Parbati Gangaram Aggarwal v. Firm Jai Ram Dass Bhagat Ram

1. These are three connected appeals (R.F.A 154 of 1956 R.F.A 155 of 1956 and R.S.A 1224 of 1957) which give rise to common questions of law and feet and would, therefore, be disposed of together. As a matter of fact, in the trial Court also all the three suits were consolidated and disposed of together by one judgment of the learned Subordinate Judge 1st Class Moga. These three suits were instituted under Order 21 Rule 63 of the CPC for a declaration that the property in dispute belonged to the plaintiff in each case and that firm Ganga Ram Kishore Chand defendant had nothing to do with the same with the result that this property could not be attached in execution of the decrees against Ganga Ram Kishore Chand. It appears that Jairam Das Bhagat Ram and Inder Singh got attached the properties in dispute in the three suits in execution of their decrees against Ganga Ram Kishore Chand. Lachhmi Devi wife of Kishore Chand and Parbati Devi wife of Ganga Ram filed objections under O. 21 Rule 58 of the CPC but the executing Court dismissed those objections with the result that the two ladies instituted the three suits mentioned above under Order 21 Rule 63 and having failed in the Courts below they are the appellants in these three appeals. According to them, the were the owners of land bearing Khasra Nos. 1576 and 1579 which they had purchased in 1940 and portions of which ware exchanged by them with Kishore Chand and Ganga Ram their husbands for he property in suit.

2. The defendants firm Jairam Das Bhagat Ram and Inder Singh contested the suits on the ground that their judgment-debtors Ganga Ram Kishore Chand and purchased the land bearing Khasra Nos. 1576 and 1579 benami in the names of their wives Lachhmi Devi and Parbati Devi and that Ganga Ram Kishore Chand being in financial difficulties they executed fictitious exchange deeds with their wives with the intention of defeating and delaying their creditors. Both the properties, which purported to form the subject-matter of the exchange deeds belonged to Ganga Ram Kishoro Chand with the result that there was no question of there being any exchange, of properties.

3. The trial Court after considering the evidence and the circumstances of the case, came to the conclusion that the plaintiffs were only benamidars of the lands bearing Khasra Nos. 1576 and 1579, the real and true owners of which were Ganga Ram Kishore Chand. On this finding the plaintiffs' suits were dismissed.

4. The two suits against Jairam Das Bhagat Ham (Nos. 548 and 549 of 1955) are the subject-matter of the two Regular First Appeals mentioned above whereas the suit against Inder Singh, the value of which for purposes of jurisdiction was Rs. 1,000/-, is the subject-matter of the Regular Second Appeal mentioned above, the first appeal against the judgment and decree of the trial Court having been dismissed by the learned Additional District Judge Ferozepore.

5. Mr. D.N Aggarwal has addressed us in support of the three appeals and has taken us through the evidence on the record. The counsel has, to begin with, drawn our attention to Exhibit P-7, a copy of a registered sale deed dated 2nd January, 1940, executed by Inder Singh and Jagir Singh sons of Bhola Singh, with, respect to the land measuring 4 kanals and 14 marlas in favour of Mst. Paro, wife of Ganga Ram and Mst. Lachhmi, wife of Kishore Chand, in lieu of a sum of Rs. 2700/-. Rs. 350/- have been described to have been received in advance as earnest money and Rs. 2350/- have been stated to have been received in cash before the Sub-Registrar, Moga. This document was presented for registration on 3rd January, 1940, and Ganga Ram and Kishore Chand were present on behalf of the vendees. Inder Singh and Jagir Singh received a sum of Rs. 2,200/- in cash before the Sub-Registrar and admitted to have already received the balance of Rs. 500/-.

6. The next document to which reference has been made is Exhibit P. 6 which is also a copy of a sale deed dated 3rd of January, 1940, executed by Bhagwan Das, son of L. Sri Ram, with respect to 17 kanals and 11 Marlas in favour of Mst. Paro, wife of Ganga Ram, in lieu of Rs. 5,000/-. This sale deed was presented for registration before the Sub-Registrar on the 4th of January, 1940, and a sum of Rs. 5,000/- was received in cash by Bhagwan Das who admitted the execution and completion of the sale deed. Here also Ganga Ram husband of Smt. Paro appeared before the Sub-Registrar on behalf of the vendee.

