TaxTMI 
TaxTMI 
2023 (8) TMI 1549
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....the process of law and has been filed by plaintiff with dishonest and malafide intention. The present application has been filed on the premise that plaintiff has verified the suit and has sworn the accompanying affidavit, fully knowing that the contents of the same are false even to his knowledge. Hence, by making false statements 'On Oath' before this Court, plaintiff has made himself liable to be proceeded under Section 340 of Cr.P.C. 2. Though the present application has been filed under Section 340 Cr.P.C., however, at the outset, at the commencement of the arguments, learned Senior Counsel for defendant No. 1 submitted that the submissions made qua this application would be made treating the present application as an application under Order 7 Rule 11 of Code of Civil Procedure, 1908 ('CPC'), for rejection of plaint. submissions have been advanced by all the parties on the issue of rejection of plaint. In view thereof, the present application is being decided treating the same as an application under Order 7 Rule 11 CPC, for rejection of plaint, on the basis of submissions made by the parties in this regard. 3. In the present case, plaintiff claims to be co-o....
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....is essentially based is wholly fraud and mis-conceived. This is evident from the stand taken and repeated by plaintiff on oath, which strikes at the very root of the plaint. 7. Learned senior counsel appearing for defendant no. 1 submits that a completely contrary position as compared to the stand taken in the present plaint, was taken by plaintiff herein in the affidavits/applications filed on behalf of plaintiff earlier. 8. It is submitted that the father was a guarantor for a loan in respect of which recovery proceedings were pending before the learned DRT, in RC No. 247/2002. In the said proceedings, Recovery Officer vide order dated 18.05.2005 had restrained the LRs. of Dr. R.N. Jain (the father) from selling the suit property and had directed to disclose factum of ownership and claim of title of suit property, and further to submit its title deed. In compliance thereof, and seeking to vacate restraint order, plaintiff and other LRs. filed an application dated 11.07.2005, supported by an affidavit, asserting in para 4 that the suit property was purchased by Mrs. Kailash Wati Jain (the mother), Mrs. Ramkali Jain, Mrs. Sushila Devi Jain and Mrs. Rattan Mala Jain in the year 19....
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....ntiff categorically stated that only two properties situated in Greater Kailash, New Delhi belonged to the father. Plaintiff also confirmed that he had not inherited any property from the father. The suit property was not mentioned in the affidavit by plaintiff, as property owned by the father. 10. Plaintiff filed additional affidavits dated 11.04.2005 and 02.07.2008 before the learned DRT, wherein plaintiff enumerated various properties as owned by his father, but there was no mention of the suit property. 11. Learned senior counsel for defendant no. 1 has also relied upon affidavit dated 04.12.2012 before DRT-I, Delhi in RC No. 116/2012; affidavit dated 04.12.2012 in RC No. 28/2012 before Recovery Officer, DRT-II; affidavit dated 02.09.2014 in RC No. 353/2012 before DRT-I, Delhi and affidavit dated 22.10.2016 in RC No. 353/2012 before DRT-II. By relying upon the aforesaid affidavits, it is contended that plaintiff has re-confirmed that he had not inherited any property from the father and that the suit property was conspicuously missing from the detailed list of father's properties, as furnished by the plaintiff. 12. Thus, it is contended by defendant no. 1 that the very b....
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....categorical stand taken before the learned DRT by urging that DRT is not a Civil Court and cannot decide the issue of title. 17. It is further the case of defendant no. 1 that the present suit is barred by limitation. Plaintiff has filed the present suit on 20.04.2017, whereas, the sale deed in favour of the mother is dated 07.01.1970. Further, the registered gift deed of which plaintiff is seeking cancellation is dated 07.06.2006. Thus, the suit having been filed more than 3 years after execution of the said registered documents, is beyond the prescribed period of limitation. The father during his lifetime never challenged the sale deed dated 07.01.1970, nor did plaintiff choose to do the same within three years from the demise of the father in the year 1997. 18. It is further contended on behalf of defendant no. 1 that mere payment does not make the person owner of a property. It is submitted that even though admittedly the sale consideration was paid by the partnership and not by the father, mere payment by a person of sale consideration will not make him the owner. 19. It is further submitted that the suit filed by plaintiff is hit by Benami Transaction (Prohibition) Act, 19....
