PETITIONER:
BHIM SINGH & ANR.
Vs.
RESPONDENT:
KAN SINGH(AND VICE VERSA)
DATE OF JUDGMENT21/12/1979
BENCH:
VENKATARAMIAH, E.S. (J)
BENCH:
VENKATARAMIAH, E.S. (J)
SHINGAL, P.N.
CITATION:
1980 AIR 727 1980 SCR (2) 628
1980 SCC (3) 72
CITATOR INFO :
RF 1981 SC 102 (33)
ACT:
Benami-What is-Tests for deciding benami transactions.
HEADNOTE:
Plaintiff no. 1 and plaintiff no. 2 were father and son
while defendant was the brother of plaintiff no. 1. The
plaintiffs in their suit against the defendant claimed that
the suit house in which the defendant was living, belonged
to them by virtue of a patta issued in their names. They
alleged that the deceased brother of plaintiff no. 1, who
remained a bachelor till his death, loved plaintiff no. 2 as
his son and had thought of adopting plaintiff no. 2 but
since he died all of a sudden it could not be done. The
defendant on the other hand claimed that he and his deceased
brother lived as members of a joint family after the
partition of their family that as a result of the joint
efforts of himself and his deceased brother the Maharaja, of
Bikaner sanctioned sale of the house to them, that the
purchase money was paid out of their joint income but that
the patta was granted in the names of the plaintiffs due to
political reasons and therefore the plaintiffs were at the
most benamidars.
The trial court held that the house was acquired by the
deceased brother from the Government of Bikaner for the
plaintiffs and the patta was granted in favour of the
plaintiffs and that they were in its possession till 1956.
It rejected the defendant’s claim that it was acquired with
the joint funds of himself and his deceased brother.
On appeal the High Court held that the house had been
purchased by the deceased brother out of his own money in
the names of the plaintiffs without any intention to confer
any beneficial interest on them and on his death plaintiff
no. 1 and the defendant succeeded jointly to the estate as
his heirs.
^
HELD: The transaction under which the patta was
obtained was not a benami transaction. The house was
acquired by the deceased brother with his money and with the
intention of constituting plaintiff no. 2 as the absolute
owner thereof. [648G]
Where a person buys 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. In that
case the transferee holds the property for the benefit of
the person who has contributed the purchase money and he is
a real owner. The second case which is loosely termed a
benami transaction is a case where a person, who is the
owner of the property, executes a conveyance in favour of
another without the intention of transferring the title to
the property thereunder. In this case the transferor
continues to be the real owner. The difference between the
two kinds of benami transactions is that whereas in the
former there is an operative transfer from the transferor to
the transferee, though the transferee holds the property for
the benefit of the person who has
629
contributed the purchase money, in the latter there is no
operative transfer at all and the title rests with the
transferor notwithstanding the execution of the conveyance.
One common feature in both cases is that the real title is
divorced from the ostensible title and they are vested in
different persons. The question whether a transaction is a
benami transaction or not depends upon the intention of the
person who has contributed the purchase money in the former
case, and upon the intention of the person who has executed
the conveyance in the latter case. The principle underlying
the former case is statutorily recognized in section 82 of
the Indian Trust Act, 1882. [638B-E]
Meenakshi Mills, Madurai v. The Commissioner of Income-
Tax, Madras, [1956] S.C.R. 691 at p. 722; Mohammad Sadiq Ali
Khan v. Fakhr Jahan Begam & Ors. 59 I.A. 1; Manmohan Das &
Ors. v. Mr. Ramdai & Anr. A.I.R. 1931 P. C. 175; Jaydayal
Poddar (deceased) through his L.Rs. & Anr. v. Mst. Bibi
Hazra & Ors. [1974] 2 S.C.R. 90 referred to.
2. The principles governing the determination of the
question whether a transfer is a benami or not are: (1) The
burden of showing that a transfer is a benami transaction
lies on the person who asserts that it is such a
transaction; (2) 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;
(3) the true character of the transaction is governed by the
intention of the person who has contributed the purchase
money and (4) the question as to what his intention was, has
to be decided on the basis of the surrounding circumstances,
the relationship of the parties the motives governing their
action in bringing about the transaction and their
subsequent conduct. [641C-E]
In the instant case the deceased brother was a
bachelor. On the death of the wife of plaintiff no. 1,
plaintiff no. 2 and his younger brother were staying with
the deceased brother. Plaintiff no. 1 was almost in an
indigent condition while defendant practised law for some
time and later entered into service. The patta for the house
was issued in the name of plaintiffs nos. 1 and 2 at the
request of the deceased brother for the benefit of plaintiff
no. 2 and was handed over to him after he completed his
education. This conduct of the deceased brother established
that it was his intention that, when he secured the patta
from the State Government in the names of plaintiffs it was
his intention that plaintiff no. 2 whom he loved, should
become the owner. [641F-H]
3. The declaration made by the deceased, who had
contributed the purchase money subsequent to the date of
purchase to the effect that the property belonged to
plaintiff no. 2 was admissible in evidence either under
section 32(3) or section 21 of the Indian Evidence Act to
prove his intention that he intended that plaintiff No. 2
should become its owner. [647E]
Shephard & Anr. v. Cartwright & Anr. [1955] A.C. 431,
distinguished.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 626 &
629 of 1971.
From the Judgment and Order dated 5-8-1970 of the
Rajasthan High Court in R.F.A. No. 31/60.
630
S. T. Desai and Naunit Lal for the Appellant.
P. R. Mridul, B. P. Sharma, Krishna Bhatt and R. K.
Bhatt for the Respondents.
