O.R. Abdul Hamid vs O.R. Abdul Rahim and another

Srinivasan, J.—This appeal arises out of final decree proceedings. First defendant in the suit is the appellant. Plaintiff and the second

defendant are respondents herein. When the suit was filed in 1967 the sister of the parties was the third defendant. The case of the plaintiff was that

their mother Hathija Bivi died in 1939 leaving certain properties and their father who was also entitled to a share therein, agreed that all the

properties of the mother could be taken by the children thereby relinquishing his own share. With the money borrowed on the security of the said

properties as well as the income from the properties, certain purchases were made in the names of defendants 1 and 3 and also in the joint names

of the parties. There was a registered agreement dated 19.4.1951 under which all the parties agreed that the properties shall be enjoyed jointly and

they will be divided later. By that agreement, it was decided by the parties that the properties are divisible among the parties. It was also stated in

the plaint that there was a separate living from 1957 and the parties had agreed that any acquisition of properties thereafter would belong to the

acquirer exclusively. The plaintiff claimed division of properties which were held jointly. First defendant was the only person who contested the

suit. Defendants 2 and 3 remained ex parte. The defence put forward by the first defendant was that the properties described in ''C'' schedule to

the plaint were his personal acquisitions acquired with the aid of his own funds, and in any event, he had been enjoying the properties exclusively

and had prescribed title by ouster. The registered agreement dated 19.4.1951 was not disputed by the first defendant.

Issue No. 3 framed by the trial court was, whether ''C'' schedule properties are the separate properties of the first defendant and not liable for

partition. The Court answered the issue in paragraph 11 of the judgment in the following words:

Having regard to the fact that the ''C'' schedule properties have been purchased with the family funds and to the fact that Exhibit A1 has come into

existence after the said purchase, ''C schedule properties come directly under the said agreement and they are partible. For the foregoing reasons.

hold that the ''C'' schedule properties are not the separate properties of the 1st defendant and answer issue No. 3 accordingly.

The document referred to as Ex A1 is the registered agreement dated 19.4.1951.

Ultimately the suit was decreed on 2.5.1970 and a preliminary decree was passed granting 2/3rd share to the plaintiff. The decree was

challenged by the first defendant in A.S. No. 671 of 1970 in this Court. When the appeal was argued, the only contention advanced by learned

counsel for the appellant related to the oral agreement of the year 1957 and the acquisitions made thereafter. In fact, the contention pertained to

the properties which were not included in the suit. Learned counsel contended that the finding of the trial court that those properties were not

divisible was given behind the back of the parties concerned and was not sustainable. This Court has stated in the judgment very clearly that no

other finding of the Court below was canvassed by the counsel for the appellant. The relevant observation of the Division Bench reads thus:

We prefaced our observations by saying that the area of controversy has become considerably limited. This is so, because Mr. G. Ramaswami,

the learned counsel for the appellant, does not challenge the findings of the court below either in the matter of reckoning of the share of the plaintiff

in the suit schedule properties or in the matter of the accounting of the income from the properties, as asked for and as directed against defendants

1 and 2.

Again the Bench said:

We have already stated that the learned counsel for the appellant did not canvass the correctness of the conclusions of the court below as regards

the findings on the issues rendered by it, excepting to state that the conclusion as regards the existence of the oral agreement regarding the above

properties has been rendered on inchoate and insufficient material. In this sense, therefore, we confirm the other findings of the trial court.

As regards the properties with reference to which leaned counsel for the appellant argued, the Bench directed the parties to work out their rights

by a separate action, if so advised. The Bench dismissed the appeal confirming the findings of the court below. The judgment of the Bench was

rendered on 3.12.1974.

The plaintiff filed an application for passing a final decree on 23.7.1975. Third defendant died on 29.1.1979. Consequent on her death, the

share of the plaintiff and his brothers got augmented and a modified preliminary decree was passed on 18.6.1979 under which each brother got

l/3rd share in the properties. A Commissioner had been appointed even before the death of the third defendant and a report has been submitted on

the basis that the plaintiff was entitled to 2/7th share. In view of the modified preliminary decree, the Commissioner had to submit a revised scheme

of division. Accordingly, Exs.C-3 and C-4 were submitted by the Commissioner. Ex.C-3 is the report of the Commissioner relating to the division

of lands. Ex.C-4 is the report pertaining to buildings. The report of the Engineer whose assistance the Commissioner had pursuant to an order of

Court is marked as Ex.C-5. Before the trial court, there was no objection by any party as to the valuation of the properties as fixed by the

Commissioner, nor was there any objection as to the mode of division suggested by the Commissioner with reference to houses. There was a

contention by the first defendant that the ''C'' schedule properties should be allotted to him in entirety in honour of his sentiment and to avoid

fragmentation of his holding. That contention was rejected by the trial court. As regards the building, there was no serious contention and all the

parties accepted that the first mode of division suggested by the Commissioner could be adopted. Accordingly, the trial court passed a decree

accepting the reports of the Commissioner Exs.C-3 and C-4 and allotting the properties on that basis.

