Chandra Reddy, C.J.
(1) The question to be answered by the Full Bench is whether a suit on the allegation that the defendant had purchased property in his own name at a court auction for the benefit of the plaintiff at a time when he was acting as the agent of the plaintiff would fall within the scope and ambit of Section 66, C.P.C.
(2) The facts necessary for the purpose of this enquiry may be briefly narrated. The plaintiff's father died, in the year 1931 leaving debts and some immoveable property. The plaintiff was at that time a minor. His mother who was illiterate found herself unequal to the task of managing the properties and sought the assistance of the defendant to manage the properties and to discharge the debts. He assumed management in 1931 which continued till 1940. The defendant persuaded all the creditors except one to give remission and also arranged for the sale of some of the properties to discharge the debts by name Lakshmamma, who was not willing to give up any part of her claim filed O. S. No. 798 of 1932, obtained a decree and brought the properties in dispute to sale in execution of the decree. They were purchased by the defendant in his own name for the benefit of the plaintiff and with the funds furnished by the plaintiff's mother.
(3) The suit was resisted mainly on the defence the Section 66, C.P.C. was a bar to it. It was decreed by the Trail Court and was affirmed on appeal by the District Judge. The Second Appeal carried by the defendant was heard by Ramaswamy Gounder, J. He passed an order of remand directing the appellate Judge to record fresh findings on certain points and, while doing so, he observed:
'Of course, if it is proved by the plaintiff that in purchasing these properties in Court sale the defendant functioned as his manager or agent and also employed his moneys for that purpose, then subject to a decision of the question arising under Sec. 66, Civil Procedure Code, the plaintiff would be entitled to succeed.'
(4) On remand, the District Judge, who heard the appeal, decided all the points in favour of the respondent and confirmed the judgment of the trial court. A second appeal was again filed against the judgment.
(5) This was heard by Bhimasankaram, J. who dismissed the appeal accepting the contention of the respondent that Sec. 66, C. P. C. did not stand in the way of the plaintiff's suit. He was of the opinion that the instant case was governed by the rulings of the Madras High Court reported in Sankunni Nayar v. Varaayanan Nambudri, ILR 17 Mad 282 and Patrachariar v. Ramaswami Chettiar, 9 Mad LW 276: (AIR 1919 Mad 942) which, under similar circumstances decided that the suit was not opposed to Sec. 66, C. P. C. However, the learned Judge granted leave under Clause 15 of the Letters Patent. When the appeal came up for hearing before a Bench of this Court, it was referred to a Full Bench, as it was represented by counsel on either side that there was a conflict between the rulings relied on by Bhimasankaram, J. and some Bench decisions of the Madras High Court and other Courts.
(6) As the principal controversy centres round Sec. 66 C. P. C. it is convenient to quote it here. It consists of two parts and the 1st part declares:
'No suit shall be maintained against any person claiming title under a purchase certified by the Court in such manner as may be prescribed on the ground that the purchase was made on behalf of the plaintiff or on behalf of some one through whom the plaintiff claims'.
(7) Sub-section 92) recites:
'Nothing in this section shall bar a suit to obtain a declaration that the name of any purchaser certified as aforesaid was inserted in the certificate fraudulently or without the consent of the real purchaser, or interfere with the right of a third person to proceed against that property though ostensibly sold to the certified purchaser on the ground that it is liable to satisfy a claim of such third person against the real owner'.
(8) We shall fist interpret the section unfettered by judicial precedents. It is immediately plain that the section is widely worded and it literally construed, it would take in every claim based on benami purchase. Be it noted that the expression used is 'the purchase was made on behalf of the plaintiff or on behalf of some one through whom the plaintiff claims'. Thus, all cases of purchases made in a court auction on behalf of or on account of the plaintiff fall within the mischief of the section. This section does not exclude from its purview benami purchases made for the benefit of a plaintiff by a defendant in his own name who was already acting as the agent of the plaintiff. The capacity, which the defendant filled prior to the purchase, cannot enter the judicial verdict. The only test is whether the court auction purchase was made on behalf of the plaintiff or of some one to whom the plaintiff traces his title. In other words, if the suit is founded on the averment that the real purchaser was the plaintiff and the certified purchaser had no beneficial interest therein, Sec. 66, C. P. C. comes into operation.