The Judgment of the Court was delivered by
VENKATARAMIAH, J.-These two cross appeals by
certificate arise out of a suit for possession of a house
situate in Bikaner and for damages for use and occupation
thereof filed in Civil Original Case No. 17 of 1957 on the
file of the District Judge, Bikaner. The plaintiffs in the
suit are the appellants in Civil Appeal No. 626 of 1971 and
the defendant is the appellant in Civil Appeal No. 629 of
1971. The genealogy showing the relationship between the
parties is given below:-
Sur Singh
|
———————————————————–
| | | |
Gad Singh Bharat Singh Bhim Singh Kan Singh
| (Died in (P.I.) (Deft.)
| Sept. 1955) |
| |
———————– |
| | | |
Duley Dhaney Deep |
Singh Singh Singh |
|
|
—————–
Himmat Dalip
Singh Singh
(P.2.) (Died in
Sept. 56)
Gad Singh, Bharat Singh, Bhim Singh (plaintiff No. 1)
and Kan Singh (defendant) are the sons of Sur Singh. Bharat
Singh died unmarried in September, 1955. Gad Singh died
thereafter leaving behind him three sons, Duley Singh,
Dhaney Singh and Deep Singh. Dalip Singh, the second son of
plaintiff No.1 died in September, 1956. Bharat Singh and the
defendant were residing in the house which was the subject
matter of the suit. After the death of Bharat Singh, the
plaintiffs Bhim Singh and Himmat Singh filed the suit out of
which this appeal arises against Kan Singh, the defendant
for recovery of possession of the suit house and other
ancillary reliefs. In the plaint, they
631
pleaded that the suit house belonged to them by virtue of a
patta dated July 12, 1940 issued in their names; that the
defendant who was the brother of plaintiff No. 1 and uncle
of plaintiff No. 2 was living in a part of the house with
their consent; that plaintiff No. 2 and his younger brother
Dalip Singh were also living in the house till the year
1956; that the defendant had refused to receive a notice
issued by them in the month of September, 1957 calling upon
him to hand over possession of the house to the plaintiffs;
that the defendant had done so on account of personal ill
will and that the plaintiffs were, therefore, entitled to
recover possession of the suit house and damages from the
defendant. These were briefly the allegations made in the
plaint. On the above basis, the plaintiffs prayed for a
decree for the reliefs referred to above.
In the written statement, the defendant did not admit
the existence of the patta on the basis of which the
plaintiffs claimed title to the suit house. He denied the
allegation that the plaintiffs were the owners in possession
of the suit house. He claimed that he was the exclusive
owner of the suit house, and in support of the said claim
stated as follows:-
There was a partition amongst the sons of Sur Singh in
the year 1929. At that partition, Gad Singh and plaintiff
No. 1 became separated and they were given all the family
properties which were situated in their village, Roda. As
Bharat Singh and the defendant had been educated at the
expense of the family, they were not given any share in the
property. Bharat Singh and he settled in Bikaner and lived
together as members of joint Hindu family. Bharat Singh died
on September 2, 1955 leaving the defendant as a surviving
coparcener. On his death, the defendant became the owner of
the properties of Bharat Singh ‘as a member of joint Hindu
family’. He further pleaded that from the year 1928, Bharat
Singh and he who were working as the Aid-de-Camp and Private
Secretary respectively of the Maharaja of Bikaner were
living in the suit house which then belonged to the
Maharaja. The defendant filed an application for purchasing
the house. The proceedings had not terminated when the
defendant left the service of the Maharaja and went to
Banaras for higher studies. On his return from Banaras, he
joined the service of the Maharaja in the civil department
of Bikaner. After a long time on account of the joint
efforts of Bharat Singh and the defendant, the sale of the
house was sanctioned. Bharat Singh who was living jointly
with him paid the consideration for the sale on November 4,
1939 ‘out of the joint income.’ Thus according to the
defendant, Bharat Singh and he became its owners from the
date of payment of the consideration. He
632
further pleaded that ‘if the patta of the property had been
granted in the names of the plaintiffs due to some reasons,
political and other surrounding circumstances and for the
safety of the property, it cannot affect the right of the
defendant’. It was also stated that Bharat Singh and the
defendant had not executed any sale deed in favour of the
plaintiffs and so they could not become owners of the suit
house. In another part of the written statement, the
defendant pleaded thus:
“The plaintiffs have taken the entire ancestral
property of the village. Still they are harassing the
defendant due to avarice. The defendant and Thakur
Bharat Singh had been doing Government service. So
there was always danger or removal or confiscation of
the property. Even if Thakur Bharat Singh might have
written or given his consent for entering the names of
the plaintiffs in the patta in this view, it is not
binding. The plaintiffs are at the most ‘benami’ even
though the patta which is not admitted might be
proved.”
It is thus seen that the defendant put forward a two-
fold claim to the suit house-one on the basis of the right
of survivorship another on the basis of a joint purchase
along with Bharat Singh. Even though in one part of the
written statement, he declined to admit the existence of the
patta, in paragraph 13 of the written statement which is
extracted above, he put forward the plea that the plaintiffs
were at the most holding the property as benamdars. He,
however, did not claim that he was entitled to the property
as an heir of Bharat Singh alongwith plaintiff No. 1. and
Gad Singh who would have inherited the estate of Bharat
Singh on his death being his nearest heirs.
In the reply, the plaintiffs denied that the defendant
was entitled to the suit house as a surviving coparcener on
the death of Bharat Singh. They, however, pleaded that
plaintiff No. 1 had purchased the suit house out of his
income; that Bharat Singh used to love plaintiff No. 2 ‘as
his son’ and was thinking of adopting him but he died all of
a sudden and that the defendant had not disclosed in his
written statement the special political circumstances under
which the names of the plaintiffs were entered in the patta.
