Ragho Prasad Gupta v. Srikrishna Poddar

Bachawat, J. One Lakhan Lal obtained from the Ramgarh Raj a settlement in respect of .08 acre of land in Plot No. 439, Khata No. 125 in village Ramgarh. It is now common case that in obtaining this settlement he acted as the benamidar of the appellant. The respondent claimed the land on the basis of an-other settlement from the Ramgarh Raj. There were proceed-ings under sec. 144 of the Code of Criminal Procedure at the ins-tance of the respondent against the appellant and Lakhan Lal. Eventually the respondent and Lakhan Lal agreed to refer the dispute to the arbitration of one Bateshwar Prasad Singh. On ·F May 16, 1951 the arbitrator made his award. The award was

filed in the court of the Additional Munsif Hazaribagh and the proceeding under sec. 14 of the Indian Arbitration Act, 1940 was marked as T.S. No. 160 of 1951. On November 9, 1953 an application in the form of a written statement on behalf of Lakhan Lal was filed setting forth the objections to the award and pray-ing that the award be set aside and the suit be dismissed. The appellant who held a special power of attorney from Lakhan Lal verified and signed the written statement. On July 1, 1955, Lakhan Lal died 'and his heirs were substituted in his place in the proceedings. On April 30, 1956 the heirs. of Lakhan Lal filed a written statement adopting the earlier written statement and stating that the appellant was the real owner and a necessary party. On May 16, 1956 the appellant filed an application praying that he f>e joined as a defendant. By an order dated June 13, 1956 the Munsif dismissed the application. He observed that only

836 SUPREME COURf REPORT!i [!%9]1SCIC

Lakhan Lal and the respondent were parties to the arbitrauon and the appellant had no /oms stwu/i to be added as a party. He added : "Jf that award is enforced and decree passed on its basis parties concerning the award am to be bound by that and no body else. If out of the suit land under award Mr. Ragho Prasad Gupta is the owner and in possession of 4 decimals out of 8 decimal land and if he was not a party to that award the decree if allowe<l on the basis of that award in question shall not bind him." Thereafter the objections to the award were vigorously pressed by the heirs of Lakhan Lal. On December 22, I 956 the Munsif dismissed the suit and declined to pass a decree in terms of the award mainly on the ground that Bateshwar Prasad was disqualified from acting as an arbitrator. The respondent tiled an appeal from this decree. On July 18, 1958 the 1st Additional Subordinate Judge, Hazaribagh, a)lowed the appeal, dismissed all the objections ~ind passed a decree in terms of the award. On April 9, 1960 the respondent started Execution Case No. 58 of 1960 in the court of the Munsif, Hazaribagh, asking for delivery of possession of the land in accordance with the award decree. The Munsif made an order for delivery of possession. On May 22, 1961 the appellant obstructed the court peon in giving posses-sion of the property. On June 6, I 961 the respondent filed an application against the appellant under 0.21 r. 97 of the Code of Civil Procedure. On December 18, 1962 the Munsif dismissed the application. He observed that as the appellant's prayer for hcing added as a party to the proceedings in T.S. No .160 of 1951 l had been rejected he was not bound by the decree passed against his benamidar. The respondent filed a revision petition under sec. 115 of the Code of Civil Procedure. On December 17, 1963 the High Court allowed the revision petition, set aside the order of the Munsif and directed the executing court to deliver posses-sion of the land to the respondent. The present appeal has been tiled by the appellant after obtaining special leave from this Court.

The crucial question in this appeal is whether the respondent is bound by the decree passed in the previous suit against the heirs of his benamidar. In Gur Narayan v. Shea Lal Singh(') the Judicial Committee held :

"The benamidar has no beneficial interest in the property or business that stands in his name; he repre-sents. in fact, the real owner, and so far as their rela-tive legal position is concerned he is a mere trustee [or him .... The bulk of judicial opinion in India is in favour of the proposition that in a proceeding by ,or•

(I) LR. 46 I.A. I.

R. P. GUPTA v. s. PODDAR (Bachawat, /.) 8:17 against the benamidar, the person beneficially ~ntitl~ is fully affected by the rules of res judicata. With this view their Lordships concur. It is open to the latter to apply to be joined in the action; but whether he is made a party or not, a proceeding by or against his representatives in its ultimate result is fully binding on him. In a contest between an alleged benarnidar, and an alleged real owner, other considerations arise with which their Lordships are not concerned in the present case."

In view of this decision, it is now well settled that in any liti-gation with a third party, the benamidar can sufficiently represent the real owner. The decision in any proceeding brought by or against the benarnidar will bind the real owner though he is not joined as a party unless it is shown that the benamidar could not or did not in fact represent the interest of the real owner in that proceeding.

