Bibi Saddiqa Fatima v. Saiyed Mohammad Mahmood Hasan ., Supreme Court Of India, Judgment, Law, casemine.com

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Case Number

Civil Appeal No. 2462 of 1968, decided on May 3, 1978

Advocates

M.N Phadke, Senior Advocate (M. Qamaruddin, M. Qamaruddin, M.Y Omar, N. Aly Khan and V.M Phadke, Advocates, with him) for the Appellant;
Lal Narain Sinha and D.P Singh, Senior Advocates (S.C Agarwal, A. Gupta, S. Mohd. Kazum and P.P Singh, Advocates, with them) for the Respondent.

Judges

Justice N.L. Untwalia
Justice P.S. Kailasam
Justice R.S. Sarkaria

Acts

Section 5, Subsection 2 of the 1983 Income Tax Act
Mussalman Wakf Validating Act, 1913 (retrospective)

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Smart Summary

Factual and Procedural Background

A Shia Muslim lady constituted a wakf-alal-aulad, dividing her properties into three qurras. The appellant’s husband was appointed Mutawalli of one of the qurras. The wakf-deed:

Made the family and their descendants the primary beneficiaries, with a small portion set apart for public, religious, or charitable purposes.
Conferred on the Mutawalli (clause 18) a power to fix stipends for his wives, children and descendants.
Declared (clause 24) that any property purchased with wakf funds would automatically form part of the wakf estate.
Provided (clause 27) that no term of the deed would operate contrary to Muslim law.

The Mutawalli’s first wife died leaving ten children. He married the appellant in 1933. In 1935 a permanent lease of land was taken in the appellant’s name, and between 1937-1939 a bungalow was erected on it. The Mutawalli died in 1939.

The appellant filed a suit against the respondent (subsequent Mutawalli) seeking eviction, arrears and damages, claiming the land and bungalow were her personal property. The respondent asserted that both the lease and construction had been financed with wakf funds and therefore belonged to the wakf. The trial court and, on appeal, the High Court accepted the respondent’s version and dismissed the suit. The appellant came to the Supreme Court in further appeal.

Legal Issues Presented

Whether the land and bungalow acquired in the appellant’s name were wakf properties or her personal properties.
Whether the Mutawalli’s power under clause 18 permitted him to use wakf funds to confer a disproportionate benefit on a single beneficiary (his wife).
Whether, in the circumstances, the transaction was benami and, if so, on whom the burden of proof lay.
Whether the appellant could advance, at the Supreme Court stage, a new case that the sums expended were payments to her by the Mutawalli.

Arguments of the Parties

Appellant's Arguments

The lease and the construction were financed by monies paid to her by her husband, and therefore the property belonged to her personally.
Alternatively, the acquisition was justified as provision for the maintenance and support of the Mutawalli’s wife, which was within the object of the wakf.
Pleadings should not be construed strictly, permitting the new stand taken before the Supreme Court.

Respondent's Arguments

All funds used for the lease and construction originated directly from the wakf estate; hence the property accreted to the wakf under clause 24.
The Mutawalli could not lawfully prefer one beneficiary over the others; equality among descendants is a core principle of Muslim law.
The appellant’s new plea was never raised in the courts below and could not be entertained at this stage.
Even if the question were open, the respondent had discharged the burden of proving the transaction was benami in favour of the wakf.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Abdul Fata Mahomed v. Rasamaya, 22 IA 76 : 22 Cal 619	Earlier doubts on validity of family wakfs	Referred to show that, after the Mussalman Wakf Validating Act, 1913, the validity of wakf-alal-aulad is beyond challenge.
Moattar Raza v. Joint Director of Consolidation, AIR 1970 All 509 (FB)	Status and powers of a Mutawalli	Approved; supports view that a Mutawalli is a manager, not an owner.
Ahmed G.H. Ariff v. CWT, (1969) 2 SCC 471	Nature of a Mutawalli’s interest	Explained to differentiate ownership from managerial powers.
Srinivas Ram Kumar v. Mahabir Prasad, 1951 SCR 277	Effect of inconsistent pleadings	Distinguished; court held appellant’s new plea could not be entertained.
Nagubai Ammal v. B. Shama Rao, 1956 SCR 451	Pleadings and alternative cases	Distinguished on similar reasoning.
Kunju Kesavan v. M.M. Philips, (1964) 3 SCR 634	Scope of appellate review of pleadings	Distinguished.
Meenakshi Mills v. CIT, 1956 SCR 691	Concurrent findings of fact	Referred to emphasise limited scope for interference with concurrent factual findings.
Gangadara Ayyar v. Subramania Sastrigal, AIR 1949 FC 88	Benami transactions – onus of proof	Applied; burden initially on party alleging benami.
Gopeekrist Gosain v. Gungapersaud Gosain, 6 MIA 53	Tests for benami	Followed to hold that source of purchase money is decisive.
Kerwick v. Kerwick, 47 IA 295	Benami principles	Followed on same point.
Sura Lakshmiah Chetty v. Kothandarama Pillai, 52 IA 286	Benami principles	Followed.
Bilas Kunwar v. Desraj Ranjit Singh, 42 IA 202	Benami principles	Followed.
Siddiqui Begam v. Abdul Jobbar Khan, AIR 1942 All 308	Benami – illustrative	Referred.
Sardar Jahan v. Afzal Begam, AIR 1941 Oudh 258	Benami – illustrative	Referred.
Kalwa Devadattam v. Union of India, (1964) 3 SCR 191	Benami transactions	Followed.
Union of India v. Moksh Builders and Financiers, (1977) 1 SCC 60	Benami transactions	Followed.
Kanakarathanammal v. V.S. Loganatha Mudaliar, (1964) 6 SCR 1	Inference from source of funds	Referred while discussing presumption once wakf funds are proved.
Jaydayal Poddar v. Bibi Hazra, (1974) 1 SCC 3	Benami – tests	Referred.
Krishnanand v. State of M.P., (1977) 1 SCC 816	Benami – evidentiary burden	Referred.

