TaxTMI 
TaxTMI 
TaxTMI 
2023 (7) TMI 1136
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....Rajouri Garden, New Delhi is joint property of Plaintiffs and Defendants, both have 50% share each in the same. (ii) Pass a decree of cancellation in favour of Plaintiffs and against Defendants thereby canceling the sale deed dated 27.03.1992 Registered in the office of Sub Registrar Delhi bearing registration No.18570, in Addl. Book No. I, Vol. No. 5686 on Page No. 109 to 122 registered on 27.03.1992 in the name of Defendant No.2. (iii) Appoint a Local Commissioner with directions to suggest the mode of partition bearing No.F-61, Rajouri Garden, New Delhi by metes and bounds and to submit a report before this Hon"ble Court thereby declaring the share of the Plaintiffs in the same whereupon, this Hon"ble Court may be pleased to pass a Preliminary Decree. (iv) Pass a final decree of partition on the basis of report submitted by learned Local Commissioner and the Plaintiffs be put in possession of their share in the aforesaid properties. (v) Pass a decree of Permanent Injunction in favour of the Plaintiff and against the Defendants, restraining the Defendants, their servants, agents, employees, representatives or any body acting through them or on their behalf from in any....
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....efendant No.1 growing, need was felt to divide the business and properties. As such in February, 2013, the parties sat together and entered into oral settlement i.e. family settlement to divide the properties between them. In fact the same was also put in writing by way of Settlement Deed as under: (a) It was agreed between the parties that property bearing No.BF-29, Tagore Garden, New Delhi will go to the share of Plaintiff No.1 and his family members and Plaintiff No.1 would pay Rs.75 Lacs to Defendant No.1 being 1.5 Cr. Total cost of construction and half of it i.e. Rs.75 Las from Plaintiff No.1"s share. (b) Ownership of Shop No. 5158 will be that of Plaintiff No.1 and Shop No. 5162 would be that of the Defendant No. 1. (c) Cash and Stock of both the shops will be divided in the ratio of 60:40 between Defendant No.1 and Plaintiff No.1. Plaintiff No.1 accepted the same for the respect he had upon his elder brother. (d) Property bearing No.F-61, Rajouri Garden, New Delhi would go to the share of Defendant No. 1. (e) In property bearing No.A-3, Vishal Enclave, New Delhi, 50% share was of Defendant No.1, 37.5% of Plaintiff No.1 and balance 12.5 share of Smt. Raj Kaur,....
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....ch in property No.F-61, Rajouri Garden, New Delhi. If the sale deed dated 27.03.1992 Registered in the office of Sub Registrar Delhi bearing registration No. 18570 in Addl. Book No. I Vol. No. 5686 on Page No. 109 to 122 registered on 27.03.1992 in the name of Defendant No.2 is left out standing, which document is voidable, serious injury will be caused to the Plaintiff. In the circumstances, the Plaintiffs seek a decree of cancellation of the aforesaid sale deed. Further direction is also sought to Sub Registrar, Delhi to cancel the said document. * * * * * "20. The cause of action arisen to file he (sic) present suit arose in favour of the Plaintiffs from time to time as explained hereinabove. The cause of action in (sic) February 2017 when the Defendant No.1 started claiming the suit property being F-61, Rajouri Garden, New Delhi is property of Defendant No.2 and the Plaintiffs have no right in the same. The cause of action further arose when the Plaintiff (sic, defendant No. 1) filed a suit for partition seeking partition of other properties without including the suit property. The cause of action further arose on 2.11.17 when the counter claim filed by the Plaintiff in s....
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....perty came to be partnership property. There is no allegation in the plaint that the subject property was purchased by the partnership firm; nor that the property was purchased in the names of the partners; nor that defendant No.2 is one of the partners in the partnership firm; nor even that the subject property has been shown in the Income Tax Returns or any other returns or documents filed, as the property of the partnership firm; 6.4. It is further pointed-out that there is also no averment in the plaint to show how defendant No.2 is holding the subject property in a fiduciary capacity for the plaintiffs. It is submitted that nowhere is it stated in the plaint that defendant No.2 was one of the partners of the partnership firm. On point to fact, it is the admitted case between the parties that defendant No. 2 was never a partner of the partnership firm. Furthermore, defendant No.2 submits, that the subject property is also clearly out of the purview of sections 14 and 15 of the Indian Partnership Act, 1932 ("Partnership Act"), which provisions read as under : "14. The property of the firm.-Subject to contract between the partners, the property of the firm includes all propert....
