TMI Blog2015 (7) TMI 1307X X X X Extracts X X X X X X X X Extracts X X X X ..... 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these expressions are those expressions which fall under Sections 81, 82, and 94 of the Trusts Act and which have been repealed by Section 7 of the Benami Act - the suit is barred by the provision of Section 4(1) of the Benami Transactions (Prohibition) Act, 1988. The suit is dismissed. - CS(OS) No. 478/2004 - - - Dated:- 30-7-2015 - Mr. Valmiki J.Mehta, J. Mr. Raman Kapur, Sr. Advocate along with Mr. Manish Kumar, Mr.Amit Kumar, Mr. Piyush Kaushik and Mr. Mohit Arora, Advocates For The Plaintiff. Mr. Pravir K. Jain, Adv. for D-1 with Mrs. Sunita Gugnani For The Defendant. Valmiki J. Mehta, J (ORAL) 1(i) The present suit is a suit for declaration, eviction, recovery of damages, rendition of accounts and permanent and mandatory injunctions. Plaintiff is Sh. Amar N. Gugnani and who was the son of late Sh. Jai Gopal Gugnani. Defendant is the brother of the plaintiff and the other son of late Sh. Jai Gopal Gugnani. Defendant has now expired and is now being represented by his legal heirs. (ii) Disputes in the present suit concerns the property no.33, Uday Park, New Delhi (suit premises). Plaintiff claims that he is the sole and exclusiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order dated 20.07.2015 reads as under:- O.A. Nos.265/2015 266/2015 List on 30th July, 2015. Counsel for the plaintiff is put to notice that the issue no.1 which is framed in this case is a completely legal issue and once the issue is a legal issue with respect to bar to the suit, then, either under Order 7 Rule 11 of Code of Civil Procedure, 1908 (CPC) or Order 12 Rule 6 CPC the suit may no longer to be continued. Plaintiff, of course, with respect to arguments of maintainability of the suit will be heard on the next date of hearing and when these OAs be also listed for hearing. 6. Before I turn to the arguments urged on behalf of the learned senior counsel for the plaintiff, why the issue is only a legal issue requires to be stated because only a legal issue can be decided as a preliminary issue and not a factual issue on which evidence is required to be led. The issue is legal because this Court is only looking at the plaint filed by the plaintiff and on the basis of admissions and statements made by the plaintiff in the plaint, it is seen that actually issue no.1 can be decided against the plaintiff by holding that the suit is barred by the Benami Transactions ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f s father who stood in fiduciary relationship would hold the property in his name trust for the Plaintiff and the Plaintiff shall be real owner always. 7. That on 4th May, 1973 the Plaintiff came to India and handed over further funds to his father for acquiring the plot that had already been identified on perpetual lease. The said deposit was made so that including the funds deposited from time to time, the Plaintiff s father had sufficient funds for the acquisition, registration of lease deed and incidental expenses. 8. That in view of the said, understanding the Plaintiff s father in his capacity as trustee obtained perpetual lease of the aforesaid plot benami in his name to endure to the exclusive benefits of the Plaintiff. All the funds in purchase of the plot were availed by the Plaintiff s father from the money deposited with father and given to him from time to time. The possession of the plot was obtained by the Plaintiff s father for and on behalf of Plaintiff in his capacity as a trustee on 9th May, 1973, a perpetual lease deed was executed by the Delhi Development Authority, which was registered on 5th July, 1974 at No.4300 in Additional Book No.1, Volume 3391, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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,- (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. 11. Before I turn to the arguments urged on behalf of the plaintiff and the judgment of the Supreme Court in the case of Marcel Martins (supra), I would at this stage refer to a judgment delivered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dar. The legal provisions which helped the plaintiff in such a suit prior to passing of the Benami Act were inter-alia the provisions of Sections 81, 82 and 94 of the Indian Trusts Act, 1882 and as per which provisions a benami owner was actually a trustee for the real owner. Section 7 of the Benami Act specifically repeals the aforesaid sections of the Indian Trusts Act, 1882 and also Section 66 of the CPC which had similar substance. 7. Section 4(3)(b) of the Benami Act, however, protected rights of a real owner where the person in whose name the property is held is a trustee or other person standing in the fiduciary capacity and the property is held for the benefit of other person, for whom the person in whose name the property is held is a trustee. Section 4(3)(b) of the Benami Act reads as under:- 4. Prohibition of the right to recover property held benami.- (3) Nothing in this section shall apply (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. 8. In a way, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t No. XI of 1859 (to improve the law relating to sales of land for arrears of revenue in the Lower Provinces under the Bengal Presidency), section 36. 94. In any case not coming within the scope of any of the proceeding sections, where there is no trust, but the person having possession of property has not the whole beneficial interest therein, he must hold the property for the benefit of the persons having such interest, or the residue thereof (as the case may be), to the extent necessary to satisfy their just demands. 9. Two of the examples where the Supreme Court has held the property to be held as a trustee in terms of Section 4(3)(b) of the Benami Act are the judgments in the cases of C. Gangacharan V. C. Narayanan, 2000 (1) SCC 459 and P.V. Sankara Kurup V. Leelavathy Nambiar, 1994(6) SCC 68. In the case of C. Gangacharan (supra), the Supreme Court has held that the property was held as a trustee as per Section 4(3)(b) of the Benami Act, and the person in whose name the property stood cannot take up a plea of the bar of Benami Act, inasmuch as, actually the owner had given moneys for the property to be purchased under his name, however, the moneys were in fraud util ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 4(3)(b) of the Benami Act for the same not to be a benami transaction which is barred as per Section 2(a) read with Sections 4(1) and 4(2) of the Benami Act. Para 9 of the judgment in J M Kohli s case (supra) gives the facts of these two Supreme Court judgments and hence the factual reasons why those cases fell in the exception of Section 4(3)(b) of the Benami Act. 14. Let me at this stage refer to the judgment of the Supreme Court in the case of Marcel Martins (supra) and which judgment has been very