SCHOOL OF LAW, RAFFLES UNIVERSITY

L/118

IN THE HONBLE SUPREME COURT OF INDIA

IN THE MATTER OF

SMT. SURASAIBALINI DEBI

v.

...APPELLANT

PHANINDRA MOHAN MAJUMDAR

...RESPONDENT

WRITTEN SUBMISSION ON BEHALF OF THE APPELLANT

MEMORANDUM FOR THEAPPELLANT

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TABLE OF CONTENTS

INDE X OF AUTHORITIES............................................................................................................3
STATEME NT OF JURISDICTION................................................................................................5
STATEME NT OF FACTS................................................................................................................6
STATEME NT OF ISSUES .................................................................................................................7
SUMMARY OF PLEADINGS..8
WRITTEN PLEADINGS.......................................................................................................................9
PRAYER FOR RELIEF ..14

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INDEX OF AUTHORITIES
A. TABLE OF CASES

SR. NO.

NAME OF CASE AND CITATION

1.
2.

North-Western Salt Company Ltd. v. Electrolytic

Alkali Company Ltd. ([1914] A.C. 461)
Sajan Singh v. Sardara Ali
[1960] A.C. 167

3.

Mithilesh Kumari & Anr vs Prem Behari Khare

1989 AIR 1247, 1989 SCR (1) 621

4.

Anil Bhasin v. Vijay Kumar Bhasin and ors.

II (2003) BC 247

5.

Petheperumal Chetty v. Muniandy Servai

Ind App 98: ILR 35 Cal 551

6.

Smt. Satya Gupta Alias Madhu Gupta Vs. Brijesh Kumar [1998]
INSC 378 (4 August 1998)

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B. TREATISES, BOOKS, REPORTS AND DIGESTS
NAME OF CASE AND CITATION

SR. NO.

1.
2.

J. Beatson, A. Burrows, J. Cartwright; Ansons law of

Contract,[29th edition, Oxford ]
Avtar Singh, Contract And Specific Relief,[11th edition,
Eastern Book Company ]

3.

T S Desai, The Indian contract Act and Sales of goods

Act,[ 29thedition, lexis nexis]

4.

Bare Acts[ The Indian Contract Act,1872 and The Sales of

Goods Act, 1930]

C. IMPORTANT DEFINITIONS
1. Appellant for the purposes of this memorandum shall stand for SMT. SURASAIBALINI
DEBI
2. Respondent for the purposes of this memorandum stands for PHANINDRA MOHAN
MAJUMDAR

D. DYNAMIC LINKS
1.
2.
3.
4.
5.

www.indiankanoon.org
www.google.com
www.advocatekhoj.com
www.lawteacher.net
www.publications.parliament.uk

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STATEMENT OF JURISDICTION

The Appellant is pleased to appear before this Honble Supreme court and
submit to its jurisdiction to present the appeal at hand filed by the appellant
under Article 136 of The Constitution of India 1950.

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STATEMENT OF FACTS
1. The Respondent was employed at Calcutta in the Court of Wards and the service rules did
not permit him to start or carry on any trade or business of his own.
2. It was therefore arranged with the Appellant that he should be held out to be the owner of
a boarding house the suit property--of which the respondent was the true owner, and he
(respondent) was to be in possession as manager.
3. Appellant held out as the nominal owner of the business and that arrangement the lease of
the premises for the business was taken in the name of appellant and licenses from the
police and the municipal authorities were also taken in the name of appellant, that from
the very inception he was in possession and management of the business and exercised all
rights of ownership.
4. The Respondent had to leave Calcutta on medical advice and he put the Appellant in
possession on the understanding that on the respondents returns the Appellant would
hand over possession.
5. When the Appellant refused to so hand over, the Respondent filed the suit, for recovery of
possession.
6. His claim was decreed by the trial Court.
7. The appeal with special leave is filed by the Appellant.

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STATEMENT OF ISSUES

1. Whether the agreement under which the business was carried illegal?
2. Whether the respondent is entitled to recover the business?

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SUMMARY OF PLEADINGS

IN RESPONSE TO THE FIRST ISSUE

the property under which the respondent was carrying out the business was held a Benami
property and hence such a transaction was held to be a Benami transaction under the Benami
Transactions (Prohibition) Act, 1988.

IN RESPONSE TO THE SECOND ISSUE

The benamidar has no beneficial interest in the property or business that stands in his name; he
represents, in fact, the real owner, and so far as their relative legal position is concerned he is a
mere trustee for him."1 From the above,an inference can be made that the respondent transferred
the benami property in the name of the appellant only to escape from the liability of income tax.
It is the frivolous contention of the respondent himself in the fact that he filed an affidavit to the
income tax officer to escape from the liability of tax and also pay a limited income tax on his
income from the business. It is the fraudulent intention to drive benefit from the benami property.
Hence froth the respondent is not entitled to recover the business.

