2023 (4) TMI 1038 - HC - Benami Property

Prohibition of the right to recover property held benami - fiduciary relationship - real owner - As pleaded plaintiff had accepted before the survey Officer that although the land was purchased in her name but the same was purchased by her husband Rameshwar and had accordingly requested the authorities to record the name of her son i.e. Chandrashekhar (the deceased husband of the petitioner no.1 and the father of the petitioner nos.2 to 6) - trial Court by the impugned order had rejected the said pleadings on the ground that they have been taken after the commencement of the trial and they are based on the pre-existing facts - scope of sub section (3) of section 4 of the Prohibition of Benami Property Transactions Act - HELD THAT - As the proposed amendment was that the plaintiff had made statement before the survey authorities that although the property was purchased in her name but in fact it was purchased by her husband Rameshwar Chawda In view of section 4 of the Act, it is clear that such defence is not permissible. The remaining proposed amendment is based upon the so called statement made by the plaintiff that she is not the owner but her husband is the owner although the property was purchased in her name. Any pleading which is barred by any law cannot be allowed to be incorporated by amendment. Accordingly, this Court is of the considered opinion that the trial Court did not commit any mistake by rejecting the proposed amendment. As no jurisdictional error was committed by the trial Court, accordingly, the petition fails and is hereby dismissed although on different grounds.

Summary

Issues involved:
The issues involved in the judgment are the rejection of proposed amendments in pleadings by the trial court and the applicability of Section 4 of the Prohibition of Benami Property Transactions Act, 1988.

Proposed Amendments in Pleadings:
The petitioners filed a petition under Article 227 against the order of the Civil Judge partially allowing amendments under Order 6 Rule 17 of the Code of Civil Procedure, 1908. The proposed amendments included facts related to the purchase of property in the name of the plaintiff's husband and subsequent allotment to her son. The trial court rejected these pleadings as they were taken after the commencement of the trial and were based on pre-existing facts.

Contentions of the Parties:
The petitioners argued that the proposed amendments were necessary for a just decision, while the respondents opposed the petition, citing that the amendments were barred by law. They referred to Section 4 of the Prohibition of Benami Property Transactions Act, stating that since the property was in the plaintiff's name, she is presumed to be the owner, and any defense based on fiduciary relationship is not permissible.

Legal Principles and Precedents:
The judgment referred to the Supreme Court case of Life Insurance Corporation of India Vs. Sanjeev Builders Private Limited, emphasizing the principles related to amendments of pleadings under Order VI Rule 17 of the CPC. The Court highlighted that all necessary amendments should be allowed for determining the real controversy, avoiding injustice, and preventing multiplicity of proceedings.

Application of Section 4 of the Act:
Section 4 of the Prohibition of Benami Property Transaction Act, 1988 prohibits the right to recover property held benami and disallows any defense based on such property. The proposed amendment suggesting that the property was purchased by the plaintiff's husband, not her, was deemed impermissible under this section.

Court's Decision:
The Court concluded that the trial court did not err in rejecting the proposed amendments as they were barred by law. Since the jurisdictional error was not committed by the trial court, the petition was dismissed on different grounds, upholding the decision of the trial court regarding the rejection of the proposed amendments.