This second appeal is directed against the judgment of an Additional District Judge, Lahore, dated the 24th of March 1965, by which he dismissed the first appeal of the present appellant with costs.
2. The facts, which form the background, according to counsel for the parties, are that the appellant and the respondent were husband and wife. They were married in 1947 at Hyderabad Deccan and that soon after their marriage they had migrated to Pakistan and settled down in Lahore. In Lahore the appellant entered into an agreement with Mst. Hamidan Kamal-ud-Din to purchase from her a plot of land measuring 3 kanals, 13 marlas and 49 square feet bearing Survey No. 191, situated in the Lahore Cantonment, for Rs. 10,983.00 and paid Rs. 2,000.00 to her as earnest money. Thereafter, the sale deed was executed in favour of his wife, the present respondent on the 17th of October 1961 and registered on the 19th of October 1961. The payment of the balance of the price amounting to Rs. 8,983.00 is shown in the endorsement by the Sub-Registrar to have been made by the respondent.
3. It appears that soon after it relations between the appellant and the respondent deteriorated and ultimately the deterioration resulted in the divorce of the respondent by the appellant in 1963.
On the 9th of November 1963, the appellant filed a suit for declaration that the sale of the plot was a benami transaction and that he was its exclusive owner, whereas the defendant-respondent was its benami-holder. He alleged that the whole price was paid by him and that the reason for executing the sale deed in favour of the defendant-respondent was that her spirits were low owing to his failure in the litigation which he had carried on for securing an evacuee property which was situated on the Mall, Lahore. The precise reason for which this sale deed was executed in favour of the defendant-respondent, in the language of paragraph 3 of the plaint, is as follows:-- "The plaintiff (appellant), therefore, out of sentiments and to restore her courage and confidence in life got the sale deed of the plot in dispute executed on 17-10-1961 and registered on 19-10-1961 in favour of the defendant (respondent) as a benamidar for the plaintiff."
4. The suit was resisted by the defendant-respondent who stated inter alia that after their migration to Pakistan, her husband, who is the appellant, was in need of money, therefore she gifted to him Rs. 10,000.00 to enable him to establish his clinic. According to her, she had no claim for the refund of that money, but recited this fact only to establish her devotion to the plaintiff- appellant. She has further pleaded in paragraphs 3 and 4 of the written statement that although the agreement of sale was made in favour of the plaintiff appellant, he "decided to acquire the property for the answering defendant. It was in pursuance of this that the final sale deed was executed in the defendant's name and the consideration was also paid by the defendant to the vendor before the Sub-Registrar, Lahore Cantt. In the presence of the plaintiff." Rather inconsistently with the words: he decided to acquire for the defendant, she has taken the stand that the price was paid by her. She thus claims to be the owner of the plot of land and has alleged in paragraph 5 of the written statement that it was in her possession.
5. Four issues were struck on the pleadings of the parties as follows
(1) Is the suit maintainable in the present form?
(2) Was the balance of consideration of Rs. 8,983.00 provided by the plaintiff?
(3) Was the land in suit acquired by the defendant as a benamidar for the plaintiff?
(4) Relief.
6. The parties produced their evidence in support of their respective claims. Eight witnesses and a few documents including the agreement of sale, a rent note of the plot of land executed in favour of the plaintiff appellant and a cheque for Rs. 9,690.00 have been produced on behalf of the plaintiff. The stand of the plaintiff-appellant was that he had borrowed Rs. 9,000.00 from P. W. 6 Dr. Ghazanfar A.I for paying the balance of the price by his wife, at the time of the registration of the plot of land and that this debt was repaid by him by withdrawing a sum of Rs. 9,690.00 from his bank and refunding it to P. W. 6 Dr. Ghazanfar A.I. The defendant examined one witness in addition to herself. The other witness was an employee of a Bank who stated that the defendant- respondent had with--drawn a sum of Rs. 5,000.00 from the Bank on the 9th of October 1961. She produced documents to prove this fact including her account with the Bank.
