1991 (5) TMI 33 - HC - Benami Property

Summary

Issues:
1. Interpretation of the Benami Transactions (Prohibition) Act, 1988.
2. Determination of whether the suit is maintainable under the Act.
3. Consideration of whether issue No. 11 can be decided as a preliminary issue.
4. Analysis of the applicability of sections 3 and 4 of the Act to the suit transaction.

Interpretation of the Benami Transactions (Prohibition) Act, 1988:
The plaintiff claimed title to a property purchased in the name of his wife, who later transferred it to another defendant. The defendants argued that the suit was not maintainable under the Benami Transactions (Prohibition) Act, 1988. The court analyzed sections 3(2) and 4 of the Act, concluding that the prohibition in section 3(1) did not apply to transactions by a person in the name of their wife or unmarried daughter. As a result, the court held the suit maintainable despite the prohibition in section 4 of the Act.

Determination of Suit Maintainability:
The court considered an application to try issue No. 11 as a preliminary issue under Order 14, rule 2 of the Code of Civil Procedure. It was argued that the issue was one of law and related to jurisdiction. However, the court found that issue No. 11 was not solely an issue of law, as it required evidence to rebut the statutory presumption under section 3(2) of the Act. Therefore, the court decided that all issues, including issue No. 11, should be disposed of simultaneously at the trial.

Consideration of Preliminary Issue Decision:
The court set aside the impugned order, ruling that issue No. 11 could not be decided as a preliminary issue. It was determined that the issue required a fresh consideration along with other issues during the trial. The court emphasized that the decision on issue No. 11 should not be influenced by previous views, allowing for a new interpretation based on the evidence presented.

Applicability of Sections 3 and 4 of the Act:
Arguments were presented regarding the applicability of sections 3 and 4 of the Act to the suit transaction. While one party contended that the provisions did not apply retrospectively, the court did not express an opinion on this matter. The court held that issue No. 11 should be reconsidered during the trial, leaving the determination of the applicability of the Act's provisions to be decided without prior influence.

In conclusion, the court allowed the revision, directing that all issues, including issue No. 11, be decided afresh during the trial without being influenced by previous views.