2018 (8) TMI 1931 - HC - Benami Property

Court upholds suit under Benami Property Act & CPC, orders trial within 1 year, maintains status quo on properties.

The court found the suit maintainable under the Prohibition of Benami Property Transactions Act, 1988, and the Civil Procedure Code. It noted the ... Benami Property - family members are fighting for the properties - petitioners argued that suit itself is not maintainable as there is a prohibition to entertain the suit under Sections 3 and 4 of Prohibition of Benami Property Transactions Act - HELD THAT:- The respondent/plaintiff is a Company represented by its Director, who is brother of the 1st defendant/1st petitioner herein. In view of the averments made in the plaint and in view of Section 2 (9)(A)(b)(iv) of The Prohibition of Benami Property Transactions Act, 1988, whether the suit is hit by Sections 3 and 4 of the Prohibition of Benami Transactions Act, 1988 or not, has to be decided in the main suit, only after leading evidence by both sides. The question whether the suit is barred by limitation or not, also cannot be decided unless and until full-fledged trial is conducted in the main suit. Similar issues regarding properties between the same parties herein came up before this Court earlier [2018 (7) TMI 2091 - TELANGANA HIGH COURT] as disposed of by recording the consent of the parties to direct the trial Court to decide the suits within one year from the date of receipt of the copy of said order, by giving opportunity to both parties. In the present case, the plaintiff/Director and defendant No.2 are siblings and defendant No.1 is the daughter of defendant No.2, thus, it seems, there is exception under Section 2 (9)(A)(b)(iv) of The Prohibition of Benami Property Transactions Act, 1988. However, the issue finally has to be decided by the trial Court after leading evidence by both sides. There is no perversity or illegality in the impugned orders dated 21st February 2017, passed in the I.As. Since the family members are fighting for the properties, as already directed in the earlier revision petitions noted above, to decide the suits within one year, in the present cases also, I hereby direct the trial Court to decide the suits within one year from the receipt of this order, by giving opportunity to both the parties. Till then, both the parties shall maintain status quo with regard to the suit properties. Issues involved:1. Maintainability of the suit under Sections 3 and 4 of the Prohibition of Benami Property Transactions Act, 1988.2. Application for rejection of suit under Order VII Rule 11(d) of CPC.3. Interpretation of Section 2(9)(A)(b)(iv) of The Prohibition of Benami Property Transactions Act, 1988.4. Whether the suit is barred by limitation.5. Previous related cases and their impact on the present case.6. Direction to trial court to decide the suits within one year.Analysis:1. The petitioner argued that the suit is not maintainable under Sections 3 and 4 of the Prohibition of Benami Property Transactions Act, 1988, and also under Section 9 of the Civil Procedure Code. The petitioner contended that the suit should be rejected as it is not maintainable and the claim sought by the respondent cannot be granted. The petitioner further requested the application for rejection of the suit under Order VII Rule 11(d) of CPC to be allowed.2. The court examined Section 2(9)(A)(b)(iv) of The Prohibition of Benami Property Transactions Act, 1988, which provides an exception to benami transactions. The respondent, a company represented by its Director, purchased properties in the name of the defendant as binamidar. The court noted the details provided in the plaint regarding the purchase and sale of properties, indicating that the plaintiff company invested the money, received the sale consideration, and is in possession of the property. The court concluded that the issue of whether the suit is hit by Sections 3 and 4 of the Prohibition of Benami Transactions Act needs to be decided after leading evidence by both sides.3. The court also addressed the limitation aspect mentioned in the plaint, emphasizing that the question of whether the suit is barred by limitation cannot be decided without a full-fledged trial. Previous related cases involving the same parties were mentioned, where the parties consented to the trial court deciding the suits within a year, which was recorded in the order dated 20th July 2018.4. Considering the familial relationships involved in the present case, the court noted the exception under Section 2(9)(A)(b)(iv) of The Prohibition of Benami Property Transactions Act, 1988. However, the final decision on this issue was deemed to be within the trial court's jurisdiction after leading evidence by both sides. The court found no perversity or illegality in the impugned orders and directed the trial court to decide the suits within one year, maintaining status quo on the suit properties until then.5. The court disposed of all revision petitions without any costs, with directions for the trial court to adhere to the timeline set for deciding the suits. Any pending miscellaneous applications were to be closed accordingly.