A. Nataraja Mudaliar vs D.P. Ramaswamy Mudaliar and Others

Walter Salis Schwabe Kt., K.C., C.J.—The first plaintiff''s father having a decree against the owners of some house property in Madras,

brought that property to sale in execution. Without obtaining the leave of the court to bid, he bought it himself using for that purpose the joint family

money, and, in order to conceal this fraud on the court, he bought it in the name of the sixth defendant. This is the case of the plaintiffs, and of some

of the defendants. That has been found by the learned judge, who saw the witnesses and examined the facts obviously with the greatest care, to be

the truth, and I can find no ground for interfering with that finding of fact.

The first plaintiff with his sons, the second and the third plaintiffs, joining as defendants the other members of the joint family has brought this suit

for partition and he claims that part of the joint family property to be brought in and divided in the partition consists of this house property standing

in the name of the sixth defendant and he brings in the sixth defendant to have that case decided. The sixth defendant resists that claim setting up,

firstly, as a fact that the plaintiff''s case is not true at all, that he never was a benamidar or nominee of the first plaintiff''s father which, as I have

pointed out, has not been accepted as the fact, and, secondly he says, that in law although he is not entitled to this property, it is not open to the

plaintiffs in this case to recover it from him by reason of Section 66 of the Code of Civil Procedure, 1908; and it is on the proper interpretation of

that section, and that section only, that this case must turn.

Before the passing of that section there was in existence Section 317 of the CPC of 1882. The terms of that section were ""No suit shall be

maintained against the certified purchaser (which means the certified purchaser who has purchased the property at Court-auction) on the ground

that the purchase was made on behalf of any other person or on behalf of some one through whom such other person claims."" There was very

soon a conflict of authorities as to the meaning of that section and I think it may be stated that the Madras view, established first of all in Natesa

Aiyar v. Venkatramayya I.L.R.(1882) Mad. 135, and followed in Krishna Aiyar v. Raghaviyan (1899) 9 M.L.J. 298 and Minakshi Ammal v.

Kalianaraina Iyer 7 M.L.J. 213 was that there was nothing in that section to prevent a member of a joint family from recovering the property which

had been bought out of the joint family money in the name of some person benami at a court-auction by the managing member of the family he

himself being the decree-holder. A different view was taken in Allahabad and the matter came before the Privy Council in Suraj Narain v. Ratan

Lal 33 M.L.J. 180 (P.C.) and, in that case there is no doubt that the Privy Council supported the view contrary to the view taken in Madras

though it is worth observing that there seems to have been very little discussion on the matter and the Madras cases do not seem to have been

cited. If, however, the matter stood there, I should find great difficulty in distinguishing that case as was done by the learned judge below but that

case was tried when the CPC of 1882 was in operation and it is a decision u/s 317 of that Code. After that case, or rather after the first hearing of

that case. Section 66 of the CPC of 1908 was introduced, and that altered the law very materially, because now the only prohibition is contained

in these words: ""No suit shall be maintained against any person claiming title under a purchase certified by the court in such manner as may be

prescribed on the ground that the purchase was made on behalf of the plaintiff or on behalf of some one through whom the plaintiff claims."" The

obvious alteration is that now the penal provision is confined to purchases on behalf of a plaintiff or persons through whom he claims, whereas

before it was wide enough, on one interpretation of it, to cover purchases on behalf of any other person. I should think that alteration was made

because, on what I may call the Allahabad interpretation there might be an injustice, it would follow that infants, whose father using the infant''s

property entered into such a transaction would be deprived, though perfectly innocent themselves, of their family property, and that it would remain

in the hands of a benamidar. It was therefore desirable that the inability to enforce rights should be restricted to the person who was guilty of the

act, which was looked upon as an illegal act. It is argued in this case that the purchase was made on behalf of the plaintiff and that the real meaning

of that clause is that if a managing member makes a purchase and for that purpose uses the money of the family, he is making that purchase on

behalf of all the members of the family. Unless I were driven to an interpretation which would have the results which, as I have already stated, in

my view, it was the desire to prevent, I should be very loathe to come do such a conclusion; but, in my judgment, it is quite unnecessary because I

do not think that a managing member buying property using family funds for that purpose can be properly said, within the meaning of that section,

to buy on behalf of other members of the family. He is doing something wholly wrong. It cannot be right for him to take the family money and put it

into property in such circumstances that, if the mail who lends his name chooses to behave in the way that this sixth defendant has behaved, the

family would be deprived of the property. I can see no distinction between the case of a coparcener and the case of a partner. Where partnership

money is used for a benami transaction of that kind it would follow, if the interpretation of that kind suggested by the section is right, that the

innocent partner would lose his property. In my judgment that is not the meaning of the section.

The learned Judge also relies on the proviso to that section and there is a great deal to be said in favour of his interpretation of the proviso but in

the view that I have expressed of the section itself, it is unnecessary to decide anything in respect of the proviso. I am aware that in coming to this

conclusion I am taking a different view to that taken in Baijnath Das v. Bishen Devi (1921) 19 A.L.J. 787. It is enough to say that 1 do not agree

with that decision or the reasoning on which it is based. I think the Court in that case gave much too wide a meaning to the words in Section 66 (1)

made on behalf of the plaintiff.

