AMICUS AI
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  • provision of Section 3(2) of the Benami Transactions (Prohibition) Act, 1988
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  • Section 3(2) of the Benami Transactions (Prohibition) Act, 1988.
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Cites
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Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
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Acts
  • provision of Section 3(2) of the Benami Transactions (Prohibition) Act, 1988
  • provisions of Section 4(1) of the Benami Transactions (Prohibition) Act
  • provisions of Order 41, Rule 22 of the Code of Civil Procedure
  • Section 3(2) of the Benami Transactions (Prohibition) Act, 1988.
  • Section 4(1) of that Act. That Section
  • Agricultural Holdings) Act, 1973.
  • sub-section (1) of Section 3,
  • sub-section (2) of Section 3
  • Order 41, Rule 27 of C.P.C
  • Order 41, Rule 22 C.P.C
  • Section 1(3)
Smart Summary

Structured Summary of the Opinion (Lingaraja Rath, J.)

Factual and Procedural Background

Defendant No. 14 (the appellant in this Letters Patent Appeal) appealed against the reversing judgment of the learned single Judge which had decreed a suit for partition brought by Plaintiff-Respondents 1 and 2. The suit sought partition of joint family properties comprising Schedule 'A' and 'B' (and alleged alienations in Schedule 'C') among members of a joint family including the plaintiffs, Defendant Nos. 1 and 2, Defendant No. 16 and others. The plaintiffs alleged that disputes arose after Defendant No. 5 returned to the paternal home and that Defendant No. 1 had gifted and alienated properties, and that the plaintiffs' interests had not been protected by Defendant No. 2.

'B' Schedule contained two items: (1) Acs. 5.42 which was alleged to have been purchased by Defendant No. 1 in the name of Defendant No. 16 out of joint family funds under an agreement of sale from Defendant Nos. 11 to 15; and (2) Acs. 12.43 allegedly purchased by Defendant No. 1 in the name of Defendant No. 16 out of joint family funds under an agreement of sale from Defendant No. 17.

At trial the learned trial Judge made a preliminary decree partitioning parts of Schedule 'A' and held that the 'B' Schedule properties belonged to the appellant only. The plaintiffs appealed; Defendant No. 17 filed a cross-objection in the appeal. The learned single Judge allowed the plaintiffs' appeal and cross-objections in part, holding that item No. 1 of Schedule 'B' was joint family property and that item No. 2 belonged to Defendant No. 17. The present LPA by Defendant No. 16 (appellant here) is confined to Schedule 'B' properties. Plaintiffs have filed cross-objections in the LPA challenging the single Judge's finding on item No. 2 of Schedule 'B'.

Legal Issues Presented

  1. Whether the items of Schedule 'B' properties were joint family properties or the separate property of the appellant (i.e., whether they were purchased out of joint family funds or out of the appellant's separate funds).
  2. Whether the presumption under Section 3(2) of the Benami Transactions (Prohibition) Act, 1988 (that purchase in the name of wife or unmarried daughter is presumed to be for their benefit) assists the appellant in a dispute between coparceners or other joint family members.
  3. Whether the Cross-Objection filed by Defendant No. 17 in the appeal was maintainable and whether it was barred by delay (timeliness) under Order 41, Rule 22, Civil Procedure Code.
  4. Whether additional evidence sought to be admitted in the LPA (under Order 41, Rule 27 CPC) should be permitted.
  5. Whether an invalid sale (e.g., unregistered/unstamped agreement) coupled with continuous possession since 1969 can give rise to ownership by adverse possession such that the vendor (Defendant No. 17) cannot, after lapse of time, reclaim title.

Arguments of the Parties

Appellant's Arguments (Mr. Subbaiah)

  • The agreements of sale for the two 'B' Schedule properties (dated 10-12-1968 and 1-6-1969) were in the appellant's name; therefore the presumption arises that the appellant paid the consideration herself and was the purchaser; the plaintiffs have not rebutted that presumption.
  • Defendant No. 2 did not claim the 'B' Schedule properties as joint family properties in his declaration before Land Reforms authorities; Defendant No. 1 had claimed properties in the name of Defendant No. 16 (appellant) — this supports the appellant's exclusive title.
  • The Land Reforms Appellate Tribunal decision (Ex. A3) showing Defendant No. 2 as possessing less than one standard holding supports that the disputed lands were not joint family lands as otherwise Defendant No. 2 could not have been held to possess less than one standard holding.
  • A statutory presumption in favour of the ostensible purchaser arises under Section 3(2) of the Benami Transactions (Prohibition) Act, 1988 where purchase is in the name of wife or unmarried daughter — this supports appellant's claim.
  • The Cross-Objection by Defendant No. 17 was not maintainable under Order 41, Rule 22 CPC because one defendant cannot file cross-objection against another in such a suit; further, Defendant No. 17 remained ex parte, and her cross-objection filed on 30-11-1993 was belated and barred by time.

