2010 (2) TMI 1297 - HC - Indian Laws

Summary

Issues involved:
The issues involved in this case include the interpretation and application of Section 4 of the Benami Transaction (Prohibition) Act, 1988, specifically regarding the filing of a Suit to enforce rights in respect of property held Benami.

Judgment Summary:

Issue 1: Suit for declaration of ownership of suit property
The respondent/plaintiff filed a Suit claiming ownership of the suit property, purchased in the name of his mother, asserting himself as the absolute owner. The petitioner/defendant, the eldest son of the plaintiff, contested this claim, asserting his own ownership of the property. The petitioner filed a petition under Order 7 Rule 11 of C.P.C. seeking rejection of the plaint based on the provisions of the Benami Transaction (Prohibition) Act, 1988.

Issue 2: Application of Section 4 of the Benami Transaction (Prohibition) Act, 1988
The petitioner argued that Section 4 of the Act prohibits the filing of a Suit to enforce rights in respect of property held Benami. The petitioner contended that the Suit falls within the scope of Section 4 and should be rejected under Order 7 Rule 11 of C.P.C. The respondent, however, argued that Section 4 should not apply retrospectively to transactions predating the Act.

Judicial Analysis and Decision:
The Court examined the provisions of Section 4 of the Benami Transaction (Prohibition) Act, 1988, which bar the filing of Suits to enforce rights in Benami properties. Referring to relevant legal precedents, including a Supreme Court decision, the Court clarified that Section 4 does not apply retrospectively to Suits filed before the Act came into force. The Court emphasized that the Act aims to prevent real owners from enforcing rights against ostensible owners post-Act enactment.

Conclusion:
The Court found that the plaintiff filed the Suit after the Act came into force, seeking to enforce rights under a Benami transaction, which is expressly prohibited by Section 4 of the Act. Consequently, the Court allowed the Revision Petition, set aside the Trial Court's order, and rejected the plaint under Order 7 Rule 11 of C.P.C.