Bhim Singh v. Kan Singh

I -• ### _j_ •• A n D 628 BHIM SINGH &.ANR. _v._ KAN SINGH _(AND_ _VICE_ _VERSA)_ _December_ 21, 1979 fP. N. SHINGHAL AND E. S. VENKAlARAMIAII, JJ.] _Benanii-What_ _is-Tests_ _for deciding benami transactions._ Plaintiff no. 1 and plaintiff no. 2 were father and son while defendant wa5 the brother of plaintiff no. 1. The plaintiffs in their suit against the defendanl claimed that the suit house in Which the defendant WM living, belonged to them by virtue of a _patta_ issued in their names. They alleged that the deceased brother of plaintiff no. 1, who remain'ed a bar-Jielor till his death, loved plaintiff no. 2 as bis son and had thought of adopting plaintiff no. 2 but since he· died all of a sudden it could not be done. The defendant on the other band claimed that he and his deceased brother lived as m'embers of a joint family after the partition of their family that as a rellult of the joint efforts of himself and his deceased brother the Ma-haraja, of Bikaner sanctioned sale cf the house io them, that the purchase money v;as paid out of their joint income but that the _patta_ wa.s granted in the names of the plaintiffs du'e _t_g_ political reasons and therefore the plaintiffs were at the most _benamidars._ The trial court held that the house was acquired by the deceas'ed brother from the Government of Bikaner for the plaintiffs and the _patta_ was granted in E favour of the plaintiffs and that they were in its J>0S5csi;ion till 195fj. It rejected the defendant's claim that it was acquired with the joint funds of him~clf z-nd his deceased brother. On appeal the High Court held that the house bad been purchased by the deceased brother out of his own money in the names of the plaintiffs without any intention to confer any beneficial interest on them a.nd on his d'eath plain· F tiff no. l and the defendant su=eded jointly to the estate as his heirs. HELD : The transaction under 'Which the· _patta_ was obtained was not a benami transaction. The house WM w.:quired by the deceased brother with his money and with the intention of constituting plaintiff no. 2 as the absolute owner thereof. [648G] H Where a person buys property with his own money but in the name of another person without any intention to benefit such other person, the transac· tion is called _benami._ In that case the ~eree holcb!I the property for the benefit of the person who hali. contributed the purchase money and he is a real owner. T·he second case which ts looeely termed a _benami_ tr.ansaction is a ~ase where a person, Who _is_ the owner of the property, executes a conveyance in favour of another without the intention of transferring the title to the property thereund'er. In this case the transferor continues to be the real owner. The difference between the two kinds of _benamj_ transactions is tha.t whereas in the former there is an operative tramfer from the tramferor to the transferee, though the transferee holds the property for tbe benefit of the person who bas A B (3 ) ##### - -j BHIM SINGH _v._ KAN SINGH _(Venkataramiah_ _J.)_ 629 contributed the purchase mon·ey, in the latter there is no operative transfer at all and the title rests with the transferor notwithstanding the execution of the conveyance. One common feature in both cases is that the real title is divorced from the ostensible title and they are vested in different persons. The queition whether a transaction is a _benami_ transaction'. or not depends upon the intention of the p'erson who has contributed the purchase money in the former case, and upon the intention of the person who has executed the conveyance in the latter case. The principle underlying the former case is statutorily r'ecognized in section 82 of the Indian Trust Act, 1882. [638B-E] _Mcenakshi Mills, Madurai_ v.. _The r:ommissioner_ _of_ _Income-Tax, Madras,_ (1956] S.C.R. 691 at p. 722; _Mohammad Sadiq_ _Ali Khan_ v. _Fakhr Jahan Begam_ &: _Ors._ _59_ I.A. 1; _Manrnohan Das_ _&_ _Ors._ v. _Mr. Ramdai_ & _Anr._ A.I.R. 1931 P. C. 175; _Jaydayal Poddar (deceased) through_ _/iis_ _L.Rs._ & _Anr._ v. _Mst. Bibi_ - _Hazra_ & _Ors._ [1974] 2 S.C.R. 90 referred to. _2._ The prinlciples governing the determination of the question whether a transfer is a _benami_ or not are : ( 1) The burden: of showing that a. transfer is a _benami_ transaction lies on th'e person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other tha.n the person in whose fa\.uur the: property is transferred, the purchase is _prilna-facie_ assumed to b'e for the benefit of the person who supplied the purchase money, nnle!S there is evidence to the contrary; (3) the true character of the transaction 0 is governed by the intention of the person who has contributed the purchas'e money and ( 4) the question as to what his intention was, has to be decided on the basis of the surrounding circumstances, the relationship of th'e parties the motives governing their action in bringing about the transaction and their sui,.eqnent conduct. [6410.E] In the instant case the deceased brother was a bachelor. On the death of _E_ the wife of plaintiff no. 1, plaintiff no. 2 and his younger brother were staying with the de.ceased brother. Plaintiff no. l was almost in an indigent condition while d'efendant practised law for some time and later entered into service. The _patta_ for the house was issued in the name of plaintiffs nos.. l and 2 at the request of the deceased brother for the benefit of plaintiff no. 2 and was handed over to him after h'e completed his education. This conduct of the deceased brothel established that it was his intention that, when he secured the _patta_ from F the State Government in the names of plaintiffs it was his intentioni that plaintiff no. 2 whom he loved, should become th~ owner. [641F-H) 3. The declaration made by the deceased, who had contributed the purch..,e money subsequent to the date of purchase to the effect that the property belonged to plaintiff no. 2 wag admissible in evidence either under section 32(3) or section 21 of the Indian Evidence Act to prove his intention that he intended G that plaintiff No. 2 should become its owner. [647E] _SheP.hard_ & _Anr._ v. _Cartwright_ & _Anr._ [1955] A.C. 431, distinguished. CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 626 & 629 of 1971. From the Judgment and Order dated 5-8-1970 of the Rajasthan High Conrt in R.F.A. No. 31/60. H 630 SUPREME COURT REPORTS [1980] 2 S.C.R. **A** _S._ _T._ _Desai_ and _Naunit Lal_ for the Appellant. _P._ _R._ _Mridul, B._ _P._ _Sharma, Krishna Bhatt_ and _R. K. Bhatt_ for the Respondents. ' . **8** **c** **D** E **F** **G** **H** Gad Singh, Bharat Singh, Bhim Singh (plaintiff No. 1) and Kan Singh (defendant) are the sons of Sur Singh. Bharat Singh died unmarried in September, 1955. Gad Singh died thereafter leavinfli behind him three sons, Duley Singh, Dhaney Singh and Deep Singh. Dalip Singh, the second son of plaintiff No.1 died in September, 1956. Bharat Singh and the defendant were residing in the house which was the subject matter of the suit. After the death of Bharat Singh, the plaintiffs Bhim Singh and Himmat Singh filed the suit out of which this appeal arises against Kan Singh, the defendant for recovery of possession of the suit house and other ancillary reliefs. In the plaint, they The Judgment of the Conrt was delivered by VENKATARAMIAH, J.