TaxTMI 
TaxTMI 
2019 (2) TMI 1786
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.... 3. The learned Predecessor of this Court vide ex parte ad interim order dated 02nd December, 2013, directed the defendants to maintain status quo with regard to suit property bearing No.C-117, East of Kailash, New Delhi- 110065 as regards possession and title. On 27th September, 2018, this Court clarified that it had not granted any stay of proceedings in Appeal No.30/2013 i.e. Kuldeep Singh Gulati and Anr. Vs. Sandeep Gulati & Anr. pending under the Maintenance and Welfare of Parents and Senior Citizens Act, 2017 before the Divisional Commissioner and the said forum was free to proceed with the case, in the event there was no stay order passed by any other Court. ARGUMENTS ON BEHALF OF THE DEFENDANTS NO.1, 2 AND 5 4. At the outset, Mr. V.K. Bali, learned senior counsel for defendant No.1, 2 and 5-applicants, submitted that the present suit was not maintainable as an identical suit of the father of plaintiffs being CS(OS) 886/2013 with the same averments and seeking the same relief, after hearing arguments on the very first date of hearing, had been dismissed as withdrawn with liberty to file other proceedings that may be permissible. The order dated 13th May, 2013 is reproduced....
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....ants No.1, 2 and 5-applicants contended that there was no averment in the plaint that Mr. R.P. Gulati, great grandfather of the plaintiffs, had succeeded to any property on demise of his father. He pointed out that there was not even a whisper in the plaint as to what properties were owned by the father of Mr. R.P. Gulati or even by Mr. R.P. Gulati himself. He emphasized that no details of any business or property being inherited by defendant No.1 on the death of Mr. R.P. Gulati had been mentioned in the plaint. 10. Mr. Bali submitted that coparcenary is a creation of law and cannot be created by an act of the parties. He pointed out that in the present case there was no coparcenary property specified or even named and no averment with regard to the hotchpotch or actual blending of properties by the parties. According to him, the only averments in the plaint were with regard to blending of income from salaries. He stated that all the three partnership firms mentioned in the plaint as businesses of the coparcenary had been formed after the death of Mr. R.P. Gulati in 1971. 11. In the alternative, Mr. Bali submitted that even if it was assumed that coparcenary/Hindu Undivided Famil....
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....to institute a suit or make an application for the execution of a decree is under any such disability, and a discharge can be given without the concurrence of such person, time will run against them all; but, where no such discharge can be given, time will not run as against any of them until one of them becomes capable of giving such discharge without the concurrence of the others or until the disability has ceased. Explanation I.-- This section applies to a discharge from every kind of liability, including a liability in respect of any immovable property. Explanation II.-- For the purposes of this section, the manager of a Hindu undivided family governed by the Mitakshara law shall be deemed to be capable of giving a discharge without the concurrence of the other members of the family only if he is in management of the joint family property. 17. Learned senior counsel for defendants No.1, 2 and 5-applicants submitted that a suit for injunction against the Karta i.e. defendant No.1 is barred by provisions of Specific Relief Act, 1963 and no injunction could be passed against the Karta of a Hindu coparcenary as Karta is entitled to exclusive and entire possession. 18. Mr. Bal....
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....n held as under:- "11. ....It is not static. We are further of the opinion that so long, on partition an ancestral property remains in the hand of a single person, it has to be treated as a separate property and such a person shall be entitled to dispose of the coparcenary property treating it to be his separate property but if a son is subsequently born, the alienation made before the birth cannot be questioned. But, the moment a son is born, the property becomes a coparcenary property and the son would acquire interest in that and become a coparcener." (emphasis supplied) 23. Learned senior counsel for the plaintiffs submitted that the aforesaid judgment in Rohit Chauhan Vs. Surinder Singh & Ors.(supra) had been reiterated subsequently in Danamma alias Suman Surpur & Anr. Vs. Amar & Ors., (2018) 3 SCC 343 and Shyam Narayan Prasad Vs. Krishna Prasad & Ors., (2018) 7 SCC 646. 24. Mr. Ganju stated that after the great grandfather of the plaintiffs i.e. Mr. R.P. Gulati came from Pakistan in 1947, he got compensation from the Settlement Commission for the family properties left behind in Pakistan and with this compensation, he started a joint family business, being a shoe busines....
