2017 (10) TMI 977 - HC - Benami Property

Suit barred by the provision of Section 4(1) of the Benami Act - suit for partition filed - Held that - A reading of the plaint shows that there is no cause of action pleaded of the suit property being inherited prior to passing of the Hindu Succession Act, 1956 or that the suit property was thrown into a common hotchpotch on a particular date, month and year. Also, in any case even assuming a plea was there of an existence of HUF, there is no evidence whatsoever led by the appellant/plaintiff that there existed an HUF and how that HUF came into existence and how that HUF s existence with its properties was then found recorded in various records including public records. Appellant/plaintiff therefore cannot have the benefit of the exception contained in Section 4(3) of the Benami Act that the suit property should not be held to be a benami property but should be held to be HUF property. The other exception of Section 4(3) of the Benami Act is that the suit property was purchased in trust by the defendant nos. 1 to 3, however, even that cause of action is absent in the plaint. Also, no such case was argued on behalf of the appellant/plaintiff in the court below that the suit property has been purchased in trust or by the defendant nos. 1 to 3 in a fiduciary capacity. Therefore, even second exception contained in Section 4(3) of the Benami Act is not available to the appellant/plaintiff. Trial court also rightly notes that after purchase of the suit property in the name of defendant nos. 1 to 3 by the sale deed dated 7.12.1959 there is no further act done by the late father Sh. Waryam Singh in the form of making of any Will or making of a declaration or drawing up of a document that the suit property will not vest with the defendant nos. 1 to 3 in the suit but will vest with the entire family. Accordingly, in opinion, the mere fact that the father Sh. Waryam Singh paid consideration of the suit property would not make the property as owned by the father, and more so because such a plea in fact would be a plea which will be barred by Section 4(1) of the Benami Act. Also find no admission that the suit property at Green Park was a family property and had to be divided between all the family members. In fact, if this was so then the earlier suit would have been decreed under Order XII Rule 6 CPC and which was not so done and that the suit filed by the sister Smt. Pushpa Sahsni, respondent no. 9 herein, defendant no. 4 in the earlier suit, was in fact dismissed in default. Appeal dismissed.

Summary

Issues:
1. Suit filed for partition of property D-16, Green Park, New Delhi dismissed by trial court.
2. Claim that property was owned by father and not defendant nos. 1 to 3.
3. Application of Benami Transactions (Prohibition) Act, 1988.
4. Existence of Hindu Undivided Family (HUF) and its impact on property ownership.
5. Interpretation of sale deed dated 7.12.1959 and legal ownership.

Analysis:

1. The plaintiff filed a suit for partition of property D-16, Green Park, New Delhi, claiming that the property was actually owned by the father, Sh. Waryam Singh, despite being in the name of defendant nos. 1 to 3. The trial court dismissed the suit based on the provisions of the Benami Transactions (Prohibition) Act, 1988, which state that the benami owner becomes the real owner once the property is in their name, regardless of the source of funds used for purchase.

2. The court examined the exceptions under the Benami Act, noting that for the suit not to be barred, there should be evidence of the property being purchased in the name of an HUF or in trust. However, the plaintiff failed to establish the existence of an HUF or any trust arrangement related to the property, thereby not qualifying for the exceptions provided in the Act.

3. The court emphasized that the mere fact that the father provided funds for the property purchase does not automatically transfer ownership to him. The sale deed dated 7.12.1959 was in the name of defendant nos. 1 to 3, and no subsequent actions by the father indicated a transfer of ownership to the entire family, including the plaintiff.

4. Regarding the argument of an earlier partition suit indicating the property as family-owned, the court found no substantial evidence to support this claim. The court dismissed the appeal, stating that the order from the earlier suit did not amount to an admission by defendant nos. 1 to 3 that the property was to be divided among family members.

5. In conclusion, the court found no merit in the appeal and upheld the trial court's decision to dismiss the suit for partition based on the provisions of the Benami Act and the lack of evidence supporting the plaintiff's claims of ownership.