LexSMT. SURASAIBALINI DEBI versus PHANINDRA MOHAN MAJUMDAR
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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SMT. SURASAIBALINI DEBI
v.
PHANINDRA MOHAN MAJUMDAR
October 27, 1964
(P. B. GAJENDRAGADKAR C.J., J. c. SHAH AND
N. RAJAGOPALA AYYANGAR JJ.)
Benanzi transaction-Inconie-tax evad'ed-True owner-Right to rec9ver
possession.
The plaintiff (respondent) was employed at Calcutta in the Court of
V{ards and the service rules did not pennit him to start or carry on any
trade o.r bu5iness of his own. It \Vas therefore arranged with the defendant
that the <lefcndanl shouli..l be hc!.J ot1t to be the O\Vncr of a boarding housc-
the suit propt:rty---0f which the plaintiff was the true O\vner, anU the
plaintiff wns to be in possession as manager. Plaintiff had to leave Calcutta
on n1edical advice and he put th~ defendant in possession on the under-
standing that on the plaintiff's return the defendant would hand over posses-
sion. \.\'hen the defendant refused to so hand over, plaintiff filed the suit
f•Jr recovery of possession. His .. claim was decreed by the trial Court and
in appeal.
In appeal to the Supreme Court, defendant's successor in
interest contenc.Jed, that the suit should have been dismissed because the
plaintiff admitted ln his evidence, that he escaped payment of income-tax
by submitting a separate return for the salary earned by him in service,
and by showirlg that the business income from the suit property belonged to
the defendant; and that therefore, the Court should not countenance his
claim au<l assist hin1 in obt<1ining possession of the suit property.
HELD (Per Gajendragadkar. C. J.
and Shah J.) : It was not the
object of the parties at the time \Vhen the transaction· was entered into
to circu1nvent or defeat the provisions of the Income-tax Act.
It is true
that the plaintiff obtained benefit of a lower rate of tax for the business
income and his personal income escaped taxation.
But it cannot on that
account be held that the transaction on which he founded his claim was
unlawful.
In claiming a decree for possession from the defendant, the
plaintiff did not plead any invalidity of the transaction under which posses-
sion of the business \Vas entrusted to the defendant. The plaintiff. as the
owner of the business, was therefore not prevented from enforcing his
title against the defendant there being no taint attached to the entrustment
in the circumstances of the case. [868 D-F, G]
Per Ayyangar J.-The plaintiff having adopted the device of purchasing
the property hennn1i in the name of the defendant, for the purpose, even
nt the inception, of evading the provisions of the Income-tax Act, would
not be entitled to recover possession of the property on the ba!<is of his.
title.
But the plaintiff's claim on the footing of possession was-not open to
any objection because the basis of his claim \Vas independent and wholly
dissociated from the illeg::ll transaction of the original benami purchase
and fell into line with the decision of the Privy Council in Sajan
Singh-
v. Sardara Ali [1960] A.C. 167. [876 F; 882 D-E]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 158 of
1964.
Appeal by special leave from the judgment and decree dated
August 30, and September 2, 1963 of the Calcutta High Court in
:ippeal from Original decision No. 125 of 1960.
862
SUPREME COURT REPORTS
[1965] l S.C.R.
S. K. Hazara ar:d P. K. Mukherjee, for the appellant.
G. S. Chatterjee and S. c. Maamular, for the respondent.
The Judgment of P. B. GAJENDRAGADKAR C.J. and J.C. SHAH
J. was delivered by SHAH 1., AYYANGAR J. delivered a separate
Judgment.
Shah J.
An action instituted by Phanindra Mohan Majumdar
hereinafter caJlcd 'the plaintiff' on the original side of the High
Court of Calcutta for a declaration that he "is the sole proprietor
of and absolutely entitled to a boarding house business carried on
in the name and style of International Home at 42, Harrison Road,
Calcutta and for an order for delivery of possession of the boarding
house business" was decreed by a single Judge of the High Court,
and the decree was confirmed in appeal under cl. 15 of the Letters
Patent by a Division Bench of the High Court.
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Surasaibalini Debi a trustee appointed under a deed of settle-
ment dated August 23, 1952 executed by the defendant
Pra-
bhendra Mohan Gupta her father, was impleaded as a party on D
the death of the defendant has appealed to this Court with special
leave.
The case of the plaintiff set out in his plaint was that in or
about the year 1Excerpt shown. Read the full judgment & AI analysis in Lexace.