Benami plea and statutory bar require factual proof; counterclaim cannot be rejected at the threshold on pleadings alone.

A counterclaim alleging a benami transaction could not be rejected at the threshold under Order 7 Rule 11(d) CPC merely because Section 4 of the Benami Transactions (Prohibition) Act, 1988 was invoked. The applicability of the statutory bar depended on disputed questions of fact, including whether the property was purchased benami and who paid the consideration, which had to be examined on the pleadings and evidence. Because the bar was not apparent from the counterclaim alone, rejection was unwarranted. The HC upheld the order refusing to reject the counterclaim and dismissed the revisional challenge.

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Issues: Whether a counterclaim alleging benami transaction could be rejected at the threshold under Order 7 Rule 11(d) of the Code of Civil Procedure, 1908 on the ground of bar under Section 4 of the Benami Transactions (Prohibition) Act, 1988.

Analysis: The applicability of the statutory bar depended on disputed questions, including whether the property was purchased benami and whether the sale consideration was paid solely by the respondent. Such questions required examination of the parties' pleadings and evidence and could not be decided merely from the counterclaim or at the preliminary stage. The existence of a benami plea did not by itself make the counterclaim barred on the face of the record.

Conclusion: The counterclaim could not be rejected under Order 7 Rule 11(d) at the threshold, and the trial court was in leaving the issue to be determined on evidence.

Final Conclusion: The revisional challenge failed, and the order refusing to reject the counterclaim was upheld.

Ratio Decidendi: Where the plea of statutory bar depends on disputed questions of fact, including the nature of the transaction and consideration, rejection under Order 7 Rule 11(d) is not warranted unless the bar is apparent from the pleadings alone.

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