2020 (9) TMI 451 - HC - Benami Property

Benami transaction made in the name of the person and his brother or sister with both their names jointly occurring in any document - Exemption u/s 2(9)(A)(iv) - HELD THAT - Trial Court has gone into the merits of the amendments and has virtually found that the petitioner is not eligible to claim the benefits of the aforementioned exemption under Section 2(9)(A)(iv) - It was not within the province of the Trial Court to have entered into the merits of the contentions of the petitioner at that stage; and all that it could have considered was whether the amendments were liable to be allowed under the ambit of Order VI Rule 17 of the CPC and nothing more nothing less. Of course, the contention of Sri.Narendra Kumar is that the suit itself is not maintainable before the Trial Court and that it ought to have been transferred to the competent Adjudicating Authority under the Act but it does not, in any manner, impact the application for amendment sought for by the petitioner because, even if the suit is found liable to be transferred to the Adjudicating Authority, then the said authority would have to consider it on its merits, before moving forward. This aspect has also not been considered by the Trial Court and for this reason, cannot find in favour of the impugned order. Ext.P4 interim application filed by the petitioner, requires to be reconsidered by the Trial Court, also adverting to the assertions of Sri.Narendra Kumar that the provisions of the Act enjoins it to transfer the suit to the appropriate Adjudicating Authority, even before the amendments can be considered. Original Petition is allowed, leading to Ext.P7 order being set aside; with a consequential direction to the Trial Court to reconsider Ext.P4.

Summary

Issues:
1. Dismissal of the application for amendment of the plaint by the Trial Court.
2. Jurisdiction of the Trial Court in considering alleged benami property transactions.
3. Interpretation of provisions of the Prohibition of Benami Transactions Act, 1988.
4. Eligibility of the petitioner for exemption under Section 2(9)(A)(iv) of the Act.
5. Compliance with Order VI Rule 17 of the Code of Civil Procedure (CPC).
6. Maintainability of the suit before the Trial Court.
7. Reconsideration of the interim application by the Trial Court.

The judgment concerns an Original Petition filed by the plaintiff challenging the Trial Court's order dismissing his application for amendment of the plaint. The petitioner asserts that the Trial Court erred in not allowing the amendments as per Order VI Rule 17 of the CPC. The respondents argue that the suit involves a benami property transaction, which falls under the Prohibition of Benami Transactions Act, 1988, and should be transferred to the competent Adjudicating Authority. The petitioner claims entitlement to exemption under Section 2(9)(A)(iv) of the Act based on the property purchase in his deceased sister's name. The Court notes that the Trial Court delved into the merits of the amendments instead of focusing on their permissibility under Order VI Rule 17, emphasizing that the Trial Court's role was limited to considering the amendment's procedural aspects.

The plaintiff alleges that he purchased the property in his deceased sister's name but is entitled to full ownership. He sought an exemption under the Act, arguing that the property registration in his sister's name was nominal, and he retained exclusive ownership rights. The petitioner's contention is that possession of a document mentioning both his and his sister's name qualifies for exemption under Section 2(9)(A)(iv) of the Act. The Court highlights that the Trial Court prematurely dismissed the application for amendment without considering the evidence required to establish exemption eligibility, emphasizing that such determinations should occur post-evidence.

The Court emphasizes that the Trial Court overstepped its jurisdiction by delving into the merits of the petitioner's contentions regarding exemption eligibility under the Act. It clarifies that the Trial Court's role was limited to assessing the permissibility of the amendments under Order VI Rule 17 of the CPC. The judgment underscores that even if the suit is transferable to the Adjudicating Authority under the Act, the Trial Court must first consider the amendments' procedural aspects before any transfer decision. Consequently, the Court directs the Trial Court to reconsider the petitioner's application for amendment, considering all contentions and provisions of the Act before proceeding further.

In conclusion, the Original Petition is allowed, setting aside the Trial Court's order and directing a reconsideration of the interim application. The Court instructs both parties to appear before the Trial Court for further proceedings. No costs are awarded, and the Trial Court is mandated to act promptly in line with the judgment's directives.