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....ies would be Hindu Joint Family properties unless proved to the contrary by the cogent evidence. He stated that the fact that defendants No.1, 2 and 4 had been working together in the family businesses since attaining majority and had been taking active part in the business of K.S. Gulati and Sons Hindu Joint Family since 1990 had been admitted by the defendants in C.P. No.06/1993. The relevant portion of the said reply affidavit by defendant No.1 relied upon by the learned senior counsel for plaintiffs is reproduced hereinbelow:- "H. ....Naturally, the wives were only tax fronts and actual business was conducted by the husbands. The answering respondent looked after the technical side whereas the management of the various units was handled by his two brothers. Although the division of the shares of the Company amongst the three families was disproportionate, it was clearly understood that all the three had equal stakes therein like in the entire family business." 29. He contended that in view of the said fact, even the pre-existence of a nucleus was not necessary. In support of his submission, Mr. Ganju relied upon the following judgments:- A. Sanwal Das Vs. Kuremal & Ors. AI....
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....ned only after conducting a trial and not in an application under Order 7 Rule 11 CPC. In support of his submission, he relied upon the following judgments:- A. Kamala & Ors. Vs. K.T. Eshwara Sa & Ors., (2008) 12 SCC 661 wherein it has been held as under:- "21. Order 7 Rule 11(d) of the Code has limited application. It must be shown that the suit is barred under any law. Such a conclusion must be drawn from the averments made in the plaint. Different clauses in Order 7 Rule 11, in our opinion, should not be mixed up. Whereas in a given case, an application for rejection of the plaint may be filed on more than one ground specified in various sub-clauses thereof, a clear finding to that effect must be arrived at. What would be relevant for invoking clause (d) of Order 7 Rule 11 of the Code are the averments made in the plaint. For that purpose, there cannot be any addition or subtraction. Absence of jurisdiction on the part of a court can be invoked at different stages and under different provisions of the Code. Order 7 Rule 11 of the Code is one, Order 14 Rule 2 is another. 22. For the purpose of invoking Order 7 Rule 11(d) of the Code, no amount of evidence can be looked into....
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....within the realm of the Court at that stage nor shall form the subject matter of an order under the said provision, in the aforesaid decision which also pertains to a partition suit, it was observed (AIR, page No. 3179):-- "whether any property is available for partition is itself a question of fact." 22. In the case of Kamala (supra), a suit was filed claiming partition in the properties. After the passing of the preliminary decree, no property was available for partition. The properties were possessed by the co-sharers independenty in accordance with the respective shares held by the co-sharers. Yet, the Supreme Court observed that what would be the effect of a partition suit which had not been taken to its logical conclusion by getting the properties partitioned by metes and bounds is a question which cannot be gone into in a proceeding under Order VII, Rule 11(d) of the Code. Whether any property is available for partition is itself a question of fact. Identity of properties which were subject matter of the earlier suit, vis-a-vis, properties which were subsequently acquired and effect thereof was beyond the purview of Order VII, Rule 11(d)." 31. Mr. Ganju lastly contended....
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....to the company petition being Co.Pet.6/1993 prior to the institution of the suit, yet there was no averment in the plaint with regard to the Company Law Board proceeding. Consequently, he submitted that the said allegation cannot be examined by the Court while dealing with an Order 7 Rule 11 CPC application. COURT'S REASONING THE APPROACH TO BE ADOPTED BY THE COURTS WHILE DEALING WITH AN ORDER 7 RULE 11 CPC APPLICATION 37. Order 7 Rule 11 CPC lays down six grounds on which a plaint can be rejected. Though it is settled law that while deciding such an application what has to be seen are the averments made in the plaint, yet the sine qua non is that pleadings must contain all requisite factual ingredients of a cause of action. This Court is of the view that it is the bounden duty and obligation of every court, while deciding an Order 7 Rule 11 CPC application, to carefully scrutinize the pleadings and the documents on which the pleadings are predicated. The Supreme Court has highlighted the requirement to read the pleadings meaningfully in view of the relied upon documents and see that the same are not illusionary or vexatious. The Apex Court in T. Arivandandam Vs. T.V. Satyap....