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....e material facts from this Court of having filed applications and affidavits before DRT, which are contrary to the pleadings made in the present proceedings. 25. It is further contented on behalf of defendant No. 1 that plaintiff's attempt to explain the suppressions by taking recourse to replication, is misconceived. Replication is not a substitute to a fair and honest plaint. 26. It is further contended by ld. Sr. Counsel for defendant No. 1 that plaintiff's excuse that he took the stand before the DRT for saving the suit property from clutches of the bank, is completely vexatious and perverse. Permitting a person to alter his position in this manner in different proceedings, would lead to legal anarchy. It is further submitted that the plaint would be without any cause of action if the averments made in the earlier suit have not been explained in the present suit. 27. In support of his submissions, ld. Senior Counsel for defendant No. 1 has relied upon the following judgments: i. S.P. Chengalvaraya Naidu Vs. Jagannath, AIR 1994 SC 853 ii. H.S. Bedi Vs. National Highway Authority of India, MANU/DE/0154/2016 iii. Seemax Construction (P) Ltd. Vs. State Bank of Indi....
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....is submitted that the suit filed by plaintiff is maintainable in law and defendant No. 1 cannot be permitted to avoid trial on merits of the several issues that have been raised by plaintiff and supported by defendant Nos. 3 to 6. 29. Ld. Senior Counsel appearing for defendant No. 3 to 6 contends that defendant No. 1 has not filed any formal application under the provisions of Order VII Rule 11 CPC, and has yet proceeded to advance oral arguments relying on the said provisions. Without a formal application being filed by defendant No. 1 invoking the provisions of Order VII Rule 11 CPC, the objections of defendant No. 1 cannot be examined and adjudicated in law. 30. It is further contended that there is no material suppression by plaintiff in the suit which would warrant dismissal of the suit without trial. It is submitted that the so called assertions made by plaintiff before the ld. DRT are not 'relevant facts' for the purposes of establishing the cause of action in the present plaint. Therefore, these were not material facts which were required to be treated in the present plaint. 31. It is further submitted that at the stage of considering averments under Order VII Ru....
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....case cannot be considered while considering submissions under Order VII Rule 11 CPC. Contents of written statement are completely irrelevant and only the plaint has to be seen as to whether it discloses any cause of action or is not otherwise barred under any law. 38. It is further submitted that a plaint cannot be rejected in part. The plaintiff's averments not only disclose a cause of action, but are also not barred under any law. The plaintiff is entitled in law to take the pleas as taken in the plaint. 39. It is further submitted that while a person is not entitled to withdraw an admission, he can always explain an admission previously made. Admissions are not conclusive. 40. It is submitted that the argument of defendant no.1 that no disclosure was made in the plaint of the previous DRT proceedings, is not relevant for a decision under Order VII Rule 11 CPC and cannot lead to rejection of a plaint. It is submitted that even if DRT proceedings had been disclosed, that would not have rendered the plaint without cause of action, since plaintiff is entitled to explain the previous admission in DRT vis-a-vis the stand taken in the present suit. Since plaintiff is entitled to....
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....i Paul Vs. Pratima Ghosh, (2007) 6 SCC 100 xvi. Punjab Tractors Limited Vs. International Tractors Ltd., (2010) 167 DLT 490 xvii. Abdul Rehman Vs. K.M. Anees ul Haq. (2011) 10 SCC 696 xviii. Ambika Prasad Thakur Vs. Kamal Singh, AIR 1966 SC 605 xix. Jai Narayan Mathur Vs. Jai Prakash Mathur, (2016) 228 DLT 515 xx. Mani Vs. Madhavi, MANU/KE/0633/2017, Kerala High Court xxi. Sejal Glass Ltd. Vs. Navilan Merchants Pvt. Ltd., MANU/SC/1098/2017 xxii. Syed Asadullah Kazmi Vs. Additional Magistrate, D.D.C. and Ors., MANU/UP/0671/1987 xxiii. YU Televentures Private Limited Vs. Telefonaktiebolaget LM Ericsson (PUBL) And ORS. Rahul Sharma And Ors. Vs. Telefonaktiebolaget LM Ericsson (PUBL) And Ors., 2016 LAWPACK(Del) 59501 xxiv. Yashvir Singh Tyagi Vs. State And Rajeev Choudhary @Rajeev Kumar Vs. State, 2109 LAWPACK(Del) 69137 xxv. H.S. Deekshit & Anr. Vs. M/s. Metropoli Overseas Limited & Ors. 45. I have heard ld. Counsels for the parties and have perused the record. 46. As per the submissions made on behalf of ld. Sr. Counsel for defendant No. 1, the present application, though having been filed under Section 340 of the Cr.P.C., is being treated as an application unde....
