2019 (1) TMI 2022 - HC - Benami Property

Use of joint nucleus funds for the purchase of the suit property - exclusive right over family property - partition of the suit property that was in the name of one brother, the sole defendant in the suit - trial Court on appreciating the evidence, has found that the deceased sole defendant could not have possessed necessary resources to purchase the property in 1956, and accordingly it held that the property is partible and passed a preliminary decree for partition. Allegation in the plaint was suit property was purchased by a certain Maruthumuthu, the father of the parties herein in the name of the first defendant. Maruthumuthu had four sons, of whom, the second plaintiff is his second son and the defendant is his youngest son. His other two sons are Ramasamy and Gurusamy, who died and their legal heirs are the first, third and fourth plaintiffs. The entire consideration for the purchase of the property proceeded from their father Maruthamuthu, and all along it was treated only as a family property. HELD THAT - As with the advent of the prohibition of Benami Property Transactions Act, 1988, it is no more permissible for anyone to plead benami either in the plaint or in the written statement, unless the case falls within the exceptions provided under Section 4 of the said Act. However, if any of the parties to the litigation claims to fall under the exception, to Section 4 of the said Act, then it must be specifically pleaded. This has not been done, and the entire case proceeds along the lines of projecting the case of benami, this is clearly impermissible. The appellants/plaintiffs necessarily have to be non-suited under Section 4 of the prohibition of Benami Property Transactions Act, 1988. This appeal is therefore dismissed and judgment and decree dated made on the file of the Additional District Judge's (Fast Track) Court, Ariyalur, is confirmed

Summary

Issues:
Partition of suit property, Allegation of exclusive property, Reversal of preliminary decree for partition, Substantial questions of law, Prohibition of Benami Property Transactions Act application.

Partition of Suit Property:
The plaintiffs sought partition of a property purchased by their father in the name of the defendant. The trial court found that the deceased defendant did not have the resources to purchase the property, leading to a preliminary decree for partition. However, the first Appellate Court reversed this decision, leading to the appeal by the plaintiffs.

Allegation of Exclusive Property:
The defense claimed that the suit property belonged exclusively to the defendant. After the defendant's death, his legal heirs contested the suit, leading to a dispute over the ownership of the property.

Reversal of Preliminary Decree for Partition:
The trial court's decision to pass a preliminary decree for partition based on the lack of resources of the deceased defendant was reversed by the first Appellate Court, resulting in the non-suiting of the plaintiffs. This reversal was a key point of contention in the appeal.

Substantial Questions of Law:
The appeal was admitted based on substantial questions of law, including whether the lower Appellate Court was correct in reversing the judgment and decree of the trial court and whether reliance on certain documents was appropriate in determining ownership of the property.

Prohibition of Benami Property Transactions Act Application:
During the proceedings, the Court observed that the case potentially fell under Section 4 of the Prohibition of Benami Property Transactions Act, 1988. This Act prohibits suits or claims related to property held benami, unless falling under specific exceptions. The Court found that the case was impermissibly proceeding based on the benami argument without meeting the exceptions under the Act, leading to the dismissal of the appeal.

In conclusion, the judgment upheld the dismissal of the appeal, confirming the decision of the first Appellate Court. The application of the Prohibition of Benami Property Transactions Act played a crucial role in the final decision, highlighting the importance of complying with legal provisions in property disputes.