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PETITIONER: OM PRAKASH AND ANR.

       Vs.

RESPONDENT: JAI PRAKASH

DATE OF JUDGMENT09/01/1992

BENCH: KASLIWAL, N.M. (J) BENCH: KASLIWAL, N.M. (J) JEEVAN REDDY, B.P. (J)

CITATION:  1992 AIR  885            1992 SCR  (1)  15  1992 SCC  (1) 710        JT 1992 (1)    81  1992 SCALE  (1)4

ACT:      Benami  Transaction (Prohibition) Act,  1988-Section  4 read  with  Article  136, Constitution  of  India,  1950-SLP pending before the Supreme Court, Whether amounts to  appeal pending-Suit based on benami transaction instituted prior to the coming into force of the Act, whether barred.      Benami Transaction (Prohibition) Act, 1988-section 4-" Shall  lie", "Shall allow" and "any property  held  benami"- Construction of.      Code of Civil Procedure, 1908-order 6,  Rules 1, 2,  7- Pleading-Written  statement-Question  of  applicability   of section  49 of the U.P.  Consolidation of Holdings  Act  not averred-Whether such plea can be taken later on appeal.

HEADNOTE:      The defendant-appellant No. 1 and  plaintiff-respondent were brothers and defendant-appellant No. 2 was the wife  of appellant No. 1.      The  appellant  No. 1 was in  Government  service  ever since 1953.  The plaintiff-respondent was looking after  the entire agricultural property in the village.      Partition was effected during consolidation proceedings and entered in the revenue records and chaks were carved out in  accordance  with  the  share  of  the  parties  in   the consolidation proceedings.      During  the  consolidation  operation,  the  plaintiff- respondent  did not raise any dispute that he was  owner  of the  entire property and the names of  defendants-appellants were wrongly mentioned as benami.      Later,  the  plaintiff-respondent filed a suit  on  the ground that the suit-land was purchased by him alone through 4  sale  deeds  dated  10.6.1968,  21.6.1968,17.1.1976,  and 23.6.1977  wherein  the names of  the  defendants-appellants were included only as benamidar and he was the real owner of the land.      The defendants-appellants contended that they had  paid their part                                                   16 of the sale consideration and the land was jointly purchased in the name of both the parties.      The  trial  court dismissed the suit holding  that  the

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names  of the defendants-appellants in the sale  deeds  were not   mentioned  as  benamidars  and  that  the   plaintiff- respondent  did not take any objection in the  consolidation proceedings.      When  the plaintiff-respondent filed an  appeal  before the  first  appellate court, it reversed  the  judgment  and decree of the trial court and decreed the suit in favour  of the plaintiff-respondent.      The  second appeal filed by  the  defendants-appellants was  dismissed  by the High Court.  The defendants  filed  a special leave petition before this Court on 15th March 1988.      During  the pendency of the special leave petition  the Benami  Transactions  (Prohibition of the Right  to  Recover Property) Ordinance,1988 was promulgated on 19.5.1988.      The  ordinance was replaced by the Benami  Transactions (Prohibition)  Act,  1988, which  received  the  President’s assent on 5.9.1988.      The  defendants filed an application  on  1.5.1989  for allowing  them to take additional grounds made available  on the basis of the aforesaid ‘Benami Act’.      Thereafter  special  leave was granted by  order  dated 21.8.1989  and  the  parties  were  given  liberty  to  file additional documents, if any, within four weeks.      The defendants-appellants contended that the suit filed by the plaintiff-respondent was not maintainable and  barred under Section 49 of the U.P.  Consolidation of Holdings Act, 1954  as  the  point regarding the land  in  question  being benami  was never raised by the plaintiff-respondent  during consolidation  proceedings and the chaks were allowed to  be recorded in the name of the defendant-appellants.      The plaintiff-respondent contended that if the ratio of Mithilesh Kumari’s case, JT. 1989(1) SC 275, was applied, it could  be  made available only in a case  where  appeal  was pending before the higher  Court and that no advantage could be  taken by the defendants-appellants, of Section 4 of  the Benami  Act, as no appeal was pending on the date  when  the Benami Act came into force.                                                   17      On  the question, whether any suit relating  to  benami transactions  can be decreed after the coming into force  of the  Benami  Act,  this Court, allowing the  appeal  of  the defendants,           HELD  :  1.01. In a suit for  recovery  of  benami property if any appeal is pending on the date of coming into force  of  Section  4, the appellate  court  can  take  into account the subsequent legislative changes. [20C]      1.02.  The   Law  Commission’s  view  was   that   the legislation replacing the ordinance should be  retrospective in  operation and that no locus penitentia need be given  to the persons who had entered in the benami transaction in the past. [20G]      1.03.  In the present case the defendants, having  lost in High Court, could have approached this Court only through a special leave petition under Art. 136 of the  Constitution and  it is only after the grant of such special  leave  that the  appeal could be heard.  Though the special leave  might have  been granted subsequently on 21.8.89 but it is a  fact that  the Judgment and decree of the High Court had  already been  challenged by the defendant-appellants, and it  cannot be said that no appeal was pending before this Court  simply on  the ground that only special leave petition was  pending when the Benami Act came into force. [21C-E]      1.04.  An appeal is a  continuation of suit and in  the present case, the appeal was pending before this Court.  The suit  had  been filed by the  plaintiff-respondent  claiming

