Holding

The burden of proving a benami transaction rests on the party alleging it, and the appellant failed to discharge that burden; consequently, the property belongs to the wife and the appeal is dismissed.

Summary

The appellant, Valliammal (by LRs), sought a declaration that he was the true owner of a 10.37‑acre plot purchased in his wife Ramayee Ammal's name, alleging the transaction was benami to shield the property from creditors of his late brother. The trial court and the first appellate court held the sale was benami, but the Madras High Court set aside those judgments, finding the appellant had not proved that his wife was a benami holder. The Supreme Court affirmed the High Court, reiterating the legal presumption that the purchaser is the owner and that this presumption can be displaced only by the party alleging benami proving the requisite facts. It emphasized that the burden of proof lies on the claimant and that the source of purchase money and the motive are the most important indicia. The Court found the appellant failed to show he provided the purchase money or any plausible reason for the benami arrangement, and therefore dismissed the appeal.

Issues considered

The presumption that the purchaser of property is the owner and how it can be displaced by alleging a benami transaction.
The allocation of the burden of proof in benami cases.
The appropriate tests or indicia to determine whether a transaction is benami, including source of money and motive.
Whether the appellant successfully proved that his wife held the property as a benami holder.
Whether the High Court was correct in setting aside the lower courts' decree.

Subjects

benami transactionpresumption of ownershipburden of proofsource of moneymotiveproperty lawdeclaration suitpermanent injunctioncivil appeal

Judgment

A VALLIAMMAL (D) BY LRS.
v.
SUBRAMANIAM AND ORS.

AUGUST 31, 2004
B
[ASHOK BHAN AND S.H. KAPADIA, JJ.)

Benami Transaction-Presumption of-Purchase ofproperty--Benami
purchase-Burden to prove benami purchase-Held: There is a presumption
C in law that the person who purchases the property is the owner of the
same-Burden lies on the person who pleads that the recorded owner is
a benami-holder.

Benami Transaction-Purchase of property--Benami purchase-
Tests to determine-Plaintifffiled a suit for a declaration that he was the
D owner of the suit property as it was purchased benami in his wife's name-
Trial court decreed the suit- .-:-irst Appellate Court confirmed the decree-
However, the High Court held that the plaintiff's .vife was not a benami-
holder Correctness of-Held: The source from where the purcl.ase money
came and the motive for benami purchase are by far the most important
E tests for determining whether a particular purchase is a benami purchase
or not-In the circumstances of the case, plaintiff failed to give valid
reasons for purchase of the property benami in his wife's name and that
he had paid the purchase money-Hence, High Court's judgment upheld.

F Benami Transaction-Essence of-Held: Intention the parties is the
essence of benami transaction-The money should have been provided by
the party invoking the doctrine of qenami.

Doctrines:
G
Doctrine of benami-Invoking of

The suit land belonged to the original plaintiff-appellant and his
deceased brother which was sold in a court auction to satisfy a decree
H passed against them in a money suit. The suit land was purchased from

966
VILLIAMMAL v. SUBRAMANIAM 967

the auction-purchaser by the original plaintiff's wife for a certain A
amount. Subsequently, she bequeathed the suit land to her daughters
by a registered will. After her death, the original plaintiff filed a suit
for declaration and permanent injunction against his daughters with
the averments that long after the auction-sale he approached a third
person who paid a certain sum to the auction-purchaser who, in turn, B
sold the suit land to his wife. The original plaintiff pleaded that he got
the sale deed executed in favour of his wife as a benami as he
apprehended that some creditors of his and also those of his deceased
brother might create problems in future if the sale deed were in his
•
favour. The plaintiff, therefore, alleged that the sale transaction was C
a benami transaction.

The trial court decreed the suit. The First Appellate Court
confirmed the decree. In second appeal, the High Court set aside the
findings recorded by the courts below and held that the plaintiff- D
appellant had failed to prove that he had purchased the property in
the name of his wife as a benami. Hence the appeal.

Dismissing the appeal, the Court

HELD : 1. There is a presumption in law that the person who E
purchases the property is the owner of the same. This presumption can
be displaced by successfully pleading and proving that the document
was taken benami in the name of another person for some reason, and
the person whose name appears in the document is not the real owner,
but only a benami. Heavy burden lies on the person who pleads that F
the recorded owner is a benami-holder. (973-F-GJ

Jaydayal Poddar v. Bibi Hazra, [1974) l.SCC 3, Krishnanand v. State
of MP., (1977) 1 SCC 816, Thakur Bhim Singh v. Thakur Kan Singh,
(1980) 3 SCC 72, His Highness Maharaja Pratap Singh v. Her Highness G
Maharani Sarojini Devi, [1994) Supp. (1) SCC 734 and Heirs of
Vraj/al J Ganatra v. Heirs of Parshottam Singh, [1998) 4 SCC 490,
referred to.

