i.2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Order: 06.11.2008
+ RFA 404/2007 & CM No.10091/2007
VIJESH CHADHA & ANR. ..... Appellant
Through: Mr.Pramod Ahuja, Adv.
versus
RAJINDRA CHADHA ..... Respondent
Through: Mr.M.M.Kalra, Adv.
CORAM:
HON’BLE MR. JUSTICE PRADEEP NANDRAJOG
HON’BLE MR. JUSTICE J.R. MIDHA
1. Whether reporters of local papers may be allowed
to see the judgment?
2. To be referred to the Reporter or not?
3. Whether judgment should be reported in Digest?
: PRADEEP NANDRAJOG, J.(Oral)
1. Delay in filing the appeal is condoned. CM
No.10091/2007 is allowed.
2. Heard learned counsel for the parties.
3. The appellants who are the son and daughter-in-law
of the respondent have suffered a decree of possession and
mesne profits against them.
4. The case of the respondent was that she was the
Page 1 of 11
owner of property No.U-6 and U-4 West Patel Nagar and that
she had permitted her son and her daughter-in-law to occupy a
portion on the second floor shown red in the site plan annexed
with the plaint. She stated that her son and daughter-in-law
started misbehaving with her and made life fairly miserable for
her, compelling her to required them to move out of the said
premises.
5. By a notice dated 7.11.2004, she requested them to
vacate the premises in their occupation/possession. They did
not do so and hence she had no option but to sue for
possession and mesne profits.
6. The defence taken by the appellants was that the
mother was the registered owner of only property No.U-6 West
Patel Nagar. They stated that the same was acquired by the
mother with the ancestral funds i.e. funds of the grandfather of
appellant No.1. Thus, the appellants denied the right of the
mother to seek possession.
7. We note that the appellants merely denied the
ownership of the mother with respect to U-4 West Patel Nagar,
New Delhi in the pleadings without stating as to who was the
owner thereof.
Page 2 of 11
8. On the pleadings of the parties following five issues
were settled on 9.11.2005:-
“1. Whether the defendants are occupying the
premises in dispute as a licencee? OPP2. Whether the plaintiff is entitled to claim relief of
possession, as prayed for? OPP3. Whether the plaintiff is entitled to claim
damages. If so, at what rate and from what
period? OPP4. Whether the property had been purchased from
out of the ancestral funds of the Hindu Family for
the residence and benefit of family members. If
so its effect? OPD5. Relief.”
9. It would be important to note that no issue was got
settled whether the mother was not the owner of property
No.U-6 West Patel Nagar. From a perusal of the issues it is
apparent that the issue which was got settled was, whether the
subject property has been purchased from out of the ancestral
funds.
10. It does happen that many a times a plea is raised in
the written statement but at the time of settlement of issues
the same is not pressed. It is important to note that in the
instant case appellants never requested the learned Trial Judge
to re-settle the issues or re-frame issue No.4.
Page 3 of 1111. From the evidence led it is apparent that parties
went to trial on the understanding that the defence taken was
that the mother was a mere name lender of the properties and
that the same was purchased from out of the ancestral funds.
12. Before analyzing the evidence, on the issue at hand,
it is impossible to note that though the property had two
municipal numbers the same is conceptually and physically a
single entity property.
13. On the issue of property being purchased benami;
the onus of proof and how the same has to be discharged; we
had penned a decision on 20.10.2008 disposing of RFA
No.784/2003 Satish Kumar vs. Prem Kumar & Ors. In paras 14
to 19 of the said decision we had culled out the law relating to
a plea of benami and in particular when the plea is raised by a
close relation. We had noted as under:-
“”14. The law relating to onus of proof of a property
being benami and discharge of said onus was first
expounded by the Federal Court in the decision
reported as Gangadara Ayyar & Ors v
Subramania Ayyar & Ors AIR 1949 FC 88 in
following terms:-“It was contended by the learned Counsel for
the appellants that the decision of the Court
below against the appellants regarding these
properties had been reached because of a
Page 4 of 11
wrong approach to this matter in law and that
the rule of onus of proof as regards benami
transactions had not been fully appreciated. It is
settled law that the onus of establishing that a
transaction is benami is on the plaintiff and it
must be strictly made out. The decision of the
Court cannot rest on mere suspicion, but must
rest on legal grounds and legal testimony. In
the absence of evidence, the apparent title
must prevail. It is also well established that in a
case where it is asserted that an assignment in
the name of one person is in reality for the
benefit of another, the real test is the source
whence the consideration came and that when
it is not possible to obtain evidence which
conclusively establishes or rebuts the
allegation, the case must be dealt with on
reasonable probabilities and legal inferences
arising from proved or admitted facts. The
Courts below proceeded to decide the case
after fully appreciating the above rule and in
our judgment their decision does not suffer
from the defect pointed out by the learned
Counsel for the appellants.” (Emphasis
Supplied)
15. In the decision reported as M.Nagendriah v M.
Ramachandraih & Anr 1969 (1) UJ 697 (SC) the
Hon’ble Supreme Court explained the law relating to
proof of benami transactions in following terms:-
“……………Now if that is so, then the onus of
proving that these purchase were benami was
on the appellant and it was for him to show by
convincing evidence that the source of money
for these acquisitions was traceable to the joint
funds from this business. Admittedly this has
not been shown by any affirmative evidence,
Shri Gupta, however, laid stress on the
contention that the respondent had also not
Page 5 of 11
been shown to possess sufficient funds with
which properties in question could be acquired.