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that he was the real owner of the property and the names  of the defendants-appellants were mentioned in the saledeeds as benami. [21E-F]      1.05.   Section  4  of  the  Benami  Act  is  a   total prohibition against any suit based on benami transaction and the  plaintiff-respondent is not entitled to get any  decree in such suit or in appeal. [21F]      Mithilesh  Kumari  and Anr. v Prem behari  Khare,  J.T. 1989 (1) S.C. 275, referred to .      2.01.  The expression "shall lie" in Section  4(1)  and "shall  allow"  in  Section  4(2)  of  the  Benami  Act  are prospective  and shall apply to present (future stages)  and future suits, claims or actions only. [20B]      2.02. The expression "any property held benami" is  not limited to any particular time, date or duration. [20C]                                                   18      3.  No foundations were laid in the  written  statement nor  any issue was raised by the  defendants-appellants,  on the  question  of  applicability of Section 49  or  th  U.P. Consolidation  of Holdings Act.   The  defendants-appellants cannot be allowed to take such plea. [19H-20A]

JUDGMENT:      CIVIL APPELLATE JURISDICTION: Civil Appeal no. 3552  of 1989.      From  the  Judgment  and order dated  24.11.87  of  the Allahabad High Court in Second Appeal No. 2719 of 1987.      J.P. Goyal, R.C. Verma, M.R. Bidsar and K.K. Gupta (NP) for the Appellants.      O.P. Rana and Girish Chandra for the Respondent.      The Judgment of the Court was delivered by      KASLIWAL,  J. This appeal by special leave is  directed against   the  Judgment  of  Allahabad  High   Court   dated 24.11.1987.   The plaintiff-respondent filed a suit  on  the ground  that the land purchased through 4 sale  deeds  dated 10.6.1968, 21.6.1968, 17.1.1976 and 23.6.1977 were purchased by  him alone and he was the real owner of said  land.   The name of the defendants/appellants were included in the  said sale  deeds  only as benamidar.   The  defendants-appellants took  the  plea that they had paid their part  of  the  sale consideration and the land was jointly purchased in the name of  both the parties.  It may be noted that  the  defendant- appellant  Om Prakash and plaintiff-respondent  Jai  Prakash are brothers and defendant-appellant NO. 2 Smt. Satyawati is the  wife  of appellant Om Prakash.  It has come  on  record that  the  appellant  NO. 1 Om  Prakash  was  in  Government service  ever  since 1953 and the  plaintiff-respondent  was looking  after  the  entire  agricultural  property  in  the village.   Consolidation proceedings also took place in  the village and during the consolidation operation partition had been  effected  in the revenue records and  chaks  had  been carved  out  in  accordance with the share of  the  parties. At  that  time  no  dispute was  raised  by  the  plaintiff- respondent that he was owner of the entire property and  the names  of  defendants-appellants were wrongly  mentioned  as benami.      The learned trial court arrived at the conclusion  that the  names  of the defendants-appellants in the  sale  deeds were  not mentioned as benamidars and further held that  the claim  of the plaintiff-respondent could not be accepted  as no  objection  had  been  taken  by  him  even  during   the consolidation  proceedings.  The suit as such was  dismissed by  the  trial  court  by  Judgment  dated  24.1.1987.   The

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plaintiff aggrieved against the judgment of                                                   19 the trial court, filed an appeal.  The first appellate court reversed  the  Judgment and decree of the  trial  court  and decreed  the  suit in favour of the plaintiff.   The  second appeal  filed  by the defendants was dismissed by  the  High Court.   The defendants aggrieved against the  Judgment  and decree of the High Court filed special leave petition before this Court on 15th March, 1988.  During the pendency of  the special leave petition, the Benami Transactions (Prohibition of  the  right  to recover  property)  Ordinance,  1988  was promulgated  by  the President of India  on  19.5.1988.  The said  ordinance  was  replaced by  the  Benami  Transactions (Prohibition)  ACt,  1988 (Hereinafter  called  the  ‘Benami Act’). The Act received the assent of the President of India on  5.9.1988.   The  defendants  filed  an  application   on 1.5.1989  for allowing them to take additional grounds  made available  on  the  basis of  the  aforesaid  ‘Benami  Act’. Thereafter special leave was granted by this court by  order dated 21.8.1989 and it was directed that printing of  record is  dispensed with and appeal will be heard on  the  special leave petition paper books.  The parties were given  liberty to  file additional documents if any within four  weeks  and the  appeal  was  directed to be listed  on  13.12.1989  for hearing.   Pending disposal of the appeal, the parties  were directed to maintain status quo as existing on that day.      In   the  above circumstances, the matter came  up  for hearing before us.      Though  there  is  no specific  order  of  this   Court allowing  the  application  dated  1.5.1989  filed  by   the appellants for raising additional grounds, the same shall be deemed  to have been allowed as the special  leave  petition was granted subsequently on 21.8.1989 after hearing both the parties.  In any case, we further make it clear that we  had permitted  the  defendants/appellants  to  argue  additional grounds made available to them under the ‘Benami Act’, which admittedly  came into force after the filing of the  special leave petition in this Court.      Learned counsel appearing on behalf of the  defendants- appellants  had  contended  that  the  suit  filed  by   the plaintiff-respondent  was not maintainable and barred  under Section  49 of the U.P. Consolidation of Holdings Act,  1954 as the point regarding the land in question being benami was never    raised   by   the    plaintiff-respondent    during consolidation  proceedings and the chaks were allowed to  be recorded  in the name of the defendants-appellants.  So  far as this objection under Section 49 of the U.P. Consolidation of  Holdings Act is concerned, no foundations were  laid  in the  written statement nor any issue was raised.   The  High Court  was thus right in holding that in the facts  of  this case,  no foundation had been laid for the applicability  of Section 49 of U.P. Consolidation of Holdings Act. We see  no error in the order of the High Court in taking the aforesaid view and we also hold that the defendants-                                                   20  appellants cannot be allowed to take such plea for which no foundation was laid in the pleadings.      The next important and formidable question which arises for  consideration  is whether any suit relating  to  benami transactions  can be decreed after the coming into force  of the Benami Act.  This Court in Mithilesh Kumari and Anr.  v. Prem  Behari Khare, J.T. 1989 (1) SC 275, has  already  held that the expression "shall lie" in Section 4 (1) and  "shall allow"  in Section 4 (2) of the Benami Act  are  prospective and shall apply to present (future stages) and future suits,

