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Benami Property - Case Laws
Showing 21 to 40 of 302 Records
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2023 (8) TMI 67 - MADRAS HIGH COURT
Benami transaction - parallel proceedings under Income-tax - cash which is said to belong to the petitioner and was seized from the hands of the petitioner's friend, was taxed in the hands of the petitioner for the Assessment Year 2021-2022 - writ filled seeking adjustment of cash that was seized from the hands of the petitioner's friend - meanwhile fourth respondent has initiated proceeding under Section 263 - HELD THAT:- The prayer of the petitioner for a Mandamus cannot be countenanced without an application by the petitioner under first proviso to Section 132 of the Income Tax Act, 1961, although there could be a corresponding duty on the part of the respondents to appropriate the amount that was seized on 20.06.2020, if an application is made. If the aforesaid seized amount is to be treated as an asset of the petitioner and adjusted u/s 132 of the Income Tax Act, 1961, the petitioner has to first file an application as is contemplated under the aforesaid provision.
Considering the fact that a parallel proceedings is also pending before the fifth respondent under the Prohibition of the Benami Property Transactions Act, 1988, pursuant to the order passed by this Court in W.P.No.9868 of 2023, direct the petitioner to file appropriate application before the third respondent in accordance with the provisions of Sections 132B of the Income Tax Act within a period of 7 days from the date of receipt of a copy of this order. The third respondent shall dispose the same within a period of 8 days thereafter.
Considering the fact that the parallel proceedings is also likely to be heard and disposed by the fifth respondent on 01.08.2023 under the Prohibition of the Benami Property Transactions Act, 1988, the third respondent shall endeavour to pass orders as expeditiously taking note of the order to be passed by the fifth respondent.
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2023 (8) TMI 2 - BOMBAY HIGH COURT
Benami transaction - real owner of property - beneficial wight in suit property - property is the self acquired property of defendant no.2 - Defendant no.1 purchased the property before the act came into force - HELD THAT:- The Hon’ble Supreme Court in the case of R. Rajagopal Reeddy, [1995 (1) TMI 67 - SUPREME COURT] has held that the plaint would not lie under section 4(1) of the Benami Transactions (Prohibition) Act for a claim to enforce any right in respect of any property held benami, against the person in whose name the property is held after coming into effect of the Act, even if the transactions were prior in point of time. Also under section 4(2) of the Act if a suit is filed by plaintiff who claims to be owner of the property on the basis of ownership document and claims ownership on the basis that the property is in his name, after the coming in force of the Act no defence would be permitted or allowed in any such suit, claim or action by or on behalf of the person claiming to be the real owner of such property held benami. Section 4(2) restricts the defence of a pre-existing right.
Such a provision the Hon’ble Supreme Court has held in the case of R. Rajagopal Reddy (supra), cannot be retrospective or retroactive by necessary implication. However, what is prohibited is the defence to be taken on that day when the act came into force. Thus, even if the transaction is prior in point of time, defence based by the owner of the property who holds the property benami in the name of some other person is not permissible under section 4(2) of the Benami Transactions (Prohibition) Act after the Act comes into force.
In the instant case, the defence is taken much prior to the coming into force of the Benami Transactions (Prohibition) Act and the defence once allowed cannot be subsequently taken away. The defence was taken in the year 1982 much before the act came into force.
In the instant case, the defence of benami transaction by defendant no.2 in favour of plaintiff is taken by the person (defendant no.1), who has purchased the property before the act came into force. On the date of the act coming into force there was no property in the name of the plaintiff, as such, whether a plea of declaration of ownership on the basis of sale deed in its favour prior to the coming into force of the Benami Transactions (Prohibition) Act can be maintained by the plaintiff against the purchaser of the property from the real owner who purchased the property benami in the name of the plaintiff, is itself doubtful.
Defence was taken by defendant no.1 of benami transaction by defendant no.2 in favour of the plaintiff and that the defendant no.2 being the real owner of the property was entitled to sell the suit property to the defendant no.1 was taken much prior to the coming into force of the Benami Transactions (Prohibition) Act and in view of the judgment of the 3 Judges bench of R. Rajagopal Reddy (supra), the defence of benami transaction taken prior to the coming into the act is available and the Benami Transactions (Prohibition) Act is not retroactive to that extent.
The Prohibition of Benami Property Transactions Act, 1988 is not applicable to the instant case.
Next Question of Law raised for the appellant that the permission was required to be taken under section 8 of the Guardianship Act from the mother of the appellant is also not tenable in view of the fact that the property is the self acquired property of defendant no.2 and the appellant plaintiff had no right in the suit property, thus the question of taking permission from the district court under section 8 of the Guardianship Act does not arise.
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2023 (7) TMI 1136 - DELHI HIGH COURT
Benami transaction - subject property as “joint property” - plaint does not disclose a cause of action and that it is also barred by law - HELD THAT:- The plaintiffs do not dispute that the subject property was purchased by defendant No.2 from its erstwhile owners, Davinder Sahni and Pritpal Kaur Chandhok, vide registered Sale Deed dated 27.03.1992. The plaintiffs contend that funds of their partnership firm were used for purchasing the subject property, since they allege, defendant No.2 had no income of her own.
Whatever may have been the legitimacy of “routing” funds in this way, even on a demurrer, the plaintiffs admit that ultimately monies were paid by defendant No.2 towards purchase of the subject property in her name. The subject property accordingly stands in the sole name of defendant No.2 and is her absolute property.
There is no averment in the plaint that the sale deed placed any restriction saying that the subject property would not be held by defendant No. 2 as sole and absolute owner. In view of the clear mandate of the section 14 of the Hindu Succession Act therefore, as a matter of law, defendant No.2 holds the subject property as full owner and not as a limited owner, and no averment in the plaint detracts from this position.
Besides, the plaintiffs' own best case, as admitted inter-alia in para 8 of the plaint, is that they routed money through third parties to buy the subject property in the name of defendant No.2. This is precisely the kind of mischief that section 4 of the Benami Transactions Act seeks to prevent, and therefore bars any claim made in respect of property so held by a third party benami for the person who funds the purchase. This in fact is the very purpose and intention of the legislature in enacting the Benami Transactions Act.