1 Smt. Satya Gupta Alias Madhu Gupta Vs. Brijesh Kumar [1998] INSC 378 (4 August 1998)

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WRITTEN PLEADINGS

1. Whether the agreement under which the business was carried illegal?
In response to the first issue the counsel on behalf of the appellant humbly submit that the
agreement is illegal and void.
In North-Western Salt Company Ltd. v. Electrolytic Alkali Company Ltd. 2 the statement by
Lindley L.J. In the case on hand there is a clear admission by the respondent himself of the
facts on which illegality is sought to be made out. The affidavits which he swore for the
purpose of evading the liability to tax are before the Court and in the circumstances I
consider that it is clearly established that the object of the respondent was to evade the
payment of income-tax
Under the Indian contract act 1872 section23 defines
Section 23:- What consideration and objects are lawful:The consideration or object of an agreement is lawful, unless -It is forbidden by law;
Or is of such nature that, if permitted it would defeat the provisions of any law or is
Fraudulent; of involves or implies, injury to the person or property of another; or the
Court regards it as immoral, or opposed to public policy.
In each of these cases, the consideration or object of an agreement is said to be
Unlawful. Every agreement of which the object or consideration is unlawful is void.
Sajan Singh v. Sardara Ali2, In that case the Court's assistance was given to the plaintiff to
restore to him his property of which he was wrongfully dispossessed by the defendant, even
though title to the property was acquired by the plaintiff by an unlawful transaction, between the
defendant and the plaintiff. In the present case as we have already observed, it was not the object
of the parties at the time when the transaction which is called in the High Court benami was
entered into to circumvent or to defeat the provisions of the Income-tax Act by taking advantage
of the fact that the business stood in the name of respondent. It is true that -the plaintiff obtained
benefit of a lower rate of tax for the business income and his personal income escaped taxation.
But it cannot on that account be held that the transaction on which he founded his claim was
unlawful. According to section 23 of Indian contract act the respondents object was to obtained
2 North-Western Salt Company Ltd. v. Electrolytic Alkali Company Ltd. ([1914] A.C. 461)
2 [1960] A.C. 167

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benefit of a lower rate of tax for the business income and his personal income escaped taxation
because of this the agreement was void.

2. Whether the respondent is entitled to recover the business?

In response to the second issue the Appellant would like to humbly submit before this
honble Supreme Court that the respondent will not be entitled to claim the possession of
the property that is held Benami.
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2. Definitions- In this Act, unless the context otherwise requires,-(a) Benami transaction means any transaction in which property is transferred to one
person for a consideration paid or provided by another person;
(b) Prescribed means prescribed by rules made under this Act;
(c) Property means property of any kind, whether movable or immovable, tangible or
intangible, and includes any right or interest in such property.
THE BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988
An Act to prohibit benami transactions and the right to recover properly held benami and
for matters corrected therewith or incidental thereto.
The sections of the said act apply in the case in hand as follows:
Section- 3 Prohibition of benami transactions3
(1) No person shall enter into any benami transaction.
(2) Nothing in sub-section (1) shall apply to the purchase of property by any person in the
name of his wife or unmarried daughter and it shall be presumed, unless the contrary is
proved, that the said property had been purchased for the benefit of the wife of the
unmarried daughter.
(3) Whoever enters into any benami transaction shall be punishable with imprisonment
for a term which may extend to three years or with fine or with both.
(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, an
offence under this section shall be non-cognizable and bailable.

4. Prohibition of the right to recover property held benami4

(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 defense based on any right in respect of any property held benami, whether
against 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,-3 Mithilesh Kumari & Anr vs Prem Behari Khare 1989 AIR 1247, 1989 SCR (1) 621

4 Anil Bhasin v. Vijay Kumar Bhasin and ors. II (2003) BC 247

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(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) 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 a trustee or towards whom he stands in such capacity.
In Petheperumal Chetty v. Muniandy Servai5, the Judicial Committee quoted "Where a
transaction is once made out to be a mere benami, it is evident that the benamidar
absolutely disappears from the title. His name is simply an alias for that of the person
beneficially interested." The purpose for deciding whether the property could be
recovered by the assertion of a real title there is a clear distinction between the cases
where only an attempt to evade a statute or to commit a fraud has taken place and cases
where the evasion or the fraud has succeeded and the impermissible object has been
achieved. It is pertinent to mention Lord Atkinsons dealing with the effect of benami
conveyances which are motivated by the design to achieve an illegal or fraudulent
purpose.
The benamidar has no beneficial interest in the property or business that stands in his
name; he represents, in fact, the real owner, and so far as their relative legal position is
concerned he is a mere trustee for him." 6 From the above,an inference can be made that
the respondent transferred the benami property in the name of the appellant only to
escape from the liability of income tax. It is the frivolous contention of the respondent
himself in the fact that he filed an affidavit to the income tax officer to escape from the
liability of tax and also pay a limited income tax on his income from the business. It is
the fraudulent intention to drive benefit from the benami property. Hence froth the
respondent is not entitled to recover the business.

5 Ind App 98: ILR 35 Cal 551

6 Smt. Satya Gupta Alias Madhu Gupta Vs. Brijesh Kumar [1998] INSC 378 (4 August 1998)

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PRAYER

In light of the issues raised, arguments advanced and authorities cited it is most humbly and
respectfully submitted that this Honorable Court may adjudge and declare that:

The Appeal should be allowed.

The court may also be pleased to pass any other order, which this Honorable Court may deem fit
in light of justice, equity and good conscience.

Sd/
Counsel
on the behalf of the appellant
Chetan Sharma

MEMORANDUM FOR THEAPPELLANT

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