TMI Blog1995 (7) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... tled to enforce his rights in the properties concerned if he can succeed in showing that he had purchased them benami in the name of his wife. But in view of the statutory presumption incorporated in sub-section (2) of section 3 of the Act, he can get the relief sought in the suit only if he can prove that the properties concerned had not been purchased for the benefit of the wife, even if he succeeds in showing that the consideration for the purchase of the properties had been paid by him. Allow this appeal, set aside the order of the Division Bench of the High Court, uphold the order of the learned single judge rejecting the application of the defendant-wife for rejection of the plaint, and remit the suit to the Delhi High Court for di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e., benami transactions, after the coming into force of the Act and not to those suits filed and defences taken in respect of such benami transactions and pending final decision at the time of coming into force of the Act as had been held earlier by a Division Bench of this court in Mithilesh Kumari v. Prem Behari Khare [1989] 177 ITR 97 (SC). Section 4 of the Act which imposes a prohibition in the matter of filing of suits or taking of defences in respect of property held benami, i.e., covered by benami transactions reads thus: 4. Prohibition of the right to recover property held benami.-(1) No suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it be that respecting which no suit can be filed or no defence can be taken under sub-sections (1) and (2) of section 4 of the Act. It is true that the benami transaction as defined in clause (a) of section 2 of the Act since means- any transaction in which property is transferred to one person for a consideration paid or provided by another person , any purchase of property made by a person in the name of his wife or unmarried daughter envisaged in sub-section (2) of section 3 of the Act, would be a benami transaction . It is also true that the same cannot be a benami transaction envisaged by clauses (a) and (b) of sub-section (3) of section 4 of the Act falling outside the purview of sub-sections (1) and (2) of section 4 thereof. But, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 5 could be of assistance in a proper appreciation of the said arguments of learned counsel, they are excerpted: Section 3: 3. Prohibition of benami transactions.-(1) No person shall enter into any benami transaction. (2) Nothing in sub-section (1) shall apply to the purchase of property by any person in the name of his wife or unmarried daughter and it shall be presumed, unless the contrary is proved, that the said property had been purchased for the benefit of the wife or the unmarried daughter. (3) 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. (4) Notwithstanding anything contained in the Code of Criminal Procedure, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and section 5 shall equally hold good for non-applicability of the provisions of sub-sections (1) and (2) of section 4 in the matter of filing of the suit or taking up the defence for the self-same reason. Further, we find it difficult to hold that a person permitted to purchase a property in the name of his wife or unmarried daughter under sub-section (2) of section 3 notwithstanding the prohibition to enter into a benami transaction contained in sub-section (1) of section 3 cannot enforce his rights arising therefrom, for to hold so would amount to holding that the statute which allows creation of rights by a benami transaction also prohibits the enforcement of such rights, a contradiction which can never be attributed to a statute. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the plaintiff had filed the suit in the High Court seeking relief in respect of properties alleged to have been purchased benami in the name of the defendant-his wife. A learned single judge rejected the application filed by the defendant in that suit seeking rejection of the plaint on the ground that the suit was barred under section 4 of the Act. The order of rejection of that application was appealed against by the defendant in a first appeal filed in the same court. A Division Bench of the High Court reversed the order of the learned single judge and granted the application of the defendant made in the suit seeking rejection of the plaint. It is that order which is now questioned by the plaintiff-husband in this appeal. Since the plaint ..... X X X X Extracts X X X X X X X X Extracts X X X X
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