Insofar as the plaintiffs' contention that defendant No.2 falls within the exception engrafted in section 2(9)(A)(ii) to the definition of “benami transaction”, a bare reading of the plaint would show that there is not even a whisper of an allegation that defendant No.2 was a partner of the partnership firm, the monies of which were allegedly routed for purchasing the subject property. There is also no allegation in the plaint that defendant No.2 was a partner of that firm.
At the highest, the plaintiffs contend that defendant No.2 was in a fiduciary capacity vis-à-vis them since she was the wife of defendant No.1, who (latter) is a partner of the firm. There is clearly no support for the proposition that a partner”s wife becomes a partner, by operation of any law or otherwise. If any doubt was to remain on that count, a bare reading of section 5 of the Partnership Act answers it squarely.
Merely because defendant No. 2 is the wife of a partner of the firm, she does not ipso-facto become a partner of the firm, inter-alia since as per section 5 of the Partnership Act, a relationship of partnership arises from contract and not from status of the parties.
It is the plaintiffs” own case that the alleged oral family settlement happened even before the settlement deed was signed in February 2013. Clearly therefore, the present suit is way beyond the limitation of 03 years stipulated in Article 59 of the Schedule of the Limitation Act, with no scope for any extension or exclusion of time or condonation of delay under any of the provisions of the Limitation Act. It may further be observed that, other than a bald plea, there is no averment in the plaint nor any separate substantive application seeking to address the point of limitation, or explaining how the cause of action is claimed to be continuing in nature.
This court is persuaded to hold that the plaint does not disclose any cause of action that requires trial. Furthermore, this court is of the opinion that applying the position of law as cited above, the reliefs claimed in the plaint are also clearly barred by law.
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2023 (7) TMI 600 - SUPREME COURT
Use of joint nucleus funds for the purchase of the suit property - Whether the Lower Appellate Court is correct in law in relying upon Patta Ex.B4 for concluding that the property belonged to Rangaraj totally overlooking the fact that patta is not a document of title? - HELD THAT:- The impugned judgment, however, does not deal with and answer the substantial questions of law, but relies upon Section 4 of the Benami Transactions (Prohibition) Act, 1988 a plea and contention which was never raised by the respondents, to dismiss the appeal.
Our attention is drawn to the exceptions carved out to Section 4 of the 1988 Act. According to the appellants, the exceptions are applicable in the present case. As per the appellants, applicability or bar under the 1988 Act would be a mixed question of law and facts.
Looking at the nature of controversy, including the contentions raised, and the impugned judgment, we are of the opinion that the same cannot be sustained being devoid of in-depth examination and considerations of the issues involved, including whether or not bar of Section 4 of the 1988 Act would be attracted. We, accordingly, pass an order of remit restoring the second appeal for fresh consideration by the High Court.
The impugned judgment is set aside and the appeal is allowed with an order of remand to the High Court to decide the second appeal afresh, and expeditiously in accordance with law.
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2023 (7) TMI 117 - MADRAS HIGH COURT
Benami transaction - Title over property - Whether the suit property was purchased by the elder brother (deceased) in the name of the plaintiff (Brother) as benami? - trial Court dismissed the suit on the ground that the plaintiff has not proved his income to purchase the suit property - property had been purchased in favour of other coparcener by another coparcener and the defendants are also perfected title by adverse possession and non suited plaintiff by dismissing the suit - HELD THAT:- The plaintiff in his evidence clearly spoken that since Subramanian was the eldest brother of the family and residing in the suit property, the invitation was printed in the name of the husband of the first defendant and house warming ceremony was performed in his name and the same cannot be a ground to hold that the entire benami transaction is proved.
The plaintiff also clearly explained how the custody of the original documents came to his brother. The specific case of the plaintiff is that during the proceedings before the planning authorities, the first defendant's husband required all the original documents. Therefore, the plaintiff had handed over all the original documents of the property to his brother Subramanian. The very fact that the first defendant's husband had appeared in that proceedings as a Lawyer and he had not claimed any right or shown any animus or hostile intention at the relevant point of time to hold that the suit property is his absolute property. The explanation given by the plaintiff with regard to the custody of the original documents is more probable. If really the plaintiff is not having any right over the property what was the necessity for the first defendant to send Ex.A8 postal card to her uncle. Therefore, the contention of the defendants the suit property was all along treated as absolute property of Subramanian cannot be countenanced.
The defendants had not established the source for the purchase of the property by the first defendant's husband. The fact that how the custody of the documents came to the hands of the first defendant's husband was also clearly established by the plaintiff. Subramanian was in fiduciary relationship with his younger brother, since he is the eldest brother of the family and also he is a Lawyer by profession. Therefore, keeping the documents in his custody particularly, when he had prosecuted certain matters before the authorities on behalf of the plaintiff is quite possible.
As far as the motive is concerned, the very motive for benami transaction is to defeat the rights of the first wife. Even such motive is true, the first defendant's husband kept silent even after his first wife relinquished her right in the year 1971 and he had not asserted his right independently as a owner. Whereas, he stood only as an agent of the plaintiff. Therefore, the plea of benami transaction has to fail.
Merely because the defendants are in possession of the suit property and paying the house tax in their name, that will not be sufficient to prove the benami transaction. Admittedly, the first defendant was a practicing Lawyer and he was inducted into the suit property and he was residing there. Hence, it is normal for him to pay house tax and water tax and keeping the receipts with him. Therefore, merely on the basis of production of these receipts by the defendants, it cannot be concluded that the entire transaction is benami transaction.
As also urged before this Court that the plaintiff had not established the so called pro-note, under which he had borrowed the amount to pay the advance amount. When Ex.B1, sale deed was perused, it makes it clear that only the plaintiff had paid the entire sale consideration. To establish the contention of the defendants that the plaintiff has no income to pay the sale consideration, one of the attesting witnesses was alive even during trial, but the defendants had not even taken any steps to examine him. Similarly, the vendor of the suit property was also not examined.
