and 10, it is averred that when it came for investing huge funds for forming layout, then also, 1st defendant refused to part with any funds and this led to
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a situation in augmenting funds by selling some properties in Sy.No.180 C/1 and 180 C/2 etc., which was agreed and endorsed on the rear side of the sale deeds by defendant No.1. It is averred that the total improvement by expending huge amounts by the plaintiff leads to the conclusion that 1st defendant's name is only sham and nominal. Thus, it is contended that defendant No.1 was involved only to get the provisional certificates and not to hold any joint rights. In paragraph 11, it is further contended that no contribution, in any manner, was offered by the 1st defendant towards the sale price or development, leads to the conclusion that he does not deserve right in the schedule properties. Thus, plaint averments clearly establishes that the plaintiff is claiming to be the investor for the suit properties investing his hard earned money on the said properties. It is not even the case of the plaintiff that his joint family funds are invested for the purpose of purchasing the properties, on the other
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hand, it is the case of the plaintiff that it is his own investment. It is also clearly contended that defendant No.1 has not invested any amount to purchase the said properties. Defendant No.1 was included as a joint owner in the sale deeds only in a fiduciary capacity to act as a legal adviser and not as a owner. Thus, the plaintiff is claiming exclusive right over the suit properties being purchased by him in the name of defendant No.1 as a legal advisor and defendant No.2, his brother, who was a minor at that time.
10. These plaint averments makes it manifestly clear that the transaction is benami in the light of the provisions of the Act. At this juncture, it is apt to refer to Sections 3 and 4 of the Act, which runs thus:
"Sec.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
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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.
4. Notwithstanding anything contained in the Cr.P.C. 1973 (2 of 1974), an offence under this Section shall be non cognizable and bailable.
Sec. 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
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allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property.
3. Nothing in this section shall apply,
a) Whether 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 coparcener 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."
11. Section 3 contemplates prohibition of benami transactions, whereas Section 4 contemplates prohibition of the right to recover property held benami. This transaction, if examined in the light of Sections 3 and 4 of the Act, what could be inferred is the plaintiff had invested in the transaction as a benami. Order VII Rule 11(1)(d) of CPC provides that where the suit appears from the statement in the plaint to be barred by
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any law, the plaint shall be rejected. The averments of the plaint itself clearly establishes that the suit is barred by the Act. Thus, the rejection of the plaint by the trial Court cannot be found fault with. The judgments referred to by the appellant are rendered in a different context which are not applicable to the facts of the present case.
12. In the case of Vaish Aggarwal (supra), the Hon'ble Apex Court while considering the suit filed by the plaintiff for a decree of separate possession of agreement of sale in respect of the land, held that the allegations in the plaint are absolutely different. The question was whether suit could be dismissed as barred by limitation. It was observed that the question of limitation is a mixed question of fact and law and exfacie reading of the plaint, it could not be held that suit was barred by time and it was further observed that a finding has been recorded by the High Court accepting
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the plea taken in the written statement. In the factual matrix of the case therein, there should have been a trial with regard to the issues framed.
13. In the case of R.K.Roja (supra), the Hon'ble Apex court had taken the view that the application under Order VII Rule 11 CPC "was not filed at earliest opportunity" and that the appellant was not diligent in prosecuting the application. In that context, it was held that the application under Order VII Rule 11 CPC could be filed at any stage but the only restriction is that the consideration of the application for rejection should not be on the basis of the allegations made by the defendants in their written statement. The court has to consider the plaint as a whole.
14. In the case of Smt.M.Printer and others (supra), this Court has held that first and foremost requirement is that the property should have been transferred in the name of a person for
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consideration paid or provided by another person. In other words, the consideration for the transaction should not have flown from the person in whose name the property is purchased. If the person in whose name the property is purchased also has contributed suitably in purchase of the property in his name along with others, whose name is not reflected in the sale deed, it would not amount to benami transaction as defined under the Act. Secondly, the object of such purchase, viz., whether the property is purchased in the name of a person with the intention of evading public revenue and where there is any dishonesty in not mentioning the name of real contributors of the fund for the purchase of the properties is to be looked into. In the context of the case that defendant had taken a stand that the entire consideration was for the purchase of the property in his name was provided by him and the plaintiffs have not contributed any amount towards sale consideration, having taken such a specific plea and
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having failed in proving the said plea, the defendant would be estopped from contending that in the event the Court comes to the conclusion that plaintiffs have contributed to the purchase of schedule property in the name of defendant, such transaction is hit by the Act. Hence, the said Judgment is not applicable to the facts of the case on hand.
15. In the light of the Judgments referred to above, coupled with the plaint averments read with under Order 7 Rule 11(1)(d) of CPC and the provisions of the Act, this Court is of the considered opinion that the suit filed by the plaintiff is hit by the provisions of the Act and requires to be rejected as barred by the provisions of the Benami Transaction (Prohibition) Act, 1988. The plaint averments exclusively reflects that the suit is barred by law. There is no prohibition in rejecting the plaint at the threshold sans going into the ordeal of
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trial. No infirmity or irregularity found in the impugned Judgment and decree.
Appeal stands dismissed.
Sd/-
JUDGE ln.