This section is presumably based on public policy, the primary object being that the certified purchase should be conclusive and to prevent its being challenged. The purpose of this section is obviously to check the practice of judgment debtors making secret purchases in the names of their relations or friends at Court auctions. It is with this aim that the embargo was laid on a suit founded on the plea of benami. This does not render benami sales illegal or invalid but it only places a procedural bar to the enforceability of a claim that the plaintiff is the real owner and the auction purchaser was only a benamidar. If we limit the operation of this section to purchase made at execution sales by the defendant who acts as agent only for that transaction it will be defeating the very purpose of this section while we will be giving effect to the legislative intent if we construe it as covering all cases of benami sales irrespective of whether the certified purchaser acted as the agent of the plaintiff only in regard to that sale or was occupying that position even before. Considering the nature and the design of the rule enacted by this section, we have to hold that it was intended to include all categories of benami transactions unless they are saved by sub-section (2).
(9) This doctrine is embodied in some of the decided cases. This view of ours gains support form a reference to Sec. 82 of the Indian Trusts Act. That section reads:
'Where property is transferred to one person for a consideration paid or provided by another person, and it appears that such other person did not intend to pay or provide such consideration for the benefit of the transferee, must hold the property for the benefit of the person paying or providing the consideration
Nothing in this section shall be deemed to affect the Code of Civil Procedure, Section 317 or Act XI of 1859 (to improve the law relating to sales of land for arrears of revenue in the lower Provinces under the Bengal Presidency), Section 36'.
(10) It is plain that this section gives statutory recognition to benami transactions i.e., putting property in false names. It is equally clear from this section that these transactions are subject to the operation of Section 317, which corresponds to Sec. 66 C.P.C. To put it differently, such purchases do not fall outside the sweep of Sec. 66. Section 82 is comprehensive enough to include all sales of a benami nature i.e., purchases made by one person in his own name for the benefit of another and is not limited to purchases by a person employed by another only for that purpose, and it leaves unaffected the operation of Section 66.
(11) We will begin with Kamurudeen Sahib v. Noor Mahomed Usman Sahib, 28 Mad LJ 251: (AIR 1916 Mad 657 (3)). There, the predecessor-in-interest of the plaintiff purchased the plaint properties at a Court auction held in execution of a decree against him in the name of another with a view to defraud his creditors and on the understanding that the purchaser should be the trustee of property for himself and make over all the profits to him till such time as he could safely take actual possession. Shortly after the sale was confirmed, the plaintiff brought a suit for recovery of possession of the property on the recital that the real purchaser was his predecessor-in-interest and that the Court auction purchaser was a mere name-lender. The suit was dismissed by the Courts below being of the opinion that, by reason of Sec. 66 C.P.C. the suit was not maintainable.
This was affirmed in second appeal by a Bench consisting of Sadasiva Aiyar and Tyabji, JJ. It was laid down by them that the plaintiff could not make out the purchase to be a benami one by virtue of the interposition of the statutory bar raised by Sec. 66 C.P.C. and that the Court auction purchase should be regarded as an operative conveyance in favour of the purchaser notwithstanding that the plaintiff was the real purchaser. A similar view was taken by the same High Court in Subramaniam Pillai v. Subramania Aiyar, 29 Ind Cas 138: (AIR 1916 Mad 1156).
(12) Affirmation of this rule is to be found in Suraj Naraij v. Ratan Lal, ILRr 40 All 159: (AIR 1917 PC 12). There, the properties were purchased at a court auction in the name of the son-in-law of one of the members of a joint Hindu family. A suit to recover the property from the auction purchaser by the other members of the family was dismissed on the ground that the defendant could resist it on the basis of Sec. 317. The dismissal was affirmed by the Privy Council with the observation that the claim to the properties by the appellant was defeated by Section 317.
