2022 (12) TMI 990 - HC - Benami Property

Benami transaction - joint Hindu family of late karta possessed several immovable properties at Chennai, Madurai and Kumbakonam, apart from the properties owned in Malaysia - Entitlement to legal heirs of late karta of JHF - After the death of plaintiff's father, first defendant started managing the joint family properties in India and in Malaysia and was maintaining the entire accounts - Whether the suit properties are the joint family properties or absolute properties of late P.L.Ramanatha Chettiar ? - HELD THAT - From this Will, it is clear that the interest in the partnership business and the properties movable and immovable, were bequeathed to his sons and daughters. There is absolutely no mention about the availability of properties which were acquired by him from his ancestors. It is a Will having no description of the properties to be shared. Similarly in Ex.D4 Will, there is no description of the properties sought to be disbursed. Through Ex.D11, whatever the properties possessed by L.P.L.Palaniappa Chettiar, were bequeathed to his sons and the legal heirs of the deceased son. Grievances of the plaintiff is that the first defendant has not acted as per the conditions/clauses in the Will - Because of the first defendant's indifferent attitude, the second defendant, their mother, had to borrow heavy loan to celebrate her marriage. She was not provided with the customary gifts and presents from time to time as per the Chettiar Community. Marriage expenses, gifts and dowry were not properly taken care. Rs.2,00,000/- and jewelleries were also not given. Plaintiff's claim that the first defendant had not acted in compliance to the conditions of the Will is one thing, and the challenge made to the very execution of the Will on the ground that the suit properties are ancestral joint family properties and therefore, the Will executed by their father P.L.Ramanathan @ P.L.Meenatchi Sundaram will bind only in respect of his share and will not extend to whole of the properties is another thing. There is unimpeachable evidence to show that share in item nos.1 and 2 of the suit properties was bequeathed to plaintiff's father P.L.Ramanathan @ P.L.Meenatchi Sundaram through Ex.D11 Will. We have also seen that the properties bequeathed under D11 Will were self acquired properties of L.P.L.Palaniappa Chettiar . When the self acquired property of an individual is bequeathed to his son, son acquires the property only as self acquired property and not as ancestral property. As relying on GOVINDBHAI CHHOTABHAI PATEL AND ORS. VERSUS PATEL RAMANBHAI MATHURBHAI 2019 (9) TMI 1681 - SUPREME COURT held the self acquired property gifted by a father to his son will not be treated as ancestral property, but only as a self acquired property. Therefore, this Court finds that shares which the plaintiff's father P.L.Ramanathan @ P.L.Meenatchi Sundaram got under the Ex.D11 Will, would be treated as his self acquired property and in respect of his self acquired property, he is entitled to bequeath the property through a Will to his son, namely, the first defendant and the first defendant got the properties as self acquired properties. Therefore, through Ex.P4 Will, plaintiff's father P.L.Ramanathan @ P.L.Meenatchi Sundaram had excluded his wife, plaintiff and second defendant from claiming any share in his properties, especially, item nos.1 2 of the suit properties. Thus, this Court finds that the plaintiff is not entitled to claim share in the suit properties claiming that the suit properties are the ancestral joint family properties and she is a co-parcener. Thus, this issue is answered that the suit properties are the self acquired and absolute properties of late P.L.Ramanatha Chettiar and not the joint family properties. Whether there are and were businesses of the family at Kumbakonam run under the name and style of Palaniappan Bankers and Palaniappa Jewellers and whether the first defendant is liable to account for the profits in the said business ? - Though it is claimed in the pleadings that there was business of family at Kumbakonam run under the name and style of Palaniappan Bankers and Palaniappa Jewellers and the first defendant was liable to account for the provisions in the said business, no evidence is produced by either side to show the running of the businesses. Therefore, this Court finds answer to this issue in negative. Whether the plaintiff is in joint possession of the suit properties ? - Whether the