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....of M/s Jain Brothers. The partnership firm was constituted in the year 1955. III All the four partners of M/s Jain Brothers decided to purchase the suit property in the name of their wives, who were all housewives. Thus, the suit property was purchased by partners of M/s Jain Brothers in the name of their wives vide Sale Deed dated 07.01.1970. The sale consideration of Rs. 3 Lakhs was paid by M/s Jain Brothers to the sellers vide Bank Draft No. DBU489701/1/70 dated 13.01.1970 from their bank account number-12269/4, Punjab National Bank, Chawari Bazar Branch, Delhi. The said amount of Rs. 3 Lakhs was debited equally to all the above mentioned partners in the books of account of M/s Jain Brothers towards their share in the firm. IV The suit property was purchased by Dr. R.N. Jain (the father) in the name of defendant No. 2 (the mother), i.e., his wife, out of his own funds, for his own use and for the use of his family and not for the sole benefit of defendant no.2 (the mother). Even the possession of the suit property is with all the parties and that the mother was having no independent right in the suit property. V The entire sale consideration for purchase of 1/4th undivided....
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....y. Therefore, upon the death of the father, in terms of his Will dated 05.09.1992, the mother acquired only a life interest of the property and the three sons of late Dr. R.N. Jain (the father) were to have ownership of the property in terms of his Will. Therefore, the property neither exclusively belonged to the mother, nor did she have any right, title or interest in the same to have been capable to gift the same to defendant no.1 by virtue of a gift deed or dispose of the same in any other way. 50. On the basis of the aforesaid submissions in the plaint, it has been averred on behalf of defendant no.1 that the suit is barred by the Benami Act. Per contra, it is the case on behalf of plaintiff that the fact of the mother being only the recorded owner, falls within the well recognized exceptions under the Benami Act, i.e., husband purchasing property in the name of the wife, to be held by the wife in name only, for the benefit of the husband and/or the entire family. 51. As regards law regarding the benami transactions, the same can be divided in the following three time zones: I Pre-Enactment of the Prohibition of Benami Property Transactions Act, 1988-In the pre-1988 period,....
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....UF; persons standing in 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, etc. 52. The above discussion would show that till 1988, benami transactions were legal and valid in India. Post 1988, a prohibition was introduced on benami transactions, with certain exceptions, inter-alia where purchase by a husband in the name of the wife was accepted as a recognized and legally permissible valid mode. Thus, as per Section 3(2) of the Benami Act prior to amendment in 2016 and as per exception to Section 2(9) of the Benami Act as amended by the 2016 Act, purchase of property by husband in the name of wife, the consideration for such property having been provided or paid out of the known sources of the husband, has been excluded from the definition of "benami transaction". It is to be noted that the present transaction is of the year 1970, i.e., before the enactment of the Benami Act in the year 1988. 53. While considering the issue regarding whether or not the present suit is barred by Benami Act, attention of this Court has been brought to the following facts: I The ledger of t....
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....of the other family members, nor has the same been pleaded. II Even today, plaintiff's family and the family of defendant Nos. 3 to 6 stay at the suit property, apart from defendant no.1's family. Thus, defendant no.1 is not the only person in possession of the suit property. III The original title deed of the suit property was not in possession of the mother, but in possession of plaintiff. The same has now been deposited by plaintiff in original before this Court. IV Plaintiff and defendant no.1 all along after the death of Dr. R.N. Jain (the father), used to share the house tax of portion of the property in the ratio of 50:50. The mother was not the person paying the house tax. Plaintiff and defendant no.1 were jointly paying house tax till 2015-16 55. In view of the aforesaid facts that have been canvassed before this Court, the plea raised on behalf of defendant No. 1 that the plaint is barred by the Benami Act, is a question which, in the facts and circumstances of the present case, cannot be decided at the time of considering the averments under Order VII Rule 11 CPC. As per the contention raised on behalf of the plaintiff, the suit property was purchased by l....
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.... see whether accepting the averments in the plaint the suit is barred by any law or not. We may quote the following observations of this Court in Popat and Kotecha Property v. SBI Staff Assn. [Popat and Kotecha Property v. SBI Staff Assn., (2005) 7 SCC 510] : (SCC p. 515, para 10) "10. Clause (d) of Order 7 Rule 7 speaks of suit, as appears from the statement in the plaint to be barred by any law. Disputed questions cannot be decided at the time of considering an application filed under Order 7 Rule 11 CPC. Clause (d) of Rule 11 of Order 7 applies in those cases only where the statement made by the plaintiff in the plaint, without any doubt or dispute shows that the suit is barred by any law in force." 57. Supreme Court in the case of Binapani Paul Vs. Pratima Ghosh and Others (2007) 6 SCC 100, has held that the burden of proving that a particular sale is benami lies on the person who alleges the transaction to be a benami. Supreme Court has laid down various tests in order to determine the question whether a particular sale is benami or not. Thus, it has been held as follows: "47. Burden of proof as regards the benami nature of transaction was also on the respondent. This asp....
