SMT. REBTI DEVI versus RAM DUTT AND ANR. ETC.

Citation: [1997] SUPP. 5 S.C.R. 236 · Decided: 19-11-1997 · Supreme Court of India · Bench: S.B. MAJMUDAR · Disposal: Dismissed

Judgment (excerpt)

A 
SMT. REBTI DEVI 
v. 
RAM DUTT AND ANR. ETC. 
NOVEMBER 19, 1997 
B 
[S.B. MAJMUDAR AND M. JAGANNADHA RAO, JJ.] 
Benami Transactions (Prohibition) Act, I 988: 
Sections 3 and 4-Benami transaction-Property purchased in the 
C name of wife-Held-Plea of benami is open even after coming into force of 
the Act-Burden of proof--Persons Pleading benami transaction have to 
discharge initial burden of proof 
A Suit was filed by the appellant for possession of property from one 
of her sons, 'R'. It was contended that the property was self acquired, bought 
D from her own money. The defendants i.e the legal heirs of 'R', pleaded that 
the real owner of the property was the appellant's husband, who had purchased 
the property in his wife'~ name However, the plea of benami transaction 
raised by the defendants was rejected by the trial court. The appellate court 
reversed the finding of the trial court which was confirmed by the High 
E Court. In the present appeal it was contended for "M", son and sole legal 
heir of the appellant, that persons pleading benami transaction have to 
discharge the initial burden of proof and the plea of benami would not be open 
to the respondents after the Act of 1988 and that in Nand Kishore Mehra's 
case the Principles decided in Rajagopala Reddy's case were doubted and 
F 
G 
therefore, the Act ofl988 is applicable to the facts of the case, even though 
the defence of benami had been raised before the Act came into force. On 
the other hand, the respondents contended that Rajagopala Reddy's case 
hold good and has not been doubted in Nand Kishore's case also, the finding 
of fact arrived at by the first appellate court has rightly not been interfered 
with by the High Court and does not call for any interference by this Court. 
Dismissing the Appeal, this Court 
HELD : I. The Respondent-defendants who have raised a defence of 
benami in their written statement have to discharge the initial burden of 
proof and establish the plea of benami. When both sides had adduced evidence 
H 
the question of burden of proof pales into insignificance. The High Court was 
236 
REBTI DEVI v. RAM DUTT 
237 
_. 
therefore right in not interfering wi~h the finding of the lower appellate A 
court that the defendants had discharged the said burden. The said finding 
of fact cannot be canvassed in this appeal. (241-B-q 
2.1. The principles decided in the case of Rajagopalll Reddy 's case 
with regard to the Benami Transactions (Prohibition) Act. 1988 while over-
ruling Mithilesh Kumari v. Prem Behari Khare, are as follows : 
(i) While section 4(1) prohibited a plea ofbcnami to be raised in a suit, 
claim or action and again section 4(2) precluded a defence of benami in suits, 
claims or actions, these two provisions did not come in the way of a decision 
B 
on such pleas in matters pending as on 19.5.88 if such pleas were already C 
raised before 19.5.88 by one party or other. This was because such pleas 
which were already raised before 19.5.88 were not intended to be affected by 
the Act, if they were raised in suits claims or actions pending as on 19.5.88. 
The repeal provision in section 7 repealed Section 82 of the Trust Act only 
in that manner and to that extent. 
(ii) On the express language of Section 4(1) any right inhering in the D 
real owner in respect of any property held benami would be not enforceable 
once Section 4(1) operated, even if such transaction had been entered into 
prior to 19.5.88 and no suit could be filed on the basis of such a plea. after 
19.5.88. The same prohibition applied in a case of Section 4(2) to defence 
taken after 19.5.88 pleading benami in respect of a transaction prior to E 
19.5.88 The Act could be said to be retrospective only to that extent. But from 
this it did not follow that where such a plea was already taken before 19.5.88 
to the effect that the property was held benami, such a plea got shut out 
merely because the proceeding in which such a plea was raised before 
19.5.88 was pending on 19.5.88. 
(iii) Where a suit had been filed before 19.5.88 and in any written 
statement filed on or after 19.5.88 a plea of benami was raised, then such 
F 
a plea of benami could not also be gone into. If however such a plea in defence 
had been raised before 19.5.88, the Act did not preclude that question to be 
decided in proceedings which were pending on 19.5.88 Mithilesh Kumari's G 
case was wrong in hoiding that such a defence could not be decided after 
19.5.88 even 

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