PAWAN KUMARversusBABULAL SINCE DECEASED THROUGH LRS. AND ORS.

                        [2019] 5 S.C.R. 1141                             1141


                          PAWAN KUMAR                                    A
                                  v.
           BABULAL SINCE DECEASED THROUGH
                       LRS. AND ORS.
               (Civil Appeal No. 3367 of 2019)                           B
                          APRIL 02, 2019
    [UDAY UMESH LALIT AND INDU MALHOTRA, JJ.]
      Code of Civil Procedure, 1908:
       Or. VII r.11 – Application under – In a suit for declaration of   C
title – Seeking rejection of plaint on the ground that the suit was
barred u/s. 4 of Benami Transaction (Prohibition) Act – Trial Court
allowing the application rejected the plaint – High Court upheld
the order of trial court – On appeal, plea that the case was covered
by s. 4(3) of the Benami Transaction Act – Held: The question
                                                                         D
whether the plaint was barred u/s. 4 of the Act or not could not
have been subject matter of assessment at the stage when
application u/Or. VII r.11 was taken up – The matter required fuller
and final consideration after the evidence was led by the parties –
Application u/Or. VII r.11 is dismissed.
      Allowing the appeal, the Court                                     E

      HELD : In the present case, the controversy has arisen in
an application under Order VII Rule 11 CPC. Whether the
matter comes within the purview of Section 4(3) of the Benanmi
Transaction Act is an aspect which must be gone into on the
strength of the evidence on record. Going by the averments in            F
the Plaint, the question whether the plea raised by the appellant
is barred under Section 4 of the Act or not could not have been
the subject matter of assessment at the stage when application
under Order VII Rule 11 CPC was taken up for consideration.
The matter required fuller and final consideration after the             G
evidence was led by the parties. It cannot be said that the plea of
the appellant as raised on the face of it, was barred under the
Act. The approach must be to proceed on a demurrer and see


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                                1141
1142            SUPREME COURT REPORTS                     [2019] 5 S.C.R.


 A     whether accepting the averments in the plaint, the suit is barred
       by any law or not. [Para 13][1151-F-H; 1152-A]
             Popat and Kotecha Property v. State Bank of India Staff
             Association (2005) 7 SCC 510 : [2005] 2 Suppl. SCR
             1030 – relied on.
 B
             Om Prakash and Another v. Jai Prakash (1992) 1 SCC
             710 : [1992] 1 SCR 15 – distinguished.
             Marcel Martins v. M. Printer and Others (2012) 5
             SCC 342 : [2012] 5 SCR 480 ; R. Rajgopal Reddy
 C           through LRs.v. Padmini Chandrasekharaiah
             through LRs. (1995) 2 SCC 630 : [1995] 1 SCR 715
             – referred to.
                              Case Law Reference
       [2012] 5 SCR 480               referred to            Para 8
 D
       [1992] 1 SCR 15                distinguished          Para 8
       [1995] 1 SCR 715               referred to            Para 12
       [2005] 2 Suppl. SCR 1030       relied on              Para 13
 E

             CIVIL APPEALLATE JURISDICTION: Civil Appeal No.3367
       of 2019
             From the Judgment and Order dated 18.08.2017 of the High Court
 F     of Judicature for Rajasthan, Jaipur Bench, Jaipur in SBRFA No.511/
       2016.
             R.K. Singh, Ms. Neeraj Singh, Kumar Gaurav, Ms. Ritu Reniwal,
       P. Dayal, Rahul Dr. Tripathi, Rameshwar Prasad Goyal, Advs. for the
       Appellants.
 G
             Sarad Kr. Singhania, Milind Kumar, Ms. Rohini Musa, Advs. for
       the Respondents.



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  PAWAN KUMAR v. BABULAL SINCE DECEASED THR.LRS.                                1143
                    AND ORS.

      The Judgment of the Court was delivered by                                A
      UDAY UMESH LALIT, J. 1. Leave granted.
      2. This appeal questions the final judgment and order dated
18.08.2017 passed by the High Court of Judicature for Rajasthan at
Jaipur in SBRFA No.511 of 2016.
                                                                                B
       3. The appellant filed a suit for declaration of title with respect to
premises in Kasba Fatehpur’s main market which were more particu-
larly described in the plaint and prayed that he be declared owner of the
premises and that the sale deed dated 24.07.2006 executed by the first
defendant in favour of the second defendant be cancelled. The material
averments in the plaint were:                                                   C