In this appeal by the first defendant, the first contention raised by learned counsel is that in view of the provisions of the Benami Transaction

(Prohibition) Act, 1988 (Act 45 of 1988) (hereinafter referred to as ''the Act'') the plaintiff is not entitled to get a final decree with reference to ''C''

schedule properties. Learned counsel contends that the claim of the plaintiff was that the ''C'' schedule properties were held by the first defendant

benami for the benefit of the family and that claim was upheld by the court. The passing of the Act which came into force on September 5,1988

prevented the plaintiff from initiating any action in order to recover the property, which would also prevent him from getting final decree. Reliance is

placed on S. 4(l) of the Act which reads thus:

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.

It is argued that the language of the Section is very wide and it refers to suit, claim or action. It is submitted that an application for passing a final

decree would certainly be an action to enforce a right in respect of the property. It is also argued that the first defendant is holding the properties

described in ''C'' schedule for the benefit of the family and the other sharers as found by the court. Hence, the Section would come into play with

the result the application for final decree should be dismissed.

Learned counsel submits that the judgment of the Supreme Court in Mithilesh Kumar and Another Vs. Prem Behari Khare, Om Prakash and

another Vs. Jai Prakash, are to the effect that the Act would apply to pending proceedings. According to him, the proceedings are pending in this

Court as the final decree is yet to be passed. It is also contended that even if final decree has been passed and the matter has reached the stage of

finality, the court can still apply the provisions of the Act and negative the claim of the plaintiff for recovery of possession in execution of the said

decree. Reliance is placed on the judgment of Kerala High Court in C. Narayanan Vs. Gangadharan, and the judgment in Urmila Bala Dasi Vs.

Probodh Chandra Ghosh and Another, . In those two cases, the Courts have taken the view that the Act would apply even at the stage of

execution and it is not open to the decree-holder to recover the property for which he has obtained a decree as the judgment-debtor is a person

holding the property benami for the decree-holder in the character of benamidar.

So far as the decisions of the Supreme Court are concerned, Mithilesh Kumar and Another Vs. Prem Behari Khare, cited and Om Prakash

Case 1992-2-L.W.699 = AIR 1992 S.C.885-cited), the issue whether the property was held benami or not, was sub judice as the matter was

pending in the Supreme Court. The appeals to the Supreme Court were against the judgments which held that the property was held benami. In

those circumstances, the Supreme Court held that the Act would apply to pending proceedings resulting in the removal of the protection of the right

of the real owner which was in existence prior to the passing of the Act. The above two rulings will not apply to the present case as the question is

no longer open. It is not in dispute that the preliminary decree has become final in the sense that the rights of the parties to the properties have been

finally determined. As pointed out already, the finding of the trial court with regard to ''C'' schedule properties was not even challenged in this

Court by learned counsel for the appellant in the earlier appeal. Hence, the question cannot be said to be sub judice and the said two rulings of the

Supreme Court will not help the appellant in the present case.

As regards the judgment of the Kerala High Court C. Narayanan Vs. Gangadharan, cited, and Calcutta High Court Urmila Bala Dasi Vs.

Probodh Chandra Ghosh and Another, though we are inclined to disagree with them we think that it is unnecessary for the present case to decide

the question whether a person is entitled to invoke the provisions of the Act in execution proceedings. On the facts and circumstances of the case,

we are of the view that the plea raised by the plaintiff in the suit is not a plea of benami at all. The plaintiffs plea was that the properties were joint

properties purchased with the aid of joint funds. Moreover, there was a registered agreement between the parties on 19.4.1951 under which the

parties agreed that the properties will be divided among them at a later stage whenever they wanted to divide. In those circumstances, the plea of

the plaintiff was not that the properties were held benami by the first defendant for the benefit of the plaintiff or other members of the family.

The Act defines ""benami transaction"" as any transaction in which property is transferred to one person for a consideration paid or provided by

another person."" In a case where joint funds are utilised and property is purchased in the name of one of the co-owners of the joint funds, it

cannot be said that the property is transferred to one person for a consideration paid or provided by ""another person."" Learned counsel tor the

appellant states that the family is other person in this case and the properties were purchased for consideration provided by the family in the name

of one member of the family. Even assuming that the family is a person, that will not satisfy the definition in the Act because the properties were not

transferred to one person in whose name the property stands. The properties are purchased for the benefit of the joint owners and it cannot be

said that the first defendant has no right at all in the properties. It is not as if the first defendant is only a benamidar and not a sharer in the

properties and the properties are held by him for the benefit of the other members only. So long as he is one of the co-owners of the property, the

definition of ""benami transaction"" as found in the Act will not apply to the present case. More so because there is an agreement dated 19.4.1951 in

this case.