Therefore in my judgment this appeal fails and must be dismissed with costs. This is a proper case for two sets of costs to be allowed, one for

the plaintiffs and the other for defendants 7 to 9, the reasoning being that the interests of some of the infant defendants might have been quite

different to the interests of the plaintiffs and on the one head of argument which has been addressed to us was different.

Coutts Trotter, J.

I am of the same opinion. It was established by the case of Bodh Singh Doodhooria v. Ganesh Chander Sen (1873) . 12 Ben. L.R. 217 that the

sections of the Code which were designed to punish a person who puts his property in the name of the benamidar were not to be applied to the

case where one member of a joint family gets property in his name and the rest of the family seek to enforce their rights against that property

standing in his name. The words of the Privy Council (at page 330) were these ; ""Their Lordships think that they cannot be taken to affect the

rights of members of a joint Hindu family, who by the operation of law, and not by virtue of any private agreement or understanding, are entitled to

treat as part of their common property an acquisition, howsoever made by a member of the family in his sole name, if made by the use of the family

funds. It is obvious that under the Hindu Law it is natural and appropriate to regard a member of a family as being in possession on behalf of the

family, so that possession would enure to the family as a whole rather than to him in the character of benamidar or nominee, which is quite alien to

the conception of the relation of one member of a Hindu Family to another"".

Further their Lordships held in that case that the section of the old Code did not apply to the case where the alleged benamidar was himself a

member of the undivided family.

The next case is where the person put in as benamidar was not a member of the undivided family but a nominee chosen by the head of the

family, and the question arose whether the Code prohibited the members of the undivided family not concerned in the transaction from asserting

their rights in the property or whether they were precluded from doing so by the section. In this presidency, the cases in my opinion, with one

possible exception, have shown a consistent course of decision. It began with the case of Natesa Ayyar v. Venkatarama Ayyar I.L.R.(1882) Mad.

349 and Krishna Ayyar v. Raghaviyar (1899) 9 M.L.J. 298 . There is a dictum, for it has been analysed by other Courts and in my opinion rightly

pronounced to be nothing'' more, in Ramakurup v. Sridevi 2 M.L.J. 173 which seems to go the other way. But, on the whole, the current of

decisions in this Court has been uniform, that the proposition which the case in Budhsingh Dudhuria v. Ganesh Chunder Sen (1872) 12 B.L.R. 317

laid down, where the property stood in the name of a member of the family, was equally applicable when the nominee was a stranger, provided

that members of the family, were merely seeking to enforce their claim to what they allege to be the undivided family property or the proceeds of

the money belonging to the undivided family. It cannot be denied that there is in the Allahabad Court a direct decision the other way, the case in

Baijnath Das v. Bishen Dent (1921) 19 A.L.J. 787 which has been referred to by my lord. The reasoning is not difficult to follow. The property is

put in the name of the benamidar, both in the Allahabad case and in the case before us, by the managing member of the family, and it is said that

that is the act under the Hindu Law, of the whole family and therefore the prohibition, which undoubtedly would extend to the managing member

himself who carried out the transaction, must equally apply to the whole of the family on whose behalf he acts or purports to act. The answer

appears to me to be that, whatever the rule may have been under the section of the old code under the section of the present Code, Section 66(1),

that result does not follow. In my opinion, the plaintiff in this suit and in similar suits is not seeking as a cestuique trust to enforce rights against the

benamidar as his trustee, bat he is following into the hands of the benamidar whose position as a trustee hi ipso facto repudiates a portion on the

proceeds of what he alleges and has, proved to be the ancestral estate in which he has a share and of which he is entitled to partition and

severance of his own share. I am therefore of opinion that it cannot be said that the purchase at the sale of this property was a purchase made on

behalf of the plaintiff. I he managing member, when he put in a benamidar, knew that he was disobeying the Court, knew that he was putting the

benamidar in a position to set up claims ''in derogation of the rights of his own family and of his coparcener and, in such circumstances, it seems

impossible to say that the purchase was made on behalf of this plaintiff within the meaning of Section 66(1) of the Code.

There only remains the difficulty created by a stray sentence in Suraj Narain v. Ratan Lal ILR (1882) Mad. 349. It is suggested by my brother

Kumaraswami Sastri J, that it may be that the items of property in question may have been in the same category as the other properties, namely,

gifts made to the son-in-law not as a benefaction to be held for the donor but as an advancement in life by way of gift. However, that does not

appear from the report and I think the simplest method of dealing with that is to say, as my Lord has said, that the Allahabad case is dealing with a

situation governed by the words of the old Code and that the differentiation in wording effected by the new Code is sufficient to distinguish the

observation of their Lordships in that case and not to make it applicable to the present case.

With regard to the two other points that were argued, as to the complicity of the first plaintiff in the transaction itself, the material put forward in

support of that, to my mind, is quite unsubstantial. It amounts to no more than that he recorded the transaction in the family account-books and it

does not in the least follow that he appreciated exactly what was done much less that he took an active and consenting part in it.

Finally it was argued that not only was the first plaintiff completely aware of what was done but that in truth the sixth defendant was not a

benamidar at all and he was never intended to be, but he was the real purchaser and had an independent right to the properties put up at Court

auction. With regard to that the learned Judge, who heard all the witnesses and discussed and weighed their evidence very carefully, has come to

the conclusion, with which I entirely agree, that there is no evidence worth the name to support the suggestion that the 6th defendant had an

independent right over these properties.

I agree that the appeal fails and that it must be dismissed with costs.