       (a) A shop in said premises was held by the first defendant, namely,
father of the appellant on rent from the erstwhile owner;
     (b) The first defendant having become old, it was the appellant
who had been looking after the entire business;                                 D
      (c) The erstwhile owner had filed suit for possession which mat-
ter came right upto this Court;
       (d) There was a compromise between the erstwhile owner and
the first defendant under which the premises where the shop is situate,
were agreed to be sold in favour of first defendant;                            E
       (e) The first defendant was not having enough money and as
such it was the appellant who arranged all the money on his own after
borrowing from money lenders on interest;
      (f) At the time of preparing the sale deed, the first defendant had
                                                                                F
indicated that the premises be taken in his name;
      (g) Even after purchase of the premises in the name of the first
defendant, the appellant was conducting the business in the said shop;
      (h) The first defendant had executed a document on a stamp
paper on 14.03.2002 in the presence of witnesses which was verified by          G
Notary Public acknowledging that the appellant had paid the entire con-
sideration towards purchase of the premises.



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1144            SUPREME COURT REPORTS                          [2019] 5 S.C.R.


 A            (i) The second defendant was also a tenant in the premises and
       after the purchase as aforesaid he was making payment of rent to the
       appellant.
               (j) Taking undue advantage of the old age and fragile health of the
       first defendant, the second defendant got written a document in his favour
 B     with respect to first floor of the disputed shop from the first defendant
       on 19.07.2002.
             With the case as aforesaid, Civil Suit No.126 of 2006 was filed by
       the appellant in the court of District Judge, Sikar.
             4. The second defendant filed his written statement denying the
 C     case pleaded by the appellant. Nine years later, the second defendant
       submitted an application under Order VII Rule 11 of the Code of Civil
       Procedure (for short ‘CPC’) praying for rejection of the plaint on the
       ground that the suit was barred under Section 4 of the Benami Transaction
       (Prohibition) Act, 1988 (hereinafter referred to as ‘the Act’).
 D           5. The trial court allowed said application under Order VII Rule
       11, CPC and by its order dated 23.09.2016 rejected the plaint. The
       relevant portion of true translation of the decision of the trial court was
       as under:
             “11. In this way in the present case, the Plaintiff in his Plaint has
 E           himself stated that he wants to purchase the disputed property in
             the name of his father from his own income or by the money
             which he had taken on interest. In my humble opinion under
             Section-4 of the Benami Transaction (Prohibition) Act, 1988 filing
             of present Suit is prohibited. Hence, the judgment of the Hon’ble
 F           Court produced on behalf of the Applicant/Defendant are
             applicable on the present case. The Plaint of the Plaintiff is
             prohibited under Order-7 Rule-11(3) C.P.C.”
             6. The appellant, being aggrieved filed SBRFA No.511 of 2016 in
       the High Court which appeal was dismissed by the High Court vide its
       judgment and order dated 18.08.2017. It was observed by the High
 G
       Court as under:
             “From the averments made in the plaint it is clear that plaintiff is
             seeking declaration in his name in respect of suit property with a
             clear stipulation that he purchased the said property from his own
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    PAWAN KUMAR v. BABULAL SINCE DECEASED THR.LRS.                             1145
            AND ORS. [UDAY UMESH LALIT, J.]

       funds/sources in the name of his father and his father was not          A
       real owner of the suit property, the Act of 1988 provides that 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, shall lie by or on behalf of a person claiming to be the real
       owner of such property. It is not the case of the plaintiff that
                                                                               B
       property in question was held by the defendant No.1 – father, for
       joint benefit/joint ownership. The suit was clearly hit by section 4
       of the Act of 1988 and the learned trial court rightly allowed the
       application under Order 7 Rule 11 CPC.”
       7. The decision rendered by the High Court is presently under
appeal. Mr. Abhishek Gupta, learned Advocate appearing for the appellant       C
invited our attention to the documents on record including the writing
dated 14.03.2002 executed by First Defendant and father of the Appellant.
The relevant portion of said document dated 14.3.2002 was as under:
       “I, Babu Lal Son of late Shri Tara Chand Meharishi, Caste –
       Brahmin, am the Resident of Near Laxminath Press, Fatehpur,             D
       District-Sikar (Raj.)
       In my name in Kasba Fatehpur near Saraswati Library there is
       shop along with rooms made over its terrace. Since this property
       (shop) was purchased by my elder son Pawan Kumar by the
       money earned with his own income, but in order to give respect to       E
       me he had got the Registry of this shop in my name. Hence, over
       this entire property only his right. In future neither mine nor any
       of my other successors shall have any right in this property.
       I have written my this script in my full senses, with healthy and
       sound mind, without under any coercion or influence in the presence     F
       of two witnesses to my elder son Pawan Kumar, so that it shall
       remain as proof and in future during their mutual partition amongst
       brothers, in connection with this shop any kind of dispute would
       not arise.”
        8. Mr. Abhishek Gupta, learned Advocate relied upon the decision       G
of this Court in Marcel Martins v. M. Printer and others1 and submitted
that the case pleaded of the Appellant was fully covered by Section 4
(3) of the Act and that the courts below were not justified in rejecting

1
(2012) 5 SCC 342
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1146               SUPREME COURT REPORTS                         [2019] 5 S.C.R.