2. The source from where the purchase money came and H
968 SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.

A the motive why the property was purchased benami are by far
the most important tests for determining whether the sale
standing in the name of one person, is in reality for the benefit of
another. [974-G-H; 975-A]

B 3. In law the title to the property vests in the person in whose
favour the sale deed has been executed. Therefore, the original
plaintiff's wife was the absolute owner of the property. By a registered
will she bequeathed the suit land to her daughters defendants/
respondents. The presumption in favour of the original plaintiffs wife
C could be displaced only if her husband was able to prove that there
were circumstances which warranted the purchase of the property
benami in the name of his wife. The plaintiff, in order to prove that
he was the real owner of the property was required to show that there
were valid reasons for purchase of the property in the name of his wife
D and that he had paid the money for the purchase of the land. The
plaintiff in his evidence admitted that neither his brother nor he
himself had any creditors at the time when the land was purchased by
his wife. Therefore, the reason given by him for the purchase of the
land in the name of his wife is not plausible. Six years have
elapsed after the Court auction and the purchase of the land by the
E original plaintiffs wife. During these six years no other creditors had
come forward to claim any money. Debt, if any, would have become
time barred. Even after the purchase of the land no creditor came
forward with any claim. The case put up by the plaintiff that he
purchased the land in the name of his wife benami does not, therefore,
F seem plausible. (975-E-H; 976-A-D]

4. The plaintiff did not provide any money for the purchase of the
land in the name of his wife. Neither in the plaint nor in his deposition
the plaintiff explained satisfactorily when the money was provided by
G a third person. Neither the person who alleged to have paid the money
nor anyone else on his behalf has been examined as a witness.
Therefore, it cannot be held that a third person had paid the
consideration on behalf of the plaintiff. It is not even averred by the
plaintiff that a third person provided money on his behalf or that he
H repaid the money to him later. (976-D-EJ
VILLIAMMAL v. SUBRAMANIAM [BHAN, J.] 969

5. It is well settled that intention of the parties is the essence of A
the benami transaction and the money must have been provided by the
party invoking the doctrine of benami. The evidence shows clearly that
the original plaintiff did not have any just.ification for purchasing the
property in the name of his wife. The reason given by him is not at
all acceptable. The source of money is not at all traceable to the B
plaintiff. No person named in the pliant or aiiyone else was examined
as a witness. The failure of the plaintiff to examine the relevant
witnesses completely demolishes his case. (976-F-G)

6. The High Court, therefore, had come to the right conclusion C
that the original plaintiff's wife did not hold the property as benami
on behalf of her husband. (977-A)

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5142 of
1998. l)

From the Judgment and Order dated 12.4.97 of the Madras High
Court in S.A. No. 1324 of 1983.

R. Sundaravaradan, Ramesh N. Keswani and Ramlal Roy for the E
Appellants.

M.A. Krishna Moorthy and P.V. Yogeswaran for the Respondents.

The Judgment of the Court was delivered by F

BHAN, J. : Aggrieved against the judgment and decree passed by
the High Court of Judicature at Madras in Second Appeal No. 1324of1983
wherein the High Court while reversing and setting aside the concurrent
judgments of the two courts below has dismissed the suit which had been G
decreed by the courts below, the plaintifti'appellants have filed the present
appeal (now represented through L.Rs.).

Since the dispute is between the members of the family it would
be useful to refer to genealogy of the family, which is as under: H
970 SUPREME COURT REPORTS [2004) SUPP. 3 S.C.R.

A ANGAPPA GOUNDER
DIED 1904
(When Malaya Gounder was 10 years old)

B
Malaya Gounder Marappa Gounder
Plaintiff (Died on 23.6.1983) (Died in 1923)
I I
Ramayee Ammal (w~e) Nachayyee Ammal
(Died on 2.1.1979) (Died in1925)

c
(son) (daughter) (daughter) (daughter)
Muthusamy Valliammal Ammaniammal Angayammal
(died in 1943) (Died in 1940) Married to Married to
(lssueless) married Karuppana V.A.Kalappa
Chinnasamy Gounder Gounder
D Gounder (Defendant) (Defendant)
(died on
18.7.1982)
Valliammal, wife (daughter)
(Appellant) Ammaniammal
(died on 10.8.2001 r (died on 22.11.2001)
Married to
E Chinnamalai Gounder
(Appellant)
(now deceased
Subramanian Samiathal through Lrs.)
(Defendant) (Defendant)
I
F
Ponnammal P.C.Palanisamy P.C.Kandasamy
(Appellant) (Appellant) (Appellant)

