TMI Blog2021 (3) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... e cannot claim any right over the suit property against the title of the de jure owner/husband/defendant. Defendant has not taken the plea of fiduciary relationship in his written statement which debars the defendant-appellant to take the advantage of Section-4(3)(b) of the old Act. In my opinion, this finding of the learned First Appellate Court suffers from misinterpretation of the provision for the reason that the question involving fiduciary relationship in the context of the present case constitutes a substantial question of law and being the same is a legal question, it is immaterial whether any plea was taken in his pleadings in the written statement. It is settled proposition of law that a statute has to be read in whole. On conjoint reading of both the old and new Act, the object and intent of the legislature is manifestly clear and unambiguous where it prohibits benami transactions and the right to such property held benami with penal provisions for such benami transactions. However, while enacting the Act, the legislatures have kept in mind the practical scenario of the society where a spouse can purchase a property in the name of another spouse and also in the nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit, and out of their relation, he included plaintiff s name in the registered sale deed. The defendant further stated that since 2010, he filed a divorce suit against the plaintiff being number T.S (Divorce) 268 of 2012 on the ground of cruelty and desertion. The defendant further denied that he entered into second marriage and drove his wife-plaintiff out of his house. The defendant further denied the right of the plaintiff to claim the suit property and prayed for dismissal of the suit. [5] On material proposition of above facts, which the parties are at variants, following issues were framed by the learned trial court as under: I S S U E S 1. Is the suit maintainable in its present form and name? 2. Is the plaintiff legally married wife of the defendant Arun Das? 3. Is the plaintiff entitled to get a decree as prayed for in her plaint? 4. To what other relief/reliefs the parties to the suit are entitled to get? [6] On the basis of aforesaid issues, the learned trial court recorded the evidence of the parties to the lis having produced their respective examinations-in-chief and they were accordingly cross- examined. At the closure of recordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with affirmation of the judgment and decree passed by the learned trial court whereby and whereunder, the Courts below declared the right title and interest of the plaintiff over the half portion of the suit land and also passed decree for partition. [11] The dismissal of the first appeal, has prompted the defendant-husband to prefer the present second appeal. While admitting the appeal, the following substantial questions of law were formulated: (I) Whether the appellate Court has misread the evidence in order to determine the plaintiff-respondent as the Benamder in terms of Section-4(3) (b) of the Benami Transactions (Prohibition) Act, 1988 ? [12] In course of hearing, having heard the learned counsel appearing for the parties, I deem it fit to formulate the following substantial questions of law on consent of the learned counsel appearing for the parties to the lis : (I) Whether both the courts below had correctly interpreted the provisions of Section-3(2) (a) of the Benami Transactions (Prohibition) Act, 1988? (II) Whether the plaintiff-wife has acquired any substantive right out of the sale deed (Exbt. 6 series)? [13] Heard Mrs. S. Deb (Gupta), lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(2)(a) shows that the purchase of property by any person in the name of his wife or unmarried daughter shall not be treated as benami transaction and it shall be presumed, unless the contrary is proved, that the said property has been purchased for the benefit of the wife or the unmarried daughter. In other words, by virtue of Section-3(2)(a) a husband can purchase a property in the name of his wife or his unmarried daughter and the same would not be a prohibitory transaction under the Benami Transactions (Prohibition) Act, 1988. [20] Section-4(3)(b) does not prohibit a transaction/transfer of an immovable property 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 his stand in such capacity. Section-2(a) of Benami Transactions (Prohibition) Act, 1988 defines a benami transaction as under: (a) Benami transaction means any transaction in which property is transferred to one person for a consideration paid or provided by another person. [21] On cumulative reading, both Sections-3 4 of the Benami Transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 peculiar confidence towards another. It refers to integrity and fidelity. It contemplates fair dealing and good faith, rather than legal obligation, as the basis of the transaction. The term includes those informal relations which exist whenever one party trusts and relies upon another, a well as technical fiduciary relations. 18. Black s Law Dictionary (7th Edn. Page 640) defines fiduciary relationship thus: Fiduciary relationship- A relationship in which one person is under a duty to act for the benefit of the other on matters within the scope of the relationship. Fiduciary relationships- such as trustee-beneficiary, guardian-ward, agent-principal, and attorney- client require the highest duty of care. Fiduciary relationship u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the term fiduciary and fiduciary relationship in the following words: 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) in regard to his affairs, business or transaction(s). The term also refers to a person who holds a thing in trust for another (beneficiary). The fiduciary is expected to act in confidence and for the benefit and advantage of the beneficiary, and use good faith and fairness in dealing with the beneficiary or the things belonging to the beneficiary. If the beneficiary has entrusted anything to the fiduciary, to hold the thing in trust or to execute certain acts in regard to or with reference to the entrusted thing, the fiduciary has to act in confidence and is expected not to disclose the thing or information to any third party. 