7. The trial Court dismissed the suit with costs on the 14th of September 1964, His findings were that the price was paid by the plaintiff-appellant and that he was in possession of the plot of land, but that the transaction was not benami because the purpose of executing the sale deed in favour of the wife as disclosed by the husband could not be achieved by the husband unless the wife was made by him the genuine transferee of the property. In other words it was a case of out and out gift. The relevant observations are as follows:- "However, the plaintiff's intention would be relevant, as the important question that has to be answered is whether the intention was capable of being fulfilled by a mere benami transaction or whether it could be fulfilled only by a genuine purchase in the defendant's name. The avowed intention of the plaintiff, as stated in paragraph 3 of the plaint, was to restore the defendant's courage and confidence in life . . . .A purchase merely in the wife's name, and not intended to be for her benefit, could not have achieved this object. The plaintiff has stated in answer to a question by the Court that at the time of the transaction he had told the defendant that the transaction was benami and not genuine. This declaration of the plaintiff is calculated more to upset the defendant had aggravate her illness rather than to restore her courage and confidence in life. I, therefore, find it difficult to accept this view of the matter."
The answer to which reference is made in the above quotation rendered in English, is as follows:- "As a physician, I was of the view that even if the plot of land was purchased benami in the name of the defendant, her confidence could be restored. The defendant was informed at the time of the transaction that it was a benami one."
8. The plaintiff went in appeal against the judgment of the trial Court which was dismissed by an Additional District Judge. Lahore, on the 24th of March 1965. The first appellate Court has upheld the decision of the trial Court that the price was paid by the plaintiff-appellant and not by the defendant-respondent and that the plaintiff-appellant was in possession of the property also, but he also agreed with the trial Court that:- "The basic point to be decided is whether, after the formality of acquisition, the proprietary rights in the property in dispute were intended to vest in the plaintiff' (although the property ostensibly might stand in the name of Mst. Fazal-un-Nisa) or the proprietary rights were intended to truly vest in Mst. Fazal-un-Nisa. . . . .Obviously, if Mst. Fazal-un-Nisa was to be merely a benamidar for the plaintiff, the transfer could hardly prove to be a tonic for her. Of course, the price, namely, Rs.
8,983.00 was paid by Altaf Mahmood (plaintiff---appellant) for implementation of the aforesaid decision. The parties in those days were living peacefully as husband and wife. It was, therefore, immaterial if the husband secured a lease deed from Ghulam Muhammad who was at the time of the transfer in actual possession of the property in dispute. For similar reasons, the custody of the title deed cannot be decisive in determining whether the proprietary rights were in reality to vest in the husband or the wife. It would thus appear that the decisive factor is plaintiff's own intendment as expressed by him in the plaint. .
Assuming that Mst. Fazal-un-Nisa was very much pulled down in mental health, the only way in which she could be restored to health was to do something real and substantial. This was possible only if the property in dispute had been not only registered in her name but actually and substantially transferred to her."
9. The plaintiff-appellant has now come in second appeal to this Court and his Advocate has summarised the findings of fact of the lower Courts in the first paragraph of the grounds of this appeal as follows:-- "(i) The agreement of sale was in the name of the appellant (plaintiff) and that earnest money of Rs. 2,000.00 was paid by the appellant. This fact is admitted by the respondent-defendant).
(ii) That the expenses of stamp duty and registration were paid by the appellant.
(iii) That the entire balance of price was paid by the appellant.
(iv) The appellant is in possession of the land in dispute (This fact has been conceded by the defendant's counsel).
(v) That the premium to the Military Estate Officer. Lahore Cantonment, was being paid by the appellant."
Counsel for the parties agree that in this appeal the finding of the lower Courts on issue No. 3 only is in dispute. From this point of view the above findings of fact are significant because the considerations on the basis of which a transaction is to be held benami or not include them. The relevant considerations have been summarised by Nathuni Lal in his book on the "Law of Benami Transaction" (1964 Edition) as follows:- "One must have regard to the following facts viz.,
(i) the source from which the purchase money was derived,
(ii) the possession of the property, i.e.,
(a) the party in possession of, and the nature and character of his possession,
(b) whether possession was taken after the alleged gift or purchase-if not taken, why not,
(iii) the position of the parties and their relation to one another,
(iv) the circumstances, pecuniary or otherwise, of the alleged transferor,
(v) his motive is making the alleged transfer,
(vi) the custody and production of the title deed, and
(vii) the previous and subsequent conduct of the parties.
