Kesho Ram vs Chetan Dass and Another

G.R. Majithia, J.—The lessee/defendant No. 2 has come up in regular second appeal against the judgment and decree of the first appellate court reversing, on appeal, those of the trial judge holding that the lease was a sham transaction.

The facts :

Respondent No. I/plaintiff filed a suit for declaration to the effect that the lease deed dated August 24, 1960, executed by Jagan Nath and Wasu Ram, original owners of the property in suit, in favour of the appellant/ defendant No. 2 and respondent No. 2/defendant No. 1, was a sham and fictitious transaction. The original owners sold the suit property to the plaintiff, vide registered sale deed, dated October 26, 1960. On August 24, 1960, they leased out the suit land to defendants Nos. 1 and 2 for 99 years on an annual rent of Rs. 500. The plaintiff sought a declaration that the transaction of lease was only a sham and fictitious transaction and was created to circumvent the provisions of the Punjab Pre-emption Act. Defendant No. 1 is the husband of the sister of the plaintiff. Defendant No. 2 is son-in-law of Chunghar Mal, uncle of the plaintiff. The lease deed was created with an express understanding that the plaintiff will retain possession of the suit property and the lease will be only a paper transaction.

The suit was resisted only by defendant No. 2/appellant. He pleaded that the suit land was jointly purchased by the father of the plaintiff and Wasu Ram, son of Chunghar Mal in the name of the plaintiff who was only a benamidar. One half share of the property was purchased by Ditta Ram subject to the leasehold rights of the defendants. He denied that the lease was a sham transaction.

On the pleadings of the parties, the following issues were framed :

Whether Shri Jagan Nath and Wasu Ram were owners of the land mentioned in para No. 1 of the plaint ?

Whether the plaintiff had purchased the suit land from Jagan Nath and Wasu Ram and entered into possession thereof ?

Whether the pattanama dated August 24, 1960, was only ostensible and was sham and fictitious, residuary and made for benefit of the plaintiff as alleged ?

Whether the suit is not properly valued for court fees and jurisdiction ?

Whether the suit is not maintainable ?

Whether the suit is collusive between the plaintiff and the defendant No. 1 ?

Whether the plaintiff is estopped by his conduct ?

Whether the plaint does not disclose cause of action ?

Whether the suit is not within time ?

Relief.

Subsequently, the following additional issue was framed on May 2, 1975 :

"Whether the suit is barred u/s 281 of the income tax Act ?

Under issue No. 1, the trial judge found that Jagan Nath and Wasu Ram were owners of the suit land ; issues Nos. 2 and 3 were dealt with together and it was held that the plaintiff had purchased the suit land from Jagan Nath and Wasu Ram and the lease deed dated August 24, 1960, was not a sham transaction ; issue No. 4 was answered in favour of the plaintiff and it was held that the suit was properly valued for purposes of jurisdiction ; issue No. 5 and the additional issue were not pressed ; under issue No. 6 it was held that defendant No. 2 had failed to prove that there was only collusion between the plaintiff and defendant No. 1 ; issue No. 7 was answered against the plaintiff and it was held that he was estopped by his conduct from filing the suit ; issues Nos. 8 and 9 were answered against the defendants.

On appeal by the plaintiff, the first appellate court, after taking into consideration documentary and oral evidence, came to the conclusion that the lease deed, dated August 24, 1960, was a sham and fictitious transaction and that the plaintiff was not estopped by his conduct from filing the suit.

The finding recorded by the first appellate court that the transaction of lease was a sham transaction is a pure finding of fact and is not open to exception in second appeal. Even otherwise, I have gone through the evidence produced on record and am not persuaded to take a view different from the one taken by the first appellate court on the basis of the evidence produced on record. The suit was not contested by one of the lessees, namely, defendant No. 1 (respondent No. 2 in appeal). He appeared at the trial as a witness for the plaintiff and admitted the entire claim of the plaintiff. He was cross-examined at length by defendant No. 2/appellant and nothing was elicited in his cross-examination to discredit his testimony. Defendant No. 2 did not appear at the trial. D. W. 3, Wasu Ram, father of defendant No. 2, claiming to be the attorney of defendant No. 2, appeared at the trial; he did not produce any evidence regarding the payment of any lease money to the owner. He admitted in cross-examination that defendant No. 2 was carrying on tailoring work in Delhi. The totality of circumstances of the instant case fully establishes that the perpetual lease was created to circumvent the provisions of the Punjab Preemption Act which was then in force. The plea of defendant No. 2 that the sale in favour of the plaintiff was only benami was never put in issue. It was indirectly taken in the written statement but was not pressed before any of the courts below. No evidence was led to substantiate the plea and this plea had not been urged and taken up in the grounds of appeal in this court.

Learned counsel for the first time during the course of arguments submitted that, in view of the provisions of Section 4 of the Benami Transactions (Prohibition) Act (45 of 1988), the suit was not maintainable and, in support of this submission, he relied upon Mithilesh Kumar and Another Vs. Prem Behari Khare, . The facts in that case were that the plaintiff-respondent (in the appeal before the apex court) filed a suit for the reliefs, inter alia, that he be declared to be the sole and real owner of the suit house and that the opposite party (appellant in appeal before the apex court) be permanently restrained from transferring the suit house, The trial judge decreed the suit declaring the plaintiff to be the sole and real owner of the suit house and permanently restraining the defendant from transferring the suit house to any other person. On appeal, the judgment and decree of the trial judge were affirmed. Second appeal by the defendant was also dismissed by the Allahabad High Court. In appeal by special leave in the apex court at the instance of the defendant, it was urged that, in view of Act 45 of 1988, the suit of the plaintiff was not competent. The apex court held that the Act came into force during the pendency of the appeal before the High Court and that the subsequent events could be taken note of and the Act being retrospective in operation, the suit could not be decreed.

There can be no quarrel with the proposition of law laid down in the aforesaid authority, but the question is of its applicability to the facts of the instant case. Section 4 of the Benami Transactions (Prohibition) Act prohibits the filing of a suit by the real owner against another on the ground that the latter was holding the property benami. Similarly, a defence cannot be raised in a suit that the defendant was holding the property benami.

In the instant case, apart from the indirect assertion in the pleadings that the property in suit was purchased benami in the name of the plaintiff from the vendors, no proof was led to substantiate the plea. A mere allegation that the property is held benami by the plaintiff will not attract the provisions of Section 4 of the Benami Transactions (Prohibition) Act. Section 4, ibid, is not attracted to the instant case.

Learned counsel for the appellant then submitted that the plaintiff executed sale deeds, exhibits P. W.-4/2 and P. W.-4/3, in favour of Bhima and Kishan Lal in respect of the suit land and, in both these documents, it was stated that the vendees were given symbolic possession. The plaintiff indirectly admitted in these documents that the possession was with the lessee and this admission debars him from challenging the validity of the lease deed dated August 24, 1960. The first appellate court took these documents into consideration and for good reasons, held that mere recital in the sale deed that symbolic possession was given to the vendees is of no consequence since lessees have not alleged and proved that they were in possession of the land sold through these two documents. The submission is bereft of merit.

For the reasons aforesaid, the appeal is dismissed with no order as to costs. Counsel''s fee is assessed at Rs. 1,000.