1997(4) ALL MR 176
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
R.G. VAIDHYANATHA, J.
Parakkate Shankaran Keshavan Vs. T.A. Sukumaran
First Appeal No.16 of 1989
29th January, 1997
Petitioner Counsel: Mr. SHEKAR NAPHADE with Smt. LATA DESAI
Respondent Counsel: Shri. P.N.KULKARNI
(A) Specific Relief Act (1963), Ss.22, 34 - Suit for declaration of title and possession of taxi - Documents like registration certificate and insurance certificate and other documents in possession of defendant - Documents also produced in court by defendant - After keeping xerox copies of documents originals were returned to defendant - It can be held that the possession of taxi was with defendant - Finding of trial Court that defendant was owner of taxi though it was purchased in name of plaintiff was proper. (Paras 9, 10, 12)
(B) Contract Act (1872), S.23 - Motor Vehicles Act (1939), Ss.2(20) and 59 - Purchase of taxi by defendant in name of plaintiff to ply it under latter's permit - Permit referred to in section 59 does not apply to taxi permit - Prohibition under S.59 does not apply - transaction is not void - Even if it is held to be void contract plaintiff being party to void contract cannot claim any relief in court. (Para 15)
(C) Sale of Goods Act (1930), S.5 - Title to motor vehicle - Cannot be decided under provisions of Motor Vehicles Act - Has to be decided under provisions of Sale of Goods Act - Even if plaintiff is shown as registered owner it does not debar party from proving that it was benami transaction. (Para 17)
JUDGMENT :- This is a plaintiff's appeal against the judgment and decree dated 20-2-1989 in Short Cause Suit No. 5094/81 on the file of City Civil Court, Bombay. The appeal has been filed in Forma Pauperis. Heard both sides.
The Appellant is the owner of a car which ............... (Sic -ed.). The appellant purchased the car by taking a loan from Canara Bank. The appellant has repaid the loan amount. The taxi permit stands in the name of the plaintiff. The car was purchased for Rs.34,250/-. Since the plaintiff was short of funds, he took a loan of Rs.6,300/- from the defendant. The loan was to be repaid to the defendant at Rs.300/- per month and it was agreed that the defendant should keep an account of the taxi business. The plaintiff was repaying the instalments to the Canara Bank either by himself directly or through the defendant. The defendant had taken signatures of the plaintiff on some papers at the Esplanade Court stating that they are necessary for the loan given by him. The plaintiff was not told the contents of the documents. After purchasing the car, the plaintiff was running it as a taxi till September, 1979. He was ill for some time. Then he was running the taxi through one Mr. Madhukar Khatu. When subsequently the plaintiff wanted to run the taxi, the defendant had taken possession of the taxi and asserted that he himself is the owner of the same. He refused to give back his taxi. Hence, the plaintiff filed the suit praying for a declaration that he is the owner of the taxi and for possession of the same.
It is denied that the plaintiff purchased the taxi or plaintiff is owner of the taxi. On the other hand, it is stated that the defendant is the owner of the taxi having purchased the same from his funds. Though the loan was taken in the name of the plaintiff, the defendant has repaid the loan amount. The loan was taken in the name of the plaintiff and other documents pertaining to the car were taken in the name of the plaintiff, since the taxi permit stood in his name eversince taking possession of the car on 14-8-1978. The defendant has been in possession of the taxi and he has been running the taxi by paying tax, insurance charges and repairs etc. It is the defendant who has paid the loan instalments to the bank. That the defendant is in possession of the taxi as owner. The plaintiff's story that defendant advanced a loan of Rs.6,300/- for purchase of the taxi is denied. Hence, it is prayed that the suit be dismissed with costs.
(1) Whether the plaintiff proves that he is the owner of the said taxi.
(2) Whether the plaintiff proves that transaction between himself and Defendants is only transaction of advancing loan as alleged.
(3) Whether the plaintiff is entitled to a declaration as prayed for.
(4) Whether the plaintiff is entitled to possession of the said taxi from the defendant.
(5) What order ?
5. After recording evidence, the learned Trial Judge answered all the issues in the negative and against the plaintiff and dismissed the suit. Being aggrieved by the judgment of the trial Court, the original plaintiff has come up in appeal.
6. The learned Counsel for the Appellant has questioned the correctness and legality of the impugned judgment. It was argued that all the title documents regarding the car and the loan papers are in the name of the plaintiff and the plaintiff has proved that he is the real owner of the vehicle. That the finding of the trial Court on this point is erroneous. He also argued that the defendant has no right or title to the car in question. On the other hand, the learned Counsel for the Respondent contended that the defendant is the real owner and the plaintiff is only name lender or benamidar and that the plaintiff has no right over the suit car. The learned Counsel for the appellant also made an alternative argument that even if the defendant proves his case, about the contract alleged by him, it is void being contrary to law and being opposed to public policy and therefore, it cannot be countenanced or recognised by a Court of law.
