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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
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Acts
  • Transactions (Prohibitions) Act, 1988 and that the provisions of S. 2
  • S. 4 of the Benami Transactions (Prohibition) Act, 1988.
  • S. 281A in 1972 in the income-tax Act of 1961,
  • S. 31 of the English Limitation Act of 1939,
  • Transactions (Prohibitions) Act, 1988,
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • Transactions (Prohibitions) Act, 1988 and that the provisions of S. 2
  • S. 4 of the Benami Transactions (Prohibition) Act, 1988.
  • S. 281A in 1972 in the income-tax Act of 1961,
  • S. 31 of the English Limitation Act of 1939,
  • Transactions (Prohibitions) Act, 1988,
Smart Summary

Structured Summary of the Opinion (A.M. Bhattacharjee, J.; Ajit Kumar Nayak, J. concurred)

Factual and Procedural Background

The trial court declared the petitioner to be the owner of the disputed property, rejecting the opposite parties' contention that the petitioner and her deceased mother were mere ostensible owners (Benamdars). The first Appellate Court overturned that decree, and that appellate judgment was thereafter affirmed by this Court in the second appeal reported as Urmila Dasi v. Probodh Chandra Ghosh (89 Cal WN 465 : AIR 1986 Cal 383), which held that the petitioner and her deceased mother were Benamdars and that the property had passed to the petitioner's father's second wife (opposite party No. 2) and was validly conveyed to opposite party No. 1.

Following the reversal of the trial decree, opposite party No. 1 applied to the trial court under Section 144 of the Civil Procedure Code for restoration of possession; the trial court allowed restoration ex parte by its order dated 4 March 1988 and directed the petitioner to restore possession. Opposite party No. 1 then applied under Order 21, Rule 35, Civil P.C. for a writ of delivery of possession. The petitioner filed objections and sought recall of the 4 March order, contending principally that the Benami Transactions (Prohibition of the Right to Recover Property) Ordinance, 1988 (promulgated 19 May 1988) barred the application under Order 21, Rule 35. The trial court, by order dated 20 July 1988, directed issuance of the writ of restoration. The petitioner challenged that order by filing the present revision, which is the subject of this opinion.

Legal Issues Presented

  1. Whether Section 2(1) of the Benami Transactions (Prohibition of the Right to Recover Property) Ordinance, 1988 — which provides that "No suit, claim or action to enforce any right in respect of any property held benami ... shall lie" — bars execution proceedings (specifically proceedings under Order 21, Rule 35 for issuance of writ of delivery of possession) that seek to enforce a decree recognising an alleged real owner's right against the person in whose name the property is held.
  2. Whether the words "suit, claim or action" in Section 2(1) of the Ordinance include execution proceedings and other post-decree enforcement steps.
  3. Whether Section 2(1) of the Ordinance applies to proceedings that were already pending (i.e., instituted) prior to the promulgation of the Ordinance on 19 May 1988.
  4. Whether the replacement legislation (Benami Transactions (Prohibitions) Act, 1988) with corresponding provisions (Section 4 of the Act) affects the applicability of the earlier reasoning and the effective date of the prohibition (deemed to be 19 May 1988 under Section 1(3) of the Act).

Arguments of the Parties

Petitioner's Arguments (Mr. Mukherjee)

  • Section 2(1) of the Benami Ordinance bars any "suit, claim or action" to enforce rights in respect of property held benami; therefore the application under Order 21, Rule 35 for issuance of a writ of delivery of possession is no longer maintainable.
  • On that basis, the petitioner also sought recall of the trial court's earlier order dated 4 March directing restoration of possession.