Court's Reasoning and Analysis

The Supreme Court affirmed the concurrent findings below, employing the following chain of reasoning:

The Mussalman Wakf Validating Act, 1913 (retrospective) renders challenges to the validity of a wakf-alal-aulad untenable (Para 13).
A Mutawalli is only a manager; ownership remains in the Almighty and the beneficiaries merely enjoy the usufruct. Equality among beneficiaries is fundamental (Paras 16, 28).
Clause 18 empowered the Mutawalli to fix stipends but not to grant a disproportionately large benefit to a single beneficiary at the expense of others. Purchasing immovable property solely for the appellant contravened this principle (Paras 17-24).
The evidence “overwhelmingly” showed that wakf funds were the sole source of the lease premium and construction costs. Acquisition in the appellant’s name therefore constituted an accretion to the wakf estate under clause 24; the appellant was a mere benamidar (Paras 21-24, 32).
The new plea—that the sums were payments to the wife—was never pleaded or put in issue; it could not be entertained for the first time in the Supreme Court (Para 25).
On the benami question, although the initial burden lay on the respondent, it was discharged by proving the source of funds. Once wakf funding was established, a presumption arose that the property belonged to the wakf, shifting any further burden to the appellant (Paras 34, 37-38).
Clause 19 of the Mutawalli’s will, reciting that the appellant built the bungalow with her own funds, was “demonstrably false” and incapable of divesting wakf property (Para 27).
The appellant’s contention that acquisition of the property fulfilled the object of the wakf (maintenance of the wife) was rejected; such an act would amount to self-dealing and a breach of fiduciary duty (Para 28).

Holding and Implications

Appeal Dismissed.

The property—land and bungalow—forms part of the wakf estate; the appellant holds no proprietary interest and is merely a benamidar. The immediate consequence is that the respondent, as Mutawalli, retains possession and control of the property. The judgment re-affirms (without creating new doctrine) the managerial, non-proprietary character of a Mutawalli’s position, underscores the principle of equal benefit among wakf beneficiaries, and clarifies the evidentiary approach to benami claims involving wakf funds.

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Bibi Saddiqa Fatima v. Saiyed Mohammad Mahmood Hasan .

A Shia Muslim lady created a wakf of her entire properties dividing them into 3 qurras. Appellant's husband was appointed Mutawalli of one of the qurras. The wakf deed provided that except a portion of money which was to be spent for public, religious or charitable objects, the wakf was primarily of a private nature for the benefit of the settlor's family and their descendants, that is, it was a wakf-alal-aulad. Under clause 18 of the deed, the Mutawalli was given a special power and right to fix stipends for his children, wives and descendants. Clause 24 provided that if any property is purchased out of the funds of the wakf, it shall be deemed to be property included in and belonging to the wakf and it shall not become the private or personal property of any one. In clause 27, it is specifically mentioned that any condition or phrase laid down in the paras of the deed was not meant to go against the Muslim law and was not to be of any effect if it did so. The Mutawalli's first wife died leaving 4 sons and 6 daughters and he married the appellant as his second wife in 1933. In 1935, a permanent lease was executed in respect of certain land in favour of the appellant. Between 1937 and 1939, a bungalow was also constructed on the land. The Mutawalli (appellant's husband) died in 1939. The appellant claimed the land and bungalow as her own and filed a suit for eviction of the respondent, and for arrears and damages. This respondent pleaded that it was the Mutawalli who had obtained the lease and constructed the bungalow, that it was wakf property and that, after the death of the Mutawalli, the respondent was in possession of the property as Mutawalli and not as a tenant and refuted appellant's claim. The trial court and the High Court on appeal dismissed the suit. In the trial court, the appellant's case was that the property was acquired with her personal savings. In the High Court, the appellant claimed the property as having been acquired with the personal money of her husband. In appeal to the Supreme Court, the appellant's case was that all money spent from time to time in acquiring the land and constructing the building was payment by the Mutawalli to his wife (appellant) and therefore the property must be held to have been acquired by the appellant herself out of her own personal fund.