(1) Whether the appellant/plaintiff is the owner of the suit car or whether the defendant is the real owner and plaintiff is only a benamidar regarding the suit car.
(2) Alternatively whether the contract pleaded by the defendant is void and unenforceable and hence he plaintiff continues to be the owner of the car.
(3) What order ?
8. In this case, admittedly the car stands in the name of plaintiff. The Registration certificate stands in the name of the plaintiff. The car is purchased in the name of the plaintiff. The bank loan is obtained in the name of the plaintiff. The learned Counsel for the appellant, therefore contended that the plaintiff should be declared as an owner of the car in question.
The defendant claims to be the real owner and pleads that the plaintiff is the Benamidar for him.
Benami transactions are well recognised in India. There are many reported cases where benami transactions have been upheld by the Courts in India. Suffice to refer to one of the decisions of the Apex Court relied on by the learned Counsel for the Respondent, which is reported in 1969(1) SCC 188 (K.M.Viswanatha Pillai V/s. K.M.Shanmugam Pillai). In fact that was also a case pertaining to ownership of motor vehicle. In para 11 of the reported judgment the Apex Court has observed as follows :-
"In India Benami Transactions are recognised and not frowned upon."
"We see nothing in the Act which expressly or by implication bars Benami transactions or person owning buses benami and applying for permits on that basis."
In Benami transactions, the points to be considered are the motive for the transaction, the custody of the title deeds, the payment of consideration and actual possession of the property in dispute. If, there is a plausible explanation as to why the documents are taken in the name of other party, and if a person setting out a benami theory is in possession of the title deeds, he is in possession of the property and has made payment of consideration then undoubtedly, it is a Benami transaction. Therefore, in the present case, we have to find out from the evidence on record, whether these points are made out by the Respondent.
9. Admittedly, the registration certificate, insurance certificate and other relevant documents pertaining to the ownership of the car were in possession of the defendant and produced by him before the Court. Though some of the documents like registration certificate, insurance certificate are marked as plaintiff's exhibits, it is an admitted fact that defendant was in possession of these documents. This, we could gather from Exh.13, which is a letter written by the plaintiff's advocate to the defendant's advocate dated 19-12-1981 during the pendency of the suit seeking these documents for the purpose of getting the permit renewal. Accordingly, the defendant gave those documents to the plaintiff who got the permit renewed and plaintiff himself produced them before the Court. It is also seen from the record that subsequently after keeping zerox copies, these original documents were returned to the defendant. Hence, we can safely hold that defendant was in possession of the title documents regarding the car like registration certificate, F.C.,I.C. etc.
10. Even the possession of the car on the date of suit was admittedly with the defendant. In fact, the suit is filed for possession of the car. The only explanation coming from the plaintiff is that during his illness he had given the car to one Madhukar Khatu for running the same and that when he wanted to take back the car, he came to know that defendant had taken possession of the car. The defendant's assertion is that he is in possession of the car eversince it was purchased, except for a short period when it was given to the plaintiff to drive as his driver.
There is oath against oath. Mr. Madhukar Khatu could not be examined, since he has died. There is no other evidence to prove the plaintiff's version that defendant had taken possession of the car wrongfully from Madhukar. The plaintiff has failed to prove the said allegation except his sole serving and interested assertion there is no other evidence to substantiate the plaintiff's version. Since the car is admittedly in the possession of the defendant on the date of suit, his version that he has been in possession of the car from the beginning appears to be more probable and reasonable. Therefore, we can safely hold that the possession of the car has been with the defendant.
11. Though the loan papers are in the name of the plaintiff, admittedly the instalments of loans were paid by the defendant. Even the Bank Manager P.W.2 Mr. K.B.Shenoy, though stated that the instalments of the loans were paid from the plaintiff's SB Account No.2900 later admitted that the amount to SB Account No.2900 was transferred from another SB Account No.2744 as per Exh.U. It is also in evidence that Account No.2744 pertains to defendant. That means, from the defendant's account, regularly instalment amounts were transferred to the plaintiff's SB Account and then from the Plaintiff's SB Account it is transferred to the loan amount. It clearly proves that the instalments were paid by the defendant by transferring the amount periodically from his account to the plaintiff's account and in turn to the loan account.