-These two cross appeals by certificate arise out of a suit for posse6sion of a house situate in Bikaner and for damages for use and occupation thereof filed in Civil Original Case No. 17 of 1957 on the file of the District Judge, Bikaner. The plain· .-,. tiffs in the suit are the appellants in Civil Appeal No. 626 of 1971 and **'t** tl:.e defendant is the appellant in Civil Appeal No. 629 of 1971. The _r_ genealogy showing the relationship between the parties is given "· below: Sur lingh Kan~ingh (Deft.) Bhar.ltSingh **(Died in** Sept. 1955) Bh **ims1ng** [. ] ~~[I. ]~~ [h ] (P.I.) Duley Singh I I Dhaney Deep # ~~I~~ Singh Singh ~~**Himmat**~~ Singh (P.2.) ~~D~~ alip Singh (Died in Sept. 56) ###### **_j_** ... + ' .... #### .. -~ BIIIM SINGH _v._ KAN SINGH _(Venkataramia,h_ _!.)_ _63_ I pleaded that the suit house belonged to them by virtue of a patta dated July 12, 1940 issued in their names; that the cloofendant who was the brother of plaintiff No. 1 and uncle of plaintiff No. 2 was living in a part of the house with their consent; that plaintiff No. 2 and his yonhger brother Dalip Singh were also Jiving in th" house till the year 1956; that the defendant had refused to receive a notice issued by them ir. the month of September, 1957 calling npon him to hand over possession of the house to the plaintiffs; that the defendant had done so on account of personal ill will and ·that the plaintiffs were, therefore, entitled to recover possession of the ~uit house and damages from the defendant The<e were briefly the allegations made in the plaint. -. On the above basis, the plaintiffs prayed for a decree for the reliefs referred to above. lo the written statement, the defendant did not admit the existence of the patta on the basis of which the plaintiffs claimed title to the suit house. He denied the allegation that the plaintifls were the owners in possessicn of the suit house. He claimed that he was the exclusive owner of the suit house, and in support of the said claim stated as followi :- There was a partition amongst the sons of Sur Singh in the year 1929. At 'that partition, Gad Singh and plaintiff No. 1 became separated and they were given all the family properties which were situated in their village, Roda. As Bharat Singh and the defendant J1ad been educated at the expense of the family, they weu~ not given any snare in the properly. Bharat Singh and he settled in Bikaner and lived togather _as_ members of joint Hindu family. Bharat Singh died on September 2, 1955 leaving the defendant as a survivi'ng coparcener. 011 his death, the defendant became the owner of the properties of Bh;m:t Singh 'as a member of joint Hindu family'. He fur:her pleaded that from the year 1928, Bharat Singh and he who were working as the Aid-de-Camp and Private Secretary respectively of the Maharaja of Bibner were living in the suit house which then belonged to ihc Mabr.raja. The defendant filed an application for purchasing the honse. The proceedings had not terminated when tbe defendant left the service ot the Maharaja and went "' Banaras for higher studies. On h;~ return from Banaras, he joined the service of the Maharnj1 in the civil department of Bikaner. After a Jong time on account of the joint efforts of Bharat Singh and the defendant, the sale of the house was sanc<ioned. Bharat Singh who was Jiving jointly with him pa;d the ccnsideration for the sale on November 4, 1939 'out of the jornc income.' Thus according to the defendant, Bharat Singh nnd lie beca111e its owners from the date of payment of the consideration _1_1 .. _3-91SCI/80_ '· ' A B c D E F G H _G32_ SUPREME COURT REPORTS [1980] 2 S.C.R. further p;eaded that 'if the patta of the property had been granted in ti::?. names of the plaintiffs due <o some reasons, political and other surroundiDg circumstances and for the safety of the property, it cannot affect the right of the defendant'. It was ~!so itated that Bharat Singh and the defendant had not executed any sale deed in favour ot the plaintiffs and so they could not become owners of the suit house. In another part of the written statement, the defendant pleaded thus : "The pkiintiffs have taken the entire ancestral property of the viliage. Still they are harassing the defundant due to avance. The defendant and Thakur Bharat Singh had been doing Government service. So there was always danger of removal or confiscation of the property. Even if Thakur Bharat Singh might have written or given his consent for entering the names of the plaintiffs in the patta in this view, it is not binding. The plaintiffs are at the most 'benami' even though the patta which is not admitted might be proved." It is thus seen that the defendant put forward a two-fold claim to the suit house-one on the basis of the right of survivorship and another on the basis of a joint purchase along with Bharat Singh. Even thou~h in one part of the written statement, he declined to admit the existence of the patta, in paragraph 13 of the written statement which is extracted above, he put forward the plea that the plaintiffs were al the most holding the property as benamdars. He, however, did not claim that he was entitled to the property as an heir of Bharat Singh alongwith plaintiff No. 1 .and Gad Singh who would have inherited the estate of Bharat Si'ngh on his death being his nearest heirs. In t11e reply, the plaintiffs denied that the defc;ndant was entitled to the suit house as a surviving coparcener on the death of Bharat Singh. They, however, pleaded that plaintiff No. l had purchased the suit house out of his income; that Bharat Singh used to love plaintiff No. 2 'a, his son' and was thinking of adopting him but he died all of a sudde'n and that the defendanl' had not disclosed in his written statement the special political circumstances under which the names of the plaintiffs were entered in the patta. They denied that the defeililan~ had any interest in the suit house. .. B c D G Or. the basis of the Oflll and documentary evidence produced before him, the learned District Judge who tried the suit held that Bharat Singh had secured the house from the Government of Bikaner for the ff plaintiffs with their money; that the patta of the house had been granted by the Patta Court in favour of the plaintiffs; that the plaintiffs were in possession of the suit hoiase till September, 1956 and that the BJIIM SINGH 1'. KAN SINGH _(Venkataramidlz,_ _J.)