R. RAJAGOPAL REDDY (DEAD) BY LRS. AND ORS. versus PADMINI CHANDRASEKHARAN (DEAD) BY LRS.

Citation: [1995] 1 S.C.R. 715 · Decided: 31-01-1995 · Supreme Court of India · Bench: KULDIP SINGH · Disposal: Disposed off

Cited by 6 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

l 
R. RAJAGOPAL REDDY (DEAD) BY LRS. AND ORS. 
A 
v. 
PADMINI CHANDRASEKHARAN (DEAD) BY LRS. 
JANUARY 31, 1995 
[KULDIP SINGH, B.L. HANSARIA AND S.B. MAJMUDAR, JJ.] 
Benami Transactions (Prohibition) Act, 1988-Sections 4(1) and 
4(2)-Effect of Section 4( 1) on pending proceedings-Claim to prope1ty on 
account of it being held benami-Proceedings not finally disposed of when 
sec. 4( 1) came into operation-Whether Section 4( 1) can be applied to such 
proceedings--H eld, No. 
B 
c 
Various suits were filed years back before coming into operation of 
Section 4(1) of the Benami Transactions (Prohibition) Act, 1988, to enforce 
right in property held benami against person in whose name such property D 
was held or any other person by or on behalf of persons claiming to be 
real owner thereof. These proceedings were pending either at the first 
appeal stage or Second Appeal stage or in revision before the High Court 
or in civil appeals before this court when Section 4(1) came into operation. 
The question raised was whether Section 4(1) of the Act could be applied . 
to such pending proceedings. The Division Bench of this Court in Mithilesh 
E 
Kumari v. Prem Behari Khare, [1989] 1 SCR 621, had taken an affirmative 
view. The correctness of that view came up for consideration before 
another Bench of this court. Ultimately the matters were placed for final 
hearing before a three Judge Bench. 
The appellants submitted that litigations were already filed by the 
parties prior to the coming into force of the Act arid the relevant provisions 
thereof and therefore, they had to be governed by the then existing law 
which held the field at the time of intiation of these proceedings; that there 
F 
is nothing in the Act to indicate that any of the provisions of the Act 
including Section 4(1) had any retrospective effect; that even the Division G 
Bench of this Court in Mithilesh Kuma1i's case had taken the view that 
Section 3(1) of the Act is prospective in operation; that it would be 
inconsistent to hold that though the Act is not retrospective it would apply 
to all pending proceedings at whatever stage they might be and such 
proceedings would incur dismissal u/s 4(1); that there was a substantive H 
715 
716 
SUPREME COURT REPORTS 
(1995] 1 S.C.R. 
A 
~ight in the plaintiff under the existing laws under which consistently such 
benami transactions were recognized and could be enforced by courts of 
law and that this substantive right was sought to be taken away by Section 
4(1) and unle~s there was anything to suggest that it is retrospective in 
operation, it could not be treated to be retrospective. 
B 
The respondents/defendants submitted that even though the Act may 
be perspective,° at least to the extent it is roping in all past transactions of 
benami purchases of properties and when rights arising therefrom are 
sought to be put to an end by Section 4(1) which covers any or every 
property held benami, there was no reason why that Section could not 
C apply to such proceedings at any stage till they got finally decided by the 
highest court and that if there is any change in law by which any pending 
litigation becomes incompetent, such change in law can be applied !o such 
pending proceedings at whatever stage they might be pending before higher 
Courts. 
D 
Disposing of the matter, this Court 
HELD : 1.1 Section 4(1) of the Benami Transactions (Prohibition) 
Act, 1988, cannot be applied to suit, claim or action to enforce any right 
in property held benami against person in whose name such property is 
E held or any other person, if such proceeding is initiated by or on behalf of 
a person claiming to be real owner thereof, prior to the coming into force 
of Section 4(1) of the Act. [720-H, 721-A] 
F 
Mithilesh Kumari v. Prem Behari Khare, [1989] 1 SCR 621 (DB), 
overruled. 
1.2. The preamble of the Act itself states that it is an Act to prohibit 
benami transactions and the right to recover property held benami, for 
matters connected therewith or incidental thereto. Thus it was enacted to 
efface the then existing rights of the real owners of properties held by 
others benami. Such an act was not given any retrospective effect by the 
G legislature. Sub-section (1) of Section 4 states that 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 against any other shall lie 
by or on behalf of a person claiming to be the r

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