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IN THE HIGH COURT OF DELHI AT NEW DELHI
Anup Jairam Bhambhani, J.
Shri Charanjeet Singh & Anr. – Appellants
Versus
Shri Harvinder Singh & Anr. – Respondents
CS(OS) 486 of 2018 & I.A. Nos. 13318 of 2018, 15952 of 2018, 456 of 2019
Decided On : 06-07-2023
PROPERTY - SUIT FOR DECLARATION - REJECTION OF PLAINT - SALE DEED - CANCELLATION - PARTITION - PERMANENT INJUNCTION - CAUSE OF ACTION - LIMITATION - BENAMI TRANSACTION - FIDUCIARY CAPACITY - HINDU SUCCESSION ACT - PARTNERSHIP ACT - FAMILY SETTLEMENT - ORAL AGREEMENT - REGISTRATION - LIMITATION ACT.
Fact of the Case:
Plaintiffs filed a suit seeking a declaration that the property bearing No. F-61, Rajouri Garden, New Delhi is joint property of Plaintiffs and Defendants, both having 50% share each in the same. They also sought cancellation of the sale deed dated 27.03.1992 registered in favour of defendant No.2, appointment of a Local Commissioner to suggest the mode of partition, and a decree of permanent injunction restraining the defendants from creating any lien, mortgage, encumbrance or third-party rights, titles or interests, or otherwise dealing with and disposing the whole or any part of the subject property. Defendant No.2 filed an application under Order VII Rule 11 CPC seeking rejection of the plaint on the grounds that the plaint does not disclose a cause of action and that it is also barred by law.
Finding of the Court:
The court held that the plaint does not disclose any cause of action that requires trial. The reliefs claimed in the plaint are also clearly barred by law. The suit is disposed of by rejecting the plaint.
Issues: 1. Whether the plaint discloses a cause of action? 2. Whether the reliefs claimed in the plaint are barred by law?
Ratio Decidendi: 1. The court held that the plaint does not disclose any cause of action that requires trial. The plaintiffs' claim that the subject property was purchased from the funds of the partnership firm but in the name of defendant No. 2 is precisely what is barred under section 4 of the Prohibition of Benami Property Transactions Act, 1988. Defendant No.2 does not fall within the exception to the definition of benami property engrafted in section 2(9)(A)(ii) of the Benami Transactions Act. The plaintiffs' contention that defendant No. 2 was in a fiduciary capacity vis-a-vis them since she was the wife of defendant No.1, who (latter) is a partner of the firm, is not supported by law. The plaintiffs' claim that the subject property was to fall to the share of defendant No. 1 under the family agreement and the sale deed in respect thereof was got executed in favour of respondent No. 2 is not supported by any averment in the plaint that defendant No. 2 was party to the oral settlement nor that she was signatory to the settlement deed. 2. The court held that the reliefs claimed in the plaint are also clearly barred by law. The sale deed, of which cancellation is sought, was admittedly executed on 27.03.1992. The present suit was filed on 10.09.2018 i.e., more than 21 years after Sale Deed dated 27.03.1992 was executed conveying the subject property to defendant No. 2. The suit is way beyond the limitation of 03 years stipulated in Article 59 of the Schedule of the Limitation Act.
Final Decision: The application under Order VII Rule 11 CPC is allowed, thereby rejecting the plaint in suit bearing CS(OS) No. 486/2018. The suit is disposed of by rejecting the plaint.
JUDGMENT
Anup Jairam Bhambhani J.
I.A.15951/2018 (Under Order VII Rule 11 CPC)
1. By way of the present application filed under Order VII Rule 11 of the Code of Civil Procedure, 1908 (`CPC'), defendant No.2 seeks rejection of the plaint inter-alia on the grounds that the plaint does not disclose a cause of action and that it is also barred by law.
2. In the present suit, the plaintiffs have made the following prayers:
"(i) Pass a decree of declaration declaring that the property bearing No. F-61, Rajouri Garden, New Delhi is joint property of Plaintiffs and Defendants, both have 50% share each in the same.