Dismissing the appeal

Held :

(1) After the passing of the Mussalman Wakf Validating Act, 1913, which was made retrospective, the validity of a Wakf made for the benefit of the settlor's family is beyond the pale of challenge.

(Para 13)

Abdul Fata Mahomed v. Rasamaya, 22 IA 76 : 22 Cal 619, referred.

(2) A Mutawalli is more like a manager than a trustee and so far as the wakf property is concerned, has to see that the beneficiaries get the advantage of the usufruct. All the beneficiaries are entitled to benefit equally subject to any special power conferred on the Mutawalli. The statement in Mulla's ‘Mohamedan law’ that a “Mutawalli is not a mere Superintendent or Manager but is practically speaking the owner” is not correct.

(Paras 16 and 28)

Tyabji's ‘Muslim Law’ 4th ed., Chapter 10, referred to.

Moattar Raza v. Joint Director of Consolidation, AIR 1970 All 509 : 1969 ALJ 1148 (FB) overruling Md. Qamar Shah Khan v. Md. Salamat Ali Khan, AIR 1933 All 407 : 1933 ALJ 685, approved.

(3) “The benefit of a wakf for a person's sons and his children, and the children of his children, for ever so long as there are descendants is taken per capita, males and females taking equally and the children of daughters being included.” “It is lawful for a Mutawalli with the income of a wakf to erect shops, houses etc. which may yield profit to the wakf as all this is for the benefit of the wakf. All properties purchased by the Mutawalli out of the proceeds of the wakf become part of the wakf and are subject to the same legal incidents as the original wakf estate.” In the present case the evidence is overwhelming that the source of the money for the acquisition of the land and bungalow in dispute, was the wakf fund. Assuming that the Mutawalli had the power to fix stipends for his wife and his descendants even during his lifetime, the power is not absolute so as to fix any stipend for one beneficiary and none for another. Equality is the golden thread that runs throughout Muslim Law. The power given to the Mutawalli under clause 18 held to be reasonably exercised by him within reasonable limits of variation according to special exigencies. He had no power to spend disproportionately for the benefit of one beneficiary be that person his young wife (as in the case of the appellant) or a young daughter or a young son. He had no power to acquire a large item of immovable property (as in the present case) to benefit only one beneficiary ignoring the others. It cannot be spelt out of clause 18, that the Mutawalli should be deemed to have fixed as stipends for the appellant numerous sums of money spent from time to time in the acquisition of the land and the construction of the building. Taking a permanent lease of land and constructing a bungalow thereupon, is, to all intents and purposes, a purchase of property out of the funds of the wakf property. The acquisition of property out of the wakf funds should have been made in the name of the Mutawalli. But it did not cease to be wakf property, merely because it was acquired in the name of one of the beneficiaries. The real owner of the property was the Mutawalli and his wife, the appellant, was a mere benamidar. The property therefore belongs to the wakf estate.

(Paras 17, 18, 21 to 24 and 32)

Ahmed G.H Ariff v. CWT, (1969) 2 SCC 471 : (1970) 2 SCR 19, explained.

(4) The plea that all the money was payment to his wife by the Mutawalli and so the property must be held to have been acquired out of her own fund was never made out in the plaint or evidence or argument at any earlier stage of the litigation. The respondent was never asked to meet such a case. Parties went to trial and evidence was adduced upon the footing that the appellant claimed that out of the money given to her by her husband as pin-money etc. she had saved and spent the savings in acquiring the property. The respondent asserted and proved that the case of the appellant was false and that all the money came from the wakf fund directly to meet the cost of the acquisition of the property. In such a situation there is no substance in the appellants' contention that the pleadings should not be construed too strictly. There was no alternative pleading by the plaintiff. The present stand is new.