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....ual of repeating a word or creation of an illusion in the plaint can certainly be unravelled and exposed by the Court while dealing with an application under Order 7 Rule 11(a). Inasmuch as the mere allegation of drawal of monies without movement of goods does not amount to a cause of action based on "fraud", the Bank cannot take shelter under the words "fraud" or "misrepresentation" used in the plaint." (emphasis supplied) 39. Even, in Kamala & Ors. Vs. K.T. Eshwara Sa & Ors. (supra) as well as Ms. Ilaria Kapur Vs. Sh. Rakesh Kapur & Ors. (supra) it has been held that a plaint can be rejected under Order 7 Rule 11 CPC if the averments made in the plaint on their face disclose no cause of action and/or if the same disclose a cause of action, the same is barred by any law. In the judgments cited by learned senior counsel for the plaintiffs, the earlier Supreme Court judgments in T. Arivandandam Vs. T.V. Satyapal and Another (supra) and I.T.C. Limited Vs. Debts Recovery Appellate Tribunal and Others (supra) have neither been set aside nor dissented or distinguished. ORDER 6 RULE 4 CPC IS ATTRACTED TO SUITS WHERE THE PLAINTIFF CLAIMS THAT A COPARCENARY OR HUF EXISTS, AS AFTER COMI....
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.... of existence of an HUF and its properties, can a suit then be filed and maintained by a person claiming to be a coparcener for partition of the HUF properties." (emphasis supplied) 41. A Division Bench of this Court in Sagar Gambhir Vs. Sukhdev Singh Gambhir and Ors., 241 (2017) DLT 98 has endorsed the said view. The relevant portion of the Division Bench's judgment is reproduced hereinbelow:- "5. The defendants filed IA No. 1325/2012 invoking Order VII Rule 11 of the Code of Civil Procedure pleading that the averments in the plaint did not disclose a cause of action. 6. Vide impugned order dated May 06, 2016, relying upon the decision of the Supreme Court reported as (1987) 1 SCC 204Yudhihster v. Ashok Kumar, and two decisions of this Court reported as 225 (2015) DLT 211 Sunny (Minor) v. Sh. Raj Singh and 227 (2016) DLT 217 Surinder Kumar v. Dhani Ram the learned Single Judge has held that the pleadings were illusory and did not disclose a cause of action. The suit has been dismissed, and we treat this to be a misnomer for the reason if a plaint does not disclose a cause of action it has to be rejected. Qua challenge to the will, the learned Single Judge has held that t....
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.... be one of narrative of fact wherein said document has been referred to as relied upon by the defendants. It is a case where the appellant as well as the defendants relied upon the documents." (emphasis supplied) THERE EXISTS A DISTINCTION BETWEEN A COPARCENARY PROPERTY AND A HINDU JOINT FAMILY PROPERTY. 42. A Mitakshara coparcenary is a body of individuals having been created by law, unlike a joint family which can be constituted by an agreement of parties. The Supreme Court in Hardeo Rai Vs. Sakuntala Devi and Others, (2008) 7 SCC 46 has held as under:- "19. We may at the outset notice the characteristics of a Mitakshara coparcenary from the decision of this Court whereupon Mr Rai has placed strong reliance being SBI v. Ghamandi Ram [(1969) 2 SCC 33 : AIR 1969 SC 1330]. Therein this Court was concerned with a notification issued by the Government of Pakistan in terms of Section 45 of the Pakistan (Administration of Evacuee Property) Ordinance, 1949. We may, however, notice the dicta laid down therein: (Ghamandi Ram case [(1969) 2 SCC 33 : AIR 1969 SC 1330] , SCC pp. 36- 37, para 5) "5. According to the Mitakshara School of Hindu Law all the property of a Hindu joint family ....
