Subhendu Kr. Dutta vs Dipankar Ghosh and Others

Asok Kumar Ganguly, J.—The matter was taken up for hearing on a number of days but on none of those days respondents ever appeared. As such, this Court heard the learned counsel for the appellant and decided the matter accordingly.

This appeal has been filed impugning the Judgment and decree vide Order No. 44, dated 21st September, 1992 passed by the Assistant District Judge, 3rd Court, Midnapore in T. S. No. 14 of 1986. By the said order the learned Judge was pleased to hold that the suit is not maintainable in law in view of the provisions of Benami Transaction (Prohibition of the Right to Recover Property) Act, 1988 (hereinafter referred to as the said Act). The suit was for specific performance of contract for sale of immovable property. The suit was filed by the plaintiff/ appellant against Pranab Kumar Ghosh, Prabir Kumar Ghosh, Partha Pratim Ghosh and Vivekananda Mission Ashram. All these parties were made defendant Nos. 1, 2, 3 and 4 and one Prithwish Kumar Sen was made the pro forma defendant No. 5. The suit property consists of vacant land with one storeyed brick built bungalow, lawn etc.

The plaint case is that a Memorandum of Agreement dated 5-7-1982 was prepared and which was duly executed by the defendant Nos. 1 to 3 and the said Memorandum of Agreement was entered into between the plaintiff and the defendant Nos. 1 to 3 in respect of the sale of the suit property and the price was fixed at Rs. 2,15,000/-and in the plaint it has been stated that the plaintiff decided to purchase the property in the benami of pro forma defendant No. 5. Pursuant to such agreement the plaintiff paid a sum of Rs. 10,000/- to the defendant Nos. 1 to 3 by bank drafts through his benamidar, the pro forma defendant No. 5 and such payments had been acknowledged in the agreement by the defendants. After such agreement was entered into, the plaintiff came to know that the defendant Nos. 1 to 3 were going to transfer the suit property to the defendant No. 4 and the plaint case is that the defendant No. 4 was at all the material time aware of the agreement between the plaintiff and the defendant Nos. 1 to 3. The plaint case is that being aware of such illegal attempt of the defendant Nos. 1 to 3, plaintiff requested the defendants to take the balance consideration money and to execute the sale deed. As the defendants did not do so, the suit was filed.

When such suit was pending, the defendant No. 5 filed an application under Order 1, Rule 10 read with Rule 15 of the CPC praying for transposition of the defendant No. 5 in the category of plaintiff and wanted to proceed as a plaintiff against the defendant Nos. 1 to 4. Along with the said application another application was filed by defendant No. 4 for deciding the maintainability of the suit, inter alia, on the ground that it appears from the averments made in the plaint that the said suit was filed by the plaintiff in the benami of defendant No. 5. The said defendant No. 5 also executed a document on 31st March, 1983 declaring the plaintiff to be the real purchaser and defendant No. 5 as a benamidar in respect of such transaction. As such, defendant No. 4 raised the question of maintainability of the suit in its present form and prayed for its dismissal.

Both the applications were taken up for hearing by the learned trial Judge and the learned trial Judge rejected the application filed by the defendant No. 5 but the application filed by the defendant No. 4 for trying the issue of maintainability of the suit was considered and allowed and the learned Judge came to the finding that the suit is not maintainable in law in the judgment and decree under appeal.

In coming to the said finding the learned Judge relied on the statements made in the plaint particularly in paragraphs 3, 4, 8 and 13 and relied on the provisions of the said Act as also the Division Bench judgment of this Court in the case of Urmila Bala Dasi Vs. Probodh Chandra Ghosh and Another, By relying on these provisions the learned Judge came to the conclusion that the defendant No. 5 is merely a benamidar of the plaintiff and as in view of the provisions of the said Act no person is entitled to institute any suit to recover benami properties nor is anyone entitled to take defence on the point of benami and the suit is not maintainable. The learned Judge came to the conclusion that the said Act has retrospective effect. The learned Judge held that the suit is hit by the provisions of the said Act. The learned Judge also held that as a result of the provisions of the said Act the jurisdiction of the Court to try the suit is hit and the suit is, therefore, not maintainable in law.