This Court is of the view that the finding of the trial Court that the defendants perfected title by adverse possession is also not correct. In order to prove the plea of adverse possession, hostile intention and animus on the part of the defendant's husband has to be established. When Subramanian himself has not shown any animus and hostile intention to hold that the suit property is his absolute property, the plea of adverse possession has to necessarily fail. Though various judgments have been placed by the learned counsel for the defendants with regard to his contentions, the fact remains that the above judgments are not applicable to the facts of the present case. The plea of benami transaction has not been established by the defendants.
Accordingly, all the points are answered. The judgment of the trial Court is set aside and the suit is decreed for declaration and recovery of possession and also the accounts as prayed for.
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2023 (6) TMI 1264 - MADRAS HIGH COURT
Joint properties purchased by husband and wife [housewife] - legal owner - exclusive right over the properties - Property purchased out of the monies earned by the plaintiff [husband] and by the indirect contribution made by 1st defendant [wife] - plaintiff was working abroad and sending money to the 1st defendant [wife] - suit properties, items 1 to 4 were purchased in the name of the 1st defendant benami out of the money sent by the plaintiff while he was in abroad and that the plaintiff took possession and managed the said properties as his own properties after returning from abroad - 1st defendant failed to prove that she had sufficient funds of her own to purchase the 4th item of the suit properties.
The plaintiff and the 1st defendant are husband and wife, married as living in Neyveli. The plaintiff got a job in a Steel Company in Saudi Arabia, and left for Saudi Arabia, the 1st defendant [wife] continued to live in Neyveli children and she was entrusted with the funds of the plaintiff - During his visit to India between 1983 and 1994, he brought various articles of value, jewellery and cash. The 1st defendant [wife] had no income of her own and was only managing and administering the affairs of the plaintiff prudently and operating the accounts and thus was acting in effect as the agent in a fiduciary capacity. While managing the affairs of the plaintiff, she purchased items 1 to 4 properties on behalf of the plaintiff utilizing the funds of the plaintiff.
HELD THAT:- This Court is of the considered view that the 1st defendant/wife has contributed equally, though not directly but indirectly by way of looking after the home and taking care of the family for more than a decade and managing the household chores, thereby releasing the husband for gainful employment and made his stay comfortable in abroad and also to reduce the expenses and save the money for future benefit of the family including for purchasing of the assets.
Though the properties purchased in the name of the 1st defendant, she alone cannot claim exclusive right over the properties merely because the title deed is in her name since the documentary evidence would establish that the 1st defendant/wife purchased the properties out of the direct financial contribution of the plaintiff also.
Likewise, the plaintiff also cannot claim absolute right merely on the basis that he had sent the money to purchase the properties and the 1st defendant is only holding the property in trust as ostensible title over the properties in fiduciary capacity, as already discussed based on Ex.A1 to Ex.A11, this Court arrives at the conclusion that since Item Nos.1 and 2 have been purchased from and out joint contribution of spouses, viz., the plaintiff by earning and the 1st defendant indirectly by way of her invaluable services as home maker, whereby reducing the expenses of her husband which lead her husband to save more and this way the wife had contributed indirectly to purchase the property item Nos.1 and 2, which aspect cannot be ignored as the same could be decided based on Ex.A1 to Ex.A11.
This Court has no hesitation to hold both the plaintiff and the 1st defendant are entitled to equal shares in the present facts of the case over the Item Nos.1 and 2 of the schedule mentioned properties and to that extent the judgment and decree of the First Appellate Court are set aside.
Item No.4 of the schedule mentioned properties - 1st defendant also failed to produce any documentary proof to show that this property was purchased by selling her ancestral property. In the absence of the documentary evidences on the part of the 1st defendant, a presumption can be drawn by this Court to the effect that this property was purchased from and out of the monies earned by the plaintiff and by the indirect contribution made by the first respondent and further as stated above, both the spouses, have directly or indirectly contributed in acquiring the properties, likewise, the item No.4 also. Accordingly, this Court holds that both the plaintiff and the 1st defendant are entitled to equal share over the item No.4 of the schedule mentioned properties and to that extent the judgment and decree of the First Appellate Court is set aside.
No hesitation to hold both the plaintiff and the 1st defendant are entitled to equal shares in the present facts of the case over the Item Nos.1 and 2 of the schedule mentioned properties and to that extent the judgment and decree of the First Appellate Court are set aside.
Benami transaction - As benami transaction would not attract in respect of the properties purchased for the benefit of the husband and the 1st defendant is only holding the property in trust for the benefit of her husband. Though they have taken a stand that the Benami Transactions would not be applicable, this Court already arrived at the conclusion that the suit properties have been purchased by the joint contribution made by the plaintiff and the 1st defendant equally, Section 3, 4 or 5 of the Benami Transaction Act would not attract in the present case.
This Court is of the view that Item Nos. 1, 2 and 4 of the schedule mentioned properties were purchased from and out of the joint contribution made by both the plaintiff and the 1st defendant and they are entitled to equal shares over the item Nos.1, 2 and 4 of the schedule mentioned properties. Accordingly, the Substantial Questions of Law Nos.2, 4, 5, 6 and 7 are answered.
Property of a female Hindu to be her absolute property - 3rd item of the suit properties was purchased by the 1st defendant by pledging her jewels and that she is the owner of the said property - When this property was purchased in the name of the 1st defendant by pledging her jewels, it should be considered that the 1st defendant alone is the full owner of the property and not a limited owner. Merely the plaintiff/husband helped her for redeeming the jewels, would no way, create a right in his favour over the property. Only Ex.A15 shows that the jewels were redeemed out of the monies received from the plaintiff. ExA14 is the document, which establishes that the money had been received by pledging the 1st defendant/wife's jewels for the purchase of Item No.3 of the schedule mentioned properties. Therefore, I do not find any error in the judgement of the First Appellate Court in holding that the Item No.3 of the schedule mentioned properties belongs to the 1st defendant only.
