2019 (9) TMI 1319 - HC - Benami Property

Benami transaction - partition of properties - joint family business - properties are purchased from monies earned from the grocery store - constitution of the business of the grocery store i.e. whether it was a proprietary or a partnership - HELD THAT - The counsel for the defendants no.1 and 2 states that it is the plea of the defendants no.1 and 2 that there was no such joint family business of a grocery store and it is the defendants no.1 and 2 who are running grocery store in their own name in their properties. Thus, no case for putting the claim of the plaintiff for partition of any of the properties, save for property No. H-75/14, Khasra No.419,428 and 429, Gamri Road, Jai Prakash Nagar, Ghonda, Delhi, is made out. The suit for partition of all the other properties save property No. H-75/14, Khasra No.419,428 and 429, Gamri Road, Jai Prakash Nagar, Ghonda, Delhi is dismissed. As far as property No. H-75/14, Khasra No.419,428 and 429, Gamri Road, Jai Prakash Nagar, Ghonda, Delhi is concerned, there is no dispute that the same belonged to the mother of the parties and on her demise, all her heirs would have a share therein. Accordingly, a preliminary decree for partition of property No. H-75/14, Khasra No.419,428 and 429, Gamri Road, Jai Prakash Nagar, Ghonda, Delhi is passed, declaring (i) the plaintiff Anil Kumar, defendant no.1 Devender Kumar, defendant no.11 Rajender Kumar, defendant no.12 Sunita Mittal and defendant no.13 Sushila Goel to be having one-seventh undivided share therein; (ii) the defendants no.3 to 5 together to be having one-seventh undivided share therein; and, (iii) the defendants no.5 to 10 together to be having the remaining one- seventh share therein. Both counsels agree that the property No. H-75/14, Khasra No.419,428 and 429, Gamri Road, Jai Prakash Nagar, Ghonda, Delhi is not divisible by metes and bounds. In view of the submission that the property is impartible by metes and bounds, a final decree for partition of property No. H-75/14, Khasra No.419,428 and 429, Gamri Road, Jai Prakash Nagar, Ghonda, Delhi is also passed, of sale thereof and of distribution of sale proceeds amongst the parties as per shares declared in the preliminary decree for partition. Before the property is sold to outsiders, the party/s shall be entitled to make inter se bids with respect thereto, with the party/s bidding the highest acquiring the share of others on payment of consideration, execution of requisite documents and delivery of possession. On any of the party/s in possession / occupation of the property No. H-75/14, Khasra No.419,428 and 429, Gamri Road, Jai Prakash Nagar, Ghonda, Delhi failing to vacate the property and deliver possession thereof to the highest bidder or to the purchaser, the said party/s shall also be liable to be dispossessed therefrom as if in pursuance to a decree for recovery of possession of immovable property. The stamp duty / court fees for drawing up of the final decree for partition be borne by the parties in proportion to their shares under the preliminary decree for partition.

Summary

Issues:
1. Partition of multiple properties
2. Validity of claims under Prohibition of Benami Property Transactions Act, 1988
3. Existence of joint family business
4. Ownership and shares in the properties

Analysis:
1. The plaintiff filed a suit for partition of several properties, alleging that the defendants were enjoying the properties and income without partition. The court noted the familial relationships and the acquisition of properties in the name of certain defendants.

2. The court raised concerns about the properties purchased in the name of specific defendants and their potential violation of the Prohibition of Benami Property Transactions Act, 1988. The plaintiff was questioned about the source of funds and the legality of claims under this Act.

3. The court delved into the nature of the alleged joint family business, focusing on whether it was a partnership or proprietary business. The plaintiff failed to provide substantial evidence or documentation regarding the business's structure or existence as a joint family business.

4. The court scrutinized the plaintiff's involvement in the business and the lack of proof establishing joint ownership or shares in the properties acquired from the business earnings. The defendants denied the existence of a joint family business, leading to the dismissal of partition claims for most properties.

5. A preliminary decree for partition was granted for one property that belonged to the mother of the parties. Specific shares were allocated to the parties, and a final decree for partition and sale of the property was issued due to its indivisibility by metes and bounds.

6. The court allowed parties to bid on the property before it was sold to outsiders, with provisions for possession delivery and dispossessing non-compliant parties. The distribution of sale proceeds and payment of stamp duty/court fees were to be in accordance with the shares declared in the preliminary decree.