They denied that the defendant had any interest in the suit
house.
On the basis of the oral and documentary evidence
produced before him, the learned District Judge who tried
the suit held that Bharat Singh had secured the house from
the Government of Bikaner for the plaintiffs with their
money; that the patta of the house had been granted by the
Patta Court in favour of the plaintiffs; that the plaintiffs
were in possession of the suit house till September, 1956
and that the
633
defendant being their close relative was living in the house
not on his own account but with the plaintiffs’ permission.
The learned District Judge also held that the defendant had
failed to prove that the suit house had been acquired by him
and Bharat Singh with their joint fund. Accordingly he
decreed the suit for possession of the house in favour of
the plaintiffs and further directed that the defendant
should pay damages for use and occupation at the rate of Rs.
50 per month from September 20, 1956 till the possession of
the house was restored to them. Aggrieved by the decree of
the trial court, the defendant filed an appeal before the
High Court of Rajasthan in Civil First Appeal No. 31 of
1960. The High Court rejected the case of the plaintiffs
that the consideration for the house had been paid by Bharat
Singh out of the funds belonging to them and also the case
of the defendant that the house had been purchased by Bharat
Singh with the aid of joint family funds belonging to
himself and the defendant. The High Court held that the
house had been purchased by Bharat Singh out of his own
money in the names of the plaintiffs without any intention
to confer any beneficial interest on them. It further held
that the suit house belonged to Bharat Singh and on his
death, Gad Singh, plaintiff No. 1 and the defendant
succeeded to his estate which included the suit house in
equal shares. Accordingly in substitution of the decree
passed by the trial court, the High Court made a decree for
joint possession in favour of plaintiff No. 1. The rest of
the claim of the plaintiffs was rejected. Dissatisfied with
the decree of the High Court, the plaintiffs and the
defendant have filed these two appeals as mentioned above.
The principal issue which arises for consideration
relates to the ownership of the suit house. It is admitted
on all hands that though Bharat Singh and the defendant were
living in the suit house from the year 1928, it continued to
be the property of the Maharaja of Bikaner till the date on
which the patta (Exh. 4) was issued by the Patta Court of
Bikaner and that on the issue of the patta, the State
Government ceased to be its owner. It is also not disputed
that the patta constituted the title deed in respect of the
suit house and it was issued in the names of the plaintiffs
on receipt of a sum of Rs. 5,000. On January 11, 1930, the
defendant had made an application, a certified copy of which
is marked as Exhibit A-116 to the Revenue Minister of the
State of Bikaner making enquiry about the price of the suit
house on coming to know that the State Government intended
to sell it. After the above application was made, the
defendant left the service of the State of Bikaner and went
to Banaras for studies. Bharat Singh who was also an
employee of the State Gov-
634
ernment was working as the Aid-de-Camp of the Maharaja in
1939. At the request of Bharat Singh, an order was made by
the Maharaja on May 4, 1939 sanctioning the sale of the suit
house for a sum of Rs. 5,000. Exhibit A-118 is the certified
copy of the said order. Exhibit A-120 is a certified copy of
the order of Tehsil Malmandi showing that a sum of Rs. 5,000
had been deposited on behalf of Bharat Singh towards the
price of the suit house. It also shows that Bharat Singh was
asked to intimate the name of the person in whose favour the
patta should be prepared. Presumably, the patta was issued
in the names of the plaintiffs as desired by Bharat Singh
and Exhibit A-121 shows that it was handed over on September
30, 1940. The patta was produced before the trial court by
the plaintiffs.
By the time the patta was issued in the names of the
plaintiffs, the mother of plaintiff No. 2 had died. He was
about eight years of age in 1940 and he and his younger
brother, Dalip Singh were under the protection of Bharat
Singh who was a bachelor. They were staying with him in the
suit house. The defendant also was residing in it. The
plaintiffs who claimed title to the property under the patta
in the course of the trial attempted to prove that the sum
of Rs. 5,000 which was paid by way of consideration for the
patta by Bharat Singh came out of the jewels of the mother
of plaintiff No. 2 which had come into the possession of
Bharat Singh on her death. The plaintiff No. 2 who gave
evidence in the trial court stated that he had not given any
money to Bharat Singh for the purchase of the house but he
had come to know from his father, plaintiff No. 1 that it
had been purchased with his money. Jaswant Singh (P.W. 2)
and Kesri Singh (P.W. 3) to whose evidence we will make a
reference in some detail at a later stage also stated that
they had heard from Bharat Singh that the jewels of the
mother of plaintiff No. 2 were with him suggesting that they
could have been the source of the price house. Plaintiff No.
1 who could have given evidence on the above question did
not enter the witness box. It is stated that he was a person
of weak mind and after the death of Bharat Singh was
behaving almost like a mad man. The defendant stated in the
course of his evidence that the mother of plaintiff No. 2
had gold jewels weighing about 3-4 tolas only. In this state
of evidence, it is difficult to hold that the plaintiffs
have established that the consideration for the suit house
was paid by them. The finding of the trial court that the
house had been purchased by Bharat Singh for the plaintiffs
with their money cannot be upheld. The case of the defendant
that the price of the suit house was paid out of the funds
belonging to him and Bharat Singh has been rejected both by
the trial court and the High Court. On going
635
through the evidence adduced by the defendant, we feel that
there is no reason for us to disturb the concurrent findings
arrived at by the trial court and the High Court on the
above question. We shall, therefore, proceed to decide the
question of title on the basis that the consideration for
the purchase of the house was paid by Bharat Singh out of
his own funds.