But it must be noted that each of these circumstances taken by itself is of no particular value and affords no conclusive proof of the intention to transfer the ownership from one person to the other.
But a combination of some or all of them and a proper weighing and appreciation of their value would go a great way towards indicating whether the ownership has been really transferred or where this real title lies."
Counsel for the parties agree that out of the above-mentioned considerations there is only one circumstance which is in favour of the defendant-respondent and it is that the (sale deed) was in her possession. The property was, however, leased by the plaintiff-appellant and the Rent Note (Exh. P. 2) was produced from his possession. A doubt has been expressed by the trial Court as to whether the rent note was executed at the time of leasing the property or during the litigation, but both the Courts have found that the property was leased by the plaintiff-appellant and that he has remained in possession of the property as well as the rent note.
10. The manner in which this appeal has been resisted on behalf of the defendant-respondent disclosed a preciseness of the point of view which was sought to be pressed. Mr. Shahzad Jahangir stated at the outset that this being a second appeal, he would not dispute the findings of fact. He referred to Abdul Hamid and others v. Khalil Ahmad (PLD 1955 FC 38) and decided to limit his address to the contention that the appeal itself was not maintainable. His reasoning was that the lower Courts have found that the transaction was not of benami nature, because the husband intended to give away the property to his wife which finding according to counsel, is a finding of fact. In support of his stand that it was a finding of fact he argued that the decisive consideration, in determining whether a transaction is benami or not, is to find out whether the intention was that it should be a gift or a quasi-trust. There are, undoubtedly several consider--nations according to counsel, which lead to the determination of the intention, but after taking all of them into consideration, the basic fact which needs to be discovered is whether the intention was to give away the property to the ostensible owner or to retain it for the benefit of the party who made the transaction. Since the essence of the whole process is the discovery of the intention of the party concerned and since intention is a fact according to the definition of "fact" given in section 3 of the Evidence Act, the whole process involved in the determination of that intention consists according to counsel, of steps taken to determine a fact and, therefore, not open to re-consideration fn second appeal. The expression "fact" has been defined in section 3 of the Evidence Act as follows:- " `Fact' means and includes-
(1) anything, state of things, or relation of things capable of being perceived by the senses;
(2) any mental condition of which any person is conscious." Illustration (d) elucidates the meaning of clause (2) as follows:- "That a man holds a certain opinion, has a certain intention, acts in good faith or fraudulently, or uses a particular word in a particular sense, or is or was at a specified time conscious of a particular sensation, is a fact."
11. Counsel elaborated the above contention by referring to judicial precedents in which it has been held that inferences drawn from facts remain questions of facts and that inferences drawn from law remain questions of law. Reference in this connection was made by him to Nadir Shah v. Lal Shah and another (PLD 1954 Lah. 447), Sree Meenakshi Mills Ltd., Madurai v. Commissioner of Income-tax, Madras (PLD 1957 SC (Ind.) 188) and Allah Dad v. Bagh A.I and another (PLD 1968 Lah.
428). The propositions on which counsel for the defendant-respondent relies are set out neatly by the Privy Council in Wali Muhammad and others v. Muhammad Bakhsh and others (AIR 1930 P C 91) as follows:- "No doubt questions of law and fact are often difficult to disentangle, but the following propositions are clearly established:--
(1) There is no jurisdiction to entertain a second appeal on the ground of erroneous finding of facts, however, gross the error may seem to be: (See Durga Choudrain v. Jawahir Singh Chaudhry 17 I A 122 (P C).
(2) The proper legal effect of a proved fact is essentially a question of law, but the question whether a fact has been proved when evidence for and against has been properly admitted is necessarily a pure question of fact. (See 45 I A 183: AIR 1918 P C 92).