Respondents' Arguments (Mr. Roy Chowdhury)

  • The respondents did not seriously dispute that an execution proceeding may fall within the terms "claim" or "action" used in the Ordinance.
  • Their primary contention was that the proceedings under Order 21, Rule 35 were initiated before the promulgation of the Ordinance (i.e., were pending when the Ordinance came into force) and therefore the Ordinance should not apply to such pending proceedings.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Urmila Dasi v. Probodh Chandra Ghosh (89 Cal WN 465 : AIR 1986 Cal 383) Prior adjudication holding the petitioner and her mother to be Benamdars; establishes that the decree in favour of the respondents recognised their claim as real owners. The court relied on that prior decision as the decree which recognised respondents' claim and therefore triggered proceedings to enforce that adjudicated claim (execution / writ of delivery).
Charles Bradlaugh v. Henry Clarks ((1883) 8 AC 354 at pp 358-361) Authority for the proposition that the word "action" is a generic term in law. Used to support the interpretation that "action" is not limited to original suits and can encompass proceedings taken to enforce rights, including execution steps.
Lougher v. Donovan ((1948) 2 All ER 11) Illustration of English law treating "action" to include "any proceeding in a Court of Law". Supported the view that "action" has wide amplitude and can include execution-type proceedings.
W.T. Lamb & Sons v. Rider ((1948) 2 KB 331) Reinforces the wide meaning of "action" in English jurisprudence. Reinforced the court's construction that "action" may include post-decree enforcement proceedings.
Mahonlal v. Sawai Mansinghji (AIR 1962 SC 73 at p. 76) Authority for the proposition that the word "sued" may embrace not only institution but also continuance of previously instituted suit. Analogously used to argue that the phraseology of the Ordinance ("shall lie" vs. "shall be instituted") can be read to include continuance of pending proceedings.
Shyabuddinsab v. Gadaq-Betgeri Municipal Borough (AIR 3955 SC 314) Principle that a new law affecting substantive rights can apply to pending proceedings only if the language of the enactment shows clear intention to do so. The court applied this principle to examine whether Section 2(1) of the Ordinance manifested an intention to cover pending proceedings and concluded that it did.
C. Chandran v. Gangadharan ((1988) 22 Reports 616) Kerala High Court single-judge decision holding that "execution proceeding" comes within "claim" and "action" in Section 2(1) of the Ordinance. The court expressed respectful agreement with this decision on the point that execution proceedings are covered by the Ordinance; it observed that the Kerala decision did not address the separate question of pending proceedings.

Court's Reasoning and Analysis

The court's analysis proceeded in a stepwise manner, grounded in the language of Section 2(1) of the Benami Ordinance and established principles of statutory construction and precedent:

  1. Nature of an execution proceeding: The court held that a proceeding under Order 21, Rule 35 is a proceeding in execution and is a means to enforce a claim recognised by a decree. A decree is a formal expression of adjudication (citing the Civil P.C. definition) and enforcement of the claim recognised by that decree necessarily involves proceedings in execution; therefore such execution proceedings are proceedings to enforce the claim.
  2. Meaning of "suit, claim or action": The court examined the words used in Section 2(1) of the Ordinance and concluded that "action" should not be read restrictively as referring only to original suits. Relying on authority (Halsbury, Charles Bradlaugh, and English cases) the court held that "action" is a generic term that can include any proceeding in a court of law, including execution proceedings and other steps taken post-decree to enforce rights.
  3. Legislative choice of words: The court emphasised the deliberate choice in the Ordinance to employ the phrase "no suit, claim or action ... shall lie" instead of the more usual "shall be instituted." The court applied the canons of statutory construction, observing that "lie" denotes not only commencement but also continuance of a proceeding; thus the language indicates a purpose to regulate proceedings already pending as well as those to be initiated.
  4. Intention to affect pending proceedings: The court considered the principle that a new statute will affect pending proceedings only if it clearly manifests such intent (citing Shyabuddinsab). It concluded that Section 2(1) manifested a clear intention to reach proceedings pending at commencement, given the wording "shall lie" and the broad phraseology "suit, claim or action."
  5. Purpose and Long Title: The court examined the object of the Ordinance as set out in its Long Title ("to prohibit the right to recover property held Benami") and held that when statutory language is capable of both narrow and wide meanings, the construction consonant with the declared object should be preferred. Applying that approach supported reading Section 2(1) broadly to include pending execution proceedings.
  6. Subsequent statutory development: The court noted that the Ordinance had been repealed and replaced by the Benami Transactions (Prohibitions) Act, 1988, and that the relevant provision (Section 4 of the Act) corresponds to Section 2 of the Ordinance. Under Section 1(3) of the Act, most provisions (including the one corresponding to Section 2 of the Ordinance) are deemed to have come into force on 19 May 1988, the date of the Ordinance. The court therefore treated its analysis of the Ordinance as applicable to Section 4 of the Act.
  7. Conclusion of illegality: On applying the foregoing interpretative conclusions to the facts — namely that the respondents' claim had been recognised by a decree and the trial court had directed issuance of a writ of delivery of possession in execution — the court concluded that continuation of that execution proceeding and the order directing issuance of the writ were barred by Section 2(1) of the Ordinance (and thus Section 4 of the Act).

