2012 (4) TMI 773 - HC - Benami Property

Summary

Issues involved:
The judgment involves the rejection of an application under Order 7, Rule 11 of the Code of Civil Procedure based on the Benami Transactions (Prohibition) Act, 1988.

Comprehensive Details:

1. Background and Allegations:
The respondent filed a suit seeking declaration of title and permanent injunction, alleging a benami purchase of land in the name of his mother. The petitioners denied the allegations and filed an application under Order 7, Rule 11(d) of Civil Procedure Code, contending the suit was not maintainable under the Benami Transactions Act.

2. Petitioners' Contentions:
The petitioners argued that the suit was prohibited under section 4 of the Act, as it claimed rights based on a benami transaction, even if it occurred before the Act came into force. They contended that the suit should have been rejected, but the trial court failed to consider this aspect.

3. Respondent's Defense:
The respondent argued that the objection raised by the petitioners should have been considered after framing issues and recording evidence. They claimed that since the transaction predated the Act and the Act was not retrospective, the suit was maintainable.

4. Court's Analysis:
The Court noted that the Act barred suits based on benami transactions, regardless of when the transaction occurred. Citing relevant case law, the Court clarified that the bar applied to suits filed after the Act's enforcement, not to claims made before. The respondent's claim of title based on a benami transaction fell under the Act's prohibition.

5. Judgment:
The Court allowed the revision, set aside the impugned order, and dismissed the respondent's suit as barred under section 4(1) of the Benami Transactions Act. No costs were awarded in the case.

In conclusion, the Court upheld the application of the petitioners under Order 7, Rule 11(d) and dismissed the suit based on the prohibition outlined in the Benami Transactions Act, emphasizing the Act's applicability to claims made post its enforcement.