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....firstly, that defendant No.2 is not a signatory to the said alleged family settlement; secondly, the alleged document purporting to be a family settlement does not record that it is a "memorandum" recording an oral family settlement, and if by way thereof, title to the subject property was conferred in favour of defendant No. 2, the alleged family settlement ought to have been registered as required in law, which it is not. It is contended, that by reason of non-registration, the purported family settlement is inadmissible in evidence. It is pointed-out that even assuming the alleged family settlement to be genuine and admissible, there is no averment in the plaint to say how the subject property came to be transferred solely in the name of defendant No.2 by way of a registered sale deed in 1992, when the family settlement was admittedly signed only in 2013; 6.7. As for the relief of seeking cancellation of Sale Deed dated 27.03.1992, defendant No.2 contends that the prayer to that effect is clearly barred by time, inasmuch as the limitation for seeking cancellation of a document is 03 years as provided in Article 59 of the Schedule to the Limitation Act, 1963 ("Limitation Act"). ....
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....ransaction or an arrangement- (a) where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and (b) the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration, except when the property is held by- (i) a Karta, or a member of a Hindu undivided family, as the case may be, and the property is held for his benefit or benefit of other members in the family and the consideration for such property has been provided or paid out of the known sources of the Hindu undivided family; (ii) a person standing in a fiduciary capacity for the benefit of another person towards whom he stands in such capacity and includes a trustee, executor, partner, director of a company, a depository or a participant as an agent of a depository under the Depositories Act, 1996 (22 of 1996) and any other person as may be notified by the Central Government for this purpose; (iii) any person being an individual in the name of his spouse or in the name of any child of such individual and the consideration for such property has been provided or paid ....
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.... precedents : 8.1. Aparna Sharma & Ors. vs. Sidhartha Sharma & Ors. MANU/DE/2205/2018 at paras 5, 7, Pushpa Kanwar vs Urmil Wadhawan & Ors MANU/DE/2993/2009 at paras 13-15 on the proposition that the meaning of "fiduciary capacity" is no longer general and expansive, and only transactions between certain relationships having fiduciary capacity as stated in section 2(9)(A)(ii) would be covered within the exception and will not be hit by the Benami Transactions Act; 8.2. Surender Kumar Khurana vs. Tilak Raj Khurana & Ors. 2016 (155) DRJ 71 at paras 5,8-9 on the proposition that joint funds or joint properties are not equal in law to HUF funds or HUF properties; 8.3. J.M. Kohli vs. Madan Mohan Sahni & Ors. MANU/DE/2726/2012 at paras 9-13 on the proposition that though there is an implied trust in benami transactions, "however, such trusts are not the trusts which are within the purview of Section 4(3)(b) of the Benami Act"; 8.4. Narender Kante vs. Anuradha Kante & Ors. (2010) 2 SCC 77 at para 26 on the proposition that a deed of family settlement seeking to partition joint family properties cannot be relied upon unless signed by all the co-sharers of the property; 8.5. Renu Khull....
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....the existence of the HUF is properly pleaded, especially when the person holding the property is not a member of the HUF but is a relative of such member; 8.11. Leena Mehta vs. Vijaya Myne & Ors. 2009 SCC OnLine Del 3577 at paras 7-11 on the proposition that a combined reading of section 3(2) of the Benami Transactions Act and section 14 of the Hindu Succession Act would show that the law presumes that a property purchased in the name of the wife or unmarried daughter is purchased for her benefit, and that she would be the absolute owner of the property in terms of the title deed; 8.12. Nikhil Batra vs. Diwakar Batra & Ors. 2019 SCC OnLine Del 8253 at para 15 on the proposition that a bald plea that the woman, in whose name the property stands, is a housewife and therefore a benami owner on behalf of the HUF, is barred by the Benami Transactions Act and does not constitute a pleading in law, especially when there are no particulars furnished alongwith such pleadings; 8.13. Savita Anand vs. Krishna Sain & Ors. MANU/DE/1944/2020 at paras 29-30 on the proposition that fiduciary relationships have a legal connotation and are not equivalent to filial relationships, the former involvi....