Plaintiff-Respondents' Arguments (Mr. M. Ramachandra Rao)

  • There is no evidence of independent purchase by the appellant of Schedule 'B' properties; the presumption in such circumstances favours the properties being joint family property, because the joint family had sufficient nucleus properties to buy the disputed lands.
  • The Cross-Objection of Defendant No. 17 is not maintainable (the plaintiffs and appellant made common cause on that point with respect to maintainability).

Cross-Objector / Defendant No. 17's Arguments (Mr. Veerabhadraiah)

  • The Cross-Objection is maintainable because, in effect, it is directed against the plaintiffs' claim that the properties are joint family properties; Defendant No. 17 can therefore assail the finding that favoured the appellant.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Surendra Kumar v. Phoolchand, (1996) 2 SCC 491 If a family possessed joint property sufficient in nature and relative value to form the nucleus from which property could have been acquired, a presumption arises that subsequent property was joint family property; burden shifts to party alleging self-acquisition to prove separate acquisition. The court relied on this decision to hold that where joint family possessed sufficient nucleus, the presumption of joint ownership of Schedule 'B' applied and appellant failed to discharge the burden of proving separate purchase.
Mallesappa v. Mallappa, AIR 1961 SC 1268 Where a manager (karta) claims immovable property was acquired by him with his separate funds and not with joint family funds, it is for him to prove by clear and satisfactory evidence; the onus is on the manager. The court cited this to reinforce that the appellant (and the husband/manager) bore the onus to prove the purchase out of separate funds and that this onus had not been discharged.
Nand Kishore v. Sushila, (1995) 4 SCC 572 : AIR 1995 SC 2145 Sub-section (2) of Section 3 of the Benami Act creates a statutory presumption that where a person purchased property in the name of his wife or unmarried daughter, it is presumed to be for their benefit — but the presumption operates in disputes between the purchaser and his wife/unmarried daughter. The court relied on the decision to hold that Section 3(2)'s presumption does not assist the appellant when the dispute is between coparceners/joint family members rather than between the purchaser and his ostensible purchaser (wife/daughter).
R. Rajagopal Reddy v. P. Chanderasekharan, (1995) 2 SCC 630 : AIR 1996 SC 238 Section 4(1) of the Benami Transactions (Prohibition) Act does not apply to property held benami prior to the coming into force of that provision (Section 4(1) came into force on 19-5-1988). The court applied this authority to reject the submission that provisions of the Benami Act (in particular Section 4(1)) could be applied retrospectively to purchases made prior to enactment; this supported the view that the Benami Act did not change the analysis for purchases made earlier.
N.S. Sreenivasan v. Deputy Registrar Co-op. Societies, 1996 (3) ALD 654 Explanation of the limited field of operation of a proviso/exception — the exception operates only within the field covered by the main section and not beyond it. The court used this principle to reject the contention that sub-section (2) of Section 3 had a broader or retrospective effect beyond the scope of sub-section (1).
L.P.A. No. 85 of 1988 (decided 6-8-1996) (referred) Where possession is through an invalid sale, the vendee acquires adverse possession from the date of possession itself (consistent law for over half a century as described in the opinion). The court applied this proposition to hold that the joint family, being in possession through an invalid sale since 1969, had acquired ownership after lapse of the statutory period; this supported dismissal of Defendant No. 17's cross-objection.

