Merely giving financial assistance by father to sons to purchase properties it could not be said to benami transaction – SC
ABCAUS Case Law Citation:
ABCAUS 2872 (2019) (04) SC
Important Case Laws Cited/relied upon by the parties
Thakur Bhim Singh v. Thakur Kan Singh (1980) 3 SCC 72
Binapani Paul v. Pratima Ghosh (2007) 6 SCC 100
Jaydayal Poddar v. Bibi Hazra SCC
The appellant was aggrieved and with the impugned judgment of the High Court by which the High Court had dismissed the appeal preferred by the original plaintiff and confirmed the judgment and decree passed by the trial Court.
The original plaintiff and the original defendants (both represented by legal heirs) were the sister and brothers and the daughter and sons of the father who had died. The Original Suit was instituted for partition and for recovery of 1/4th share of the plaintiff in the plaint scheduled properties.
It was the case on behalf of the original plaintiff that her late father was an Estate Agent and he was doing money lending business in his name and also in the names of his sons and he was purchasing properties in the names of his sons, though his father was funding those properties.
However, it was the case of the original defendants that the plaint schedule properties were exclusively owned by the defendants in their individual rights.
The Trial Court noted that there was an additional issue as to whether the claim of the plaintiff barred by Section 2 of the Benami Transaction (Prohibition of Right to Recover Property) Ordinance, 1988 as alleged?
The Trial Court dismissed the suit by holding that the properties were not the self acquired by the deceased father.
Aggrieved, the the original plaintiff preferred an appeal before the High Court. The High Court set aside the judgment and decree passed by the learned trial Court holding that all though the properties were in the names of the original defendants, the transactions, in question, were benami in nature and in that view of the matter, the plaintiff had inherited 1/4th share therein.
Feeling aggrieved and dissatisfied with the judgment and order passed by the High Court, the legal representatives of the original defendants approached the Hon’ble Supreme Court.
The Hon’ble Supreme Court had remitted the matter back to the High Court observing that the High Court had not properly appreciated and/or considered whether the transaction in question was benami or not.
On remand, the High Court, by the impugned judgment dismissed the appeal by specifically observing that the purchase/transaction in favour of defendant with respect to the suit schedule properties were not the benami transactions and that they were the self acquired properties of defendants and, therefore, the plaintiff was not entitled to any share in the suit schedule properties.
The High Court further observed and held that the provisions of the Benami Transactions (Prohibition) Act, 1988 are retroactive in application.
Aggrieved with the impugned judgment of the High Court, the original plaintiff (since deceased and represented through the legal heirs) had preferred appeal in the Hon’ble Supreme Court.
According to the Hon’ble Supreme Court, the question to be decided was whether in the facts and circumstances of the case and merely because some financial assistance had been given by the father to the sons to purchase the properties, can the transactions be said to benami in nature?
The Hon’ble Supreme Court observed that as held in past, while considering a particular transaction as benami, the intention of the person who contributed the purchase money is determinative of the nature of transaction. It was further observed as to what the intention of the person who contributed the purchase money, has to be decided on the basis of the surrounding circumstance; the relationship of the parties; the motives governing their action in bringing about the transaction and their subsequent conduct etc.
It was noted that the Hon’ble Supreme Court had an occasion to consider the nature of benami transactions. After considering a catena of decisions of on the point, the Court observed and held that the source of money had never been the sole consideration. It is merely one of the relevant considerations but not determinative in character.
It was further observed that the Court had laid down the following six circumstances as a guide while considering whether a particular transaction is benami in nature:
(1) the source from which the purchase money came;
(2) the nature and possession of the property, after the purchase;
(3) motive, if any, for giving the transaction a benami colour;
(4) the position of the parties and the relationship, if any, between the claimant and the alleged benamidar;
(5) the custody of the title deeds after the sale; and
(6) the conduct of the parties concerned in dealing with the property after the sale.
Applying the above law, the Hon’ble Supreme Court opined that the High Court had rightly come to the conclusion that the plaintiff has failed to prove that the purchase of the suit properties in the names of defendant were benami in nature.
The Hon’ble Supreme Court observed that it was true that, at the time of purchase of the suit properties, some financial assistance was given by Late father. However, as observed in the earlier decisions, that cannot be the sole determinative factor / circumstance to hold the transaction as benami in nature.
The Hon’ble Supreme Court pointed out that the plaintiff had miserably failed to establish and prove the intention of the father to purchase the suit properties for and on behalf of the family, which were purchased in the names of defendant. The plaintiff – daughter had not stepped into the witness box and that the evidence on behalf of the plaintiff had been given by her husband who, as such, can be said to be an outsider, so far as the joint family is concerned.
Also, it was noted the plaintiff and her husband were maintained by Late father. The financial assistance was also given to the plaintiff and her husband to purchase the residential house. Thus, the late father provided a shelter to his daughter and also gave the financial assistance to purchase the residential house. He even purchased the share certificates and his daughter (original plaintiff) was also given certain number of shares.
The Hon’ble Supreme Court opined that considering the facts and circumstances of the case, as above the late father also must have given the financial assistance to defendants sons and helped them purchase the properties. Therefore, his intention to give financial assistance to purchase the properties in the names of defendant cannot be said to be to purchase the properties for himself and/or his family members and, therefore, the transactions cannot be said to be benami in nature.
The Hon’ble Supreme Court was of the view that the intention was to provide financial assistance for the welfare of his sons and not beyond that. None of the other ingredients to establish the transactions as benami transactions, as laid down by the Court were satisfied, except that some financial assistance was provided.
Accordingly, the Hon’ble Supreme Court held that the purchase of the suit properties in the names of defendant could not be said to be benami transactions and, therefore, as rightly observed and held by the trial Court and confirmed by the High Court, the plaintiff had no right to claim share in the suit properties which were purchased by the sons in their names by separate sale deeds.
The appeal was accordingly dismissed.