(ii) Pass a decree of cancellation in favour of Plaintiffs and against Defendants thereby canceling the sale deed dated 27.03.1992 Registered in the office of Sub Registrar Delhi bearing registration No.18570, in Addl. Book No. I, Vol. No. 5686 on Page No. 109 to 122 registered on 27.03.1992 in the name of Defendant No.2.
(iii) Appoint a Local Commissioner with directions to suggest the mode of partition bearing No.F-61, Rajouri Garden, New Delhi by metes and bounds and to submit a report before this Hon'ble Court thereby declaring the share of the Plaintiffs in the same whereupon, this Hon'ble Court may be pleased to pass a Preliminary Decree.
(iv) Pass a final decree of partition on the basis of report submitted by learned Local Commissioner and the Plaintiffs be put in possession of their share in the aforesaid properties.
(v) Pass a decree of Permanent Injunction in favour of the Plaintiff and against the Defendants, restraining the Defendants, their servants, agents, employees, representatives or any body acting through them or on their behalf from in any manner whatsoever creating lien, mortgage, encumbrances, creating third party interest and dealing with or disposing of a part or whole of Property bearing No.F-61, Rajouri Garden, New Delhi.
(vi) Grant costs.
(vii) Grant such other, further relief/s in the facts and circumstances of the case as this Hon'ble Court may deem just and equitable in favour of the Plaintiffs."
3. Briefly, it is the plaintiffs' allegation that property bearing No. F-61 Rajouri Garden, New Delhi (`subject property') is the `joint property' of the plaintiffs and the defendants, both sides having a 50% share therein. In that respect, the plaintiffs seek a decree of declaration. Furthermore, it is the plaintiffs' case that Sale Deed dated 27.03.1992 registered in favour of defendant No.2 be cancelled since defendant No.2 is not the sole or absolute owner of the subject property. In that behalf, the plaintiffs seek a decree of cancellation of the said sale deed. Furthermore, the plaintiffs seek a decree of partition and separate possession in respect of their respective shares in the subject property, based on a mode of partition to be worked-out by appointing a local commissioner.
4. The plaintiffs further seek a decree of permanent injunction, restraining the defendants from creating any lien, mortgage, encumbrance or third-party rights, titles or interests, or otherwise dealing with and disposing the whole or any part of the subject property.
5. The paragraphs of the plaint that are relevant for deciding the present application are the following:
"8. As such, from the funds of aforesaid partnership, Property bearing No. F-61, Rajouri Garden, New Delhi was purchased on 27.3.1992 from its erstwhile owners Mrs. Devinder Sahni and Ms. Pritpal Kaur Chandhok. The said property was purchased in the name of Defendant No.2, namely Smt. Bhupinder Kaur Sahni, wife of Defendant No.1. Though the aforesaid property was purchased out of the partnership funds, the Defendant No.2 held the same in a fiduciary capacity for the benefit of members of the family/firm. The said property was always treated as such. Defendant No.2 had no income of her own. By paying monies from the firm to third parties and thereafter receiving cheque in lieu thereof from third parties in the name of Defendant No.2, suit property has been p
AI
The court held that the rejection of the plaint was improper as the plaintiff sufficiently alleged that the property did not qualify as benami under the exceptions provided in the Benami Transactions....
The court held that a claim for property belonging to a joint Hindu family is not barred as benami under the Prohibition of Benami Property Transactions Act when purchased with family funds, requirin....
The main legal point established in the judgment is the requirement for clear pleadings and necessary averments for the existence of joint Hindu family/HUF properties, and the court's wide discretion....
The main legal point established in the judgment is the application of the Benami Transaction (Prohibitions) Act, 1988, and the Limitation Act, 1963 in determining the validity of property transactio....
Claims of property ownership must be substantiated with credible evidence, as allegations of trust do not override the Benami Transactions Act without proof of fraud.
At the stage of Order VII Rule 11 of the CPC, the Court cannot go into the veracity of the pleas taken in the plaint or its truthfulness. The same can only be tested in a trial.
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