Court's Reasoning and Analysis

The court analysed both the documentary and oral evidence led at trial and the findings of the learned single Judge. The reasoning proceeded in distinct steps:

  1. Evaluation of appellant's evidence: The appellant (DW4) asserted she had funds (pasupukunkuma Rs. 2,000 and income from three acres bequeathed by her mother, plus money-lending receipts) to purchase the 'B' Schedule properties. The court found the assertions unsupported by independent corroborative evidence (no witnesses for money-lending, no identification or evidence of the three acres bequeathed, inconsistent or non-tallying cist receipts). The trial judge's rejection of additional evidence application (C.M.P. No. 12801 of 1996) under Order 41, Rule 27 CPC was upheld because the appellant had not made out grounds to admit new evidence.
  2. Reliance on contemporaneous statements and witnesses: PW2 (elder brother of Defendant No. 1) denied knowledge of any pasupukunkuma given to the appellant and denied that she had three acres given by her mother; his testimony was treated as a denial rather than ignorance and credited by the court. The Land Reforms Tribunal order (Ex. A2) containing Defendant No. 1's statement that the lands in Korlamanda were his self-acquired property but that an extent was in his wife's name was considered critical.
  3. Construction of the Land Reforms statement: The court construed Defendant No. 1's statement as meaning that the entire land was his self-acquired property and that a portion stood in his wife's name — i.e., the wife's interest was limited to being the name in which the portion stood, not proof of independent acquisition by her. The court noted the statement was made in the context of ceiling proceedings under the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973, where lands of husband and wife and minors are aggregated.
  4. Application of presumptions and burden of proof: Citing Surendra Kumar and Mallesappa, the court applied the presumption that where a family possessed sufficient joint nucleus property from which acquisition could have occurred, the acquired property is presumed to be joint family property. The burden then shifts to the party alleging separate acquisition to prove it. The appellant failed to discharge that burden; therefore Schedule 'B' properties had to be held joint family property.
  5. Analysis of the Benami Transactions Act argument: The court rejected the appellant's reliance on Section 3(2) of the Benami Act as misread — sub-section (2) creates a presumption only in disputes between the purchaser and his wife/unmarried daughter, not in disputes arising among other joint family members/coparceners. The court also rejected the contention that sub-section (2) operates retrospectively or more broadly than sub-section (1), relying on R. Rajagopal Reddy and N.S. Sreenivasan to hold that the exception/proviso cannot have a field larger than the main provision.
  6. On the Cross-Objection by Defendant No. 17: The court held the cross-objection was maintainable because, had the plaintiffs succeeded entirely, the title would have shifted from appellant to the joint family and that, effectively, the cross-objection was also directed against the plaintiffs. However, the court found Defendant No. 17's substantive claim to item No. 2 of Schedule 'B' unsustainable: the parties' pleadings alleged the purchase in 1969 (even if via an invalid sale), the joint family had been in possession since 1969, and under settled law (L.P.A. No. 85/1988 referenced) possession through an invalid sale gives adverse possession from the date of possession. Defendant No. 17 had not appeared, had not objected to the land reforms declarations when publicly notified, and had thereby permitted lapse of title over many years.
  7. Procedural rulings: The court refused to admit additional evidence in the LPA (C.M.P. No. 12801 of 1996) under Order 41, Rule 27 CPC for lack of grounds, and rejected the appellant's arguments about timeliness and maintainability preventing Defendant No. 17's cross-objection from being considered.

Holding and Implications

Holding:

The Letters Patent Appeal is dismissed.

Additionally, the court made the following dispositive rulings:

  • The Cross-Objections filed by Respondents 1 and 2 in the L.P.A. are allowed.
  • The Cross-Objections filed by Respondent No. 16 (Defendant No. 17) in A.S. No. 2735 of 1990 are dismissed.
  • Each party is to bear its own costs.

Direct consequences and implications:

  • Schedule 'B' properties are held to be joint family properties (the court held the burden of proving separate acquisition had not been discharged by the appellant).
  • The appellant's statutory reliance on Section 3(2) of the Benami Act did not assist her in a dispute among joint family members and was rejected on scope and temporal grounds.
  • Defendant No. 17's substantive claim to item No. 2 of Schedule 'B' failed because the joint family had been in possession since 1969 and title had lapsed against Defendant No. 17; additionally Defendant No. 17 did not avail the opportunity to object in land reforms proceedings.
  • No broader new precedent was created by this judgment; the decision applies and relies on existing principles and authorities concerning presumptions of joint family acquisition, burden of proof on the manager/karta, scope of the Benami Act provisions, and acquisition through adverse possession arising from possession via invalid sale.

This summary is prepared exclusively from the content of the provided opinion and does not add or infer facts beyond the text of the judgment.

    Nakkalapu Annapurnamma v. Nakkalapu Narendra Kumar And Ors.