Court Fees paid under the Section 37(2) of Court Fees Act is maintainable ? - The evidence available in this case shows that the plaintiff is not in physical possession of any of the suit properties. She resides in U.S.A. and conducts this case through her power of attorney PW1. There is also evidence to show that there are about 272 residential flats in item no.2 of the suit properties. Therefore, this Court finds that the plaintiff is not in possession of the suit properties and Court fee paid under Section 37 (2) of the Court fees Act claiming to be in joint possession is not correct for issue nos.5 6. Whether sale in the name of the ninth defendant is hit by lis pendens? - Before purchasing this property, it is seen that Exs.D2, D10 paper publications were made in the newspaper. After purchasing item no.2 of the suit properties, 8th and 9th defendants had entered into Ex.D4 agreement for sale. It is now claimed by the 9th defendant that 272 residential units had been constructed in the land. The learned counsel for the 9th defendant submitted that the 9th defendant's interest has to be protected as 9th defendant is a bonafide purchaser for value after taking necessary steps by issuing paper publications. No one objected to the purchase by 9th defendant. Ex.D3 sale deed was executed on 10.01.2008 during the pendency of the suit and therefore, it is no doubt that this sale in favour of the 9th defendant is hit by lis pendens. The right of pendente lite purchaser in item no.2 of the suit properties is subject to the right available to the owner of the property. Accordingly, this issue is answered. Whether the suit is barred for non-joinder of proper and necessary parties ? - Now it is found that the claim of partition in item no.1 of the suit properties by defendants 5 to 7 is barred by the Prohibition of Benami Property Transactions Act, 1988. Therefore, the other legal heirs of P.L.Palaniappa Chettiar are not proper and necessary parties to this suit. Similarly, the sale in favour of the 8th defendant and subsequent construction of flats by the 9th defendant had taken place after the institution of the suit. Therefore, the impleadment of the buyers of the flats is not necessary for the reason that the sale transaction is hit by the principle of lis pendens and therefore, they are not proper and necessary parties. Accordingly, this issue is answered. Whether the suit is barred for partial partition ? - Even as per the admitted evidence of PW1, he claims that there are certain other joint family properties, but they are not shown as suit properties. Even in respect of item nos.3 to 5 of the properties, there is no evidence produced to show that these properties are in possession and enjoyment of the family. The defendants have also not given the details of the properties, which are not included. Therefore, it is held that the suit is not hit by partial partition. Suit barred by limitation - The plaintiff has filed the suit presuming that the suit properties are joint family properties and as a co-owner, she is entitled for partition. She had issued Ex.P5 notice before the institution of the suit. There is no plea of ouster taken by the defendants. She has subsisting right as per Ex.D11 Will. Therefore, this suit cannot be held as barred by limitation. Apart from the claim of partition as co-parcener, the plaintiff is also entitled for partition as per clause 4(g) of Ex.D11 Will. - The executors and trustees, namely, R.M.Thenammai and Valliappan @ Palaniappan @ Sinnavalieppan A/L Valliappa Chettiar have every right to enforce the terms of the Will as intended by the testator. Though this Will is not useful to advance the case of the plaintiff for partition, this Will is certainly useful to enforce her claim under the Will, if the executors fail to exercise their duties, responsibilities and powers. As found that item nos.1 2 of the suit properties are the self acquired properties of the first defendant through Ex.P4 Will executed by his father P.L.Ramanathan @ P.L.Meenatchi Sundaram and therefore, this Court finds that the plaintiff is not entitled for the relief of partition or for that matter any other relief. Since the defendants 5 to 7's claim is barred by the provisions of the Prohibition of Benami Property Transactions Act, 1988, they are also not entitled for claiming partition of their 3/8 share in item no.2 of the suit properties as a counter claim. The suit as well as the counter claim of the defendants 5 to 7 are dismissed.