7. It has been seriously contended on behalf of the appellants that these two documents, duly registered, must be deemed to represent the correct state of affairs and the two ladies must be held to be the owners of the property sold to them by these documents. It is common ground that some time in 1945, Ganga Ram built a factory on a part of the land which was the subject-matter of the two sale deeds mentioned above. According to the learned counsel for the appellants, a sum of about Rs. 80,000/- was spent on the construction of this factory on an area of about 2 kanals and 13 Marlas.

8. In 1948, Ganga Ram Kishore Chand took loan from Jairam Das Bhagat Ram on the basis of hun-dis on various occasions. It is also common ground that in 1950, a sum of Rs. 17,800/- was due from the debtor firm to the creditor firm.

9. On 6th of February, 1950, about 16 kanals of land are alleged to have been given by the ladies to their husbands in exchange for one residential house and a shop underneath it. It is contended on behalf of the appellants that Girdhari Lal on behalf of Jairam Das Bhagat Ram was present on the occasion of the execution of this deal for exchange.

10. In the same year, i.e, 1950, a Board of trustees is said to have been appointed by Ganga Ram Kishore Chand for the purpose of paying off their creditors. In December, 1950, the factory said to have been built in 1945 and the site underneath was sold to Khushi Ram for Rs. 55,000/- and this sum, according to the counsel for the appellants, was paid to various creditors. A sum of Rs. 9,375/- was also paid to Jairam Das Bhagat Ram towards the amount due to them.

11. It is admitted that at that time there was a balance of Rs. 5,900/- due from Ganga Ram Kishore Chand and a hundi for this sum was duly executed. Some time later, Jairam Das Bhagat Ram instituted a suit for the amount due to them and in 1955 obtained a decree against Ganga Ram Kishore Chand. In execution of this decree the house and the shop were got attached. To this attachment, objections were raised by the two ladies under Order 21 Rule 58 which were disallowed giving rise to the present suit.

12. On behalf of the appellants, as already noticed, reliance has principally been placed on the two sale deeds mentioned above and it has been contended on the authority of V.E.A.R.M Firm v. Maung Ba Kyin; AIR 1927 PC 237, that where the ostensible owners of the property under a duly registered deed and a deed of transfer object to an attachment by a party claiming to attach that property under his debt due from the vendor, the person attaching must show that the sale was a fraudulent one. Reference has been made to another Privy Council decision in Manmohan Das v. Mt. Ramdei, AIR 1931 PC 175, for the proposition that the onus of proof always rests upon the party who impeaches the apparent tenor of a deed.

13. The counsel has also cited Mt. Bibo v. Sampuran Singh, AIR 1936 Lah 222, in which it is laid down that a suit for a declaration that the gift by a person to his wife is fraudulent and fictitious, having been effected to defraud the donor's creditors, the onus of proving that the donor was in debts or in embarrassed circumstances lies on the plaintiff.

14. Two decisions reported in AIR 1944 Nag 44 (FB), Vinayak Shamrao v. Moreshwar Ganesh and AIR 1944 Nag 133, Mt. Ratnibai v. Khemraj have also been relied upon by the appellants. Both of these decisions deal with cases where a plea of defeating or delaying creditors under Section 53 of the Transfer of Property Act was the subject-matter of discussion.

15. In the first case, it has been laid down that where the transferee is a volunteer then the facts that the transfer was real and that it was intended to defeat or delay creditors is sufficient enough. But when he is not a mere volunteer and has an interest to protect, as for instance, when he is a creditor of the transferor or a member of a joint family entitled to a share of the property, then something more is required. It must then be shown in addition that “the real object of the transfer is to place the property beyond the reach of the creditors for the benefit of the debtor and is not for the payment of his debts,” but for protection of his interests.

16. The second case is an authority for the proposition that a man in financial difficulties is perfectly at liberty to ask a person who is about to give him a present, to give it to his wife instead of to himself so as to save it from his creditors. But he cannot say to a creditor who, in law, has to transfer to him some property to transfer it to his wife with the object of saving it from his other creditors. If, however, he adopts the latter course the result is a voidable and not a void transaction and it can be set aside only by a suit of a particular kind (on behalf of creditors generally) or on insolvency. It is also laid down in this authority that a fraudulent transaction is not a sham transaction.

