Delhi High Court
Raman Jain vs Magan Mala Jain & Ors. on 8 January, 2019
Author: Valmiki J. Mehta
Bench: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No. 12/2019
% 8th January, 2019
RAMAN JAIN ..... Appellant
Through: Mr. Sarvam Ritam Khare, Ms.
Meena Sehrawan and Ms.
Shweta Chaurasia, Advocates
(9716023080)
versus
MAGAN MALA JAIN & ORS. ..... Respondents
Through:
CORAM:
HON'BLE MR. JUSTICE VALMIKI J. MEHTA
To be referred to the Reporter or not? YES
VALMIKI J. MEHTA, J (ORAL)
CM No. 284/2019 (Exemption)
1. Exemption allowed subject to just exceptions.
CM stands disposed of.
CM No. 283/2019 (Delay in Filing) & CM No. 285/2019 (Delay in Re-filing)
2. For the reasons stated in the applications, delays in filing and re-filing are condoned, subject to just exceptions. RFA No. 12/2019 Page 1 of 15 CMs stand disposed of.
RFA No. 12/2019
3. This Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) is filed by the plaintiff in the suit impugning the Judgment of the trial court dated 02.08.2018 by which the trial court has decided the preliminary issue against the appellant/plaintiff, and as per this decision on the preliminary issue, the suit filed by the appellant/plaintiff for declaration, partition, injunction, recovery of mesne profits etc. has been held to not be maintainable.
4. In sum and substance, the suit plaint claims right in the suit property bearing H. No. MD-69, Vishakha Enclave, Pitampura, Delhi situated on a plot ad measuring 287.5 sq. meters. Parties to the suit/this appeal are the children and widow of late Sh. Daya Chand Jain. The appellant/plaintiff and the respondent nos. 2 and 3/defendant nos. 2 and 3 are the sons of late Sh. Daya Chand Jain. Respondent no.4/defendant no.4 is the daughter of Sh. Daya Chand Jain and RFA No. 12/2019 Page 2 of 15 respondent no.1/defendant no. 1 is the widow of Sh. Daya Chand Jain i.e. the mother of the other parties in the suit.
5. The preliminary issue which was framed in the present suit in terms of the order dated 31.05.2018, reads as under:-
"Whether the suit is maintainable in the present form? Onus on parties."
6. The trial court by the impugned judgment has held that the appellant/plaintiff by the suit has claimed a decree of declaration that the Sale Deed executed of the suit property on 12.04.2004 in favour of the respondent no.1/defendant no.1/mother was only in a fiduciary capacity and as a benami transaction, and this cause of action and relief is barred by limitation as per Article 58 of the Limitation Act, 1963. Article 58 of the Limitation Act provides that for the relief of declaration, the period of limitation is three years. The trial court for dismissing the suit as time barred for the relief of declaration has held that the cause of action accrued as regards the relief of declaration in the year 2011 when the respondent no. 1/defendant no.1/mother had file a Civil Suit No. 141/2011 for eviction of the appellant/plaintiff from the suit property by claiming herself to be the RFA No. 12/2019 Page 3 of 15 exclusive owner. Accordingly, the trial court held that once the relief of declaration cannot be granted as sought by the appellant/plaintiff, the other reliefs automatically would fail because they were dependent upon the grant of the main relief of declaration. It is noted that in the subject suit filed by the appellant/plaintiff, it was admitted by the appellant/plaintiff that the Sale Deed of the suit property was executed in the name of the respondent no.1/defendant no.1/mother vide Sale Deed dated 12.04.2004, but it was pleaded in the suit that the appellant/plaintiff had a 25% share in the suit property as the appellant/plaintiff had paid 25% of the price of the earlier property purchased being H. No. 54, FD Block, Pitampura, Delhi in the name of the respondent no.1/defendant no.1/mother, which was sold subsequently by the mother and the proceeds from the sale of H. No. 54 were utilized for purchase of the suit property bearing no. MD-69. The appellant/plaintiff also claimed that the 25% share of the respondent no.1/defendant no.1/mother was held by her on account of there existing a Hindu Undivided Family/Joint Hindu Family, and therefore, the appellant/plaintiff had an additional share of 6.25% in RFA No. 12/2019 Page 4 of 15 the suit property resulting in the share of the appellant/plaintiff becoming 31.25% each.
7. The trial court besides holding that the suit seeking the relief of declaration is time barred by applying Article 58 of the Limitation Act, has also held that the allegations with respect to existence of HUF are completely bald allegations and vague allegations, which cannot suffice to create a cause of action of existence of HUF.