_ _633_ defendant being their close relative was living ;n the house not on his <Jwn account but with the plaintiffs' permission. The learned District Judge also held that the defendant had failed to prove that the suit house had been acquired by him and Bharat Singh with their joint fund. Accordingly he decreed the suit for possession of the house in favour of the plaintiffs and further directed that the defendant should pay damages for use and occupation at the rate of Rs. 50 per month from September 20, 1956 till the possession of the house was restor A B c D E F G R ~- ed to them. Aggrieved by the decree of the trial court, the defendant filed an appeal before the High Court of Rajasthan in Ci'Vil First ,fi.ppeal No. 31 of 1960. The High Court rejected the case of the plaintiffs that the consideration for the house had been paid by Bharat ' Singh out of the funds belonging to them and also the case of the defendant that the house had been purchased by Bharat Singh with the aid of joint family funds belonging to himself and the defendant. The High Court held that the house had been purchased by Bharat Singh out of his own money in the names of the plaintiffs without any intention to confer any beneficial interest on them. It further held that the suit house belonged to Bharat Singh and on his death, Gad Singh,,plaintiff No. 1 and the defendant succeeded to bis estate which included the suit house in equal shares. Accordingly in substitution of the decree passed by the trial court, the High Court made a decree for joint possession in favour of plaintiff No. 1. The rest of the claim of the plaintiffs was rejected. Dissatisfied with the decree of the High Court, the plaintiffs and the defendant have filed these two appeals as mentioned above. The principal issue which arises for consideration relates to the ownership of the suit house. It is admitted on all hands that though Bharat Singh and the defendant were living in the suit house from the year 1928, it continued to be the property of the Maharaja of Bikaner till the date on which the patta (Exh. 4) was issued by the Patta Court of Bikaner and that on the issua of the patta, the State Government ceased to be its owner. It is also not di~puted that the patta constituted the title deed in respect of the suit house and it was issued in the names of the plaintiffs on receipt of a sum of Rs. 5,000. On January 11, 1930, the defendant had made an application, a cer~fied copy of which is marked as Exhibit A-116 to the Revenue Minister of the State of Bikaner making enquiry about the price of the suit honse on coming to know that the State Government intended to sell it. After the above application was made, the. defendant left the service of the State of Bikaner and went to Banaras for studies. Bharat Singh who was also an employee of the State Gov A B c D E G H 634 SUPREME cou:n REPORTS [19801 2 s.c. (. ernment was working as the Aid-de-Camp of the Maharaja in 1939. At the request of Bharat Singh, an order was made by the Maharaja on May 4, 1939 sanctioning the !Lale of the suit house for a sum o[ Rs. 5,000. Exhibit A-118 is the certified copy of the said order. Exhibit A-120 is a certified copy of the order of Tehsil Mahnandi showing that a sum of Rs. 5,000 bad been deposited on behalf of Bharat Singh towards the price of the suit house. It also shows that Bharat Singh was asked to intimate the name of the person in whose favour the patta should be prepared. Presumably, the patta was issued in the names of the plaintiffs as desired by Bharat Singh and Exhibit A-121 shows that it was handed over on September 30, 1940. The patta was produced before the trial court by the plaintiffs. _Y_ By the time the patta was issued in the names of the plaintiffs, the mother of plaintiff No. 2 had died. He was about eight years of age in 1940 and he and his younger brother, Dalip Singh were under the protection of Bharat Singh who was a bachelor. They were staying with him in the suit house. The defendant also was residing in it. Th~ plaintiffs who claimed title to the property under the patta in the course of the trial attempted to prove that the sum of Rs. 5,000 which was paid by way of consideration for the patta by Bharat Singh came out of the jewels of the mother of plaintiff No. 2 which had come into the possession of Bharat Singh on her death. The plaintiff No. 2 who gave evidence in the trial court stated that he had not ~iven any money to Bharat Singh for the purchase of the house but he had come to know from his father, plaintiff No. 1 that it had been purchased with his money. Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3) to whose evidence we will make a reference in some detail at a later stage also stated that they had heard from Bharat Singh that the jewejs of the mother of plaintiff No. 2 were with him suggesting that they could have been the source of the price house. Plaintiff No. 1 who could have given evidence on the above question did not enter the witness box. It is stated that he was a person of weak mind and after the death of Bharat Singh was behaving almost like a mad man. The defendant stated in the course of his evidence that the mother of plaintiff No. 2 had gold jewels weighing about 3-4 tolas only. In this state of evidence, it is difficult to hold that the plaintiffs have established that the consideration for the suit house was paid by them. The finding of the trial court that the house had been purchased by Bharat Singh for the plaintiffs with their money cannot be upheld. The case of the defendant that the price of the suit house was paid out of the funds belonging to him and Bharat Singh bas been rejected both by the trial court and the High Court. On going I _-¥_ - .) BHIM SINGH _v._ KAN SINGH _(Venkataramiah,_ _J.)_ 635 through the evidence adduced by the defendant, we feel that there is no reason for us to disturb the c<Jncurrent findings arrived at by the trial court and the High Court on the above question. We shall, therefore, proceed to decide the question of title on the basis that the considera1ion for the purchase of the house was paid by Bharat Singh out of his own funds. It was contended by the learned counsel for the defendant that since the plaintiffs had failed to establish that they had contributed the , price paid for the suit house, the suit should be dismissed without going into the question whether Bharat Singh had purchased the suit house with his money in the names of the plaintiffs for the benefit of plaintiff No. 2. The plaint does not disclose the name of the person or persons who paid the sale price of the suit house. The suit i~ based on the patta standing in the names of the plaintiffs. In the written statement of the defendant, there was an allegation to the effect that even though the patta was standing in the names of the plaintiffs, they were only benamidars and the real .title was with Bharat Singh and the defendant. The particulars of the circumstances which compelled Bharat Singh or the defendant to take the patta in the names of the plaintiffs were not disclosed although it was stated that it had been done owing to some political and other surrounding circumstances and for the safety of the property. From the evidence led by the parties, we are satisfied that they knew during the trial of the suit that the question whether the transfer effected under the patta was a benami transaction or not arose for consideration in the case. Even in the appeal before the High Court, the main question on which arguments were addressed was whether the transaction was a benami