It was contended by the learned counsel for the
defendant that since the plaintiffs had failed to establish
that they had contributed the price paid for the suit house,
the suit should be dismissed without going into the question
whether Bharat Singh had purchased the suit house with his
money in the names of the plaintiffs for the benefit of
plaintiff No. 2. The plaint does not disclose the name of
the person or persons who paid the sale price of the suit
house. The suit is based on the patta standing in the names
of the plaintiffs. In the written statement of the
defendant, there was an allegation to the effect that even
though the patta was standing in the names of the
plaintiffs, they were only benamidars and the real title was
with Bharat Singh and the defendant. The particulars of the
circumstances which compelled Bharat Singh or the defendant
to take the patta in the names of the plaintiffs were not
disclosed although it was stated that it had been done owing
to some political and other surrounding circumstances and
for the safety of the property. From the evidence led by the
parties, we are satisfied that they knew during the trial of
the suit that the question whether the transfer effected
under the patta was a benami transaction or not arose for
consideration in the case. Even in the appeal before the
High Court, the main question on which arguments were
addressed was whether the transaction was a benami
transaction or not. Merely because the plaintiffs attempted
to prove in the trial court that the money paid for
purchasing the house came out of their funds, they cannot in
the circumstances of this case be prevented from claiming
title to the property on the basis that even though Bharat
Singh had paid the consideration therefor, plaintiff No. 2
alone was entitled to the suit house. Reference may be made
here to the decision of this Court in Bhagwati Prasad v.
Shri Chandramaul(1) where the Court observed as follows:-
“There can be no doubt that if a party asks for a
relief on a clear and specific grounds, and in the
issues or at the trial, no other ground is covered
either directly or by necessary implication, it would
not be open to the said party to
636
attempt to sustain the same claim on a ground which is
entirely new……..But in considering the application
of this doctrine to the facts of the present case, it
is necessary to bear in mind the other principle that
considerations of form cannot over-ride the legitimate
considerations of substance. If a plea is not
specifically made and yet it is covered by an issue by
implication, and the parties knew that the said plea
was involved in the trial, then the mere fact that the
plea was not expressly taken in the pleadings would not
necessarily disentitle a party from relying upon it if
it is satisfactorily proved by evidence. The general
rule no doubt is that the relief should be founded on
pleadings made by the parties. But where the
substantial matters relating to the title of both
parties to the suit are touched, though in directly or
even obscurely in the issues, and evidence has been led
about them, then the argument that a particular matter
was not expressly taken in the pleadings would be
purely formal and technical and cannot succeed in every
case. What the Court has to consider in dealing with
such an objection is: did the parties know that the
matter in question was involved in the trial, and did
they lead evidence about it ?”
After holding that the parties to the said case were
not taken by surprise, the Court granted the relief prayed
for by the plaintiff on the basis that defendant was a
licensee even though the plaintiff had pleaded in his plaint
that the defendant was tenant. In the above case, the Court
distinguished the decision in Trojan & Co. Ltd. v. RM. N. N.
Haggappa Chettiar(1) on which much reliance was placed by
the learned counsel for the defendant before us. In the case
of Trojan & Co. Ltd. (supra), this Court came to the
conclusion that the alternative claim on which relief was
sought was not at all within the knowledge of the parties in
the course of the trial. The case before us is not of the
nature.
In Ismail Mussajee Mookerdum v. Hafiz Boo(2) the
plaintiff laid claim to a property which had been
transferred in her name by her mother alleging that she had
paid the purchase money to her mother. The court came to the
conclusion that she had failed to prove that she had paid
the consideration. Still a decree was made in her favour
holding that she had become the owner of the property by
virtue of the transfer in her favour even though
consideration had not been
637
paid by her since it had been established in the case that
her mother intended to transfer the beneficial interest in
the property in her favour. This is borne out from the
following passage at page 95:
“In her evidence, which was very confused, she
tried to say that she paid that purchase-money to her
mother. This was clearly untrue: as both Courts have
found. The fact, therefore, remains that the properties
purchased by the sale proceeds were purchased no doubt
in Hafiz Boo’s name, but were purchased out of funds
emanating from her mother’s estate. This circumstance
no doubt, if taken alone, affords evidence that the
transaction was benami, but there is, in their
Lordships’ opinion, enough in the facts of the case to
negative any such inference.”
Moreover no plea was raised on behalf of the defendant
before the High Court in this case contending that the High
Court should not go into the question whether the transfer
under the patta was a benami transaction or not. We,
therefore, reject the above contention and proceed to
examine whether the High Court was right in arriving at the
conclusion that the plaintiffs were only benamidars holding
the property for the benefit of its real owner, Bharat Singh
as the consideration therefor had emanated from him.
Under the English law, when real or personal property
is purchased in the name of a stranger, a resulting trust
will be presumed in favour of the person who is proved to
have paid the purchase money in the character of the
purchaser. It is, however, open to the transferee to rebut
that presumption by showing that the intention of the person
who contributed the purchase money was that the transferee
should himself acquire the beneficial interest in the
property. There is, however, an exception to the above rule
of presumption made by the English law when the person who
gets the legal title under the conveyance is either a child
or the wife of the person who contributes the purchase money
or his grand child, whose father is dead. The rule
applicable in such cases is known as the doctrine of
advancement which requires the court to presume that the
purchase is for the benefit of the person in whose favour
the legal title is transferred even though the purchase
money may have been contributed by the father or the husband
or the grandfather, as the case may be, unless such
presumption is rebutted by evidence showing that it was the
intention of the person who paid the purchase money that the
transferee should not become the real owner of the property
in question. The doctrine of advancement is not in vogue in
India.