Holding and Implications

Holding: Revision allowed; the execution proceeding and the order directing issuance of the writ of delivery of possession are quashed as illegal and violative of Section 2 of the Benami Transactions (Prohibition of the Right to Recover Property) Ordinance, 1988 (now corresponding to Section 4 of the Benami Transactions (Prohibition) Act, 1988).

Immediate consequences for the parties:

  • The revisional petition was allowed and the trial court's proceeding for recovery of possession (including the order directing issuance of the writ of delivery of possession) was quashed.
  • No costs were awarded.
  • Records (if any) were to be sent down along with a copy of the order at once.

Broader legal implications (as stated or necessarily derived from the opinion):

  • The court construed the Ordinance's phraseology broadly: "suit, claim or action" and the use of "shall lie" were interpreted to encompass execution proceedings taken to enforce adjudicated claims, not merely the institution of new suits.
  • The court held that the corresponding provision in the subsequently enacted Benami Transactions (Prohibitions) Act, 1988 (Section 4) is to be treated as having effect from 19 May 1988 and that the same interpretation applies.
  • This decision affirms that proceedings in execution that seek to enforce alleged real-owner rights in respect of property held benami are prohibited under the statutory scheme as construed by the court, and that such prohibition can extend to proceedings pending at the commencement of the statute where the statutory language clearly demonstrates such intention.

Note: The court expressed respectful agreement with a Kerala High Court single-judge decision (C. Chandran v. Gangadharan) that execution proceedings fall within the terms "claim" and "action" in Section 2(1); it added that the Kerala decision did not consider whether pending execution proceedings would be covered.

Disposition

Revision allowed. The proceedings and the order directing issuance of the writ of delivery of possession are quashed.

    Urmila Bala Dasi v. Probodh Chandra Ghosh And Another

    A.M Bhattacharjee, J.:—The decree of the trial court declared the title of the petitioner in respect of the disputed property negativing the contention of the opposite parties that the petitioner and her deceased mother were mere ostensible owners or Benamdars and the petitioner could recover possession of the property in execution of that decree. The decree, was, however, over turned by the first Appellate Court and its judgment has thereafter been affirmed by this Court in second appeal in Urmila Dasi v. Probodh Chandra Ghosh (since reported in 89 Cal WN 465 : (AIR 1986 Cal 383), holding that the petitioner and her deceased mother were mere Benamdars of the petitioner's father in respect of the disputed property, which having been duly inherited by his second wife, the opposite party No. 2, could be and was properly conveyed by her to and in favour of the opposite party No. 1. The decree of the trial court in favour of the petitioner having thus been reversed in appeal, the opposite party No. 1 applied to the trial Court under S. 144 of the Civil P.C for restoration of the disputed property to him and the trial court has allowed the same ex parte by its order dt/- 4th March, 1988 and has directed the petitioner to restore possession of the disputed property to the opposite party No. 1 and the opposite party No. 1 has now made an application under O. 21, R. 35 of the Civil P.C for the issuance of a writ of delivery of possession. The petitioner has filed objection to the said application and has also prayed for recall of the order dated 4th March, directing restoration of possession mainly on the ground that the said Order is no longer sustainable and the application under O. 21, R. 35 for issuance of writ of delivery of possession is no longer maintainable in view of the provisions of the Benami Transactions (Prohibition of the Right to Recover Property) Ordinance, 1988 promulgated by the President of India on 19th May, 1988. The trial court, however, by its order dated 20-7-1988, directed issuance of the writ of restoration of possession and the same has been assailed before us by the petitioner in revision.

