1. Appeal against rejection of suit for declaration, possession, injunction — Benami transaction claim. (Para 1 , 2 , 34 , 35 )
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2026 Supreme(Del) 1212
2026 DHC 8248
IN THE HIGH COURT OF DELHI AT NEW DELHI
NEENA BANSAL KRISHNA, J.
Surya Deep Garg @ Suraj Garg, S/o Shri Ravindra Prakash Gupta – Appellant
Versus
Smt. Neha Garg, W/o Sh. Surya Deep Garg @ Suraj Garg – Respondent
RFA 674 of 2026, CM APPL.44816 of 2026, CM APPL.44817 of 2026
Decided On : 24-09-2026
Advocates Appeared :
For the Appellant : Mr. S.S. Panwar, Advocate, Ms. Nividita Panwar, Mr. Nawal Kishor, Mr. Praveen Singh, Advocate, Ms. Durgesh Nandini, Advocate
Important Points
A suit claiming beneficial ownership of a property is barred under the Benami Transaction (Prohibition) Act if the consideration is not proven to be from the individual's exclusive known sources. Furthermore, a suit dismissed in default bars a subsequent suit on the same cause of action under Order IX Rule 9 CPC.
Subject
Civil Law - Property Law
Act Referred
Code of Civil Procedure, 1908: S.96, O.VII R.11, O.IX R.9
Benami Transaction (Prohibition) Act, 1988: S.2(9), S.2(9)(A)(iii), S.3, S.4, S.4(1), S.4(2)
Transfer of Property Act, 1882: S.3
Hindu Marriage Act: S.9, S.13
Indian Trusts Act: S.82
Domestic Violence Act: S.12
Indian Penal Code: S.498A, S.406
Benami Transaction (Prohibition) Act, 1988: S.2(9), S.2(9)(A)(iii), S.3, S.4, S.4(1), S.4(2)
Transfer of Property Act, 1882: S.3
Hindu Marriage Act: S.9, S.13
Indian Trusts Act: S.82
Domestic Violence Act: S.12
Indian Penal Code: S.498A, S.406
Headnote
(A) Benami Transaction (Prohibition) Act - Exception for Spouse/Child - Requirement of 'known sources of income' - Funds paid from joint accounts of the individual and spouse, or from a proprietorship firm in the spouse's name, do not constitute the exclusive known sources of income of the individual to attract the exception under Section 2(9)(A)(iii). (Para 96-101)
(B) Code of Civil Procedure - Order IX Rule 9 - Bar on fresh suit - Where a previous suit challenging a title deed is dismissed in default and the application for restoration is rejected, a subsequent suit based on the same cause of action is barred, regardless of whether the subsequent suit also challenges a later sale deed. (Para 80-85)
(C) Limitation - Cause of Action - Subsequent Sale - The discovery of a subsequent registered sale deed does not reset the limitation period for challenging the original title deed if the party had knowledge of the original transaction and the title standing in others' names. (Para 76-77)
Issues: Whether the suit for declaration and possession was barred by the Benami Transaction (Prohibition) Act, the law of limitation, and Order IX Rule 9 of the CPC.
(B) Code of Civil Procedure - Order IX Rule 9 - Bar on fresh suit - Where a previous suit challenging a title deed is dismissed in default and the application for restoration is rejected, a subsequent suit based on the same cause of action is barred, regardless of whether the subsequent suit also challenges a later sale deed. (Para 80-85)
(C) Limitation - Cause of Action - Subsequent Sale - The discovery of a subsequent registered sale deed does not reset the limitation period for challenging the original title deed if the party had knowledge of the original transaction and the title standing in others' names. (Para 76-77)
Issues: Whether the suit for declaration and possession was barred by the Benami Transaction (Prohibition) Act, the law of limitation, and Order IX Rule 9 of the CPC.
Legal Category Hierarchy
- civil procedure
- benami transactions
- property law
-
evidence
- judicial admissions (Para 31)
Advocates:
For the Appellants/Petitioners: S.S. Panwar, Nividita Panwar, Nawal Kishor, Praveen Singh, Durgesh Nandini
For the Respondents: Sheikh Imran Alam & Associates, Saurabh Jain, Muenuddin Siddiqui & Associates
For the Appellants/Petitioners: S.S. Panwar, Nividita Panwar, Nawal Kishor, Praveen Singh, Durgesh Nandini
For the Respondents: Sheikh Imran Alam & Associates, Saurabh Jain, Muenuddin Siddiqui & Associates
Table of Contents
2. Appellant claimed suit property was benami; respondents argued suit barred by limitation, Benami Act, and prior dismissal. (Para 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 58 , 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67 , 68 , 69 , 70 )
3. Transaction excluded from benami exception under Section 2(9)(A)(iii) as property also held in mother-in-law's name and funds not exclusively from known sources. (Para 94 , 95 , 96 , 97 , 98 , 99 , 100 , 101 , 102 , 103 , 104 , 105 , 106 , 107 )
4. Section 2(9)(A)(iii) exception inapplicable where part consideration paid from joint account or firm in wife's name; Section 4(1) bars suit. (Para 101 , 103 )
5. Appeal dismissed — First appeal under Section 96 CPC rejected with no merit. (Para 108 , 109 )
6. What is the effect of dismissal of an earlier suit for non-prosecution on a subsequent suit based on the same cause of action under Order IX Rule 9 CPC?
