Order
1. The property in question is a two-storeyed building, each floor admeasuring about 2300 square feet, there being six rooms on the ground floor. This property originally belonged to one Amar Chand Gangwal. The said Amar Chand Gangwal inducted the respondent Kishori Lal Goenka as a tenant in respect of the second floor of the building. Later on, the said Amar Chand Gangwal sold one-half undivided share in the property to Kalyan Chand and the other one-half share to Surender Kumar. In June 1961, a tenant was inducted in the first floor of the property also. It appears that Surender Kumar executed a document styled “declaration-cum-release deed” in favour of the partnership firm of M/s Ratan Lal Bansi Lal. By that document the executant Surender Kumar admitted the fact that he was the benamidar of one-half share in the property conveyed by Amar Chand Gangwal under a deed of conveyance dated 7-11-1950 and that the consideration for the purchase of one-half share was actually paid by the aforesaid firm of which his father was a partner. After execution of this document, the appellant herein entered into an agreement with the firm for the purchase of one-half share which it had derived under the conveyance dated 7-11-1950 acknowledged by the declaration of 24-12-1964. The appellant also entered into another agreement for purchase of the other half share of the property from Kalyan Chand. Under the terms of the said agreement, the appellant came to be put in possession of the ground floor of the property on 18-3-1967. Before the execution of the declaration-cum-release deed by Surender Kumar, it appears that suits were filed for eviction against both the tenants of the first floor and the second floor claiming possession on two grounds, viz., the arrears of rent and damage caused to property by unauthorised changes made therein. So far as the first ground was concerned, it was not available for the reason that the arrears were made good. The suits were, therefore, confined to the second ground only. However, after the appellant purchased the right, title and interest in the property under the deed of conveyance dated 26-3-1971, it moved an application on 8-1-1972 for being impleaded as Plaintiff 3, which application was allowed. After being so impleaded, the appellant moved an amendment application on 3-12-1976 to add an additional ground for seeking eviction, viz., that the property was required reasonably and bona fide by the appellant. Thus, the suits proceeded essentially on two grounds, viz., (1) damage caused to the property by structural alterations; and (2) the appellant's requirement of the property. Incidentally, it may be mentioned here that the title of the appellant was put in question by the tenants.
2. The trial court decreed the suit holding that (1) the appellant's predecessor had good and valid title and, therefore, the appellant had a valid title; (2) the tenants were liable to be evicted on the ground of default in payment of rent; (3) the appellant did not have sufficient accommodation in its possession and consequently, required extra accommodation; and (4) the tenants had illegally and unauthorisedly put up permanent structures in their respective tenements and had, therefore, caused damage and waste to the property. On these findings, the trial court directed delivery of possession and also granted a preliminary decree for mesne profits. The tenant preferred appeals which were heard by the learned District Judge who allowed the appeals holding that the appellant before us was not the owner of the undivided portion of the premises and, therefore, the suits were not maintainable; (2) the notices to quit were defective; (3) the tenants were neither liable to be evicted on the ground of wilful default in payment of rent, or alleged reasonable requirement of landlord nor were they liable to be evicted on the ground that they had carried out construction activity in their respective premises which had caused waste or damage to the property. The learned District Judge reversed the decrees passed by the trial court. Thereafter the appellant and Respondents 1 and 2 herein preferred second appeals before the High Court of Calcutta. When the appeals came up for hearing before a Division Bench of the High Court, the tenant raised a preliminary objection regarding the maintainability of the appeals relying on an earlier decision in Devki Nandan Boobna v. Har Sundar Sarkar (1986) 1 CLT 278. On that basis the Division Bench referred the matter to a larger Bench. The appeals, therefore, came up for hearing before a five-Judge Bench presided over by the learned Acting Chief Justice. The Full Bench while upholding the maintainability of the appeals came to the conclusion that by the deed of declaration-cum-release Surender Kumar could not transfer his undivided right, title and interest in the property to the firm of M/s Ratan Lal Bansi Lal in view of the provisions in the Benami Transactions (Prohibition) Act, 1988. The exact view taken in this behalf is to be noticed in para 141 which may be reproduced for ready reference:
“It is contended on behalf of the appellant that Surender Kumar, the benamidar by executing the registered instrument styled ‘deed of release’ conveyed his right, title and interest in the suit property but such argument runs counter to the other arguments of the appellant-plaintiffs that Surender Kumar is the benamidar of the partnership firm, appellant-plaintiff 1. When the appellant-plaintiff 1 claims that it is the real owner, the ostensible owner being the benamidar, it is no more open to it to argue that there was a conveyance by the deed of release. The benamidar before the enactment of Benami Transactions (Prohibition) Act could not have any right, title and interest in the property which the benamidar could convey. So, the deed of release could be said to be a mere declaration, a mere admission that the executant, i.e the benamidar, had no right or interest in the property and it could not operate as conveyance. Then the execution of the deed by Surendra Kumar is of no consequence.”
3. The Full Bench of the High Court also took the view that the notices to quit were illegal and invalid as one of the landlords who issued notices was not entitled to give the notice and the said defect was fatal to the suit; that the findings recorded by the lower appellate court on the question of reasonable requirements; unauthorised structural alterations amounting to waste and damage to the property, etc., were unassailable. Consequently, the Full Bench of the High Court dismissed the appeals. Hence, these appeals by special leave under Article 136 of the Constitution.
