Sunday 3 June 2012

Sanctity of Benami Transaction in Pakistan

PLJ 2001 Karachi 173

[Sindh Bench at Sukhur]

Present: syed zawwar hussain jafferi, J.

 QURIB ALI @ MUHAMMAD QABIL-Appellant

versus

Dr. SHAH NAWAZ and others-Respondents Civil Appeal No. 7 of 1982, decided on 6.4.2001.

 (i) Benami Transaction--

—In order to prove benami character of a transaction, no documentary evidence was invariably essential. [Pp. 175 & 180] A & D

(ii) Benami Transaction--

—True touchstone for determining benami nature of transaction are: (i) Source of consideration, (ii) From whose custody titie documents and other documents came in evidence, (iii) Who is in possession of suit property, (iv) Motive for benami transaction.                                                 [P. 180] E

 (iii) Benami Transaction--

—-Benami transaction has full recognition in Pakistan, and Legislature by any general measure has not declared such transaction as invalid.

[P. 182] I

(iv) Benami Transaction--

—Benami transaction-During employment of Khairpur State, appellant purchased property in his brother's name due to embargo placed on purchase of land by government servants without permission-After his dispossession from property, appellant filed suit claiming to be its real owner having paid entire sale consideration, remained in possession of property and its title document, and paid all Government dues-Trial Court dismissed suit and appeal filed against it was also dismissed by High Court-On petition for special leave to appeal, Supreme Court remanded case to High Court for its decision after re-appraisal of
evidence—Held: Title documents, original challan for paying money supported by revenue receipts and entries in the name of appellant clearly proved that he had purchased suit property and made payment of sale consideration, and he was in possession of it before 1976, when he was forcibly dispossessed by Respondent-Held Further : Circular placing ban on purchase of land by Government servants in Khairpur State was beyond doubt, genuine, original and relevant, whereby motive for purchase of land by appellant in his brother's name stands clearly proved-Besides that the fact that at relevant time, appellant was issueless made out a strong motive for a benami transaction-Held Further: Circular imposing restriction on purchase of land by
Government servants did not restrain them from purchasing immovable property in the name of other person for various reasons-Held-Further : Appellant had successfully proved his case through oral and documentary evidence-He was real owner of suit property-Judgment and decree passed by Civil Judge and affirmed in appeal were set aside and suit of appellant was decreed with cost-Trial Court was directed to appoint Commissioner to ascertain mesne profits and pass final decree  accordingly.                           [Pp. 181 & 182] F, G, H, J & K

1995 MLD 316 (Karachi); 1997 MLD 390; 1998 SCMR 806; 1991 SCMR 703; PLD 1969 Karachi 221; AIR 1930 Allahabad 732; 1999 MLD 2934 (a) (Karachi); AIR 1954 Madras 811 ref.

(v) Qanoon-e-Shahadat Order, 1984 (P.O. No. 10 of 1984)--

—Art. 52-Manual of Khairpur State Special Circulars, published in year 1936-Authenticity of-Respondents' center'Jon that original Manual produced in Court contain!\\e relevant Circular No. 24 was not signed by any authority, was Held, based on misconception of law in view of Art. 52 of Qanoon-e-Shahadat Order.            [P. 177] B

M/s. Qadir Bux Memon and Zaheer Hassan, Advocates for Appellant.

Mr. Ahmed Ali Shahani, Advocate for Respondents. Date of hearing: 19.2.2001.

