TaxTMI 
TaxTMI 
2016 (4) TMI 1332
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....brother of Satyapal shall hereafter be referred to as "Sudhir". 2. Satyapal had sought the relief of declaration and consequential injunction in respect of property being one-half share of the premises - a 21/2 storeyed property at K-155, Hauz Khas Enclave [hereafter referred to as "the suit property"]. Sudhir, in the possession suit, sought for a decree of possession and mesne profits, in respect of the suit property. The third proceeding, being FAO(OS) 327/2013 is preferred by Sudhir, who claims to be aggrieved by the said common order which decreed his possession suit and at the same time rejected the plaint in Satyapal's declaration suit to the extent that it holds that the declaration suit was not time-barred. 3. The brief facts are that Satyapal and Sudhir are brothers. Satyapal purchased one half share of the suit property from one Ms. Kamal Mathur by registered deed dated 29.12.1975. On the same day, i.e. on 29.12.1975, the co-owner of the other half share, Sh. Rajiv Mathur, son of Ms. Kamal Mathur conveyed his right, title and interest through a registered sale deed for a consideration of `2 lakhs. This sale deed, for the other half was executed in favour of Sudh....
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....would remain vested with and owned by the plaintiff to the entire exclusion of the defendant as he neither paid for nor ever stayed therein any time. He also assured that a release deed in favor of the plaintiff would be executed by him later. It is important to appreciate that the original title deed of the share registered in the name of the defendant is with the plaintiff only as he is the de facto owner of the said property in entirety....." 7. The plaintiff Satyapal also stated that payments were shown in respect of balance sheets of the parties in terms of the registered documents but the pay orders were prepared from Satyapal's bank accounts. It was stated that Satyapal also extended a loan to Sudhir to the tune of `2,05,000/-, duly reflected in the balance sheet of the parties for a long time and that the amount was utilized for construction of his later acquired New Friends Colony property. Satyapal further stated that all amounts and liabilities such as electricity, water, property tax in respect of the suit property were paid by him. 8. Satyapal relied upon the circumstance that Sudhir removed a half of the amount of `2,00,000/- from the balance sheet as on 31.....
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....with terrace rights was executed by the original owner, Sh. Rajiv Mathur in favour of Sudhir on 29.12.1975, and no attempt was made by Satyapal to have the sale deed itself set aside or claim any right, title or interest since then. Thus, the suit was liable to be rejected for lack of cause of action. The application was resisted by Satyapal, who argued that the cumulative effect of the contentions asserted to the contrary, and which postulated that triable issues be decided after considering all the materials on record. The applicability of the Benami Act was denied and it was asserted that Satyapal followed an enforceable course of approaching the Court. 11. After service of summons in CS(OS) 1399/2011, i.e. the declaration suit, Sudhir filed CS(OS) 1480/2011, claiming the relief of decree of possession. In that suit, it was asserted that Sudhir purchased the share in the suit property through registered sale deed. It was also asserted that Satyapal and other family members, i.e. Sh. K.C. Gupta and Sh. B.C. Gupta used to reside in the suit property as and when required and that Sudhir kept residence in the New Friends Colony property along with his family members. In the posse....
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.... Transactions of financing by Banks and other financial institutions of purchase of property abound in today's time and in which consideration is paid by such financier but title is conveyed in favor of another. Such transactions cannot be by any stretch of imagination be said to be benami or coming with the purview of Benami Act. The case of SPG really is to release/relinquishment in the year 1991-92 by SKG of the share in the property in favor of SPG. Relief of declaration also to the said effect only has been claimed. However, SPG, in addition thereto, has also claimed the relief of declaration that the recitals in the sale deed with respect to the upper floor showing SKG to be the purchaser thereto is void. The said relief is inconsistent to the first relief of declaration of upper floors pursuant to the release. Though the relief of declaration of title pursuant to release cannot be said to be hit by the provisions of Benami Act, but the relief of declaration of recitals in the sale deed qua the upper floors is premised solely on the plea of the sale consideration having flown from SPG and the said relief will definitely be hit by the Benami Act. The application of SPG un....
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....members of the family. Though SPG and SKG are stated to be having other siblings also but none of them are stated to have been parties to the settlement alleged. I am therefore unable to hold that an opportunity has to be given to SPG to prove any such agreement by SKG to convey the upper floors of the property to SPG in as much as even if SPG were to succeed in proving so, the same would still not make SPG the owner of the upper floors admittedly owned by SKG." 14. The learned Single Judge went on to hold that the essential prerequisite for a valid and binding family settlement was existence of an antecedent claim or dispute. It was held by relying on Hansa Industries Pvt. Ltd. v. Kidarsons Industries Pvt. Ltd. 2006 (8) SCC 531 that an antecedent title of some sort, of the parties in the property should exist in which event the settlement would acknowledge and defend what that title is with each parties' relinquishment of claims in the property other than that falling to their respective shares. 15. On an appreciation of the materials, the Court, therefore, was of the opinion that the plaint in the declaration suit was liable to be rejected. The Court, however, held that....