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..... Ms. Kaur also submits that though it is the plaintiffs" own case that construction on the subject property began in 2014, the present suit has been filed only on 10.09.2018, whereby the suit is clearly time-barred. Submissions on behalf of the plaintiffs 11. Opposing the application seeking rejection of the plaint, the plaintiffs have raised the following contentions : 11.1. The plaintiffs contend that the subject property was purchased on 27.03.1992 from the funds of the partnership firm "M/s Sujan Singh & Sons." which was started by the father of the concerned parties. It is submitted that though the subject property was purchased in the name of defendant No.2, who is the wife of defendant No.1, it has been categorically averred in para 8 of the plaint that defendant No.2 held the subject property in a fiduciary capacity, for the benefit of the family/firm and that the subject property has always been treated as family property. It is the plaintiffs" contention that defendant No.2 had no income of her own, and that, in fact the subject property was purchased by the partnership firm paying monies to third parties, who then gave cheques in the name of defendant No.2 in lieu of....
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....iew of section 14 of the Hindu Succession Act, it is argued that a challenge to the right of the woman under section 14 is entertainable if it is proved that though a property was purchased in her name, it was not for her benefit, which is the case here. Furthermore, it is contended that since section 67 of the Benami Transactions Act gives overriding effect to that statute and recites that the provisions of that statute shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force, and the Benami Transactions Act of 1988 being a later statute, it must prevail over the Hindu Succession Act of 1956, implying thereby that the effect of section 14 of the Hindu Succession Act stands negated; 11.6. It is also argued that the averments in the plaint make out a case that defendant No.2 falls within the exception contained in section 2(9)(A)(ii) of the Benami Transactions Act, which position has to be decided only after evidence is led and not at the stage of deciding the present application under Order VII Rule 11 CPC; 11.7. In particular, reliance is placed by the plaintiffs upon a decision of a Division Bench of this court in Neeru Dhir....
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....le deciding an application under Order VII Rule 11 CPC; 13.4. Marcel Martins vs. M Printer & Ors. (2012) 5 SCC 342 at paras 31-38, Pawan Kumar vs. Babulal since deceased through LRs & Ors. (2019) 4 SCC 367 at paras 8, 10, 13 and Neeru Dhir (supra) MANU/DE/2444/2020 at para 20 on the proposition that fiduciary capacity implies a relationship analogous to that between a trustee and a beneficiary of a trust and has wide import, extending to situations where parties are in a position founded on confidence, trust and good faith. The contention being that a disputed question of fiduciary relationship cannot be decided at the stage of deciding an application under Order VII Rule 11 CPC; 13.5. Anita Anand (supra) MANU/DE/3395/2018 at paras 3, 11-20, 22-24 and Hemant Satti (supra) 2013 (139) DRJ 391 at paras 1-3, 7, 10, 15 on the proposition that a challenge to the right of a woman under section 14 of the Hindu Succession Act is entertainable if it is proved that though a property was purchased in the name of a woman, it was not for her benefit, to submit that the question of whether the property was for the woman"s benefit cannot be decided in an application under Order VII Rule 11 CPC; ....
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.... ownership of such property. In the present case, the conveyance deed executed by DDA was in the name of defendant no.1, there was no restriction placed in the conveyance deed about the right of ownership of defendant no.1. Defendant no.1 was absolute owner of the property in terms of the title deed in her favour. The property cannot be considered to be either of her husband or of anyone else after 31 years of execution of the title deed in her favour." (emphasis supplied) 14.2. On section 2(9)(A)(ii) of the Benami Transactions Act, in Savita Anand (supra) a Co-ordinate Bench of this court has explained the concept of "fiduciary relationship" in the following words : "29. However, we are unable to accept this submission. Being a mother, D1 would have naturally assumed the role of the caretaker of her children including the appellant after the death of her husband. By setting out a ground for allotment of a plot to her, it cannot be assumed that D1 had entered into a fiduciary relationship with her children. Fiduciary relationships have legal connotation and are not equivalent to filial relationships. Fiduciary relationships or capacity involve the existence of a duty or obligati....