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.... those of a partnership. In the case of the former the shares of the individual members in the profits and losses are not worked out, while they have to be worked out in the case of partnership accounts." (emphasis supplied) 45. Consequently, a partnership property cannot be a Hindu Joint Family Property. THERE IS NO PRESUMPTION THAT A BUSINESS STANDING IN THE NAME OF ANY MEMBER OF THE JOINT FAMILY IS A JOINT FAMILY BUSINESS. 46. It is also settled law that there is no presumption that a business standing in the name of any member of the joint family is a joint family business. The Supreme Court in P.S.Sairam & Anr. Vs. P.S.Rama Rao Pissey & Ors. (2004) 11 SCC 320 has held as under:- "7. Crucial question in the present appeal is as to whether business which was conducted by defendant No.1 was his separate business or it belonged to joint family, consisting of himself and his sons. It is well settled that so far as immovable property is concerned, in case the same stands in the name of individual member, there would be a presumption that the same belongs to joint family, provided it is proved that the joint family had sufficient nucleus at the time of its acquisition, but no su....
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....y possesses joint property - There is no presumption that a family, because it is joint, possesses joint property or any property. When in a suit for partition, a party claims that any particular item of the property is joint family property, or when in a suit for a mortgage, a party contends that the property mortgaged is joint family property, the burden of proving it rests on the party asserting it." (emphasis supplied) 50. In Makhan Singh (Dead) By LRs. Vs. Kulwant Singh, (2007) 10 SCC 602, the Apex Court has held as under:- "7. ......In this connection the judgment in D.S. Lakshmaiah case becomes relevant. It had been observed that a property could not be presumed to be a joint Hindu family property merely because of the existence of a joint Hindu family and raised an ancillary question in the following terms: (SCC p. 314, para 7) "7. The question to be determined in the present case is as to who is required to prove the nature of property whether it is joint Hindu family property or self-acquired property of the first appellant." 8. The query was answered in para 18 in the following terms: (SCC p. 317) "18. The legal principle, therefore, is that there is no presumpti....
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.... Appasaheb Peerappa Chamdgade (supra) cited by the plaintiffs, there were Hindu Joint Family properties and the business was started from the Hindu Joint Family funds. The said judgment categorically holds that proof of nucleus/ sufficient income of a Hindu Joint Family as well as purchase from the said nucleus is a must. 53. In Ms. Ilaria Kapur Vs. Sh. Rakesh Kapur & Ors. (supra), it was also held that if nucleus whereof was generation of funds from Hindu joint family business for the purchase of properties, then it is immaterial whether the name of one of the family members appears on a document by which the said property was purchased by the joint family. LAND GRANTED TO A DISPLACED PERSON UNDER THE PROVISIONS OF THE DISPLACED PERSONS (COMPENSATION AND REHABILITATION) ACT, 1954 IS IN THE NATURE OF A GRANT AND A GRANT IS ALWAYS SELF ACQUIRED 54. In the opinion of this Court, land granted to a displaced person under the provisions of the Displaced Persons (Compensation and Rehabilitation) Act, 1954 is in the nature of a grant and does not retain the characteristics of properties left behind in Pakistan. A grant is always self acquired. In Pohla Singh alias Pohla Ram (D) by LRs ....
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....he present plaint, there is no mention of any identifiable property ever owned by the great grandfather of the plaintiffs' i.e. R.P. Gulati. The income tax assessment order relied upon by learned senior counsel for the plaintiffs does not show that the alleged R.P. Gulati HUF existed or owned any asset. The assessment order only mentions about a shoe business carried out by Mr. R.P. Gulati - but there is no averment in the plaint to the said effect. There is also no averment that any specific property was owned by Mr. R.P. Gulati or that defendant No.1 succeeded to any specific estate/business of his father. 59. As there is no question of inheritance or succession, the essential averment with regard to nucleus, i.e., sine qua non for Hindu Joint family, is lacking in the plaint. IN ANY EVENT, THE SUCCESSION HAVING OPENED UP ON THE DEATH OF GREAT-GRANDFATHER AFTER COMING INTO FORCE OF THE HINDU SUCCESSION ACT, 1956, THE GRANDFATHER OF THE PLAINTIFFS WOULD HOLD THE PROPERTY AS HIS PERSONAL / INDIVIDUAL PROPERTY. 60. In any event, Mr. R.P. Gulati, the great-grandfather of the plaintiffs, having died after coming into force of the Hindu Succession Act, 1956, the property inherit....
