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Ganesa Naicken Vs. Arumugha Naicken - Court Judgment

LegalCrystal Citation
SubjectContract;Property
CourtChennai High Court
Decided On
Case NumberSecond Appeal Nos. 566 and 567 of 1949
Judge
Reported inAIR1954Mad811; (1954)IIMLJ35
ActsTrusts Act, 1882 - Sections 82; Contract Act, 1872 - Sections 23
AppellantGanesa Naicken
RespondentArumugha Naicken
Appellant AdvocateS. Ramanathan, Adv.
Respondent AdvocateG.R. Jagadeesa Iyer, Adv.
Cases ReferredManiram v. Furushotham
Excerpt:
indian trusts act (ii of 1882), section 82--doctrine of benami-- free darkhast grant of house-site by government to b-- suit by a against b for declaration of title alleging that b was only his benamidar--indian contract act (ix of 1872), sections 10, 23--agreement between a and b--opposed to public policy--not enforceable;a, apprehending that, if he himself mad a darkhast to government for the free grant of a house-site, it would not be granted, made b, his brother-in-law, apply for it and it was granted on condition that he should not alienate it without the consent of the tahsildar. a then built a house and sunk a well on the site. on a suing b for a declaration of his title to the land alleging that b was only his benamidar,;held: there was no scope for the application to such a case..........further held that the respondent would be entitled to a charge on the appellant's interest in the suit property in the sum of rs. 1,000 representing the moneys spent by him, the respondent, for the construction of the house.4. the learned district munsifs conclusion was based on his finding that the respondent could not be permitted to set up a case which really amounted to having played a fraud on the government in putting the appellant as a mere namelender and obtaining a grant on false representation.5. there were two appeals against this decision of the learned district munsif one by the plaintiff, in so far as the decision as regards title to the site was concerned. the other appeal was by the defendant against the direction of the munsif in respect of the sum of rs. 1000 which,.....
Judgment:
1. These two appeals arise out of a suit filed by the respondent for a declaration of his title to the property described in the plaint schedule consisting of a site in Rayappapuram in the town of Tiruppur and the superstructure thereon.

The case of the respondent as set out in the plaint was that in the year 1925 he had submitted a petition to the Government to obtain a sale of a vacant site in Hemingway Street in Tiruppur and that while that petition was pending he came to know that vacant sites would foe granted by Government on dharkhast in Rayappapuram and, apprehending that if he put in an application for one of such vacant sites he might not be granted any site, because he had already applied for a site in Hemingway Street, he made the appellant, who was a son of his sister and also his brother-in-law apply for a site in Rayappapuram, that eventually a site was granted on dharkhast to the appellant in December 1931, that subsequently he sunk a well and constructed a house with his own moneys and ever since he was in possession and enjoyment of the property paying the municipal taxes, etc., in respect of it, that at no time did the appellant possess or enjoy the property, that it was only sometime before the institution of the suit that the defendant attempted to set up title in himself, that though the grant was in the name of the appellant, it was he, the plaintiff, who was entitled to the site as the appellant was only a benamidar for him and it was, therefore, necessary that the court should declare his title to the property.

2. The appellant denied that the application made by him for the grant of a site was on behalf, and for the benefit, of the respondent. He also denied that the well was dug and the house was built with the funds of the respondent. He stated that he incurred the expenses for them. He further alleged that the respondent on account of his intimate relationship was managing the property on his behalf but he had no title to the property. A few months prior to the suit, the appellant approached him with a request to sell the house for Rs. 1,000 and even prepared the sale deed to be executed by him but he would not agree to sell the house and the suit was really an attempt on the part of the respondent to obtain the property unlawfully. This was the case of the appellant.

3. The learned District Munsif of Tiruppur who tried the suit held that the site belonged to the defendant appellant but that the house was built by the plaintiff-respondent at his own costs. He further held that the respondent would be entitled to a charge on the appellant's interest in the suit property in the sum of Rs. 1,000 representing the moneys spent by him, the respondent, for the construction of the house.

4. The learned District Munsifs conclusion was based on his finding that the respondent could not be permitted to set up a case which really amounted to having played a fraud on the Government in putting the appellant as a mere namelender and obtaining a grant on false representation.

5. There were two appeals against this decision of the learned District Munsif one by the plaintiff, in so far as the decision as regards title to the site was concerned. The other appeal was by the defendant against the direction of the Munsif in respect of the sum of Rs. 1000 which, according to his finding, was the amount spent by the plaintiff for the construction of the house.

6. The learned Subordinate Judge agreed with the learned District Munsif that it was the plaintiff-respondent who dug the well and built the house with his own funds but came to a different conclusion on the question of title to the site. He took the view that the dharkhast application by the appellant was really benami for the respondent, and, therefore the acquisition of the site by the appellant was also for the benefit of the respondent. He therefore held that the respondent had acquired title to the suit site. In the result he allowed the appeal of the plaintiff and dismissed the appeal of the defendant. The defendant filed two second appeals to this court evidently because of the two decrees passed in the two appeals in the lower appellate court.