(3) Where the question to be decided is one of fact, it does not involve an issue of law merely because documents which were not instruments of title or otherwise the direct foundation of rights, but were really historical materials, have to be construed for the purpose of deciding the question.
(See Midnapur Zamindary Co. v. Uma Charan Mondal (45 M L J 663: 29 C W N 131: AIR 1923 P C 187).
(4) A second appeal would not lie because some portion of the evidence might be contained in a document or documents and the first appellate Court had made a mistake as to its meaning, (See Nowbutt Singh v. Chutter Dharee Singh (19 S W R 222).
Great reliance was placed by the appellants' counsel on 54 1 A 178 (AIR 1927 P C 102), but there the tenancy was admitted, and the question was whether it was permanent or not, and the solution of it depended upon what was the legal inference to be drawn from proved facts, or in other words, the question was what was the legal effect of proved facts."
The last part of the above quotation should be noted. It follows from it that a legal inference with respect to a question of law arising from a set of facts is a question of law. To the same effect are the following observations in Nadir Shah's case: "It is contended by Mr. Mushtaq Hussain Munir, learned counsel for the respondent, that a conclusion or inference to be drawn from the evidence is always a matter of law the correctness of which can be called in question in second appeal. This argument is often advanced from the Bar but there is no warrant for it. An inference as to a fact, drawn from the evidence, direct or circumstantial, remains an inference of fact which cannot be questioned in second appeal, but where the question is whether the facts found do or do not constitute a legal transaction of a particular kind, e.g. a sale, mortgage, servitude or tort, such question is clearly one of law."
The last observation made in the above quotation raises the deli--cate question as to when inferences drawn from facts are of fact and when of law. This aspect has been examined by Roscoe Pound in Volume V of his book "Jurisprudence". He has supported his conclusion by quoting from the judgment of Lord Denning in British Launderers' Association v. Borrough of Hendon Rating Authority ((1949) 1 K B 470) and simultaneously paid a tribute to the quality of his Lordship's discussion The following observations of the author, which appear in the above Volume at pages 549 and 550 may be reproduced with advantage:- "It has been said in what seems the best judicial discussion of the subject, that a distinction must be made between primary facts and the conclusions to be drawn from them. `Primary facts are facts which are observed by witnesses and proved by oral testimony or facts proved by the production of a thing itself, such as original documents. Their determination is essentially a question of fact for the tribunal of fact, and the only question of law that can arise on them is whether there was any evidence to support the finding. The conclusions from primary facts are, however, inferences deduced by a process of reasoning from them. If, and in so far as, those conclusions can as well be drawn by a layman (properly instructed on the law) as by a lawyer, they are conclusions of fact for the tribunal of fact; and the only questions of law which can arise on them are whether there was a proper direction in point of law; and whether the conclusion is one which could reasonably be drawn from the primary facts . . . . . If, and in so far, however, as the correct conclusion to be drawn from primary facts requires, for its correctness, determination by a trained lawyer-as, for instance, because it involves the interpretation of documents or because the law and the facts cannot be separated, or because the law on the point cannot properly be understood or applied except by a trained lawyer-the conclusion is a conclusion of law on which an appellate tribunal is as com--petent to form an opinion as the tribunal of first instance'."
12. The conclusion, which follows from the above dis--cussion, to my mind, is that it depends upon the object with which inferences are drawn in a case as to whether those inferences are inferences of law or of fact. If the object of the process is to infer the existence of a fact by construing and interpreting a set of other facts, then the inference is of fact, but if the object is to draw a legal inference from a set of facts then such an inference is an inference of law:
13. Applying the above principle to those cases in which the object is to determine whether a transaction was of benami nature or not, one undoubtedly follows a process of thought for discovering the intention of the party who made the transac--petition. The basic document of title is rarely of any help in benami transactions because as pointed out in some precedents the idea ir--respective of any motive in making a benami transaction is to conceal the reality. The investigation made for the discovery of the reality may lead to the conclusion that either the intention was to make a gift or to create a quasi-trust. If it is found that there was a gift then) that puts an end to the controversy about the benami character of the transaction, because then the ostensible owner should be declared to be the real owner, but if the conclusion is that the real owner desired to remain the beneficiary and allowed the ostensible owner merely to act as his trustee, then it is a benami transaction.
