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Delhi High CourtIndian Cases

S.C. Mehta And Ors. vs P.K. Wadhwa And Ors. on 12 November 2003

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Delhi High Court
S.C. Mehta And Ors. vs P.K. Wadhwa And Ors. on 12 November, 2003
Equivalent citations: 2004IAD(DELHI)110, AIR2004DELHI132, 108(2003)DLT90, 2003(71)DRJ773, AIR 2004 DELHI 132, (2004) 15 ALLINDCAS 454 (DEL), 2004 (15) ALLINDCAS 454, (2004) 182 TAXATION 674, (2004) 135 TAXMAN 402, (2004) 2 RECCIVR 435, (2004) 2 CIVLJ 87, (2003) 108 DLT 90
Author: R.C. Chopra
Bench: R.C. Chopra
JUDGMENT

R.C. Chopra, J.

1. This application under Order 47 Rule 1 read with Section 151 of the Code of Civil Procedure (hereinafter referred to as “the Code” only) has been moved by the Objector M/s Endure Capital Private Limited for review of the orders dated 7th January, 2003 passed by this Court. The application is opposed by the Decree Holder.

2. The facts relevant for the disposal of this application, briefly stated, are that the Decree Holder, in execution of a money decree against the judgment Debtor, has obtained attachment of the second floor of property No.A-190, Inder Puri, New Delhi. The objector filed an application under Order 21 Rule 58 read with Section 151 of the Code pleading that it is the owner of the said property by virtue of a Sale Deed dated 7.9.1995 and as such, the said flat is not liable to be attached in execution of the decree against the judgment Debtor. According to the objector, the judgment Debtor is merely a lessee of the said flat and has no right, title or interest therein. However, according to the Decree Holder, the Sale Deed in favor of the objector is a sham and bogus document and in fact, the judgment Debtor is the real owner of the said property. The Decree Holder relied upon a deed of understanding between the judgment Debtor and the objector in terms of which the judgment Debtor had obtained a loan from the objector for the purchase of the said flat and only with a view to secure and safeguard the repayment of loan this Sale Deed was got executed in the name of the objector. The Decree Holder has pointed out that in the said Deed of Understanding, it was clearly stipulated between the judgment Debtor and the objector that for obtaining a loan of Rs.4 lacs from the objector, the judgment Debtor was agreeing that the Sale Deed of the flat be executed in favor of the objector as a security. A photocopy of the Deed of Understanding has been placed on record. By orders dated 7.1.2003 which are sought to be reviewed, this Court held that since the Deed of Understanding was being disputed by the objector and various questions of facts and law had been raised, which cannot be adjudicated without giving parties opportunity to lead evidence, the issues are to be framed on the objection petition filed by the objector and the question of attachment of the flat in question is to be decided after recording evidence.

3. Learned counsel for the applicant seeks review of the order dated 7th January, 2003 on the ground that the application filed by the objector for withdrawing attachment does not require any evidence as the plea raised by Decree Holder is barred by Section 4 of the Benami Transactions (Prohibition) Act, 1988 (hereinafter referred to as “the Act” only) which prohibits an action to recover any property held benami. Learned counsel for the Decree Holder has opposed this application firstly on the ground that the application for review is not maintainable and secondly on the ground that the plea raised by the Decree Holder is not hit by Section 4 of the Act. He argues that the Decree Holder is not claiming to be the real owner of the suit property nor he is raising any defense in respect of any property held benami but his plea is that the Sale Deed in favor of the objector is a sham and bogus document and the judgment Debtor is the real owner of the flat in question.

4. I have heard learned counsel for the applicant/objector and learned counsel for the Decree Holder as well as judgment Debtor. I have gone through the records.

5. Before adverting to the merits of the application, it would be fruitful to refer to Section 4 of the Benami Transactions (Prohibition) Act, 1988 which reads as under :-

“4. Prohibition of the right to recover property held benami. – (1) No suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property.
(2) No defense 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.
(3) Nothing in this section shall apply, –
(a) where the person in whose name the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of the coparceners in the family; or
(b) where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity, and the property is held for the benefit of another person for whom he is a trustee or towards whom he stands in such capacity.”
6. After going through this Section and the judgments reported in “Sree Meenakshi Mills Ltd. Vs. I.T.Commissioner” , “Ouseph Chacko and Anr. Vs. Raman Nair Raghaban Nair” and “Gopal Bariha Vs. Satyanarayan Das & Ors.” , this Court is of the considered view that the plea of attachment of the flat in question being raised by the Decree Holder is not hit by Section 4 of the Act for the reason that the Decree Holder is not claiming to be the real owner of the property in question as referred to in Clause (1) of Section 4 nor is raising any defense based on any right in respect of the property held benami as detailed in Clause (2) thereof. The Decree Holder is merely raising a plea that the Sale Deed in favor of the objector is a sham and bogus document which was created with a view to provide security for the loan advanced by the objector to the judgment Debtor and as such, the objector is not the real and true owner of the flat in question. It is true that Section 92 of the Evidence Act excludes oral evidence contrary to the terms of a written contract but it does not preclude a party from establishing that a written contract is not a genuine document but only a device to cloak the real transaction. The right of a party to seek a declaration from a Court that a document is fictitious, sham and bogus and was not intended to be acted upon cannot be taken away by Section 4 of the Act unless the conditions laid therein are fulfillled. Since the Decree Holder in this case is not falling within the categories of the persons described in Clauses (1) and (2) of Section 4 of the Act, it cannot be said that the plea raised by him is barred and cannot be put to trial even. Section 53 of the Transfer of Property Act also permits a Decree Holder to seek a declaration that a transfer is fraudulent and a fraud on the creditors. In , a similar question was considered by a Division Bench and it was held that the prohibition under Section 4 of the Act does not prohibit the right of a third party to get a Sale Deed declared a sham document and show that the real owner is someone else. The Division Bench categorically held that Section 4 of the Act prohibits action by someone claiming to be the real owner and challenging ostensible owner as a Benamidar but it does not prohibit a third party to get a declaration that someone is the real owner and the ostensible owner is merely a Benamidar.

7. This Court, therefore, is of the considered view that plea of the objector for review of the orders dated 7th January, 2003 cannot be allowed as Section 4 of the Act is not attracted to the controversy between the Decree Holder and the objector. This Court has not so far given any finding on the application of the objector for release of the attachment and has merely directed the objections to be tried and disposed of after recording evidence. The objector may raise this plea at the stage of final disposal of its objections and as such, there are no good grounds for the review of the order as prayed.

8. This Court need not go into the question as to whether the review application is maintainable or not.

The application is accordingly dismissed.