7. So far as the well and the house are concerned, there were concurrent findings of fact that it was the plaintiff-respondent who expended the moneys for them. This is binding on us in second appeal.

8. The question as regards title to the site raises an interesting question which appears to be bereft of authority. The plaintiff's case, already set out above, is that though it was the defendant who made the actual application for the grant of the site on dharkhast and though the grant was to him, it must be deemed to have been a grant to him, the plaintiff. The defendant has been described as the plaintiff's bena-midar.

9. Though the defendant has been described as a benamidar and the transaction of the acquisition of the site as a benami transaction it is clear that the description is not justified in law. The nature of a benami transaction has been described by the Judicial Committee of the Privy Council in -- 'Gumarayan v. Sheolal Singn', AIR 1918 PC 140 at p. 143 (A) thus:

"The system of acquiring and holding property and even of carrying on business in names other than those of the real owners, usually called the benami system, is and has been a common practice in the country ....... The rule applicable to benami transactions was stated with considerable distinctness in a judgment of this Board delivered by Sir George Farwell (-- 'Eilas Kunwar v. Desraj Ranjit Singh', AIR 1915 PC 96 (B)). Referring to a benami dealing, their Lordships say: 'It is quite unobjectionable and has a curious resemblance to the doctrine of our English law that the trust of the legal estate results to the man who pays the purchase money, and this again follows the analogy of our common law that where a feoffment is made without consideration the use results to the feoffer.' So long, therefore, as a benami transaction does not contravene the provisions of the law the courts are bound to give it effect. As already observed the benamidar has no beneficial interest in the property or business that stands in his name; he represents, in fact the real owner, and so far as their relative legal position is concerned, he is a mere trustee for him ......."

The principle underlying benami transactions is embodied in Section 82, Trusts Act. Now, obviously, In this case, there is no scope for the application of this doctrine. The grant on dharkhast by the Government was not made for any consideration; it was a free grant. It is not a case where the plaintiff supplied the consideration for the acquisition of the site. There is therefore no kind of trust in this case.

10. Is there then any other legal basis for the plaintiff's claim? For unless the plaintiff is able to establish that the defendant is under a legal liability to hold the property for his benefit and unless the plaintiff is able to establish that the beneficial title vests in him, he is not entitled to succeed. Mr. Jagadeesa Aiyar who appeared for the plaintiff-respondent was unable to put forward any legal basis for the plaintiff's claim. It could not lie in contract because there was no consideration even assuming that one could assume an agreement between the plaintiff and the defendant that the defendant when he obtained the grant should hold it for the benefit of the plaintiff. In our opinion, even if there had been some consideration for an agreement of this sort, this court would not enforce such an agreement because it would be opposed to public policy.

11. The dharkhast grant is in the nature of a gift by the Government. It is intended to be personal to the grantee. That is why there is a specific provision in the grant that the property shall not be alienated without the consent of the tahsildar (vide Ex. A. 1). Any contract which has the effect of circumventing this policy of the Government would, in our opinion, be opposed to public policy. It can well be imagined that serious and disastrous consequences might ensue if we were to uphold the plea of the plaintiff-respondent that there could be benami acquisitions of sites on dharkhast. Government may in accordance with their avowed policy grant sites on dharkhast to Harijans or members of scheduled castes. If the respondent's plea were to be accepted, a rich exploiter could make the members of the privileged classes apply for grants of Bites and subsequently set up his own title to them on the ground that the applicants were only his "benamidars" or namelenders. That would be completely destroying the object of the Government.

12. When there is a specific provision in the grant that there should be no alienation without the consent of the Tahsildar, by declaring the plaintiff's title we would in effect be circumventing that provision.

13. There is also another way of looking at the transaction. The plaintiff says that he apprehended that if he himself applied, he would not have been granted a site, and, therefore, he set up some one else to apply for a site with the intention of appropriating that site to himself. This would in a way also amount to playing a fraud on the Government, The decision in -- 'Maniram v. Furushotham', AIR 1930 All 732 (C) is a case in which a like attempt by a person to obtain a railway contract for his own benefit was not allowed to succeed.

14. We therefore hold that the plaintiff-respondent cannot be granted a declaration that he has title to the suit site. As the prayer in the plaint was for a declaration of his title to the property which comprised both the site and the house, the suit cannot be decreed as prayed for by him. There will only be a declaration that the plaintiff-respondent is entitled to the well and the house on the suit site. The suit will otherwise be dismissed. We do not think that on the plaint as framed, the court should declare in favour of the plaintiff a charge on the defendant's interest with regard to the amount expended by the plaintiff on the well and the house.

15. The second appeals are allowed to the extent above indicated and there will be a decree embodying the result of the judgment. There will be no order as to costs in both the appeals.


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