C.S. Dias JUDGMENT
C.S. Dias, J.
1. Whether a civil Court can consider an application when its jurisdiction is alleged to be barred by operation of law is the question that is agitated for the second time before this Court.
2. The petitioners -- the defendants in O.S. No. 210 of 2012 of the Court of the Munsif, Thodupuzha (Trial Court) -- seek to quash Exhibit P-9 order, granting leave to respondent to amend the plaint.
3. The thumbnail sketch of the facts in the original petition are: the petitioners are the defendants in O.S. No. 210/2012 (Exhibit P-1) filed by the respondent. The respondent has sought a decree, inter-alia, to declare that the settlement deed executed by the 1st petitioner in favour of his wife -- the 2nd petitioner -- is invalid and not binding on the respondent, on the ground that it was the respondent who had paid the sale consideration for the purchase of plaint 'B' schedule property in the name of his sister -- the mother of the 1st petitioner. The petitioners have filed Exhibit P-2 written statement and Exhibit P-3 additional written statement refuting the allegations in the plaint. The right claimed by the respondent in respect of 'B' schedule property is hit by the provisions of the Prohibition of Benami Property Transaction Act, 1988 (hereinafter referred to as 'Act'). The Act was amended on 1.11.2016 by inserting Section 2(9) (A) (b) (iv), carving out an exception in respect of properties transferred, held or where the consideration is paid by a brother or sister. The respondent in order to wriggle out of admissions in the plaint and to bring the suit within the fold of the exception, has filed I.A. No. 913/2017 (Exhibit P-5), seeking leave to amend the plaint and insert an additional paragraph. The Trial Court had dismissed the application. The respondent challenged the order before this Court in O.P.(C) No. 1522/2019. This Court by Exhibit P-8 judgment set aside the order and directed the Trial Court to re-consider the matter. Consequent to the remand, the Trial Court by the impugned Exhibit P-9 order has allowed Exhibit P-5, granting leave to the respondent to amend the plaint. It is aggrieved by Exhibit P9 that the petitioners are before this Court.
4. Heard Sri. M. Narendra Kumar, the learned counsel appearing for the petitioners and Sri. Mathew John, the learned counsel appearing for the respondent.
5. Sri. M. Narendra Kumar argued that the oblique intention of the respondent in filing Exhibit P-5 was to claim the benefit of the exception under Section 2 (9) (A) (b) (iv) of the Act, inserted by Benami Transactions (Prohibition) Amendment Act, 2016 (Act 43 of 2016), which came into effect from 1.11.2016. According to him, the amendment is impermissible in law. The sheet anchor of his contentions were that the Trial Court failed to appreciate that this Court had categorically directed Exhibit P-5 application to be reconsidered after adverting to all the contentions including that recorded in Exhibit P-8 judgment. A reading of the averments in Exhibit P-1 plaint would substantiate that the transaction alleged by the respondent is one squarely hit by the provisions of the Act. The jurisdiction of the Trial Court stands ousted in light of Section 45 read with Section 65 of the Act. He relied on the decision of this Court in Glenny v. The Catholic Syrian Bank Ltd. [MANU/KE/0164/2003 : 2003 (2) KLJ 536] to fortify on the proposition of ouster of jurisdiction by operation of law. He submitted that the original petition be allowed by setting aside Exhibit P-9 order and matter be remitted back to the Trial Court.
6. Sri. Mathew John, on the other hand, defended Exhibit P-9 order. He invited the attention of this Court to paragraph 9 of Exhibit P-8 judgment and argued that the earlier order was set aside only for the reason that the court below had gone into the merits of the amendment, which was found untenable. He drove the attention of this Court to paragraph 5 of Exhibit P-1 plaint, wherein the transaction pertaining to plaint 'B' schedule property is averred. According to him, the respondent has not attempted to withdraw any admission in the plaint, but has only sought to clarify certain factual aspects as evident in Exhibit P-5. The petitioners ought to have raised an objection with regard to the ouster of jurisdiction at the initial stage of the suit, which was not done and, therefore, it is too late in the day for the petitioners to contend that the jurisdiction of the Trial Court is ousted. Hence the original petition be dismissed.