Jewels in the 5th item locker were purchased by the plaintiff for the benefit of the 1st defendant and that the plaintiff is not entitled to the same - relationship of husband and wife between the plaintiff and the 1st defendant came to an end by dissolution of the marriage - The correspondences took place between the 1st defendant and the plaintiff, clearly reveals that the plaintiff had not bought the same on his own volition, but only on requests made by the 1st defendant persistently to gift her jewels, the plaintiff in order to fullfill her wishes, bought the jewels, sarees, etc., and presented her. Therefore, once he presented the gifts, he is not entitled to claim it back though he purchased out of his own earnings. Therefore, this Court is of the view that the Item No.5 of the schedule mentioned properties belongs to the 1st defendant. Thus, do not find any error in the judgment and decree of the First Appellate Court on this aspect of Item No.5. Accordingly, the substantial question of law No.3 is answered in favour of the 1st defendant.
This Court holds as regards Item Nos. 1, 2 and 4 of the schedule mentioned properties, that both the plaintiff and the 1st defendant are entitled to half share each and as far as Item No.3 and 5 of the schedule mentioned property are concerned, the 1st defendant is the absolute owner of the same.
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2023 (6) TMI 1263 - MADRAS HIGH COURT
Benami transaction - Relief of declaration and partition seeked - suit for declaration as the co-owner to the extent of 21,000 Sq.ft of the suit property and for consequential relief of partition and separate possession of plaintiff's share in the suit property - plaintiff also sought for the relief of permanent injunction restraining the defendants from encumbering the suit property or changing the physical features of the suit property by putting up construction -Whether plaintiff is entitled to the relief of declaration that the plaintiff is the owner of 21,000 sq.ft out of 85,949 sq.ft in the suit schedule property? - Whether the plaintiff is entitled to the relief of partition by metes and bounds as prayed for?
HELD THAT:- Admittedly, in this case, there is no written documents, in support of the plaintiff's plea that there was a partnership arrangement between the parties to develop the suit property and share the profits. The learned senior counsel appearing for the plaintiff empathetically submitted that the partnership arrangement can be formed even orally and it is not necessary that it should be only by way of written documents.
As rightly contended by defendants even in the plaint averments, the plea regarding the oral partnership is very vague and bereft of material particulars. The plaintiff has not pleaded the date, place etc., in which the oral agreement was entered into. There is no plea in whose presence the oral arrangement between the parties was entered into. Even during trial, the plaintiff has not examined any independent witnesses in support of the oral partnership agreement. Therefore, except the interested testimony of PW.1, there is no other acceptable evidence available on record to suggest oral partnership agreement. In such circumstances, we cannot come to a conclusion that there was an oral partnership agreement between the plaintiff and the contesting defendants.
Main legal plea raised by the contesting defendants is that the plaintiff is not entitled to maintain a suit prayer that he is a co-owner of the suit property on the ground that he contributed financially for purchase of the suit property - As there is some evidence available on record atleast to show that the plaintiff contributed to the extent of Rs. 96,38,266/- to enable the first defendant to acquire land with an extent of 9168 sq.ft. However, there is no evidence available on record to support the case of the plaintiff that he contributed Rs. 2,16,38,266/- to enable the first defendant purchased the suit property to the extent of 21,000 sq.ft.
In any event, even assuming the suit property was purchased by first defendant out of the contribution made by the plaintiff, it is the case of the plaintiff that it was purchased in the name of the first defendant for the benefit of future business entity to be formed by plaintiff and the defendants 1, 9 and 10. Therefore, it can only be treated as property purchased in the name of first defendant for the benefit of plaintiff and the contesting defendants. In such circumstances, the same would come under the Prohibition of Benami Property Transaction Act, as per the definition contained in Prohibition of Benami Transaction Act.
As far as contention raised by the learned Senior Counsel for the plaintiff that the 1st defendant stands in fiduciary capacity and hence exception recognized under Benami Prohibition Act gets attracted, is concerned, as discussed earlier, this Court already concluded that the plea of oral partnership was not proved by plaintiff. Hence, there is no fiduciary relationship between the plaintiff and the 1st defendant.
The plaintiff cannot seek a declaration that he is the co-owner of the property and for consequential relief of partition and permanent injunction in view of the specific bar contained under Section 4 of the Act.
This Court comes to a conclusion that the suit is barred by Section 4 of Prohibition of Benami Property Transaction Act even assuming the plaintiff proved that he contributed for purchase of the suit property in the name of the first defendant. Therefore, issues No.3 and 4 are answered against the plaintiff.
Relief of declaration and partition as prayed for denied - The plaintiff is not entitled to any relief and the suit is dismissed.
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2023 (6) TMI 914 - CALCUTTA HIGH COURT
Benami transaction - burden of proof - principle of preponderance of probability that although the suit property was purchased in name of Wife but the consideration money was paid or provided by her husband (deceased) - whether the transaction i.e. the purchase of suit property under registered deed of sale by Wife is benami transaction? - Dispute raised by the son to claim 1/3 share in the property - HELD THAT:- As Court is required to bear in mind the well-settled principles to the effect that the burden of showing that a transfer is a benami transaction always lies on the person who asserts it. In the Indian society, if a husband supplies the consideration money for acquiring property in the name of his wife, such fact does not necessarily imply benami transaction.
Source of money is, no doubt, an important factor but not a decisive one. The intention of the supplier of the consideration money is the vital fact to be proved by the party who asserts benami. In other words, even if it is proved that Sailendra paid the consideration money, the plaintiff must further prove that Sailendra really intended to enjoy the full benefit of the title in him alone.
In the case before us, Sekhar could not bring any evidence even to show what was amount of consideration money and how the consideration money was paid and how the suit property was purchased and even he could not prove who paid the consideration money. He could not produce any document relating to the suit property.
