Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2019 Supreme(SC) 388

SUPREME COURT OF INDIA
Uday Umesh Lalit, Indu Malhotra, JJ.
Pawan Kumar - Appellant
Vs.
Babulal Since Deceased Through Lrs. And Ors. - Respondents
Civil Appeal No. 3367 of 2019 (Arising Out of Special Leave Petition (Civil) No. 36694 of 2017)
Decided On : 02-04-2019

Advocates Appeared:
For the Appellant :Mr. Abhishek Gupta, Advocate
For the Respondent:Ms. Rohini Musa, Advocate, Mr. R.K. Singh, Advocate, Ms. Neeraj Singh, Advocate, Mr. Kumar Gaurav, Advocate, Ms. Ritu Beniwal, Advocate, Mr. P. Dayal, Advocate, Mr. Rameshwar Prasad Goyal, Advocate and Mr. Milind Kumar, Advocate

IMPORTANT POINT
Disputed question like whether a plea of ownership of property is barred by section 4(3)(b) of Benami Transaction (Prohibition) Act, 1988 cannot be decided under Order VII Rule 11, CPC.

Headnote:Code of Civil Procedure, 1908 – Order VII Rule 11 – Disputed question like whether a plea of ownership of property is barred by section 4(3)(b) of Benami Transaction (Prohibition) Act, 1988 – Cannot be decided under Order VII Rule 11 – Such matter requires fuller and final consideration after the evidence is led by the parties. (Para 13)
       (2012) 5 SCC 342; (2005) 7 SCC 510 – Relied upon
       (2011) 8 SCC 497; (1995) 2 SCC 630 – Referred
       (1992) 1 SCC 710 – Distinguished
       Facts of the case:
       The appellant filed a suit for declaration of title with respect to premises in Kasba Fatehpur's main market which were more particularly described in the plaint and prayed that he be declared owner of the premises and that the sale deed dated 24.07.2006 executed by the first defendant in favour of the second defendant be cancelled.
       The second defendant filed his written statement denying the case pleaded by the appellant. Nine years later, the second defendant submitted an application under Order VII Rule 11 of the Code of Civil Procedure praying for rejection of the plaint on the ground that the suit was barred under Section 4 of the Benami Transaction (Prohibition) Act, 1988.
       The trial court rejected the plaint.
       The appellant’s appeal was dismissed by the High Court.
       Finding of the Court:
       Impugned judgment is not sustainable.
       Result: Appeal allowed.

Judgement Key Points

Based on the provided legal document, here are the key points:

Legal Principle: A disputed question regarding whether a plea of ownership of property is barred by Section 4(3)(b) of the Benami Transactions (Prohibition) Act, 1988, cannot be decided under Order VII Rule 11 of the Code of Civil Procedure, 1908; such matters require fuller consideration after evidence is led by the parties. (!) (!) (!)
Case Outcome: The appeal filed by Pawan Kumar against the High Court's dismissal of his suit was allowed; the application under Order VII Rule 11 CPC was dismissed, and the trial was directed to be expedited. (!) (!)
Factual Background: The appellant filed a suit for declaration of title and cancellation of a sale deed, claiming he purchased a shop in his father's name using his own funds to show respect to his aging father, with a notarized document acknowledging the appellant's sole ownership. (!) (!) (!) (!) (!)
Procedural History: Nine years after the suit was filed, the second defendant applied for rejection of the plaint under Order VII Rule 11 CPC, arguing the suit was barred by the Benami Act. The trial court initially allowed this application and rejected the plaint. (!) (!) (!)
High Court Decision: The High Court dismissed the appellant's appeal, holding that the suit was clearly hit by Section 4 of the Benami Act because the plaintiff claimed to have purchased the property in his father's name without joint ownership or fiduciary intent as per the Act's exceptions. (!) (!)
Key Evidence: A document dated 14.03.2002 executed by the appellant's father stated that the property was purchased by the appellant (the elder son) with his own income, registered in the father's name only out of respect, and that the father and his successors had no rights in the property. (!) (!)
Legal Interpretation of "Fiduciary Capacity": The court noted that "fiduciary capacity" implies a relationship of trust and confidence where one acts for the benefit of another, similar to a trustee-beneficiary relationship, and must be determined based on the factual context. (!) (!) (!) (!)
Precedents Relied Upon: The judgment relied on Marcel Martins v. M. Printer (2012) 5 SCC 342 and CBSE v. Aditya Bandopadhyay (2011) 8 SCC 497 to interpret fiduciary relationships and the scope of the Benami Act. (!) (!) (!) (!)
Order VII Rule 11 Application: The court cited Popat and Kotecha Property vs. State Bank of India Staff Association (2005) 7 SCC 510, stating that disputed questions regarding legal bars on suits cannot be decided at the initial stage of an Order VII Rule 11 application and require full trial evidence. (!) (!)
Directives: The trial court was directed to dispose of the pending suit within six months, with the merits to be decided independently after evidence is led. (!) (!)