    2. The sole argument advanced by Mr. Mukherjee, the learned Counsel for the petitioner, being based on the provisions of S. 2(1) of the aforesaid Ordinance, the same may be reproduced hereinbelow for the facility of discussion:—

    “2. (1) 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 person shall lie by or on behalf of a person claiming to be the real owner of such property.”

    3. The proceeding under O. 21, R. 35, which has given rise to the present revisional application is a proceeding in execution. This is not obviously a suit not having been initiated by the presentation of a plaint or in any other manner prescribed therefor as provided in S. 26 of the Civil P.C It may be little surprising that the framers of the Ordinance, instead of using the usual expression “suit or other proceeding,” have chosen to use the expression “suit, claim or action”. A proceeding in execution of a decree is obviously a proceeding to enforce a claim. The decree, is, to borrow from S. 2(2) of the Civil P.C a “formal expression of an adjudication” accepting or rejecting the calim made by the parties in the suit, but the decree by itself does not enforce the claim until the decree is executed and satisfied, or unless the decree is complied with out of the Court. While a suit may be a claim to the relief prayed for therein and the decree is a formal declaration or recognition of such claim or a direction to grant such claim, the claim so declared, recognised or directed to be granted, can only be enforced by the execution of that decree unless, as already pointed out, the claim is adjusted or satisfied out of Court. We do not think that there should be any room for doubt that when a party proceeds with the executon of a decree, he obviously proceeds to enforce a claim granted by the decree. And after the decree in this case, granted by the first Appellate Court and a firmed by this Court has recognised the claim of the respondent that the petitioner and/or her mother was or were mere Benamidars, any step in furtherance of, or seeking compliance of, that decree would be a step to enforce that claim. The claim of the respondents that the petitioner and/or her mother was or were Benamidars has been accepted by the Court by making formal expression of adjudication to that effect and to seek enforcement of that adjuducation by any legal process would be seeking to enforce that claim.

    4. We are also inclined to think that this proceeding claiming issuance of writ of delivery of possesion is also an “action” within the meaning of S. 2(1) of the Ordinance. The expression “action”, though a frequent visitor in the realm of English Law and Legislation, is probably a stray visitor in our Legislations. But there should be no reason to think that it has been used in any restricted sense of original action only which ends with a decree or final order. A suit or similar original proceeding may end with the decree or the order; but if further legal actions in the shape of execution proceedings are necessary for the enforcement of such decree and order, those proceedings are also “actions” to enforce the right or claim granted by such decree or order.

    5. As will appear from Halsbury (3rd Edition — Volume I, page 2), even in English Law, the term ‘action” is not invariably used in the sense of an original proceeding only and “according to the legal meaning of the term, is a proceeding by which one party seeks in a court of justice to enforce some right against, or to restrain the commission of some wrong by, another party”. In the case at hand, the respondents by seeking issuance of writ of recovery of possession is obviously endeavouring to enforce their right as the real owner as against the petitioner who has been held to be a Benamdar and for restraining the petitioner from the commission of the wrong by retaining the possession of the property and by refusing or resisting its delivery. “The word ‘action’”, as was pointed out by Lord Chancellor, Earl of Selborne, as early as in 1883 in Charles Bradlaugh v. Henry Clarks, (1883) 8 AC 354 at Pp 358-361, is “a generic term”. In S. 31 of the English Limitation Act of 1939, the term “action” was clearly defined to include “any proceeding in a Court of Law” See Lougher v. Donovan, (1948) 2 All ER 11; W.T Lamb & Sons v. Rider, (1948) 2 KB 331. Construing the word “action” in an Insurance Policy, a Division Bench of the Punjab High Court, relying mainly on Halsbury (supra), has also held the word to be of very wide amplitude, much wider than the word “suit”. In ordinary Lexicons e.g, the Concise Oxford Dictionary the word “action”, in law, has been taken to mean any “legal process”. We have also noted that in its 57th Report, on the basis of which the present Ordinance was promulgated, the Law Commission of India proposed (6.33, page 37) only barring of institution of suits and any defence therein on the assertion that any property is held Benami and recommended as hereunder:—