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....ved by it from other banks about clients/loan defaulters, etc., under the Right to Information Act, 2005, it is apposite to refer to its observations on what constitutes fiduciary relationship and capacity, ... It also referred to the definition of fiduciary relationship given by The Advanced Law Lexicon 3rd Edition 2005 and also set down the scope of fiduciary relationship in paras 57 & 58, which are reproduced for convenience: "57. The Advanced Law Lexicon, 3rd Edn., 2005, defines "fiduciary relationship" as: "Fiduciary relationship.--A relationship in which one person is under a duty to act for the benefit of the other on matters within the scope of the [fiduciary] relationship .... Fiduciary relationship usually arises in one of the four situations: (1) when one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first, (2) when one person assumes control and responsibility over another, (3) when one person has a duty to act for or give advice to another on matters falling within the scope of the relationship, or (4) when there is a specific relationship that has traditionally been recognised as involving fiduc....
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....pellant, although, has argued that the period of limitation for the cancellation/annulment of a settlement deed dated 11.11.1980 is covered under Article 59 of the Limitation Act and not under Article 58 of the Limitation Act, however, the perusal of the plaint shows that not a single averment is made in the plaint regarding the period of limitation. The appellant has not pleaded any fact claiming exemption of any period to be excluded while calculating the period of limitation for seeking cancellation of the document, executed on 11.11.1980 and registered in the year 1981 and which was duly signed by the appellant. The plaint is completely silent as to the fact when the period of limitation had begun. In the plaint, the appellant has not disclosed the date on which she claims to have gained knowledge of the instrument i.e. the settlement deed dated 11.11.1980. Admitted facts are that this settlement deed was executed by her mother and it also bears her signatures as well as signatures of other siblings. In the absence of any pleadings to the contrary, the knowledge of execution of this deed therefore can be assigned to the date on which this deed was signed by the appellant i.e. 1....
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....start running does not stop. The plaint is bereft of any facts, showing as to why it should be reckoned from the date of alleged cause of action and not from the date of execution of the instrument." (emphasis supplied) 15. Upon a careful consideration of the submissions made on both sides, and in particular, on a close and meaningful reading of the averments contained in the plaint, in the backdrop of the position of law as discussed above, in the opinion of this court the following inferences can be drawn : 15.1. The plaintiffs do not dispute that the subject property was purchased by defendant No.2 from its erstwhile owners, Davinder Sahni and Pritpal Kaur Chandhok, vide registered Sale Deed dated 27.03.1992. The plaintiffs contend that funds of their partnership firm were used for purchasing the subject property, since they allege, defendant No.2 had no income of her own. This is what para 8 of the plaint recites : "8. As such, from the funds of aforesaid partnership, Property bearing No.F-61, Rajouri Garden, New Delhi was purchased on 27.3.1992 from its erstwhile owners Mrs.Devinder Sahni and Ms. Pritpal Kaur Chandhok. The said property was purchased in the name of Defenda....
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....y purpose and intention of the legislature in enacting the Benami Transactions Act; 15.4. Insofar as the plaintiffs" contention that defendant No.2 falls within the exception engrafted in section 2(9)(A)(ii) to the definition of "benami transaction", a bare reading of the plaint would show that there is not even a whisper of an allegation that defendant No.2 was a partner of the partnership firm, the monies of which were allegedly routed for purchasing the subject property. There is also no allegation in the plaint that defendant No.2 was a partner of that firm. At the highest, the plaintiffs contend that defendant No.2 was in a fiduciary capacity vis-à-vis them since she was the wife of defendant No.1, who (latter) is a partner of the firm. There is clearly no support for the proposition that a partner"s wife becomes a partner, by operation of any law or otherwise. If any doubt was to remain on that count, a bare reading of section 5 of the Partnership Act answers it squarely. The provision reads as follows : "5. Partnership not created by status. - The relation of partnership arises from contract and not from status; and, in particular, the members of a Hindu undivided ....