2008 (1) TMI 984 - HC - Benami Property

Summary

Issues Involved:
1. Application for rejection of the plaint under Order 7 Rule 11 read with Section 151 CPC.
2. Claim of partition and injunction against alienation of the suit property.
3. Allegation of the property being held benami and applicability of the Benami Transaction (Prohibition) Act, 1988.
4. Existence of a Hindu Undivided Family (HUF) and applicability of exceptions under Section 4(3) of the Benami Act.
5. Bar of limitation and necessity of seeking cancellation of the sale deed.

Issue-wise Detailed Analysis:

1. Application for Rejection of the Plaint:
The defendant filed an application under Order 7 Rule 11 read with Section 151 CPC seeking rejection of the plaint. The primary grounds were that the suit was barred by the Benami Transaction (Prohibition) Act, 1988, and that the plaintiffs did not plead co-ownership of the property. The court noted that for deciding such an application, it is required to only see the averments in the plaint and accompanying documents, not the defense set up by the defendant.

2. Claim of Partition and Injunction:
The plaintiffs sought partition of the suit property and an injunction against defendant No. 1 from alienating or creating third-party interest. The property was claimed to be purchased by the father and step-mother of defendant No. 1 for the benefit of the entire family, though the conveyance deed was executed in the name of defendant No. 1.

3. Allegation of Benami Property:
The defendant argued that the suit was barred by the Benami Act, as the property was held benami by defendant No. 1. The plaintiffs contended that the property was purchased as a joint family property and defendant No. 1 held it as a trustee. The court emphasized that the Benami Act's Section 4(3) provides exceptions where the person holding the property is a coparcener in a Hindu undivided family or a trustee/fiduciary.

4. Existence of Hindu Undivided Family (HUF):
The plaintiffs claimed the property was a joint family property. The court noted that the existence of a joint family or joint family property is a question of fact that requires evidence. The court referred to various judgments to highlight that a fiduciary relationship or trust could exist beyond a registered trust, thereby falling within the exceptions of the Benami Act.

5. Bar of Limitation and Necessity of Cancellation of Sale Deed:
The defendant argued that the suit was barred by limitation as it was filed 45 years after the conveyance deed's registration and without seeking its cancellation. The plaintiffs maintained that their rights were admitted until the defendant published a notice in 2006, which triggered the cause of action. The court found that the issue of limitation and the necessity of cancellation of the sale deed could not be decided without leading evidence, as the property was claimed to be co-parcenary.

Conclusion:
The court concluded that the plaint could not be rejected at this stage as the plaintiffs' case, as pleaded, fell within the exceptions of the Benami Act. The issues raised required a full-fledged trial to determine the facts. Consequently, the application for rejection of the plaint was dismissed with costs of Rs. 20,000.