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....t of another. We would examine the present transaction on the touchstone of the above two indicia. *** 18. It is well settled that intention of the parties is the essence of the benami transaction and the money must have been provided by the party invoking the doctrine of benami. The evidence shows clearly that the original plaintiff did not have any justification for purchasing the property in the name of Ramayee Ammal. The reason given by him is not at all acceptable. The source of money is not at all traceable to the plaintiff. No person named in the plaint or anyone else was examined as a witness. The failure of the plaintiff to examine the relevant witnesses completely demolishes his case."" 58. In view of the aforesaid, it is apparent that the question with respect to benami transaction would have to be determined by this Court on the basis of various tests/circumstances as laid down by Supreme Court in the aforesaid judgment. These facts and circumstances on the basis of which the question of benami transaction is to be determined, would be established only on the basis of evidence to be led by the parties. Therefore, it is clear that suit cannot be dismissed at this st....
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....ere is an accrual of the right asserted in the suit and its infringement or at least a clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted. In support of this contention the learned Senior Counsel strongly relied on a decision of the Privy Council in Bolo v. Koklan [(1929-30) 57 IA 325 : AIR 1930 PC 270] . In this decision Their Lordships of the Privy Council observed as follows: (IA p. 331) "... There can be no 'right to sue' until there is an accrual of the right asserted in the suit and its infringement, or at least a clear and unequivocal threat to infringe that right, by the defendant against whom the suit is instituted." 15. A similar view was reiterated in C. Mohammad Yunus v. Syed Unnissa [AIR 1961 SC 808] in which this Court observed: (AIR p. 810, para 7) "7. ... The period of six years prescribed by Article 120 has to be computed from the date when the right to sue accrues and there could be no right to sue until there is an accrual of the right asserted in the suit and its infringement or at least a clear and unequivocal threat to infringe that right." In C. Mohammad Yunus [AIR 1961 SC 808] , this Court....
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.... the decree passed in Suit No. 183 of 1974 came to the knowledge of the plaintiff in the year 1986, when Suit No. 424 of 1989 titled Assema Architect v. Ram Prakash was filed in which a copy of the earlier decree was placed on record and thereafter he took steps at the earliest and filed the suit for declaration and in the alternative for possession. It is not in dispute that as per Article 59 of the Limitation Act, 1963, a suit ought to have been filed within a period of three years from the date of the knowledge. The knowledge mentioned in the plaint cannot be termed as inadequate and incomplete as observed [Ram Prakash Gupta v. Rajiv Kumar Gupta, MANU/DE/8542/2006] by the High Court. While deciding the application under Order 7 Rule 11, few lines or passages should not be read in isolation and the pleadings have to be read as a whole to ascertain its true import. We are of the view that both the trial court as well as the High Court failed to advert to the relevant averments as stated in the plaint." 7.1. From the aforesaid decision and even otherwise as held by this Court in a catena of decisions, while considering an application under Order 7 Rule 11CPC, the Court has to go ....
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....dication under Order VII Rule 11 CPC. (See: Mayar (H.K.) Ltd. Vs. Vessel M.V. Fortune Express, (2006) 3 SCC 100) 66. In view of the aforesaid, averments as made on behalf of defendant No. 1 cannot as such be considered at the time of adjudication of the case under Order VII Rule 11 CPC. 67. Whether or not there was any 'admission' by plaintiff in the proceedings before the ld. DRT and what is the effect of such 'admission', if any, would have to be considered by this court at the time of final adjudication of the matter. Similarly, the effect of any suppression of material facts made by plaintiff at the time of filing of the plaint, shall be considered by this Court at the time of final adjudication of the matter. These questions, as raised on behalf of defendant No. 1 with respect to admission or estoppel, would be required to be proved by way of leading evidence and cannot be decided in such a summary manner, especially when as per the law of the land, only the statements as made in the plaint will have to be considered, and not the defence as projected in the written statement. 68. Moreover, it has been held in a catena of judgments that a party is entitled to....
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....ny right, title or interest in the property, does not make the mother owner of the suit property, if otherwise in law it can be determined that not the mother, but the father was the real owner of the property. Nor does such "admission" divest the plaintiff of ownership in property, if it can be proved that Dr. R.N. Jain (the father) was the real owner of suit property and therefore, plaintiff has ownership rights in the property through the father Dr. R.N. Jain's Will dated 05.09.1992. "Admissions" do not confer or take away title in immoveable property. (See Ambika Prasad Thakur and Others Vs. Kamal Singh and Others, AIR 1966 SC 605) 71. There is another aspect of the matter. Submission raised on behalf of defendant no.1 pertaining to suppression/contradictory pleas before the DRT relate to prayer (i) in the plaint with regard to seeking declaration that the suit property was owned by the father. Plaintiff has also sought further prayer for decree for cancellation of gift deed dated 07.06.2006 executed by the mother in favour of defendant no.1 on account of undue influence by defendant no.1 upon the mother and the said gift deed not being based on free and fair consent. Ther....