Original plaintiff Malaya Gounder died after the disposal of the first
appeal. Respondents who filed the appeal in the High Court impleaded
G Ammaniammal daughter of the brother of the original plaintiff and
Valliammal, daughter-in-law, wife of the pre-deceased son Muthusamy as
the legal representatives of Malaya Gounder on the basis of an alleged will
executed by him in their favour. Valliammal died intestate without any
issue during the pendency of the appeal in this Court on I 0.8.2001 and after
H her death her share has devolved on the defendants/respondents being the
VILLIAMMAL v. SUBRAMANIAM [BHAN, J.] 971
. ...
nearest collateral. Ammaniammal also died on 22.11.2001 and is now A
represented through her children.

The land measuring 10.37 1/2 acres (suit land) belonged to Malaya
Gounder, plaintiff and his xounger brother, Marappa Gounder. Marappa
Gounder stood guarantee for his Uncle Chinnamalai Gounder in a loan B
transaction advance by one Samasundaram Chettiar who was a money-
lender for a sum of Rs. 200,. ·' Samasundaram Chettiar filed a suit being
OS No. 338 of 1925 against Chinnamalai Gounder as well as the guarantor.
Marappa Gounder died in the year 1923 and was succeeded to by his
brother Malaya Gounder, as the legal representative of Marappa
Gounder. Suit was decreed against the debtor as well as the guarantor. C
They were made jointly liable. Suit land was sold on 1.8.1927 in the
auction to satisfy the decree passed in OS No. 338 of 1925. Land was
purchased by one Chockalingam Chettiar. Chockalingam Chettiar could
not get physical possession of the land, however, he was given the
symbolical possession. D
The suit land was purchased by Ramayee Ammal wife of Malaya
Gounder, original Plaintiff, for a consideration of Rs. 500 on 5.12.1933.
Ramayee Ammal executed a registered will in favour of her daughters the
defendants/respondents herein. Ramayee Ammal died on 2.1.1979. E

Malaya Gounder, after the death of his wife filed the present suit for
declaration and permanent injunction against his daughters with the
averments that long after the auction sale the plaintiff Malaya Gounder
approached Pattayakkaarar, who was kinu enough to pay a sum of Rs. 500 F
to Chockalingam Chettiar in full and final settlement of the decreetal debt
in O.S. No. 388 of 1925. Chockalingam Chettiar in tum sold the suit land
which he had purchased in court auction in favour of Ramayee Ammal,
wife of the plaintiff on 5.12.1933. The sale consideration for the same was
paid through Ramiah Pillai, the Secretary of Pattayakkaarar. It wa!r alleged
that he got the sale deed executed in favour of his wife as a benami as he G
thought it would not be safe for him to ,get the sale deed executed in his
name as some creditors of Marappa Gounder may not create a problem
in future. It was further averred that the property was all along in his
possession and that he continued to encumber the property as its owner.
He mortgaged the same to co-operative society. He treated the property H
972 SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R.

A to be ancestral. Even a partition had taken place between the plaintiff and
his co-sharers. In these documents, the suit land was treated as an ancestral
property and his wife neither objected to the partition nor claimed any share
in it. That his wife knew that she was only a name-lender, and did not
claim the property to be hers. Original Plaintiff Malaya Gounder's son
B Muthusamy died issueless and his wife Valliammal was also residing with
him. After the death ofRamayee Ammal on 2.1.1979 the daughters started
claiming right over the property and tried to trespass into the same.
Plaintiff resisted their action and neighbours intervened and supported
his claim. Suit was filed to establish his title over the suit land and to get
C an injunction restraining the defendants from disturbing his peaceful
possession.

In the written statement ti led by the defendants/respondents the claim
of the original plaintiff over the suit land was disputed. According to them,
plaintiff was not the owner of the suit land. After the court sale, Ramayee
D Ammal being the vendee from auction purchase became the absolute
owner. She executed a will and bequeathed the suit land in their favour.
The case put forth by the plaintiff that the property was purchased in the
name of Ramayee Ammal as benami on his behalf to safeguard the same
'
from some other creditors of Marappa Gounder was denied. According
E to them, the brothers of Ramayee Ammal who were well to do provided
money and helped her in acquiring the suit land. Regarding the mortgage
and the partition effected by the plaintiff it was averred that the same were
fraudulent transactions without the knowledge of the real owner. If
Ramayee Ammal was not the real owner, she would not have executed the
F registered will in their favour on 28.1.1974. Accordingly, it was prayed
that the suit be dismissed.

