High Court sets aside trial court order, remits for fresh consideration. Suit maintainability and jurisdiction to be determined first.

The High Court set aside the trial court's order allowing the amendment of the plaint and remitted the matter back for fresh consideration. The trial court was directed to first determine the maintainability of the suit and its jurisdiction under the Benami Transactions (Prohibition) Act before addressing the amendment application. The entire process was to be expedited and completed by 31.03.2021.

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Issues Involved: Jurisdiction of the civil court, applicability of the Benami Transactions (Prohibition) Act, 1988, amendment of the plaint, and maintainability of the suit.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Civil Court:
The primary issue was whether a civil court can consider an application when its jurisdiction is alleged to be barred by operation of the Benami Transactions (Prohibition) Act, 1988. The petitioners contended that the trial court's jurisdiction was ousted under Sections 4 and 45 of the Act, which prohibit suits to enforce rights in respect of benami property and bar civil courts from entertaining such suits. The court highlighted the necessity to address jurisdictional objections at the earliest, as per precedents like T.M.Bagasarwalla v. H.R.Industries and Hiralal Vallabbram v. Sheth Kasturbhai Lalbhai and others.

2. Applicability of the Benami Transactions (Prohibition) Act, 1988:
The respondent's claim was that the property transaction fell within the exceptions of the amended Act, specifically Section 2(9)(A)(b)(iv), which exempts transactions where the consideration is paid by a brother or sister. The petitioners argued that the transaction was a benami transaction and thus barred by the Act. The court noted that the Act, effective from 1988 and extensively amended in 2016, aims to prohibit benami transactions and the right to recover property held benami. The court emphasized that if the suit is found to be a benami transaction not falling within the exceptions, it would be barred under Section 4 of the Act.

3. Amendment of the Plaint:
The respondent sought to amend the plaint to fit within the exceptions of the amended Act. The trial court initially dismissed this application, but upon remand, allowed it. The petitioners challenged this, arguing that the amendment aimed to circumvent the Act’s prohibitions. The court underscored that the trial court should have first resolved the jurisdictional issue before considering the amendment application. The court referenced the Supreme Court's rulings in Church of Christ Charitable Trust & Education Charitable Society v. M/s.Ponniamman Educational Trust and Central Provident Fund Commissioner, New Delhi v. Lal.J.R. Education Society, which stress that the trial court must decide on jurisdictional objections as a preliminary issue.

4. Maintainability of the Suit:
The court directed the trial court to re-evaluate the maintainability of the suit in light of Sections 4 and 45 of the Act and determine whether the suit should be transferred to the Adjudicating Authority under Section 65 of the Act. The court instructed the trial court to treat the jurisdictional issue as a preliminary one, as per Order XIV Rule 2(2) of the Code of Civil Procedure, and only if it finds it has jurisdiction, to then decide on the amendment application.

Conclusion:
The High Court set aside the trial court's order allowing the amendment of the plaint and remitted the matter back for fresh consideration. The trial court was directed to first determine the maintainability of the suit and its jurisdiction under the Benami Transactions (Prohibition) Act before addressing the amendment application. The entire process was to be expedited and completed by 31.03.2021.

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