Title deed and all documents relating to the suit property were all along in the custody of Lila and Lila all along paid municipal tax and got the suit property mutated in her name and Sekhar could not bring any evidence on record to lead any prudent man to infer that his father had a motive to create benami in name of his mother or Sailendra intended to enjoy the full benefit of the title in him alone. Judgments relied upon by the appellant in spite of having unquestionable value of the proposition laid down therein, shall not come in aid of the appellant in the factual matrix of the case at hand.
We are inclined to hold that learned Court below has correctly held that Sekhar has failed to discharge his burden to prove that subject sale transaction is benami transaction and we have not found any wrong in the approach and decision of the learned Court below and we are of the view that judgment and decree impugned cannot be annihilated.
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2023 (5) TMI 402 - SC ORDER
Constitutional validity - Amendment to Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 - retrospective or prospective effect - Attachment of property - Punishment of impresonment for offence - HELD THAT:- The issue is covered in the decision rendered by a 3-Judge Bench of this Court in UNION OF INDIA & ANR. VERSUS M/S. GANPATI DEALCOM PVT. LTD. [2022 (8) TMI 1047 - SUPREME COURT] where it was held as under:
a) Section 3(2) of the unamended 1988 Act is declared as unconstitutional for being manifestly arbitrary. Accordingly, Section 3(2) of the 2016 Act is also unconstitutional as it is violative of Article 20(1) of the Constitution.
b) In rem forfeiture provision under Section 5 of the unamended Act of 1988, prior to the 2016 Amendment Act, was unconstitutional for being manifestly arbitrary.
c) The 2016 Amendment Act was not merely procedural, rather, prescribed substantive provisions.
d) In rem forfeiture provision under Section 5 of the 2016 Act, being punitive in nature, can only be applied prospectively and not retroactively.
e) Concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, viz., 25.10.2016. As a consequence of the above declaration, all such prosecutions or confiscation proceedings shall stand quashed.
f) As this Court is not concerned with the constitutionality of such independent forfeiture proceedings contemplated under the 2016 Amendment Act on the other grounds, the aforesaid questions are left open to be adjudicated in appropriate proceedings.
Petition disposed off.
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2023 (5) TMI 349 - CALCUTTA HIGH COURT
Benami Transactions - Owner of joint family property and shares of the parties in various properties - validity of gift deed (a sham) - property purchased out of stridhana property - burden of prove - Rule of Succession - HELD THAT:- It is trite law that when a plea of benami is taken burden of proof lies on the person, who asserts so that the property is benami. In JAYDAYAL PODDAR (DECEASED) THROUGH HIS L. RS AND ANOTHER VERSUS MST. BIBI HAZRA AND ORS. [1973 (10) TMI 55 - SUPREME COURT] speaking for the Bench, Justice R. S. Sarkaria succinctly, laid down the principle of law that It is well settled that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so.
Reliance also placed on BINAPANI PAUL VERSUS PRATIMA GHOSH AND ORS. [2007 (4) TMI 752 - SUPREME COURT] referring to BHIM SINGH (DEAD) LRS. VERSUS KAN SINGH [1979 (12) TMI 158 - SUPREME COURT] as well as the four indicia laid down therein. It was observed by the Supreme Court of India in this case that the four factors should have to be considered cumulatively. The Court in this case considered the relationship of the parties, namely, husband and wife primarily motive of the transaction i.e. security for the wife and seven minor daughters as they were not protected by the prevailing law and the legal position at that material point of time.
Coming to the present case it is averred in the original Plaintiff that the properties, namely, premises no. 26, Sitaram Ghosh Street, Calcutta and 31, College Row, Calcutta were purchased by his grand-father Nani Gopal Dutt in benami, in the name of Rani Bala Dutt since deceased. Rani Bala Dutt was name lender only but actual ownership was that of Nani Gopal Dutt - Although it is stated by PW 1 that though it is not mentioned in the deed that property was purchased benami but they were aware of the fact that consideration money was paid by Nani Gopal Dutt. It is also stated by him that he was two years infant at the time of execution deed so personal knowledge cannot be put on him on the transaction. In course of cross-examination it is also conceded by him that he heard information from paternal uncle and thought consideration money relating to the documents was paid by Nani Gopal Dutt.
Original testimony of PW 1 states that he was two years old at the time of execution of deed in respect of the premises; he has no personal knowledge therefore. He derived his knowledge about execution and payment of consideration money from his paternal uncle. There is no other proof that consideration money was paid by Nani Gopal Dutt. It is specifically stated by PW 1 that Nani Gopal Dutt did not transfer any money to Rani Bala Dutt as they were husband and wife - There is no evidence to show by any cogency the circumstances prevailing at the time of purchase of the properties or any intention of Nani Gopal Dutt to purchase the properties in the name of his wife.
In absence of anything more the available evidence adduced on behalf of the original Plaintiff failed to establish, by preponderance of probabilities, that the property was purchased by Nani Gopal Dutt in the name of his wife in benami; that consideration money was paid by Nani Gopal Dutt and that Rani Bala is the only ostensible owner or name lender but the real owner of the Nani Gopal Dutt. Therefore, it is not established that the premises no. 26, Sitaram Ghosh Street, Calcutta and 31, College Row, Calcutta were purchased by Nani Gopal Dutt in benami of his wife or that consideration money was provided by Nani Gopal Dutt.
In absence of any cogent evidence it cannot be decided that Rani Bala Dutt was a benamdar and the real owner was Nani Gopal Dutt in respect of the two premises namely 26, Sitaram Ghosh Street, Calcutta and 31, College Row, Calcutta.
Property purchased by a woman with her stridhana - HELD THAT:- Property purchased by a woman with her stridhana and savings of the income of stridhana constitute stridhana according to all schools of Hindu Law, as discussed by Sir D. F. Mulla. It does not make any difference whether the property is immovable or not. There is no presumption that property of a woman who has no income should be actually that of her husband. This is the presumption which impressed too much the plaintiff’s witness - it is the conclusion that the two premises namely 26, Sitaram Ghosh Street, Calcutta and 31, College Row, Calcutta were owned by Rani Bala Dutt as her stridhana property.