17. These decisions do not appear to me to be very helpful in deciding the precise question which arises in the present case. Reference is next had to Mohammad Ishaq v. Mohammad Yusaf, AIR 1927 Lah 420, but here too the Court was concerned with the scope and effect of Section 53 of the Transfer of Property Act. It is laid down in this authority that in cases where there are debts due at the time of a gratuitous transfer, it will be presumed that the transfer was made with intent to defeat or delay the creditors. But where there are no debts due at the time and the transferor runs into indebtedness subsequently, the presumption will be regulated by the peculiar circumstances of each particular case.

18. Lastly, the counsel has cited AIR 1936 Lah 222, which lays down the same proposition as is found in Mohammad Ishaq's case, AIR 1927 Lah 420 and indeed follows that decision.

19. On behalf of the respondents, principal reliance has been placed on a decision of the Privy Council in Lakshmiah Chetty v. Kothandarama Pillai, AIR 1925 PC 181. This is an authoriy or the proposition that a purchase by an Indian of the property in India in the name of his wife unexplained by other proved or admitted facts is to be regarded as a benami transaction by which the beneficial interest in the property is in the husband, although the ostensible title is in the wife. The rule of the law of England that such a purchase by a husband in England is to be assumed to be a purchase for the advancement of the wife dos not apply to India.

20. In so far as the question of onus of proof in a suit under Order 21 Rule 63 of the CPC is concerned, Mr. C.L Aggarwal has relied on Janki Das v. Gulzar, ILR 12 Lah 763 : (AIR 1932 Lah 174), in which Tek Chand J., who prepared, the judgment on behalf of the Division Bench stated the law to be thus:—

“It is settled law that in a suit under Order 21, Rule 63 of the CPC, the onus lies upon the plaintiff who had unsuccessfully objected before the executing Court, to establish both consideration and good faith for the transaction on which he relies.”

21. Support for this proposition was sought from Mohammad Ali Mohammad Khan v. Mst. Bismillah Begum, 35 Cal WN 324 : (AIR 1930 PC 255).

22. Another decision cited by the respondents is Firm Ahmad Din-Allah Ditta v. Sardar Pratap Singh, AIR 1939 Lah 438, in which a Division Bench of the Court (Addison and Ram Lall, JJ.) observed that where an objection to attachment on the ground that the objector had purchased the property previously is upheld by executing Court and decree-holder's suit for declaration that the transfer is bogus is dismissed by the trial Court and he files an appeal, double burden lies on the decree-holder to establish his case. To same effect is a decision of Tek Chand and Beckett, JJ., in Udho Das v. Khair Mohammad, AIR 1942 Lah 192, cited by the appellants. In this decision, it is observed that in a suit to set aside the decision of an executing Court under Order 21 Rule 63 of the CPC, it is for the plaintiff to prove his title; and if it is found that there is no conclusive evidence on the question of title the plaintiff's suit must fail.

23. After bestowing my best attention to the arguments addressed at the Bar and the authorities cited in my opinion the decision of the Privy Council in V.E.A.R.M Firm's case, AIR 1927 PC 237 does not lay down, as is contended on behalf of the appellants, that the onus in the present case should have been on the defendant firm Jairam Das Bhagat Ram of affirmatively proving that the plaintiffs were not the true owners of the property in dispute. It is noteworthy that in the Privy Court decision mentioned above, the burden of proof is nowhere mentioned. All that is stated therein is that where there is duly registered deed, obviously the party claiming to attach that property for somebody else's debt must show that the sale was a fraudulent one; and “that could only be done in this case (there is no other evidence) by showing utter inadequacy of consideration.”

24. It is clear that this decision does not state as to when the defendant must undertake his obvious task of establishing that the duly registered deed was fraudulent. Following the normal practice, if the plaintiff assumes the original burden and produces the registered deed then in the absence of the defendant saying anything against it, the plaintiff would clearly succeed; but if the defendant can establish utter inadequacy of consideration or some other circumstances suggesting a fraudulent sale, the plaintiff would in his turn have to plead something more than the mere innocent appearance of the instrument and must show that the deed is as good as it looks. That the onus in a suit under Order 21 Rule 63 is on the plaintiff is also clear from the language of this rule, as it clearly lays down that the party against whom an Older has been made in the proceedings where a claim or an objection has been preferred, may institute an suit to establish the right which he claims to the property in dispute.