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....ordance with Section 8, the joint family property ceases to be joint family property in the hands of the various persons who have succeeded to it as they then hold the property as tenants in common and not as joint tenants as provided under Section 19 of the Act, 1956. The Supreme Court held that when the appellant's grandfather died in 1973 in the said case, his share in the joint family property was divided between his sons as individual shares and it no longer remained joint family property. According to the Apex Court, the appellant's father and uncles did not own any family property jointly that could be subjected to partition. 63. The Supreme Court in Danamma alias Suman Surpur & Anr. Vs. Amar & Ors. (supra) did not refer or rely upon Rohit Chauhan (supra). It only deals with the interpretation and effect of the Hindu Succession (Amendment) Act, 2005 to Section 6 with regard to female coparcenors. Consequently, the said judgment offers no assistance to the plaintiffs. 64. Undoubtedly, the Supreme Court in Shyam Narayan Prasad Vs. Krishna Prasad & Ors., (supra) has relied on and applied the judgment in Rohit Chauhan (supra), but the said judgment has been passed with....
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....Y DEFENDANT NO.5, WHO IS AN INDEPENDENT INCOME TAX ASSESSEE HAVING RENTAL AND BUSINESS INCOME. CONSEQUENTLY, THE EXCEPTION CONTAINED IN SECTION 4(3) OF THE ACT, 1988, AS IT THEN STOOD, IS NOT ATTRACTED TO THE PRESENT CASE. 69. As far as C-117, East of Kailash, New Delhi is concerned, this Court finds that not only the Agreement to Sell and Receipt of payment are in favour of the defendant No. 1's wife, namely, defendant No. 5 but the Conveyance Deed executed by the DDA is also in her favour exclusively. In fact, the said property was purchased by defendant No.5, who is an independent Income Tax Assessee admittedly having rental and business income. On the date of purchase, father of the plaintiffs (defendant No.4) was nine years old. 70. The Benami Transaction (Prohibition) Act, 1988 (for short "Act, 1988") states that property in the name of an individual has to be taken as owned by that individual and no claim to such property is maintainable as per Section 4 (1) of the Act, 1988. Consequently, the defendant No. 5 is the absolute owner of the said property. A Coordinate Bench of this Court in Surender Kumar Vs. Dhani Ram and Others (supra) has held as under:- "11......the....
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....he joint family property, then the said property becomes a part of the joint family estate; in other words, the separate property of a coparcener loses its separate character by reason of the owner's conduct and get thrown into the common stock of which it becomes a part. This doctrine, therefore, inevitably postulates that the owner of the separate property is a coparcener who has an interest in the coparcenary property and desires to blend his separate property with the coparcenary property. There can be no doubt that the conduct on which a plea of blending is based must clearly and unequivocally show the intention of the owner of the separate property to convert his property into an item of joint family property. A mere intention to benefit the members of the family by allowing them the use of the income coming from the said property may not necessarily be enough to justify an inference of blending; but the basis of the doctrine is the existence of coparcenary and coparcenary property as well as the existence of the separate property of a coparcener. How this doctrine can be applied to the case of a Hindu female who has acquired immovable property from her father as a limite....
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....77. In Vankamamidi Venkata Subba Rao Vs. Chatlapalli Setharamaratna Ranganayakamma, 1997 (5) SCC 460, the Apex Court held that it is a well settled legal position that if the right of a Hindu woman under any instrument is in recognition of pre-existing right, the limited right though prescribed under the instrument, gets enlarged into an absolute right by operation of Section 14(1) of the Act, 1956. 78. In Gangamma & Ors. Vs. G. Nagarathnamma & Ors., (2009) 15 SCC 756, the Supreme Court has held as under:- "4. The suit properties consist of both agricultural lands and urban properties and the plaint case is that they are ancestral properties belonging to the joint family. The further plaint case is that though some of the properties stand in the name of the first defendant, they were bought benami in her name by the late Ganganna out of the income from agricultural lands and the income of the first plaintiff's husband who was working as an accountant in a private firm and drawing salary. He also had a leather business and had earning from running a taxi. Thus he was contributing seven to eight thousand rupees every month to the family and out of such income the suit properti....