transaction or not. Merely because the plaintiffs attempted lo prove in the trial court that the money paid for purchasing the honse came out of their funds, they cannot in the circumstances of this case b_e prevented from claiming title to the property on the basis that even though Bharat Singh had paid the consideration therefor, plaintiff No. 2 alone was entitled to the suit house. Reference mav be made here to the decision of this Court in _Bhagwati_ _Prasad_ v. _Shri_ _Clwndramau/(1)_ where the Court observed as follows : "There can be no doubt that if a party asks for a relief on a clear and specific grounds, and in the issues or at the trial, no other ground is covered ei1her directly or by necessary implication, it would not be open to the said party to (I) [196<>1 2 S,C.R.286. A II c D E F G H A **B** **D** E **F** G 636 SUPREME C!JURT REPORTS [1980] _Z_ S.C.R. attempt to sustain the same claim on a ground which is entirely new. . . . . . . . . . But in considering the application of this doctrine to the facts of the present ca~e, it is necessary to bear in mind the other principle that considerations of form cannot over-ride the legitimate considerations of substance. If a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it if it is satisfactorily proved by evidence. The general rule no doubt is that the relief should be founded on pleadinga made by the parties. Bnt where the substantial matters relating to the title of both parties to the suit arc touched, though indirectly or even obscurely in the issues, <ind evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case. What the Court has to consider in dealing with such an objection is: did the parties know that the matter in question was involved in the trial, and did they lead evidence **about** **it?"** After holding that the parties to the said case were not taken by surprise, the Court granted the relief prayed for by the plaintiff on the basis that defendant was a licensee even though the plaintiff had pleaded in his plaint that the defendant was tenant. In the above case, the Court distinguished the decision in _Tro;an_ & _Co. Ltd._ v. _RM. N._ _N._ _Hagappa Chettiar(l)_ on which much reliance was placed by the learned counsel for the defendant before us. In the case of _Trojan_ & _Co._ _Ltd._ (supra), this Court came to the conclusion that the alternative claim on which relief was sought was not at all within the knowledge of the parties in the course of the trial. The case before us is not of the nature. In _Ismail_ _Mussa;ee Mookerdum_ v. _Hafi;:,_ _Boo(')_ the plaintiff laid claim to a property which had been transferred in her name by her mother alleging that she had paid the purchase money to her mother. The court came to the couclusion that she had failed to prove 11hat she had paid the consideration. Still a decree was made in her favour holding that she had become the owner of the property by virtue of the transfer in her favour even though consideration had not been (I) [1953] S.C.R. 789. (2) 33 I.A. 86. I ' _r_ - _)_ BHJM SINGH _v._ KAN SINGH _(Venkatarami"h._ J.) 63 7 paid by her since it had been establi•hed in the case that her mother **A** intended to transfer the beneficial interest in the property in her favour. This is borne out from the following passage at page 95 "Jn her evidence, which was very confused, she tried to say that she paid that purchase-money to her mother. This was clearly untrue : as both Courts have found. The fact, therefore, remains that the properties purchased by the sale proceeds were purchased no doubt in Hafiz Boo's name, but were purchased out of funds emanating from her mother's estate. This circumstance no doubt, if taken alone, affords evidence that the transaction was benami, but there is, in their Lordships' opinion, enough in the facts of the case to **negative** **any** **such** **inference."** Moreover no plea was raised on behalf of the defendant before the High Court in this case contending that the High Court should not go into the queotion whether the transfer under the patta was a benami transaction or not. We, therefore, reject the above contention and proceed to examine whether the High Court was right in arriving at the ooneksion that the plaintiffs were only benamidars holding the property for the benefit of its real owner, Bharat Singh as the consideration therefor had emanated from him. Under the English law, when real or personal property is purchased in the name of a stranger, a resulting trust will be presumed in favour of the person who is proved to have paid the purchase money in the character of the purchaser. It is, however, open to the transferee to rebut that presumption by showing that the intention of the person who contributed the purchase money was that the transferee shm1lJ himself acquire the beneficial interest in the property. There is, however, an exception to the above rule of presumption made by the Engli•h law when the person who gets the legal title under the conveyance is either a child or the wife of the person who contributes the purchase money or his grand child, whose father is dead. The rule applicable in such cases is known as the doctrine of advancement which requires the court to presume that the purchase is for the benefit of the person in whose favour the legal title is trans ferred even though the purchase money may have been contributed by the father or the husband or the grandfather, as the case may be, unless such presumption is rebutted by evidence showing that it was the intention of the person who paid the purchase money that the transferee should not become 1he real owner of the property in question. The doctrine of advancement is not in vogue in India. **8** c **D** I' G **H** 638 SUPREME COURT REPORTS (1980] 2 SC.R. **A** The counterpart of the English law of resulting trust referred to above is the Indian law of benami transactions. Two kinds of benami transactions are generally recognized in India. Where a person buys a property with his own money but in the name of another person without any intention _to_ benefit such other person, the transac **B** **c** **D** **E** **H** tion is called benami. In that case, the transferee holds the property for the benefit of the person who has contributed the purchase money, and he is the real owner. The second case which is loosely termed as a benami transaction is a case where a person who is the mmer of the property executes a conveyance in favour of another without the intention of transferring the title to the property therennder. In _**/1'**_ this case, the transferor continues to be the real owner. The difference between the two kinds of benami transactions referred to above lies in the fact that whereas in the former case, there is an operative transfer from the transferor to the transferee though the transferee holds the property for the benefit of the person who has contributed the purchase money, in the latter case, there is no operative ~ransfer at all and the title rests with the transferor notwithstanding the execution of the conveyance. One common feature, however, in both these cases