2016 (8) TMI 1516 - HC - Benami Property

Benami Transactions - Prohibition of benami transactions - claim of a daughter for her legitimate share in the family property is being stoutly resisted by her brothers aided by their mother for the past about two decades - acquisition intended for the benefit of his wife - HELD THAT - The presumption can be rebutted by proving that either Surya Narayana Iyer wanted to screen the property from creditors or that he wanted to escape from the land ceiling provisions. Nothing of that sort has even been suggested in evidence and we are totally in the dark as to what prompted Surya Narayana Iyer to purchase the property in the name of his wife. The attempt in evidence was only to show that the seventh defendant had no independent source of income to purchase the property by Exts.A3, A4 and A5 sale deeds. Evidence is let in to show that Surya Narayana Iyer was a Contractor by profession and a bus operator whereas the seventh defendant was only a home maker with no independent source of income. We hasten to add that the source of income to meet the sale consideration is irrelevant in the context of the presumption flowing under Section 3(2) of the Act. It is natural for a person to purchase the property in the name of his wife intended for her benefit which has gained statutory recognition under Section 3(2) of the Act. The only reason stated by the court below to hold that Exts.A3, A4 and A5 sale deeds were not intended for the benefit of the seventh defendant is the enjoyment of income by others also The mere fact that the husband was also taking income from the property covered by Exts.A3, A4 and A5 sale deeds does not conclude that the said acquisition was not intended for the benefit of his wife. It is normal for a husband to take the income from the property of his wife and vice versa and nothing more can be attributed to such course of conduct. The sharing of income is insufficient to rebut the statutory presumption which is heavily loaded in favour of the ostensible title holder. We have no hesitation to hold that item Nos.3, 4, 5 and 6 of the plaint 'A' schedule property belongs absolutely to the seventh defendant under Exts.A3, A4 and A5 sale deeds. The preliminary decree for partition to the extent it declares that the plaintiff has 1/9 shares over item Nos.3, 4, 5 and 6 of the plaint 'A' schedule property is hereby set aside. The preliminary decree for partition in respect of item Nos.1 and 2 of the plaint 'A' schedule property and item Nos.1 to 3 of the plaint 'B' schedule property is confirmed. (No arguments were addressed before us as regards the correctness or otherwise of the decree granted in relation to the plaint 'B' schedule property). Some of the parties including the seventh defendant have died pending Appeal Suit and their legal heirs have already been brought on record. The parties are at variance as to whether the seventh defendant has executed a registered Will dated 14.9.1994 bequeathing her property in favour of her sons. The genuineness of the Will can be considered in the final decree proceedings dependent on which the share of the seventh defendant can be allotted. The plaintiff will get 1/9 shares over item Nos.3, 4, 5 and 6 of the plaint 'A' schedule property only if the Will is disbelieved and otherwise her share is confined to the items mentioned above. There is no necessity to pass a supplementary preliminary decree dependent on the finding on the Will as more than 19 years have elapsed since the filing of the suit for partition. It would suffice if the court below passes a composite supplementary preliminary decree and a final decree on a motion made by any of the parties to this Appeal Suit.

Summary

Issues:
- Claim of daughter for share in family property
- Application of Section 3(2) of the Benami Transactions (Prohibition) Act, 1988
- Partibility of specific properties
- Presumption of benami transactions
- Interpretation of statutory provisions
- Rebuttal of statutory presumption
- Consideration of past transactions
- Evidence regarding property ownership
- Validity of registered Will

Analysis:

The judgment revolves around the daughter's claim for a share in the family property, contested by her brothers and mother. The key issue is the application of Section 3(2) of the Benami Transactions (Prohibition) Act, 1988, concerning the presumption of benami transactions. The court considers the partibility of various properties, with a focus on properties covered by specific sale deeds executed before the Act came into force.

Regarding the partibility of certain properties, the court confirms the daughter's entitlement to shares in properties covered by particular sale deeds. However, a dispute arises concerning other properties, with the daughter asserting that they belong to the family, while the seventh defendant claims ownership. The court analyzes past transactions and statutory provisions to determine ownership rights.

The judgment delves into the statutory presumption under Section 3(2) of the Act, which applies to purchases in the name of a wife or unmarried daughter. The court emphasizes the rebuttal of this presumption through tangible evidence. The plaintiff and the fifth defendant argue against the application of this presumption to past transactions, citing legal precedents to support their position.

In evaluating the evidence presented, the court considers factors such as the source of income and the enjoyment of property income. The judgment emphasizes the need for clear evidence to rebut the statutory presumption and determine property ownership conclusively. The court ultimately rules in favor of the seventh defendant, concluding that specific properties belong solely to her based on the evidence and legal principles applied.

The judgment also addresses the validity of a registered Will, highlighting its potential impact on property distribution. The court allows the Appeal Suit and Cross Objections, setting aside the daughter's claim to certain properties while confirming her entitlement to others. The final decree is contingent on the determination of the Will's authenticity, providing clarity on property shares based on the outcome.