Family Court Appeal No.22 of 1995

11th June, 1998

Petitioner Counsel: Mr.S.V. RAJESHWAR
Respondent Counsel: Mr.J.B. PATEL

Cases Cited:
(1995) 2 SCC 630 [Para 7]
(1989) 2 SCC 95 [Para 7]

JUDGMENT

B.N. SRIKRISHNA, J. :- This is an Appeal by the original Plaintiff, impugning the order dated 28th September, 1994, made by the IV Family Court, Bombay, dismissing the Appellant's S.C. Suit No.173 of 1986.

2. Though we are not concerned with the details of the case put forward in the Appellant's Suit before the Family Court, we may broadly indicate the case of the Appellant in the Trial Court.

3. The Appellant filed a Suit in the City Civil Court, Bombay, alleging that he was the real owner of Flat No.708-C, Poonam Apartments, Worli, Bombay, in which 1st Respondent (Appellant's mother-in-law) and 2nd Respondent (Appellant's wife) were residing and that he was the real owner of the Suit flat and that Respondent No.1 being a Benamidar, had no right, title or interest therein. This Suit was filed before the City Civil Court, Bombay on 9th January, 1986, and came to be transferred to the Family Court at Bombay.

4. While this Suit was pending before the Family Court, with effect from 19th of May, 1988, the Benami Transactions (Prohibition) Act, 1988 (hereinafter referred to as the 'Benami Act'), came into force. The Appellant/Plaintiff realising that he may have difficulties with his Suit, moved an amendment application on 9.11.1993, praying that in the alternative to the original prayer, it be declared that Flat No.708-C, Poonam Apartments, Worli, was a Joint Hindu family property of the Appellant/Plaintiff and the Respondent/Defendant, and that, the Plaintiff had equal right and share in the said suit premises. This application for amendment was rejected by an order made by the Family Court on 9.11.1993. The Appellant/Plaintiff challenged the said order by an appeal against order before this Court, which was also dismissed. The Appellant, thereafter, moved another application for amendment on 21.4.1994, by which he sought deletion of prayer No. (a) in the Plaint for a declaration that the suit flat was a Benami Transaction, that the 1st Respondent (Original Defendant No.1) was his Benamidar, and that, he was the real owner of the suit premises. This amendment application was also rejected by an order of Family Court dated 1st July, 1994, and the Appellant/Plaintiff was not allowed to delete prayer (a) in the Plaint. The Appellant/Plaintiff challenged the said order of the Family Court by a Revision Application before this Court, which was also dismissed by this Court on 6.9.1994.

5. Thus, the Family Court having declined to grant permission to change the parameters of the case, the case made out before the Family Court remained as it was earlier, namely, that the transaction was a Benami Transaction, and that, the First Respondent (Original Defendant No.1) was the Benamidar of the Appellant (Plaintiff), the Appellant (Plaintiff) being the real owner of the suit premises. The Appellant sought the relief of permanent injunction against the Respondents on the above footing.

6. The 1st Respondent (Defendant No.1) raised a preliminary objection about the maintainability of the Suit, based on the provisions of the Benami Act. The Family Court heard parties on this preliminary issue, and by its impugned order dated 28.9.1994, held that the Suit was not maintainable, in view of Section 4 of the Act, and dismissed the Suit. Being aggrieved by the said order, the Appellant is before this Court.

7. The Appellant heavily relies on the observations of the Supreme Court in R.Rajagopal Reddy v. Padmini Chandrasekharan, (1995) 2 SCC 630, which overruled the law laid down earlier by a Smaller Bench of Two Judges in Mithilesh Kumari v. Prem Behari Khare, (1989) 2 SCC 95. Having perused the Judgment in R.Rajagopal Reddy (Supra), we are of the view that the Appellant is entitled to succeed.

8. The effect of the prohibition contained in Section 4 of the Benami Act, was the subject matter of interpretation by the Supreme Court in Mithilesh Kumari (supra). In Mithilesh Kumari (Supra), the Supreme Court took the view that the prohibitions in Section 4 would apply even to proceedings pending on the date on which the Act came into force, as the expression, "any property held benami", was not limited to any particular time, date or duration. The Supreme Court took the view that once the property was found to have been held benami, no suit claim or action to enforce any right in respect thereof shall lie.

