Benami property exception in spouse's name must be tried on evidence, not rejected at the pleading stage.

A plaint alleging that property standing in a spouse's name was purchased from known sources and falls within the statutory exception to benami prohibition cannot be rejected under Order VII Rule 11 at the threshold. The court held that the trial court erred by applying repealed or inapplicable provisions of the Benami Transactions (Prohibition) Act, while ignoring the amended exception under Section 2(9)(A)(b), Exception (iii). Whether the pleaded facts actually satisfy that exception is a factual issue requiring evidence, and the order rejecting the plaint was unsustainable.

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Issues: Whether the plaint could be rejected under Order VII Rule 11 of the Code of Civil Procedure, 1908 by applying the repealed Section 3(2) and Section 4 of the Benami Transactions (Prohibition) Act, 1988, without considering the amended statutory exception in Section 2(9)(A)(b) Exception (iii).

Analysis: The plaint pleaded that the properties standing in the wife's name were purchased from the husband's known sources and that the case fell within the statutory exception permitting purchase of immovable property in the name of a spouse. The rejection of the plaint rested on the repealed provision and ignored the amended regime brought into force on 01.11.2016. Whether the pleaded facts satisfy the statutory exception is a matter requiring evidence and cannot be decided at the threshold under Order VII Rule 11.

Conclusion: The plaint could not be rejected at the threshold on the basis adopted by the Trial Court, and the order rejecting the plaint was unsustainable.

Ratio Decidendi: Where the plaint discloses a claim that the purchase of property in a spouse's name falls within the statutory exception to benami prohibition, the issue is factual and must be tried; a plaint cannot be rejected under Order VII Rule 11 by applying a repealed or inapplicable benami provision.

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