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2018 (8) TMI 740 - HC - Benami PropertyReliefs of declaration and injunction - who is the owner of the properties - Section 3(2) of the Benami Transactions (Prohibition) Act, 1988 - Held that - The trial court has committed a grave and fundamental error in rejecting the suit plaint under Order VII Rule 11 CPC by relying upon the provision of Section 4 and repealed provision of Section 3(2) of the Benami Transactions (Prohibition) Act. When the impugned judgment was passed on 19.12.2016, what was, and is now applicable is the Prohibition of Benami Property Transactions Act, 1988 which became applicable w.e.f 1.11.2016. Since the suit has been held to be barred at the threshold by applying Order VII Rule 11 CPC, and the plaint has been rejected by applying the repealed provision of Section 3(2) of the Act which was no longer applicable, and by ignoring the provision of Section 2(9)(A)(b) Exception (iii) which was applicable, the impugned judgment is hence illegal and is set aside. Whether or not the appellant/plaintiff/husband will or will not have the benefit of Section 2(9)(A)(b) Exception (iii) is a matter of fact which requires trial and such a suit cannot be rejected at the threshold by applying Order VII Rule 11 CPC. Appeal allowed - decided in favor of appellant.
Issues:
- Rejection of plaint under Order VII Rule 11 CPC based on provisions of Benami Transactions (Prohibition) Act, 1988. - Interpretation of Section 2(9)(A)(b) Exception (iii) of the Prohibition of Benami Property Transactions Act, 1988. - Applicability of Section 2(9)(A)(b) Exception (iii) in determining ownership of properties. Analysis: The High Court judgment pertains to a Regular First Appeal challenging the Trial Court's rejection of the plaint under Order VII Rule 11 CPC based on the Benami Transactions (Prohibition) Act, 1988. The plaintiff, who is the husband, filed a suit claiming ownership of two properties purchased from his own sources. The Trial Court's rejection was based on the repealed Section 3(2) of the Act, which was incorrect as the amended Act was applicable since 1.11.2016. The Court highlighted the importance of Section 2(9) of the amended Act, which defines Benami Transactions and exceptions. In this case, the properties held in the name of the wife fell under Exception (iii) of Section 2(9)(A)(b), allowing a person to purchase property in the spouse's name from known sources, making the property of the de jure owner, i.e., the husband. The High Court found the Trial Court's judgment erroneous for not considering the applicable Section 2(9)(A)(b) Exception (iii) and relying on the repealed provision. It emphasized that determining the applicability of the exception is a factual matter requiring trial and evidence, not a ground for rejecting the suit under Order VII Rule 11 CPC. Consequently, the High Court set aside the impugned judgment, allowing the appeal and directing the trial court to proceed with the suit according to law after due trial and evidence. In conclusion, the High Court directed the parties to appear before the District & Sessions Judge for further proceedings and disposal of the suit in accordance with the law. The appeal was disposed of based on the above observations, emphasizing the need for a proper trial to determine the ownership of the properties in question.
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