It may be noted in this connection that the said Act came into force on 5th September, 1988 and the said suit was filed on 5th of April, 1986. Therefore, admittedly the suit was filed much prior to the coming into effect of the said Act.

Now, the question is whether the said Act has retrospective operation. The Division Bench of this Court in Urmila Bala Dasi Vs. Probodh Chandra Ghosh and Another, held that the provisions of the said Act would also apply to a pending proceeding. In other words, the proceedings which are pending on the commencement of the said Act will come under sweep of Section 4 of the said Act (see paragraph 8 at page 312 of the report).

There is also a Supreme Court judgment, which was delivered by considering the provisions of the said Act, in the case of Mithilesh Kumar and Another Vs. Prem Behari Khare, These very questions whether the said Act has a retrospective operation or not or whether the said Act would apply to pending suits, were considered by the Hon''ble Supreme Court. While considering these questions, the learned Judges expressed their views in paragraph 22 by saying that the provision of Section 4 would apply to past transactions as well. In paragraph 22 of the judgment, the learned Judges held that Section 4 of the said Act deals within its sweep past benami transactions and the learned Judges declared that when an Act is declaratory in nature, like the said Act, the presumption of its prospectivity is not applicable. In view of the aforesaid two judgments, the decision taken by the learned Judge, which is under appeal, cannot be said to be a wrong decision, at the time when it was delivered.

But subsequently, and during the pendency of this appeal the said Act has been construed by a larger Bench of the Supreme Court and the larger Bench of the Supreme Court while rendering the decision in R. Rajagopal Reddy and Others (deceased by legal representatives) Vs. Padmini Chandrasekharan (deceased by legal representatives), took a different view and held that the Act will only apply prospectively and the decision in Mithilesh kumari was overruled. Dealing with this aspect of the matter the learned Judges in paragraph 11 of the judgment in R. Rajagopal Reddy observed as follows :-

"Then to imply by necessary implication that Section 4 would have retrospective effect and would cover pending litigations filed prior to coming into force of the section would amount to taking a view which would run counter to the legislative scheme and intent projected by various provisions of the Act to which we have referred earlier."

The learned Judges clarified the position further in paragraph 11 as follows :-

"From the conclusion that Section 4(1) shall apply even to past benami transactions to the aforesaid extent, the next step taken by the Division Bench that, therefore, the then existing rights got destroyed and even though suits by real owners were filed prior to coming into operation of Section 4(1) they would not survive, does not logically follow."

Following the said decision in R. Rajagopal Reddy subsequently the Supreme Court, in the case of C. Gangacharan v. C. Narayanan, reported in AIR 2000 SC 589, held that the said Act is not retrospective in operation and do not apply to pending suits (see paragraph 5).

In view of this subsequent declaration of law and by which the previous decision of the Supreme Court in Mithilesh Kumar and Another Vs. Prem Behari Khare, has been overturned, this Court is of the opinion that the judgment under appeal cannot be upheld today. Therefore the impugned decision of dismissing the suit which was filed in 1986 and much prior to the coming into effect of the said Act in 1988, cannot be affirmed.

For the reasons aforesaid, this Court is of the opinion that the suit is maintainable in law. The Judgment and Decree passed by the learned Judge of the 3rd Court in dismissing the suit, is set aside. The suit is restored to its file. The Order No. 44 dated 21-9-1992 passed in the aforesaid suit, is also set aside. The records be sent back to the Court below immediately. Hearing of the suit may be proceeded in accordance with law and as expeditiously as possible since the suit is of 1986. We, however, do not make any observation on the merits of the case. The application for transposition filed by the defendant No. 5, may be taken up by the Court below and disposed of in accordance with law.

The appeal is thus allowed.

No order as to costs.

Tapan Kumar Dutt, J.

I agree.