Rule of succession - HELD THAT:- There is no authority to suggest that the claim of the sons of a predeceased son is preferred to a son or daughter or are set on the same pedestal in matter of succession of stridhana property of a woman. When a son was living, the rights of the sons of a predeceased son do not come to the foreground or hold their sway. In nutshell, it is the conclusion that in absence of any daughter, it is the son who would inherit the stridhana properties of a woman. Therefore, the original Plaintiffs, being predeceased sons of the son of Rani Bala Dutt had no right, title or interest or right to succeed Rani Bala Dutt’s srtidhana properties. These properties namely premises no. 26, Sitaram Ghosh Street, Calcutta and 31, College Row, Calcutta do not form part of joint properties as between the original Plaintiffs and the Defendant. The original Plaintiffs are not entitled to any partition in respect of the properties located at premises no. 26, Sitaram Ghosh Street, Calcutta and 31, College Row, Calcutta. The original Defendant Paresh Chandra Dutt being the surviving son of Rani Bala Dutt inherited her stridhana properties and the properties located at 26, Sitaram Ghosh Street as well as 31, College Row, Calcutta.
Preliminary decree in respect of 8B, Nabin Pal Lane, Calcutta, 16, Beniatola Lane, Calcutta and 17, Beniatola Lane, Calcutta has already been drawn up. Since it is decided hereby that the properties located at premises no. 26, Sitaram Ghosh Street, Calcutta and 31, College Row, Calcutta do not form part of the joint properties as between the original Plaintiffs and the Defendant and that these two later properties should not be subject to the present partition suit, no further preliminary decree need to be drawn up - the suit should be fixed for hearing on the report of the Partition Commissioner and argument for passing final judgment.
Fix 10/03/2023 for argument.
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2023 (5) TMI 267 - PATNA HIGH COURT
Hindu Undivided Family - Rejection of plaint under Order VII Rule 11 D of the Code of Civil Procedure - rejection of plaint sought on the ground that from plain reading of the plaint, it will appear that the suit property is purchased in the name of defendant, namely, Anpurna Devi (original petitioner), the suit is barred by the provision of Benami Transactions (Prohibition) Act, 1988 as well as barred under Hindu Law and the plaintiffs have got no cause of action.
HELD THAT:- Sub-section 3 of Section 4 will not be applicable where the person in whose name the property is held is co-parcener in any Hindu Undivided Family and property is held for the bona fide of the co-parceners in the family. It is the case of the defendant that she was also a co-parcener. It is settled principle of law that a female member is never considered as co-parcener in a Hindu Undivided Family.
In the case of NAND KISHORE MEHRA VERSUS SUSHILA MEHRA [1995 (7) TMI 64 - SUPREME COURT], the Hon’ble Supreme Court has held that if the property is standing in the name of wife, the provision under Section 4 will not be applicable because it is saved under Section 3 of the said Act. However, it may be mentioned that the claim of the plaintiffs is that the property is the joint family acquisition.
In view of the aforesaid settled principle of law, even after the property is purchased by the husband in the name of the wife the onus/burden is on the husband to draw that the property was purchased not for the benefit of the wife.
Further, the question whether the property is self-acquired property or joint family property is purely a question of fact and that cannot be agitated in Order VII Rule 11 of the Code of Civil Procedure.
The plaintiffs have asserted for permanent injunction for restraining the defendant from alienating the suit property especially by defendant, namely, Anpurna Devi (original petitioner). It is, therefore, obvious that the plaint could not have been rejected as prayed by the defendant under the provision of Order VII Rule 11 of the Code of Civil Procedure especially with regard to first relief regarding the declaration of joint family property.
This Court, therefore, does not find that the lower Court below has committed error of jurisdiction and illegality in passing the impugned order - this Civil Revision application is dismissed.
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2023 (5) TMI 266 - TELANGANA HIGH COURT
Cancellation of gift deed in respect of the suit schedule property - perpetual Injunction restraining respondents from interfering with the suit schedule property - suit claim is barred under Section 4 of The Benami Transactions (Prohibition) Act, 1988 or not? - HELD THAT:- It is to be seen whether the suit claim of respondent No.1 falls within the purview of Section 4 of the Act. As per the entire averments of the plaint, it is manifest that respondent No.1 has purchased the suit schedule property in the name of his mother and subsequently, she executed registered release deed in favour of the respondent No.1-plaintiff on 24.07.2013 severing her rights over the suit schedule property and declared him as the beneficiary and the rightful owner, as all the charges, taxes were borne by him and paid entire sale consideration in respect of the same. In view of the said pleadings, it can be said that the contention of learned counsel for the petitioner that the suit claim is barred under Section 4 of the Act is not tenable.
The suit claim is not barred under Section 4 of the Act. Therefore, the plaint cannot be rejected under Order VII Rule 11 (d) read with Section 151 of C.P.C. - the Civil Revision Petition is dismissed.
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2023 (4) TMI 1038 - MADHYA PRADESH HIGH COURT
Prohibition of the right to recover property held benami - fiduciary relationship - real owner - As pleaded plaintiff had accepted before the survey Officer that although the land was purchased in her name but the same was purchased by her husband Rameshwar and had accordingly requested the authorities to record the name of her son i.e. Chandrashekhar (the deceased husband of the petitioner no.1 and the father of the petitioner nos.2 to 6) - trial Court by the impugned order had rejected the said pleadings on the ground that they have been taken after the commencement of the trial and they are based on the pre-existing facts - scope of sub section (3) of section 4 of the Prohibition of Benami Property Transactions Act - HELD THAT:- As the proposed amendment was that the plaintiff had made statement before the survey authorities that although the property was purchased in her name but in fact it was purchased by her husband Rameshwar Chawda
In view of section 4 of the Act, it is clear that such defence is not permissible. The remaining proposed amendment is based upon the so called statement made by the plaintiff that she is not the owner but her husband is the owner although the property was purchased in her name. Any pleading which is barred by any law cannot be allowed to be incorporated by amendment.
