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2019 (4) TMI 232 - SC - Indian LawsMaintainability of plaint - rejection of the plaint on the ground that the suit was barred under Section 4 of the Benami Transaction (Prohibition) Act 1988 - Prohibition of the right to recover property held benami - Whether the matter comes within the purview of Section 4(3) of the Act? Held that - Whether the plea raised by the appellant is barred under Section 4 of the Act or not could not have been the subject matter of assessment at the stage when application under Order VII Rule 11 CPC was taken up for consideration. The matter required fuller and final consideration after the evidence was led by the parties. It cannot be said that the plea of the appellant as raised on the face of it was barred under the Act. The approach must be to proceed on a demurrer and see whether accepting the averments in the plaint the suit is barred by any law or not. The application preferred by the second defendant under Order VII Rule 11 CPC is dismissed - appeal allowed.
Issues Involved:
1. Declaration of title and cancellation of sale deed. 2. Applicability of Section 4 of the Benami Transaction (Prohibition) Act, 1988. 3. Rejection of plaint under Order VII Rule 11 of the Code of Civil Procedure (CPC). Detailed Analysis: 1. Declaration of Title and Cancellation of Sale Deed: The appellant filed a suit seeking a declaration of title over a shop in Kasba Fatehpur's main market and the cancellation of a sale deed dated 24.07.2006 executed by the first defendant in favor of the second defendant. The appellant claimed that although the property was registered in the name of the first defendant (his father), he had paid for it and was the actual owner. The plaint included several material averments, such as the appellant managing the business, arranging the purchase money, and the first defendant acknowledging the appellant's ownership through a notarized document dated 14.03.2002. 2. Applicability of Section 4 of the Benami Transaction (Prohibition) Act, 1988: The second defendant filed a written statement denying the appellant's claims and later submitted an application under Order VII Rule 11, CPC, arguing that the suit was barred under Section 4 of the Benami Transaction (Prohibition) Act, 1988. The trial court agreed, stating that the appellant's claim of having purchased the property in his father's name from his own funds was prohibited under Section 4 of the Act. The High Court upheld this view, noting that the appellant's claim did not fall under the exceptions provided in Section 4(3) of the Act, which include properties held by a coparcener in a Hindu Undivided Family or in a fiduciary capacity. 3. Rejection of Plaint under Order VII Rule 11 of the Code of Civil Procedure (CPC): The trial court allowed the application under Order VII Rule 11, CPC, and rejected the plaint. This decision was upheld by the High Court, which found that the suit was clearly barred by Section 4 of the Benami Transaction (Prohibition) Act, 1988. The appellant contested this, arguing that his case was covered by Section 4(3) of the Act, which provides exceptions for properties held in a fiduciary capacity. The Supreme Court examined the relevant legal provisions and precedents, including the case of Marcel Martins v. M. Printer and others, which discussed the concept of fiduciary capacity. The Court noted that the determination of whether a relationship is fiduciary depends on the factual context and the relationship's nature, involving trust and confidence. The Court found that the appellant's claim required a full trial to assess the evidence and determine whether the suit was barred by Section 4 of the Act. Conclusion: The Supreme Court allowed the appeal, setting aside the decisions of the lower courts and dismissing the application under Order VII Rule 11, CPC. The Court directed the trial court to expedite the matter and dispose of the pending suit within six months, emphasizing that the merits of the case should be independently assessed based on the evidence presented. The appeal was allowed with no costs.
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