(13) Another illustration of this principle is Baijnath Das v. Bishen Devi, ILR 43 All 711: (AIR 1921 All 185). In that case, the property in dispute was bought at an auction held in execution of a decree by the father of a joint Hindu family benami in the name of his wife. After the death of the father one of the sons instituted a suit for a declaration that the property so purchased was joint family property. The defence of the auction-purchaser that the suit could not be sustained by reason of Sec.k 66 C.P.C. was upheld as she was not a member of the joint family.
(14) Yet another instance of this doctrine is contained in Balaram v. Naktu, 54 Mad LJ 462: (AIR 1928 PC 75), where the Judicial Committee of the Privy Council decided that a certified purchaser could take shelter under Sec. 66 C.P.C. in a suit for a declaration that the purchase in question was for the benefit of the plaintiff. The property in suit was knocked down in favour of one Nakthu for a certain sum of money. The sale was confirmed and a sale certificate issued to him. Some time thereafter, one Bhika filed a suit against Nakthu and his sons averring that he was the real purchaser, he having found the purchase money, that the defendant was only his agent in that behalf and that the defendant had not carried out his promise to convey the property to him whenever asked to do so. Their Lordships ruled that the claim to enforce the alleged agreement should fail as Sec. 66 C.P.C. applied to the case.
(15) An illuminating discussion on this subject, which has collected the leading cases on the different aspects of this matter is reported in Bishan Dayal v. Kesho Prasad, ILR (1937) All 113: (AIR 1937 All 176). The plaintiff sued for possession of a half share in certain properties purchased by the defendant in an auction sale in execution of a decree. The averments in the plaint were that the bid at the court auction was made by the defendant on account of both of them and consequently the plaintiff was entitled to half it. Chief Justice Sulaiman and Bajpai, J. held that the suit was opposed to Sec. 66 C.P.C. and should therefore fail. The learned Judges distinguished cases which dealt with sales by a member of joint family or by one of joint decree-holders on the ground that the claims were not based on private agreements. This was affirmed by the Privy Council in Bishun Dayal v. Kesho Prasad, AIR 1940 PC 202.
(16) We may lastly refer to Suryanarayana v. Venkata Subba Rao, : AIR1951Mad943 . Here also, the plaintiff founded his suit on the allegation that the plaint properties were purchased in the name of the defendant for the benefit of the plaintiff, that the defendant executed an agreement to convey this property to him and that, in spite of it, he failed to carry out his agreement. In order to get over the difficulty created by Section 66, the suit was framed as one for specific performance of that contract. The defence, that Section 66 was attracted to that case, prevailed with Chief Justice Rajamannar and Somasundaram, J. notwithstanding the fact that the suit was based upon an alleged agreement. It was held that the alleged contract could not make any difference since the plaintiff's title ultimately defended upon the benami nature of the transaction.
(17) It was urged by Sri Krishna Rao, counsel for the respondent, that the principles enshrined in Section 82 of the Indian Trusts Act or in the above-mentioned rulings are inapplicable to case like the present, i.e., where the certified purchaser was acting as agent of the plaintiff even prior to the purchase of the property in dispute but is governed by Section 88 of the cases cited by him, which will be noticed presently.
(18) Before we advert to the decisions called in aid by him, we shall discuss the applicability of Section 88 of the Trusts Act. That section recites
'Where a trustee, executor, partner, agent, director of a company, legal adviser or other person bound in a fiduciary character to protect the interests of another person, by availing himself of his character, gains for himself any pecuniary advantage, or where any person so bound enters into any dealings under circumstances in which his own interests are, or may be, adverse to those of such other person and thereby gains for himself a pecuniary advantage, he must hold for the benefit of such other person the advantage so gained'.