The only explanation in the evidence of the plaintiff is that he was giving Rs.1500/- to the defendant every month and he would in turn pay the instalments to the Bank. Except his assertion, which is denied by the defendant, there is no other evidence to corroborate the version of the plaintiff that he was paying Rs.1500/- to the defendant towards payment of instalments. Even, if we exclude the interested oral evidence of plaintiff and defendant, the documentary evidence clearly shows that the loan instalments were paid from the defendant's SB Account. Hence, we can conclude that the loan amount is discharged by the defendant and thereby the defendant has paid consideration amount for the purchase of the car.
12. The next and last point for the consideration is as to what is the motive or reason for purchasing the car in the name of the plaintiff, if really the defendant was the real owner. The learned Counsel for the Appellant commented that there is no contemporaneous document to show the circumstances under which the car was purchased Benami in the name of the plaintiff. It may be so. In most of the Benami transactions, there will be no contemporaneous documents. But Benami transaction can be proved by the four points, which I have already mentioned.
Admittedly, the plaintiff was a taxi driver. He was having a taxi permit. Defendant did not know driving at all. He was never running a taxi. One has to have a permit to run a taxi. Since, there was already a taxi permit in the name of the plaintiff, the defendant says that he purchased the car in the name of the plaintiff, so that the car can be run under the permit belonging to the plaintiff. No doubt, there is oath against oath on this point. But however, there is some material on record to corroborate the defendant's version.
The Bank Manager P.W.2 Mr. Shenoy has admitted in his cross-examination as follows :-
"As the permit was in the name of the plaintiff, we granted loan to him.........." Therefore, the bank would not have granted a loan, if defendant had applied for loan. The Bank granted the loan to the plaintiff since he was having a taxi permit. Therefore, the version of the defendant that the car was purchased in the name of the plaintiff, since the permit was standing in his name is more probable and plausible in the circumstances of the case. This is further strengethened by the fact that the plaintiff himself has given power of attorney and affidavit and also an agreement in favour of the defendant almost conceding that the defendant is the owner of the car and he can run the car and these documents are collectively marked as Exh.2.
The learned Trial Court has considered the evidence of the plaintiff and his witness and the defendant and his witness and the relevant documents and has rightly come to the conclusion that the defendant is the real owner and the plaintiff was only a name lender or a Benamidar. In my view the finding of the trial Court on this point does not suffer from any illegality or infirmity. After reappreciating the evidence, I agree with the finding of the trial court that that the defendant is the real owner of the car in question though it was purchased in the name of the plaintiff. Point No.1 is answered accordingly.
13. The learned Counsel for the Appellant contended that the defendant is pleading that he purchased the car in order to make use of the permit standing in the name of the plaintiff and thereby he is claiming a right over permit standing in the name of the plaintiff without taking permission of the R.T.O. and thereby this contract pleaded by him is void and opposed to Section 59 of the Motor Vehicles Act, 1939 and hence, the contract is unenforceable. It is true that from the pleadings and the evidence, we find that the parties have entered into this contract of defendant purchasing the car in the name of the plaintiff in order to make use of the permit, which was standing in the name of the plaintiff. Let us for a moment hold that such a contract is bad in law and it is void and unenforceable under section 23 of the Contract Act r/w Section 59 of the Motor Vehicles Act; in the present case, the defendant has not come to the Court asking any relief on the basis of that void contract. He has not filed a suit for possession of the car. He has not claimed any relief under that contract. Therefore, the question of contract being unenforceable on the ground that it is void does not arise in this case, since the defendant has not approached this Court for any relief. Hence, even if we accept the appellant's contention that the contract is bad in law, nothing can be done since the respondent-defendant has not come to the Court asking for any relief under that contract.
When once we come to the conclusion that the contract is bad in law, then both the parties to the contract cannot move the court for any relief under that contract. Though the plaintiff has his own theory that he had taken a loan from the defendant etc. and that he is the real owner, but on evidence I have come to the conclusion that the defendant is the real owner and he purchased the car with the assistance of the plaintiff in order to make use of a permit. That means, on evidence, the Court had come to the conclusion that both parties have agreed to enter into this contract to make use of the permit standing in the name of the plaintiff. That means, the plaintiff and the defendant are parties to such a void contract and therefore neither party can approach the Court for any relief under that contract. The plaintiff cannot now say that it is a void contract and he must be given possession of the car. if it is held to be a void contract, then the plaintiff is also not entitled to claim possession of the car being party to the void contract. Even at the cost of repetition, I must say that the defendant has not come to the Court claiming any relief under that contract. It is well settled that either party to a void contract cannot move the Court for any relief. It may be, that the plaintiff has come to Court with a theory of loan transaction. But if on facts the Court comes to the conclusion that it is a void contract, then both the plaintiff and the defendant are parties to such a contract and neither of them can ask any relief from the Court. Hence, even if arguments of the learned Counsel for the Appellant that it is a case of void contract is accepted, it won't give any benefit to the plaintiff to get any relief from the Court like possession of the car or other reliefs.
