2020 (11) TMI 760 - HC - Benami Property

Benami transaction - suit property belonged to father late Yashpal Sain of appellant wherein she is entitled to 1/4th share in the said property - suit was filed by Smt. Savita Anand, ( appellant ) for partition and permanent injunction against three defendants, i.e. her mother Smt.Krishna Sain (who has since expired during the pendency of the appeal and will be referred to for convenience as D1 ), her sister Smt.Sarita Mullick (hereinafter referred to as D2 ) and her brother Sh.Sanjeev Sain (hereinafter referred to as D3 ) - how the plaintiff/appellant could claim a share in the suit property merely on the basis of her late father being a member of the Society in question, given the dicta of the courts? - argument of appellant was that the case ought not to have been dismissed without trial as there were many factual issues that were to be proved by leading evidence HELD THAT - The appellant appears to be very eager to establish a vested right in the suit property by claiming it to be an HUF property or in the alternative, joint family property. The purchase of 5 Bighas 10 biswas land at Mathura Road in 1960 cannot be connected with any compensation received as a refugee by late Yashpal Sain in the absence of any document to substantiate payment and receipt of such compensation. Nor can the purchase of the property at Mathura Road by him be accepted as a restoration of ancestral property, when the existence of any such ancestral property at Lahore, Pakistan, is itself completely doubtful in the absence of cogent and clear disclosures in the plaint in this regard. There is no reason to presume that it was this compensation that he may have received that was invested in the property that was purchased at Mathura Road. Secondly, the said plot of land at Mathura Road was acquired by the Government in 1960, thus extinguishing all rights of late Yashpal Sain in that land. Though compensation for the same amounting to ₹14,101.88 paise was also awarded to him, such compensation did not take the colour of joint family funds. Even if this compensation was thereafter ploughed back into the purchase of a plot measuring 5494 sq yds in the Society, no conclusion can be drawn that this plot was also of the nature of an HUF property in which the appellant could stake a claim Yashpal Sain failed to complete the requisite formalities as a result of which no plot of land was in fact allotted to him. At the time of his death, no plot stood in his name to which the appellant could stake a claim as his legal heir. Thus on both the threads of arguments, the appellant was rightly held to be not entitled to any share in the suit property. Whatever may have been the source of the various payments made towards consideration, development charges, electricity charges, all documents that determine the ownership of the suit property stand in the name of D1.The Share Certificate (dated 3rd June, 1964) stands in the name of D1.The receipts for payment of various amounts also stand in the name of D1. When the partnership was dissolved, the land was not sought to be divided in the shares of the partners in the partnership business clearly establishing that it was the asset not of the partnership but of D1. All these documents were well within the knowledge of the appellant when they were executed between 1963 and 2011 and the admissions contained explicitly in them, as also disclosed in the conduct of all family members including the appellant and her husband, cannot be permitted to be withdrawn by her merely because it is now convenient to claim otherwise, after the filing of the present suit. Through the appellant s own conduct it is well proven that D1 was the absolute owner of the property and during her lifetime the appellant could not have claimed a share in the same. We are unable to find any error in the impugned judgement, which we uphold. The appeal is devoid of merit

Summary

Issues Involved:
1. Partition and Permanent Injunction: Whether the appellant is entitled to a 1/4th share in the suit property as a legal heir of her deceased father.
2. Benami Transactions (Prohibition) Act, 1988: Whether the appellant's claim is barred under the Benami Act.
3. Hindu Undivided Family (HUF): Whether the suit property is part of an HUF and if D1 acted as the Karta.
4. Fiduciary Capacity: Whether D1 held the property in a fiduciary capacity for the benefit of her children.
5. Membership and Interest under the Bombay Cooperative Societies Act, 1925: Whether the appellant can claim a share based on her father's membership in the cooperative society.

Detailed Analysis:

1. Partition and Permanent Injunction
The appellant filed a suit for partition and permanent injunction, claiming a 1/4th share in the suit property as a legal heir of her father, late Yashpal Sain. The appellant argued that the property was acquired using joint family funds and thus should be divided among all legal heirs. However, the respondents contended that the property was self-acquired by D1 and did not form part of the estate left by Yashpal Sain. The court concluded that at the time of the father's death, he had not acquired the suit property, and thus it did not form part of his estate. Consequently, the appellant could not claim any right, title, or interest in the suit property as her inheritance.

2. Benami Transactions (Prohibition) Act, 1988
The court examined whether the appellant's claim was barred under the Benami Act. The appellant's assertion that D1 had purchased the property using joint family funds was found to be in violation of Section 4 of the Benami Act, which prohibits any suit to enforce a right in respect of property held benami. The court held that the appellant's claim fell foul of the provisions of the Benami Act and was thus barred by law.

3. Hindu Undivided Family (HUF)
The appellant claimed that D1 acted as the Karta of an HUF and held the property in trust for the family. However, the court found no averment or material to establish that late Yashpal Sain was carrying on any ancestral business as the Karta of an HUF. The court observed that the pleadings were insufficient and vague to sustain a case of the suit property being an HUF property. The court concluded that there was no foundation for the claim that D1 acted as the Karta of an HUF.

4. Fiduciary Capacity
The appellant argued that D1 held the property in a fiduciary capacity for the benefit of her children. The court, however, did not accept this submission, stating that fiduciary relationships have legal connotations and are not equivalent to filial relationships. The court found no evidence to show that D1 had entered into a fiduciary relationship with her children. The court concluded that D1 did not hold the property in a fiduciary capacity, and the appellant's claim was not covered under Section 4(3)(b) of the Benami Act.

5. Membership and Interest under the Bombay Cooperative Societies Act, 1925
The appellant contended that under the Bombay Act, the membership and interest in the cooperative society were inheritable. However, the court found no evidence to show that late Yashpal Sain had left any heritable right in the cooperative society. The court observed that the allotment of the suit property to D1 was an independent allotment and not a follow-through of any allotment made to late Yashpal Sain. The court concluded that the appellant had no inheritable right in the suit property based on her father's membership in the cooperative society.

Conclusion
The court upheld the impugned judgment, dismissing the appellant's suit for partition and permanent injunction. The court found that the appellant's claim was barred under the Benami Act, and there was no evidence to support the claims of HUF or fiduciary capacity. The court also concluded that the appellant had no inheritable right in the suit property based on her father's membership in the cooperative society. The appeal was dismissed with no order as to costs.