14. Counsel for the defendant-respondent has argued that in this case the finding of the lower Courts is that the intention of the plaintiff appellant was to make a gift. The reason for which they came to this conclusion, as disclosed in their judg--ments, is that the object of the transaction being to resuscitate the down hearted wife by acquiring property, this object could not be fulfilled if there was an ostensible gift only and the wife was also told that she was not the real owner. Both the lower Courts have laid emphasis on this aspect of the case and counsel for the defendant- respondent has argued on that basis that the intention being admittedly to revive the spirits of the emotion--ally depressed wife, it is inconsistent with that intention that the husband should, at the same time, take the stand that he meant to make the transaction merely ostensible and not real.
This conclusion of the lower Courts, according to counsel, is a finding of fact. Counsel has, therefore, contended that this finding cannot be disturbed in second appeal. He supplemented his argument by saying that a finding of fact is not open to re--consideration in second appeal unless the inference on which it is based is found to be absurd. He referred to Chittaluri Sitamma and another v. Saphar Sitapatirao and others (AIR 1938 Mad. 8) in support of this point of view.
15. The above reasoning of counsel for the defendant---respondent does not, to my mind, fully recognise that in the process of the lower Court's reasoning there is continuously an attempt to find out whether the facts, which have been proved, do according to law, constitute one kind of transaction or another. A number of those factors which are relevant for drawing such a conclusion have been set out above in the summary made by Nathuni Lal in his book on the Law of Benami Transactions. All of those considerations play their part in the process of thinking and if it is said that they are all used for discovering the intention with which the transaction was made, then it is clear that they help in determining whether the in--tention was to create a quasi-trust or to make a gift. But whether transaction is a quasi-trust or gift is a question of law. It is true that with the determination of the nature of intention it is possible directly to arrive at a conclusion as to whether the nature of the transaction was one or the other, but let not be forgotten that conclusions, which are drawn about the intention, are drawn with a view to find out whether the intention fits into one type of transaction or another. In this case, the lower Courts have come to the conclusion that the object of the husband was to revive the spirits of the emotionally suffering wife but it appears that the learned Judges have not kept in view the nature of the suffering which the wife was undergoing. 1t was not on account of any lack of goodwill towards the husband but on the contrary on account of the suffering of the husband as a result of his failure in a certain litigation. It was, therefore, a sympathetic suffering. The cure of that suffering, if I may say so, required a reassurance that the family was still financially self-sufficient and progressive so that the pain of the family loss would be forgotten. The loss was not of the wife but of the family, therefore, if the family acquired the property in the name of the wife, without the property (being exclusively) of the wife, it could make no substantial difference. Yet the lower Courts have taken the view that since the acquisition was for the benefit of the wife, the object could be achieved only by a gift to her.
This way of thinking to my mind is not supported by the circumstances of the case.
16. The process of thought which is set out above is not confined to inferences of facts, because the entire outlook is controlled and directed by the legal provisions in view of which and for the purposes of the application of which the facts are scanned and analysed. The basic object is to find out whether the facts fit into the creation of a quasi-trust or the making of a gift.
17. I am accordingly inclined to think that it is open for the plaintiff-appellant to raise the question in this appeal as to' whether the transaction in dispute was a benami one or not I. I have attempted to analyse the relevant factors, but there are judgments in which the above processes have been presumed without analysing them. They are, for instance, Maqsudan Lal v. Ram Chander Ram Rachhpat and another (AIR 1925 Lah. 511), Mrs. N. Johnstone etc. v. Gopal Singh and others (AIR 1931 Lah. 419), Malik Jai Kishan Singh v. Parmeshir Da.s and others (AIR 1937 Lah. 471) and Bansi Lal and others v. Mohi Ram and others (AIR 1955 Him. Para. 2).
18. In consequence of the above conclusion, I accept this appeal, set aside the judgments of the first appellate Court dated the 24th of March 1965 and of the trial Court dated the 14th of September 1964, and decree the suit as prayed for in the plaint with costs throughout.