2016 (1) TMI 1500 - HC - Benami Property

Benami transactions - requisite legal cause of action of existence of HUF and its properties made out or not? - HELD THAT - In a case such as the present, besides ipse dixit of the plaintiff being a partner, it is necessary in law as per Order VI Rule 4 of the Code of Civil Procedure, 1908 (CPC) to make specific reference to the partnership deed as per which plaintiff is a partner in M/s. Khurana Associates and M/s. Khurana Sales Corporation. This however has not been done and the plaint is conspicuously silent in this regard. It is also seen that there is only ipse dixit of the plaintiff of joint funds and joint properties being purchased from the joint funds, however, 'joint funds' or joint properties are not in law equal to HUF funds/HUF properties or businesses. It is also further required to be noted that 'joint funds' is an expression which is not in law equal to joint Hindu family property. 'Working together' is not equivalent to existence of a joint Hindu family. Conclusion arrived at (i) The plaint only talks of 'joint funds', 'joint properties' and 'working together' without the necessary legal ingredients averred to make a complete existence of a cause of action of joint Hindu family/HUF with its properties and businesses. (ii) Joint funds, joint businesses or working together etc do not mean averments which are complete and as required in law for existence of HUF and its properties have been made, and, joint funds and joint properties do not necessarily have automatic nexus for they being taken as with joint Hindu family/HUF properties. (iii) In view of the specific bar contained in Sections 4(1) and (2) of the Benami Act, once properties in which rights sought by the plaintiff are not by title deeds/documents in the name of the plaintiff but are in the name of defendants, the plaintiff is barred under Section 4(1) of the Benami Act from claiming any right to these properties and the only way in which the right could have been claimed was if there was an existence of an HUF and its properties, but, the plaint does not contain the legally required ingredients for existence of HUF and its properties. (iv) With respect to the properties lacking in exact details with the complete address, no reliefs can be claimed or granted with respect to the vague properties. The suit plaint does not contain the necessary averments as required by law for existence of joint Hindu family/HUF properties and its businesses and thus in fact the suit plaint would be barred by Section 4(1) of the Benami Act as the necessary facts to bring the case within the exceptions contained in Section 4(3) of the Benami Act are not found to be pleaded/existing in the plaint.

Summary

Issues Involved:
1. Existence of Hindu Undivided Family (HUF) and its properties.
2. Legal cause of action for claiming reliefs regarding properties.
3. Application of the Benami Transactions (Prohibition) Act, 1988.
4. Specificity and sufficiency of pleadings in the plaint.

Detailed Analysis:

1. Existence of Hindu Undivided Family (HUF) and its properties:
The primary issue in the suit was whether the facts alleged in the plaint established the existence of an HUF and its properties. The court referenced a previous judgment, explaining that after the Hindu Succession Act, 1956, ancestral property inherited post-1956 does not automatically create an HUF. The court emphasized that for an HUF to exist, it must be shown that the property was either inherited before 1956 or that it was thrown into a common hotchpotch to create an HUF. The plaintiff failed to provide necessary details about the creation or continuation of the HUF, such as specific dates or actions taken to form the HUF.

2. Legal cause of action for claiming reliefs regarding properties:
The court examined the plaint to determine if it disclosed a legal cause of action. The plaintiff claimed rights to various properties as a coparcener in an HUF. However, the court found that the plaint lacked specific averments required by law to establish the existence of an HUF and its properties. The court noted that mere statements of joint funds and joint properties do not suffice to establish an HUF. The necessary legal ingredients, such as the creation of an HUF before 1956 or the throwing of properties into a common hotchpotch, were not pleaded.

3. Application of the Benami Transactions (Prohibition) Act, 1988:
The court highlighted the relevance of the Benami Transactions (Prohibition) Act, 1988, which mandates that property in the name of an individual is presumed to be owned by that individual unless it falls under the exceptions of an HUF or trust properties. The plaint did not contain specific averments to bring the case within the exceptions of the Benami Act. Therefore, the plaintiff's claims were barred under Section 4(1) of the Benami Act.

4. Specificity and sufficiency of pleadings in the plaint:
The court stressed the importance of detailed and specific pleadings as required by Order VI Rule 4 of the CPC. The plaint lacked necessary details, such as the exact date of creation of the HUF, specific properties claimed as HUF properties, and the partnership deeds under which the plaintiff claimed to be a partner. The court found that the properties mentioned in the plaint were vague and lacked complete details, making it impossible to grant reliefs for such properties.

Conclusion:
The court concluded that the plaint did not contain the necessary legal and factual averments to establish the existence of an HUF and its properties. The claims were barred by the Benami Transactions (Prohibition) Act, 1988, and the suit lacked the required specificity in pleadings. Consequently, the suit was dismissed, and all pending applications were disposed of.