    Lingaraja Rath, J.:— Defendant No. 14 in O.S No. 3 of 1987 in the Court of the Subordinate Judge, Nuzivid, is the appellant against the reversing judgment of the learned single Judge decreeing the suit of partition brought by the plaintiff-Respondents 1 and 2 for their share in the joint family properties consisting of themselves, Defendant No. 1, Defendant No. 2 and Defendant No. 16. Respondent No. 1 is the son of Defendant No. 2 (Respondent No. 4) and Respondent No. 2 who are husband and wife. The appellant is the wife of Defendant No. 1 (Respondent No. 3). Defendant No. 5 (Respondent No. 7) is the daughter of Defendant No. 1 and Defendant No. 16 and is the sister of Defendant No. 2. The suit was brought on the pleadings that the plaintiffs and the defendants are members of the joint family possessing Schedule ‘A’ and ‘B’ properties and that while they were living peacefully, disputes arose between the parties due to Defendant No. 5 having come back to the paternal home and started living there along with her son. Defendant No. 1 gifted some properties to Defendant No. 5 and had alienated some properties, and the interest of the plaintiffs were not properly protected by Defendant No. 2. ‘A’ Schedule properties consisted of Acs. 9.00 of wet land and Acs. 20.00 dry land. ‘B’ Schedule properties consisted of two items i.e, (1) Acs. 5.42 cents which had been purchased by Defendant No. 1 in the name of Defendant No. 16 out of the joint family funds from Defendant Nos. 11 to 15 under an agreement of sale and (2) Acs. 12.43 cents which had been purchased by Defendant No. 1 in the name of Defendant No. 16 out of the joint family funds under an agreement of sale from the Defendant No. 17. ‘C’ Schedule properties are those which were alienated by Defendant No. 1 at the instance of Defendant No. 5 for inadequate consideration. Defendant No. 2, besides Plamtiff No. 1, had another son who had died on 8-12-1984. He also has a daughter. Plaintiff No. 1 (Respondent No. 1) claimed in the suit his share as a coparcener and Plaintiff No. 2 claimed a share as heir to her deceased-son. In the suit both Respondents 3 and 4 as also Defendant No. 17 (Respondent No. 16) remained ex parte and the suit was contested only by the appellant and the Defendant No. 5.

    2. The learned trial Judge passed a preliminary decree for partition directing partition of plaint ‘A’ Schedule properties except items 1, 7 and 9 but held, so far as ‘B’ Schedule properties are concerned, as those belonging to the appellant only. Assailing the decision, the plaintiffs filed an appeal in this Court. In the appeal cross-objection was also filed by the Defendant No. 17 from whom item No. 2 of the ‘B’ Schedule properties had been stated to have been purchased. The learned single Judge allowed the appeal as well as the cross-objections holding that item No. 1 of ‘B’ Schedule is joint family property and item No. 2 of ‘B’ Schedule belongs to Defendant No. 17. The present Letters Patent Appeal by Defendant No. 16 is confined to ‘B’ Schedule properties only. The plaintiffs have filed cross-objections in the L.P.A questioning the finding of the learned single Judge in regard to item No. 2 of ‘B’ Schedule. The learned single Judge, on an analysis of the evidence, found item No. 1 of Schedule ‘B’ properties to have been the joint family property it having been purchased by Defendant No. 1 from out of the family funds in the name of his wife, the present appellant. In reaching the conclusion, the plea of the appellant of both items of the properties to have been purchased out of the nucleus fund of Rs. 2,000/- given to her as Pasupukunkuma at the time of her marriage as also from the income from three acres of land allegedly given to her by her mother at the time her, death was negatived. The learned single Judge also allowed the cross-objection of Defendant No. 17 taking the view that though item No. 2 of ‘B’ Schedule properties was purported to have been purchased through an agreement of sale from her, yet the alleged agreement having not been produced and there being no reliable evidence of possession of the property by Defendant No. 16, and the title having throughout continued in Defendant No. 17, she is entitled to dismissal of the suit as regards that property.