25. I also find support for my view from Mahadeo Missir v. Ram Prasad, ILR 8 Pat 890 : (AIR 1929 Pat 579), where a Division Bench of that Court exhaustively discussed this very question, and distinguished the decision of the Privy Council in V.E.A.R.M Firm's case, AIR 1927 PC 237.

26. I may at this stage also observe that in a later decision in AIR 1930 PC 255, on which reliance was placed by Tek Chand, J., In Janki Das's case, ILR 12 Lah 763 : (AIR 1932 Lah 174) the Privy Council cast the onus on the plaintiff who instituted the suit for a declaration that the deed of wakf and the deed of gift were valid and that the properties which were the subject-matter of those deeds were not liable to attachment and sale.

27. A Division Bench of the Madras High Court in Appathurai Chettiar v. Vellayam Chettiar, ILR 55 Mad 748 : (AIR 1932 Mad 302), also took the same view as the Patna High Court did in Mahadeo Missir's case, ILR 8 Pat 890 : (AIR 1929 Pat 579).

28. The Rangoon High Court has also in Lakshmanan Chetty v. Ko Po Zon, 144 Ind Cas 851 : (AIR 1933 Rang 129), similarly explained the Privy Council decision in V.E.A.R.M Firm's case, AIR 1927 PC 237 and adopted the same view as the Patna and Madras High Courts have done in the two cases mentioned above. In this decision, the learned Judge goes to the length of observing that the Privy Council in V.E.A.R.M Firm's case, AIR 1927 PC 237 did not intend to lay down any original proposition of law and that the decision in that case proceeded on its own facts.

29. In Dhirendra Nath Das v. Indra Chandra Kisriwala, AIR 1939 Cal 578 also, B.K Mukherjea, J., as he then was similarly explained the Privy Council decision in V.E.A.R.M Firm's case, AIR 1927 PC 237 and cast the onus on claimant to show that he has a right which is denied to him by an adverse order against him in the claim proceeding under Order 21 Rule 53 of the CPC. The burden, according to this decision cannot be discharged merely by pointing to the innocent appearance of the instruments under which the plaintiff claims he must prove that the documents are as good as they look and it is not for the defendant to make out that they are collusive.

30. Thus according to the decided cases as well as the language of Order 21 Rule 63 of the CPC, the plaintiff, who seeks to get rid of the effect of the adverse Order against him, must, normally speaking show affirmatively that the order passed on due enquiry by the executing Court was erroneous, and this burden of proof cannot be held to have been discharged by merely establishing the apparent innocent tenor of the instrument on the basis of which he claims title. He must go further and establish that the document is truly, and in essence, as good as it looks.

31. The Privy Council decision in V.E.A.R.M Firm's case, AIR 1927 PC 237 is, as discussed above, clearly distinguishable and the ratio of that decision does not support the appellants' contention. In the present case, it may further be mentioned that the plaintiff has lost in the trial Court and is an appellant in this Court with the result that he has on him the further onus of dislodging the decision of the Court below.

32. In so far as the plea with respect to the benami nature of the transaction is concerned, it has now been authoritatively seeded that the main criterion for deciding whether the person. In whose name the benami purchase is made is or is not the real owner, the source from which the acquisition is made is the main criterion. As early as 1854, a Judicial Committee of the Privy Council in Gopeekrisht Gosain v. Gungapersaud Gosain, 6 Moo Ind App 53 (PC) held that “whereas a purchase of real estate is made by a Hindu in the name of one of his sons, the presumption of the Hindu Law is in favour of its being a benami purchase and the burden of proof lies on the party in whose name it was purchased, to prove that he was solely entitled to the legal and beneficial interest in such purchased estate”. It is true that this was a case from Bengal but the principle enunciated by the Judicial Committee was followed by a Division Bench of the Lahore High Court in L. Kanshi Ram v. Shankar Das, AIR 1928 Lah 397, and by another Division Bench of the same Court in N. Johnstone v. Gopal Singh, ILR 12 Lah 546 : (AIR 1931 Lah 419).