S.4 sub-S.(3) contains exceptions to the Section. Clause (a) refers to Hindu Undivided Family. Clause (b) refers to the property held by a

trustee or other person standing in a fiduciary capacity. Clause (b) reads thus:

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.

In the present case, the properties are found to have been purchased by the joint funds of a Muslim family. All of them are co-owners and their

joint funds have been utilised for the purchase of the property, but the purchase has been made in the name of one of the co-owners. A co-owner

who has taken advantage of the joint funds to purchase a property in his name will hold it in trust for all the co-owners. It is a resulting trust under

S. 90 of the Trusts Act. Thus, the first defendant in whose name the properties stand, really stands in a fiduciary capacity with regard to others.

We are quite aware that one co-owner does not stand in a fiduciary capacity with reference to another co-owner ordinarily. But in a case where a

co-owner has gained, an advantage with the aid of co-owners'' common funds, with reference to that property, he stands in a fiduciary capacity

vis-a-vis the other co-owners.

11.-a. The question has been considered by a Division Bench of Allahabad High Court in Dwarka Prasad v. Mahadeo Prasad (Al R 1930 All

631). In that case the Division Bench has relied on S. 88 of the Trusts Act and observed that where there is a fund belonging jointly to several

persons and one of those persons makes a purchase of land with that fund that purchase enures to the benefit of all the persons entitled to share in

the fund.

In Balayya v. Guruvayya (AIR 1915 Mad 129), a Division Bench held that where one of the two co-owners of a debt obtains document in his

own name in derogation of the right of the other, the latter has a right to have it declared that the former holds the document for the latter''s benefit

also under S. 90 of the Trusts Act. In C.V. Ramaswami Naidu and Others Vs. C.S. Shyamala Devi and Others, a Division Bench of this Court

considered the relationship of co-owners and held that S. 90 of the Trusts Act would apply to properties purchased by one co-owner with the aid

of common funds. The Bench observed:

Co-ownership is a relationship which springs and slopes from consensus and contract. Legislation has only imprinted on the concept of co-

ownership certain rights which have a supervening effect which are declaratory of the rights inter se as between co-owners. The legal relationship is

always knitted in a framework of jointness and no one therein can predicate with certainty as to what portion of the property held in common is his;

and an element of inseparability is inhered in the doctrine of co-ownership. Excepting for certain rights which he has to deal with the said properly

for the conjoint benefit of himself and other co-owners, he cannot project in himself a title which is inconsistent with or derogatory to the other title

of the co-owner It therefore, follows that the concept of co-ownership has certain peculiar rights and liabilities attached to it, and that is why it is

accepted law that a co-owner cannot, even by the mere possessory title of the property in him, claim the same by adverse possession.

In Mohammed Ismail and Another Vs. Khadirsa Rowther and Others, a Division Bench considered the question once again and applied S. 90

of the Trusts Act to acquisitions made by certain members of a Muslim joint family. The Bench observed:

This is a case in which admittedly the appellants along with the 6th defendant were in possession of the properties belonging to all the members of

the family. They are of a large extent of 40 acres. Under those circumstances, unless and until it is proved that the subsequent acquisitions were

made out of their independent income, they must be held to belong to other co-owners as well, as per the terms of S. 90of the Indian Trusts Act, 2

of 1982. This is not a case to which the principle of law applicable to the joint Hindu family has been applied. On the contrary, purely on the well

accepted principle that where a co-owner derives advantages in view of his position in derogation of the rights of the other co-owners, he must

disgorge the benefit in favour of the co-owners.

Hence we hold that in this case the first defendant will come under S. 4(3)(b) of the Act as he is holding the property in a fiduciary capacity

vis-a-vis other sharers.

The next contention of learned counsel is that the ''C'' schedule properties should be allotted to the first defendant in equity. It is sub-milled that

he has been in possession ever since the purchase thereof and the value of the lands is equal and nobody will suffer any prejudice if the ''C''

schedule properties are allotted to him and the other sharers are allotted the lands in ''A'' schedule. This contention was not put forward by him in

the court below. There only one contention was raised that the division of ''C'' schedule properties would lead to fragmentation and the first

defendant''s; sentiments should be honoured and the entire ''C'' schedule properties should be allotted to him. In Ex.C-3, the Commissioner has

stated as follows:

I am proceeding to divide the properties in each village separately as each party to the suit is claiming share in each village, and the nature of the

properties are also likewise. Hence I have no alternative except to divide the properties in each village separately.