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claims or actions only.  The expression "any  property  held benami"  is  not  limited to any particular  time,  date  or duration.  In a suit for recovery of benami property if  any appeal  is  pending  on the date of  coming  into  force  of Section  4,  the appellate court can take into  account  the subsequent legislative changes.  Section 4 of the Benami Act reads as under:-           "(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 the real owner of such property."      In  the case of Mithilesh Kumar this  Court  considered the  1/30th  report of the Law Commission submitted  to  the Government   on   August  14,   1988.   Benami   Transaction (Prohibition)  Bill,  1988  was drafted  after  getting  the report  and  the Bill was introduced in the Rajya  Sabha  on 31st  August,  1988 and then the Bill was passed.   The  Law Commission  devoted several pages to  justify  retrospective legislation and its view was that the legislation  replacing the  Ordinance  should  be retrospective  in  operation  and that  no locus penitentia need be given to the  persons  who had entered in the benami transaction in the past.   Learned counsel appearing for the respondent was unable to  convince us to take a different view from that already taken by  this Court in Mithiledsh kumari’s case.      It was  vehemently contended by the learned counsel for the plaintiff-respondent that even if the ratio of Mithilesh Kumari’s case is applied, it can be made available only in a case  where appeal was pending before the higher Court.   It was  contended that in the present case, only special  leave petition                                                   21 filed  on 15th March, 1988 was pending at the time when  the Benami  Act  came into force.  It was pointed out  that  the Ordinance  was promulgated on 19.5.1988 and the  Benami  Act received  the assent of the President on 5.9.1988.   It  was thus  contended that no appeal was pending on  19.5.1988  or 5.9.1988  as  the special leave was granted  much  after  on 21.8.1989  and  thus  no  advantage  can  be  taken  by  the defendants-appellants  of Section 4 of the Benami Act as  no appeal was pending on the date when the benami Act came into force.      We find no force in the above contention of the learned counsel   for  the  plaintiff-respondent.    Special   leave petition was filed against the Judgment of the High Court on 15.3.1988  and special leave was granted on 21.8.1989  after hearing   both  the  parties.   In  the  present  case   the defendants  having lost in High Court could have  approached this Court only through a special leave petition under  Art. 136   of the Constitution and it is only after the grant  of such  special leave that the appeal could be heard.   Though the  special leave might have been granted  subsequently  on 21.8.1989  but it is a fact that the Judgment and decree  of the High Court had already been challenged by the defendant- appellants and it cannot be said that no appeal was  pending before  this  Court simply on the ground that  only  special leave  petition  was pending when the Benami Act  came  into

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force.  There is a clear prohibition under Section 4 of  the benami  Act  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  against  any other person shall lie by or on behalf of a person  claiming to  be the real owner of such property.  It is well  settled that an appeal is a continuation of suit and in the  present case the appeal was pending before this Court.  There is  no manner  of dispute that the present suit had been  filed  by the  plaintiff-respondent  claiming that  he  was  the  real owner  of  the  property and the names  of  the  defendants- appellants  were mentioned in the sale deeds as benami.   In our view, Section 4 of the Benami Act is a total prohibition against  any  suit  based  on  benami  transaction  and  the plaintiff-respondent  is not entitled to get any  decree  in such suit or in appeal.      As  a  result of the above discussion,  we  allow  this appeal, set aside the Judgment and decree of the High  Court and dismiss the suit.  In view of the fact that the suit  is dismissed  on  account of legislative change  brought  about during the pendency of the appeal in this Court, there would be no order as to cost. V.P.R.                                       Appeal allowed.                                                   22