638
The counterpart of the English law of resulting trust
referred to above is the Indian law of benami transactions.
Two kinds of benami transactions are generally recognized 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.
In that case, the transferee holds the property for the
benefit of the person who has contributed the purchase
money, and he is the real owner. The second case which is
loosely termed as a benami transaction is a case where a
person who is the owner of the property executes a
conveyance in favour of another without the intention of
transferring the title to the property thereunder. In this
case, the transferor continues to be the real owner. The
difference between the two kinds of benami transactions
referred to above lies in the fact that whereas in the
former case, there is an operative transfer from the
transfer to the transferee though the transferee holds the
property for the benefit of the person who has contributed
the purchase money, in the latter case, there is no
operative transfer at all and the title rests with the
transferor notwithstanding the execution of the conveyance.
One common feature, however, in both these cases is that the
real title is divorced from the ostensible title and they
are vested in different persons. The question whether a
transaction is a benami transaction or not mainly depends
upon the intention of the person who has contributed the
purchase money in the former case and upon the intention of
the person who has executed the conveyance in the latter
case. The principle underlying the former case is also
statutorily recognized in section 82 of the Indian Trusts
Act, 1882 which provides that where property is transferred
to one person for a consideration paid or provided by
another person and it appears that such other person did not
intend to pay or provide such consideration for the benefit
of the transferee, the transferee must hold the property for
the benefit of the person paying or providing the
consideration. This view is in accord with the following
observations made by this Court in Meenakshi Mills. Madurai
v. The Commissioner of Income-Tax, Madras(1):-
“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
639
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 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.”
In Mohammad Sadiq Ali Khan v. Fakhr Jahan Begum &
Ors.(1) the facts were these: A Mahemmodan bought an
immovable property taking the conveyance in the name of his
daughter who was five years of age. The income was credited
to a separate account, but it was in part applied to
purposes with which she had no concern. Upon her marriage,
the deed was sent for the inspection of her father-in-law.
After the death of the donor it was contended that the
property was part of his estate, the purchase being benami.
The Judicial Committee of the Privy Council held that there
was a valid gift to the daughter because there was proof of
a bona fide intention to give, and that intention was
established. In the course of the above decision, it was
observed thus:-
“The purchase of this property was a very natural
provision by Baqar Ali for the daughter of his
favourite wife, and though there may be no presumption
of advancement in such cases in India, very little
evidence of intention would be sufficient to turn the
scale. The sending of the deed for the inspection of
the lady’s father-in-law, which the Chief Court held to
be established, was clearly a representation that the
property was hers, and their Lordships agree with the
learned Judges in the conclusion to which they came.”
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In Manmohan Dass & Ors. v. Mr. Ramdei & Anr. (1) Lord
Macmillian speaking for the Judicial Committee observed:
In order to determine the question of the validity
or invalidity of the deed of gift in question it is of
assistance to consider.
‘the surrounding circumstances, the position of
the parties and their relation to one another, the
motives which could govern their actions and their
subsequent conduct.’ Dalip Singh v. Nawal Kanwar 35
I.A. 104 (P.C.) always remembering that the onus of
proof rests upon the party impeaching the deed.
The principle enunciated by Lord Macmillan in the case
of Manmohan Dass & Ors. (supra) has been followed by this
Court in Jayadayal Poddar (deceased) through his L. Rs. &
Anr. v. Mst. Bibi Hazara & Ors.(2) where Sarkaria, J.
observed thus:
“It is well settled that the burden of proving
that a particular sale is benami and the apparent
purchaser is not the real owner, always rests on the
person asserting it to be so. This burden has to be
strictly discharged by adducing legal evidence of a
definite character which would either directly prove
the fact of benami or establish circumstances
unerringly and reasonably raising an inference of that
fact. The essence of a benami is the intention of the
party or parties concerned; and not unoften such
intention is shrouded in a thick veil which cannot be
easily pierced through. But such difficulties do not
relieve the person asserting the transaction to be
benami of any part of the serious onus that rests on
him; nor justify the acceptance of mere conjectures or
surmises, as a substitute for proof. The reason is that
a deed is a solemn document prepared and executed after
considerable deliberation and the person expressly
shown as the purchaser or transferee in the deed,
starts with the initial presumption in his favour that
the apparent state of affairs is the real state of
affairs. Though the question, whether a particular sale
is benami or not, is largely one of fact, and for
determining this question, no absolute formulae or acid
tests, uniformly applicable in all situations, can be
laid down; yet in weighing the probabilities and for
gathering
641
the relevant indicia, the courts are usually guided by
these circumstances: (1) the source from which the
purchase money came; (2) the nature and possesion 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.”
The principle governing the determination of the
question whether a transfer is a benami transaction or not
may be summed up thus: (1) The burden of showing that a
transfer is a benami transaction lies on the person who
asserts that it is such a transaction; (2) 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; (3) the true character of the
transaction is governed by the intention of the person who
has contributed the purchase money and (4) the question as
to what his intention was has to be decided on the basis of
the surrounding circumstances, the relationship of the
parties, the motives governing their action in bringing
about the transaction and their subsequent conduct etc.
Now we shall refer to the facts of the present case.
When the suit house was purchased from the Maharaja of
Bikaner, Bharat Singh was a bachelor and he did not marry
till his death in the year 1955. The wife of Bhim Singh had
died before 1939 leaving behind her two young children.
Plaintiff No. 2 was about eight years old in the year 1939
and his younger brother Dalip Singh was about two years old.
