Benami property bar requires factual proof before rejecting a plaint; premature findings at the pleading stage cannot stand.

A suit or defence concerning benami property is barred only if the transaction first falls within the statutory definition of a benami transaction, and that threshold cannot be conclusively decided on disputed pleadings alone. Where the plaint claims purchase in a child's name from the plaintiff's own known source of income or stridhan, the applicability of the statutory exception depends on facts that require evidence. The trial court therefore could not finally hold at the Order 7 Rule 11 stage that Section 4 of the Prohibition of Benami Property Transactions Act did not bar the suit; that finding was premature and was set aside, with the benami issue left for trial.

---

---

Issues: Whether the plaint was liable to be rejected under Order 7 Rule 11 of the Code of Civil Procedure, 1908 on the ground that the suit was barred by Section 4(1) of the Prohibition of Benami Property Transactions Act, 1988, and whether the trial court could finally hold at that stage that the transaction was not benami.

Analysis: A suit or defence relating to property held benami is barred by Section 4 of the Prohibition of Benami Property Transactions Act, 1988, but the bar operates only if the transaction is first shown to fall within the statutory definition of a benami transaction under Section 2(9). Where the plaint asserts that the property was purchased in the name of a child from the plaintiff's own known source of income, the claim that the case falls within the statutory exception cannot be resolved merely on the pleadings unless the necessary factual foundation is established. Whether the property was in truth acquired from Stridhan or other known source and whether the transaction is benami is a question of fact that requires evidence. At the stage of deciding the application under Order 7 Rule 11, the trial court could not conclusively record a finding that the suit was not barred by Section 4 on a premature assessment of the merits. Order 14 Rule 2 permits a preliminary issue to be tried only in the limited statutory situations, and the question whether the alleged bar is attracted must still be determined on the basis of evidence where the foundational facts are disputed.

Conclusion: The trial court's finding that the suit was not barred by Section 4 of the Prohibition of Benami Property Transactions Act, 1988 was premature and was set aside; the benami issue was left to be determined at trial.

---