8. In my opinion, no fault can be found in the judgment of the trial court dismissing the suit claiming the relief of declaration as time barred because admittedly in the year 2011, the mother had filed the suit claiming exclusive ownership of the suit property and for eviction of the appellant/plaintiff. Therefore, from the year 2011, the cause of action had accrued in favour of the appellant/plaintiff, and limitation also therefore commenced from the year 2011 that if the mother/defendant no.1 was not the owner of the suit property, and that the appellant/plaintiff was the owner of 31.25% share in the suit property as stated above, then such a right had to be asserted within three years of 2011 at best, and which was not done, and therefore, the RFA No. 12/2019 Page 5 of 15 subject suit filed much later on 20.02.2018 was clearly barred by limitation. Once the relief of declaration fails and it is to be held that the mother is the sole owner of the suit property, then obviously all other consequential reliefs claimed by the appellant/plaintiff, which were dependent on claiming the relief of declaration, would also be barred.
9. Even assuming that the suit was not time barred, the trial court has rightly held that the plaint was completely vague as regards the claim of existence of HUF. In law, the existence of HUF can only be if a person inherits a property from his paternal ancestors prior to 1956 when the Hindu Succession Act was passed or an HUF can exist if after 1956, a person throws his individual property into the common hotchpotch. There is no other way that an HUF can come into existence and these aspects have been dealt with in detail by this Court in the judgment in the case of Surinder Kumar v. Dhani Ram and Others, 227 (2016) DLT 217. The judgment in Surinder Kumar (supra) relies upon the ratios of the judgments of the Hon'ble Supreme Court in the cases of Commissioner of Wealth Tax, Kanpur and Others v. Chander Sen and Others, (1986) 3 SCC 567 and RFA No. 12/2019 Page 6 of 15 Yudhishter v. Ashok Kumar, (1987) 1 SCC 204, and which state that inheritance by a person of a property from his paternal ancestors after 1956 results in the property being taken by the successor as a self- acquired property and not as an HUF property. Only if a property is inherited by a person from his paternal ancestors prior to 1956, would the property be an HUF in the hands of the person who succeeds to the same. The principles laid down by this Court in the case of Surinder Kumar (supra) have been affirmed by the Division Bench of this Court in the case of Sagar Gambhir v. Sukhdev Singh Gambhir and Ors 241 (2017) DLT 98, and the relevant para of that judgment is para 10 and this para 10 which crystallizes the legal position of when an HUF comes into existence, and this para 10 reads as under:-
"10. In Chander Sen's case (supra), the Supreme Court held that after the promulgation of the Hindu Succession Act, 1956, the traditional view under the Hindu Law no longer remained the legal position. This decision was followed incase (supra) the Supreme Court held that after the promulgation of the Hindu Succession Act, 1956, the traditional view under the Hindu Law no longer remained the legal position. This decision was followed in Yudhishter's case (supra). We agree with the legal position noted by the learned Single Judge which flows out of the two decisions of the Supreme Court, which would be as under:-
"(i) If a person dies after passing of the Hindu Succession Act, 1956 and there is no HUF existing at the time of the death of such a person, inheritance of an immovable property of such a RFA No. 12/2019 Page 7 of 15 person by his successors-in-interest is no doubt inheritance of an 'ancestral' property but the inheritance is as a self-acquired property in the hands of the successor and not as an HUF property although the successor(s) indeed inherits 'ancestral' property i.e. a property belonging to his paternal ancestor.
(ii) The only way in which a Hindu Undivided Family/joint Hindu family can come into existence after 1956 (and when a joint Hindu family did not exist prior to 1956) is if an individual's property is thrown into a common hotchpotch. Also, once a property is thrown into a common hotchpotch, it is necessary that the exact details of the specific date/month/year etc. of creation of an HUF for the first time by throwing a property into a common hotchpotch have to be clearly pleaded and mentioned and which requirement is a legal requirement because of Order VI Rule 4 CPC which provides that all necessary factual details of the cause of action must be clearly stated. Thus, if an HUF property exists because of its such creation by throwing of self-acquired property by a person in the common hotchpotch, consequently there is entitlement in coparceners etc. to a share in such HUF property.
(iii) An HUF can also exist if paternal ancestral properties are inherited prior to 1956, and such status of parties qua the properties has continued after 1956 with respect to properties inherited prior to 1956 from paternal ancestors. Once that status and position continues even after 1956; of the HUF and of its properties existing; a coparcener etc. will have a right to seek partition of the properties.