These two children were living with Bharat Singh. Bhim
Singh, plaintiff No. 1 was almost in indigent condition. The
defendant had by then acquired a degree in law and also had
practised as a lawyer for some time. It is stated that the
defendant had again been employed in the service of the
State of Bikaner. The patta was issued in the names of
plaintiffs 1 and 2 at the request of Bharat Singh. Even
though the defendant stated in the written statement that
the patta had been taken in the names of the plaintiffs
owing to certain political circumstances, he had not
disclosed in the course of his evidence those circumstances
which compelled Bharat Singh to secure the patta in the
names of the plaintiffs, though at one stage, he stated that
it was under his advice that Bharat Singh got the patta in
the names of the plaintiffs. Bharat
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Singh had no motive to suppress from the knowledge of the
public that he had acquired the property. It was suggested
in the course of the arguments that he had taken the patta
in the names of the plaintiffs because he was in the service
of the State. We do not find any substance in this
submission because the property was being purchased from the
State Government itself and there was no need for him to
shield his title from the knowledge of the State Government.
It appears that Bharat Singh acquired the suit house for the
benefit of plaintiff No. 2 for the following circumstances:
The first circumstance is that the original patta had been
handed over by Bharat Singh to plaintiff No. 2 on his
passing B. Sc. Examination. This fact is proved by the
evidence of plaintiff No. 2 and it is corroborated by the
fact that the patta was produced by the plaintiffs before
the Court. In the course of his evidence, the defendant no
doubt stated that the patta had been stolen by plaintiff No.
2 from the suit house during the twelve days following the
death of Bharat Singh when the keys of Bharat Singh’s
residence had been handed over to plaintiff No. 2 by the
defendant. It is difficult to believe the above statement of
the defendant because of two circumstances-(i) that the
defendant did not state in the written statement that the
patta had been stolen by plaintiff No. 2 and (ii) that
within a month or two after the death of Bharat Singh,
plaintiff No. 2 wrote a letter which is marked as Exhibit A-
124 to the defendant stating that the rumour which the
defendant was spreading that plaintiff No. 2 had stolen some
articles from the suit house was not true since whenever
plaintiff No. 2 opened room or any of the almirahs of Bharat
Singh in the suit house, Devi Singh the son of the defendant
was keeping watch over him. That letter has been produced by
the defendant and there is no reference in it to a false
rumour being spread about the theft of the patta by
plaintiff No. 2. Plaintiff No. 2 however, while asserting
his claim to the suit house in the course of that letter
stated that he had seen that the patta had been executed in
his favour; and that the patta contained his name. The
defendant does not appear to have sent any reply to Exhibit
A. 124 nor did he call upon the plaintiffs to return the
patta to him. He did not also file a complaint stating that
the patta had been stolen by plaintiff No. 2. We are of the
view that there is no reason to disbelieve the evidence of
plaintiff No. 2 that the patta had been handed over to him
by Bharat Singh on his passing the B.Sc. examination. This
conduct of Bharat Singh establishes that it was the
intention of Bharat Singh when he secured the patta from the
State Government in the names of the plaintiffs the
plaintiff No. 2 whom he loved should become the owner. It is
no doubt true that the name of plaintiff No. 1 is also
included in the patta. It may have been so included by way
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of abundant caution as plaintiff No. 2 was a minor when the
patta was issued. The above circumstance is similar to the
one which persuaded their Lordships of the Privy Council in
the case of Mohammad Sadiq Ali Khan (supra) to hold that the
property involved in that case belonged to the person in
whose favour the conveyance had been executed.
The second circumstance which supports the view that
Bharat Singh intended that plaintiff No. 2 should become the
owner of the suit house is proved by the declarations made
by Bharat Singh regarding the title to the suit house.
Jaswant Singh (P.W. 2) was a former Prime Minister of the
State of Bikaner. His wife was a cousin of plaintiff No. 1,
Bharat Singh and the defendant. Being a close relative of
Bharat Singh who was also the Aid-de-Camp of the Maharaja of
Bikaner, he was quite intimate with Bharat Singh who used to
discuss with him about his personal affairs. P.W. 2 has
stated in the course of his evidence that Bharat Singh
thought it proper to purchase the house in the name of
plaintiff No. 2 and that he intended to make plaintiff No. 2
his heir and successor. He has also stated that Bharat Singh
had expressed his desire to give all his property to
plaintiff No. 2 by a will and that he had told Kesri Singh
(P.W. 3) just a day prior to his (Bharat Singh’s) death that
a will was to be executed. This statement of Jaswant Singh
(PW. 2) is corroborated by the evidence of Kesri Singh (P.W.
3) whose wife was also a cousin of Bharat Singh, plaintiff
No. 1 and the defendant. The relevant portion of the
deposition of Kesri Singh (P.W. 3) reads thus:
“I came from Jaipur to Bikaner by train one day
before the death of Bharat Singh and when I was
returning after a walk I found Bharat Singh standing at
the gate of his house. I asked Bharat Singh to
accompany me to my house to have tea etc. Bharat Singh
came with me to my house. Bharat Singh told me at my
house that he was not quite all right and that he might
die at any time. He wanted to execute a will. He
further told me that his house really belonged to
Himmat Singh. It has been purchased in his name. He
wanted to give even other property to Himmat Singh.. By
other property which Bharat Singh wanted to give to
Himmat Singh was meant Motor car, bank balance and the
presents which he had. The house regarding which my
talk took place with Bharat Singh at my house was the
house in dispute.”