judgment

The instant appeal has been remanded by the Hon'ble Supreme Court on the ground that the evidence produced by the parties respectively had not received proper consideration in the light of law bearing BENAMI transaction. In the opinion of the worthy apex Court no documentary evidence was invariably essential in order to support a finding of a benami character of a transaction. The matter is remanded to the High Court for a fresh decision after taking into consideration the evidence already on record and on a proper evaluation thereof in the light of relevant law. The above appeal was remanded on 3rd July, 1991 and for ten long years it could not be disposed of for one reason or the other. It was argued seriously by the parties on 14.2.2001 and 19.2.2001 and finally it was fixed for judgment which is given hereunder :-- The facts of the case are already given in the judgments of the learned Senior Civil Judge, Khairpur and the Hon'ble High Court and for the sake of brevity, need not be repeated. However, for co-relating the submissions of the parties, the main features of the case are narrated below: Qurib Ali was in the employment of erstwhile Khairpur state when he purchased certain land specifically described in Para 7 and 11 of the plaint, in the name of his brother Muhammad Chuttal. The reason for purchasing the above property. In the name of his brother was that Qurib Ali was a Government servant and an embargo was placed on the purchase of land by the Government servants without obtaining permission from the Government. Qurib Ali paid the entire sale consideration, and claimed to have remained in possession and enjoying of the said property and paid the Government dues (Dhal etc.). He also possessed the documents of title of the land purchased by him and the various receipts paid towards the installments of the land. He was also in possession of a registered document for the piece of land purchased by him from a private person in the name of his brother. Qurib Ali has thus produced revenue receipts ranging from the year 1950 to 1977, Village Form 8-A and 8-B in respect of the land purchased by him in the name of his brother. Besides he examined five witnesses who were all unanimous in supporting his claim of BENAMI transaction in favour of Muhammad Chuttal. In defense, Shahnawaz son 01 Muhammad Chuttal and two other witnesses namely Bagh Ali and Bux Ali were examined, who denied that Qurib Ali had remained in possession of the land in question. PW Shahnawaz has also produced certain documents, which are mostly the duplicates of the original documents produced hy Qurih Ali. DW Bagh Ali and Bux Ali have denied that Qurib Ali remained in possession of land after its purchase. The learned trial Court did not believe the oral testimony of the witnesses on the point of. Benami character of the property, and insisted upon production of any written undertaking wherein Muhammad Chuttal would have promised to return the land to Qurib Ali when he so desired. He also repelled the contention that any embargo was placed on Government servants in Khairpur state for purchasing property in his own name. For such reasons, it was held that the Plaintiff had given insufficient proof of the benami character of the transaction. Consequently, the suit was dismissed. The Plaintiff assailed the above judgment and decree in appeal before Hon'ble High Court but he could not succeed in appeal also. The learned single Judge of this Court was also of the opinion that nothing documentary was produced to prove the benami character of the transaction and reliance was placed only on oral evidence which, in his worthy opinion, was not sufficient. Besides, Muhammad Chuttal has all along remained the recorded owner of the land in question. It was also held that the Plaintiff/appellant has failed to show any law under which fetters were placed on his powers to purchase the land in his own name being a Government servant. Summing up his findings, the learned Judge observed that the appellant utterly failed to prove that he had provided the funds for the purchase of the property and that he exercised a domain over the property as absolute owner thereof. The simply copy produced of the Circular of Khairpur state imposing a ban on the purchase of property by Government servants was also discharged as inadmissible as its genuineness, in his worthy opinion, was highly questionable. For such reasons, appeal was dismissed which obliged the appellant to move an application for leave to appeal which was allowed and consequently the matter is remanded to this Court for fresh decision after a careful re­appraisal of the evidence on record, and after proper evaluation thereof. The parties were also given an opportunity to produce proper circulars, instructions and Rules relevant on the question of acquisition of immovable property by Civil Servants of Khairpur state at the relevant time. The question of law contained in Section 23 of the Contract Act demanded consideration for final decision of the case and its impact on the legality of the claim of the appellant, was also to be judged. The learned counsel for the appellant has relied upon the case of Major (Retd.) Mazhar Mahmood Khan vs. Khushal Khan Jadoon, reported in M.L.D. 1995 Kar. 316.

The learned counsel for the respondent has relied upon the following case*law :--

(1)             1997 MLD 390 (Syed Habib Mehmood vs. Mrs. Bilqees Fatima).

(2)              1988 S.C.M.R. 806 (Mst. Sardar Khatoon and Ors. vs. Dost Muhammad and another).

