MR. JUSTICE S.RAVINDRA BHAT (OPEN COURT)

1. Heard learned counsel for the parties.

2. It is submitted that despite the best efforts, no settlement is possible. On the previous date of hearing, this Court had on consideration of the facts recorded inter alia as follows: -

“4. This Court has carefully considered the pleadings. Joint ownership of the suit property is an admitted fact. The defendant’s contention, however, is that the plaintiff cannot accept more than 10% share in the property as the entire funding was by her. The defendant, however, consciously does not say that there was any joint family; nor is there any allegation that the plaintiff held such share or the share in the property in trust on her (i.e. the defendant’s) behalf.

5. Section 3 of the Benami Transactions (Prohibition) Act, 1988 prohibits anyone from holding property benami, which is defined under Section 2(a) as;

“any transaction in which property is transferred to one person for a consideration paid or provided by another person.”

6. This Court is of the opinion that the defence set up in the written statement clearly is to the effect that the plaintiff is a benami property owner on behalf of the defendant. The Section 4 enacts a bar for the enforcement of any property right held benami.

7. Section 4(2) interestingly mandates that;

“no defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property.”

Section 4(3) enacts a limited exception to the prohibition under Sections 4(1) and (2). It is to the following effect that;

“(3) Nothing in this section shall apply:-

(a) where the person in whose name the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of the coparceners in the family; or

(b) where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity, and the property is held for the benefit of another person for whom he is a trustee or towards whom he stands in such capacity.”

8. In this case, the defendant unambiguously admits to the benami partnership of the plaintiff; however, there is no assertion that the property was held as a HUF property or the plaintiff held it trust or on behalf of the defendant. In these circumstances, the Court is of the opinion that no further evidence is required and a trial is unnecessary.”

3. The parties had sought for some time to explore the possibility of a settlement. As mentioned earlier, a settlement is not forthcoming. However, the defendant had made a submission stating that even though this Court had rendered its prima facie view, the question of ratio or the portion of shares of property is undetermined, and that evidence is required to be gone into for this purpose. The defendant’s learned Senior counsel relied upon Section-45 of the Transfer of Property Act to submit that in such cases where ownership is admitted, the concerned parties would be entitled to shares in the property, in accordance with the proportion of payment (of consideration) made by them for acquiring it. It is stated that this provision remains unaffected by enactment of Benami Transactions (Prohibitions) Act, 1988 -hereafter referred to as Benami Act. Section-45 (of the Transfer of Property Act, 1882) reads as follows: -

“45. Joint transfer for consideration Where immovable property is transferred for consideration to two or more persons and such consideration is paid out of a fund belonging to them in common, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property identical, as nearly as may be, with the interests to which they were respectively entitled in the fund; and, where such consideration is paid out of separate funds belonging to them respectively, they ar