There is no reason to disbelieve the evidence of these
two witnesses. Their evidence is corroborated by the
deposition of Dr. Himmat Singh (D.W. 6) who was the
Secretary of a Club in Bikaner
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of which Bharat Singh was a member. He was examined by the
defendant himself as his witness. In the course of his
cross-examination, Dr. Himmat Singh (D.W. 6) referred to
what Bharat Singh had told him a few months prior to his
death. The substance of his deposition is found in the
judgment of the trial court, the relevant portion of which
reads thus:
“D.W. 6 Dr. Himmat Singh is the Secretary of the
Sardul Club, Bikaner. He is the Senior Eye-Surgeon in
the Government Hospital, Bikaner. He has stated that
Bharat Singh was the member of Sardul Club. A sum of
Rs. 425/6/-remained outstanding against him till the
year 1955. This amount was received on 28-10-1955. He
has said that he does not know who deposited this
amount. On the merits of the case, he has stated that
he intimately knew Bharat Singh and members of his
family. Bhim Singh and his sons Himmat Singh and Dalip
Singh used to live in this house. Bharat Singh took
this house for Bhim Singh and Himmat Singh. Four months
before his death, Bharat Singh told the witness that he
had already taken the house for Bhim Singh and Himmat
Singh and that whatever else would remain with him
shall go to them. Dr. Himmat Singh refutes the
defendant’s stand and supports the plaintiff’s case.”
It was argued on behalf of the defendant that there is
some variation between the deposition of Dr. Himmat Singh
(D.W. 6) and the above passage found in the judgment of the
trial court and that the evidence of D.W. 6 should not be
believed as he had turned hostile.
The deposition of Dr. Himmat Singh (D.W. 6) was read
out to us. It was also brought to our notice that an
application had been made by the defendant to treat D.W. 6
as hostile and that it had not been granted by the trial
court. Even though there is a slight variation between what
is stated by D.W. 6 and what is contained in the judgment of
the trial court with regard to certain details, we do not
feel that the said variation is of any substantial nature.
The evidence of D.W. 6 suggests that Bharat Singh was of the
view even during his life time that the suit house belonged
to plaintiffs and not to himself. Even though an application
had been made by the defendant to treat D.W. 6 as hostile,
we feel that this part of the evidence of D.W. 6 cannot be
rejected on that ground since it is consistent with the
evidence of Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3).
It is seen from the judgment of the High Court that the
effect of the statement of Kesri Singh (P.W.3) in his
deposition that Bharat Singh
645
had told him that the suit house was the property of
plaintiff No. 2 has not been considered. The High Court
while dealing with the evidence of Jaswant Singh (P.W. 2)
and Kesri Singh (P.W. 3) laid more emphasis on those parts
of their evidence where there was a reference to the alleged
utilisation of the jewels or moneys belonging to the
plaintiffs by Bharat Singh for the purpose of acquiring the
suit house. The High Court has also observed in the course
of its judgment that neither of them had stated that Bharat
Singh had told them that he was purchasing or had purchased
the suit house as a gift to Bhim Singh and Himmat Singh. The
above observation does not appear to be consistent with the
evidence of Kesri Singh (P.W. 3) discussed above.
It was, however, contended on behalf of the defendant
that the statement made by Bharat Singh in the year 1955
could not be accepted as evidence in proof of the nature of
the transaction which had taken place in the year 1940. It
was contended that the question whether a transaction was of
a benami nature or not should be decided on the basis of
evidence about facts which had taken place at or about the
time of the transaction and not by statements made several
years after the date of the transaction. In support of the
above contention, the learned counsel for the defendant
relied on the decision of the House of Lords in Shephard &
Anr. v. Cartwright & Anr.(1). The facts of that case were
these: In 1929, a father, with an associate, promoted
several private companies and caused a large part of the
shares, for which he subscribed, to be allotted in varying
proportions to his three children, one of them being then an
infant. There was no evidence as to the circumstances in
which the allotments were made. The companies were
successful and in 1934 the father and his associate promoted
a public company which acquired the shares of all the
companies. The children signed the requisite documents at
the request of their father without understanding what they
were doing. He received a cash consideration and at various
times sold, and received the proceeds of sale of, their
shares in the new company. He subsequently placed to the
credit of the children respectively in separate deposit
accounts the exact amount of the cash consideration for the
old shares and round sums in each case equivalent to
proceeds of sale of the new shares. Later he obtained the
children’s signatures to documents, of the contents of which
they were ignorant, authorising him to withdraw money from
these accounts and without their knowledge he drew on the
accounts, which were by the end of 1936 exhausted, part of
the sums withdrawn being dealt with for the benefit of the
children but a large part remaining unaccounted for. He died
in
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1949. In the action filed against his executors, it was
contended by them that the subsequent conduct of the father
showed that when the shares were got allotted by him in the
names of the children in 1929, he did not intend to make
them the real owners of the shares and that the presumption
of advancement had been rebutted. This contention was met by
the plea that the subsequent conduct of the father in
dealing with the shares as if they were his own could not be
relied upon either in his favour or in favour of his
representatives, executors and administrators to prove that
he had no intention to create any beneficial interest in his
children in the shares in question when they were obtained.
On these facts, the House of Lords held that the subsequent
acts and declarations of the father could not be relied upon
in his favour or in favour of his executors to rebut the
presumption of advancement. Viscount Simonds in the course
of his judgment observed thus:
“My Lords, I do not distinguish between the
purchase of shares and the acquisition of shares upon
allotment, and I think that the law is clear that on
the one hand where a man purchases shares and they are
registered in the name of a stranger there is a
resulting trust in favour of the purchaser; on the
other hand, if they are registered in the name of a
child or one to whom the purchaser then stood in loco
parentis, there is no such resulting trust but a
presumption of advancement. Equally it is clear that
the presumption may be rebutted but should not, as Lord
Eldon said, give way to slight circumstances: Finch v.