Let us examine the facts of the present case. In the courts below it was not disputed that Lakhan Lal fully represented the appellant in the agreement of reference to arbitration and in the arbitration proceedings. It was not disputed before us that the award given by the arbitrator was as much binding upon the appellant as if the reference to arbitration was made by the appel-lant himself. The award was filed in court and the notice of the filing of ilie award was given to ilie appellant and Lakhan Lal the two parties to the arbitration agreement. Upon service of tlie notice, the proceeding for enforcement of the, award under s. 14 of the Indian Arbitration Act commenced. The appellant was not a necessary party in ilie proceeding. As the attorney of Lakhan Lal, the appellant filed an application for setting aside tlie award within the time prescribed by Article 158 of the Indian Limitation Act, 1908 and thereafter actively conducted the pro-ceedings. There can be no doubt that while Lakhan Lal was alive, he fully represented the appellant. On his death his heirs were brought on the record. , They adopted his written statement and stated that the appellant was the real owner and a necessary party. At this stage the appellant filed an application for being added as a party. The Munsif dismissed the application observ-ing that the appellant would not be bound by the decree in .the proceedings. Now the question whether the respondent would be bound by the decree was not in issue before the Munsif and' the expression Of opinion oi:t that question cannot operate as res judicata. The Iion-joinder of the appellant as a party did not cause him any prejudice. All the contentions which could be advanced on his behalf against the validity of the award were put foie.vard by Lakhan Lal's heirs and vigorously pressed. Like Lakhan Lal, his heirs continued to represent the appellant in the Sup. CT/69-7 proceedings. In somewhat similar' circumstances the Calcutta High Court held in Prakash Chandra Ghosh v. Mah1"ma Ranjan Chakravarti( 1 ) that the decree against the heirs of the benamidar bound the real owner. There, a mortgagee brought a suit on his mortgage against the sons of· a benamidar a mortgagor and the application of the real owners to be added as a party in the mort-gage suit was rejected with the remark that "By the petitioner• not being made parties, they will not be prejudiced in any way in this suit beyond the fact that, if their case be true, they will be driven to another litigation to fight out their own case." After the rejection of the application the heirs of the benamidar con-tested the suit on behalf of the real owners. On these facts the coun held that the real owners in possession of the property were bound by the decree passe<I in the mortgage suit and the sale in execution of the decree.

The appellant relied on the decision in Mata Prasad v. Ram Charan Sahu('). In.that case, a suit for sale on a mortgage was brought against the ostensible purchaser of the mort~aged pro-perty. The defendant pleaded that she was the benam1dar for his three sons and that the real owners should be brought on the record as defendant. But no steps were taken for adding them as parties. In a subsequent suit for. possession or the property brought by her sons, the Court held that the decree in the earlier suit did not operate as res judicata. The reason was that some defences open to her sons were not open to her and the decree again.st her was based on the finding that she was not the benami-dar for her sons and did not represent them. Some observations in this decision lend support to the contention that the benamidar <:eases to represent the real owner as soon as he discloses his benami status and pleads that the real owner should be added as a party to the suit. In our opinion the contention is unsound. and we are unable to agree with those broad observations.

It follows that the appellant is bound by the decree passed in the ear :ier suit. The decree can be executed against him under 0. 21 r. 35 C.P.C. and he is bound to vacate the property.

The appellant submitted that the High Court had no power to set aside the Munsifs order under s. 115 of the Code of Civil Procedure. This point was not taken in the High Court. If we allow the appellant to raise thLs contention there will be grave miscarriage of justice. The award was made in 1951. The decree in accordance with the award wa~ passed in 1958. For over 16 years the respondent has been depnved of the property awarded to him. Had the High Court dismissed the revision 11 petition on the ground that it had no jurisdiction to interfere with the Munsif's order, the respondent would have immediately ffled {I) l.L.R. [1947J(Z)Cal.185. 12) I.LR. 36 All, 446.

R. P. GUPTA v. s. PODDAR (Bachawat, !.) 831 a suit under 0.21 r. 23 C.P.C. to establish his right to the pro-perty. To that suit the appellant would have had no defence. He is bound by the decree in the earlier suit and is liable to be ejected. The ends of justice require that the appellant ought not to be pennitted to raise this new contention now. It is therefore not necessary to decide whether this contention has any merit. The appeal is dismissed with costs.

The appeal is dismissed with costs.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1117 of 1965.

Appeal by special leave from the judgment and order dated December 17, 1963, of the Patna High Court in Civil Revision No. 287 of 1963.

C. B. Agarn,ala and K. K. Sinha, for the appellant.

M. C. Chag!a and Naunit Lal, for the respondent.