    (i) No suit to enforce any right in respect of any property held Benami against the person in whose name the property is held……. shall be instituted in any court by or on behalf of a person claiming to be the real owner of such properly.

    (ii) In any suit no defence based on any right in respect of any property held Benami whether as against the person in whose name the property is held…….shall be allowed in any Court by or on behalf of a person claiming to be the real owner of such property.”

    6. It is, therefore, clear that in spite of the recommendation of the Law Commission of India to bar institution of suits only, the Ordinance-making authority has thought it fit to bar other proceedings also and has provided in express words barring of all claims and actions to enforce the right of a person alleging to be the real owner against the Benamdar. There should, therefore, be no doubt that the object of the Ordinance is not only to bar suits stricto sensu, but all claims and actions which would further the enforcement of the rights of an alleged real owner against the Benamdar.

    7. Mr. Roy Chowdhury, appearing for the respondents, has not very seriously disputed that a proceeding in execution like the present one may be regarded to be a “claim” or “action” within the meaning of S. 2(1) of the Ordinance. But what he has very seriously urged is that the proceedings under O. 21, R. 35 for the issuance of writ of delivery of possession having been initiated before the promulgation of this Ordinance of 19th May, 1988, the Ordinance cannot apply to the present proceeding which was already pending at the date of commencement of the Ordinance. But there is no authority for the blanket proposition that a new law even affecting substantive rights, can not apply to pending proceedings without express words to that effect, as pointed out by the Supreme Court in Shyabuddinsab v. Gadaq-Betgeri Municipal Borough, AIR 3955 SC 314 at p. 320. The view that pending proceedings are not to be affected by any new law so as to affect the substantive rights does not go beyond this that in every case the language of the enactment has to be examined to determine whether the Legislature clearly intended to bring pending proceedings also within the reach of the new enactment. We are satisfied from an examination of the provisions of S. 2(1) of the Ordinance that it has manifested its clear intention to cover also the proceedings pending at its commencement.

    8. The Ordinacne in S. 2(1), extracted hereinbefore, has used the expression “no suit, claim or action” “shall lie” instead of the usual expression “shall be instituted”. A suit or other proceedings may be said to have been “instituted” only when it is initialed but a proceeding lies and continues to lie until it is disposed of. Bearing in mind the well-accepted cannon of interpretation that a Legislature never uses a word in vain or without a purpose, we are inclined to hold that by using the expression “shall lie” by making a departure from the usual expression “shall be instituted”, the Ordinance clearly demonstrates its resolve to regulate all such suits, claims or actions also which would be lying in Court on the date of it commencement. As already stated, a proceeding lies not only when it is initialy orginated but it continues to lie until it is brought to an end and if it is provided that a proceeding “shall not lie”, that would bar not only its commencement but also its continuance. Reference in this connection may be made to the observations of the Supreme Court in Mahonlal v. Sawai Mansinghji, AIR 1962 SC 73 at p. 76 where it has been pointed out that the word “sued” would embrace not only the insitutition but also continuance of previously instituted suit.

