2018 (11) TMI 1871 - HC - Benami Property

Court bars suit under Benami Act, sets aside trial court decision. Plaintiff's claim rejected.

Dukhiya Bai And Others Versus Pheruram Verma And Others

Dukhiya Bai And Others Versus Pheruram Verma And Others - TMI Issues Involved:Interpretation of Section 4(1) of the Benami Transactions (Prohibition) Act, 1988 in relation to the maintainability of a suit filed after the Act came into force.Analysis:The primary issue in this case revolved around the interpretation and application of Section 4(1) of the Benami Transactions (Prohibition) Act, 1988. The petitioners, who were defendants before the trial court, challenged the trial court's decision on issue No. 14, which related to the suit being hit by the provisions of the Act. The petitioners argued that the trial court was unjustified in treating the issue as a mixed question of law and fact, contending that it was purely a question of law. On the other hand, the respondents supported the trial court's decision, maintaining that the issue required consideration of both law and facts.Upon considering the arguments presented by both parties, the court delved into the interpretation of Section 4(1) of the Act. Section 4(1) explicitly prohibits the enforcement of any right in respect of property held benami through a suit, claim, or action. The court emphasized that the bar imposed by Section 4(1) pertains to the institution of a suit to make a claim based on a benami transaction, regardless of when the transaction occurred. Citing precedents, including judgments by the Supreme Court, the court highlighted that the Act applies prospectively, except in certain circumstances, and clarified that the bar under Section 4(1) extends to suits filed after the Act came into force.In applying the legal principles to the facts of the case, the court found that the plaintiff had filed a suit for declaration of title and possession after the Act had already come into effect. The plaintiff's claim was based on transactions that took place prior to the Act but were being enforced through the suit filed post the Act's enactment. Consequently, the court concluded that the suit was barred by Section 4(1) of the Act, rendering it liable for rejection under Order 7, Rule 11(d) of the Civil Procedure Code. Therefore, the court set aside the trial court's decision, rejecting the plaintiff's claim and allowing the civil revision filed by the defendants.In conclusion, the court held that the suit was indeed barred by Section 4(1) of the Benami Transactions (Prohibition) Act, 1988, and ordered the rejection of the plaintiff's plaint. The court directed the trial court to comply with the order and communicated the decision to the concerned authorities for necessary action.