A subsequent suit on the same cause of action is barred under Order IX Rule 9 CPC when the earlier suit was dismissed for default. (Para 80 , 81 , 82 , 83 , 84 , 85 , 86 )
7. Does the 2016 amendment to the Benami Transactions Act apply retrospectively for determining if a prior transaction is benami?
Yes, the substituted Section 2(9) introducing exceptions is declaratory and curative, hence retrospective in application. (Para 90 , 91 )
8. Is a transaction where property is held jointly in the name of the spouse and another person protected under Section 2(9)(A)(iii) of the Benami Act?
No, as the exception only covers property held in the name of a spouse or child, not including a third party such as a mother-in-law. (Para 94 , 95 )
9. Can a plaintiff claim exclusive ownership of funds in a joint account to establish that consideration was paid from his known sources under the Benami Act?
No, a plaintiff cannot unilaterally claim exclusive ownership over monies in a joint account to establish sole known source of funds. (Para 97 )
10. Is the source of purchase money the sole determining factor for a benami transaction?
No, the intention of the parties must be gathered from surrounding circumstances including relationship, possession, custody of title documents, and subsequent conduct. (Para 104 , 105 )
JUDGMENT :
NEENA BANSAL KRISHNA, J.
1. Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (hereinafter referred to as ‘CPC’) has been filed on behalf of the Appellant against the Judgment and Decree dated 11.04.2026 passed by the Ld. District Judge in CS DJ No. 580/2023, whereby the Suit filed by the Appellant for Declaration, Possession and Permanent Injunction has been rejected under Order VII Rule 11 CPC, by the Learned District Judge, Delhi
2. The facts in brief, as stated in the Plaint, are that the marriage of Appellant/ Plaintiff Surya Deep Garg and Defendant No. 1, /Smt. Neha Garg was solemnized on 02.12.2001 according to Hindu customs and rites.
3. After the marriage, Appellant and Defendant No.1 resided together at the house of the parents of the Appellant, i.e., H. No.959, Sector-3, R.K. Puram, New Delhi. However, after some time, Defendant No.1 insisted that the Appellant should stay in a house near the house of her mother.
4. Consequently, the Defendant No.2, Smt. Suneeta Gupta, arranged a rented accommodation for the Appellant and Defendant No.1, which was a single-bedroom set at the Lower Ground Floor in Property No. R-116, Khirki Extension, Malviya Nagar, New Delhi, on a monthly rent of Rs.4,000/- per month.
5. The Appellant, however, used to pay the rent to the landlord every month through his mother-in-law, Defendant No.2, as the accommodation had been arranged by her. Subsequently, after some time, the Appellant came to know that the said property was owned by the maternal grandmother of Defendant No.1.
6. The Appellant, on coming to know of this fact, felt cheated. After some time, purchased a two-bedroom flat bearing No. JD-18E/A, Upper Ground Floor, Khirki Extension, Malviya Nagar, New Delhi from his own funds, on the basis of registered Agreement to Sell, GPA, Will and other documents dated 10.02.2004, from the erstwhile owner, Sh. Panna Lal Saini S/o Late Sh. Munshi Ram, for sale consideration of Rs.1,25,000/-, paid through a cheque dated 30.10.2003. However, the documents were executed in the name of Defendant No. 1, allegedly out of love and affection.
7. After some time, the Appellant sold this Flat for a consideration of Rs.2,00,000/-, which was received by the Appellant and Defendant No.1 in their joint Account maintained with ICICI Bank, Green Park Extension Branch, New Delhi.
8. After selling this Flat No. JD-18E/A, the Appellant had purchased another Flat bearing No.R-71, Khirki Extension, Malviya Nagar, New Delhi on 16.09.2005, from Mrs. Nisha Jaideva for a consideration of Rs.3,50,000/, although the documents were again executed in the name of Defendant No.1, allegedly out of love and affection.
9. The Appellant explained that the sum of Rs.3,50,000/- and a sum of Rs. 50,000/- (towards fittings and fixtures in the flat) were paid by him as under:
(i) Rs.1,50,000/- vide Pay Order dated 15.09.2005 issued by ICICI Bank, Green Park branch
(ii) Rs.2,00,000/- vide Pay Order dated 15.09.2005 issued from the Joint Account of Appellant and Defendant No.1 in Union Bank of India, Branch South Extn.-I, New Delhi.
(iii) Rs.50,000/- vide Pay Order dated 15.09.2005 from the personal account of the Appellant towards the fittings and fixtures.
10. After shifting to the new second flat, a son, Master Arth, was born on 20.09.2005, at Ratlam, M.P., and the entire expenses were borne by the Appellant.
11. On 02.02.2007, the above-mentioned flat was sold by the Appellant to Mrs. Suman Behl for a consideration of Rs.23,75,000/-, out of which a sum of Rs.3,85,000/- was received by way of cheques which were deposited in the joint Account of the Appellant and Defendant No.1, and the balance amount was received in cash.
12. Thereafter, the Appellant purchased flat bearing No. 90/80-AB, First Floor, measuring 200 Sq. Yds. in Malviya Nagar, New Delhi (hereinafter the ‘Suit Property’) from Shri Sandeep Malik for a total sale consideration of Rs.27,00,000/-. The sale consideration was again paid by the Appellant fro