(19) The language of this section indicates that it comes into play only where the persons contemplated by that section buy some property for themselves or gain any other advantage by making use of their fiduciary position and that could enure for the benefit of the beneficiary. This section envisages a fiduciary acquiring property for himself; in other words, he is the real purchaser and not a benamidar. It does not cover benami purchases. It a case where a trustee or an executor or a partner or other person holding a fiduciary relationship acts in a manner inconsistent with the fiduciary duty, he cannot retain the advantage acquired by him in violation of the interests of the other and the law compels him to hold it for the other person. There is thus a radical difference between Section 82 and Section 88 in that in the latter case a fiduciary buys the property or acquires the advantage for himself and not for the benefit of the other person. Therefore, Section 88 of the Trusts Act does not render any assistance to the respondent.
(20) We shall now turn to the cases relied on by the respondent. In ILR 17 Mad 282, the property was purchased by one Raman Nambiar as manager or agent on behalf of the plaintiff, who was a minor and also the execution debtor, the purchase money having been advanced by the certified purchaser on the understanding that it was to be repaid. Raman Nambiar acknowledged himself as the manager or agent and acted as such. The market value of the land was very much higher than that for which it was bought at the sale and Raman Nambiar at the time of the sale dissuaded the other bidders from taking part in the auction, representing that he was buying the land for the use of the auction debtor's illom. He continued to be the agent till his death and after him the 1st defendant was the agent until the date of the controversy which resulted in the litigation. In those circumstances, it was held by Muttusami Ayyar and Best, JJ. that the transaction was not a mere benami purchase and therefore Section 317 C.P.C. was not a bar to the suit. Much reliance is placed by Mr. Krishna Rao, on the observations of Muthusami Ayyar, J. occurring at p. 286 of the report:
'But it is also found that Raman Nambiar was, at the time of the Court sale, managing the affairs of respondent's illom as its agent, and that he bought the lands as such, though he advanced the purchase money on the understanding that he was to be repaid ..............It is also found that Raman Nambiar continued to be the agent of the illom till his death, and that after him, the 1st defendant was agent till the date of the controversy which resulted in this litigation. Until 1889, the kanom originally granted by the illom was outstanding and it does not appear that Raman Nabiar ever asserted his title to the land in dispute, or that the 1st defendant asserted the right of his toward to it prior to 1889. Under these circumstances, I consider that the decision of the courts below can be supported on the ground that Raman Nambiar bought the land as agent of plaintiff's illom subject to a charge in his favour for the amount advanced by him and that until 1889, the land was treated as the property of the illom; otherwise an agent would be enabled to make a profit out of his principal's property, which he intended to deal with as agent, and continued to do so till 1889, and thereby to turn the understanding on which his name was inserted in the certificate and the land was since held into a means of perpetrating fraud on his principal'.
(21) On the basis of the above remarks, it was argued on behalf of the respondent by Sri Krishna Rao that if the certified purchaser was already holding the position of an agent of the real owner, the purchase fall outside the pale of Section 66. It is not clear from the passage cited above whether the learned Judges though that the conduct of the auction purchaser amounted to fresh acts which had the effect of creating a new title in plaintiff's favour by way of transfer or whether it fell under the class of suits excepted in Section 66(2) C.P.C. corresponding to second paragraph of Section 317. In 28 Mad LJ 251: (AIR 1916 Mad 657 (3)) Tyabji, J. thought that ILR 17 Mad 282 would 'now apparently fall under the first or the second or the third class of suits excepted in Sec. 66(2)'. It is also pertinent to note that Sec. 317 was confined to a certified purchaser where as Section 66 widens the scope of that rule by extending it to all persons tracing their title to the orginal certified purchaser but in other respects there is no material alteration of law. in this case, the suit was not against his successor.
