2019 (2) TMI 196 - HC - Benami Property

Real ownership of property - Benami Property or not - purchase consideration was paid by two brothers but registered in the name of 5 members - Partition of property - no amicable settlement to be done - Prohibition of Benami Property Transactions Act,1988 - Held that - Section 4 provides that no defence based on any right in respect of any property held benami, whether against the person in whose name property is held, or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property. The defence of the defendant no.1 is thus not allowed under the said law. The defendant no.1 to have not pleaded any exception to the Benami law vis- -vis the subject property - Once it is found to be so, the plaintiff is entitled to a decree forthwith, not only under Order XII Rule 6 of the CPC but also under Rule XV Rule 1 of the CPC. The pleas in the written statement of the defendant no.1, being the only contesting defendant, do not raise any substantial question of law of fact for an issue to arise or framed - The plaintiff is thus entitled to a decree forthwith. Considering the size of the property and the number of shares therein, the property is found to be not capable of division by metes and bounds. No purpose will thus be served in issuing a commission for exploring the possibility of division by metes and bound - Once it is so, there is again no impediment to passing a final decree for partition, of sale of the property and of distribution of sale proceeds as per shares declared in the preliminary decree for partition.

Summary

Issues:
Partition of property no.S-3B, Janta Market, Rajouri Garden, New Delhi – 110 027; Ownership dispute based on contribution towards purchase price; Application for decree on admissions; Possibility of settlement through mediation; Benami property transaction; Entitlement to decree under Order XII Rule 6 and Rule XV Rule 1 of CPC; Final decree for partition, sale of property, and distribution of sale proceeds; Possession of property by parties; Costs imposition and payment.

Analysis:

1. Partition of Property: The plaintiff filed a suit for the partition of property no.S-3B, Janta Market, Rajouri Garden, New Delhi – 110 027, claiming a 1/5th undivided share for both the plaintiff and the four defendants based on a deed of purchase. The suit progressed with summons issued and pleadings completed.

2. Ownership Dispute: Defendant no.1 contested the claim, arguing that the entire sale consideration for the property was paid by him and another individual not party to the suit, making them the exclusive owners. However, the court held that such claims were unsustainable under the Benami Transactions Act, as ownership is determined by the recorded title holders, not the source of funds.

3. Benami Property Transaction: The court highlighted that the defendant's claims were in violation of the Benami Transactions Act, which prohibits defenses based on rights to benami properties. The Act defines benami transactions and restricts any claims against the recorded property holders by alleged real owners.

4. Decree on Admissions: The plaintiff filed an application for a decree on admissions under Order XII Rule 6 of the CPC, which was supported by the defendants no.3 & 4, leading to the entitlement of the plaintiff to a decree under both Order XII Rule 6 and Rule XV Rule 1 of the CPC.

5. Mediation and Settlement: Despite suggestions for mediation due to familial relations, the plaintiff cited threats from defendant no.1, leading to the registration of an FIR. The court found no possibility of an amicable settlement due to the defendant's delaying tactics.

6. Final Decree for Partition and Sale: A preliminary decree was passed declaring the shares of the parties in the property. As the property was indivisible, a final decree for partition, sale of the property, and distribution of sale proceeds was issued. Parties were allowed to bid for each other's shares before the sale, with possession and eviction terms outlined.

7. Costs Imposition: The parties were directed to bear their own costs, with the defendant no.1 having paid the costs imposed previously.

In conclusion, the court granted a partition decree, addressed ownership disputes under the Benami Transactions Act, and facilitated the sale of the property to resolve the ownership conflict among the parties involved.