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2015 (7) TMI 1307 - HC - Benami PropertyProhibition on Benami transactions - exception contained in Section 4(3)(b) of the Benami Act - fiduciary relationship with respondent or not - time limitation - Whether the claim in the suit is barred by the provisions of Benami Transactions Prohibition Act, 1988? Held that - Since Section 7 of the Benami Act repealed certain provisions, hence, the relationship of trust comprised in such provisions necessarily would be excluded from the sweep of the expression trust/fiduciary relationship found in Section 4(3)(b) of the Benami Act because what is excluded by Section 7 of the Benami Act cannot be got included in Section 4(3)(b) of the Benami Act. Since the plaintiff in the plaint himself states that the property was purchased as a benami property in the name of the father, late Sh. Jai Gopal Gugnani, merely and although the plaintiff has used the expressions fiduciary relationship and trustee, yet these expressions of fiduciary relationship and trustee are not those expressions which will cause the transaction to fall under the exception of Section 4(3)(b) of the Benami Act, but these expressions are those expressions which fall under Sections 81, 82, and 94 of the Trusts Act and which have been repealed by Section 7 of the Benami Act - the suit is barred by the provision of Section 4(1) of the Benami Transactions (Prohibition) Act, 1988. The suit is dismissed.
Issues Involved:
1. Whether the claim in the suit is barred by the provisions of the Benami Transactions Prohibition Act, 1988? Issue-wise Detailed Analysis: 1. Whether the claim in the suit is barred by the provisions of the Benami Transactions Prohibition Act, 1988? The present suit is for declaration, eviction, recovery of damages, rendition of accounts, and permanent and mandatory injunctions concerning property no.33, Uday Park, New Delhi (suit premises). The plaintiff claims to be the sole and exclusive owner of the suit premises, although the title document was in the name of his father, late Sh. Jai Gopal Gugnani. The defendant, the plaintiff's brother, was residing in the suit premises and was represented by his legal heirs after his demise. On 11.08.2008, the issue framed was: "Whether the claim in the suit is barred by the provisions of Benami Transactions Prohibition Act, 1988? OPD". The court noted that legal issues resulting in the bar of any law to the filing of the suit can be treated as preliminary issues under Order XIV Rule 2 of the CPC and that the suit plaint can be rejected at any stage under Order VII Rule 11 CPC. The plaintiff's evidence commenced on 22.09.2009, but even after six years and around 25 hearing dates, the plaintiff's evidence was not completed. The plaintiff, residing in the USA, cited illness for non-appearance in the witness box. On 20.07.2015, the court noted that issue no.1 is a strictly legal issue and put the plaintiff to notice regarding the arguments on this issue. The court examined the plaint and found that the plaintiff admitted the property was purchased in the name of his father as a benami transaction, with the plaintiff being the real owner. The plaintiff argued that the suit is not barred by the Benami Act, citing the exception in Section 4(3)(b) of the Benami Act, which allows exceptions for fiduciary relationships or trustees. The plaintiff relied on the Supreme Court judgment in Marcel Martins Vs. M. Printer and Others (2012) 5 SCC 342. Section 4 of the Benami Act prohibits suits to enforce any right in respect of any property held benami against the person in whose name the property is held. However, Section 4(3)(b) provides an exception for properties held by a trustee or in a fiduciary capacity. The court referred to its judgment in J M Kohli Vs. Madan Mohan Sahni & Anr, which held that the expression "fiduciary relationship" cannot negate the Benami Act itself. The court noted that the Benami Act repealed Sections 81, 82, and 94 of the Indian Trusts Act, 1882, which previously gave statutory recognition to benami transactions. The court emphasized that the fiduciary relationships covered under these repealed sections are excluded from the exception in Section 4(3)(b) of the Benami Act. The court distinguished the facts of Marcel Martins, where the property was transferred involuntarily due to a statutory body's policy, from the present case, where the transaction was voluntary. The court held that the plaintiff's claim falls under the definition of a benami transaction as per Section 2(a) of the Benami Act and is thus barred by Sections 4(1) and 4(2). In conclusion, the court held that the suit is barred by Section 4(1) of the Benami Transactions (Prohibition) Act, 1988, and dismissed the suit, leaving the parties to bear their own costs. All pending applications were disposed of, and the next hearing date was canceled.
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