2021 (3) TMI 380 - SC - Benami Property

Prohibition of Benami Property Transactions - Petitioner contends that the Petitioner as the head of a joint family representing him and his brothers are absolute owners of the suit properties.contention of the Petitioner that the Respondent No.1 was holding the property as a trustee, in fiduciary capacity, and the property held by him could not, therefore, be treated as Benami, in view of Section 4(3)(b) of the Benami Act - HELD THAT - On a perusal of the plaint, it is patently clear that the Petitioner has, in the plaint, pleaded that the suit properties belonged exclusively to the Petitioner as the head of the joint family, but the same had been purchased in the name of the Defendants. It is nowhere stated that the suit properties were purchased out of any joint family funds. The suit is barred by law and /or in other words barred by Section 4 of the Act of 1988. The contention of the Petitioner that the Respondent No.1 was holding the property as a trustee, in fiduciary capacity, and the property held by him could not, therefore, be treated as Benami, in view of Section 4(3)(b) of the Benami Act, is inconsistent with the pleadings in the plaint. The argument that, from a plain reading of the plaint, it is clearly inferable that the plaintiff had asserted the properties as joint family properties is not correct. That was not the case, made out in the plaint. It is true, as argued by Colonel Balasubramanian, that a plaint can be rejected on consideration of the averments in the plaint, but not the allegations made by the Defendant in defence. The plaintiff claims to have made investments in the suit properties purchased in the name of the Defendants. As observed by the High Court, it is not even the case of the plaintiff that joint family funds have been invested in the property. Rather it is the case of the plaintiff that the property was purchased from the funds of the plaintiff. As held by this Court in Popat and Kotecha Property v. State Bank of India Staff Association 2005 (8) TMI 691 - SUPREME COURT , clause (d) of Rule 11 of Order VII CPC applies only in those cases where the statement made by the plaintiff in the plaint, without any doubt or dispute, shows that the suit is barred by any law in force. In our considered view, there is no infirmity in the order of the Trial Court and impugned judgment of the High Court rejecting the plaint under Order VII Rule 11 of the CPC for the reasons discussed above. Substantial justice has been done by nipping in the bud, a suit which is ex facie barred by law, thereby saving precious judicial time as also expenditure and inconvenience to the parties to the suit. The impugned judgment does not call for interference under Article 136 of the Constitution of India.

Summary

Issues:
1. Rejection of plaint under Order VII Rule 11 of the Code of Civil Procedure.
2. Application of the Prohibition of Benami Property Transactions Act, 1988 to the case.
3. Interpretation of the Benami Property and Benami Transaction definitions.
4. Prohibition on the right to recover property held benami.
5. Prohibition on re-transfer of property by benamidar.

Analysis:

1. The petitioner filed a suit seeking a declaration of sole ownership over certain properties against the defendants. The defendant filed an application under Order VII Rule 11 of the CPC, contending that the claim was prohibited by the Benami Property Transactions Act, 1988. The court rejected the plaint, and both the Trial Court and the High Court affirmed this decision.

2. The Act of 1988 defines Benami Property and Benami Transaction, prohibiting such transactions and making them punishable. Section 4 of the Act prohibits the right to recover property held benami against the person in whose name the property is held. Section 6 prohibits the re-transfer of benami property by the benamidar.

3. The court analyzed the definitions of Benami Property and Benami Transaction under the Act of 1988. It was observed that the plaintiff claimed exclusive ownership of properties purchased in the defendants' names, without mentioning joint family funds. The defendant argued that the plaintiff's claim was in the nature of a benami transaction, prohibited by the Act.

4. The defendant contended that the plaintiff's claim was barred by the Act of 1988, as the properties were purchased in the defendants' names without joint family funds. The plaintiff argued that the Act did not apply, citing different legal aspects. The court held that the plaint was rightly rejected as it was barred by law.

5. The court referred to previous judgments to support its decision. It emphasized that a plaint can be rejected if it shows the suit is barred by law. The High Court's judgment was deemed appropriate in rejecting the plaint under Order VII Rule 11 of the CPC. The dismissal of the Special Leave Petition was upheld, as the suit was considered ex facie barred by law.

In conclusion, the rejection of the plaint under Order VII Rule 11 of the CPC was justified due to the application of the Benami Property Transactions Act, 1988, and the lack of joint family fund involvement in the property purchase. The courts' decisions were upheld, emphasizing the importance of preventing suits barred by law to save judicial time and resources.