strenuously relied upon by the learned senior counsel for the plaintiff to argue that the judgment passed by this Court in J M Kohli s case (supra) will not hold the field but it is the ratio in the case of Marcel Martins (supra) which will hold the field. Let us therefore examine the facts in the case of Marcel Martins (supra), again keeping in mind, that it depends upon the facts of each case as to whether the relationship is in the nature of a fiduciary relationship which is exempted by Section 4(3)(b) of the Benami Act and only which is in the nature of exception to the Benami Act. Surely Section 4(3)(b) of the Benami Act, and which is an exception, cannot have an effect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Benami Act, which is a voluntary transaction deliberately entered into as a benami transaction, in the facts of the case before it the transaction became benami involuntarily because of the requirement of the policy of a statutory body viz the Corporation. But for the requirement of the Corporation to transfer the property only in one name, the title deed would have been in the names of all the legal heirs and in such circumstances Sh. Marcel Martins was a trustee having fiduciary capacity falling in the exception of Section 4(3)(b) of the Benami Act. The relevant paragraphs of the judgment of the Supreme Court in the case of Marcel Martins (supra) are paras 27 to 46 and which paras read as under:- 27. It is common ground that although the sale deed by which the property was transferred in the name of the appellant had been executed before the enactment of above legislation yet the suit out of which this appeal arises had been filed after the year 1988. The prohibition contained in Section 4 would, therefore, apply to such a suit, subject to the satisfaction of other conditions stipulated therein. In other words unless the conditions contained in Section 4(1) and (2) are h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;, as a noun, means one who holds a thing in trust for another, a trustee, a person holding the character of a trustee, or a character analogous to that of a trustee with respect to the trust and confidence involved in it and the scrupulous good faith and condor which it requires; a person having the duty, created by his undertaking, to act primarily for another's benefit in matters connected with such undertaking. Also more specifically, in a statute, a guardian, trustee, executor, administrator, receiver, conservator or any person acting in any fiduciary capacity for any person, trust or estate. 33. Words and Phrases, Permanent Edn. (Vol. 16-A, p. 41) defines fiducial relation as under: There is a technical distinction between a 'fiducial relation' which is more correctly applicable to legal relationships between parties, such as guardian and ward, administrator and heirs, and other similar relationships, and 'confidential relation' which includes the legal relationships, and also every other relationship wherein confidence is rightly reposed and is exercised. Generally, the term 'fiduciary' applies to any person who occupies a position of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... society. Medical or religious adviser, husband and wife, an agent who appropriates money put into his hands for a specific purpose of investment, collector of city taxes who retains money officially collected, one who receives a note or other security for collection. In the following cases debt has been held not a fiduciary one; a factor who retains the money of his principal, an agent under an agreement to account and pay over monthly, one with whom a general deposit of money is made. 37. We may at this stage refer to a recent decision of this Court in CBSE v. Adiya Bandopadhyay:2 (2011) 8 SCC 497 wherein Ravindeeran, J. speaking for the Court in that case explained the term 'fiduciary' and 'fiduciary relationship' in the following words: (SCC pp.524-25, para 39) 39. The term fiduciary refers to a person having a duty to act for the benefit of another, showing good faith and candour, where such other person reposes trust and special confidence in the person owing or discharging the duty. The term fiduciary relationship is used to describe a situation or transaction where one person (beneficiary) places complete confidence in another person (fiduciary) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al). Even so, the reason why the property was transferred in the name of the appellant was the fact that the Corporation desired such transfer to be made in the name of one individual rather than several individuals who may have succeeded to the tenancy rights. A specific averment to that effect was made by plaintiffs-respondents in para 7 of the plaint which was not disputed by the appellant in the written statement filed by him. It is, therefore, reasonable to assume that transfer of rights in favour of the appellant was not because the others had abandoned their rights but because the Corporation required the transfer to be in favour of individual presumably to avoid procedural complications in enforcing rights and duties qua in property at a later stage. 42. It is on that touchstone equally reasonable to assume that the other legal representatives of the deceased-tenant neither gave up their tenancy rights in the property nor did they give up the benefits that would flow to them as legal heirs of the deceased tenant consequent upon the decision of the Corporation to sell the property to the occupants. That conclusion gets strengthened by the fact that the parties had made co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f their suit. That apart no question of fact beyond what has been found by the High Court was or is essential for answering the plea raised by the appellant nor is there any failure of justice to call for our interference at this stage. 46. In the result, this appeal fails and is hereby dismissed but in the circumstances without any orders as to costs. 16. With all humility I may note that in the judgment in the case of Marcel Martins (supra), none of the parties drew attention of the Supreme Court to the extremely important provision of Section 7 of the Benami Act that the fiduciary relationships which were protected earlier by virtue of Sections 81, 82 and 94 of the Trusts Act, such fiduciary transactions by virtue of repeal of these provisions would stand excluded from Section 4(3)(b) of the Benami Act i.e those transactions which were transactions of trust and fiduciary in nature, once they were in the nature falling under Sections 81, 82 and 94 of the Trusts Act, then on these Sections being repealed, hence trust/fiduciary relationships covered under such Sections were those transactions which were benami transactions which stood prohibited by the promulgation of the Be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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