    9. We are also inclined to hold that such an interpretation that S. 2(1) of the Ordinance would also bring within its prohibition pending proceeding would be in perfect consonance with the object of the Ordinance. The authors of Benami transactions, have, more often than not, unclean hands, for they are not expected to indulge in such activities for any benevolent or charitable purpose or to enable them to read the scriptures or count the beads of their Rosaries. Though they ought not to have been entitled to any equity or any other forensic protection, the Courts in India, including our pre-indepndence as well as post-independence apex courts, far from frowning upon those transactions, have approved them as legal and valid. It is only as late as in 1972 that our Parliament could show its awarness to this menace by inserting S. 281A in 1972 in the income-tax Act of 1961, though that measure could not yield the desired result. The Law Commission in its 57th Report in 1973 on Benami Transactions drew our serious attention to enact law out-lawing Benami Transactions and suggested the necessary amendments. But the authorities concerned could not afford to take the matter in serious consideration for about 15 years and only in May, 1988, this Ordinance has been promulgated on the basis of the recommendations of the Law Commission. The Long Title of this Ordinance expressly declares the object to be “to prohibit the right to recover property held Benami”. It is well-settled that the Long Title of a legislation is an enacting part of legislation and is legitimately admissible to aid its construction. It may not control, circumscribe or widen the scope of legislation, if the provisions thereof are otherwise clear and unambiguous; but if the terms of the legislation are capable of both a wider and a narrower construction, that construction which would be in tune with the avowed object manifested in the Preamble or declared in the Long Title, ought to be accepted Therefore, the object declared in the Long Title being to “prohibit the right to recover property held Benami”, the provisions should be held to be applicable to all cases wherever the right to recover such property is sought to be enforced or resisted after the promulgation of the Ordinance and, as we have already indicated, the expression “shall lie” being capable of meaning both institution and also continuation of a proceeding, the latter view making the provisions applicable to pending proceedings should be accepted which would make the law more comprehensive to effectuate the avowed purpose and object of the Ordinance.

    10. Mr. Mukherje has drawn our attention to a single Judge decision of the Kerala High Court in C. Chandran v. Gangadharan (1988) 22 Reports 616 where the learned Judge has held “execution proceeding” to come within the expression “claim” and also the expression “action” within the meaning of S. 2(1) of the Ordinance and, as already indicated, we cannot but be in respectful agreement with that view. But the question as to whether S. 2(1) would also apply to execution proceeding pending on the date of the commencement of the Ordinance did not arise for consideration in that Kerala case.

    11. We must note that the Ordinance in question has now been repealed and replaced with considerable additions by the Benami Transactions (Prohibitions) Act, 1988 and that the provisions of S. 2 of the Ordinance and those of S. 4 of the Act are the same. The provisions of S. 1(3) of the Act provide that the provisions of S. 4, corresponding to S. 2 of the Ordinance, and, in fact, all the provisions of the Act except those contained in Ss. 3, 5 and 8 shall be deemed to have come into force on 19th May, 1988, i.e, the date of the commencement of the Ordinance. We have also noted that the Long Title of the Act also declares its object to “to prohibit….. the right to recover property held Benami” as did the Long Title of the Ordinance. We have hereinbefore referred to S. 2 of the Ordinance as the same was in operation when the impugned order was passed; but now in view of this Benami Transactions (Prohibitions) Act, 1988, all our observations made hereinabove on and about S. 2 of the Ordinance must be taken to relate to S. 4 of the Act.

    12. We accordingly allow the revision and quash the proceeding of the court below for recovery of possession of the disputed property and the order directing issuance of writ of delivery of possession, as illegal and violative of the provisions of S. 2 of the Benami Transactions (Prohibition of the Right to Recover Property) Ordinance, 1988, now replaced by S. 4 of the Benami Transactions (Prohibition) Act, 1988. No costs.

    13. Records, if any along with copy of this order to go down at once.

    Ajit Kumar Nayak, J.:— 14. I agree.

    Revision allowed.

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    Comments

    Urmila Bala Dasi v. Probodh Chandra Ghosh And Another
    (Oct 12, 1988)