22. It is manifest that while the expression fiduciary capacity may not be ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff s name, only on consideration that she was his wife. In this circumstance, a critical question lies whether Sub-section-(2) (a) of Section-3 and Sub- section-3 of Section-4 save the transaction like the one with which this Court is concerned. [24] On conscious reading of Section-3 as aforestated forbids benami transactions in any form, but, it excludes a transaction where a property is purchased by a husband in the name of his wife or by a father in the name of his unmarried daughter. In the second part of Clause-A of Sub-section-2 of Section-3 provides to draw a presumption in favour of such wife and unmarried daughter that such property had been purchased for the benefit of the wife or the unmarried daughter, but, that presumption is rebuttable. As I discussed earlier that the plaintiff-wife, in the instant case, has never pleaded that the property was purchased in her name for her benefit qua the defendant-husband has stated that the suit property was purchased for his own benefit and for that matter of fact, in my opinion, the defendant has successfully rebutted the presumption that the suit property was purchased in favour of her for her benefit. [25] Almost a similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s passed on 27.04.2018 under the Old Act when Sub-section-2 of Section-3 and Sub-section-3 of Section-4 of the old Act was omitted w.e.f. 01.11.2016 by Act-43 of 2016. Under the New Act, Sub-Section-9 of Section-2 defines the Benami Transactions which mean as under: 2(a) Benami Transactions : (A) A transaction or an agreement- (a) Where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and (b) The property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration, Except when the property is held by- (i) a Karta, or a member of a Hindu undivided family, as the case may be, and the property is held for his benefit or benefit of other members in the family and the consideration for such property has been provided or paid out of the known sources of the Hindu undivided family; (ii) a person standing in a fiduciary capacity for the benefit of another person towards whom he stands in such capacity and includes a trustee, executor, partner, director of a company, a depository or a participant as an agent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied daughter has been omitted. [29] So, under the new Act, if a husband purchases a property in the name of his wife or if the wife purchases any property in the name of her husband and if, the consideration money is paid by either of the individuals, then, such transaction shall not be treated as benami transactions because the same falls under the exception to the prohibited benami transactions in view of Section-2 (9) (a) and Exception (iii) beneath the Section-2(9)(b). Inasmuch as, it is legally permissible for a person to purchase an movable property in the name of his/her spouse from his/her known sources, and in which position, the property purchased will not be a Benami property but the property will be of the de-jure owner, he/she may be husband or wife and not of the de-facto owner, he may be the husband or wife. [Emphasis supplied] [30] In the case in hand, it is established that the husband- defendant-appellant had paid the total consideration money to the vendor to purchase the suit property, and, only included the name of his wife, the plaintiff-respondent for his own benefit. In my considered view, such purchase would come within the purview of Except ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the benefit of another. We would examine the present transaction on the touchstone of the above two indicia. [33] Keeping in mind the aforesaid propositions, in the case in hand, it transpires that, firstly, the husband-defendant, the appellant herein, had purchased the suit property from his known source of income and secondly, after such purchase both the plaintiff and the defendant used to possess the suit property as husband and wife. Thirdly, the motive for inclusion of name of the plaintiff is not clear though the defendant has stated that the suit property was purchased for his own benefit. Fourthly, it is quite evident in the instant case, that both the plaintiff and the defendant were the husband and wife and the Old Act permits the husband to purchase any property in the name of his wife or in joint names. Fifthly, the custody of the title deed undisputedly lies with the defendant-husband which would be revealed from the fact that the plaintiff-wife has produced the certified copy of the sale deed. Sixthly, stating the conduct of the parties, it reveals that the relationship between the plaintiff-wife and the husband-defendant became strange and the defendant, ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the new Act which reads as under: The provisions of Sections-3, 5 and 8 shall come into force at once, and the remaining provisions of this Act shall be deemed to have come into force on the 19th day of May, 1988. A plain reading of Section-1(3), in my opinion, makes it aptly clear that barring Sections-3, 5 8, all other remaining provisions that include Section-2(9)(a) and Exception Clause (iii) of the New Act shall operate retrospectively. I have already quoted Section-2(9)(a) and Exception Clause (iii) of the New Act. It needs to be quoted Sections-3, 5 and 8 for better appraisal. 3. Prohibition of benami transactions.-( 1) No person shall enter into any benami transaction. 27[* * * * *]. 8[(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. 9[(3) Whoever enters into any benami transaction on and after the date of commencement of the Benami Transactions (Prohibition) Amendment Act, 2016 (43 of 2016) shall, notwithstanding anything contained in sub-section (2), be punishable in accordance with the provisions contained in Chapter VII.] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h procedure as may be prescribed; (b) no amount shall be payable for the acquisition of any property held banami; (c) the purchase of property by any person in the name of his wife or unmarried daughter for their benefit would not be benami transaction; (d) the securities held by a depository as registered owner under the provisions of the Depositiories Act, 1996 or participant as an agent of a depository would not be benami transactions. 2. During the administration of the Benami Transactions (Prohibition) Act, 1988, it was found that the provisions of the aforesaid Act are inadequate to deal with benami transactions as the Act does not (i) contain any specific provision for vesting of confiscated property with Central Government; (ii) have any provision for an appellate mechanism against an action taken by the authorities under the Act, while barring the jurisdiction of a civil Court; (iii) confer the powers of the civil court upon the authorities for its implementation; and (iv) provide for adequate enabling rule making powers. 3. In view of the circumstances stated above, comprehensive amendments to the Benami Transactions (Proh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , benamidar and any other person who abets or indices any person to enter into such benami transaction, shall be punishable with rigorous imprisonment for a term which shall not be less than one year but which may extend to seven years and shall also be liable to a fine. (b) A benami property shall also be liable for confiscation by the Adjudicating Authority. (3)************** [42] The rule of reading and understanding a statute was stated by Tindal, CJ, in Sussex Peerage case in the following form: If the words of the statute are in themselves precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense. The words themselves do alone, in such case, best declare the intent of the lawgiver. [ Sussex Peerage case (1844) 11 C-1 and F-85, P. 143; Shivram Anand Shiroor vs. Radhabai Shantram Kowshik Mrs. And Another, 1984 1 SCC 588, P. 592; AIR 1984 SC 786; M/S. Ansal Properties Industries Ltd. vs. State of Haryana Anr, (2009) 3 SCC 553, P.40]. The rule is also stated in another form: When the language is plain and unambiguous and admits of only one meaning no question of construction of a statute arises, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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