    3. Mr. Subbaiah, the learned Counsel appearing for the appellant has urged, contending the Schedule ‘B’ properties to be that of the appellant alone, that such conclusions should have been drawn in view of the fact that the agreements of sale, respectively dated 10-12-1968 and 1-6-1969 from Defendant Nos. 11 to 15 and Defendant No. 17 being in the name of the appellant, there is to be the presumption that the properties were purchased by her paying the consideration herself. The presumption has not been rebutted by the plaintiffs. Further the Defendant No. 2 in his declaration made before the Land Reforms authorities also did never claim ‘B’ Schedule properties as joint family properties whereas the Defendant No. 1 had claimed the properties as the properties of Defendant No. 16. In Ex. A3, decision was given by the Land Reforms Appellate Tribunal of Defendant No. 2 possessing only an extent of land of 0.3204 S.H for which he directed allotment of more lands to him from out of the surplus lands of Defendant No. 1 so as to grant him 1.00 S.H Such decision could not have been made if the property in the ‘B’ Schedule was joint family property as in that case Defendant No. 2 could not have been held to possess less than one standard holding. Lastly it is submitted that the general presumption of the appellant being the purchaser also has the statutory backing in provision of Section 3(2) of the Benami Transactions (Prohibition) Act, 1988 which stipulates that unless the contrary is proved, a purchase by a person of property in the name of his wife or unmarried daughter has to be presumed to have been made for the benefit of the ostensible purchaser. So far as the Cross-objection filed by Defendant No. 17 is concerned, Mr. Subbaiah argues it to be not maintainable within the ambit of Order 41, Rule 22 C.P.C as no Cross-objection is possible to be taken by one defendant against another in a suit in respect of a finding given against him. Besides Defendant No. 17 (Respondent No. 16) having remained ex parte in the suit which was filed as early as 20th of April, 1985 and was decreed on 30th of March, 1990, filing of the Cross-objection on 30-11-1993 i.e, more than three years after filing of the appeal on 16th of July, 1990 is hopelessly belated and barred by time.

    4. The submission of the appellant has been resisted by Mr. M. Ramachandra Rao, appearing for plaintiff-respondents, urging there being not an iota of evidence to support the independent purchase by the appellant of Schedule ‘B’ properties and that the presumption in such circumstances is of the properties as belonging to the joint family which possessed of sufficient nucleus properties for purchase of the disputed properties. Mr. Ramachandra Rao, however, made common cause with the Counsel for appellant to contend that the Cross-objection of Defendant No. 17 is not maintainable. Mr. Veerabhadraiah, the learned Counsel appearing for the Cross-objector (Defendant No. 17) urges that since in effect the Cross-objection is only against the plaintiffs who claimed the properties to be joint family property, it is maintainable and it is open for Defendant No. 17 to assail the finding on that count.

    5. The facts which weighed with the learned single Judge for granting the decree in favour of the plaintiffs for item No. 1 of ‘B’ Schedule were that except the bare statement of the appellant, who examined herself as DW4, of there having been funds available with her to make the purchase, there is no other evidence to support such purchase, and on the contrary, the evidence of PW2, the elder brother of Defendant No. 1, an 85 years old person, as also the statement made by the Defendant No. 1 before the Land Reforms Tribunal saying the properties to have been purchased by him in the name of his wife, were clinching of the fact of the properties to have been of the joint family. It is the case of the appellant in her written statement as also in her evidence that at the time of her marriage with Defendant No. 1, she was given pasupukunkuma of Rs. 2,000/- which she saved and increased by deft management by investing the same in money-lending. Out of the increased income as also out of the income of Acs. 3.00 which had been bequeathed to her by her mother through a will, she was able to purchase the properties. Except the statement of hers in Court, no evidence has been led in support of such fact. The learned single Judge took the view with which we also agree that, in fact, if she had the nucleus fund of Rs. 2,000/- and she was indulging in money-lending activities, some of the so called borrowers could have been examined to prove the facts. None of them were examined No. evidence was absolutely led of any three acres of land to have been given to her through a will. No such land was identified as being given to her or which was in her possession or of her having derived any income out of that. No evidence was led of any separate enjoyment of the ‘B’ Schedule properties by the appellant except filing some cist receipts corresponding to years 1984, 1985 and 1986. The survey numbers noted thereon do not tally. In this L.P.A, the appellant filed an application C.M.P No. 12801 of 1996 to receive certain documents as additional evidence in the appeal. Absolutely no grounds as required under Order 41, Rule 27 of C.P.C has been made out to justify the admitting of additional evidence at this stage. The C.M.P is rejected.