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....hara Law is unity of ownership and once there is a partition, unity of coparcenary is destroyed/ dissolved. The Supreme Court in Hardeo Rai (supra) has held as under:- "22. For the purpose of assigning one's interest in the property, it was not necessary that partition by metes and bounds amongst the coparceners must take place. When an intention is expressed to partition the coparcenary property, the share of each of the coparceners becomes clear and ascertainable. Once the share of a coparcener is determined, it ceases to be a coparcenary property. The parties in such an event would not possess the property as "joint tenants" but as "tenants-in-common". The decision of this Court in SBI [(1969) 2 SCC 33 : AIR 1969 SC 1330] , therefore, is not applicable to the present case. 23. Where a coparcener takes definite share in the property, he is owner of that share and as such he can alienate the same by sale or mortgage in the same manner as he can dispose of his separate property." (emphasis supplied) 80. In the opinion of this Court, once partition of a coparcenary takes place, the coparcenary dissolves and shares of members get ascertained. Consequently, on a partition, n....
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.... not do so, in which case the said property would be his or their self- acquisition, and succession to such property would be governed not by the law of joint family but only by the law of inheritance. In such a case, if a property was jointly acquired by them, it would not be governed by the law of joint family; for Hindu law does not recognize some of the members of a joint family belonging to different branches, or even to a single branch, as a corporate unit. Therefore, the rights inter se between the members who have acquired the said property would be subject to the terms of the agreement whereunder it was acquired. The concept of joint tenancy known to English law with the right of survivorship is unknown to Hindu law except in regard to cases specially recognized by it. In the present case, the uncle and the two nephews did not belong to the same branch. The acquisitions made by them jointly could not be impressed with the incidents of joint family property. They can only be co-sharers or co-tenants, with the result that their properties passed by inheritance and not by survivorship. (emphasis supplied) 83. The Supreme Court in Kalyani (Dead) By LRs. Vs. Narayanan and Oth....
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....anaged on partnership principles [See: Sangramsinh P.Gaekwad & Ors. Vs. Shantadevi P.Gaekwad (Dead) Through LRs & Ors., (2005) 11 SCC 314 and Ebrahimi Vs. Westbourne Galleries Ltd. & Ors.,(1972) 2 ALL ER 492]. If partners happen to be some or the other members of a family or where most of them are females, it will not be a Hindu Joint Family business. Also if averments in the reply to Co.Pet.6/1993 are believed to be true and correct, then the averments in the plaint with regard to third partition in April, 1989 would be false! HUF BANK ACCOUNT IS NOT RELATABLE TO ANY PROPERTY. THEREFORE, IRRELEVANT 86. As regards the HUF Bank account opened on 22nd November, 1985, it is not relatable to any property. It is an admitted position that the Public as well as the Private Limited Companies, Partnership Firms and Family Members of the defendant No.1 had been filing independent Income Tax Returns. Therefore, the said HUF Bank account is wholly irrelevant. 87. In any event, showing in Income Tax Return, a HUF Bank account is meaningless unless the sufficient income is shown from nucleus of Hindu Joint Family Properties. The consistent legal position is that once there is no sufficient nuc....
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....the part of the assesses to waive his interest in the self acquired property...." (emphasis supplied) BALANCE OF CONVENIENCE IS ENTIRELY IN FAVOUR OF THE 88. This Court is of the view that the balance of convenience is entirely in favour of the defendant nos. 1 and 5 as they have been out of possession of their own house (C-117, East of Kailash, New Delhi) since 2010. It is pertinent to mention that after construction of the said house in 1978, the defendant nos. 1 and 5 had been in occupation of the same for the thirty-two years. This Court is of the view that no sane person would voluntarily walk out of its own property in their ‗twilight years' if they were not harassed or subjected to atrocities. In fact, it is the case of defendants No.1, 2 and 5 that they had been subject to a number of atrocities. 89. Since the defendant No. 4 and plaintiffs are in exclusive possession of all cars of family as well as the factory and warehouse (Serial Nos.(x) and (xiii) of Schedule to the plaint) which are yielding rental income, this Court is of the view that even if the plaintiffs have to vacate the aforesaid property, they would not suffer any irreparable harm and injury. ....