Kishan Ram Marwari vs Godawari Devi and Others

Harries, C.J.—This is a plaintiff''s appeal from a decree of the learned Subordinate Judge of Dhanbad dismissing his claim for a declaration. The plaintiff in the year 1925 obtained a decree for about Rs. 10,000 against defendant 4 who was the manager of the Katras Encumbered Estate. On 3rd December 1926, this claim was admitted by the manager at Rs. 9924. In the year 1927 one Bansidhar brought a suit against the plaintiff for Rs. 3800, and on 9th June 1927 this suit was compromised by the plaintiff agreeing to pay the said Bansidhar Rs. 3000 within a month. It is now the plaintiff''s case that he took steps to prevent the attachment of the decree which he held against the Katras Encumbered Estate. According to the plaintiff, he executed a registered deed of assignment on 16th August 1927 of the decree for Rs. 9924 in favour of Nagarmall, husband of defendant 1. In this deed, it is said, that the consideration for the sale was Rs. 4000 but according to the plaintiff no money passed, and this transaction was a purely benami one, the purpose being to put this decree of Rs. 9924 out of the reach of Bansidhar who held a decree for Rs. 3000 against the plaintiff.

Later Nagarmall assigned the decree to his adopted son Saligram, defendant 3, and the present suit was brought for a declaration that these two deeds of assignment were inoperative and were benami transactions.

The defence was that the assignment to Nagarmall was a genuine and valid assignment for good consideration and that Nagarmall had become the owner of the decree in every sense of the word. Accordingly, it was contended that Nagarmall could do what he liked with the decree and assign it to Saligram if he so desired. The learned Subordinate Judge came to the conclusion that the assignment to Nagarmall was a genuine and valid transaction and accordingly dismissed the plaintiff''s claim in its entirety.''

It has been strenuously argued by Mr. R.S. Chatterji on behalf of the appellant that the decree of the lower Court cannot be sustained. The lower Court, in the first place, held that there was no real motive for this transaction. The Court has found that at the date of this assignment to Nagarmall the plaintiff had considerable house property and shop property which could have been attached by Bansidhar in execution of his decree for Rs. 3000. The plaintiff admits that he had this property, and that being so there appears to have been no purpose whatsoever in executing a benami assignment of this decree against the encumbered estate.

Decrees against encumbered estates are often very difficult to realize, and Bansidhar would be far more likely to execute his decree against the plaintiff''s house or shop property than against this decree for Rs. 9000 odd. According to Mr. Ghatterji, however, the plaintiff executed the assignment in order to prevent Bansidhar attaching the decree held by the plaintiff. In other words, he has to admit that the assignment was made with a view to defrauding Bansidhar, one of the plaintiff''s creditors. According to the plaintiff, Bansidhar eventually accepted Rs. 1000 in full satisfaction of his decree for Rs. 3000, and if that be so it would appear that the fraud was successful. The learned Subordinate Judge was not satisfied that Bansidhar had received anything; but in any event according to the plaintiff''s own case, the fraud, if not wholly successful, had at least been partially successful. That being the case, the plaintiff cannot possibly ask this Court to declare this transaction in favour of Nagarmall to be a benami one. The plaintiff in putting forward such a case would be asking this Court to relieve him from the consequences of his own fraud which this Court would never do.

However I am satisfied in this case that there was no real motive for a benami transaction. As I have pointed out, the plaintiff on his own showing had ample property and there was no purpose whatsoever in protecting this decree and allowing the other property to be available for execution. The learned Subordinate Judge has further found that there was no such relationship existing between Nagarmall and the plaintiff as would cause Nagarmall to become a benamidar of the plaintiff. In the plaint it is suggested that Nagarmall was a friend and a co-villager and fellow casteman of the plaintiff, and this was denied in the written statement. In evidence what plaintiff said was that Nagarmall was a co-villager and fellow casteman of the plaintiff. He did not say that they were on friendly terms. Further, it must be remembered that Nagarmall was carrying on business at Calcutta, and I can see nothing in their respective positions which would lead Nagarmall to act as a benamidar for the plaintiff. All the plaintiff says about the matter is that he discussed the necessity for protecting this debt with his wife, and they agreed that it should be transferred to Nagarmall benami.