JUDGMENT :

Uday Umesh Lalit, J.

Leave granted.

2. This appeal questions the final judgment and order dated 18.08.2017 passed by the High Court of Judicature for Rajasthan at Jaipur in SBRFA No. 511 of 2016.

3. The appellant filed a suit for declaration of title with respect to premises in Kasba Fatehpur's main market which were more particularly described in the plaint and prayed that he be declared owner of the premises and that the sale deed dated 24.07.2006 executed by the first defendant in favour of the second defendant be cancelled. The material averments in the plaint were:

(a) A shop in said premises was held by the first defendant, namely, father of the appellant on rent from the erstwhile owner;
(b)The first defendant having become old, it was the appellant who had been looking after the entire business;
(c) The erstwhile owner had filed suit for possession which matter came right upto this Court;
(d) There was a compromise between the erstwhile owner and the first defendant under which the premises where the shop is situate, were agreed to be sold in favour of first defendant;
(e) The first defendant was not having enough money and as such it was the appellant who arranged all the money on his own after borrowing from money lenders on interest;
(f) At the time of preparing the sale deed, the first defendant had indicated that the premises be taken in his name;
(g) Even after purchase of the premises in the name of the first defendant, the appellant was conducting the business in the said shop;
(h) The first defendant had executed a document on a stamp paper on 14.03.2002 in the presence of witnesses which was verified by Notary Public acknowledging that the appellant had paid the entire consideration towards purchase of the premises,
(i) The second defendant was also a tenant in the premises and after the purchase as aforesaid he was making payment of rent to the appellant,
(j) Taking undue advantage of the old age and fragile health of the first defendant, the second defendant got written a document in his favour with respect to first floor of the disputed shop from the first defendant on 19.07.2002.
With the case as aforesaid, Civil Suit No. 126 of 2006 was filed by the appellant in the court of District Judge, Sikar.

4. The second defendant filed his written statement denying the case pleaded by the appellant. Nine years later, the second defendant submitted an application under Order VII Rule 11 of the Code of Civil Procedure (for short 'CPC') praying for rejection of the plaint on the ground that the suit was barred under Section 4 of the Benami Transaction (Prohibition) Act, 1988 (hereinafter referred to as 'the Act').

5. The trial court allowed said application under Order VII Rule 11, CPC and by its order dated 23.09.2016 rejected the plaint. The relevant portion of true translation of the decision of the trial court was as under:

"11. In this way in the present case, the Plaintiff in his Plaint has himself stated that he wants to purchase the disputed properly in the name of his father from his own income or by the money which he had taken on interest. In my humble opinion under Section-4 of the Benami Transaction (Prohibition) Act, 1988 filing of present Suit is prohibited. Hence, the judgment of the Hon'ble Court produced on behalf of the Applicant/Defendant are applicable on the present case. The Plaint of the Plaintiff is prohibited under Order-7 Rule-11(3) C.P.C."

6. The appellant, being aggrieved filed SBRFA No. 511 of 2016 in the High Court which appeal was dismissed by the High Court vide its judgment and order dated 18.08.2017. It was observed by the High Court as under:

"From the averments made in the plaint it is clear that plaintiff is seeking declaration in his name in respect of suit properly with a clear stipulation that he purchased the said properly from his own funds/sources in the name of his father and his father was not real owner of the suit properly, the Act of 1988 provides that no suit, claim or action

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2019 Supreme(SC) 388

SUPREME COURT OF INDIAUday Umesh Lalit, Indu Malhotra, JJ.Pawan Kumar - AppellantVs.Babulal Since Deceased Through Lrs. And Ors. - RespondentsCivil Appeal No. 3367 of 2019 (Arising Out of Special Leave Petition (Civil) No. 36694 of 2017)Decided On : 02-04-2019

IMPORTANT POINTDisputed question like whether a plea of ownership of property is barred by section 4(3)(b) of Benami Transaction (Prohibition) Act, 1988 cannot be decided under Order VII Rule 11, CPC.

Cases Referred (4)

SUPREME COURT OF INDIA
Uday Umesh Lalit, Indu Malhotra, JJ.
Pawan Kumar - Appellant
Vs.
Babulal Since Deceased Through Lrs. And Ors. - Respondents
Civil Appeal No. 3367 of 2019 (Arising Out of Special Leave Petition (Civil) No. 36694 of 2017)
Decided On : 02-04-2019

IMPORTANT POINT
Disputed question like whether a plea of ownership of property is barred by section 4(3)(b) of Benami Transaction (Prohibition) Act, 1988 cannot be decided under Order VII Rule 11, CPC.