Benami law and plaint rejection: disputed facts and statutory exception must be tried, not summarily rejected at threshold.

The amended Benami prohibition did not apply retrospectively to a suit filed before the amendment, so the unamended Section 4, including the statutory exception in Section 4(3), governed the dispute. A plaint cannot be rejected under Order VII Rule 11 CPC unless the bar is apparent from the plaint itself; where the pleadings assert that the property was acquired for the family and that the holder acted in a fiduciary or representative capacity, the Benami objection raises disputed facts requiring evidence. The plaint was therefore not liable to threshold rejection and the suit had to proceed to trial.

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Issues: (i) whether the amended Benami law applied retrospectively to a suit instituted before the amendment came into force; (ii) whether the plaint could be rejected under Order VII Rule 11 CPC on the ground that the suit was barred by the Benami law, or whether the plea fell within the unamended statutory exception requiring evidence.

Issue (i): whether the amended Benami law applied retrospectively to a suit instituted before the amendment came into force.

Analysis: The suit had been filed before the amendment that omitted the exception in Section 4(3) of the Benami Transactions (Prohibition) Act, 1988. The legal position governing Section 4 had already been settled to the effect that the prohibition does not operate retrospectively in a manner that would defeat suits instituted before the amendment date. Applying that principle, the unamended provision, including the exception in Section 4(3), governed the dispute.

Conclusion: The amended Benami law did not apply retrospectively and the unamended Act governed the case.

Issue (ii): whether the plaint could be rejected under Order VII Rule 11 CPC on the ground that the suit was barred by the Benami law, or whether the plea fell within the unamended statutory exception requiring evidence.

Analysis: At the stage of Order VII Rule 11 CPC, the court must proceed only on the plaint averments and can reject a plaint only where the bar is apparent on the face of the plaint. The pleadings and supporting documents disclosed an asserted case that the property was purchased for the family and that the named holder stood in a fiduciary or representative capacity, which raised a factual question touching the exception in Section 4(3) of the Benami Transactions (Prohibition) Act, 1988. Whether the transaction was truly benami or fell within the statutory exception required a fuller inquiry on evidence, not summary rejection at the threshold.

Conclusion: The plaint could not be rejected at the threshold under Order VII Rule 11 CPC and the matter required trial.

Final Conclusion: The order dismissing the suit was set aside and the suit was restored for further proceedings from the stage at which the impugned order had been passed.

Ratio Decidendi: A plaint cannot be rejected under Order VII Rule 11 CPC unless the bar of law is from the plaint itself; where applicability of the Benami prohibition depends on disputed facts and the possible operation of the statutory exception, the issue must be decided on evidence at trial.

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