- 1 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 IN THE HIGH COURT OF KARNATAKA, KALABURAGI BENCH DATED THIS THE 24TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MS JUSTICE J.M.KHAZI REGULAR SECOND APPEAL NO.200345 OF 2015 (DEC/INJ) BETWEEN: DUDDUPUDI SATYANARAYANA S/O VENKANNA AGED ABOUT 64 YEARS, OCC:AGRICULTURE, R/O: VENKATESHWARA CAMP, GANDHINAGAR POST, SINDHANUR, TQ.SINDHANUR, DIST.RAICHUR – 584 128. …APPELLANT (BY SRI. D. P. AMBEKAR, ADVOCATE) AND: 1(A) PEDDAPPA DIED BY HIS LRS SHARANAMMA W/O BASPUR HANUMANTHU, AGE ABOUT:45 YEARS, OCC: HOUSEHOLD AND AGRICULTURE, 1(B) YAMANOORAPPA D/O ERAPPA, AGE ABOUT: 40 YEARS, OCC: AGRICULTURE, 1(C) BASAMMA W/O ERAPPA, AGE ABOUT: 65 YEARS, OCC: HOUSEHOLD & AGRICULTURE Digitally signed by SHIVALEELA DATTATRAYA UDAGI Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 1(D) HOSAGERAPPA S/O PEDDAPPA, AGE ABOUT: 66 YEARS, OCC: AGRICULTURE, 1(E) LAXMAMMA W/O ANNAPPA, AGE ABOUT:66 YEARS, OCC: HOUSE HOLD AND AGRICULTURE, 1(F) HOSAGERAPPA S/O ANAPPA, AGE ABOUT:43 YEARS, OCC:AGRICULTURE, 1(G) NINGAPPA S/O ANNAPPA, AGE ABOUT:40 YEARS, OCC:AGRICULTURE, ALL R/O. PWD CAMP, DUDDUPUDI SCHOOL, VALABELLARY ROAD, VENKATESHWARA COLONY, SINDHANUR, TQ:SINDHANUR, DIST:RAICHUR 1(H) G. LAXMI W/O NAGAREDDY D/O PEDDAPPA, AGE ABOUT: 50 YEARS, OCC:HOUSEHOLD AND AGRICULTURE, R/O.SIRWAR VILLAGE TQ:MANVI, DIST:RAICHUR. 2. ERAPPA S/O AMARAPPA @ ANNAPPA, AGED ABOUT 42 YEARS, OCC:AGRICULTURE, R/O. NEAR DUDDUPURI SCHOOL, OLABELLARI ROAD, TQ.SINDHANUR, DIST.RAICHUR – 584 128. - 3 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 3. RAVIKUMAR S/O MARATAPPA AGE: 44 YEARS OCC: AGRICULTURE R/O MALLATA VILLAGE TQ: MANVI DIST: RAICHUR 4. RAJA HUSSAIN S/O SHAMEED SAB AGE ABOUT: 42 YEARS OCC: AGRICULTURE R/O WARD NO:30, RAICHUR ROAD, GUNDAMMA CAMP, SINDHANUR TQ: SINDHANUR DIST: RAICHUR – 58412. AS PER VIDE ORDER DATED:30.01.2025 …RESPONDENTS (BY R1 (A TO D) ARE SERVED; R1 (E TO G), R2 ARE HELD SUFFICIENT VIDE ORDER DATED 29.03.2021; SRI. P.S. MALIPATIL, ADVOCATE FOR R1(H); SRI. G.G. CHAGASHETTI, ADVOCATE FOR R3; SRI. SANGANABASAVA. B. PATIL, ADVOCATE FOR R4) THIS REGULAR SECOND APPEAL IS FILED UNDER SECTION 100 OF CPC, PRAYING TO SET ASIDE THE JUDGMENT AND DECREE DATED 07.02.2013 PASSED IN R.A.NO.91/2011 ON THE FILE OF THE PRINCIPAL DISTRICT JUDGE, RAICHUR, SETTING ASIDE THE JUDGMENT AND DECREE DATED 30.07.2011 PASSED IN O.S.NO.486/2006 ON THE FILE OF THE SENIOR CIVIL JUDGE AT LINGASUGUR SITTING AT SINDHANUR AND TO PASS ANY OTHER APPROPRIATE ORDERS, IN THE INTEREST OF JUSTICE. - 4 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MS JUSTICE J.M.KHAZI ORAL JUDGMENT (PER: HON'BLE MS JUSTICE J.M.KHAZI) In this regular second appeal defendant No.2 has challenged the impugned judgment and decree of the first appellate Court, which reverse the judgment and decree passed by the trial Court and decreed the suit filed by the plaintiff declaring him as the absolute owner of suit schedule property and that the sale by defendant No.1 in favour of defendant No.2 is null and void and not binding on the plaintiff and other consequential relief. 2. For the sake of convenience, parties are referred to by their ranks before the Trial Court. 3. Plaintiff is the paternal grand father of defendant No.1. He filed the suit against defendant No.1 and challenge the sale executed by him in favour - 5 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 of defendant No.2 contending that he is the absolute owner in possession and enjoyment of suit schedule property. A partition has taken place between him and his three sons about 20 years back. The father of defendant No.1 deserted his family including defendant No.1 and living with one Saramma. With a fond hope that defendant No.1 would take care of his family and also with love and affection for him, plaintiff purchased suit schedule property in the name of defendant No.1 when he was a minor. Plaintiff is the real owner and he is in possession and enjoyment of the suit schedule property, whereas defendant No.1 is the ostensible owner. 3.1 Taking advantage of the sale deed standing in his name defendant No.1 wanted to sell the suit schedule property in favour of defendant No.2. When plaintiff refused to sign the sale deed, defendant No.1 and his mother have become hostile towards the plaintiff - 6 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 and neglected him. Defendant No.1 has executed the sale deed dated 25.6.2003 in favour of defendant No.2. In the panchayat dated 09.07.2005 defendant No.1 has denied the title of the plaintiff which forced him to file the suit. 4. Defendant No.1 filed written statement admitting the relationship and the fact that the partition has taken place between plaintiff and his sons and the father of defendant No.1 has deserted him and his family and staying with one Saramma. However, he has denied that suit schedule property purchased by plaintiff in the name of defendant No.1. He has contended that the mother of defendant No.1 has purchased suit schedule property in the name of defendant No.1, but in the sale deed plaintiff is shown as his guardian. He has denied that he is addicted to bad habits and tried to alienate suit schedule property to meet the expenses of his bad habits. As a matter of fact, defendant No.1 has - 7 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 sold 1 acre out of suit schedule property to defendant No.2 