is that the real title is divorced from the ostensible title and they are vested in different persons. The question whether a transaction is a benami transaction or not mainly depends upon the intention of the person who has contributed the purchase money in the former case and upon the intention of the person who has executed the conveyance in the latter case. The principle underlying the former case is also statutorily recognized in section 82 of the Indian Trusts Act, 1882 which provides that where property is transferred to one person fer a consideration paid or provided by another person and it appears that such other person did not 1ntend to pay or provide such consideration for the benefit of the transferee, the transferee must hold the property for the benefit of the person paying or providing the consideration. This view is in accord with the following observations made by **thiS** Court in _Meenakshi_ _Mills._ _Madurai_ v. _The Commissioner_ _of_ _Income-_ _Tax, Madras(')_ : "In this connection, it is necessary to note that the word 'benami' is used to denote two classes of transactions which differ from each other in their legal character and incidents. In one sense, it signifies a transaction which is real, as for example when A sells properties to **B** but the sale deed mentions X as the purchaser. Here the sale itself is genuine. but the real purchaser is B, X being his benamidar. This is (1) [1956] S.C.R. 691 at p. 722. I _)_ ## r ~· "' !!HIM SINGH _v._ KAN SINGH _(Venkataramid,h,_ J.) 639 the class of transactions which is usually termed as benami. But the word 'benami' is also occasionally used, perhaps not quite accurately, to refer to a sham transaction, as for example, when A purports to sell bis property to B without intending that his title should cease or pass to B. The fnndamental difference between these two classes of transactions is that whereas in the former there is an operative transfer resulting in the vesting of title in the transferee, in the latter there is none such, the transferor continuing to retain the title notwithstanding the execution of the transfer deed. It is only in the former class of cases that it would be necessary, when a dispute arises as to whether the person named in the deed is the real transferee or B, to enquire into the quest;on as to who paid the consideration for the transfer, X or B. But in the latter class of cases, when the question is whether the transfer is genuine or sham, the point for decision would be, not who paid the consideration but whether any consideration was paid."_ In _Mohammad Sadiq Ali Khan_ v. _Fakhr lahan Begum_ & _Ors.(')_ the facts were these : A Mahemmodan bought an immovable property taking the conveyance in the name of his daughter who was five years **of** **age.** **The income was credited to a separate account, but** **it** **was** in part applied to purposes with which she had uo concern. Upon her marriage, the deed was sent for the inspection of her father-inlaw. After the death of the donor it was contended that the property was part of his estate, the purchase being benami. The Judicial Committee of the Privy Connell held that there was a valid gift to the daughter because there was proof of a bona fide intention to give, and that intention was established. In the conrse of the above decision, it was observed thus : **A** **B** **c** **D** **E** **F** "The purchase of this property was a very natural provision by Baqar Ali for the daughter of his favourite wife, and though there may be no presumption of advancement in **G** such cases in India, very little evidence of intention would be sufficient to turn the scale. The sending of the deed for the inspection of the lady's father-in-law, which the Chief Court held to be established, was clea-rly a representation that the property was hers, and their Lordships agree with the learned Judges in the conclusion to which they came." **H** (I) _59_ I.A. I. 640 SUPREME COURT REPORTS [1980] 2 s.c.R. A In _Manmohan Dass_ _&_ On. v. _Mr. Ramdei_ _&_ _Anr.(')_ Lord Mac- _(_ mman speaking for the Judicial Committee observed : I B c D E F G ff In order to determine the question of the validity or invalidity of the deed of gift in question it is of assistance to consider . 'the surrounding circumstances, the position of the parties and their relation to one another, the motives which could govern their actions and their rnbsequent conduct.' _Da/ip_ _Singh_ v. _Nawal Kanwar_ 35 I.A. 104 (P.C.) always remembering th•at the onus of proof rests upon the party impeaching the deed. The principle enunciated by Lord Macmillan in the case of - _Manmohan Dass_ _&_ _Ors._ (supra) has been followed by this Court in _Jayadayal Poddar (deceased) through his_ _L._ _Rs._ _&_ _Anr._ v. _Mst._ _Bibt_ _Hazara_ & _Ors._ Cl where Sarkaria, J. observed thus : "It is well settled that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so. This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly and reasonably rai,ing an inference of that fact. The essence of a benami is the intention of the party or parties concerned; and not unoften such intention is shrouded in a thick veil which cannot be easily pierced through. But such difficulties do not relieve the person asserting the transaction to be bcnami of any )l'art of the serious onus that rests on him; nor justify the acceptance of mere conjectures or surmises. as a substitute for proof. The reason is that a deed is a· solemn document prepared and executed after considerable deliberation and the person expressly shown as the purchaser or transferee in the deed. starts with the initial presumption in his favour that the apparent state of affairs is the real state of affairs. Though the question, whether a particular sale is benami or not, is largely one of fact, and for determining this question, no absolute formulae or acid tests, uniformly applicable in all situations, can be laid down; yet in weighing the probabilities and for gathering _(1)_ A.LR. 1931 P.C 175. (2) [1974] 2S.C.R.90. _j_ " Now we shall refer to the facts of the present case. When the suit house was purchased from the Maharaja of l3ikaner, Bharat Singh was a bachelor and he did not marry till his death in the year 1955. The wife of Bhim Singh had died before 1939 leaving behind her two young children. Plaintiff No. 2 was about eight years old in the ye11r 1939 and his younger brother Dalip Singh was about two years old . These two childre.n were living with Bharat Singh. Bhim Singh, plaintiff No. 1 was almosl in indigent conditi'on. The defendant had by then acquired a degree in law and also had practised as a lawyer for some time. It is stated that the defendant had again been employed in the service of the State of Bikaner. The patta was issued in the names of plaintiffs 1 and 2 at the request of l3harat Singh. Even though the defendant stated in the written statement that the patl'a had been taken in the names of the plaintiffs owing to certain political circumstances,. he had not disclosed in the course, of his evidence those circnmstances which compelled Bharat Singh to secure the patta in the names of the plaintiffs, though at one stage, he sl'ated that it was under his advice that Bharat Singh got the patta in the names of the plaintiffs. Bharat BHIM SINGH _v._ KAN SINGH _(Venkataramiah,_ _J.)