Trial Court after taking into consideration evidence both oral and
documentary into consideration decreed the suit and held that Ramayee
Ammal was holding the property benami on behalf of the Malaya
G Gounder, the original plaintiff. It was also held that the property continued
to be in possession of the Malaya Gounder in spite of court sale and he
alone was dealing with the same as the owner. Trial Court held that the
plaintiff had purchased the property in the name of his wife Ramayee
Ammal apprehending that other creditors of Marappa Gounder might ,,
H move against the plaintiff as he was the legal representative of his brothers.
VILLIAMMAL v. SUBRAMANIAM (BHAN, J.] 973

Judgment and decree of the trial Court was confirmed in the appeal by A
the first Appellate Court.

After the decision of the first Appellate Court original plaintiff
Malaya Gounder died and the defendants/respondents filed the appeal in
the High Court impleading Ammaniammal (brother's daughter) and B
Valliammal (daughter-in-law) as his legal representatives on. the basis of
the alleged will executed by him in their favour. Substantial question of
law framed in the second appeal was:

"Whether the courts below have wrongly cast the onus of proving C
the benami nature of the sale on the defendants and further more
whether they have failed to apply the various tests laid down by
the Supreme Court for determination of the question whether the
sale in favour of Ramayee was a benami transaction?"

The High Court set aside the findings recorded by the courts below D
and held that the plaintiff had failed to prove that he had purchased the
property in the name of his wife as a benami. He failed to prove that he
had provided the money for the purchase of the suit land iii the name of
his wife. He had also failed to prove that Pattayakkaarar provided the
money for the purchase of the suit land in the name of his wife on his behalf E
or that he had repaid the money later to Pattayakkaarar. Considering all
these circumstances, the High Court came to the conclusion that the trial
court and the first Appellate Court misconceived and misconstrued the
evidence and committed grave error in decreeing the suit. The findings
recorded by the courts below were set aside being perverse and not F
sustainable in law.

Counsel of the parties have been heard at length.

There is a presumption in law that the person who purchases the
property is the owner of the same. This presumption can be displaced by G
successfully pleading and proving that the document was taken benami in
the name of another person from some reason, and the person whose name
appears in the document is not the real owner, but only a benami. Heavy
burden lies on the person who pleads that the recorded owner is a benami-
holder. H
974 SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.
A This Court in a number of judgments has held that it is well-
established that burden of proving that a particular sale is benami lies on
the person who alleges the transaction to be a benami. The essence of a
benami transaction is the intention of the party or parties concerned and
often, such intention is shrouded in a thick veil which cannot be easily
B pierced through. But such difficulties do not relieve the person asserting
the transaction to be benami of any part of the serious onus that rests on
him, nor justify the' acceptance of mere conjectures or surmises, as a
substitute for proof. Referred to Jaydayal Poddar v. Bibi Hazra, [1974]
1 SCC 3; Krishnanand v. State of Madhya Pradesh, [1977] 1 SCC 816;
C Thakur_Bhim Singh v. Thakur Kan Singh, [1980] 3 SCC 72; His Highness
Maharaja Pratap Singh v. Her Highness Maharani Sarojini Devi & Ors.,
[1994] Supp. 1 SCC 734; and Heirs of Vrajlal J. Ganatra v. Heirs of
Parshottam S. Shah, [1996] 4 SCC 490. It has been held that in the
judgments referred to above that the question whether a particular sale is
a benami or not, is largely one of fact, and for determining the question
D no absolute formulas or acid test, uniformly applicable in all situation~ can
be lajd. After saying so, this Court spelt out following six circumstances
which can be taken as a guide to determine the nature of the transaction:
'
I. the source from which the purchase morn::y came;
E
2. the nature and possession of the property, afterthe purchase;

3. motive, if any, for giving the transaction a benami colour;

4. the position of the parties and the relationship, if any,
F between the claimant and the alleged benamidar;

5. •
the custody of the title deeds after the sale; and

6. the conduct of the parties concerned in dealing with the
G property after the sale."

The above indicia are not exhaustive and their efficacy varies
according to the facts of each case. Nevertheless, the source from where
the purchase money came and the motive why the property was purchased ·r'
H benami are by far the most important tests for determining whether the sale
VILLIAMMAL v. SUBRAMANIAM [BHAN, J.] 975
_,
standing in the name of one person, is in reality for the benefit of another. A
We would examine the present transaction on the touchstone of the above
two indicia.

