2020 (9) TMI 720 - HC - Benami Property

Suit for partition - whether suit is barred under the provisions of Benami Transactions (Prohibition) Act 1988? - one Gopal Pillai is the father of the 1st respondent and the 8th respondent who purchased the property in the name of the 8th respondent and after the death of Gopal Pillai, the 1st defendant/8th respondent sold the suit property through Power of Attorney to the petitioners herein and therefore, respondents 1 to 7 herein/plaintiffs filed the suit for partition and also seeking to declare the sale deed in favour of the petitioners herein and Power of Attorney as null and void HELD THAT - Gopal pillai is the father of 1st and 8th respondents. While Gopal pillai was working in Food Corporation of India at Madras Harbour, at that time, he purchased the property in the name of the 8th respondent. At that time, the age of the 8th respondent is only 19 years and studying in the school. For the sake of investment, the said property was acquired by Gopal pillai in the name of 8th respondent and the said property was in the possession of Gopal Pillai. After the death of Gopal Pillai dated 20.03.1994, taking advantage of the same, in the year 2001, 8th respondent has executed General Power of Attorney in favour of the 9th respondent herein and sold the property in the name of the petitioners. Therefore, the 1st respondent came to knowledge of the sale deed on 30.03.2004 and after that the respondents 1 2/plaintiffs applied for the certified copy of sale deeds and thereafter, they filed the suit. Admittedly, in this case, the 1st respondent/plaintiff in his plaint has stated that 1st and 8th respondents are coparcener and the sons of Gopal Pillai who purchased the property out of his funds in the name of the 8th respondent. So, Gopal Pillai, was in possession of the property. After the death of Gopal Pillai, without the knowledge of the 1st respondent, 8th respondent executed General Power of Attorney in the name of the 9th respondent. 9th respondent sold the property to the petitioners. So the issues raised herein that (i) as to whether the property is purchased by Gopal Pillai in the name of the 8th respondent out of his funds; if so at the time of purchase, whether the 8th respondent has got the means to purchase the property and (iii) as to whether Gopal Pillai has purchased the property in the fiduciary capacity or the purchase of property alleged to have been made by Gopal Pillai in the name of the 8th respondent is hit by Benami Transactions (Prohibition) Act, are all points can be decided only after recording evidence in the suit. Time and again, the Honourable Supreme Court and this Court have reiterated that at the time of deciding the application under Order 7 Rule 11, of CPC, the court has to see only the averments made in the Plaint not the defence taken by the defendants in the case. The facts of this case are peculiar in nature and therefore, that has got to be decided only after trial and not at this stage. Therefore, at these circumstances, this court does not find any merit in the Revision and therefore, the Revision is liable to be dismissed.

Summary

Issues:
1. Application to reject the plaint under Order 7 Rule 11 CPC based on Benami Transactions (Prohibition) Act 1988.
2. Interpretation of property ownership and fiduciary capacity.
3. Consideration of legal precedents and retrospective application of Benami Transactions Act.
4. Examination of coparcener rights and application of Benami Transactions Act.
5. Determination of cause of action and rejection of plaint under Order 7 Rule 11 CPC.

Issue 1: Application to reject the plaint under Order 7 Rule 11 CPC based on Benami Transactions (Prohibition) Act 1988.
The petitioners, as 3rd and 4th defendants in the suit, filed an application to reject the plaint under Order 7 Rule 11 CPC, arguing that the suit was barred by the Benami Transactions Act. They contended that the property was purchased in the name of the 1st defendant from the funds of Gopal Pillai, attracting the Benami Transactions Act. The trial court dismissed the application, leading to the Civil Revision Petition challenging this decision.

Issue 2: Interpretation of property ownership and fiduciary capacity.
The respondents claimed that the property was purchased by Gopal Pillai in the name of the 1st defendant, who later sold it to the petitioners. They argued that the purchase was made in a fiduciary capacity, and the sale was null and void. The petitioners, however, disputed this, asserting that the 1st defendant did not have the means to purchase the property independently, thus falling under the Benami Transactions Act.

Issue 3: Consideration of legal precedents and retrospective application of Benami Transactions Act.
The petitioners cited various judgments, emphasizing the retrospective nature of the Benami Transactions Act. They argued that even though the purchase predated the Act, it should still apply. They contended that the plaint should be rejected under Order 7 Rule 11 CPC due to the Act's applicability to the case.

Issue 4: Examination of coparcener rights and application of Benami Transactions Act.
The respondents asserted that both the 1st and 8th respondents were coparceners, as Gopal Pillai purchased the property in the 8th respondent's name. They argued that the property was acquired in a fiduciary capacity, and the sale was invalid. They maintained that the Benami Transactions Act did not apply in this scenario.

Issue 5: Determination of cause of action and rejection of plaint under Order 7 Rule 11 CPC.
After careful consideration, the court noted that the issues raised regarding property ownership, fiduciary capacity, and the applicability of the Benami Transactions Act required a detailed examination during trial. The court emphasized that the decision on these matters should be made after recording evidence, rather than at the preliminary stage of the case. Therefore, the court dismissed the Civil Revision Petition, concluding that the issues raised needed to be addressed during the trial phase.

This comprehensive analysis highlights the key legal arguments, interpretations, and considerations made by both parties in the context of the Benami Transactions Act and property ownership disputes, leading to the court's decision to dismiss the Civil Revision Petition.