33. To the same effect is the decision of Shadi Lal, C.J, and Hilton, J., in Hari Ram v. Kundan Lal, AIR 1932 Lah 193 (1) where it is laid down that “the criterion, in cases where a transaction is alleged to be benami, is to determine the source of the purchase money”. It is true that in this case it is further observed “that there is no presumption that when a document stands in the name of a woman the property conveyed by it must be deemed to belong to the husband, and that the onus is clearly upon the person alleging the transaction to be benami to show that the apparent state of things is not the real state of things; in other words that the person who appears as the owner on the face of the deed is not the real owner”, but this observation in my opinion, does not detract from the rule that in order to determine the benami nature of a transaction the source of the purchase money is, normally speaking, the principal criterion.

34. Recently, the Supreme Court has in Kedar Nath Motani v. Prahlad Rai, Civil Appeal No. 151 of 1955: (AIR 1960 SC 213), made the following instructive observations:

“We must remember that benami transactions are common in India, and have always been recognised. They are entered into for a variety of reasons, and the benamidnr holds the property in trust for his principal. ………………

In establishing the benami nature of a transaction, the cardinal point to be proved is the source of money … … … … … …”.

35. But then Mr. D.N Aggarwal has contended that the very fact that the purchase was effected in the name of the ladies must be deemed to connote that the property was gifted or was intended to be gifted to them. The case of gift or an intended gift was not put forward in the pleading, and no issue was framed or even claimed on that part of the case; nor was such a case developed in the Court below and indeed in the grounds of appeal in this Court also we do not find this case being made out. It is on issues based on pleadings alone that evidence can be led and arguments directed, and the considered the present appellant can hardly be heard to base his case on such a plea.

36. The argument on behalf of the appellant really proceeds on the assumption that there is some kind of a doctrine of advancement which assumes that property purchased in the name of near relations of the person who actually supplies the money should be deemed to have been intended to be absolutely conveyed to them. This question has been discussed in the Principles of Hindu Law by D.F Mulla 12th Edition, at page 749 and the position is stated as follows:—

“It is important to note that the law of benami is in no sense a branch of Hindu law. It is merely an application of the equitable rule that where there is a purchase by in the name of B, there is a resulting trust of the whole to A. In this respect the general rule of the Indian law, which is laid down in the Indian Trusts Act, 1882, section 82 differs but little, if at all, from the general rule of English law on the subject. In both systems of law, the fact to be first determined is from what source the money came with which the purchase-money was paid. But in England there is an exception when a purchase is made by a person in the name of his child or wife, though with his own money. In such a case, the transaction is presumed to have been made by way of advancement or gift to the child or wife, and the burden of proving that there was no advancement or gift lies on the person who so alleges it. But this exception is not recognised in India. In this country where a purchase is made by a person with his own money it is prima facie assumed to be for his benefit, whether it is made in the name of a child, wife, or a stranger, and there is no presumption in favour of an advancement or gift such as there is in the English law. The burden therefore of proving an advancement or gift lies on the person alleging that there was an advancement or gift. In 6 Moo Ind App 53 (PC), their Lordships of the Privy Council said: “Benami purchases in the names of children, without any intention of advancement are frequent in India.” But this rule of Indian law does not apply to transactions where both parties are English, not even if they were born in India, though the transactions may have taken place in India and the property may be situated in India. The general rule in India in the absence of all other relevant circumstances is thus stated by Lord Campbell in Dhurm Das Pandey v. Mst. Shama Soondri Dibiah, 3 Moo Ind App 229: ‘The criterion in these cases in India is to consider from what source the money comes with which the purchase-money is paid’.”

37. Nothing has been brought to our notice on behalf of the appellant suggesting that the above passage does not represent the correct legal position.

38. It is also noteworthy that the ladies, who knew best as to why and in what circumstances the properties in question were intended to be absolutely conveyed to them, have not cared to appear as witnesses. They were the best witnesses to depose about the source of their title and to inform the Court as to why the properties in question were purchased in their names and also as to the source from which they secured the consideration money; their non-appearance in support of their claim, therefore, must give rise to a very strong inference against them. For the reasons given above, this appeal must fail and is hereby dismissed. In the peculiar circumstances of the case, however, there will be no order as to costs.

KE/I/D.V.C

39. Appeal dismissed.