_ 641 the relevant indicia, the courts are usually guided by these circumstances: (1) the source from which the purchase money came; (2) the nature and possesion of the property, after the purchase; (3) motive, if any, for giving the transaction a benami colour; ( 4) the position of the parties and the relationship, if- any between the claimant oand 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." F G H The principle governing the determination of the question whether a tronsfer is a benami transaction or not may be summed up thus : ( 1) The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie a.sumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention cf the person who has contributed the purchase money and ( 4) the question as to what his intention was has to be decided on the basis of the surrounding circumstances, the relationship of the parties, the motives governing their action in bringing about the transaction and their snb B c D sequent conduct etc. E A F ·G 642 SUPREME COURT REPORTS .(1980] 2 S.C.R. Singh had no motive to suppress from the knowledge of the public that he had acquired the property. It was suggested in the course of the a.rguments that he had taken the patta in the names of the plaintifl'> because he was in the service of the State. We do not find any substance in this submission because the property was being purchased from the State Government itself and there was no need for him to shield his title from the knowledge of the State Government. It appears that Bharat Singh acquired the suit house for the benefit of plaintiff No. 2 for the following circumstances : The first circumstance is that the original patta had been handed over by Bharat Singh to plaintiff No. 2 on his passing B.Sc. Examination. This fact is proved by the evidence of plaintiff No. 2 and it is corrobomted by the fact tbat the patta was produced by the plaintiffs before the Court. In the course of bis evidence, the defendant no doubt stated that tbe patt:i had been stolen by plaintiff No. 2 from the suit bouse during tl:e twelve days following the deatb of Bharat Singh when the keys •Jf Bharat Singh's residence had been h•anded over to plaintiff No. 2 by the defendant. It is difficult to believe the above statement of foe defendant because of two circumstances-(i) that the defendant did not state in the written statement that the patta had been stolen by plaintiff No. 2 and (ii) that within a month or two after the death of Bharat Singh, plaintiff No. 2 wrote a letter which is marked as Exhibit A-124 to the defendant stating that the rumour which the defenda,1t was spreading that plaintiff No. 2 had stolen some articles from the suit house was not true since whenever plaintiff No. 2 opened room or any of the almirahs of Bharat Singh in the suit house, Devi Singh. lhe son of the defendant was keeping watch over him. That letter hos been produced by the defendant and there is no reference in it to a false rumour being spread about the theft of the patta by plaintiff No. 2. Pl'aintiff No. 2 however, while asserting his claim to the suit house in the course of that letter stated that he had seen that the patta had been executed in his favour; and that the patta c·ontained his name. The defendant does not appear to have sent any reply to Exhibit A. 124 nor did he cull upon the plaintiffs to return the patta to him. He did not also file a complaint stating that the patta had been stolen by plaintiff No. 2. We are of the view that there; is no reason to di>believe the evidence of plaintiff No. 2 that the patta had been handed over to him by Bharat Singh on his passing the B.Sc. examination. This conduct of Bharat Singh establishes that it was the intention of Bharat Singh when he secured the patta from the State Government in the names of the plaintiffs that plaintiff No. 2 whom he loved should become the owner. It is no doubt trne that the name of plaintiff No. 1 is also included in the P'atla. It may have been so included by way 1, BllIM SINGH _v._ KAN SINGH _(Venkataramia;/z,_ _!.)_ 643 of abundant caution as plaintiff No. 2 was a minor when the patta **A·** was issued. The above circumstance is similar to the one which persuaded their Lordships of the Privy Council in the case of _Mohammad_ _Sadiq_ _Ali_ _Khan_ (supra) to hold that the property involved in that case belonged to the person in whose favour the conveyance had been executed. The second circumstance which supports the view that Bharat Singh intended that plaintiff No. 2 should become the owner of the suit house is proved by the declarations made by Bharat Singh regarding the title to the suit house. Jaswant Singh (P.W. 2) was a former Prime Minis **B** ter of the State of Bikaner. His wife was a cousin of plaintiff No. 1, Bharat Singh and the defendant. Being a close relative of Bharat Singh who was also the Aid-de-Camp of the Mahamja of Bikaner, he was quite intimate with Bharat Singh who used to discuss with him about **c** his personal affairs. P.W. 2 has stated in the course of his evidence that Bharat Singh thought it proper to purchase the house i11 !he name of plaintiff No. 2 and that he intended to make plaintiff No. 2 his heir and successor. · He has also stated that Bharat Singh had expressed his desire to give all his property to plaintiff No. 2 by a will and that he bad told Kesri Singh (P.W. 3) just a day prior to his (Bharat Singh's) death that a will was to be executed. This statement of Jaswant Singh (PW. 2) is corroborated by the evidence of Kesri Sing.-i (P.W. 3) whose wife was also a cousin of Bharat Singh, plaintiff No. **1** and the defendant. The relevant portion of the deposition of Kesri **E** Singh (P.W. 3) reads thus: ' "I came from Jaipur to Bikaner by train one day before the death of Blrarat Singh and when I was returning after a walk I found Bharat Singh standing at the gate of his house. I asked Bharat Singh to accompany me to my house to have tea etc. Bharat Singh came with me to my house. Bharat Singh told me at my house that he was not quite all right and that he might die at any time .. He wanted to execute a will. He further told me that his house really belonged to Himmat Singh. It has been purchased in his name. He wanted to give even other property to Himmal Singh. . . . . By other property which Bhamt Singh wanted to give to Himmat Singh was meant Motor car, bank balance and the presents which he had. The house regarding which my talk took place with Bharat Singh at my honse was the house in dispute." **F** **G** There is no reason to disbelieve the evidence of these two wil- **H** nesses. Their evidence is corroborated by the deposition of **Dr.