(Para 25)

Srinivas Ram Kumar v. Mahabir Prasad, 1951 SCR 277 : AIR 1951 SC 177 ; Nagubai Ammal v. B. Shama Rao, 1956 SCR 451 : AIR 1956 SC 593 ; and Kunju Kesavan v. M.M Philips, (1964) 3 SCR 634 : AIR 1964 SC 164, distinguished.

(5) In the present case, the concurrent findings of the trial court and High Court on the primary facts cannot be seriously challenged, apart from the question whether the question of benami is essentially a question of fact.

(Para 26)

Meenakshi Mills v. CIT, (1956) SCR 691 : AIR 1957 SC 49 ; and Gangadara Ayyar v. Subramania Sastrigal, AIR 1949 FC 88 : (1949) 1 MLJ 568, referred to

(6) Clause 19 of the last will of the Mutawalli does not advance the appellant's case. The recital in that clause is that his wife had taken a perpetual lease and constructed the bungalow with her funds. The recital was demonstrably false and could not operate against the wakf or bind the subsequent Mutawalli. If the property became the acquired property of the wakf, a Mutawalli, like the appellant's husband, cannot by a mere declaration in his will, make it his wife's property. The recital could have been pressed into service if there was a statement by the appellant's husband in his will that he had constructed the bungalow for the appellant out of his own funds or that he had constructed it by taking the money from the wakf estate and treating it as payments of stipends to her as and when the sums were paid.

(Para 27)

(7) The contention of the appellant that acquiring the property with the wakf fund was in fulfilment of the object of the wakf as this provision was made for the maintenance and support of the wife of the Mutawalli is without substance. Acquisition of immovable property directly with the wakf fund is an accretion to the wakf property. The Mutawalli had no power, while administering the wakf, to acquire a property for a particular beneficiary by way of maintenance and support. He, like a trustee or a person standing in fiduciary position, cannot advance his own interests or the interests of his close relatives. Such a use would amount to a breach of the power vested in him and the property acquired would be treated as wakf property.

(Para 28)

(8) The present case is not one of purchase of property by a husband in the name of his wife with his own money, but a purchase with wakf money. The appellant is a benamidar on behalf of the wakf. Assuming the burden lay on him, the respondent has strictly discharged it. By far, the most important test for determining whether a sale standing in the name of one person is in reality for the benefit of another, is, where the purchase money has come from and that has been established beyond doubt in this case. The motive to acquire the property in the name of the wife was that the appellant was constantly troubling her husband and he therefore got a fictitious lease in her favour.

(Paras 36 and 32)

Gopeekrist Gosain v. Gungapersaud Gosain, 6 MIA 53; Kerwick v. Kerwick, 47 IA 295 : AIR 1921 PC 56; Sura Lakshmiah Chetty v. Kothandarama Pillai; 52 IA 286 : AIR 1925 PC 181; and Bilas Kunwar v. Desraj Ranjit Singh, 42 IA 202 : AIR 1915 PC 96, followed

Mt. Siddiqui Begam v. Abdul Jobbar Khan, AIR 1942 All 308 and Mt. Sardar Jahan v. Mt. Afzal Begam, AIR 1941 Oudh 258, referred to

(9) The onus of establishing that a transaction is benami is on the person asserting so.

(Para 34)

Gangadara Ayyar Subramania Sastrigal, AIR 1949 FC 98, applied

Kalwa Devadattam v. Union of India, (1964) 3 SCR 191 : AIR 1964 SC 880; and Union of India v. Moksh Builders and Financiers, (1977) 1 SCC 60, followed

(10) But in this case, once it is found that the property was acquired with the money of the wakf a presumption would arise that the property is wakf property. In such a situation it will not be unreasonable to say, rather it would be legitimate to infer, that it was for the appellant to establish that the property was her personal property and not that of the wakf. This the appellant has not done. In fact the consent of the parties and the nature of possession of the property after acquisition goes in favour of the respondent and against the appellant

(Paras 37 and 38)

Kanakarathanammal v. V.S Loganatha Mudaliar, (1964) 6 SCR 1 : AIR 1963 SC 271; Jaydayal Poddar v. Mst Bibi Hazra, (1974) 1 SCC 3; and Krishnanand v. State of M.P, (1977) 1 SCC 816, referred to.

VPS/3909.C

Bibi Saddiqa Fatima v. Saiyed Mohammad Mahmood Hasan .

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments

Respondent's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Bibi Saddiqa Fatima v. Saiyed Mohammad Mahmood Hasan .

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