Fiduciary holding of family property defeats the benami bar; limitation challenge fails, but possession relief is refused.
Contemporaneous payment records, a joint bank account, related correspondence, and a letter expressing intent to transfer the property established that the suit property was bought with the mother-in-law's funds and held for family benefit. On that basis, the daughter-in-law was treated as holding the property in a fiduciary capacity within Section 4(3)(b) of the Prohibition of Benami Transactions Act, so the benami bar did not apply. The limitation challenge was also rejected because the cause of action arose only when the rival branch challenged title and the later conveyance deed created a fresh dispute. Possession relief was refused, as settled occupation by both branches and unresolved testamentary claims could not be adjudicated on the record.
Issues: (i) Whether the daughter-in-law held the suit property in a fiduciary capacity or as trustee for the mother-in-law so as to attract the exception in Section 4(3)(b) of the Prohibition of Benami Transactions (Prohibition) Act, 1988; (ii) whether the challenges to the mutation and conveyance deed were barred by limitation; (iii) whether possession of the occupied portions of the property could be granted.
Issue (i): Whether the daughter-in-law held the suit property in a fiduciary capacity or as trustee for the mother-in-law so as to attract the exception in Section 4(3)(b) of the Prohibition of Benami Transactions (Prohibition) Act, 1988.
Analysis: The documentary record, including the contemporaneous payment trail, the joint bank account, correspondence referring to payment towards the cost of the plot, and the daughter-in-law's own letter expressing an intention to transfer the property to the mother-in-law, established that the property was purchased with the mother-in-law's funds and was intended for the benefit of the family. The factual context supported a relationship of confidence and trust between the two, sufficient to constitute a fiduciary relationship. In that setting, the statutory bar against benami claims did not apply.
Conclusion: The issue was answered in favour of the mother-in-law's side. The daughter-in-law was held to have held the property in trust in a fiduciary capacity within Section 4(3)(b), and the benami bar was inapplicable.
Issue (ii): Whether the challenges to the mutation and conveyance deed were barred by limitation.
Analysis: No dispute had arisen during the daughter-in-law's lifetime, and the cause of action to assert title arose only when the rival family branch challenged the mother's claim in 2014. The subsequent conveyance deed in favour of the grandson was also a fresh transaction giving rise to a live cause of action. The suits were therefore timely.
Conclusion: The limitation objection was rejected.
Issue (iii): Whether possession of the occupied portions of the property could be granted.
Analysis: Both branches of the family were in settled occupation of different portions of the house, and inter se rights depending upon an unproved will were not adjudicated in these proceedings. Since the competing possession claims could not be resolved on the present record, no decree for possession was warranted.
Conclusion: Possession relief was declined to both sides.
Final Conclusion: The judgment affirmed the mother's title claim, invalidated the benami objection and limitation defence, set aside the grandson's mutation and conveyance, but declined a decree for possession and left intra-family testamentary disputes open.
Ratio Decidendi: Where contemporaneous documents and conduct show that property was acquired with one family's funds and held by a close relation in a relationship of trust for family benefit, the holder may be treated as a fiduciary trustee and the benami bar under Section 4 does not apply.