Thus no objection was raised before the Commissioner when he divided properties in each village, and on the other hand, each party claimed a

share in each village. There is no evidence before us to show that the lands in all the villages are of the same value. In the absence of such evidence,

the method adopted by the Commissioner in allotting 1/3rd share in all the lands is the best method of division and the court below is right in

accepting the same. No material has been placed before us to differ from that conclusion of the Court below.

The next contention of learned counsel is that in ''H'' schedule, item No. l has not been valued properly and the value given by the

Commissioner is exaggerated. According to him, the value of that property would be only around Rs. 1,50,000/- as stated by the Commissioner in

his earlier report and it has been valued at present in Ex.C-4 at Rs. 1,94,000/-. Reliance is placed by learned counsel on the objections to the

Commissioner''s report filed by the second defendant. It is stated by the second defendant in his objections that item No. 1 is worth Rs.

1,50,000/- and not Rs. 1,94,000/- as valued by the Commissioner. Significantly, the first defendant did not choose to object to the value of item

No. 1 specifically. In his objection, he has merely stated that alt the house properties have been valued very highly. The relevant sentence reads

thus:

Item No. 1 has been valued excessively without considering the actual situation of the building in a village like Kandiur which is a minor Panchayat

and which do not have any appreciation value for the building. Likewise the other items of the same schedule have been valued so highly.

Thus the complaint of the first defendant is that all the items have been valued highly by the Commissioner. But before the trial Court no objection

was taken to the valuation of the Commissioner; nor was any material placed before the Court to change the valuation. In fact the commissioner

was assisted by an engineer on the direction given by the Court and the engineer has filed a report which is marked as Ex.C-5. The

Commissioner''s valuation of the properties is based on the report of the engineer and in the absence of any material to show that the valuation is

erroneous, we cannot accept the contention of the learned counsel for the appellant. It should also be stated that all the parties agreed that the first

mode of suggestion by the Commissioner for dividing the house properties is the best mode of division and that has to be accepted by the trial

court.

It is next argued that the Commissioner should have valued house properties in items 4 and 5 of ''H'' schedule at the value of one half of the

value of item No. 1. Items 4 and 5 have been valued by the commissioner at Rs. 59,146/-. While it is the case of the first defendant in his

objections to the Commissioner''s report that items 4 and 5 have also been valued highly, his present version goes against the same. At the same

time it should be pointed out that it is the second defendant who has stated in his memorandum of objections in the trial court that items 4 and 5

have been under-valued by the Commissioner and they could be valued at Rs. 75,000/-. But, no material has been placed by any of the parties to

show that the said items have not been properly valued. The Court below negatived this contention and accepted the value of the commissioner.

Learned counsel submits that item No. 6 of ''H'' schedule is a shop and it has been valued at Rs. 3,086/- by the Commissioner. According to

learned counsel, it is a shop which will yield regular income and it cannot be valued on the basis of the measurements of the structure or the age of

the structure. Learned counsel contends that the fact that the property will yield regular income has not been taken into account by the

Commissioner or by the Court below. Here again, no materials have been produced before the court as to what would be the value of item No. 6.

As pointed out earlier, in his Memo of Objections, the first defendant has stated that item No. 6 has also been valued highly by the Commissioner,

while the second defendant has not stated anything about the value of item No. 6 in his memo of objections. The trial court has considered the

matter of division of the buildings in paragraphs 12 to 14 of its judgment and on the basis of the evidence available, it has come to the correct

conclusion that the properties'' have been valued correctly and the allotment suggested by the Commissioner is acceptable.

The last of the arguments is that there is an omission on the part of the Commissioner as well as the Court below to divide item No.7 of ''A''

schedule and items 2 and 3 of ''H'' schedule which are buildings. There is no dispute that these items have not been allotted to any party. The

parties agree that they should be divided by casting lots and yesterday, we made allotment on the basis of lots. We had also recorded it by an

order of Court made yesterday. Item No. 7 of ''A'' schedule has been allotted to the second defendant. Item No. 2 of ''H'' schedule has been

allotted to the plaintiff. Item No. 3 of ''H'' schedule has been allotted to the first defendant. There is no dispute before us that the three items art of

the same value. Hence allotment has been made by us in this Court. Thus all the contentions urged by learned counsel for the appellant as against

the decree passed by the Court below fail and the appeal has to fail with regard to the same. The appeal has to be dismissed excepting with regard

to the modifications by adding to the final decree the allotment of item No. 7 of ''A'' schedule to the second defendant, item No. 2 of ''H'' schedule

to the first defendant. In other respects, the final decree passed by the Court below is confirmed and the appeal is dismissed. There will be no

order as to costs.