 A     the plaint under Order VII Rule 11, CPC. Mr. R.K. Singh, learned
       Advocate appearing for the respondent, on the other hand, contested
       the submission and relied upon a decision of this Court in Om Prakash
       and another v. Jai Prakash2.
              9. Before we consider the rival submissions, we must note Section
 B     4 of the Act, as it stood before it was amended by Act 43 of 2016, was
       as under:
                “4. Prohibition of the right to recover property held
                benami.—
                (1) No suit, claim or action to enforce any right in respect of any
 C              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 of such property.
                (2) No defence based on any right in respect of any property held
                benami, whether against the person in whose name the property
 D              is held or against any other person, shall be allowed in any suit,
                claim or action by or on behalf of a person claiming to be the real
                owner of such property.
                (3) Nothing in this section shall apply,—
                (a) where the person in whose name the property is held is a
 E
                coparcener in a Hindu undivided family and the property is held
                for the benefit of the coparceners in the family; or
                (b) where the person in whose name the property is held is a
                trustee or other person standing in a fiduciary capacity, and the
                property is held for the benefit of another person for whom he is
 F
                a trustee or towards whom he stands in such capacity.”
              10. In Marcel Martins1 a suit was filed in the year 1990 praying
       for declaration that the plaintiffs were co-owners of certain properties
       to the extent of their contribution. After a full-fledged trial, the Suit was
       dismissed by the Trial Court but the judgment was reversed by the High
 G     Court. While considering the question whether the case of the plaintiffs
       would come within the purview of Sub-Section (3) of Section 4 of the
       Act, the matter was dealt with by this Court as under:-

       2
           (1992) 1 SCC 710
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PAWAN KUMAR v. BABULAL SINCE DECEASED THR.LRS.                              1147
        AND ORS. [UDAY UMESH LALIT, J.]

  “28. The critical question then is whether sub-section (3) of             A
  Section 4 saves a transaction like the one with which we are
  concerned.
  29. Sub-section (3) to Section 4 extracted above is in two distinct
  parts. The first part comprises clause (a) to Section 4(3) which
  deals with acquisitions by and in the name of a coparcener in a           B
  Hindu Undivided Family for the benefit of such coparceners in
  the family. There is no dispute that the said provision has no
  application in the instant case nor was any reliance placed upon
  the same by the learned counsel for the respondent-plaintiffs.
  30. What was invoked by Mr Naveen R. Nath, learned counsel                C
  appearing for the respondents was Section 4(3)(b) of the Act
  which too is in two parts viz. one that deals with the trustees and
  the beneficiaries thereof and the other that deals with the persons
  standing in a fiduciary capacity and those towards whom he stands
  in such capacity. It was argued by Mr Nath that the circumstances
  in which the purchase in question was made in the name of the             D
  appellant assumes great importance while determining whether
  the appellant in whose name the property was acquired stood in a
  fiduciary capacity towards the respondent-plaintiffs.
  31. The expression “fiduciary capacity” has not been defined in
  the 1988 Act or any other statute for that matter. And yet there is       E
  no gainsaying that the same is an expression of known legal
  significance, the import whereof may be briefly examined at this
  stage.
  32. The term “fiduciary” has been explained by Corpus Juris
  Secundum as under:                                                        F
    “A general definition of the word which is sufficiently
    comprehensive to embrace all cases cannot well be given. The
    term is derived from the civil or Roman law. It connotes the
    idea of trust or confidence, contemplates good faith, rather than
    legal obligation, as the basis of the transaction, refers to the        G
    integrity, the fidelity, of the party trusted, rather than his credit
    or ability, and has been held to apply to all persons who occupy
    a position of peculiar confidence toward others, and to include

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1148      SUPREME COURT REPORTS                           [2019] 5 S.C.R.