On this reasoning the counsel tried to induce us
to infer that the properties must be held to be
joint of the appellant and Ramachandraiah.
This, in our opinion, is not a correct approach.
Ostensible owner must be held to be a true
owner in the absence of cogent evidence
establishing that he is a mere benamidar, or is
holding property for another person who claims
to be the beneficial or real owner. The onus also
does not change merely because the beneficial
owner and the ostensible owner are brothers or
they may be owning some other property
jointly. The mere circumstance that the
ostensible owner has not proved that he had
himself paid the price or that he had sufficient
funds to be able to do so, would also net be
enough by itself to sustain the claim of the
alleged beneficial owner. The initial onus is
always on the party seeking to dislodge the
ostensible title. We are not unmindful of the fact
that in this country benami transactions are not
uncommon and they are certainly not
forwarded upon. We are equally conscious of
the fact that the appellant and respondent
Ramachandraiah are real brothers and not utter
strangers. But at the same time it cannot be
ignored, as just observed, that the initial onus
must as a matter of law be on the party
asserting benami nature of title………..”
(Emphasis Supplied)
16. The observations of the Hon’ble Supreme Court in
M.Nagendriah’s case (supra) to the effect that the
onus of proof of benami transactions cannot be
discharged merely on account of some deficiency in
the evidence led by the alleged benami owner leads
to an irresistible conclusion that the onus of proof of
benami transaction is very heavy on the person
alleging the same and can be discharged only by
leading positive evidence.
Page 6 of 11
17. In the decision reported as Jaydayal Poddar &
Anr v Mst. Bibi Hazra & Ors AIR 1974 SC 171 the
Hon’ble Supreme Court enumerated six
circumstances which must be looked into by the
courts in determining whether a particular
transaction is benami or not. At this juncture, it would
be apposite to refer to following observations made
by the Hon’ble Court in the said decision:-
“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 raising 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 benami of any part 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,
uniformally applicable in all situations, can be
laid down; yet in weighing the probabilities and
for gathering the relevant indicia, the courts are
usually guided by these circumstances : (1) the
source from which the purchase money came;
(2) the nature and possession of the property,
Page 7 of 11
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 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.
The above indicia are not exhaustive and their
efficacy varies according to the facts of each
case. Nevertheless No. I, viz. the source whence
the purchase money came, is by far the most
important test for determining whether the sale
standing in the name of one person, is in reality
for the benefit of another.” (Emphasis Supplied)
18. After noting leading judicial authorities on the
point, the Hon’ble Supreme Court in the decision
reported as Valliammal (D) by Lrs. v
Subramaniam & Ors AIR 2004 SC 4187
summarized the law relating to proof of benami
transactions as under:-
“There is a presumption in law that the person
who purchases the property is the owner of the
same. This presumption can be displaced by
successfully pleading and proving that the
document was taken benami in name of
another person for some reason, and the person
whose name appears in the document is not the
real owner, but only a benami. Heavy burden
lies on the person who pleads that recorded
owner is a benami-holder.” (Emphasis Supplied)
19. Having laid down the afore-noted legal position in
respect of proof of benami transactions, the Hon’ble
Supreme Court proceeded to note the six
circumstances enumerated in Jaydayal Poddar’ s
case (supra) and concluded that the source from
where the purchase money came and the motive as
to why the property was purchased benami are the
Page 8 of 11
most important tests for determining whether the
sale standing in the name of one person, is in reality
for the benefit of another person. The Hon’ble Court
emphasized that a party invoking the plea of benami
in order to prove the real ownership of the property
which is the subject-matter of lis is required to show
that there were valid reasons for purchase of the
property in name of the benamidar and that the
purported real owner had paid the sale consideration
for the purchase of the property.”
14. It is obvious that the onus to prove that the mother
was a mere benamidar was on the appellants.
15. The learned Trial Judge has noted, in para 7 of the
impugned decision, that the appellant No.1 was a toddler aged
3 years when his grandfather died and had no personal
knowledge of what was the estate left behind by his
grandfather. There being no documentary evidence led to
show that the source of funds was a source other than that of
the mother, learned Trial Judge has held that the appellants
failed to establish that the respondent was a benami owner of
the property and that the same was acquired from out of the
ancestral funds.
16. Holding that it was a case of a permissive
possession akin to a gratuitous licensee, since the mother had
wanted her son and daughter-in-law to leave the house,
Page 9 of 11
learned Trial Judge has held that the mother was entitled to a
decree of possession.
17. Mesne profits have been awarded to the mother
@Rs.4000/- per month with effect from the date the children
were asked to vacate the suit premises.
18. It is urged at the hearing today that there exists an
award which shows the ancestral funds which were used for the
acquisition of the property.
19. Where is that award? We do not know.
20. We have gone through the record of the learned
Trial Judge. We do not find any award on the record of the
learned Trial Judge. We have gone through the evidence of the
appellants. Not a word has been spoken by them about any
award.
21. Except for a bald statement made by appellant No.1
when he entered the witness box that the source of funds is
ancestral, we find no evidence to sustain the said statement.
22. Presumption of law is that he who is the recorded
owner of a property in a sale deed is presumed to have paid
the funds for acquiring the same.
23. There has to be strong and cogent evidence
Page 10 of 11
showing that the source of funds was elsewhere to displace the
presumption in favour of the registered owner of the property.
24. We find no merits in the appeal. The appeal is
dismissed.
25. Costs shall follow.
PRADEEP NANDRAJOG, J.
J.R. MIDHA, J.
NOVEMBER 06, 2008
dharmender
Page 11 of 11