We must observe in passing that the subsequent conduct would not take the case out of the scope of Sec. 317 but that would only be useful as proof of the nature of the transaction. But the decision does not seem to have been rested on that ground. If the learned judges who decided ILR 17 Mad 282 intended to lay down that if the certified purchaser wa acting as the agent of the plaintiff even before the purchase in question and if the statutory bar created by Sec. 66 would not avail the defendant, we must demur to the pro-position and express our respectful dissent from it. In our judgement, Section 66 C.P.C. does not recognise any such distincion. The only criterion in judging whether Section 66 operates as a bar is whether Section 66 operates as a bar is whether the purchase was made on account of another person. It is immaterial what relations existed between the parties prior to the trasaction which culminated in the litigation.
(22) Another case, to which our attention was invited by the Counsel for the respondent, is Kumbalinga Pillai v. Ariaputra Padiachi, ILR 18 Mad 436. That was a suit to compel the defendant to execute in favour of the plaintiff a conveyance of certain land and deliver possession of the document or in the alternative to pay him a certain sum of money. The property as well as the sale certificate were in the possession of the plaintiff. In such a situation, Chief Justice Colins and Parker J. decided that it fell within the principles laid down in Monappa v. Surappa, ILR 11 Mad 234 and ILR 17 Mad 282. It may be mentioned that fell for decision. The learned Judges merely observed that it was governed by the two decisions. The criticism that we made in regard to ILR 17 Mad 282 applies with equal vigour to this case also and it is not necessary to common upon it seperately.
(23) Coming now to ILR 11 Mad 234, it was a case of a Court auction purchaser acknowledging that his purchae was benami and giving possession to the real puirchaser and doing acts clearly indicating an intention to waive his right and restoring the property to the real owner. Having regard to these facts, it was held that the antecedent relations of the parties, operated as a valid transfer of property and consequently Section 317 C.P.C did not defeat the right of the plaintiff. It may be mentioned that the property was purchased in 1876 and possession given immediately thereafter i.e., prior to the passing of the Transfer of Property Act, 1882, which requires a deed of transfer to create little in a person if the property exceeds a certain value. It is pertinent to note here what the learned Judge said.
'.......... benami purchases are not made illegal though the real purchaser is disabled from maintaining a suit against the certified purchaser at an auction sale in execution of a decree on the sole ground that he was only a benamidar.' The reason of the rule there was that the property having been restored to the real owner, a fresh act reason of the antecedent relations operated as a valid transfer of property. Therefore, ILR 11 Mad 234 does not lend any resistance to the respondents.
(24) There is another ruling of the Madras High Court to which we were referred i.e., 9 Mad LW 276 : (AIR 1919 Mad 942) and which followed ILR 17 Mad 282. The facts there were similar to those in ILR 17 Mad 282. Here again, there is no independent consideration of the question bearing on Section 317 C.P.C. After noticing Ganga Sahai v. Kesari, ILR 37 All 545: (AIR 1915 PC 81) and Bodh Sing Doordhooria v. Gunesh Chunder Sen, 12 Beng LR 317 (PC) the learned Judges observed.
'The result of the decision seems to be that if the plaintiff does not seek relief merely on the ground that the certified purchaser was a name lender, but relies upon a certain state of facts as establishing cetain other kinds of legal relations between himself and the certified purchaser which entitle him to rely on those relations as involving and creating effectual legal claims in favour of the plaintiff over the property purchased, he could rely on such facts and circumstances in support of his legal claims.'
We must observe that ILR 37 All 545: (AIR 1915 PC 81) & 12 Beng LR 317 (PC) stand on a different footing in that the plaintiffs therein claimed a right to a share in the properties by operation of law and not by any agreement and there was no question in those cases of thecertified purchaser not being the real purchaser. In another cantext we will have occasion to deal with them and show that the doctrine of those cases did not govern a case like the one before the learned Judges. As regards ILR 17 Mad 282, we have earlier dealt with it and it is not necessary to say anything here again. Suffice it to say that we cannot subscibe to the proposition enunciated in 9 Mad LW 276: (AIR 1919 Mad 942). The fact that the defendant was the paid agent of the plaintiff before the made the purchase in his name on account of the plaintiff would not create effectual legal claims in favour of the latter over property to defeat the provisions of Section 66 C.P.C.
