TMI Blog2020 (1) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... at the original of that document was with the purchaser: this was not denied. the argument that the plaintiff s plea regarding the real consideration being barred, has no merit. The plaintiff did not claim return of any amount from the buyer; the suit is not based on any plea involving examination of a benami transaction. Besides, the plaintiff is not asserting any claim as benami owner, nor urging a defense that any property or the amount claimed by him is a benami transaction. Therefore, the defendant appellant s argument is clearly insubstantial. In the present case, the appellants did not prove that the transaction (to which they were not parties) was benami; on the contrary, the appellant s argument was merely that the transaction could not be said to be for a consideration in excess of ₹ 1,30,000/-: in the context of a defense in a suit for money decree. The defendant/appellants never said that the plaintiff or someone other than the purchaser was the real owner; nor was the interest in the property, the subject matter of the recovery suit - Therefore, in the opinion of this court, the conclusions and the findings in the impugned judgment are justified. Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheques for the sum of ₹ 16,500/-, ₹ 3,500/- and ₹ 60,000/- all dated 16.02.1990, drawn on the State Bank of India, Indore Branch. Before the due date, Sanjay requested the plaintiff (Surendra) not to present the cheques for collection for a few months; this request was complied with. The cheques, when presented, were returned by the banker to the plaintiff (Surendra). In these circumstances, the suit for recovery of a sum of ₹ 80,000/- (together with interest @ 12% till the date of the filing of the suit and for future interest, consequently, was instituted. 4. Sanjay, in his written statement denied the suit allegations. However, the written statement did not dispute the execution of the GPA or that he had entered - on behalf of the plaintiff, into the agreement to sell with Niranjan Singh Nagra and obtained ₹ 50,000/- as earnest money. The written statement also did not deny that Sanjay requested Surendra for a loan of ₹ 80,000/- which was given to him. However, in the defense, Sanjay alleged that Surendra asked him to return the amount on the same day i.e. 30.01.1990, which he did. The written statement then alleged that Sanja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The court noted that Surendra had not relied upon these circumstances to seek relief on the basis of the contract (for sale). The High Court then reasoned that these documents were needed only to consider their impact vis-a-vis the defendants claim for return of ₹ 80,000/-. 8. The High Court in its impugned judgment upheld the plaintiff s contention that he possessed sufficient amount to advance 80,000/- to Sanjay. Rs. He also had sufficient funds to deposit amounts in the bank account, for which statement of account, Ex. D/1 was on the record. Given that the real consideration for the transaction was ₹ 2,30,000/-, the fact that some amount was deposited in the bank account, did not in any way detract from the suit claim. The court, therefore, held that the deposit by itself could not be relied on, that the amount was paid to Sanjay who issued three cheques. The High Court then concluded and held as follows:- 15. Since it is not disputed by the respondents that the loan amount of ₹ 80,000/- was given by the appellant on 30/01/90 and the dispute is only whether the amount was returned by the respondent no. 2 to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of ₹ 2,30,000/- as against the declared value of ₹ 1,30,000/- could not be countenanced by the court as it was contrary to the public policy. He also relied on the Benami Transactions (Prohibition) Act, 1988 (hereafter the Benami Act ) to submit that any plea based on benami transactions could not be canvassed in courts. It was argued that as on 30.01.1990 or soon thereafter, the plaintiff did not have any amount in his bank account. Counsel lastly argued that consistent position of the defendant, Sanjay was that the three cheques were issued to the plaintiff at the latter s insistence and that despite repeated requests, they were not returned. This was clearly stated in the written statement and was consistently reiterated during the course of the oral deposition. The high court, it was urged, fell into error in completely overlooking this aspect. 11. It is submitted on behalf of the plaintiff/respondent that the basis for dismissal of the suit by the trial court was that the amount in question was part of the sale consideration of a sum of ₹ 1,30,000/- for the plot belonging to the respondent which has been sold and from which ₹ 50,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement was ₹ 2,30,000/-. This was admitted by Sanjay, the defendant in his deposition. It is also not disputed that the original agreement with the purchaser (who ultimately finalized the transaction), is dated i.e. 03.07.1989. A second agreement was entered into on 30.11.1989. However, this showed a lesser consideration of ₹ 1,30,000/-. It is also not disputed that Sanjay, the second appellant received ₹ 50,000/- from the buyer and handed over that amount to Surendra. Furthermore, on 29.01.1990, Surendra went to Indore at Sanjay s behest to conclude the transaction directly with the purchaser, Niranjan Singh Nagra. He also received the amount agreed. Also, there is no dispute that Sanjay wanted ₹ 80,000/- and was given it, by his uncle, the plaintiff, Surendra, for the purpose of expansion of his business. This is where the version of the two parties diverges: Sanjay alleged that the amount was returned the next day and that Surendra did not return the post dated cheques issued by him; Surendra alleges that Sanjay in fact never returned the amount. The trial court was persuaded by arguments on behalf of Sanjay and the circumstance that the sum of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. In the opinion of this court, the argument that the plaintiff s plea regarding the real consideration being barred, has no merit. The plaintiff did not claim return of any amount from the buyer; the suit is not based on any plea involving examination of a benami transaction. Besides, the plaintiff is not asserting any claim as benami owner, nor urging a defense that any property or the amount claimed by him is a benami transaction. Therefore, the defendant appellant s argument is clearly insubstantial. 19. The relevant provisions of law, i.e. Sections 3 and 4 of the Benami Act, read as follows: Prohibition of benami transactions. 3. (1) No person shall enter into any benami transaction. (2)Whoever enters into any benami transaction shall be punishable with imprisonment for a term which may extend to three years or with fine or with both. (3) Whoever enters into any benami transaction on and after the date of commencement of the Benami Transactions (Prohibition) Amendment Act, 2016, shall, notwithstanding anything contained in sub-section (2), be punishable in accordance with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the position of the parties and the relationship, if any, between the claimant and the alleged benamidar ; (5) the custody of the title deeds after the sale ; and (6) the conduct of the parties concerned in dealing with the property after the sale. (Jaydayal Poddar v. Bibi Hazra1, SCC p 7, para 6). 14. The above indicia are not exhaustive and their efficacy varies according to the facts of each case. Nevertheless, the source from where the purchase money came and the motive why the property was purchased benami are by far the most important tests for determining whether the sale standing in the name of one person, is in reality for the benefit of another. We would examine the present transaction on the touchstone of the above two indicia. *** *** *** 18. It is well-settled that intention of the parties is the essence of the benami transaction and the money must have been provided by the party invoking the doctrine of benami. The evidence shows clearly that the original Plaintiff did not have any justification for purchasing the property in the name of Ramayee Ammal. The reason given by him is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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