through registered sale deed dated 20.06.2005 for his family necessity. There is no cause of action and sought for dismissal of the suit. 5. Defendant No.2 who is subsequently impleaded has filed written statement stating that the contents of para 2 of the plaint are beyond his knowledge. The claim of the plaintiff that he has purchased suit schedule property in the name of defendant No.1 is barred by Prohibition of Benami Property Transitions Act, 1988 (‘Act’ for short) and thereby his title is ousted. Consequently, defendant No.1 is the absolute owner. Defendant No.2 has claimed that he purchased suit property after satisfying with the title of defendant No.1 and verifying relevant records. It was not resisted by the plaintiff. In fact he has participated in the proceedings of sale transaction and sought for dismissal of the suit. - 8 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 6. Based on the pleadings, trail Court framed necessary issues. 7. At the trial, plaintiff gave evidence as PW1, three witnesses as PW2 to 4 and relied upon Ex.P1 to 8. 8. On the other hand, defendant No.1 examined himself as DW1, his mother as DW2. Defendant No.2 is examined as DW3. No documents are marked on behalf of defendants. 9. The trial Court dismissed the suit. 10. It was challenged by plaintiff in R.A.No.91/2011. The first appellate Court allowed the appeal and decreed the suit by reversing the judgment and decree of the trial Court. 11. Aggrieved by the same, defendant No.1 filed RSA No.7248/2013 before this Court. However, vide order dated 04.12.2013 it was dismissed for default of not complying the office objections. - 9 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 12. After coming to know about the dismissal of the second appeal filed by the defendant No.1, defendant No.2 filed the present appeal contending that the impugned judgment and decree of first appellate Court is against law, facts and probability of the case. It has committed serious error of law in not considering question of limitation in its right perspective. Having regard to the fact that partition has taken place about 25 years back the allegations of the plaintiff that suit schedule property purchased nominally in the name of defendant No.1 is against the facts borne out from the records. The first appellate Court has committed a serious error in accepting the plea of Benami transaction. Defendant No.2 has proved that he is a bonafide purchaser for value without notice and therefore sale by defendant No.1 in his favour is required to be upheld. 13. Vide order dated 19.11.2024, the appeal is admitted on the following substantial question of law. - 10 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 “ Whether in the facts and circumstances of the matter, the First Appellate Court is justified in reversing the judgment and decree passed by the Trial Court on the premise that defendant No.1 being the grandson of the appellant held the property in a fiduciary capacity for the benefit of the appellant?” 14. Heard elaborate arguments on both sides and perused the records. 15. The relationship between plaintiff and defendant No.1 and the fact that partition has taken place about 20 years prior to the filing of the suit and the father of defendant No.1 deserted his family including defendant No.1 and was saying with one Saramma is not in dispute. It is also not in dispute that suit schedule property was purchased through registered sale deed dated 20.6.2005, in the name of defendant No.1 during his minority. While plaintiff claim that he nominally purchased the suit schedule property in the - 11 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 name of defendant No.1, as his father has deserted his family, defendant No.1 has contended that his mother paid the sale consideration out of the income derived from the properties fallen to their share. The defendant No.1 has also contended that in the light of provisions of the Act, the claim of the plaintiff is not sustainable. 16. The trial Court negatived all the contentions of the plaintiff and also held that the suit is barred by limitation and dismissed the same. 17. Even though the defendant No.1 raised the issue of plaintiff debarred from seeking relief in the light of provisions of the Act, the trial Court failed to frame any issue on that aspect. 18. However, the first appellate Court not only reversed the findings of the trial Court and also raise the issue regarding prohibition under the Act, it held that the transaction in question comes under the - 12 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 exception and as such the same would not come in the way of plaintiff claiming the relief and decreed the suit. 19. In the light of the same, substantial question of law is raised as to whether the first appellate Court is justified in holding that defendant No.1 being the grand son of plaintiff held the property in a fiduciary capacity for the benefit of plaintiff. While sub section 1 of section 3 of the Act, prohibits any person from entering into any Benami transaction, sub section 2 and 3 prescribes punishment for entering into Benami transaction. 20. Section 4 prohibits right to recover property held Benami. Before the 2016 amendment, it reads as follows: “4. 