TMI Blog1988 (8) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... money was sent by the plaintiff to the defendant in O. S. No. 349 of 1983 for the specific purpose of purchasing landed properties in the name of the plaintiff, but, instead, he purchased the properties in the names of himself and his other brothers with the funds provided by the plaintiff. Therefore, it has to be-held that the plaintiff is the beneficial owner and he is entitled to recover possession of the plaint schedule properties from the defendants in these suits. In our view, this is a case where section 82 of the Indian Trusts Act squarely applies" Section 82 of the Trusts Act gives statutory recognition to benami transactions. In a transaction covered by this section, the transferee holds the property for the benefit of the person paying or providing the consideration. It therefore, follows that when once it is proved that the consideration for the transaction flowed from a person other than the transferee, then that person who provided the consideration and not the transferee is the real owner of the property. A benami transaction does not vest any title in the benamidar but vests the title in the real owner. It is true that when the benamidar is in possession of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Legislature that the Legislature wanted "the section to be mandatory". There cannot be any difference in regard to this principle although the statute does not provide for penalty for disobedience. (See Statutory Construction, Crawford, 1940 edn. para 263). The right to recover property held benami, after the coming into force of section 2, cannot be enforced through court, because-no suit, claim or action to enforce any right in respect of any property held benami against the benamidar shall lie by or on behalf of the real owner of such property. Learned counsel for the respondent, however, argues that proceedings for execution of a decree though passed in a benami suit, cannot be said to be a "suit", "claim" or "action" to enforce any right in respect of any property held benami contemplated under section 2 and if that be so, the execution petition is maintainable in law. If it is held otherwise, the executing court which cannot go behind the decree ordinarily, will be able to go behind the decree and give the relief to the petitioner which was specifically denied to him by the trial court, counsel submits. It is not as if there is no substance in this argument. It may, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties, of an alleged right, of an alleged infringement thereof (either actual or threatened) and of a court having power to enforce such a right". That this meaning has been accepted by courts in India is clear from the decision of the Punjab High Court in Bharat Bank Ltd. v. Ruby General Insurance Co. Ltd. [1951] 21 Comp Cas (Ins) 40 ; AIR 1951 Punj 97. Another shade of meaning that should be noticed is this : 'The legal and formal demand of one's right from another person or party made and insisted on, in a court of justice'.-Black's Law Dictionary. The word 'action' in the section therefore can be given the meaning given to this word in Halsbury's Laws of England. The execution proceedings from which this revision arises, therefore, can either be treated as a "claim" or an "action" within the meaning of section 2. A question would arise immediately and it is this : Could the execution petition be said to be a "claim" or an "action" (within the meaning of section 2) to enforce any right in respect of any property held benami ? It should be conceded that the execution petition, going by the meaning given to the words "claim" or "action" in any event; is an "action" to enfor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... real owner, the respondent. It should, in this connection be noted that, on the suit being decreed, the property, till then "held benami", will not cease to be one "held benami" unless and until the decree is executed and the relationship of benamidar and real owner till then existing between the parties is extinguished. It is also significant to note that till the decree passed in a suit of the nature in hand is executed and property taken delivery of, the property cannot be said to be held not benami, because under law the person who had paid the consideration for the transaction under which the property is held, for all practical purposes, is treated as the real owner on whose behalf alone the benamidar is in possession of the property. The possession of the benamidar in law is the possession of the real owner. That the intention of the Legislature in enacting section 2 is not in anyway different from what is stated above, is established by the special circumstances stated hereunder. A reference in this connection to the recommendations of the Law Commission is profitable. The Law Commission has stressed the need to bring in the enactment prohibiting the right to recover prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a benami suit will also fall within the mischief of section 2, he is absolved from that doubt by the preamble which makes it clear that the object of the enactment is to prohibit the right to recover property held benami Learned counsel for the respondent then argued that section 4 read along with clause (b) of sub-section (3) of section 2 makes it clear that section 2 has no retrospective operation ; it has only prospective operation and, therefore, the rights of parties already determined by the passing of the decree cannot be reopened. Section 4(1) which is relevant here reads : "4(1). Section 82 of the Indian Trusts Act, 1882 (2 of 1882), section 66 of the Code of Civil Procedure, 1908 (5 of 1908) and section 281 A of the Income-tax Act, 1961 (43 of 1961), are hereby repealed." Clause (b) of sub-section (3) of section 2 reads: "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". Dilating on this aspect, learned counsel argues that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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