(3)              1991 S.C.M.R. 703 (Muhammad Sajjad Hussain vs. Muhammad Anwar Hussain).

(4)             PLD 1969 Kar. 221 (Sultan vs. Nawab Mouladad).

(5)              AIR 1930 Allahbad 732 (Mani Ram Misra v. Purshotam Lai and another).

(6)              MLD 1999 Kar. 2934 part (a) (Mst. Halima vs. Muhammad Kassam and Others).

(7)             AIR 1954 Madras 811 (Ganesa Naicken vs. Arumugha Naicken)

I have heard the learned counsel for the parties at length, perused the record and have also carefully gone through the various rulings produced on their behalf.

During the course of proceedings, the counsel for the appellant moved applications for summoning the original Circular referred to above to the Deputy Commissioner, Khairpur, who is the Custodian of old record of Khairpur state. It appears that proper interest was not taken and consequently an "UNSIGNED" Circular was sent which was neither authentic nor carried any more evidentiary value than the one already on record. After a passage of time, the counsel for the appellant was successful in getting original Book captioned as "A MANUAL OF KHAIRPUR STATE SPECIAL CIRCULARS". It was published in the year 1936 under the authority of Government of Khairpur state. This book contains many circulars on different subjects including the relevant Circular No. 24, which appears at page 48 of this book. The original copy of the book is kept on record.

The learned counsel appearing on behalf of the Defence vehemently challenged the authenticity of the above book on the solitary ground that it was not signed by any authority. This objection is manifestly based on misconception of law. In this connection it may be stated that Section 52 of the Qanun-e-Shahadat completely repels the contention raised on behalf of defence. For ready reference, the contents of Section 52 of Qanun-e-Shahadat are reproduced below :

"Section 52. Relevancy of statements as to any law contained in law books.-When the Court has to form an opinions to a law of any

country and statement of such law contained in a book purporting to be printed or published under the authority of the Government of such country and to contain any such law and any report of a ruling of the courts of such country contained in a book purporting to be a report of such ruling, is relevant."



Thus, the motive of the appellant for making a benami transaction in the name of his brother stands fully proved. The other criteria for proving the character of Benami transaction are also proved by the evidence, which is discussed below, under Issue No. 5 which is apparently the most important issue. The appellant has examined himself as Ex. 72. In his statement, Qxirib Ali has fully supported his contentions as put forth in his pleadings. He has stated that he was in the Government service of Khairpur state and was issueless. These were persons for making Benami transaction and the same appear to be plausible. Qurib Ali, the appellant has further stated that he made the payment and incurred expenditure on the improvement of the land. He claimed that his brother was only a grazier and cultivated small pieces of lands which were hardly enough for his own maintenance. He has produced 5 true copies of Form 8-A as Ex. 74/1 to 74/5 Revenue Receipts for Flat rate as Ex. 75, 81 land Revenue receipts as Ex. 76/1 to 76/81, 6 land revenue bills as Ex. 77/1 to 77/6. True copy of Form A. No. 1072 as Ex. 78, True copy of Khasra of two Dehs as Ex. 80 and 81, true copies of "A" Forms Nos. 496, 633/496 etc. as Ex. 81 to 85, Revenue bill form as Ex. 86. Land Revenue receipts as Ex. 87/1 to 87/2. Original challan as Ex. 88. True copy of flat rate bill as Ex. 92. All these documents are originals or certified true copies and I have no reason to dis-believe them or doubt their authenticity or genuineness. In presence of such over-whelming evidence or purchase of land and possession thereof, I cannot subscribe to the observations of the two courts that Qurib Ali only confined his case to oral testimony.

As for the other evidence, as already stated, Qurib Ali examined as many as 7 witnesses, who are all either the close relatives of the parties, their close acquaintances. To appreciate and evaluate their evidence, the jist of each evidence is given below :--

PWJIAND Ex. 45. He stated that Qurib Ali was Government servant and because of the ban on purchase of immovable property by Government servants, Qurib Ali being issueless purchased the land in question in the name of his brother Muhammad Chuttal. Qurib Ali paid the sale consideration and bore the improvement charges of the land. Muhammad Chuttal used to graze buffaloes. Qurib Ali used to get the land cultivated and his brother used to live separately. In cross, he stated that three sons were born to Qurib Ali after his retirement. I was often present when Qurib Ali purchased the land.