    6. As against such state of evidence, on behalf of the appellant, PW2, who is the elder brother of the husband of the appellant, denied of knowledge of any Pasupukunkuma to have been given to the appellant at the time of her marriage. He stated that there was a custom prevalent amongst the affluent persons belonging to their community to give pasupukunkuma to the brides at the time of the marriage but no such Pasupukunkuma was given to Defendant 16 to his knowledge. His evidence has been commented upon by Mr. Subbaiah as he having stated of not knowing that the appellant had got three acres of land from her mother in a will in 1968 and that he did not know that she had been improving her assets all those years and had purchased the ‘B’ Schedule lands with her money. Reading his evidence we are not of the view that his statement was one of ignorance, but was on the contrary, one of denial of such facts to have happened. He is not only a very old person, but specifically stated that he was on visiting terms with his brother, his wife and the Defendant No. 5. The learned single Judge rightly took the view that there is no reason why a man of his age would come to speak falsehood. If Pasupukunkuma of Rs. 2,000/- had been given at the time of the marriage, that certainly could not have been without his knowledge. Coupled with such fact is the statement found in the order of the Land Reforms Tribunal dated 29th of April, 1977 that Defendant No. 1 (Respondent No. 3) had stated that the lands in Korlamanda village were his self-acquired property and were in the name of his wife i.e, an extent of Acs. 11.46 was in his name and another extent of Acs. 17.85 was in the name of his wife. It is this Acs. 17.85 which is the Schedule ‘B’ properties.

    7. Ex. A2, the orders of the Land Reforms Tribunal, Nuzivid shows the statement of Defendant No. 1-Respondent No. 3 to have been-

    “He further stated that the lands in Korlamanda village are his self-acquired property and in the name of his wife i.e An extent of Ac. 11.46 is in the declarant's name and another extent of Ac. 17.85 is in the name of his wife;”

    8. On the basis of such statement, it is the submission of the learned Counsel for the appellant that the declaration was to the effect of Ac. 17.85 to be that of the appellant, whereas it is the submission of the learned Counsel for the Respondent Nos. 1 and 2, which has found favour with the learned single Judge, that the Respondent No. 3 was making the statement of the property being his self-acquired property, a portion being in his name and the other in his wife's name. On consideration of the statement and the attendant facts we are inclined to agree with the view taken by the learned single Judge. When the statement was made that the properties in the village were his self-acquired properties and that one extent of land was in his name and the other extent in his wife's name, it was meant that the entire land was claimed by him as his own but that a portion of it was in his wife's name only i.e,- her interest in the property does not extend beyond her name. A plain construction of the language leads to such understanding of the statement. The Respondent No. 3 was making a statement in connection with the determination of ceiling under the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973. In defining the family unit under the provisions of that Act, the lands belonging to the husband and wife as also to all their minor children are taken together to compute the ceiling and determine the land retainable by the family. Hence, even if the lands had independently belonged to the appellant, the result so far as the land reforms proceedings are concerned would have been the same. If it was a fact that the land actually belonged to the appellant, the Respondent No. 3 would, in the normal course, have stated that part of the lands in Korlamanda village is his self-acquired property and the other lands to be that of his wife and would have given the respective extents of the land. Instead, it was his statement that the land stood in the name of his wife which could only mean that the statement was being made in the context of his earlier statement that the lands were his self-acquired lands, to explain which he had stated, though the lands were his self-acquired, that a portion of it was standing in the name of his wife. Such conclusion gets more fortified by the fact, as we have noticed, that there is absolutely no evidence of the appellant having been possessed of any independent means at any time to purchase such substantial property in her name, a fact which gets credence from the evidence of PW2 also. Once it is held that the property had been purchased by the Respondent No. 3 in the name of the appellant, there would be a presumption that the property was joint family property because of the fact that the Respondent No. 3 was the karta of the joint family and the manager of its properties and it is the admitted fact that there were enough joint family properties to form the nucleus for the purpose of purchase of Schedule ‘B’ lands. In a recent decision - Surendra Kumar v. Phoolchand, (1996) 2 SCC 491, where the claim advanced by the appellant in the case was that the property had been purchased in his name as a minor out of the funds paid by his maternal grandfather, the Supreme Court held, noting that the plea of such funding of the purchase had been negatived by both the Courts below, that while it was no doubt true that there is no presumption that a family because it is joint possessed joint property and therefore the person alleging the property to be joint has to establish that the family was possessed of some property with the income of which the property could have been acquired, but that such a presumption is a presumption of fact which can be rebutted. But where it is established or admitted that a family which possessed joint property which from its nature and relative value may form sufficient nucleus from which the property in question may have been acquired, the presumption arises that it was the joint property and the burden shifts to the party alleging self-acquisition to establish affirmatively that the property was acquired without the aid of the joint family. In Mallesappa v. Mallappa, AIR 1961 SC 1268, the Court observed:

    “…….but, in our opinion, there is no doubt that where a manager claims that any immovable property has been acquired by him with his own separate funds and not with the help of the joint family funds of which he was in possession and charge, it is for him to prove by clear and satisfactory evidence his plea that the purchase money proceeded from his separate fund. Te onus of proof must in such a case be pleaded on the manager and not on his coparceners.”

