2020 (3) TMI 589 - HC - Benami Property

Benami transactions - application was filed for summoning of the documents before leading rebuttal evidence - application filed by the petitioner under Order XVI Rule 6 CPC read with Section 151 CPC for summoning documents/record from the Deputy Commissioner Income Tax Department - HELD THAT - The conclusion of the trial court pertaining to the irrelevance of the documents is apparently against the record inasmuch as as already noticed the plaint is inter alia based on the allegation pertaining to transaction being Benami and irrespective of the fact as to whether the same would have any implication ultimately qua the relief claimed in the suit the petitioner essentially is entitled to lead evidence qua the said fact and once the documents sought to be summoned pertain to the said aspect the rejection by indicating the same as irrelevant cannot be sustained. The other finding based on the provisions of Section 4 of the Act 1988 also has no substance in view of the fact that the provision restricts the right of those seeking enforcement or defend an action based on same being Benami however the third parties are not prevented from alleging and/or proving the said aspect and therefore the rejection on this count also cannot be sustained. Various submissions made by learned counsel for the respondent pertaining to delay in the suit the fact that the plaintiff is not entitled to lead rebuttal evidence and that provisions of Order VII Rule 14 and Order XI CPC were not followed apparently have no substance inasmuch as once the court has permitted leading of rebuttal evidence the defendant cannot preempt the fact as to what evidence can be or would be led by the plaintiff. The provisions of Order VII Rule 14 and Order XI CPC also have no application inasmuch as neither the documents are available with the plaintiff nor the same are claimed to be available with the defendants and therefore the fact that no application under the provisions of Order VII Rule 14 and Order XI CPC was filed would have no implication whatsoever. So far as the observations made by the trial court though the same has not been made basis for rejection of the application that the particulars of the documents have not been indicated suffice it to observe that once the requisition as prayed by the petitioner is issued the department has to respond on the said aspect and same also in view of submission that record is maintained property wise cannot be preempted at this stage. In view of the above discussion the writ petition is allowed. The order dated 3/2/2020 passed by the trial court is quashed and set aside. The application filed by the petitioner under Order XVI Rule 6 CPC is allowed. The trial court is directed to summon the documents/record as prayed by the petitioner in its application under Order XVI Rule 6 CPC from the office of Deputy Commissioner Income Tax Department Jaipur.

Summary

Issues:
1. Rejection of application under Order XVI Rule 6 CPC for summoning documents/record from the Income Tax Department.
2. Allegations of Benami transaction and cancellation of sale deed.
3. Contestation of suit by respondents.
4. Framing of issues by trial court.
5. Rebuttal evidence and application for summoning documents.
6. Arguments and submissions by both parties.
7. Interpretation of Order XVI Rule 6 CPC.
8. Relevance of documents in dispute.
9. Application of Benami Transaction (Prohibition) Act, 1988.
10. Trial court's reasoning for rejection of application.
11. Analysis of trial court's conclusions.
12. Consideration of delay in the suit and procedural aspects.
13. Application of Order VII Rule 14 and Order XI CPC.
14. Decision and directions of the High Court.

Detailed Analysis:

1. The High Court addressed the rejection of the application under Order XVI Rule 6 CPC for summoning documents from the Income Tax Department. The petitioner sought cancellation of a sale deed alleging a Benami transaction, and the trial court rejected the application citing irrelevance and stage of the suit.

2. The suit involved allegations of a Benami transaction and sought cancellation of a sale deed. The respondent contested the validity of the agreement and sale of the land, denying the Benami allegations. Issues were framed, and evidence was presented by both parties.

3. Respondents contested the suit, disputing the Benami transaction and sale of the land. Joint written statements were filed, denying the allegations made by the petitioner.

4. The trial court framed multiple issues, and additional issues were added during the proceedings. The court considered the evidence presented by both parties and the stage of the suit.

5. The petitioner filed an application under Order XVI Rule 6 CPC during the rebuttal evidence stage, seeking documents from the Income Tax Department related to the alleged Benami transaction. The trial court rejected the application, leading to the petitioner's appeal.

6. Both parties presented arguments regarding the relevance of the documents, the timing of the application, and the procedural aspects of the case. The respondent opposed the application, emphasizing the stage and history of the suit.

7. The High Court interpreted Order XVI Rule 6 CPC, highlighting the provision for summoning documents without requiring personal attendance. The key condition was the relevance of the document to the dispute at hand.

8. The relevance of the documents in dispute was crucial, considering the petitioner's claim of a Benami transaction forming the basis of the suit. The High Court emphasized the importance of allowing evidence on such critical aspects.

9. The application of the Benami Transaction (Prohibition) Act, 1988 was discussed, clarifying that the Act does not restrict third parties from alleging or proving a transaction as Benami, contrary to the trial court's interpretation.

10. The trial court's reasoning for rejecting the application was based on the perceived irrelevance of the documents and the stage of the suit. The High Court analyzed these reasons and found them insufficient to justify the rejection.

11. The High Court scrutinized the trial court's conclusions, highlighting the errors in dismissing the application based on the Act's provisions and the stage of the suit. The petitioner's right to lead evidence on the Benami transaction was upheld.

12. The High Court considered arguments related to delay in the suit and procedural aspects raised by the respondent, concluding that these factors did not impact the petitioner's right to summon relevant documents during the proceedings.

13. The application of Order VII Rule 14 and Order XI CPC was deemed irrelevant in this context, as the focus was on the relevance of the documents to the dispute rather than procedural technicalities.

14. In its decision, the High Court allowed the writ petition, quashed the trial court's order, and directed the summoning of documents from the Income Tax Department as requested by the petitioner under Order XVI Rule 6 CPC.