 He has repelled all suggestions vehemently that the land was not purchased by Qurib Ali, or the same was being cultivated by Muhammad Chuttal.

PWSODHOEx. 46.

He stated that Qurib Ali purchased the land when he was in Government service in the name of his brother and he used to enjoy its produce and make expenditure on cultivation. He stated that Muhammad Chuttal had no interest in the land in question. In cross, he admitted that he was cultivating different survey Nos. of Plaintiff Qurib Ali as his Hari. He has also denied all suggestions put forward by defence about the title of Muhammad Chuttal over the land in question.

PWRAHIMBUXEx. 47.

He has stated about the theft of the bag of Qurib Ali which was stolen by the defendants and which contained important documents. As for the factum of ownership, this witness has pleaded ignorance.

PW GULZAR Ex. 48.

He has deposed in un-ambiguous terms that the land belonged to Qurib Ali who has purchased it while in Government service in the name of his brother. Qurib Ali used to keep haries and he also acted as a witness of the sale-deed Ex. 49 which was a benami sale in the name of Muhammad Chuttal for which sale consideration was paid by the Qurib Ali. He is the maternal uncle of the parties, and is supposed to be well versed with the facts .of the case. He was also not prepared to admit that Muhammad Chuttal had any interest in the land in question.

PWMIANBUXEx. 50.

He deposed that he cultivated the land in question as a Hari of Qurib Ali. He used to give him seed and fertilizer. About three-four years back, defendants have occupied the land.

PW SAHIB KHAN Ex. 51.

The land was given to me on harrap by Qurib Ali and he used to give seed and fertilizer to me and take batai. At present land is in possession of Shahnawaz (His statement was recorded on 2.9.1980).

PW MUHAMMAD AYUB Ex. 70.

He is a witness about the theft of the bag of Qurib Ali. He has stated that Abdul Majeed took away the bag without informing us.

I now propose to summarily deal with the evidence produced in defence.

DW 1 Shah Nawaz, who is son of Muhammad Chuttal, who died prior to the retirement of Qurib Ali and who was subsequently married with the daughter of Qurib Ah', occupied the land in the year 1976 and got the foti khata badal in favour of L.Rs of Muhammad Chuttal. He has stated that the land in question was purchased by his late father and during his life time has remained in possession and enjoyment of the same. He has denied all contention of the Plaintiff Qurib Ali and has further denied that he has not occupied the land but it has devolved upon him in due course of law. He has produced a number of documents which are listed below as Ex. 113 to 142. It is noticed that most of such documents are duplicate copies of the documents produced by Qurib Ali, or receipts for Dhal etc. after the occupation of the land by him. The witnesses examined by the defence are Beaux Ali and Bagh Ali. Their evidence may also be summarized as under :--

DW BAGH ALI (Ex. 98).

He deposed that the suit land was purchased by Muhammad Chuttal and I used to cultivate the land as hari on a portion. Prior to me Nizamuddin and Abdul Majeed used to cultivate the land as haries. (Such persons have not been examined). He has strongly asserted that Qurib Ali neither purchased the land nor he had any concern with the same. He has never remained in possession. In cross, he has admitted that 30-40 years ago he used to sell fuel. His Goth is situated 2 miles away from the land in question.

DW3 BUXALI (Ex. 101).

He deposed that after death of Muhammad Chuttal, Nizamuddin used to cultivate the land and sons of Bagh Ali are cultivating the land. In cross, he admitted that for the last 10-12 years he was working as Beldar. I heard that Muhammad Chuttal purchased the land and I do not know who paid the consideration. He repelled the suggestion that the suit land belonged to Plaintiff Qurib Ali.

