2017 (1) TMI 1793 - HC - Benami Property

Benami Transaction - whether the claim is on the basis of 'Benami Transaction' or not will be determined after completion of evidence? - HELD THAT - As relying on ANAND KUMAR AND ANOTHER VERSUS VIJAY KUMAR 2012 (4) TMI 773 - MADHYA PRADESH HIGH COURT it is safe to deduce that the submission of the respondent that, the transaction referred to in the plaint occurred in the year 1971 and 1972 and therefore, the Act of 1988 will not defeat the same, is ill-founded as the prohibition under the Act bars any claim or suit or action on the basis of a 'Benami Transaction'. Therefore what is relevant, the date on which the suit has been filed and not the date of transaction itself which may be prior to coming into force of the Act of 1988 but the suit has been filed after introduction of the Act of 1988. Further, upon perusal of the plaint, this Court has no hesitation in concluding that the averments in the plaint referred to the 'Benami Transaction' as the basis of claiming title. Thus, the plaint deserves to be rejected in terms of under Order 7, Rule 11, Civil Procedure Code.

Summary

Issues:
1. Rejection of application under Order 7, Rule 11 of Civil Procedure Code.
2. Claim of ownership based on 'Benami Transaction'.
3. Interpretation of Benami Transactions (Prohibition) Act, 1988.

Analysis:

1. The applicant filed an application under Order 7, Rule 11 of Civil Procedure Code challenging the ownership claim made in the plaint as being based on a 'Benami Transaction'. The trial Court rejected the application, stating that the issue of 'Benami Transaction' would be determined after evidence completion. The applicant contended that the plaint itself revealed the ownership claim through a 'Benami Transaction', prohibited under the Benami Transactions (Prohibition) Act, 1988. The applicant relied on a previous judgment for support.

2. The respondent argued that rejecting the plaint at the threshold would endorse ownership over the property and that the Act of 1988, enacted after the transaction in question, would not apply. The Court referred to a judgment stating that the Act bars claims based on 'Benami Transactions' filed after its enactment, regardless of when the transaction occurred. The Court concluded that the plaint clearly referred to a 'Benami Transaction' as the basis for claiming ownership, leading to the rejection of the plaint under Order 7, Rule 11.

3. The Court emphasized that the crucial factor is the date of filing the suit, not the date of the transaction, in determining the applicability of the Act. As the suit was filed after the Act's introduction, any claim based on a 'Benami Transaction' was barred. The Court found that the plaint indeed referenced a 'Benami Transaction' for claiming title, justifying the rejection under Order 7, Rule 11. Consequently, the revision application was allowed, and the suit filed by the plaintiff was dismissed as legally barred.

This detailed analysis highlights the Court's interpretation of the law regarding 'Benami Transactions' and its application to ownership claims, leading to the rejection of the plaintiff's suit under Order 7, Rule 11 of the Civil Procedure Code.