Jharmal Singh & Anr. vs Ravinder Singh Majithia (Since Deceased Through Lr's) & Anr

S. No.,Particulars of documents,Exhibition of documents

1.,Certified copy of registered Sale Deed dated 09.08.1965.,Ex.PW1/1

2.,Site Plan,Ex.PW1/2

3.,"Cer(cid:38)fied copy of Will dated 03.03.2001 executed by late Sh. Prahlad

Singh.",Ex.PW1/3

4.,"Cer(cid:38)fied copy of judgment dated 08.01.2008 passed in Probate Case

bearing PC No. 113/2007.",Ex.PW1/4

5.,Legal Notice dated 10.01.2012,Ex.PW1/5 (also Ex. D-1)

6.,Postal Receipts and Courier Receipts,Ex.PW1/6 & Ex.PW1/7

7.,Certified copy of Rent Agreement dated 09.05.2012.,Ex.PW1/9

,,

construction of the suit property. DW2 during his crossexamination dated 14.09.2015 denied knowledge about money spent on construction of the suit,,

property on the plea he had only provided labour. He also could not depose as to how much money was paid to him for construction of the house. He,,

volunteered that payment was made to him sometime by the defendant no. 1 and sometime by late Sh. Prahlad Singh. He could not produce any copy,,

of rate contract and deposed that he had not entered into any agreement with the parties for construction of the house. He also could not recall as to,,

how many houses have been constructed by him.,,

The aforesaid deposition of DW2 is of no help to the defendants for the simple reason that DW2 could not produce the copy of rate contract and,,

state as to how much amount was spent on the construction. Nothing has been said regarding purchase of material and about other works such as,,

finishing work etc. Moreover, defendant no. 1 as DW4 could not say during crossexamination as to how much amount was paid by him for",,

construction. Hence, there is no plausible evidence to infer that the defendant no. 1 had contributed any money in construction of the suit property.â€",,

(emphasis added),,

I completely agree with the discussion and reasoning of the trial court contained in the aforesaid paras because oral statements are not discharge of,,

onus of proof, more so when endeavor by means of the oral statements is to take away valuable rights in an immovable property. Also, it was not",,

believable that the appellant no. 1/defendant no. 1 while working in Government service besides doing Government service would/could also have,,

participated in the business of shop at Motia Khan. In my opinion, therefore there is no warrant for interference with the aforesaid observations and",,

conclusions of the trial court whereby it has been held that the appellant no. 1/defendant no. 1 did not pay or make any contribution for purchase or,,

construction of the suit property.,,

Another reason given by the trial court for disbelieving the plea of the appellant no.1/defendant no. 1 was that this plea of appellant no.,,

1/defendant no. 1 of being owner on account of paying moneys is to be held to be barred by Section 4 of the Benami Transactions (Prohibition) Act,",,

1988 (hereinafter referred to as 'the Benami Act') as the plea of appellant no.1/defendant no. 1 was that he was a joint owner i.e a benamidar of the,,

subject property although the sale deed of the suit property dated 9.8.1965, Ex.PW1/1, was in the sole name of late Sh. Prahlad Singh. Trial court for",,

holding the defence of appellant no.1/defendant no. 1 of being owner allegedly by having paid moneys and thus being barred by the Benami Act has,,

referred to two judgments passed by this Court in the cases of J.M. Kohli Vs. Madan Mohan Sahni and Anr., in RFA No. 207/2012 decided on",,

7.5.2012 and CS(OS) No. 478/2004 titled as Sh. Amar N. Gugnani Vs. Naresh Kumar Gugnani (through legal heirs) decided on 30.7.2015. These,,

judgments hold that since by passing of the Benami Act the relevant provisions of the Indian Trusts Act calling the benamidar as a trustee have been,,

repealed, hence the relationship of benami transaction though is in the nature of a trust/trustee the same cannot be included in the exception contained",,

in Section 4(3)(b) of the Benami Act because otherwise effectively the repealed provisions of the Indian Trusts Act will again be brought into force.,,

The object of excluding fiduciary relationships from benami transactions is to give exception to a very limited classes of fiduciary relationships,,

provided that they are really not in the nature of bemani transactions. The relevant paras of the judgment of the trial court in this regard are paras 28,,

to 32 and these paras read as under:-,,

Even otherwise, plea of the defendants that the suit property was purchased out of the joint income of defendant No. 1 and the deceased brother,",,