After analyzing the evidence discussed above and making its proper evaluation, there remains no room for doubt that the appellant has succeeded in proving the Benami character of the transaction. The overwhelming evidence which is unimpaired by cross-examination has titled the balance in his favour. It would be worthwhile to mention that DW Shahnawaz was not born when the purchases were made and thus, whatever he has stated in this behalf in hearsay. No direct evidence has been produced to show that the purchased were made by Muhammad Chuttal in his benefit. Judged from the surrounding circumstances, also, the nature of transaction is proved to be Benami. I have no hesitation to respectfully subscribe to the view of the learned Judge of the Hon'ble Supreme Court that documentary evidence is not invariably essential to support a finding for Benami character of a transaction. In the instant case, the appellant has not confined to production of oral evidence but he has placed on record authentic and genuine record in support of his claim. As has been rightly pointed out that the true touchstone for determining Benami nature of transaction as consistently formulated by the Superior Courts through various judicial pronouncements. Some of them are also mentioned in the Remand Order which are reproduced as under :--

(i)    Source of consideration.

 (ii)   From whose custody title documents and other documents

came in evidence.

(iii) Who is in possession of suit property, (iv) Motive for the Benami transaction.

In the light of evidence on record, I wish to make my observations on each point as under :—

Point No. (i) & (ii) :

Admittedly, the documents produced as Ex. 79 to 86 are the title documents which remained in possession of the person who is the real owner. Similarly, documents produced as Ex. 88 is the original challan for paying money which is supported by Revenue receipts Ex. 76/1 to 76/81 and the entries in the name of Qurib Ali in Form VIII-A Ex. 74/1 to 74/5 as well . as Ex. 80 clearly and manifestly prove that the land in question was purchased by Qurib Ali and he made the payment of sale consideration.

Point No. (iii)

The documents produced above clearly establish that since before 1976, the appellant was in possession when he was forcibly dispossessed by ~~"  "•"• Respondent No. 1 through force. The statement of various persons examined as PWs and DWs are in consonance on this point.

Point No. (iv):

The circular placing a ban on the purchase of land by Government servants in Khairpur state is reproduced as under :—












The Book containing such notification/circular is beyond any doubt genuine, original and relevant. Besides, the above reason the fact that at the relevant time, Qurib Ali was issueless, makes out a strong motive for a "Benami Transaction". The above discussion exhaustively covers the main Issue No. 5 which is pivtoal in the whole case and is replied in favour of appellant. Incidentally, Issue Nos. 6 & 7 are also covered tinder this discussion and these are also decided in favour of appellant. H  As for Issue No. 8 is concerned, the learned trial Curt has rightly pointed out that the suit having been filed by the appellant, thi« issue is declared as redundant.

Issues Nos. 9 and 10 are discussed in the concluding paragraph of this judgment while Issues Nos. 1 to 4 were not pressed by the parties. Thus all the issues are discussed as framed in the suit.

Referring to the legal objection relating to Section 23 of Contract Act, suffice it to say that in the instant suit, an agreement implied or concluded is not to be enforced against the Government. Therefore, Section 23 of Contract Act shall have no impact on the brivity of contract between Qurib Ali and Muhammad Chuttal. The law of Benami Transaction has full recognition in Pakistan and the legislature by any general measure has not declared such transaction as void. The Circular No. 24 issued by the erstwhile state imposes restrictions on purchase of property by a Government servant. It does not restrain a Government servant from purchasing immovable property in the name of other person for various reasons. In my opinion, Section 23 of Contract Act has no application on the present case.

The upshot of the above discussion is that the appellant has successfully proved his case tiirough oral and documentary evidence. He is the real owner of the land in question and the judgment and decree passed by the learned senior Civil Judge and affirmed in appeal are liable to be set K aside. Consequently, the suit of the appellant is decreed as prayed with cost. The learned trial Court is directed to ascertain the mesne profits by appointing a Commissioner and pass final decree in accordance with law.

(S.A.K.M.)                                                       Suit decreed Appeal accepted.


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