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....ansa (supra) did not propound any principle of law that varied with what was stated in Kale (supra). Learned counsel emphasized that in both Kale (supra) and Hansa (supra), the Supreme Court stated that as a rule, the courts would lean in favor of family settlement at promoting peace and harmony in society and not look too minutely into inter se arrangements between the members of the family. If this broad perspective were kept in mind, the fact that a settlement evidenced by a long course of conduct was pleaded and that uninterrupted and enjoyment of the suit property for over 35 years was attempted by the defendant/Sudhir no less underscored the need for a full trial and opportunity to Satyapal to establish his claim that he was the owner of the property pursuant to a settlement. It was urged that a meaningful rather than selective reading of the pleadings has been emphasized by the Supreme Court in various judgments. 18. It was submitted that the learned Single Judge fell into error in not appreciating that the oral arrangement under which the parties agreed that Satyapal had been the owner of the premises and that Sudhir was to execute a formal release were only elements to ....
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....nces amongst others urged in the written statement. Without going into such defences or much less the tenability, the learned Single Judge could not have decreed the suit. The defendant Satyapal had in fact set-up the plea of adverse possession besides all other contentions and had in fact set-up the plea of estoppel and applicability of doctrine of approbate reprobate. 21. Sh. Sanjeev Sindhwani, learned senior counsel for Sudhir urged that this Court should not interfere with the impugned judgment, both in respect of rejection of Satyapal's suit as well as decree of possession drawn in Sudhir's suit. It was contended that besides the assertion made in the course of hearing, there was no clear averments in the plaint as to when and if in what circumstances, a family settlement was arrived at. Learned senior counsel disputed that a valid family settlement could be arrived between some members of the HUF. In the absence of a clearly articulated case for family settlement, setting-out the discretion of all family members and as to why there was need for such settlement, the requisites for the applicability of the rule enunciated in Kale (supra) were not fulfilled. It was in....
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....that "the relief of declaration of title pursuant to release cannot be said to be hit by the provisions of Benami Act". Therefore, it is seen that the suit was held not to be barred under the Benami Act. Yet, the learned Single Judge curiously went on to reject relief (b) on the footing that "the relief of declaration of recitals in the sale deed qua the upper floors is premised solely on the plea of the sale consideration having flown from SPG and the said relief will definitely be hit by the Benami Act. The application of SPG under Order VII Rule 11 CPC is thus allowed to the extent of the relief in prayer paragraph (b) and the plaint of SPG insofar as claiming said relief is rejected." Likewise, the learned Single Judge was of opinion that the relief of declaration was not permissible. 25. It is well established that a plaint cannot be rejected in part by a civil court, whilst exercising its powers under Order VII, Rule 11. The rule was enunciated in Roop Lal Sathi v. Nachhattar Singh Gill, 1982 (3) SCC 487, where it was held that only a part of the plaint cannot be rejected and if no cause of action is disclosed, the plaint as a whole must be rejected. Raptakos Brett & Co. L....
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.... bonafide to put and end to the dispute amongst themselves is not a transfer. It is also not a creation of an interest. In a family settlement, each party takes a share in the property by virtue of independent title which is admitted to that extent by the other parties. Every party who takes benefit under it need not necessarily be shown to have under the law claim to share in property. All that is necessary to show is that the parties are related to each other in some way and have a possible claim to the property or a claim or even a semblance of a claim on some other ground as, say, affection". In that decision, the Supreme Court spelt out the raison d'être for recognizing such family settlements as valid. It has observed:- "Courts give effect to a family settlement upon the broad and general ground that its object is to settle existing or future disputes regarding the property amongst members of the family. The word "family" in the context is not to be understood in a narrow sense of being a claim to share in the property in dispute". In Tek Bahadur V/s. Debi Singh AIR 1966 SC 292 also indicates that: "Such Family Arrangemen....
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.... (2) The said settlement must be voluntary and should not be induced by fraud, coercion or undue influence; (3) The family arrangements may be even oral in which case no registration is necessary; (4) It is well settled that registration would be necessary only if the terms of the family arrangement are reduced into writing. Here also, a distinction should be made between a document containing the terms and recitals of a family arrangement made under the document and a mere memorandum prepared after the family arrangement had already been made either for the purpose of the record or for information of the Court for making necessary mutation. In such a case the memorandum itself does not create or extinguish any rights in Immovable properties and therefore does not fall within the mischief of Section 17(2) (sic) (Section 17(1)(b)?) of the Registration Act and is, therefore, not compulsorily registrable; (5) The members who may be parties to the family arrangement must have some antecedent title, claim or interest even a possible claim in the property which is acknowledged by the parties to the settlement. Even if one of the parties to the settlement has no....
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....ch arrangements is to end potential or existing conflicts, the court finds it irrational that despite the absence of a conflict between the two disputing members (of a family) for a valid and binding settlement, all have to be necessarily made parties. If the law is that those not considered family members can enter into binding "family" arrangements, it cannot be that all members of a family have to be party to a settlement as a precondition for its binding nature. This argument is, accordingly rejected. 30. The last complaint against the dismissal of the declaration suit, by the impugned judgment is that the learned Single Judge, by refusing to see that when a valid family arrangement exists, could not have nevertheless insisted that without a formal conveyance through a registered document, Satyapal's claim was barred. This court finds merit in the appellant/plaintiff's submission. Having once held that the transaction was not covered by the Benami Act, the learned Single Judge ought to have permitted parties to urge all contentions in the course of the suit, during the trial. Instead, the impugned judgment rests on a narrow premise that valid title can pass only when....