In my view the suggestion that Nagarmall readily became a party to this transaction is not supported by the evidence.

The learned Subordinate Judge further held that Nagarmall was in possession of this document throughout, and if that be so, it is against the contention that the transaction was a benami one. According to the defence, the whole Rs. 4000 mentioned as the consideration was not paid in cash. Rs. 1000 was paid in cash, and goods to the value of Rs. 3000 were supplied to the plaintiff by Nagarmall. It is common ground that at this time the plaintiff was carrying on a cloth business and did enter into transactions with a firm in which Nagarmall was a partner. The plaintiff himself admits that he still owes Rs. 900 for cloth, but the evidence of the defendant shows that over Rs. 3000 was owing on these transactions and what is more important is that the plaintiff was never sued for this sum. According to the defendant, he gave the plaintiff goods to the value of Rs. 3000 as part of the consideration of this document.

The learned Subordinate Judge was satisfied that the plaintiff had received over Rs. 3000 worth goods; but he was not satisfied on the evidence that the remaining Rs. 1000 had been paid in cash. It may be that the whole of the consideration was not paid, but that does not make the transaction a benami one. If this was a genuine transaction, then Nagarmall would naturally be in possession of the document. The plaintiff is bound to explain this possession and he explains it in a somewhat extraordinary way. According to the plaintiff, shortly after this transaction he began to buy goods from Nagarmall''s firm; but the two transactions were entirely independent. According to the plaintiff, Nagarmall demanded some security for the amount owing on these cloth transactions, and the plaintiff very shortly after the assignment was executed, handed over the assignment to Nagarmall by way of security.

If the assignment was a benami one which gave Nagarmall no interest whatsoever in the decree in question, it is somewhat difficult to understand what value that assignment would be as a security. Mr. Chatterji has argued that the learned Judge has found that the document was given to Nagarmall as a security; but in my view he has misunderstood the Judge''s finding. He does use the word "security" but what the learned Judge clearly meant was that the assignment was a sort of security for the prize of goods. In other words, Nagarmall was to obtain the price of the goods not from the plaintiff but by realization of the decree which had been transferred to him. The Subordinate Judge finds in the clearest terms that the assignment was a bona fide and genuine one and passed the interest in the decree to Nagarmall.

Lastly, the learned Subordinate Judge was satisfied that at least Rs. 3000 of the consideration was paid by Nagarmall. It was not paid in cash, but it was discharged by the plaintiff receiving goods to the value of over Rs. 3000. Mr. Chatterji has argued that it was not open to the defendants to show in this case that consideration was paid in any manner other than in cash. It is true that the assignment states that the consideration is Rs. 4,000 in cash; but in my view it was open to the defendants to show that the actual consideration was paid not actually in cash but in goods to the value of Rs. 3000. Mr. Chatterji has argued that to allow such proof is to allow evidence to vary the terms of a written contract, and he relies upon the terms of Section 92, Evidence Act. In my view, evidence of the manner in which the consideration was paid is not evidence tending to vary the terms of a written contract. The consideration is stated as Rs. 4000, and the defendants were entitled to show that this amount had in fact been paid.

However this case is looked at, the plaintiff''s claim is bound to fail. If we accept the argument for the plaintiff that there was a motive for this transaction, namely defeating the claims of Bansidhar, then as those claims were defeated wholly or in part, the plaintiff''s claim must fail. On the other hand, if the findings of the learned Subordinate Judge be accepted, the assignment was for valuable consideration and was a bona fide and genuine transaction. In my view it is quite impossible in this case to say that the learned Subordinate Judge was wrong in holding that this was a genuine transaction for consideration.

In my view the evidence amply supports the findings of the learned Subordinate Judge, and that being so this appeal must fail. If the transaction in favour of Nagarmall is held to be genuine, then the plaintiff cannot possibly obtain any relief with respect to the subsequent transaction by Nagarmall in favour of Saligram. For the reasons which I have given I am satisfied that no ground has been made out for interfering with the decree of the Court below, and I would therefore dismiss this appeal with costs.

Manohar Lall, J.

I agree.