** Himmat Singh (D.W. 6) who was the Secretary of a Club in Bikaner 644 SUPREME COUl<T REPOR'I S [1980] _2_ S.C.R. A of which Bharat Singh was a member. He was examined by the defendant himself as his witness. Jn the course of his cross-examination, Dr. Himmat Singh (D.W. 6) rc!errcd to what Bharat Singh had told him a few months prior to his death. The substance of his deposition is found in the judgment of the trial court, the relevant portion ( _)_ of which reads thus : B D II It was argued on behalf of the defendant that there is some varia.tion between the deposition of Dr. Himmat Singh (D.W. 6) and the above passage found in the judgment of the trial court and that the evidence of D.W. 6 should not be believed as he had turned hostile. The deposition of Dr. Himmat Singh (D.W. 6) was read out to us. It was also brought to our notice that an application had been made by the defendant to treat D.W. 6 as hostile and that it had not been granted by the trial court. Even though there is a slight,·ariation between what is stated by D.W. 6 and what is contained in the judgment of the trial court with regard to certain det·ails, we do not feel that the said variation is of any substantial nature. The evidence of D.W. 6 suggests that Bharat Singh was of the view even during his life time that the suit house bolonged to plaintiffs and not to himself. Even though an application had been made by the defendant to treat D.W. 6 as hostile, we feel that this part of the evidence of D.W. 6 cannot be rejected on that ground since it is consistent with the evidence of Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3). It is seen from the judgment of the High Court that the effect of the statement of Kesri Singh (P.W.3) in his deposition that Bharat Singh "D.W. 6 Dr. Hinunat Singh is the Secretary of the Sardul Club, Bikancr. He is the Senior Eye-Surgeon in the Government Hospital, Bikancr. He has stated that Bharat Singh was the member of Sardul Club. A sum of Rs. _42516/ .._ remained outstanding against him till the year 1955. This amount was received on 28-10-1955. He has said that he does not know who deposited this amount. On the merits of the case, he has stated that he intimately knew Bharat Singh and members of his family. Bhim Singh and his sons Himmat Singh and Dalip Singh used to live in this house. Bharat Singh took this house for Bhim Singh and Himmat Singh. Four months before his death, Bharnt Singh told the witness that he had already taken the house for Bhim Singh and Himmat Singh and that whatever else would remain with him shall go to them. Dr. Himmat Singh refutes the defendant's stand and supports the plaintiff's case." BIHM SINGII _v._ KAN S!NGJI _(Ve11kataramia/1._ _J.)_ _64b_ ' ' •had told him that the suit house was the property of pla,intiff No. 2 "has not been considered. The High Court while dealing with the evi· -dencc of Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3) laid more emphasis on those parts of their evidence where there was a reference to the alleged utilisation of the jewels or moneys belonging to th~ ,plaintiffs by Bharat Singh for the,urpose of acquiring the suit house. The High Court has also observed in the course of its judgment that neither of them had stated that Bhamt Singh had told them that he was purchasing or had purchased the suit house as a gift to Bhim Singh· and Himmat Singh. The above observation does not appear to be consistent with the evidence of Kesri Singh (P.W. 3) discussed above. 't. It was, however, contended on behalf of the defendant that the statement made by Bharat Singh in the year 1955 could not be accepted as evidence in proof of the nature of the transaction which had taken place in the year 1940. It was contended that the question whether a transaction was of a benami nature or not should be decided on the basis of evidence about facts which had taken place at or about the time of the transaction and not by statements made several years after the date of the transaction. In support of the ·above contention, the learned counsel for the defendant relied on the decision of the House of Lords in _Shephard_ & _Anr._ v. _Cartwright_ & _Anr.(')._ The facts of ~:\that case were these: In 1929, a father, with an assii(;'ate, promoted " several private companies and caused a large part of the shares, for which he subscribed, to be allotted in varying proportions to his three children, one of them being then an infant. There was no evidence as to the circumstances in which the allotments were made. The companies were successful and in 1934 the father and his associate pro· moted a public company which acquired the shares of all the companies. The children signed the requisite documents at the request of their father without understanding what they were doing. He received a cash consideration and at ~mious times sold, and received the proceeds of sale of, their shares in the new company. He subsequently placed to the credit of the children respectively in separate deposit accounts the exact amount of the· cash consideration for the Qld shares and round sums in each case equivalent to proceeds of sale of the new shares. Later he obtained the children's signatures to documents, of the contents of which they were ignorant, authorising him to withdraw money from these accounts and without their knowledge he drew on the accounts, which were by the end of 1936 exhausted, part of the sums withdrawn being dealt with for the benefit of the children but a large part remaining unaccounted for. He died in A B c D E F G H (1) [1955] A.C. 431. ' **A** **B** **c** 646 **SUPREl\iIE COURT REPORTS** [1980] ~ s.c.R. 1949. ln the action filed against his executors, it was contended by them that the subsequent conduct of the father showed that when the shares were got allotted by him in the names of the children in 1929, he did not intend to make them the real owners of the shares and that the presumption of advancement had been rebutted. This contention was met by the plea that the subsequent conduct of the father in dealing with the shares as if they were his own could not be relied upon either in his favour or in favour of his representa.tives, executors and administrators to prove that he had no intention to create any beneficial interest in his children in the shares in question when they were obtained. On these facts, the House of Lords held that the subsequent acts and declarations of the father could not be relied _y_ upon in his favour or in favour of his executors to rebut the presl!lllption of ad\'ancement. Viscount Simonds in the course of his judgment observed thus : "1\ly Lords, I do not distinguish between the purchase of **D** shares and the acquisition of shares upon allotment, and l think that the law is clear that on the one hand where a man purchases shares and they arc registered in the nume of " stranger there is a resulting trust in favour of the purchaser; on the other hand, if they are registered in the name of a **E** **F** **G** child or one to whom the purchaser then stood in loco parentis, there is no such resulting trust but a presumption of advancement. Equally it is clear that the presumption may be rebutted but should not, a.s Lord Eldon said, give way to slight circumstances : _Finch_ v. _Finch_ ( 1808) 15 Ves. 43. It must then be asked by what evidence can the presumption be rebutted, and it would, I think, be very unfortunate if any doubt were cast (as I think it has been by certain passages in the judgments under review) upon the wellsettled law on this subject. It is, I think, correctly stated in substantially the same terms in every text book that I have consulted and supported by authority extending over a Jong period of time. I will take, as an example, a passage from Snell's Equity, 24th ed., p. 153, which is as follows : "The acts and declarations of the parties before or at the **B** time of the purchase, or so immediately after it as to constitute a part of the transaction, are admissible in evidence either for or against the party who did the act or made the BHIM Sll\GH _v._ KAN SINGH _(Venkataramiah,_ _J.)