7. In Church of Christ Charitable Trust & Education Charitable Society v. M/s. Ponniamman Educational Trust [MANU/SC/0515/2012 : (2012) 8 SCC 706] the Honourable Supreme Court has, inter-alia, held that, Order VII Rule 11 of the Code of Civil Procedure (Code) makes it clear that the relevant facts which need to be looked into for deciding an application thereunder are the averments in plaint; that the averments in the plaint are germane; that the pleas taken by the defendant in the written statement are wholly irrelevant and that the Trial Court can exercise the power under Order VII Rule 11 at any stage of the suit-before registering the plaint or after issuance of summons to the defendants or at any time before the conclusion of trial. The above legal position has been reiterated by the Honourable Supreme Court in Central Provident Fund Commissioner, New Delhi and others v. Lal. J.R. Education Society and others [MANU/SC/1161/2016 : (2016) 14 SCC 679].
8. Based on the settled position of law, let us first examine Exhibit P-1 plaint, which instituted in the year 2012. The significant averments in the plaint pertaining to the purchase of plaint 'B' schedule property are as follows:
"3. The plaintiff is a permanent resident in the above address. The plaintiff was working in the Air Force and Merchant Navy now leading a retired life with his family at "Thodupuzha Taluk". The plaintiff purchased an extent of 30 cents of property in Sy. No. 281/3/2 vide Sale deed No. 1332/1991 of Thodupuzha SRO dated 18.5.1991. On the same day itself the plaintiff purchased another land just adjoining the property comprised in Sale deed No. 1332/1991 having a total extent of 30 cents which is lying on the western side as per Sale deed No. 1333/1991 in the name of his sister Mary. The property purchased in the name of plaintiff was belong to Dr. Sundararajan, S/o. Madhavan Pillai Thayyakodathu House, Thodupuzha. The said property is scheduled here under as Plaint A schedule property. Eastern side of the said property is the River, Southern side is the pathway towards the river from the public road, western side is the property of Thayyakkodathu Mahadevan which is conveyed to Mary, the sister of the plaintiff and Northern side is the property of Vellaringattu Chacko. The property purchased in the name of the plaintiff sister Mary was belong to Mahadhevan, S/o. Madhavan Pillai. The entire sale consideration for the property purchased in the name of plaintiff and his sister, Mary was paid by the plaintiff himself. The said Mary was married to one Manalel John at Alappuzha and she was employed as college professor at Alappuzha. The first defendant in this suit is the son of the said Mary and second defendant is his wife. The defendants are residing at Alappuzha.
4. The plaintiff purchased the said 30 cents of property in the name of Mary lying at Thodupuzha Village, which is comprised in Sy. No. 281/3/2. The Eastern side of said property belong to the plaintiff, southern side is a pathway proceeding from the public road towards the river, Western side is a public road and the Northern side is the 14 feet pathway towards A schedule property and further to southern side is the property of Vellaringattu Chacko. This property is more clearly scheduled as plaint B schedule property. There is a pathway having a width of 14 feet approximately starting from the public road on the western side passes through the Northern side of B schedule property and ends in the A schedule property. The said pathway is scheduled here in as plaint C schedule pathway. There is an iron gate fixed at the North Western corner of the B schedule property in the western end of the plaint C schedule pathway which is an opening towards B schedule property from the Western side public road. The plaintiff is using the said gate and plaint C schedule pathway is used for the ingress and egress towards B and A schedule properties.
