KOPPULA KOTAYYA NAIDU Vs. CHITRAPU MAHALAKSHMAMMA

JUDGEMENT

(1.) Defendants 1 to 3 (father and two sons) are the appellants. The suit property originally belonged to the 1 defendant and the 4 defendant had a mortgage over it. From the evidence it appears that a portion of it belonged to one Sitayya Naidu, another son of the 1 defendant, but no such distinction has been made in the suit and it is not necessary to refer to it any further. At a revenue sale on 8th May, 1918, the property was purchased by the 4 defendant for Rs. 762 in the name of his clerk. The case of the appellants is that this purchase by the 4th defendant was benami for themselves, the main object of the benami sale being to defeat an anticipated claim for partition from one Ranganayakulu Naidu, the son of the 1 defendant's brother. Though the property was sold, admittedly the appellants continued in possession; but according to the 4 defendant it was thenceforward as his tenants whereas the appellants contend that it was because the real title vested in them. Later on, 6 acres out of this property were sold by the 4 defendant to the 1 defendant's daughter Chittamma for Rs. 1000. The appellants allege that this sale was for the purpose of reimbursing Chittamma for the money which she lent for the purchase at the auction. Ranganayakulu brought a suit O. S. No. 42 of 1922 for partition and recovery of a half share of the family properties. That suit was directed against the present suit property and another 20 acres sold to one Chelamayya. In that suit the contention was raised by the plaintiff that the sale of the suit land to the 4 defendant was benami, but this was denied by the present defendants. After some evidence had been taken in the suit it was compromised on 25 January, 1924, as a result of which Ranganayakulu Naidu received 7 acres, 5 acres of which form portion of the suit property. Subsequently, on 5 August, 1924, the 4 defendant sold the remaining property to the plaintiff for Rs. 4,000 under the sale deed, Exhibit H, and the present suit was instituted by her for recovery of the property from the defendants.

(2.) The defendants denied that the 4 defendant had any title to the suit property as it was purchased by her benami for themselves . The plaintiff disputed the benami purchase contending that the 4 defendant purchased it for himself. It was also contended by the plaintiff that in the circumstances of the case it was not open to defendants 1 to 3 to raise the plea that the property was purchased benami by the 4 defendant. The second issue in the case related to these contentions. The learned District Judge" upheld the contention of the appellants that the property was purchased benami for them by the 4 defendant, but he declined to give effect to this finding because he held that the 1 defendant defrauded Ranganayakulu of some portion of the suit property by setting up the false plea-that the property belonged to the 4 defendant as a result of the auction purchase. Having been party to a plea of fraud which was successfully carried out, the learned Judge came to the conclusion that it was not open to the defendants to raise the contention that the purchase of property by the 4th defend-ant at the auction sale was benami for them. It was held in Kamayya v. Mamayya (1916) 32 M.L.J. 484 that a person who has conveyed property benami to another for the purpose of effecting a fraud on his creditors cannot, where the fraud has been effected, set up the benami character of the transaction by way of defence in a suit by the transferee for possession under the conveyance. Following this decision the learned Judge decreed the claim of the plaintiff.

(3.) On behalf of the appellants Mr. Somasundaram, accepting the finding that the purchase by the 4 defendant was benami for the appellants, argues that no fraud was committed by them in O. S. No. 42 by raising the plea that the 4th defendant became the owner of the land by the auction purchase, and that even if a fraud has been committed, since both the 4 defendant and the appellants were parties to the fraud, the Lower Court should have dismissed the plaintiff's suit. The latter argument raises the question whether Kamayya V/s. Mamayya (1916) 32 M.L.J. 484 was correctly decided. Mr. Raghava Rao, on behalf of the respondent, besides supporting the judgment of the Lower Court on the ground on which it is based, argues further that the learned Judge should have held that the purchase by the 4 defendant at the revenue sale was not benami for the appellants but it was for himself. Thus, the points arising for consideration in this appeal are (1) whether the purchase of the suit property at the revenue auction by the 4th defendant was benami for the appellants; (2) whether by raising the plea that the property was sold to the 4 defendant at the revenue sale the defendants as a matter of fact defrauded. Ranganayakulu, the plaintiff in O.S. No. 42 of 1922; and (3) whether in the event of our. upholding the findings of the District Judge, effect should not be given to the decision in Kamayya V/s. Mamayya (1916) 32 M.L.J. 484.