Accordingly, this Court is of the considered opinion that the trial Court did not commit any mistake by rejecting the proposed amendment. As no jurisdictional error was committed by the trial Court, accordingly, the petition fails and is hereby dismissed although on different grounds.
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2023 (4) TMI 977 - MADRAS HIGH COURT
Benami Transaction or not - properties purchased by the father in the name of mother - Plaintiff contended that, her mother was only a benami for her father, and that she did not have any right in her to execute Exts.P3 and P8 settlement deeds. - suit is laid for partition of three items of properties which are described in Schedules A to C in the plaint and plaintiff also seeks a declaration that the two settlement deeds that her mother had executed pertaining to Schedule A and Schedule B items of properties are null and void - HELD THAT:- The person in whose name stamp papers were purchased, more so when they are spouses, can never be considered as a strong piece of evidence to compel an inference conclusively the intent behind a purchase. This Court considers that it is far too inadequate to prove benami.
The evidence as has been made available does not preponderate a possibility that the properties purchased under Ext. D-1= Ext.P.17 and Ext.D-2 = Ext.P.18 in the name of Rajeswari Bai are not held benami by her for her husband Bapanna Rao, but on the contrary they suggest that they are the personal properties of Rajeswari Bai. Issue No:1 is therefore, decided against the plaintiff. Consequently, there is no need to consider the Additional Issue on the tenability of pleading benami in the face of statutory bar under the Benami Transaction (Prohibition) Act, 1988 or its current version.
Validity of settlement deed - exclusion of plaintiff - mental status of Monther for execution of deed - right of the plaintiff over property under the schedule A category - HELD THAT: - It is true that the plaintiff too has not examined herself. But non-examination of the first defendant is critical since she alone could provide the facts pertaining to the mental status of Rajeswari Bai at the time of Exts.P.3 and P.8, more so when the mental state of the 2nd defendant is suspect. They at least could have examined any physician who had treated Rajeswari Bai with supporting medical records but that was ignored.
This Court now has little option than to hold that Rajeswari Bai would not have been in sound mental state sufficient enough to understand what she was doing and that Exts.P.3 and P.8 are not the product of her free will. Issues 3, 5 and 6 are decided accordingly.
It may have to be stated that the basic theory which the defendants plead for justifying the execution of settlement deeds is not without any merit. After all, the first defendant has been caring both her ailing mother and brother besides caring her nephews, and given the circumstances, it would be only natural for Rajeswari Bai to execute the settlement deeds in their favour, but the point is not about the availability of circumstances for justifying the exclusion of plaintiff and her branch from the settlement deeds, but it is about her mental capacity to execute them. Here the defendants are seen wanting in their efforts when they chose to withhold the first defendant from being examined as a witness.
It has come on record that in the 'A' schedule property, the defendants have put up a substantial structure at considerable expenses. Therefore, they must have a fair chance of retaining the same by adjusting the equities vis-a-vis their shares in other two schedules of properties. However, they may have to wait for another day when final decree is passed.
Order:
Ext.P3 settlement deed executed by Rajeswari Bai are set aside as null and void and Plaintiff's 1/3 share in all the schedules of suit properties are hereby declared.
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2023 (4) TMI 882 - BOMBAY HIGH COURT
Benami Transactions - family arrangement - exception in Section 4(3)(a) of the Benami Act - “Jurisdiction of the Court to entertain” under Section 9A of the CPC - Suit filed as barred under the provisions of the Benami Transactions (Prohibition) Act, 1988) - Whether the suit is barred by limitation ? - Scope of preliminary issue under Section 9A - requirement of evidence to decide the preliminary issues - The learned Single Judge observed that the issues of limitation and benami were mixed questions of fact and law requiring evidence - whether plaint was ex-facie barred by limitation on the basis of the admissions in the plaint itself? - HELD THAT:- The bar of Benami under Benami Act requires examination of factual aspects including the exceptions to Section 2(9) and 4(3). The question whether a transaction is Benami or not is therefore one of fact requiring evidence.
There is, therefore, no dispute that limitation and benami transactions being mixed questions of fact and law, require evidence. That being the position, such questions in view of paragraphs 50, 54, 56 of Nusli Neville Wadia vs. Ivory Properties [2019 (10) TMI 1314 - SUPREME COURT] cannot be decided under Section 9A.
In view of the law settled in the case of Nusli Neville Wadia vs. Ivory Properties (supra), we have no doubt in holding that, in the facts of this case, limitation and benami transactions are not covered within the ambit of “jurisdiction of the Court to entertain” under Section 9A of the CPC and cannot be decided as preliminary issues under Section 9A of the CPC. Section 9A only deals with issues of whether the Court does or does not have jurisdiction to entertain a suit.
Respondent’s interpretation is misplaced. A plain reading of the order clearly indicate that although the learned Single Judge kept importuning the Appellant to lead evidence as the same was necessary to decide the issues but the appellant refused to do so. There is a difference between refusing to lead evidence and evidence not being required to be led. In the facts of the case as borne out from the orders, the evidence was necessary to be led to decide the preliminary issues. Just because now that the Appellant can raise a point in the light of the Apex Court decision in the case of Nusli Neville Wadia vs. Ivory Properties (supra), objection cannot be raised to state that decision on preliminary issues on the basis of admission and pleadings ought to be considered without having to lead evidence. It is also evident from the above order that the Plaintiff, the Appellant herein, did not wish to lead evidence on either of the two preliminary issues.
Therefore, whether or not the appellant gave consent or elected to have the preliminary issues decided, that cannot come in the way of the law settled in the case of Nusli Neville Wadia vs. Ivory Properties (supra) being applied. The law laid down in Nusli Neville Wadia vs. Ivory Properties (supra) was always the law and the Appeal/ impugned order will have to be tested on that basis.