 A       those informal relations which exist whenever one party trusts
         and relies on another, as well as technical fiduciary relations.
       The word ‘fiduciary’, as a noun, means one who holds a thing in
       trust for another, a trustee, a person holding the character of a
       trustee, or a character analogous to that of a trustee with respect
 B     to the trust and confidence involved in it and the scrupulous good
       faith and condor which it requires; a person having the duty, created
       by his undertaking, to act primarily for another’s benefit in matters
       connected with such undertaking. Also more specifically, in a
       statute, a guardian, trustee, executor, administrator, receiver,
       conservator or any person acting in any fiduciary capacity for
 C     any person, trust or estate.”
       33.Words and Phrases, Permanent Edn. (Vol. 16-A, p. 41) defines
       “fiducial relation” as under:
          “There is a technical distinction between a ‘fiducial relation’
 D        which is more correctly applicable to legal relationships between
          parties, such as guardian and ward, administrator and heirs,
          and other similar relationships, and ‘confidential relation’ which
          includes the legal relationships, and also every other relationship
          wherein confidence is rightly reposed and is exercised.

 E        Generally, the term ‘fiduciary’ applies to any person who
          occupies a position of peculiar confidence towards another. It
          refers to integrity and fidelity. It contemplates fair dealing and
          good faith, rather than legal obligation, as the basis of the
          transaction. The term includes those informal relations which
          exist whenever one party trusts and relies upon another, as
 F        well as technical fiduciary relations.”
       34. Black’s Law Dictionary (7th Edn., p. 640) defines “fiduciary
       relationship” thus:
          “Fiduciary relationship.—A relationship in which one person
          is under a duty to act for the benefit of the other on matters
 G
          within the scope of the relationship. Fiduciary relationships—
          such as trustee-beneficiary, guardian-ward, agent-principal, and
          attorney-client—require the highest duty of care. Fiduciary
          relationships usually arise in one of four situations: (1) when
          one person places trust in the faithful integrity of another, who
 H        as a result gains superiority or influence over the first, (2) when
     PAWAN KUMAR v. BABULAL SINCE DECEASED THR.LRS. 1149
             AND ORS. [UDAY UMESH LALIT, J.]

             one person assumes control and responsibility over another,           A
             (3) when one person has a duty to act for or give advice to
             another on matters falling within the scope of the relationship,
             or (4) when there is a specific relationship that has traditionally
             been recognised as involving fiduciary duties, as with a lawyer
             and a client or a stockbroker and a customer.”
                                                                                   B
         35.Stroud’s Judicial Dictionary explains the expression “fiduciary
         capacity” as under:
             “Fiduciary capacity.—An administrator who [had] received
             money under letters of administration and who is ordered to
             pay it over in a suit for the recall of the grant, holds it ‘in a     C
             fiduciary capacity’ within the Debtors Act, 1869 so, of the debt
             due from an executor who is indebted to his testator’s estate
             which he is able to pay but will not, so of moneys in the hands
             of a receiver, or agent, or manager, or moneys due on an
             account from the London agent of a country solicitor, or
             proceeds of sale in the hands of an auctioneer, or moneys which       D
             in the compromise of an action have been ordered to be held
             on certain trusts or partnership moneys received by a partner.”
         36.Bouvier’s Law Dictionary defines “fiduciary capacity” as
         under:
                                                                                   E
             “What constitutes a fiduciary relationship is often a subject of
             controversy. It has been held to apply to all persons who occupy
             a position of peculiar confidence towards others, such as a
             trustee, executor, or administrator, director of a corporation or
             society, medical or religious adviser, husband and wife, an agent
             who appropriates money put into his hands for a specific              F
             purpose of investment, collector of city taxes who retains
             money officially collected, one who receives a note or other
             security for collection. In the following cases debt has been
             held to be not a fiduciary one: a factor who retains the money
             of his principal, an agent under an agreement to account and          G
             pay over monthly, one with whom a general deposit of money
             is made.”
         37. We may at this stage refer to a recent decision of this Court
         in CBSE v. Aditya Bandopadhyay 3, wherein Raveendran, J.
3
    (2011) 8 SCC 497
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1150      SUPREME COURT REPORTS                           [2019] 5 S.C.R.


