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2023 (6) TMI 1263 - HC - Benami PropertyBenami transaction - Relief of declaration and partition seeked - suit for declaration as the co-owner to the extent of 21,000 Sq.ft of the suit property and for consequential relief of partition and separate possession of plaintiff's share in the suit property - plaintiff also sought for the relief of permanent injunction restraining the defendants from encumbering the suit property or changing the physical features of the suit property by putting up construction -Whether plaintiff is entitled to the relief of declaration that the plaintiff is the owner of 21,000 sq.ft out of 85,949 sq.ft in the suit schedule property? - Whether the plaintiff is entitled to the relief of partition by metes and bounds as prayed for? HELD THAT - Admittedly, in this case, there is no written documents, in support of the plaintiff's plea that there was a partnership arrangement between the parties to develop the suit property and share the profits. The learned senior counsel appearing for the plaintiff empathetically submitted that the partnership arrangement can be formed even orally and it is not necessary that it should be only by way of written documents. As rightly contended by defendants even in the plaint averments, the plea regarding the oral partnership is very vague and bereft of material particulars. The plaintiff has not pleaded the date, place etc., in which the oral agreement was entered into. There is no plea in whose presence the oral arrangement between the parties was entered into. Even during trial, the plaintiff has not examined any independent witnesses in support of the oral partnership agreement. Therefore, except the interested testimony of PW.1, there is no other acceptable evidence available on record to suggest oral partnership agreement. In such circumstances, we cannot come to a conclusion that there was an oral partnership agreement between the plaintiff and the contesting defendants . Main legal plea raised by the contesting defendants is that the plaintiff is not entitled to maintain a suit prayer that he is a co-owner of the suit property on the ground that he contributed financially for purchase of the suit property - As there is some evidence available on record atleast to show that the plaintiff contributed to the extent of Rs. 96,38,266/- to enable the first defendant to acquire land with an extent of 9168 sq.ft. However, there is no evidence available on record to support the case of the plaintiff that he contributed Rs. 2,16,38,266/- to enable the first defendant purchased the suit property to the extent of 21,000 sq.ft. In any event, even assuming the suit property was purchased by first defendant out of the contribution made by the plaintiff, it is the case of the plaintiff that it was purchased in the name of the first defendant for the benefit of future business entity to be formed by plaintiff and the defendants 1, 9 and 10. Therefore, it can only be treated as property purchased in the name of first defendant for the benefit of plaintiff and the contesting defendants. In such circumstances, the same would come under the Prohibition of Benami Property Transaction Act, as per the definition contained in Prohibition of Benami Transaction Act. As far as contention raised by the learned Senior Counsel for the plaintiff that the 1st defendant stands in fiduciary capacity and hence exception recognized under Benami Prohibition Act gets attracted, is concerned, as discussed earlier, this Court already concluded that the plea of oral partnership was not proved by plaintiff. Hence, there is no fiduciary relationship between the plaintiff and the 1st defendant. The plaintiff cannot seek a declaration that he is the co-owner of the property and for consequential relief of partition and permanent injunction in view of the specific bar contained under Section 4 of the Act. This Court comes to a conclusion that the suit is barred by Section 4 of Prohibition of Benami Property Transaction Act even assuming the plaintiff proved that he contributed for purchase of the suit property in the name of the first defendant. Therefore, issues No.3 and 4 are answered against the plaintiff. Relief of declaration and partition as prayed for denied - The plaintiff is not entitled to any relief and the suit is dismissed.
Issues Involved:
1. Entitlement to declaration of ownership. 2. Entitlement to partition by metes and bounds. 3. Bar of suit under Prohibition of Benami Property Transaction Act, 1988. 4. Joint venture development of the property. 5. Relief entitlement. Summary: Issue 1: Entitlement to Declaration of Ownership The plaintiff sought a declaration as the co-owner of 21,000 sq. ft. out of 85,949 sq. ft. in the suit property. The court found that there was no written document supporting the plaintiff's claim of a partnership agreement for developing the property. The court noted that while oral partnerships are legally recognized, the plaintiff failed to provide sufficient evidence, such as independent witnesses, to prove the existence of an oral partnership agreement. Consequently, the court concluded that the plaintiff was not entitled to the declaration of ownership. Issue 2: Entitlement to Partition by Metes and Bounds The plaintiff also sought partition and separate possession of the claimed share. Given the court's conclusion on the lack of evidence for an oral partnership and the application of the Prohibition of Benami Property Transaction Act, the plaintiff was not entitled to the relief of partition as prayed for. Issue 3: Bar of Suit under Prohibition of Benami Property Transaction Act, 1988 The defendants argued that the suit was barred under the Prohibition of Benami Property Transaction Act, 1988. The court agreed, stating that if a property is purchased by one person out of another person's contribution and is held for the benefit of the contributor, it constitutes a benami transaction. The court found that the plaintiff's claim fell within this definition and was thus barred by Section 4 of the Act. The court also rejected the plaintiff's argument that the first defendant stood in a fiduciary capacity, as the plaintiff failed to prove the existence of an oral partnership. Issue 4: Joint Venture Development of the Property The plaintiff claimed that there was an oral agreement for a joint venture to develop the property. The court found no credible evidence to support this claim. The plaintiff's testimony was deemed insufficient, and no independent witnesses were examined to corroborate the oral partnership agreement. Therefore, the court concluded that the property was not held for a joint venture. Issue 5: Relief Entitlement In light of the conclusions on the previous issues, the court determined that the plaintiff was not entitled to any relief. The suit was dismissed, and the plaintiff was directed to pay the costs of the suit to the defendants. Conclusion: (a) The plaintiff is not entitled to any relief, and the suit is dismissed. (b) The plaintiff is directed to pay the costs of the suit to the defendants.
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