Summary

Issues Involved:
1. Whether the plaintiff is entitled to the relief of partition.
2. Whether the plaintiff is entitled to one-third share in the suit properties and separate possession thereof.
3. Whether there are and were businesses of the family at Kumbakonam run under the name and style of Palaniappan Bankers and Palaniappa Jewellers and whether the first defendant is liable to account for the profits in the said business.
4. Whether the suit properties are the joint family properties or absolute properties of late P.L.Ramanatha Chettiar.
5. Whether the plaintiff is in joint possession of the suit properties.
6. Whether the Court Fees paid under the Section 37(2) of Court Fees Act is maintainable.
7. Whether the plaintiff is entitled to any other relief or reliefs.
8. Whether the suit is barred for non-joinder of proper and necessary parties.
9. Whether the suit is barred by limitation.
10. Whether the suit is barred for partial partition.
11. Whether sale in the name of the ninth defendant is hit by lis pendens.
12. To what extent the plaintiff is entitled to.

Issue-wise Detailed Analysis:

Issue 1: Whether the plaintiff is entitled to the relief of partition.
The court found that the plaintiff is not entitled to the relief of partition. The properties in question were determined to be self-acquired by the plaintiff's father, P.L.Ramanathan @ P.L.Meenatchi Sundaram, and not joint family properties. Therefore, the plaintiff cannot claim a share in these properties as a coparcener.

Issue 2: Whether the plaintiff is entitled to one-third share in the suit properties and separate possession thereof.
The court concluded that the plaintiff is not entitled to one-third share in the suit properties. The properties were found to be self-acquired by the plaintiff's father and bequeathed to the first defendant through a valid will. The plaintiff's claim that the properties were ancestral and hence she was entitled to a share was dismissed.

Issue 3: Whether there are and were businesses of the family at Kumbakonam run under the name and style of Palaniappan Bankers and Palaniappa Jewellers and whether the first defendant is liable to account for the profits in the said business.
The court found no evidence to support the claim that there were family businesses at Kumbakonam under the names Palaniappan Bankers and Palaniappa Jewellers. Therefore, the first defendant is not liable to account for any profits from such businesses.

Issue 4: Whether the suit properties are the joint family properties or absolute properties of late P.L.Ramanatha Chettiar.
The court determined that the suit properties are the absolute properties of late P.L.Ramanatha Chettiar and not joint family properties. The properties were acquired through the income generated from the partnership business run by L.P.L.Palaniappa Chettiar and P.L.Palaniappa Chettiar, and not from any ancestral nucleus.

Issue 5: Whether the plaintiff is in joint possession of the suit properties.
The court found that the plaintiff is not in joint possession of the suit properties. The plaintiff resides in the USA and conducts the case through her power of attorney. Additionally, there are residential flats constructed on the suit properties, indicating that the plaintiff does not have physical possession.

Issue 6: Whether the Court Fees paid under the Section 37(2) of Court Fees Act is maintainable.
The court concluded that the court fees paid under Section 37(2) of the Court Fees Act is not maintainable as the plaintiff is not in joint possession of the suit properties.

Issue 7: Whether the plaintiff is entitled to any other relief or reliefs.
The court found that the plaintiff is not entitled to any other reliefs. The primary claim for partition was dismissed, and no other claims were substantiated with sufficient evidence.

Issue 8: Whether the suit is barred for non-joinder of proper and necessary parties.
The court determined that the suit is not barred for non-joinder of proper and necessary parties. The other legal heirs of P.L.Palaniappa Chettiar were not necessary parties as the claim for partition was dismissed.

Issue 9: Whether the suit is barred by limitation.
The court found that the suit is not barred by limitation. The plaintiff issued a notice before the institution of the suit, and there was no plea of ouster taken by the defendants.

Issue 10: Whether the suit is barred for partial partition.
The court held that the suit is not barred for partial partition. There was no evidence to show that other joint family properties existed or were excluded from the suit.

Issue 11: Whether sale in the name of the ninth defendant is hit by lis pendens.
The court concluded that the sale in favor of the ninth defendant is hit by the principle of lis pendens. The sale and subsequent construction of flats occurred during the pendency of the suit, making the transaction subject to the outcome of the suit.

Issue 12: To what extent the plaintiff is entitled to.
The court found that the plaintiff is not entitled to any share in the suit properties. The properties were self-acquired by the plaintiff's father and bequeathed to the first defendant through a valid will.

Conclusion:
The suit and the counterclaim of defendants 5 to 7 were dismissed. The court directed the parties to bear their own costs. The properties in question were determined to be self-acquired by the plaintiff's father, and the plaintiff was not entitled to any share in them. The claims of the defendants 5 to 7 were also barred by the Prohibition of Benami Property Transactions Act, 1988.