_ 64 7 declaration. . .. But subsequent declarations are admissible as evidence only against the party who made them, and not in his favour." The above passage, we are of the view, does not really assist the defendant in this case. What was held by the House of Lords iri the case of _Shephard_ _&_ _Anr._ (supra) was that the presumption of advancement could be displaced only by a statement or conduct anterior to or contemporaneous to the purchase nor could any conduct of the children operate against them as admissions against their in" terest as they acted without the knowledge of the facts. In the instant case, we are concerned with the conduct and declarations of Bharat Singh subsequent to the transaction which were against his interest. The evidence regarding such conduct and declarations is not being used in his favour but against the legal representative of Bharat Singh i.e. the defendant who would have become entitled to claim a share in the suit house if it had formed part of his estate. Such conduct or declaration would be admissible even according to the above decision of the House of Lords in which the statement of law in Snell's Equity to the effect 'but subsequent declarations ar'1 admissible as evidence only against the party who made them, and not in his favour' is quoted with approval. The declarations made by Bharat Singh would be admissible as admissions under the provisions of the Indian Evidence Act being statements made by _him_ against his proprietary interest under section 21 and section 32(3) of the Indian Evidence Act. The defendant cannot also derive any assistance from the decision of this Court in _Bibi Saddiqa_ _Fatima_ v. _Saiyed._ _M"Ohammad_ _Mahmood Hasan(')._ The question before the Court in the case of _Bibi Siddiqa Fatima_ (supra) was whether a property which had been purchased by a husband in !Ji's wife's name out of the fund belonging _to_ a waqf of which he was a Mutawalli could be claimed by the wife as her own property. This Court held that the wife who was the ostensible owner could not be treated as a real owner having regard to the fact that the purchase money had come out of a fund belonging to a waqf over which her husband who was the Mutawalli had no uncontrolled or absolute interest. Jn reaching the aoove conclusion. this Court observed thus : A B c D E F G "We may again emphasize that im a case of this nature. all the aspects of the benami law including the 8 (1) [1978] 3 S.C.R. 886. 4-91SCij80 A B c D f1 H 648 SUPREME COORT REPORTS [1980] 2 S.C.R. question of burden of proof cannot justifiably be applied fully. Once it is found, as it has been consistently found, that the property was acquired with the money of the waqf, a presumption would mise that the property is a waqf property irrespective of the fact as to in whose name 11 was acquired. The Mutawalli by transgressing the limits of his power and showing undue fdvour to one of the beneficiaries in disregard to a large number of other beneficiaries could not be and should not be permitted to gain advantage by this method for one beneficiary which in substance would be gaining advantage for himself. In such a situation it will not be unreasonable to say-rather it would be quite legitimate to infer, that it was for the plaintiff to establish that the property acquired was her personal property and not the property of the waqf." It was next contended that the defendant had spent money on the repairs and reconstruction of the building subsequent to the date of the patta and that therefore, he must be held to have acquired some interest in it. We have gone through the evidence bearing on the above question. We are satisfied that the defendant has not established that he had spent any money at all for construction and repairs. Even if he has spent some money in that way with the knowledge of the actual state of affairs, it would not in law confer on the defendant any proprietary interest in the property. It is also significant that neither Gad Singh during his life time nor his children after his death have laid any claim to a share in the suit hou~e which they were entitled to claim alongwith the defendant if it was in fact a part of the estate of Bharat Singh. Their conduct also probabalises, the case of the plaintiffs1 that Bharat Singh did not intend to retain for himself any interest in the suit house. On the material placed before us, we are satisfied that the transaction under which the patta was obtained was not a benami transaction end that Bharat Singh had acquired the suit house with his money with the intention of constituting plaintiff No. 2 as the absolute owner thereof. Plaintiff No. 2 is, therefore, entitled to a decree for possession of the suit house. The trial court passed a decree directing the defendant to pay damage~ for use and occupation in respect of the suit house at the rate of Rs. 50/- per month from September 20, 1956 fr]] the / DHIM SINGH _v._ KAN SINGH _(Venkataramiah,_ _!.)_ 649 possession of the house was delivered to the plaintiffs. The operalion of the decree of the trial court was stayed by the High Court during the pendency of the appeal before it. In view of the decree passed by the High Court, the defendant has continued to be in possession of the suit house till now. Nearly twenty years have elapsed from the date of the institution of the suit. Jn the circumstances, we are of the view that the defendant should be directed to pay mesnc profits at the rate of Rs. 50/- per month till today and that an enquiry should be made by the trial court under Ordoc 20, "- Rule 12 of the Code of Civil Procedure to determine the mesne profits payable by the defendant hereafter till the date of delivery of **r** **'Possession.** In the result, the decree passed by the High Court is set aside and a decree is passed directing the defendant to deliver possession of the suit house to plaintiff No. 2 and to pay mesne profits to him at the rate of Rs. 50/- per month from September 20, 1956 till today and also to pay future mesne profits as per decree to be passed by the trial court under Order 20, Rule 12 of the Code of Civil Procedure. For the foregoing reasons, Civil Appeal No. 626 of 197! Is accordingly allowed with costs throughout. Civil Appeal No. 629 of 1971 is dismissed but without costs. _C.A._ 626/71 _allowed._ P.B.R. _C.A. 629/71 dismissed._ A **B** **c** **D** E