The present Appeal being tested on the touchstone of Section 9A in the light of the decision in the case of Nusli Neville Wadia vs. Ivory Properties (supra), and [2015 (9) TMI 1606 - BOMBAY HIGH COURT] clearly holding the requirement of evidence to decide the preliminary issues will have to be set aside and is hereby set aside.
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2023 (3) TMI 1448 - CALCUTTA HIGH COURT
Notice u/s 24(1) of the Prohibition of Benami Property Transactions Act, 1988 - HELD THAT:- Both the parties jointly submit that the issue of legality of the aforesaid notice is covered in favour of the petitioner, by a judgement of the Hon’ble Supreme Court which was followed by this Court in order in Deific Abode LLP – Vs – Union of India & Ors [2022 (11) TMI 1438 - CALCUTTA HIGH COURT]
Considering the joint submission of the parties that the issue of legality of the aforesaid notices are covered by the aforesaid order of this Court in favour of the petitioner, this writ petition is disposed of by setting aside the impugned notice under Section 24(1) of the Prohibition of Benami Property Transactions Act, 1988 and all subsequent proceedings on the basis of the aforesaid notices are also quashed and all legal consequence will automatically follow.
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2023 (3) TMI 1447 - CALCUTTA HIGH COURT
Notice u/s 24(1) of the Prohibition of Benami Property Transactions Act, 1988 - HELD THAT:- Both the parties jointly submit that the issue of legality of the aforesaid notice is covered in favour of the petitioner, by a judgement of the Hon’ble Supreme Court which was followed by this Court in order in Deific Abode LLP – Vs – Union of India & Ors [2022 (11) TMI 1438 - CALCUTTA HIGH COURT]
Considering the joint submission of the parties that the issue of legality of the aforesaid notices are covered by the aforesaid order of this Court in favour of the petitioner, this writ petition is disposed of by setting aside the impugned notice under Section 24(1) of the Prohibition of Benami Property Transactions Act, 1988 and all subsequent proceedings on the basis of the aforesaid notices are also quashed and all legal consequence will automatically follow.
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2023 (3) TMI 1446 - CALCUTTA HIGH COURT
Notice u/s 24(1) of the Prohibition of Benami Property Transactions Act, 1988 - HELD THAT:- Both the parties jointly submit that the issue of legality of the aforesaid notice is covered in favour of the petitioner, by a judgement of the Hon’ble Supreme Court which was followed by this Court in order in Deific Abode LLP – Vs – Union of India & Ors. [2022 (11) TMI 1438 - CALCUTTA HIGH COURT]
Considering the joint submission of the parties that the issue of legality of the aforesaid notices are covered by the aforesaid order of this Court in favour of the petitioner, this writ petition is disposed of by setting aside the impugned notice under Section 24(1) of the Prohibition of Benami Property Transactions Act, 1988 and all subsequent proceedings on the basis of the aforesaid notices are also quashed and all legal consequence will automatically follow.
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2023 (3) TMI 1391 - MADRAS HIGH COURT
Benami transaction - As argued petitioner submits that, without providing any opportunity to the petitioner, the first respondent has passed the impugned order, which is in violation of the principles of natural justice - respondent submits that, initially, notice was sent to the petitioner and the petitioner appeared before the Initiating Authority and petitioner has given four addresses, from which, all are incorrect address. Due to which, the notices sent to the petitioner were returned with an acknowledgment “no such person”. Hence, the present impugned order was passed in the absence of the petitioner - HELD THAT:- This Court is of the view that, expressing any opinion on the merits of the case would adversely affect the interest of the petitioner as well as the respondents. This Court has to see whether any opportunity was given to the petitioner before passing the impugned order. A perusal of the impugned order reveals that, the petitioner had not appeared before the adjudicating authority. In his absence, the present impugned order is passed, which is in violation of principles of natural justice.
In view of the above, the impugned order passed by the first respondent u/s 26(3) of the Prohibition of Benami Property Transactions Act, 1988, is set aside and the matter is remitted back to the first respondent for fresh consideration.
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2023 (2) TMI 1102 - DELHI HIGH COURT
Prohibition of Benami Property Transactions - attachment and confiscation of properties which were admittedly acquired prior to the enforcement of the Benami Transactions (Prohibition) Amendment Act, 2016 - HELD THAT:- These petitions would be liable to be allowed in light of the recent decision rendered in Union of India & Anr. v. Ganpati Dealcom Pvt.Ltd. [2022 (8) TMI 1047 - SUPREME COURT]
Continuation of only the civil provisions u/s 4, etc. would mean that the legislative intention was to ensure that the ostensible owner would continue to have full ownership over the property, without allowing the real owner to interfere with the rights of benamidar. If that be the case, then without effective any enforcement proceedings for a long span of time, the rights that have crystallized since 1988, would be in jeopardy. Such implied intrusion into the right to property cannot be permitted to operate retroactively, as that would be unduly harsh and arbitrary.
As we hold as under -
a) Section 3(2) of the unamended 1988 Act is declared as unconstitutional for being manifestly arbitrary. Accordingly, Section 3(2) of the 2016 Act is also unconstitutional as it is violative of Article 20(1) of the Constitution.
b) In rem forfeiture provision under Section 5 of the unamended Act of 1988, prior to the 2016 Amendment Act, was unconstitutional for being manifestly arbitrary.
c) The 2016 Amendment Act was not merely procedural, rather, prescribed substantive provisions.
d) In rem forfeiture provision under Section 5 of the 2016 Act, being punitive in nature, can only be applied prospectively and not retroactively.
e) Concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, viz., 25.10.2016. As a consequence of the above declaration, all such prosecutions or confiscation proceedings shall stand quashed.
f) As this Court is not concerned with the constitutionality of such independent forfeiture proceedings contemplated under the 2016 Amendment Act on the other grounds, the aforesaid questions are left open to be adjudicated in appropriate proceedings.”
In light of the aforesaid enunciation of the law on the subject, it is evident that the impugned proceedings cannot be sustained. Accordingly, and in view of the law as declared by the Supreme Court, the instant writ petitions are allowed.
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