Mr. Prahlad Singh and thus the defendants are residing therein in their own right is also not sustainable after the enactment of the Benami,,

Transactions (Prohibition) Act, 1988. In this regard, it is relevant to peruse section 4 of the Benami Transactions (Prohibition) Act, 1988 which reads",,

as under:,,

“Prohibition of the right to recover property held benami. â€",,

(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.",,

(3) Nothing in this section shall apply,â€"",,

(a) where the person in whose name the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of the,,

coparceners in the family; or,,

(b) where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity, and the property is held for the",,

benefit of another person for whom he is a trustee or towards whom he stands in such capacity.â€​,,

It is evincible from bare perusal of subsection (1) of section 4 of the Benami Transactions (Prohibition) Act, 1988 that the suit shall not be filed by",,

or on behalf of a person claiming to be the real owner of the suit property against the person in whose name, the benami property is held. Further, as",,

per subsection (2) of section 4 of the said Act, no defence based on any right in respect of any property held benami shall be raised against a person in",,

any suit filed by him claiming to be real owner of such property. However, sub section (3) of section 4 of the said Act provides for exceptions with",,

respect to the property held by coparcener in a Hindu Undivided Family for the benefit of coparceners in the HUF. Similar is the case with respect to,,

trustee and persons standing in fiduciary capacity and the property is held for the benefit of another person for whom he is trustee or towards him, he",,

stands in a fiduciary capacity.,,

The defendant no.1 has pleaded that the suit property was purchased in the name of his brother from the joint contribution; the question is, whether",,

such plea, if taken is permissible. As per the ratio laid down in judgment titled as J M Kohli Vs. Madan Mohan Sahni & Anr in RFA No.207/2012",,

decided on 07.05.2012 by Hon’ble High Court of Delhi, said plea even if taken, in any case is not sufficient to come within the purview of",,

exception laid down in sub section (3)(b) of section 4 of the Benami Act, 1988. Their lordship observed as:-",,

“8. In a way, therefore, there may be some ostensible conflict between the provision of Section 4(3)(b) of the Benami Act and Section 7 of the",,

same Act which repeals the provisions of the Indian Trusts Act, 1882, however, one has to read and interpret Section 4(3)(b) in a manner which is in",,

accord with the legislative intention to bar claims against properties held as benami. The concept of trust was always inbuilt once a transaction was a,,

benami transaction as the benamidar was the trustee for the real owner. But in spite of the concept of trust being inbuilt in benami transactions, the",,

Benami Act provided that no rights could be asserted in a benami property by the actual/dejure owner. Putting it differently, once Sections 81, 82 and",,

94 of the India Trusts Act, 1882 have been repealed, they cannot be brought in from the back door, so to say, by giving the same content contained in",,

the repealed provisions of Sections 81, 82 and 94 of the Indian Trusts Act, 1882 to Section 4(3)(b) of the Benami Act. If we give such an",,

interpretation, the entire Benami Act will fall and it will be as if the same has not been enacted. Therefore, Section 4(3)(b) which provides that the",,

property which is held as a trustee or in a fiduciary capacity must be interpreted in the sense that the trustee or a person who is holding the property in,,

a fiduciary capacity has either committed a fraud and got the property title in his name or is in furtherance of law holding property in his name,,

however in the capacity of a trustee or in fiduciary capacity, although the real owner is somebody else.â€​",,

In CS(OS) No. 478/2004 titled as Sh. Amar N. gugnani Vs. Naresh kumar Gugnani (through Legal heirs) decided on 30.07.15 by Hon’ble,,

High Court of Delhi, their lordship observed that since the plaintiff in the plaint himself states that the property was purchased as a benami property in",,

the name of the father, late Sh. Jai Gopal Gugnani, merely and although the plaintiff has used the expressions fiduciary relationship and trustee, yet",,

these expressions of fiduciary relationship and trustee are not those expressions which will cause the transaction to fall under the exception of Section,,

4(3)(b) of the Benami Act, but these expressions are those expressions which fall under Sections 81, 82, and 94 of the Trusts Act and which have",,

been repealed by Section 7 of the Benami Act. It was held that the suit is barred by the provision of Section 4(1) of the Benami Transactions,,

