2020 (6) TMI 791 - HC - Benami Property

Benami Transaction - Real owners of property - Whether Govindasamy Naidu alone was having half share in the land covered under the sale deed dated 05.04.1911 Ex. A1 or Govindasamy Naidu and Chinnasamy Naidu are having equal right interest and title in the half share of the property covered under Ex. A1 dated 05.04.1911? - HELD THAT - No hesitation to hold that Chinnamma Naidu had adequately contributed for purchasing the half share in the suit property by his elder brother Govindasamy Naidu under Ex. A1 and that is the reason why Chinnama Naidu could independently execute Exs. A5 A6 and A7 registered mortgage deeds in favour of third parties for availing a loan. It is also to be stated that even a mortgage cannot be permitted to be executed by a person who has no title to the property covered under the mortgage. This is more so that the mortgage deeds under Exs. A5 A6 and A7 were registered mortgage deeds. In the absence of title in favour of Chinnamma Naidu the registering authorities would not have permitted execution of Exs. A5 A6 and A7 by Chinnamma Naidu independently. Therefore we answer point No. 1 framed in this appeal to the effect that it was established by the appellants/plaintiffs that their grandfather Chinnamma Naidu had adequately contributed for purchasing the property covered under Ex. A1 sale deed dated 05.04.1911 along with his elder brother Govindasamy Naidu. Whether Govindasamy Naidu was holding the share of his brother Chinnamma Naidu in his fiduciary capacity? - Whether the suit transaction is hit by the provisions of Benami Transaction Act? - HELD THAT - Having regard to the fact that Ex. A1 in this case emanated during the year 1911 and the custom tradition and belief practiced in those days we are of the view that Chinnamma Naidu reposed absolute faith and trust towards his elder brother Govindasamy Naidu and Govindasamy Naidu true to such faith and confidence reposed on him had held the suit property in a fiduciary capacity on behalf of his brother Chinnama Naidu. Such a relationship falls within the exception to Section 4 of the Prohibition of Benami Property Transaction Act 1988 (now Section 2(9)(ii)(iv) of The Benami Transactions (Prohibition) Amendment Act 2016. It is evident from Section 4 of the Act that the provisions of the Act are not applicable if a person in whose name the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of such coparcener in the family. As we have held in respect of point No. 1 Chinnamma Naidu has got a share in the property covered under Ex. A1 along with his elder brother Govindasamy Naidu. Therefore Chinnama Naidu is a coparcener in respect of the suit property and therefore the applicability of the Act is specifically excluded. The appellants/plaintiffs also raised the plea with respect to fiduciary capacity in their reply statement before the trial court and evidence was also let in to that effect. Therefore we hold that Govindasamy Naidu was holding the suit property in a fiduciary capacity for and on behalf of his younger brother Chinnamma Naidu and consequently the suit transaction is not hit by the provisions of Benami Transaction Act. Accordingly we answer point Nos. 2 and 3 also in favour of the appellants/plaintiffs. Whether the claim of the appellants for partition and separate possession is hit by the provisions of Limitation Act? - HELD THAT - As evident from the fact that the name of the father of the plaintiffs Ramachandran is reflected in the revenue records in respect of the suit property indicating that the plaintiffs who are legal heirs of Ramachandran continue to remain in possession of the suit property. Even otherwise in a suit for partition the possession of one of the co-parceners is for and on behalf of the other. The cause of action for filing a suit for partition is recurring one. As long as the relationship of co-ownership subsists the right to seek partition continues. Even if one of the co-owners files a suit and subsequently abandon it for some reason it will not be a ground for dismissal of the suit filed by another co-owner on the same cause of action. All that it implies is that the co-owner who abandons a legal action initiated by him without continuing it any further can be construed as the one who has chosen to continue his ownership in common without resorting to seek for division of the property and to allot him a separate share. We therefore hold that right to bring an action for partition is a continuing right incidental to the right of joint ownership in the property in question. Such right subsists as long as the property remains undivided. Therefore we hold that the claim of the appellants for partition and separate possession is not hit by the provisions of Limitation Act and we answer Point No. 4 also in favour of the appellants/plaintiffs. Whether the present suit for partition is not maintainable without a prayer for declaration of title? - HELD THAT - In view of our conclusion with respect to point No. 1 holding that Chinnamma Naidu has jointly contributed for purchase of half share of the property covered under Ex. A1 along with his elder brother Govindasamy Naidu we have to necessarily answer this question also in favour of the plaintiffs. Even otherwise under Ex. A10 Patta the name of Govindasamy Naidu and Chinnamma Naidu were mentioned as joint owners of the property in question. That apart Ex. A11 series of Kist receipt would indicate that Chinnamma Naidu has individually paid kist in respect of his share of the property covered under Ex. A1. As long as the revenue records stood mutated in the name of grandfather of the plaintiffs Chinnama Naidu and the plea of the plaintiffs that they were in joint possession of the suit property along with the descendants of Govindasamy Naidu coupled with the admission of Ponnusamy tenth defendant in his written statement admitting the title of Chinnama Naidu in the suit property we are of the view that the suit filed by the plaintiffs for partition even without the relief of declaration of title is maintainable. We accordingly answer Point No. 5 also in favour of the plaintiffs. Whether the plaintiffs are ousted from the suit property as has been claimed by the defendants 10 to 13? - HELD THAT - The plaintiffs in their plaint have asserted that they are jointly in possession of the suit property along with the other legal heirs viz. defendants. The revenue records also stand in the name of their father Ramachandran. In a suit property it is always regarded that the possession of one of the co-parceners is for and on behalf of the other co-parcener as well and the plea of ouster cannot be considered in a suit for partition on par with the plea of ouster raised in a suit for declaration. We could also see from Ex. B16 filed before the trial court that Nandakumar son of Ponnusamy (tenth defendant) has filed a separate suit before the District Munsif Court Coimbatore against Rajagopal Son of Annasamy the third defendant in the suit and three others. The said suit was filed for a bare injunction to restrain the defendants in the suit from in any manner alienating or encumbering the suit property. The plaintiff asserts a right to portion of the suit property on the basis of the settlement deed executed in his favour by his father Ponnusamy (tenth defendant in the present suit). In the plaint the plaintiff in O.S. has categorically refers to the present suit filed by the appellants/plaintiffs and also states that they are also in joint possession of the suit property along with other legal heirs. In such circumstances the plea of ouster cannot be countenanced. Therefore we answer point No. 6 also in favour of the appellants/plaintiffs in this appeal.