    9. Such being the presumption, which apply to the facts of the present case completely, it has to be held that the Schedule ‘B’ properties are in fact joint family properties as the burden has never been discharged by the appellant. Even a further fact which lends support to such conclusion is that the Respondent No. 3 remained ex parte in the suit and did not come forward to deny the case of the plaintiffs. There is absolutely no evidence of there being any discord between the appellant and the Respondent No. 3. If really the property was of Respondent No. 3 alone, one would expect of Respondent No. 3 to have come forward to put facts straight.

    10. To detract from such conclusion it is the submission of Mr. B.V Subbaiah that had the Schedule ‘B’ properties been joint family properties the Defendant No. 2 would have made such statement in his declaration filed under the Land Reforms (Ceilinig on Agrl. Holdings) Act. The mere failure of the Defendant No. 2 to state as such in no way affects the positive conduct and declaration of the Respondent No. 3. It is the case of the plaintiffs that the Defendant No. 2 was in fact not protecting the interests of his share in the joint family properties even in the face of alienation of Schedule ‘C properties by the Respondent No. 3 for inadequate considerations, even though ultimately the legal heirs of Defendant No. 2 were the sufferers.

    11. The other submission raised by Mr. Subbaiah is a presumption to be drawn in favour of the appellant under Section 3(2) of the Benami Transactions (Prohibition) Act, 1988. It is the argument that a presumption arises under the law of the property to have been purchased for the benefit of the wife or the unmarried daughter. The submission is because of misreading of the provision itself. All that sub-section (2) of Section 3 says is that where there is a dispute between a person and his wife or unmarried daughter, as the case may be, regarding the nature of the property purchased by him in either of their name, there shall be a presumption that he had purchased it for their benefit. This presumption has nothing to do when the dispute is raised not by the person who claims to be the real purchaser as against his wife or unmarried daughter, but is one raised by others, may be the coparceners, as to the nature of the property. The decision in Nand Kishore v. Sushila, (1995) 4 SCC 572 : AIR 1995 SC 2145 relied upon by Mr. Subbaiah does not lay down any different proposition. It was observed by the Court:

    “……….But, it has to be made clear that when a suit is filed or defence is taken in respect of such benami transaction involving purchase of property by any person in the name of his wife or unmarried daughter, he cannot succeed in such suit on defence unless he proves that the property although purchased in the name of his wife or unmarried daughter, the same had not been purchased for the benefit of either the wife or the unmarried daughter, as the case may be, because of the statutory presumption contained in sub-section (2) of Section 3 unless a contrary is proved that the purchase of property by the person in the name of his wife or his unmarried daughter, as the case may be, was for her benefit.”

    12. When, on the other hand, the dispute is between the members of the joint family and some items of properties are claimed to be joint, the mere fact that the properties stand in the name of one of them would not take it out of the hotchpot unless it is established that the property was in fact purchased independently out of the separate income of either the ostensible purchaser or of the person who was making the purchase in favour of such ostensible purchaser.

    13. There is even a further fact which liquidates the argument advanced. It has now been authoritatively held by the Supreme Court in R. Rajagopal Reddy v. P. Chanderasekharan, (1995) 2 SCC 630 : AIR 1996 SC 238 that the provisions of Section 4(1) of the Benami Transactions (Prohibition) Act do not apply to property held benami prior to coming into force of Section 4(1) of that Act. That Section came into force 19-5-1988 as is found in Section 1(3) thereof. Admittedly, the purchases in the present case were made much prior to that. Section 3 came into force on 5-9-1988. Under sub-section (1) of Section 3, a prohibition was enacted to enter into any benami transactions. Obviously, the Section is prospective in nature. Faced with such problem, Mr. Subbaiah tried to contend that while sub-section (1) of Section 3 is prospective, yet sub-section (2) has retrospective effect and the presumption thereunder will arise also in respect of benami transactions which had been entered into prior to the Act. Apart from the fact that sub-section (2) does not raise any such presumption against parties outside the transaction, we are also unable to agree of the retrospective nature of the provision. Sub-section (2) is only an exception to sub-section (1) and has been rightly pointed out by Mr. Ramachandra Rao, the field of operation of an exception cannot be larger than the main provision itself. In a recent decision of this Court - N.S Sreenivasan v. Deputy Registrar Co-op. Societies, 1996 (3) ALD 654 the scope of the proviso was explained by one of us (Lingaraja Rath, J.) observing:

    “It is well known that the field of operation of a proviso, which has overriding effect over the section to which it is enacted, and is mostly in the nature of an exception, is within the field covered by the section itself but does not extend beyond it. An exception always operate exclusively only in the field it occupies and has no application outside it and to that extent only the generality of section is excluded. Barring such operation of the proviso, the section operates uninhibitedly within its own sphere.”