Finch (1808) 15 Ves. 43.
It must then be asked by what evidence can the
presumption be rebutted, and it would, I think, be very
unfortunate if any doubt were cast (as I think it has
been by certain passages in the judgments under review)
upon the well-settled law on this subject. It is, I
think, correctly stated in substantially the same terms
in every text book that I have consulted and supported
by authority extending over a long period of time. I
will take, as an example, a passage from Snell’s
Equity, 24th ed., p. 153, which is as follows:
“The acts and declarations of the parties before
or at the time of the purchase, or so immediately after
it as to constitute a part of the transaction, are
admissible in evidence either for or against the party
who did the act or made the
647
declaration. … But subsequent declarations are
admissible as evidence only against the party who made
them, and not in his favour.”
The above passage, we are of the view, does not really
assist the defendant in this case. What was held by the
House of Lords in the case of Shephard & Anr. (supra) was
that the presumption of advancement could be displaced only
by a statement or conduct anterior to or contemporaneous to
the purchase nor could any conduct of the children operate
against them as admissions against their interest as they
acted without the knowledge of the facts. In the instant
case, we are concerned with the conduct and declarations of
Bharat Singh subsequent to the transaction which were
against his interest. The evidence regarding such conduct
and declarations is not being used in his favour but against
the legal representative of Bharat Singh i.e. the defendant
who would have become entitled to claim a share in the suit
house if it had formed part of his estate. Such conduct or
declaration would be admissible even according to the above
decision of the House of Lords in which the statement of law
in Snell’s Equity to the effect `but subsequent declarations
are admissible as evidence only against the party who made
them, and not in his favour’ is quoted with approval. The
declarations made by Bharat Singh would be admissible as
admissions under the provisions of the Indian Evidence Act
being statements made by him against his proprietary
interest under section 21 and section 32(3) of the Indian
Evidence Act
The defendant cannot also derive any assistance from
the decision of this Court in Bibi Saddiqa Fatima v. Saiyed
Mohammad Mahmood Hasan(1). The question before the Court in
the case of Bibi Siddiqa Fatima (supra) was whether a
property which had been purchased by a husband in his wife’s
name out of the fund belonging to a waqf of which he was a
Mutawalli could be claimed by the wife as her own property.
This Court held that the wife who was the ostensible owner
could not be treated as a real owner having regard to the
fact that the purchase money had come out of a fund
belonging to a waqf over which her husband who was the
Mutawalli had no uncontrolled or absolute interest. In
reaching the above conclusion, this Court observed thus :
“We may again emphasize that in a case of this
nature, all the aspects of the benami law including the
648
question of burden of proof cannot justifiably be
applied fully. Once it is found, as it has been
consistently found, that the property was acquired with
the money of the waqf, a presumption would arise that
the property is a waqf 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
will not be unreasonable to say-rather it would be
quite legitimate to infer, that it was for the
plaintiff to establish that the property acquired was
her personal property and not the property of the
waqf.”
It was next contended that the defendant had spent
money on the repairs and reconstruction of the building
subsequent to the date of the patta and that therefore, he
must be held to have acquired some interest in it. We have
gone through the evidence bearing on the above question. We
are satisfied that the defendant has not established that he
had spent any money at all for construction and repairs.
Even if he has spent some money in that way with the
knowledge of the actual state of affairs, it would not in
law confer on the defendant any proprietary interest in the
property.
It is also significant that neither Gad Singh during
his life time nor his children after his death have laid any
claim to a share in the suit house which they were entitled
to claim alongwith the defendant if it was in fact a part of
the estate of Bharat Singh. Their conduct also probabilities
the case of the plaintiffs that Bharat Singh did not intend
to retain for himself any interest in the suit house.
On the material placed before us, we are satisfied that
the transaction under which the patta was obtained was not a
benami transaction and that Bharat Singh had acquired the
suit house with his money with the intention of constituting
plaintiff No. 2 as the absolute owner thereof. Plaintiff No.
2 is, therefore, entitled to a decree for possession of the
suit house.
The trial court passed a decree directing the defendant
to pay damages for use and occupation in respect of the suit
house at the rate of Rs. 50/- per month from September 20,
1956 till the
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possession of the house was delivered to the plaintiffs. The
operation of the decree of the trial court was stayed by the
High Court during the pendency of the appeal before it. In
view of the decree passed by the High Court, the defendant
has continued to be in possession of the suit house till
now. Nearly twenty years have elapsed from the date of the
institution of the suit. In the circumstances, we are of the
view that the defendant should be directed to pay mesne
profits at the rate of Rs. 50/- per month till today and
that an enquiry should be made by the trial court under
Order 20, Rule 12 of the Code of Civil Procedure to
determine the mesne profits payable by the defendant
hereafter till the date of delivery of possession.
In the result, the decree passed by the High Court is
set aside and a decree is passed directing the defendant to
deliver possession of the suit house to plaintiff No. 2 and
to pay mesne profits to him at the rate of Rs. 50/- per
month from September 20, 1956 till today and also to pay
future mesne profits as per decree to be passed by the trial
court under Order 20, Rule 12 of the Code of Civil
Procedure.
For the foregoing reasons, Civil Appeal No. 626 of 1971
is accordingly allowed with costs throughout. Civil Appeal
No. 629 of 1971 is dismissed but without costs.
C.A. 626/71 allowed.
P.B.R. C.A. 629/71 dismissed.
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