Plaintiffs case was that he had purchased the suit land in the name
of his wife in order to screen the property from the creditors of his brother. B
The names of the creditors were not given in the plaint. The plaintiff
averred that one Pattayakkaarar paid consideration for the purchase of the
suit land. The relevant passage from the plaint as follows:

"Thereafter the plaintiff approached the Pattayakkaarar again and C
he was kind enough to pay Rs. 500.00 to Chokkalingam Chettiar
in full settlement of the claim. The payment was made through
Ramiah Pillai, the Secretary of Pattayakkaarar. In pursuance of the
Settlement, Chokkalingam Chettiar executed a sale deed on
05.12.1933 with regard to the entire suit properties reciting therein
that he had received the sale consideration from Ramaiah Pillai. D
• When taking the sale deed, plaintiff thought that it will not be safe
to have the sale deed executed in his favour, as some other
creditors of Marappa Gounder might again give trouble and
therefore the. sale deed was taken benami in the name of his wife
Ramayee Ammal." E
In law title to the property vests in the person in whose favour the
sale deed has been executed. Therefore Ramayee Ammal wa5 the absolute
owner of the property. By a registered will dated 28.1.1974 she bequeathed
the suit land to her daughters defendants/respondents. The presumption F
in favour of Ramayee Ammal could be displaced only if her husband
Malaya Gounder, the original plaintiffr was able to prove that there were
circumstances which warranted the purchase of the property benami in the
name of his wife. The plaintiff, in order to prove that he was the real owner
of the property was required to show that there were valid reasons for
purchase of the property in the name of his wife and that he had paid the G
money for the purchase of the land. Plaintiff in his evidence as PW 1
admitted that neither his brother nor he himself had any creditors in the
year 1933 when the land was purchased by his wife Ramayee Ammal.
Therefore, the reason given by him for the purchase of the land in the name
of his wife is not plausible. It ' also appears from his deposition that he H
976 SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.

A had some other pieces of land in another village which were recorded in
his name. Names of prospective creditors have not been disclosed. If there
were any unsatisfied creditors then they would have proceeded against the
plaintiff for the recovery of their money by attachment or sale of the land
held by him in other village. Action took place in 1927. Land was
B purchased by Ramayee Ammal in the year 1933. During these six years ,,
no other creditors had come forward to claim any money against him or ·'
his uncle for whom the guarantee was given by his brother. Debt, if any,
would have become time barred. Even after 1933 no creditor came
forward with any claim. Marappa Gounder, brother of the plaintiff died
C in 1923. The property was sold in execution of the decree in the year
1927 and the sale deed in favour of Ramayee Amrnal, the wife of the
plaintiff was executed in the year 1933. Apprehension of the plaintiff that
some other creditors of Marappa Gounder might proceed against the
plaintiff is totally unjustified. The case put up by the plaintiff that he
purchased the land in the name of his wife benami does not seem to be
D plausible.
•
The plaintiff did not provide any money for the purchase of the land
in the name of his wife. Neither in the plaint nor in his deposition the '
plaintiff explained satisfar.torily when the money was provided by a third
E person. Neither the person who alleged to have paid the money nor anyone
else on his behalf has examined as a witness. Therefore, it cannot be held
that Pattayakkaarar or anyone else paid the consideration on behalf of the
plaintiff. It is not even averred by the plaintiff that Pattayakkaarar provided
money on his behalf or that he repaid the money to him later.

F It is well settled that intention of the parties is essence of the benami
transaction and the money must have bean provided by the party invoking
the doctrine of benami. The evidence shows clearly that the original
plaintiff did not have any justification for purchasing the property in the
name ofRamayee Ammal. The reason given by him is not at all acceptable.
G The source of money is not at all traceable to the plaintiff. No person
named in the plaint or anyone else was examined as a witness. The failure
of the plaintiff to examine the relevant witnesses completely demolishes
his case.

H Since the original plaintiff failed to prove that he had provided the
VILLIAMMAL v. SUBRAMANIAM [BHAN, J.} 977

money for the purchase of the land and the reasons why he purchased the A
property benami in the name of his wife, the High Court has come to the
right conclusion that Ramayee Ammal did not hold the property as benami
on behalf of her husband Malaya Gounder.

For the reasons stated above, we do not find any merit in this appeal B
and dismiss the same with no order as to costs.

V.S.S. Appeal dismissed.

-·