    14. For all such considerations, we would hold that Schedule ‘B’ properties were the joint family properties, for which reason the appeal fails. Coming to the Cross-objection which has been allowed by the learned single Judge, it is the argument of the learned Counsel for the appellant that provisions of Order 41, Rule 22 of the Code of Civil Procedure does not contemplate filing of Cross-Objections, in the appeal by a defendant against another defendant and that secondly though the suit was filed in February, 1987 the Respondent No. 16 remained ex parte, did never challenge the decree which was made on 30-3-1990, did not appear in the appeal which was preferred on 16-7-1988, and only filed the objections more than three years after i.e, on 13-11-1993. For such reasons the learned single Judge should have thrown out the Cross-Objections. So far as the first submission is concerned, we are not inclined to accept it as it cannot be said that in raising the Cross-Objection the Respondent No. 16 was agitating only against the appellant and not the plaintiffs. The suit was dismissed by the learned trial Judge in respect of the ‘B’ Schedule properties recording the finding that the property belonged to the appellant. It was open for the Respondent No. 16 also to maintain an independent appeal in respect of the finding to establish her own title to the property. The plaintiffs preferred appeal in this Court and in the event the appeal in this Court and in the event the appeal would have succeeded also in respect of the second item of ‘B’ Schedule properties, the resultant situation would have been that the title of the property would have stood transferred from the appellant to that of the joint family. Hence in effect the Cross-Objection was also against the plaintiffs. We hence need not go into the question whether Cross-Objections are not maintainable by a defendant in respect of findings which are in favour of another defendant. But while holding the Cross-Objection as maintainable, yet we are unable to agree with the learned single Judge or accept the submission of Mr. T. Veerabhadrayya, learned Counsel appearing for Defendant No. 17, of item 2 of the Schedule ‘B’ properties as continuing with him. It was the specific case of the Respondents 1 and 2 that the property was purchased by the Respodent No. 3 out of the joint family funds in the name of the appellant on 1 -6-1969 from the Respondent No. 16 paying the consideration, through an agreement of sale of that date. Respondent No. 16 never appeared in the case. No issue was struck of the property not to have been purchased and as not belonging either to the appellant or to the joint family. It was the case of the parties that the purchase itself was on 1-6-1969 through the agreement of sale. It may be that the transaction was illegal there having been no registration and no stamp duty paid. But in the plaint copious references were made of the property to have been purchased and since the date of purchase it to have been in the possession and enjoyment of the joint family. Thus, in effect, the statement was that by virtue of an invalid sale, the joint family was in possession of property since 1-6-1969. In a recent case-L.P.A.No 85 of 1988 decided on 6-8-1996, the law was analysed and held to have been consistent since more than half a century that where possession is through an invalid sale, the vendee ipso facto acquires adverse possession from the date of possession itself. That being so, it has to be held without any further proof that the joint family having been in possession of the property since 1969 through an invalid sale has become the owner of the properties after the lapse of the statutory period. Respondent No. 16 having willingly suffered the lapse of title, it would be hardly within her competence to raise an objection nearly 28 years after. Even a further fact also gives credence to the conclusion. The declarations made under the Land Reforms (Ceiling on Agrl. Holdings) Act by landholders are publicly notified so that anyone holding objection in respect of any declaration or having any interest in the land would come forward and raise objection before the officer. No objection was filed by the Respondent No. 16 to the declaration made by the Respondent No. 3 claiming the property to be self acquired. No objection was also made even after the final decision was made by the Tribunal even though such decisions are publicly notified. Keeping such considerations in view we have to hold the Cross-Objections filed by Defendant No. 17 to be without merit.

    15. In the result, the Letters Patent Appeal is dismissed. The Cross-Objections filed by the Respondents 1 and 2 in the L.P.A are allowed and the Cross-Objections filed by Respondent No. 16 (Defendant No. 17) in A.S No. 2735 of 1990 is dismissed. Each party to bear its own costs.

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