2025 (5) TMI 1451 - SC - Indian Laws

Special leave petitions dismissed for partition suit under Order VII Rule 11 CPC rejection challenge

SMT. SHAIFALI GUPTA Versus SMT. VIDYA DEVI GUPTA & ORS. And DEEPAK LALCHANDANI Versus SMT. VIDYA DEVI GUPTA & ORS.

SC dismissed special leave petitions challenging rejection of applications under Order VII Rule 11 CPC. The suit concerned partition and possession of ... Maintainability of the suit - Rejection of an application under Order VII Rule 11 of CPC - suit for partition, possession, declaration, mandatory & permanent injunction and for accounting with regard to the properties - alleged to be the family properties purchased out of the funds of the joint family Or derived from the income from the joint family business - plea under Section 4 read with Section 14 of the Benami Act - HELD THAT:- It is pertinent to mention that Shaifali Gupta (defendant No.2) had neither moved application under Order VII Rule 11 CPC for the rejection of the plaint nor she has filed any revision challenging the order of the court of first instance rejecting such an application moved by the defendant Nos.5 and 6. Therefore, she is not a person aggrieved by the rejection of the application under Order VII Rule 11 and cannot be permitted to assail the impugned orders. She has acquiesced to the jurisdiction of the trial court and has by her conduct accepted the order of the court of first instance and chosen to contest the suits on merits. The defendant Nos.5 and 6 are only subsequent purchasers of some of the properties. They cannot claim any knowledge of the nature of the property in the hands of the original owners. They cannot have any personal knowledge as to if the said properties in the hands of the original owners are Joint Hindu Family property or are their individual properties or they have been acquired benami by the family members or are the properties possessed by the female hindu in absolute sense. In such a situation, they are not the right person to move application under Order VII Rule 11 CPC for the rejection of the plaint as allegedly barred by Section 4 of the Benami Act. In Pawan Kumar vs. Babu Lal a similar issue arose before this Court in a matter concerning rejection of plaint under Order VII Rule 11 (d) CPC. This Court held that for rejecting a plaint, the test is whether from the statement made in the plaint it appears without doubt or dispute that the suit is barred by any statutory provision. Where a plea is taken that the suit is saved by the exception to the benami transaction, it becomes the disputed question of fact which has to be adjudicated on the basis of the evidence. Therefore, the plaint cannot be rejected at the stage of consideration of application under Order VII Rule 11 CPC. The ratio of the above case squarely applies to the facts of the case at hand. Accordingly, in our opinion, the courts below have not committed any error of law in rejecting the application under Order VII Rule 11 CPC on the above score. More importantly, Section 14 of the Act simply provides that the property possessed by a female Hindu shall be held by her as a full owner. It does not bar or prohibit a suit in respect of such a property. Therefore, in the absence of any bar contained in the above provision, the suit plaint is not liable to be rejected as barred by law. The courts below have rejected the application filed by defendant Nos.5 and 6 under Order VII Rule 11 CPC and have refused to reject the plaint as barred by any statute. It means that the parties are at liberty to contest the suit on merits. They have right to get the necessary relevant issues framed in the suit including that of suit being barred by any provision of law and if any such issue is framed, it will be open for the court to consider the same on merits after the parties have led evidence. In such a situation, the defendants have not suffered any prejudice and there is no miscarriage of justice so as to permit them to avail the discretionary jurisdiction of this Court under Article 136 of the Constitution of India. Accordingly, we do not deem it necessary to entertain these Special Leave Petitions and the same are dismissed. 1. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in the judgment are:Whether the suit for partition, possession, declaration, injunction, and accounting in respect of properties allegedly belonging to a Joint Hindu Family is maintainable or barred under the Benami Transaction (Prohibition) Act, 1988 (hereinafter 'the Benami Act'), specifically under Section 4 and Section 14 thereof.Whether an application under Order VII Rule 11 CPC for rejection of the plaint on the ground of bar by the Benami Act is sustainable at the threshold, i.e., on the basis of plaint averments alone without evidence.Whether subsequent purchasers of some of the suit properties are entitled to invoke the provisions of the Benami Act to challenge the maintainability of the suit.Whether the properties described in the plaint can be held to be benami properties on the face of the plaint.Whether the provisions of Section 14 of the Benami Act, which confer full ownership rights to a female Hindu in respect of property possessed by her, bar the suit.Whether the plea under Section 4 read with Section 14 of the Benami Act can be raised for the first time before the Supreme Court when not raised or argued before the courts below.