Summary

Issues Involved:
1. Ownership and contribution towards the purchase of the suit property.
2. Fiduciary capacity of Govindasamy Naidu.
3. Applicability of the Benami Transactions Act.
4. Limitation period for filing the suit.
5. Necessity of a declaration of title for the partition suit.
6. Plea of ouster by the defendants.

Detailed Analysis:

Point 1: Ownership and Contribution
The court examined whether Govindasamy Naidu alone held half of the property purchased under the sale deed dated 05.04.1911 or if both Govindasamy Naidu and Chinnamma Naidu had equal rights. The plaintiffs argued that Chinnamma Naidu contributed equally to the purchase, despite the sale deed being in Govindasamy Naidu's name due to customary practices. The court found that subsequent mortgage deeds executed by both brothers, and other documentary evidence, supported the claim that Chinnamma Naidu had indeed contributed to the purchase. Thus, the court concluded that Chinnamma Naidu had an equal share in the property.

Point 2: Fiduciary Capacity
The court considered whether Govindasamy Naidu held the property in a fiduciary capacity for his brother Chinnamma Naidu. The plaintiffs argued that the property was held in trust due to the customary practice of registering property in the elder brother's name. The court accepted this argument, noting that the relationship and actions between the brothers indicated a fiduciary capacity. This relationship fell within the exceptions of the Benami Transactions Act, confirming that Govindasamy Naidu held the property for the benefit of both brothers.

Point 3: Applicability of Benami Transactions Act
The defendants contended that the suit was barred by the Benami Transactions Act. The court, however, found that the fiduciary relationship between the brothers exempted the transaction from the Act's provisions. The court cited Section 4 of the Act, which allows for exceptions in cases of fiduciary relationships, and concluded that the transaction was not a benami transaction.

Point 4: Limitation Period
The court addressed whether the suit was barred by limitation, given that the plaintiffs' father had previously filed and withdrawn a similar suit. The plaintiffs argued that the cause of action arose from a notice received in 2010, which threatened their rights. The court agreed, stating that the right to sue for partition is a recurring one and that the plaintiffs' suit was timely, as it was filed in response to a new and imminent threat to their rights.

Point 5: Necessity of Declaration of Title
The court examined whether the suit for partition was maintainable without a declaration of title. Given the established joint ownership and the fiduciary relationship, the court held that a declaration of title was unnecessary. The plaintiffs' claim for partition was valid based on the evidence of joint ownership and possession.

Point 6: Plea of Ouster
The defendants argued that the plaintiffs were ousted from the property. The court found no evidence to support this claim, noting that the plaintiffs had continuously asserted joint possession. The court emphasized that possession by one co-owner is considered possession for all co-owners in a suit for partition, and the plea of ouster was not applicable.

Conclusion
The court set aside the trial court's judgment and decree, allowing the appeal and granting a preliminary decree for partition as prayed by the plaintiffs. The court awarded no costs, considering the close relationship between the parties.