2023 (8) TMI 68 - HC - Benami Property

Benami transactions - property is joint hindu family - real owner - trial Court held that the plaintiff was not able to prove that there was any nucleus of the joint family property from which they have purchased the suit property - HELD THAT - The suit land has been purchased in the name of the plaintiff and defendant No.2 jointly. However, the finding of both the Courts is that at the relevant time the plaintiff was a minor and that there was no nucleus or ancestral joint family property from which the amount was received to purchase the suit property. There was no evidence whatsoever that the family owned ancestral property, as such, the Court held that the property is not the ancestral property. The suit property is held to be purchased by the defendant No.2. Since both the Courts below have held that the suit property is individual property of the defendant No.2 and not a joint family property, the issue of sale of the suit property for legal necessity does not survive. In view of the judgment of the 3 Judges Bench of R.Rajagopal Reddy 1995 (1) TMI 67 - SUPREME COURT and in the case of Dattaram Govindrao Kale . 2023 (8) TMI 2 - BOMBAY HIGH COURT the defence of benami transaction taken prior to the Act coming into force is available and the Benami Transactions Prohibition Act is not retroactive to that extent.

Issues Involved:
1. Joint Hindu Family Membership
2. Joint Family Property
3. Exclusive Ownership and Possession
4. Ancestral Property Nucleus
5. Illegal Possession
6. Refusal to Deliver Possession
7. Title Based on Partition
8. Legal Necessity for Alienation
9. Necessary Party to the Suit
10. Limitation Bar
11. Benami Transactions [Prohibition] Act, 1988

Summary:

1. Joint Hindu Family Membership:
The trial court confirmed that the plaintiff and defendant No.2 are members of a joint Hindu family.

2. Joint Family Property:
The plaintiff failed to prove that the suit property is joint family property or that it was purchased from the ancestral joint family property. The trial court found no evidence of ancestral property or its sale proceeds being used for the purchase.

3. Exclusive Ownership and Possession:
The trial court concluded that defendant No.2 exclusively purchased the suit property and that defendant No.1 lawfully possessed it based on a sale deed executed by defendant No.2. The appellate court upheld this finding.

4. Ancestral Property Nucleus:
The plaintiff could not demonstrate that the suit property was purchased from the nucleus of any ancestral property, as no such property was proven to exist.

5. Illegal Possession:
The plaintiff's claim of illegal possession by the defendants was not substantiated.

6. Refusal to Deliver Possession:
This issue did not arise as the plaintiff failed to prove other foundational claims.

7. Title Based on Partition:
The plaintiff did not establish his title to the suit property based on partition.

8. Legal Necessity for Alienation:
Since the property was deemed self-acquired by defendant No.2, the question of selling it for legal necessity did not arise.

9. Necessary Party to the Suit:
The appellate court found that the mother and sister of the plaintiff were not necessary parties to the suit.

10. Limitation Bar:
The appellate court held that the suit was not barred by limitation.

11. Benami Transactions [Prohibition] Act, 1988:
The court held that the Benami Transactions [Prohibition] Act, 1988, does not apply retroactively to defense claims made before the Act came into force. The Supreme Court's judgment in R. Rajagopal Reddy clarified that the Act prohibits benami transactions prospectively from its commencement date, affecting future transactions and not pending suits.

Conclusion:
The High Court dismissed the Second Appeal, affirming the decisions of the lower courts that the suit property was self-acquired by defendant No.2, and the plaintiff's claims were not substantiated. The Benami Transactions [Prohibition] Act, 1988, was not applicable to the case.

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