MANGATHAI AMMAL (DIED) THROUGH LRS AND versus RAJESWARI & OTHERS

Citation: [2019] 7 S.C.R. 619 · Decided: 09-05-2019 · Supreme Court of India · Bench: L. NAGESWARA RAO · Disposal: Case Partly allowed

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Judgment (excerpt)

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MANGATHAI AMMAL (DIED) THROUGH LRS AND OTHERS
v.
RAJESWARI & OTHERS
(Civil Appeal No. 4805 of 2019)
MAY 09, 2019
[L. NAGESWARA RAO AND M. R. SHAH, JJ.]
Benami transactions: Transactions, whether benami or not –
Determination of – Held: Payment of part sale consideration cannot
be the sole criteria to hold the sale/transaction as benami – Intention
of the person who contributed the purchase money is determinative
of the nature of transaction – Intention has to be decided on the
basis of the surrounding circumstances; relationship of the parties;
motives governing their action in bringing about the transaction
and their subsequent conduct – On facts, courts below erred in
decreeing the suit for partition of the properties by original plaintiffs-
daughter-in-law and son-in-law, claiming 3/4th share in the suit
properties since the father-in-law had purchased the suit properties
in the name of his wife-defendant no.1 by selling the ancestral
properties – Courts below erred in holding that the transactions/
sale deeds were benami transactions – It erred in shifting the burden
on the defendants to prove that the sale transactions were not benami
transactions – Merely because of payment of part sale consideration
and stamp duty at the time of the execution of the sale deed by the
father-in-law, it cannot be said that the sale deed in favour of
defendant no.1 was benami transaction – Furthermore, from the
facts and circumstances, it cannot be said that the suit properties
were purchased in the name of defendant no.1 by the husband from
the funds received by selling of the ancestral properties – Thus, the
order passed by High Court and trial court holding that the plaintiffs
have 3/4th share in the suit properties (except Item Nos. 1 and 3 of
the suit properties) set aside – Benami Transaction (Prohibition)
Act, 1988.
Partly allowing the appeal, the Court
HELD: 1.1 Both, the trial court and the High Court have
erred in shifting the burden on the defendants to prove that the
sale transactions were not benami transactions. In fact when the
   [2019] 7 S.C.R. 619
619
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SUPREME COURT REPORTS
[2019] 7 S.C.R.
plaintiffs’ claim, though not specifically pleaded in the plaint, that
the Sale Deeds in respect of suit properties, which are in the
name of defendant no.1, were benami transactions, the plaintiffs
have failed to prove, by adducing cogent evidence, the intention
of the NM-father to purchase the suit properties in the name of
defendant no.1-his wife. Even the reasoning and the findings
recorded by the trial court confirmed by the High Court while
holding the Sale Deeds/transactions in favour of defendant no.1
as benami cannot be said to be germane and or fulfilling the
circumstances as are carved out by this Court. [Para 8.4, 9]
[633-F-H; 634-A]
1.2 The first reason given by the trial court while holding
the suit properties as benami transactions is that part sale
consideration was paid by NM at the time of the purchase of the
property vide Sale Deed. The payment of part sale consideration
cannot be the sole criteria to hold the sale/transaction as benami.
While considering a particular transaction as benami, the intention
of the person who contributed the purchase money is
determinative of the nature of transaction. The intention of the
person, who contributed the purchase money, 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 subsequent conduct etc. NM, who
contributed part sale consideration by purchasing property might
have contributed being the husband and therefore by mere
contributing the part sale consideration, it cannot be inferred that
Sale Deed in favour of the defendant no.1-wife was benami
transaction and for and at behalf of the joint family. Therefore,
the trial court as well as the High Court erred in holding the suit
properties as benami transactions/ancestral properties on the
basis of the document-Sale deed. [Para 9.1] [634-B-F]
1.3 Merely because of the stamp duty at the time of the
execution of the Sale Deed was purchased by NM, by that itself it
cannot be said that the Sale Deed in favour of defendant no.1 was
benami transaction. Except the said two documentary evidences
no other documentary evidence/transaction/Sale Deed in favour
of defendant no.1 have been considered by the trial court and
even by the High Court. [Para 9.2] [634-F-G]
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