Benami Transactions (Prohibition) Act, 1988 – ss. 3, 4 – Respondent constituted his nephew-second appellant (sole proprietor of first appellant) as his attorney for disposing of his flat – An agreement to sell was entered on 03.07.89 wherein consideration for the flat was Rs. 2,30,000/- – However, a second agreement entered on 30.11.89 showed lesser consideration of Rs.1,30,000/- – Further, second appellant wanted Rs. 80,000/- for the expansion of his business – Given by the respondent – Second appellant issued post-dated cheques which were returned by the banker to the respondent – Respondent filed suit for recovery of Rs.80,000/- – Second appellant alleged that he returned the amount immediately but the respondent did not return the cheques – Suit dismissed – During the appeal filed by the respondent, applications for amending the plaint were also filed – High Court decreed the suit – On appeal, held: Consideration for the flat in terms of the agreement dtd. 03.07.89 was Rs. 2,30,000/- – This was admitted by second appellant in his deposition – It is also undisputed that the original agreement with the purchaser (who ultimately finalized the transaction) is dtd. 03.07.89 – Respondent had put the matter, during cross examination, to the appellant who admitted the document, despite the fact that it was a photocopy – Respondent argued that the original of that document was with the purchaser – This was not denied – Once these were admitted, the respondent could not be faulted for seeking consequential amendment, purely formal, to back his argument that there was sufficient money, after lending Rs. 80,000/- to the appellant, which was deposited in his account – Further, the argument that the respondent’s plea regarding the real consideration being barred based on a prohibited transaction outlawed by the Benami Act, has no merit – Respondent did not claim return of any amount from the buyer; the suit was not based on any plea involving examination of a benami transaction – Onus of establishing that a transaction is benami is upon one who asserts it – Appellants did not prove that the transaction (to which they were not parties) was benami – Their argument was merely that the transaction could not be said to be in excess of Rs. 1,30,000/-: in the context of a defense in a suit for money decree – Findings in the impugned judgment are justified.
Dismissing the appeal, the Court
HELD: 1. The plaintiff had put the matter, during the course of cross examination, to the appellant/defendant. The latter, unsurprisingly, admitted the document, despite the fact that it was a photocopy. The plaintiff had argued that the original of that document was with the purchaser: this was not denied. Once these were admitted, the plaintiff could not be faulted for seeking a consequential amendment, that was purely formal, to back his argument that there was sufficient money, after lending Rs. 80,000/- to the defendant, which was deposited in his account. The argument that the plaintiff’s plea regarding the real consideration being barred, has no merit. The plaintiff did not claim return of any amount from the buyer; the suit is not based on any plea involving examination of a benami transaction. Besides, the plaintiff is not asserting any claim as benami owner, nor urging a defense that any property or the amount claimed by him is a benami transaction. Therefore, the defendant appellant’s argument is clearly insubstantial. The onus of establishing that a transaction is benami is upon one who asserts it. In the present case, the appellants did not prove that the transaction (to which they were not parties) was benami; on the contrary, the appellant’s argument was merely that the transaction could not be said to be for a consideration in excess of Rs. 1,30,000/-: in the context of a defense in a suit for money decree. The defendant/appellants never said that the plaintiff or someone other than the purchaser was the real owner; nor was the interest in the property, the subject matter of the recovery suit. [Paras 16-18, 20 and 21] [449-D; 450-A-B, H; 452-E]
Valliammal (D.) by LRs v. Subramaniam & Ors. (2004)
7 SCC 233 : [2004] 3 Suppl. SCR 966 – relied on. Binapani Paul v. Pratima Ghosh & Ors. (2007) 6 SCC
100 : [2007] 5 SCR 946 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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