5. The plaintiff submitted that the document happened to be nominally taken in the name of the plaintiffs sister only on the fact that the plaintiff at that point of time was working in Merchant Navy and such during most of the period the plaintiff was sailing in the ship in which he was working. During that period the Government decided to acquire the plaint schedule properties for the construction of excise department building and it was resisted through the filing of petitions and thereby the government dropped the said plan. The plaintiff initially intent to construct a shopping complex on the western portion of the B schedule property and thereafter to construct a residential house in the A schedule property purchased in his name by utilizing the advantage obtained from the B schedule property purchased in the name of Mary. To facilitate such development in the plaint B schedule property, the availability of the person in whose name the said property was purchased in station was necessary as a document had to be registered for the same. The plaintiff and his sister was having a smooth and cordial relationship and that the plaintiff never thought that she would raise any claim in respect of the B schedule property. Despite the fact that the plaintiff's sister knew that the plaint B schedule property was purchased in her name, she never made any enquiry about even the whereabouts of the property much less she took the same. Though the total extent of plaint A and B schedule property were purchased by two documents the properties are lying as a compact plot without any separating boundary. The western side of the B schedule property which abuts the public road enclosed with a wall with gate affix to the same. The gate was always in the lock and key of plaintiff and he continues to be in absolute possession and enjoyment of the entire 60 cents of A and B schedule properties, uninterruptedly as owner, openly and peacefully from 1991 onwards. The original of the title deeds of the plaint A and B schedule property are in the possession of the plaintiff. The property tax in respect of plaint A and B schedule property is being paid by the plaintiff."
9. Thus, the substance of the respondent's case is that he had paid the entire sale consideration for the purchase of plaint 'B' schedule property in the name of his sister Mary and that the document happened to be nominally taken in the name of the Mary only due to the fact that the respondent was working in the Merchant Navy.
10. The Benami Transactions (Prohibition) Act, 1988 came into force on 5.9.1988. The Act was enacted with the objective to prohibit benami transactions and the right to recover property held benami. The Act was extensively amended by Act 43 of 2016, which came into force with effect from 1.11.2016, except Sections 3, 5 and 8 which are deemed to have come into force w.e.f. 19.05.1988 (read Section 1 (3) of the Act).
11. The relevant provisions of the Act, for the determination of the 'lis' are extracted below:
(i) Section 2 (1) of the Act, reads thus:
"2(1): "Adjudicating Authority means the Adjudicating Authority appointed under Section 7.
(ii) Section 2 (8) of the Act, reads thus:
"2(8) "benami property" means any property which is the subject matter of a benami transaction and also includes the proceeds from such property'.
(iii) Section 2 (9) of the Act, reads as follows:
"benami property" means any property which is the subject matter of a benami transaction and also includes the proceeds from such property"
(iv) Section 4 of the Act, reads as follows:
"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 or such property."
(v) Section 45 of the Act, reads as follows:
"Bar of jurisdiction of civil Courts-No civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which any of the authorities, an Adjudicating Authority or the Appellate Tribunal is empowered by or under this Act to determine, and no injunction shall be granted by any Court or other forum in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act'.
(vi) Section 65 of the Act, reads thus:
Transfer of pending cases:- (1) Every suit or proceeding in respect of a benami transaction pending in any Court (other than a High Court) or Tribunal or before any forum on the date of the commencement of this Act shall stand transferred to the Adjudicating Authority or the Appellate Tribunal, as the case may be, having jurisdiction in the matter.
(2) Where any suit, or other proceeding stands transferred to the Adjudicating Authority or the Appellate Tribunal under sub-section (1) -
(a) The Court, Tribunal or other forum shall, as soon as may be, after the transfer, forward the records of the suit, or other proceeding to the Adjudicating Authority or the Appellate Tribunal, as the case may be;
(b) the Adjudicating Authority may, on receipt of the records, proceed to deal with the suit, or other proceeding, so far as may be, in the same manner as in the case of a reference made under sub-section (5) of section 24, from the stage which was reached before the transfer or from any earlier stage or de novo as the Adjudicating Authority may deem fit."
12. The above extracted provisions makes it is explicitly clear that, once it is established in Court that the claim put forth in the suit is a 'benami transaction' not falling within the exceptions under Section 2 (9) of the Act, then no suit will lie in view of Section 4 of the Act; that there is a clear bar of jurisdiction of civil Courts under Section 45 of the Act and that pending cases have to be transferred to the Adjudicating Authority or Appellate Authority.
13. The petitioners have emphatically contended in Exhibit P-7 counter affidavit, filed to Exhibit P-5 application, that the transaction falls within the foul of the provisions of the Act.