4. Of the three questions that survive for consideration, the question regarding title to the property assumes some importance as that may interfere with the right of the partnership, for the recovery of rent and to sue for eviction in future if the judgment of the Full Bench stands. The learned Senior Counsel for the appellant, Shri A.K Ganguli was, therefore, justified in stressing that we should go into this question even after we indicated to him that on the two issues available, on which he was seeking eviction, we were disinclined to disturb the finding in exercise of jurisdiction under Article 136 of the Constitution, since the findings thereof were essentially based on questions of fact and appreciation of evidence. We will, therefore, confine ourselves to the question whether the High Court was right in the view it took on the question whether the partnership firm of M/s Ratan Lal Bansi Lal had acquired the right, title and interest of Surender Kumar under the document of declaration-cum-release deed dated 24-12-1964. By this document of 24-12-1964, Surender Kumar executed a release deed in favour of the firm at the behest of the latter. The document recites that whereas the sum of money paid as price by him to the said Amar Chand Gangwal, the vendor, belonged to the partnership firm, the undivided one-half portion of the property was purchased by the moneys of the firm in his name and on being called upon by the firm to execute a release deed in disclaimer of the right, title and interest, he was executing the document acknowledging the fact that the firm was the real owner of the share in the property standing to his name. It is necessary to bear in mind the fact that this document was executed long before the Benami Transactions (Prohibition) of the Right to Recover Property Ordinance, 1988 came into force on 19-5-1988. The Act, viz., Benami Transactions (Prohibition) Act, 1988 which repealed the aforesaid Ordinance came to be enacted on 5-9-1988, Section 1(3) whereof says that the provisions of Sections 3, 5 and 8 shall come into force at once and the remaining provisions shall be deemed to have come into force with effect from 19-5-1988. Therefore, long before this change in law was brought about, Surender Kumar had executed a release deed in favour of the firm acknowledging the fact that the firm was the real owner of the property which stood in his name and that he had no right, title and interest therein and was, therefore, releasing whatever right, title and interest he had acquired by virtue of conveyance of 7-11-1950 in favour of the firm. The Full Bench of the High Court seems to have proceeded on the premise that since the Act had retrospective operation, as held by this Court in the case of Mithilesh Kumari v. Prem Behari Khare (1989) 2 SCC 95, (1989) 1 SCR 621, it was not open to the partnership firm to contend that Surender Kumar was merely the ostensible owner and the real owner was the partnership firm. The High Court next proceeded on the premise that since before the enactment of the Act, the benamidar had no right, title and interest in the property he could not convey the same by a release deed on 24-12-1964. On that premise, the High Court brushed aside the release deed and held that the partnership firm was not the owner in respect of the right, title and interest conveyed to Surender Kumar under the conveyance deed of 7-11-1950. We are afraid this line of reasoning adopted by the Full Bench of the High Court is not correct.
5. The Act prohibits entering into benami transactions and says that no person shall enter into any benami transaction and further provides that whoever enters into such a transaction, shall be punishable with imprisonment for a term which may extend to three years or with fine or with both. Section 4 bars a suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is so held or against any other person by or on behalf of a person claiming to be the real owner of such property. Similarly, no defence based on any right, in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property. Section 5 deals with the question of property held benami being liable to acquisition and Section 6 lays down that nothing in the Act shall affect the provisions of Section 53 of the Transfer of Property Act or any law relating to transactions for an illegal purpose. A reading of Section 4 of the Act shows that the real owner is precluded from claiming title to the property against the person holding the same benami either by way of assertion or defence. Under the Act any transaction entered into prior to the coming into force of the Act, between the ostensible owner and the real owner is not voided by any provision, whatsoever. If that be so, the execution of the release deed by Surender Kumar on 24-7-1964 (sic 24-12-1964) in favour of the firm had extinguished his title as an ostensible owner in favour of the firm, the real owner, which had paid the consideration to Amar Chand Gangwal, the original vendor. Section 41 of the Transfer of Property Act, in terms states that where with the consent, express or implied, of the persons interested in immovable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, had acted in good faith. This provision is clearly intended to protect third party transferees who bona fide and after due care and caution purchase the property from the ostensible owner taking him to be the real owner. It may next be noted that even if it is so assumed, we are of the opinion that in the instant case Surender Kumar having already released his right, title and interest as ostensible owner of the property in favour of the firm, the firm had acquired complete title over the property long before the Act came into force. Such a transaction which preceded the coming into force of the Act has not been voided by any specific provision in the Act. We are, therefore, of the opinion that the High Court was wrong in concluding that the title continued in Surender Kumar. We set aside that part of the High Court's finding and hold that the appellant was the owner of the property insofar as it related to the interest of Surender Kumar therein.
6. The question whether a second appeal can lie against the order of the first appellate court need not be gone into as we are of the opinion that on the other two points the finding recorded by the first appellate court as well as the second appellate court does not require any interference at our ends. Accordingly, except for the above modification in regard to acquisition of title in relation to Surender Kumar's share in the property, the appeals fail and are dismissed with no order as to costs.