14. The learned Counsel for Respondent contended that this is not a case of void contract and there is no prohibition for the defendant to purchase a car and run the same in a permit which is standing in the name of the plaintiff.
15. Section 59 of the Motor Vehicles Act, 1939, which was in force when the suit transaction took place provides that a permit shall not be transferable from one person to another except with the permission of the transport authority. It is further provided that without such permission no person can confer right on any other person to whom the vehicle covered by the permit is transferred.
It was argued on behalf of the Appellant that in view of the prohibition in Section 59 of the Motor Vehicles Act, 1939, the agreement pleaded by the Respondent about use of plaintiff's permit for running a taxi is a void agreement.
The word used in Section 59 is "permit". The word permit has been defined in Section 2(20) of the said Act. It says that permit is a document issued by the Competent Authority authorising the use of a transport vehicle as a contract carriage or stage carriage or authorizing the owner as a private carrier or public carrier to use such vehicle.
In the present case, it is not a case of transport vehicle being used either as a contract carriage or stage carriage. It is nobody's case. Then the question is whether the later part of the definition is attracted. The later part applies to owner of a private carrier or a public carrier. Private Carrier is defined in Section 2(22) of the said Act as a vehicle used for the carriage of goods. Hence it cannot apply to a taxi.
Then, Public Carrier is defined in Section 2(23) of the said Act, where also it pertains to transfer of goods in a vehicle. Hence, even this definition is not applicable to a taxi.
A taxi comes under the definition of "Public service vehicle", which is defined in Section 2(25) of the Act, which says that any motor vehicle used for carriage of passengers including a motor cab, contract carriage or stage carriage comes within the definition of "public service vehicle". But public service vehicle is not mentioned in the definition of permit in Section 2(20) of the Act. Therefore, permit referred to in Section 59 of the Act is not applicable to a taxi permit, since it does not come within the definition of permit in Section 2(20) of the Act. Hence, in my view, prohibition in Section 29, of the Act on which strong reliance was placed by the learned Counsel for the Appellant has no application, since that permit is not applicable to the permit of a public service vehicle.
I have already extracted para 12 of the Apex Court's judgment in the earlier part of my judgment, where the Apex Court has clearly observed that nothing in the Act which bars Benami transactions or persons owning buses Benami and applying for permits on that basis. I have also pointed out that the definition of permit does not include the permit of public service vehicle and I have also pointed out that a taxi comes under the definition of public service vehicle.
16. The learned Counsel for the Appellant invited my attention to AIR 1970 J & K 165 (Ghulam Ahmed v/s. Mohd. Iqbal and others). In that case, there was a direct dispute regarding the right to use a permit. It was held that the contract is void under Section 23 of the Contract Act. But in the present suit, no dispute is raised regarding the use of the permit. The defendant has not claimed any relief in this Court regarding the use of permit. The only question before the Court is about the ownership of the car. Hence, in my view the said decision has no bearing on the point of consideration.
Hence, for the above reasons, my finding is that the contract in the present case is not void. Even if it is held to be void contract, it will not help the plaintiff in any way. Since he also being a party to a void contract cannot claim any relief in a Court of law. Hence, point No.2 is answered accordingly.
17. Before parting with the case, I have to refer to another contention raised by the learned Counsel for the appellant that the appellant being the registered owner of the car must be declared as the owner of the car. He referred to 1976 A.C.J. 1 (Maina v/s. Niranjan Singh). Where the question was about the liability of the registered owner of the vehicle to pay compensation in accident case. It was held that since the sale is not reported to the Registering Authority, registered owner is liable.
In my view, the question of title to a motor vehicle cannot be decided on the basis of the provisions of Motor Vehicles Act. The Motor Vehicles Act no doubt provides about the transfer of registration certificate etc. But a title to a moveable property like a car has to be decided under the provisions of the Sale of Goods Act and not under the Motor Vehicles Act. Even though the plaintiff is shown as a registered owner in the registration certificate, it does not debar party proving that it was only a Benami transaction. I have already referred to the decision of the Apex Court, which has upheld that Benami transactions have been well recognised in India and they are not invalid. I have already pointed out the evidence on record and agreed with the finding of the trial court that it is a case of Benami transaction and defendant is the real owner of the vehicle. Hence, I find no merits in the appeal.
Since the appeal is filed in Forma Pauperis, the Court fee payable on the appeal memo shall be paid by the appellant. A copy of the decree shall be forthwith sent to the Collector of Bombay, as provided in Order 33 Rule 14 r/w. Order 44 Rule 1 CPC for taking necessary steps to recover the Court fee from the Appellant according to law.