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Maintainability of Suit vis-`a-vis Bar under the Benami ActLegal Framework and Precedents: Section 4(1) of the Benami Act bars any suit, claim, or action to enforce any right in respect of benami property by or on behalf of the real owner against the person in whose name the property is held. The Act defines 'benami property' and 'benami transaction' under Sections 2(8) and 2(9), with certain exceptions, including properties held in fiduciary capacity or those falling under specified categories.The Court relied on the precedent in Pawan Kumar vs. Babu Lal (2019) 4 SCC 367, which held that for rejection of plaint under Order VII Rule 11(d) CPC on the ground of statutory bar, the bar must be apparent on the face of the plaint without doubt or dispute. If the suit is saved by exceptions under the Benami Act, it raises a disputed question of fact requiring evidence, and thus the plaint cannot be rejected at the threshold.Court's Interpretation and Reasoning: The Court noted that the plaint consistently describes the suit properties as Joint Hindu Family properties purchased from joint family funds or income derived from the joint family business. There is no averment that the properties are benami in the hands of any party. Hence, the suit cannot be held barred by the Benami Act merely on the basis of the plaint.Key Evidence and Findings: The Court observed that the issue of whether the properties are benami is a factual issue to be adjudicated upon after evidence is led. The subsequent purchasers (defendant Nos.5 and 6) who moved the application under Order VII Rule 11 CPC cannot claim personal knowledge about the nature of the properties in the hands of original owners and are not the appropriate parties to invoke the Benami Act at the threshold.Application of Law to Facts: Given that the properties are alleged to be joint family properties and fall within exceptions under Section 2(9)(A)(ii) of the Benami Act, the suit is not barred. The application for rejection of the plaint under Order VII Rule 11 CPC was rightly rejected by the courts below.Treatment of Competing Arguments: The defendants argued that properties standing exclusively in the name of defendant No.2 are her personal properties and not amenable to partition, invoking Section 4 read with Section 14 of the Benami Act. The plaintiffs countered that this plea was never raised before the courts below and that the properties fall within exceptions under the Benami Act. The Court agreed with the plaintiffs that these are factual issues not suitable for rejection of plaint at the threshold.Conclusions: The suit is maintainable and not barred by the Benami Act on the face of the plaint. The question of benami character of the properties is a disputed factual issue to be decided after evidence.Issue 2: Applicability of Section 14 of the Benami Act and Raising New Pleas Before Supreme CourtLegal Framework: Section 14 of the Benami Act provides that property possessed by a female Hindu shall be held by her as a full owner.Court's Interpretation and Reasoning: The Court held that Section 14 does not bar or prohibit a suit in respect of such property. Moreover, no specific plea under Section 14 was taken or argued before the courts below. The Court emphasized that a party cannot raise a new plea for the first time before the Supreme Court in a Special Leave Petition without foundation in the lower courts.Application of Law to Facts: Since the defendants did not raise Section 14 as a ground for rejection of plaint before the trial court or the High Court, they are precluded from doing so at this stage.Conclusions: The suit is not barred by Section 14 of the Benami Act, and the defendants cannot raise this plea for the first time before the Supreme Court.Issue 3: Competency of Subsequent Purchasers to Challenge Suit Maintainability Under Order VII Rule 11 CPCCourt's Reasoning: The Court noted that subsequent purchasers (defendant Nos.5 and 6) cannot claim knowledge of the true nature of the properties in the hands of original owners. They are not the appropriate parties to move an application under Order VII Rule 11 CPC to reject the plaint on the ground of bar by the Benami Act.Application of Law to Facts: The subsequent purchasers' application under Order VII Rule 11 CPC was rightly rejected as they lack locus standi to raise such a preliminary bar without evidence.Conclusions: Subsequent purchasers cannot challenge the maintainability of the suit on the ground of bar by the Benami Act at the threshold.Issue 4: Scope and Test for Rejection of Plaint Under Order VII Rule 11 CPCLegal Framework and Precedents: Order VII Rule 11 CPC permits rejection of plaint if the suit appears from the plaint to be barred by any law. The test is strict and requires that the bar must be apparent without doubt or dispute.Court's Interpretation: The Court reiterated that if the bar is dependent on disputed facts or evidence, the plaint cannot be rejected at the threshold. The factual disputes must be resolved at trial.Application: Since the issue of benami character and joint family nature of the properties are disputed questions of fact, rejection of plaint under Order VII Rule 11 CPC was not justified.3. SIGNIFICANT HOLDINGS'Section 4(1) of the Benami Act bars a suit in respect of benami property, but whether the property is benami or not is a question of fact to be decided on evidence and not on the basis of mere averments in the plaint.''The provisions of Order VII Rule 11 CPC do not permit rejection of the plaint where the question of bar by statute depends upon disputed facts or is subject to exceptions.''Subsequent purchasers of properties cannot claim personal knowledge about the nature of the properties in the hands of original owners and therefore cannot maintain an application under Order VII Rule 11 CPC to reject the plaint on the ground of bar by the Benami Act.''Section 14 of the Benami Act, which provides that property possessed by a female Hindu shall be held by her as full owner, does not bar a suit in respect of such property.''A plea not raised before the courts below cannot be entertained for the first time before the Supreme Court in a Special Leave Petition.''The suit for partition and other reliefs in respect of properties alleged to be joint Hindu family properties purchased from joint family funds is maintainable and not barred by the Benami Act at the threshold.'