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 of such property. (2) No defence based on any right in respect of any property held benami, whether against - 13 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 the person in whose name the property 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 coparcener in a Hindu undivided family and the property is held for the benefit of the coparceners in the family; or (b) whether the person in whose name the property is held as 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 a trustee or towards whom he stands in such capacity”. 21. Thus, as per section 4(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 of such property. No such suit, claim or action could be entertained by any Court. Similarly as per section 4(2) no defence based on any right in respect of any property held Benami, whether against the person in whose name - 14 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 the property 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. 22. However, by sub section 3, before the 2016 amendment, an exception was carved out wherein (a) person in whose name the property is held is a coparcener in a Hindu undivided family and the properties held for the benefit of the coparcener in the family or (b) where the person in whose name the property is held as a trustee or other person standing in a fiduciary capacity and the property held for the benefit of other person for whom he is a trustee or towards whom he stands in such capacity. 23. Admittedly a partition has taken place in the family of plaintiff and his three sons. Consequently, section 3(a) is not applicable. Similarly the concept of trust and trustee is also not applicable. - 15 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 24. The first appellate Court held that the relationship between plaintiff and defendant No.1 is fiduciary in nature and therefore the exception is applicable and the plaintiff is entitled for decree and reverse the judgment and decree of the trial Court. However, the first appellate Court has erred in appreciating the concept of fiduciary relationship. 25. Admittedly, according to the plaintiff himself after the partition, father of defendant deserted his family and children and went away with one Saramma. He failed to take care of the welfare of his wife and children. Therefore, as a paternal grandfather plaintiff took the responsibility of his family. In token of his love and affection towards defendant No.1 and believing that during his old age defendant No.1 would take care of him, plaintiff purchased suit schedule property in the name of defendant No.1 who was a minor and got the sale deed executed. Having regard to the fact that defendant No.1 was the minor when the sale deed was - 16 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 registered in his name and out of love and affection towards defendant No.1 plaintiff got executed the sale deed in his name, it is plaintiff who is standing in fiduciary capacity towards defendant No.1. 26. When the plaintiff has purchased the suit schedule property for the benefit of defendant No.1 and standing in the nature of fiduciary relationship with defendant No.1, question of plaintiff claiming back the property would not arise. On plaintiff being in a fiduciary relationship with defendant No.1 he is precluded from claiming back the property. The ground on which the first appellate Court granted relief in favour of plaintiff is contrary to the concept of fiduciary relationship between him and defendant No.1. Plaintiff being in a position of dominance, authority, trust and good faith and having it given benefit to defendant No.1 he is precluded from claiming back the property and not vice- versa. The first appellate Court has confused itself about the fiduciary relationship between the parties. - 17 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 27. Out of suit schedule property, defendant No.1 has sold 1 acre in favour of defendant No.2. Even though defendant No.1 filed RSA No.7248/2013 against plaintiff and defendant No.2 he has failed to prosecute the same. On 04.12.2013 the said appeal came to be dismissed for non compliance of office objections. He has not chosen to get it restored. After realizing that defendant No.1 has failed to prosecute the said appeal, defendant No.2 has filed the present appeal. The conduct of defendant No.1 indicate and support the allegations made by defendant No.2 that now he is colluding with plaintiff. 28. Thus from the above discussion, this Court is of the considered opinion that the first appellate Court is not justified in reversing the judgment and decree passed by the trial Court on the premise that defendant No.1 being the grandson of plaintiff held the property in a fiduciary capacity for the benefit of plaintiff and - 18 - NC: 2025:KHC-K:1357 RSA No. 200345 of 2015 accordingly substantial question of law is answered in the negative. 29. In the result, the appeal filed by defendant No.2 succeeds and accordingly the following: ORDER i) The appeal filed by appellant /defendant No.2 is allowed. ii) The impugned judgment and order dated 27.02.2013 passed by the first appellate Court in R.A.91/2011 on the file of the Principal District Judge, Raichur, is set aside. iii) Suit is dismissed as barred under section 4 of Prohibition of Benami Property Transactions Act, 1988. Send back the trial Court records along with the copy of this judgment. Sd/- (J.M.KHAZI) JUDGE SMP List No.: 1 Sl No.: 40