(Prohibition) Act, 1988.",,

Having regard to mandate of section 4 (2) of the Benami Transactions (Prohibition) Act, 1988 and the ratio of the aforesaid judgment passed by",,

Hon'ble High Court of Delhi, it is amply clear that Section 4(2) nullifies the defence available to the real owner in recovering the benami property from",,

the benamidar. Once section 4(2) applies, no defence will be permitted or allowed in any such suit by or on behalf of person claiming to be the real",,

owner of such property held benami. Section 4(1) of the Act places a bar on the plaintiff “pleading benami†while Section 4(2) places a bar on the,,

defendant pleading benami after coming into force of the Act. It may also be noted that section 7 of the benami Act has repealed Section 81, 82 and",,

94 of the Indian Trust Act 1882.â€​,,

(underlining added),,

I completely agree with the aforesaid findings and conclusions of the trial court that the defence of the appellants/defendants was barred by the,,

Benami Act inasmuch as if a defence as is pleaded by the appellants/defendants is permitted to be raised that the suit property should be taken as joint,,

property of late Sh. Prahlad Singh and appellant no. 1/defendant no. 1, effectively a benami relationship would be furthered and which is prohibited in",,

view of Section 4 of the Benami Act. Also, in my opinion, the Benami Act was passed for facts of the case such as the present where a Government",,

servant who did not have a property in his name used to claim ownership of the same on the ground of the property being in the name of a family,,

member. The facts/defence of the appellants/defendants therefore clearly falls against the intendment of the Legislature in bringing in the Benami Act,",,

and therefore the defence was rightly held by the trial court to be barred by the Benami Act.,,

12.(i) Learned counsel for the appellants/defendants then argued that the trial court has wrongly held that the appellants/defendants should pay mesne,,

profits at the rate of Rs.10,000/- per month with effect from 1.2.2012 till August, 2017 and thereafter increase by 10% after eleven months because it",,

is argued that the respondents/plaintiffs have failed to lead any evidence to show the rate of rent in the area.,,

(ii) I cannot agree with this argument urged by the appellants/defendants because the respondents/plaintiffs have filed on record and proved a rent,,

agreement dated 9.5.2012, Ex.PW1/9, and which is with respect to a second floor in the same Rajouri Garden area. This lease deed of the second",,

floor was from 1.6.2012 to 31.3.2014 at Rs.50,000/- per month and therefore considering that the suit premises are a total of two rooms with kitchen",,

and a bathroom on two floors of the subject property, hence trial court reduced the figure of rent of Rs.50,000/- per month in terms of the lease deed",,

Ex.PW1/9 to a figure of Rs.10,000/- per month. Surely some amount of honest guess work is always inbuilt whenever a Court arrives at the figure of",,

mesne profits since there cannot be identical evidence with respect to an identical property, and thus there is adjustment of the rate of rent to",,

determine mesne profits after evidence is led with respect to what is the rate of rent in the area. In my opinion, therefore the trial court has committed",,

no error in awarding a sum of Rs.10,000/- per month as mesne profits from 1.2.2012 till August, 2017.",,

In my opinion, trial court has also committed no error in increasing the mesne profits by 10% as courts do take judicial notice of increase of rent",,

and one such judgment is a judgment passed by this Court in the case of M/s. M.C. Agrawal HUF Vs. M/s. Sahara India and Ors., (2011) 183 DLT",,

105 wherein this Court has held that it is not illegal to grant 10% increase every year after fixing a base rent, unless there is overwhelming evidence to",,

the contrary. In this case, there is no evidence on the contrary and though the trial court has specifically not referred to the judgment in the case of",,

M.C. Agrawal HUF (supra), the principle which is applied by the trial court is completely in accordance with the ratio in the case of M.C. Agrawal",,

HUF (supra).,,

In view of the aforesaid discussion this appeal is without merit and the same is therefore dismissed with costs. Let the counsels for the,,

respondents/plaintiffs file their certificate of costs, and such costs as stated in the certificate of the counsels for the respondents/plaintiffs shall be the",,

costs as against the appellants/defendants in favour of the respondents/plaintiffs with respect to this appeal. Necessary certificate be filed by the,,

counsels for the respondents/plaintiffs within a period of two weeks from today and costs be paid within six weeks thereafter.,,