Punjab National Bank, New Delhi vs Chinta Seethapathy Rao and others

The appellant is the nationalised bank and is the plaintiff in the trial Court. The plaintiff-bank filed the suit OS No.1278 of 1986 against the defendants and obtained a decree. The plaintiff-bank obtained an order of attachment dated 3-11-1986 passed in IA No.1026 of 1986. The third party-claimant filed a claim petition under Order 38, Rule 8 read with Order 21, Rule 58 CPC for raising the attachment. The trial Court after taking into consideration the fact that the third party-claimant purchased the property under Ex.Al, dated 20-2-1967 long prior to the suit and also relying on Exs.A4 to A17 and 34, held that the property was purchased out of his own funds and accordingly held that the claimant has established that he is the owner and possessor of the schedule property and consequently it was held that the petition schedule property is not liable for attachment. So holding, the trial Court has allowed the petition and raised the order of attachment made in 1A No.1026 of 1986. Aggrieved by the said order, the appellant-Bank has filed the present appeal.

The learned Counsel for the 1st respondent has placed the certified copy of the judgment to establish that the suit was decreed in favour of the plaintiff-bank on 26-2-1986. The learned Counsel appearing for the appellant-bank has contended that irrespective of the fact whether the suit is decreed or not, the legal plea raised in this appeal survives and is valid.

In the light of the rival contentions, it would be necessary to set out in brief the facts leading to the filing of the claim petition.

The petition schedule property is an open plot of land, admeasuring 392 square yards bearing Municipal No.7-1-28 situate at Ameerpet of Hyderabad, said to have been purchased by the claimant with his own funds i.e., savings as an employee of the Co-operative Department and the said plot was purchased under a registered sale deed dated 20-2-1967 and he has also obtained a sanctioned plan and constructed a house to the extent of ground floor by investing a sum of Rs.22,000-00. Out of the said amount he has obtained Rs.10,000-00 as loan from the Government and Rs. 12,000-00 from private sources. The claim petitioner has obtained the sale deed in the name of the 2nd defendant, who is his wife. She has no income of her own and she has also no streedhana property. The site was not purchased for the benefit of his wife but the same was purchased in the name of his wife, only to avoid it being treated as a joint family property.

The plaintiff-bank who is the 1st respondent in the claim petition before the trial Court, has filed counter and contended that the transaction is hit by the Benami Transactions (Prohibition) Act, 1988 (Act 45 of 1988) (hereinafter referred to as ''Act 45 of 1988'') and hence the Court cannot raise the attachment.

Considering the various aspects and questions of law, the trial Court has allowed the claim petition and raised the attachment. As already stated, aggrieved by the order of the trial Court, the present appeal has been filed.

Sri M. Venkata Subbha Rao, the learned Counsel appearing for the appellant-bank has contended that no evidence has been placed before the trial Court to show that the consideration amount has passed from her husband and he cannot claim the benefit out of this transaction. He has also contended that the transaction is hit by the provisions of Act 45 of 1988. According to his submission, u/s 3(2) of Act 45 of 1988 it has to be presumed that the sale transaction was for the benefit of the wife. He placed strong reliance on the decision of the Supreme Court reported in Nand Kishore Mehra Vs. Sushil Mehra, . Their Lordships of the Supreme Court in that case has clearly laid down that the Benami Transactions (Prohibition) Act, 1988 is not applicable to the purchase of property by a person in the name of his wife or unmarried daughter. Their Lordships have also held that he has to prove that the said property has not been purchased for their benefit. In the instant case the claimant-petitioner has established that the property was purchased under Ex.Al dated 20-2-1967 long prior to the filing of the suit. Further, the petitioner-claimant also filed Exs.A4 to A17 and A34, which are statements submitted by the petitioner to his superior authority as required under the service conditions. At this juncture it is necessary to note that the earliest judgment of the Supreme Court on this subject reported in Mithilesh Kumar and Another Vs. Prem Behari Khare, , lias been overruled by the subsequent judgment of the Supreme Court reported in R. Rajagopal Reddy (dead) by L.Rs. and others Vs. Padmini Chandrasekharan (dead) by L.Rs., . In this case the Supreme Court has clearly observed as follows :

"The Preamble of the Act Itself states that it is an Act to prohibit benami transactions and the right to recover property held benami, for matters connected therewith or incidental thereto. Thus it was enacted to efface the then existing rights of the real owners of properties held by others benami. Such an act was not given any retrospective effect by the Legislature. Section 4 is not retrospective. A mere look at the provisions in sub-section of Section 3 also shows that the prohibition u/s 3(1) is against persons who are to enter into benami transactions and it has laid down that no person shall enter into any benami transaction which obviously means from the date on which this prohibition comes into operation i.e., with effect from September 5, 1988. That takes care of further benami transactions. Sub-section (3) of Section 3 also throws light on this aspect. It states that whoever enters into any benami transaction shall be punishable with imprisonment for a term which may extent to three years or with fine or with both. Therefore, the provision creates a new offence of entering into such benami transactions. It is made non-cognizable and bailable as laid down under sub-section (4). It is obvious that when a statutory provision creates new liability and new offence, it would naturally have prospective operation and would cover only those offences which take place after Section 3(1) comes into operation."

In view of the well settled legal proposition laid down by the Supreme Court in R. Rajagopal Reddy v, P. Chcmdrasekharan (supra), I am unable to agree with the contention raised by the learned Counsel for the appellant-bank. The appeal is devoid of merits and is liable to be dismissed. It is accordingly dismissed. There will be no order as to costs.