9. This view was reconsidered by a larger Bench of Three Learned Judges of the Supreme Court in R.Rajagopal Reddy (Supra). The larger Bench of Three Judges decided in R.Rajagopal Reddy (Supra) that the view taken in Mithilesh Kumari (Supra) was erroneous, and that, there was no provision made in the Benami Act for giving retrospective effect to the prohibition contained in Section 4 expressly, nor could such retrospective operation of the Statute be held to be effective by necessary implication. The Supreme Court in terms held (vide para 11) that Section 4(1) of the Benami Act meant, "no such suit shall thenceforth lie to recover the possession of the property held Benami by the Defendant. Plaintiff's right to that effect is sought to be taken away and any suit to enforce such a right after coming into operation of Section 4(1) i.e. 19th May, 1988, shall not lie. The Legislature in its wisdom has nowhere provided in Section 4(1) that no such suit, claim or action pending on the date when Section 4 came into force shall not be proceeded with and shall stand abated. On the contrary, clear legislative intention is seen from the words "no such claim, suit or action shall lie", meaning thereby, no such suit, claim or action shall be permitted to be filed or entertained or admitted to the portals of any court for seeking such a relief after coming into force of Section 4(1)".

10. In R.Rajagopal Reddy (Supra), the Supreme Court disagreed with the views expressed in Mithilesh Kumari (Supra), by saying, "with respect, the view taken that Section 4(1) would apply even to such pending suits which were already filed and entertained prior to the date when the Section came into force, and which has the effect of destroying the then existing right of Plaintiff in connection with the suit property, cannot be sustained in the face of the clear language of Section 4(1). It has to be visualised that the Legislature in its wisdom has not expressly made Section 4 retrospective. Then to imply by necessary implication that Section 4 would have retrospective effect and would cover pending litigations filed prior to coming into force of the Section, would amount to taking a view which would run counter to the Legislative Scheme and intent projected by various provisions of the Act to which we have referred earlier".

These observations in para 11 of the Judgment in R.Rajagopal Reddy (Supra) make it amply clear in our view that the Plaintiff's Suit, which was already pending on 19th May, 1988, when the Benami Act came into force, was not liable to be dismissed on account of the prohibition contained in Section 4(1) of the said Act.

11. Mr.Patel, learned Advocate for the Respondents, however, invited our attention to the observations of the Supreme Court in para 19 of the Judgment in R.Rajagopal Reddy (Supra), and contended that the observations therein suggest something to the contrary. Mr.Patel contended that on 28th of September, 1994, when the impugned order was made the Judgment in Mithilesh Kumari (Supra) held the field. Hence, the impugned order of the Family Court was perfectly in accord with the law laid down by the Supreme Court. The present Appeal was filed on 7th November, 1994, and while it was pending, the Supreme Court overruled the view taken in Mithilesh Kumari (Supra) by its Judgment in R.Rajagopal Reddy (Supra) on 31.1.1995. Against this background, Mr.Patel urged that the observations in para 19 of R.Rajagopal Reddy (Supra) meant that the law laid down by the Supreme Court in R.Rajagopal Reddy (Supra) meant that the law laid down by the Supreme Court in R.Rajagopal Reddy (Supra) was not applicable to Appeals which were pending on the date of the said Judgment.

12. It is not possible to accept the submission of the learned Advocate. In the first place, when a Court expounds and interprets the provisions of a Statute, the law as expounded, comes into effect, not from the date of the Judgment, but from the date on which the Statute itself was brought into force. Secondly, when a Judgment of a smaller Bench expounding the law is overruled by a larger Bench, the overruling view also must be taken to have been effective from the date on which the interpreted Statute itself came into force. In our view, the Judgment in R.Rajagopal Reddy (Supra), must be taken to have expounded the correct legal position as regards the provisions of Section 4 of the Benami Act, from the date on which the said Act came into force. Consequently, it is not possible for us to accept the contention that the Supreme Court has held that the law laid down in R.Rajagopal Reddy (Supra) is not applicable to the present Appeal which was pending on the date on which R.Rajagopal Reddy (Supra) was decided.

13. Applying the law as laid down in R.Rajagopal Reddy (Supra), we have no difficulty in holding that the impugned Judgment of the Family Court is erroneous and needs to be set-aside.

14. In the result, the following order is made :

(a) Impugned order of the Family Court No.IV, Bombay, dated 28.9.1994 made in S.C. Suit No.173 of 1986 is hereby quashed and set-aside. It is held that the Suit of the Appellant i.e. S.C. Suit No.173 of 1986 was not liable to be dismissed because of the prohibition contained in Section 4(1) of the Benami Transactions (Prohibition) Act, 1988.

(b) S.C. Suit No.173 of 1986 is restored to the file of the Family Court No.IV at Bombay for expeditious hearing and disposal in accordance with the law.

(c) Pending hearing and final disposal of the said Suit, the Respondents, their servants and agents are restrained by an order and injunction of this Court from transferring, handing over possession, encumbering and/or creating any third party rights in respect of the suit premises i.e. Flat No.708, Poonam Apartments, C Building, Dr.Annie Bessant Road, Worli, Bombay-400 018.

No order as to costs.

Certified copy expedited

Appeal allowed