14. The Honourable Supreme Court in R. Rajagopal Reddy (dead) by LRs and others v. Padmini Chandrasekharan (dead) by LRs [MANU/SC/0061/1996 : (1995) 2 SCC 630] has held that the Act will not apply to suits, claims and action to enforce any right in property held benami against person in whose name such property is held, only if such proceeding is initiated prior to the coming into force of the Act i.e., w.e.f. 05.09.1988, the date on which the prohibition came into operation. The said view has been reiterated by a Division Bench of this Court in Meenakshi Ammal and others v. S. Vijayalekshmi and others [MANU/KE/1301/2016 : 2016 (3) KLT 690].
15. The case set up by the respondent is that plaint 'B' schedule property was purchased by him in the name of Mary -- his sister as per sale deed 1333/1991 i.e., in the year 1991, which is after the coming of the Act. The suit was instituted only in 2012. Thus, there is no doubt, if it is established that the transaction falls within the foul of the Act, the jurisdiction of the Trial Court stands barred.
16. In T.M. Bagasarwalla v. H.R. Industries [(MANU/SC/0280/1997 : 1997 (3) SCC 443] the Honourable Supreme Court has held that, when an objection as to jurisdiction of a civil Court is raised to entertain a suit and to pass any interim orders therein, the Court should decide the question of jurisdiction in the first instance at the earliest possible time.
17. In Hiralal Vallabbram v. Sheth Kasturbhai Lalbhai and others [MANU/SC/0337/1967 : AIR 1967 SC 1853] the Honourable Supreme Court has held that the question of jurisdiction is a question of law and can be raised at any point of time.
18. This Court had in Exhibit P-8 judgment succinctly directed the Court below to consider the question whether the suit need to be transferred to the Adjudicating Authority. However, the Court by Exhibit P-9 impugned order allowed the application for amendment, by holding that the argument addressed does not have any impact on the amendment; that it was not proper to enter into the merits of the case; and that as the amendment Act was in 2016 the plaintiff could have not have raised the matter at the time of filing the suit in 2012.
19. In view of the clear enunciation of law in the above cited precedents and the provisions of the Act, I am of the considered opinion that, Exhibit P-9 order is erroneous and unsustainable in law and is liable to be interfered with because when the petitioners have raised a specific plea that the suit is hit by the prohibitions under Sections 4 and 45 of the Act, the Trial Court ought to have considered the said question as a preliminary issue, as laid down in T.M. Bagasarwalla v. H.R. Industries, before making an endeavor to decide on Exhibit P-5 application, otherwise as it is commonly said in the idiom it would be like putting the cart before the horse. I say this because, if ultimately the Court finds that it lacks jurisdiction then Exhibit P-9 order would become non-est and void. I refrain from delving deeper into the merits, like whether the amendment can be permitted or is there any implication on the suit in light of Section 1 (3) of the Act and Section 6 of the General Clauses Act, 1897, etc., because I am conscience that I am remanding the matter for fresh consideration. Accordingly, I remit the matter back to the Trial Court for de novo consideration, to decide on the maintainability of the suit in view of Sections 4 and 45 of the Act, as contemplated under Order VII Rule 11 (d) of the Code or decide whether the suit has to be transferred in light of Section 65 of the Act, in which case the Trial Court shall try the question as a preliminary issue, as provided under Order XIV Rule 2 (2) of the Code. Only if the Trial Court finds it has jurisdiction, it shall decide Exhibit P-5 application.
In the result, in exercise of the supervisory jurisdiction of this Court as enshrined under Article 227 of the Constitution of India, I allow this original petition by setting aside Exhibit P-9 order passed in I.A. No. 913 of 2017 in O.S. No. 210 of 2012. The Court of the Munsif, Thodupuzha is directed to decide the maintainability of the O.S. No. 210 of 2012 or whether the suit has to be transferred. Only if the Court below finds it has jurisdiction to try the suit, it shall decide on the faith of Exhibit P-5 application. Considering the fact that the suit is of the year 2012, the entire exercise shall be done, as expeditiously as possible and at any rate on or before 31.03.2021.
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