 A     speaking for the Court in that case explained the terms “fiduciary”
       and “fiduciary relationship” in the following words: (SCC pp. 524-
       25, para 39)
          “39. The term ‘fiduciary’ refers to a person having a duty to
          act for the benefit of another, showing good faith and candour,
 B        where such other person reposes trust and special confidence
          in the person owing or discharging the duty. The term ‘fiduciary
          relationship’ is used to describe a situation or transaction where
          one person (beneficiary) places complete confidence in another
          person (fiduciary) in regard to his affairs, business or
          transaction(s). The term also refers to a person who holds a
 C        thing in trust for another (beneficiary). The fiduciary is expected
          to act in confidence and for the benefit and advantage of the
          beneficiary, and use good faith and fairness in dealing with the
          beneficiary or the things belonging to the beneficiary. If the
          beneficiary has entrusted anything to the fiduciary, to hold the
 D        thing in trust or to execute certain acts in regard to or with
          reference to the entrusted thing, the fiduciary has to act in
          confidence and is expected not to disclose the thing or
          information to any third party.”
       It is manifest that while the expression “fiduciary capacity” may
 E     not be capable of a precise definition, it implies a relationship that
       is analogous to the relationship between a trustee and the
       beneficiaries of the trust. The expression is in fact wider in its
       import for it extends to all such situations as place the parties in
       positions that are founded on confidence and trust on the one part
       and good faith on the other.
 F
       38. In determining whether a relationship is based on trust or
       confidence, relevant to determining whether they stand in a
       fiduciary capacity, the court shall have to take into consideration
       the factual context in which the question arises for it is only in the
       factual backdrop that the existence or otherwise of a fiduciary
 G     relationship can be deduced in a given case. Having said that, let
       us turn to the facts of the present case once more to determine
       whether the appellant stood in a fiduciary capacity vis-à-vis the
       respondent-plaintiffs.”

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     PAWAN KUMAR v. BABULAL SINCE DECEASED THR.LRS.                             1151
             AND ORS. [UDAY UMESH LALIT, J.]

      11. The factual aspects of the matter were, thereafter, considered        A
and in paras 42 and 43 it was observed:-
       “42. … …That conclusion gets strengthened by the fact that the
       parties had made contributions towards the sale consideration paid
       for the acquisition of the suit property which they would not have
       done if the intention was to concede the property in favour of the       B
       appellant.
       43. … … Reposing confidence and faith in the appellant was in
       the facts and circumstances of the case not unusual or unnatural
       especially when possession over the suit property continued to be
       enjoyed by the plaintiffs who would in law and on a parity of
                                                                                C
       reasoning be deemed to be holding the same for the benefit of the
       appellant as much as the appellant was holding the title to the
       property for the benefit of the plaintiffs.”
       12. It was, thus, concluded that the transaction was completely
saved from the mischief of Section 4 of the Act by reason of the same
falling under Sub-Section (3)(b) and that the Suit was not barred under         D
the Act. This judgment was rightly relied upon by Mr. Abhishek Gupta,
learned Advocate. On the other hand, the reliance placed by Mr. R.K.
Singh on the decision in Om Prakash2, in our view, is completely
misplaced. The issue there was whether prohibition under Section 4
would apply in relation to actions initiated before the coming into force       E
of the Ordinance or not? In any event of the matter, the issue whether
the provisions of the Act are retrospective has already been settled4.
       13. In the present case, the controversy has arisen in an application
under Order VII Rule 11 CPC. Whether the matter comes within the
purview of Section 4(3) of the Act is an aspect which must be gone into
on the strength of the evidence on record. Going by the averments in            F
the Plaint, the question whether the plea raised by the appellant is barred
under Section 4 of the Act or not could not have been the subject matter
of assessment at the stage when application under Order VII Rule 11
CPC was taken up for consideration. The matter required fuller and
final consideration after the evidence was led by the parties. It cannot        G
be said that the plea of the appellant as raised on the face of it, was
barred under the Act. The approach must be to proceed on a demurrer
and see whether accepting the averments in the plaint the suit is barred
4
    R. Rajgopal Reddy through LRs. Vs. Padmini Chandrasekharaiah through LRs.
    (1995) 2 SCC 630                                                            H
1152                SUPREME COURT REPORTS                      [2019] 5 S.C.R.


 A     by any law or not. We may quote the following observations of this
       Court in Popat and Kotecha Property vs. State Bank of India Staff
       Association5:
                “10. Clause (d) of Order 7 Rule 7 speaks of suit, as appears from
                the statement in the plaint to be barred by any law. Disputed
 B              questions cannot be decided at the time of considering an
                application filed under Order 7 Rule 11 CPC. Clause (d) of Rule
                11 of Order 7 applies in those cases only where the statement
                made by the plaintiff in the plaint, without any doubt or dispute
                shows that the suit is barred by any law in force.”

 C
             14. We, therefore, allow this appeal, set aside the view taken by
       the courts below and dismiss the application preferred by the second
       defendant under Order VII Rule 11 CPC. Since the Suit has been
       pending since 2006, we direct the Trial Court to expedite the matter and
       dispose of the pending Suit as early as possible and preferably within six
 D     months from today. Needless to say that the merits of the matter will be
       gone into independently by the Trial Court.
                 15. The appeal stands allowed in aforesaid terms. No costs.


 E     Kalpana K. Tripathy                                           Appeal allowed.




 F




 G




       5
 H         (2005) 7 SCC 510