(25) There remain groups of cases dealing with claims to a share in the properties acquired either by the manager of a joint Hindu family or by one of the partners or joint decree-holders or persons similarly situated. We shall refer to one or two leading cases under each head.
(26) At the forefront comes 12 Beng LR 317 (PC). That was a suit instituted by a member of a joint Hindu family to recover possession of properly alleged to belong to the joint estate purchased by the defendant at a sale in exectution of a decree against the estate of one member of the family only. Their Lordships of the Privy Council held that Section 260 of Act VIII of 1859 which corresponds to the present section 66, was not an obstruction to the recovery of the property as it would not effect the rights of member of a joint Hindu family who were entitled to treat as part of their common property an acquisition made by the member of the family in his sole name if made by the use of the family funds. Thus, the right was acquired by operation of law and not by virtue of any private agreement. It was remarked there that the provisions of the section were designed to check the practice of making what were known as benami purchases at auction sales. It is not necessary to make a detailed reference to them.
(27) ILR 37 All 545: (AIR 1915 PC 81) is an instance of a claim by the heirs of one of the decree holders to a share in the property purchased by the other joint decree-holder. One of the three joint decree-holder of a mortage decree took out execution under Section 231 of the old Code stating that the other decree-holder had died and praying that the execution might be subject to the rights of their heirs and representatives. On these representations, leave to bid at the sale was given to him and he purchased the property in his own name and got possession of it after getting the sale certificates. It was laid down by the Privy Council that Section 317 of the Code could not be used as a defence against the suit as the application of one of the joint decree holders was made under Section 231 with the allegation that it was obviously made for the benefit of the joint decree-holders. In that case, it was the money due under the joint decree that went towards the acquisition of the property. It would be seen that the claim was not based on the plea of benami purchase but on the ground that the plaintiffs had the same beneficial interest therein as the certified purchaser.
(28) Achhaibar Dubev. Tepasi Dube, ILR 29 All 557 is of the same category.
(29) Sri Krishna Rao next relied upon venkatappa v. Jalayya, ILR 42 Mad 615: (AIR 1919 Mad 94) (FB) and vadivelu Mudaliar v. Manicka Mudaliar, ILR 43 Mad 643: (AIR 1920 PC 30). But these cases have no parallel because the suits were filed for specific performance of agreements for conveyance of the property and they are not cases in which the certified purchase is attacked as being benami for the real owner. In fact, the distinction between the two cases is pointed out by their Lordships of the Privy Council in ILR 43 Mad 643: (AIR 1920 PC 30) in these words:
'The object of Secion 66 was to put an end to purchases by one person in the name of another; and the distinction between a purchase on behalf of another and a purchase coupled with an undertaking to convey to another at the price of purchase, is some what narrow.'
Thus, these two decision do not furnish any analogy here. It is seen that the ratio decidendi of all these rulings is inappicable to a case of benami purchase. In the former group of cases, the sale in question is not impeached as being for the benefit of another person, the court auction purchaser being merely a name lender. The right claimed by the plaintiff in the property in dispute is by operation of law and not by any agreement. The claim is founded on the basis of the certified purchaser being the real purchaser but the claim is based upon certain legal rights. That is thees ential distinction between those case as and those where the title of the auction purchaser is put in issue.
(30) What emerges from the above discussion and the rulings is that any suit founded upon the avertments that the auction purchase was not intended to benefit the purchaser, he being only a benamidar but the beneficial owner was the plaintiff, falls within the range of section 66 C.P.C. irrespective of the fact that the certified purchaser happened to be the agent of the plaintiff even before the particular transaction took place.
(31) For these reasons, we hold that the suit of the plaintiff must be dismissed and this appeal allowed with costs throughout.
(32) Appeal allowed.