2023 (2) TMI 384 - HC - Benami Property

Benami transaction - whether the present transaction was benami or not? - HELD THAT - Parties are ad idem that the suit property in question was purchased in the name of petitioner from the funds sent to the petitioner by husband of respondent No.1. A bare reading of Section 4 shows that in order to establish that the present Suit is prohibited thereunder, or falls in the exception carved out under Section 2(9) of the Benami Act, evidence is required to be led. It is an established position in law that under Order 7 Rule 11 CPC, only averments made in the plaint have to be seen and nothing else can be considered while adjudicating upon such an application. In order to establish that the suit property is benami, and it was purchased out of funds sent by son of the petitioner, and it falls under the prohibition of Section 4, or falls in the exception under Section 2(9), evidence will have to be led. As such, in the present case, plaint could not have been rejected under Order 7 Rule 11 CPC. Thus it is clear that there is no error in the order impugned herein. Accordingly, find no merit in the present Revision Petition and the same is hereby dismissed.

Summary

Issues:
1. Dismissal of application under Order 7 Rule 11 CPC seeking rejection of the plaint.
2. Interpretation of Section 4 of the Benami Transaction (Prohibition) Act, 1988.
3. Examination of exceptions provided under Section 2 sub-section 9 of the Benami Act.
4. Consideration of evidence requirement to establish benami property.

Analysis:
The judgment pertains to a Revision Petition filed to set aside an order dismissing an application under Order 7 Rule 11 CPC seeking rejection of the plaint. The petitioner, who purchased property financed by her son, argued that the suit was barred by law under Section 4 of the Benami Act, prohibiting the right to recover benami property. The respondents contended that exceptions under Section 2 sub-section 9 applied to their case, falling under the first exception of karta. The court emphasized that to determine if the suit property was benami and fell under Section 4 prohibition or exceptions, evidence needed to be presented. It clarified that under Order 7 Rule 11 CPC, only plaint averments are considered, and evidence is crucial to establish benami transactions.

The court referred to judgments emphasizing that disputed questions cannot be decided at the stage of considering applications under Order 7 Rule 11 CPC. It highlighted the need for evidence to ascertain if the plea is barred under the Benami Act. The court cited a case where it was held that no vested right existed regarding exempted transactions under the Act, emphasizing the need for trial to determine the applicability of exceptions. The judgment stressed that the suit could not be rejected under Order 7 Rule 11 CPC without a trial to establish the factual basis for the exceptions under Section 2 sub-section 9 of the Benami Act.

In conclusion, the court found no error in the impugned order, dismissing the Revision Petition. It emphasized the requirement for evidence to establish benami property and the need for a trial to determine the applicability of exceptions under the Benami Act. The court upheld the importance of factual examination and trial proceedings in cases involving benami transactions, dismissing the petition and disposing of pending applications.