(iv) Even before 1956, an HUF can come into existence even without inheritance of ancestral property from paternal ancestors, as HUF could have been created prior to 1956 by throwing of individual property into a common hotchpotch. If such an HUF continues even after 1956, then in such a case a coparcener etc of an HUF was entitled to partition of the HUF property."RFA No. 12/2019 Page 8 of 15
(Underlining Added)
10. In the present plaint, it is seen that the appellant/plaintiff has not made any averment whatsoever as to how the HUF came into existence i.e. whether the HUF came into existence because of inheritance by a person of the property from his paternal ancestors prior to 1956 or if the HUF was created after 1956 by throwing self- owned property into common hotchpotch. Therefore, on vague averments, and by applying the ratio of the Division Bench of this Court in the case of Sagar Gambhir (supra) {para 10 (ii)} it is held that the suit plaint completely lacks the requisite averments as to how an HUF would come into existence. It has been consistently held that mere uttering a mantra of existence of an HUF is not enough as it has to be stated as to how the HUF came into existence and whether the same was prior to 1956 or post 1956. Accordingly, it is held that the trial court rightly rejected the suit on account of there not existing the requisite averments of a cause of action of the existence of an HUF.
11. I may note that The Benami Transactions Prohibition Act, 1988 was amended and a new Act was brought into force namely, The Prohibition of Benami Property Transactions Act, 1988. The amended RFA No. 12/2019 Page 9 of 15 Benami Act came into force w.e.f 01.11.2016. In the new Benami Act, there is an exhaustive definition of what is a 'benami transaction', and the same is the provision of Section 2(9) of the amended Act. In the present case, the relevant definition of 'Benami Transaction' would be as contained in Section 2(9)(A) Exception (i), and this provision reads as under:-
„2. (9) "benami transaction" means,-- (A) a transaction 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;
12. It is therefore seen that in view of the provision of Section 2(9)(A) Exception (i), whenever a person alleges the existence of an HUF, besides stating as to how the HUF came into existence, as per the ratio of the Division Bench of this Court in the case of Sagar RFA No. 12/2019 Page 10 of 15 Gambhir (supra), it must also be stated in the plaint that property which is stated to be an HUF property is held for the benefit of the other members of the family and consideration of such property has been provided or paid out of the known sources of the HUF property. The suit plaint, therefore, when read with the provision of Section 2(9)(A) Exception (i) and the ratio in the case of Sagar Gambhir (supra) shows that sufficient averments do not exist in the plaint to show as to how an HUF has been created and accordingly, the suit plaint was not maintainable in the absence of a valid cause of action of the existence of an HUF.
13(i). It is also noted that a part of cause of action in the suit plaint with respect to the claim of the appellant/plaintiff that the suit property is on account of appellant/plaintiff having paid 25% of the sale consideration out of its own funds i.e. the funds which were owned by the appellant/plaintiff. As per para 5 of the plaint, the plea is that the appellant/plaintiff will have 25% right in the property on account of 25% funds financed by him for purchase of the original property at H. No. 54, and the same was sold thereafter resulting in the purchase of the suit property being H. No. MD-69. As per the RFA No. 12/2019 Page 11 of 15 definition of Benami Transaction contained in Section 2(9) of the new Benami Act, there is no exception provided as to a property being exempted from a benami transaction where a mother is an owner and the son claims ownership right on account of making 25% payment for the purchase of the property. The definition of 'Benami Transaction' in the new Act is exhaustive as regards the Exceptions to the 'Benami Transaction' and there are only four Exceptions which are provided. The first Exception is with regard to the existence of an HUF, the second Exception is with regard to the existence of a particular type of fiduciary capacity only, the third exception is of a property being purchased by a person in the name of his spouse or child or finally a property being in the name of brother or sister or lineal ascendant or descendent whether the name of the individual only appears as a joint owner in any document.
13(ii). We would be concerned in the present case with Exception (iv) because the respondent no. 1/defendant no. 1/mother will be a lineal ascendant of the appellant/plaintiff and Exception (iv) can only come into play in case the name of the appellant/plaintiff is shown in a document as a joint owner, and the same is not the case of RFA No. 12/2019 Page 12 of 15 the appellant/plaintiff. In order to understand the aforesaid position of law, the entire definition of 'Benami Transaction' as contained in Section 2(9) of the new Benami Act is reproduced as under:-
„2. (9) "benami transaction" means,--
(A) a transaction 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 out of the known sources of the individual;
(iv) any person in the name of his brother or sister or lineal ascendant or descendant, where the names of brother or sister or lineal ascendant or descendant and the individual appear as joint-owners in any document, and the consideration for such property has been provided or paid out of the known sources of the individual; or RFA No. 12/2019 Page 13 of 15 (B) a transaction or an arrangement in respect of a property carried out or made in a fictitious name; or (C) a transaction or an arrangement in respect of a property where the owner of the property is not aware of, or, denies knowledge of, such ownership;
(D) a transaction or an arrangement in respect of a property where the person providing the consideration is not traceable or is fictitious;
Explanation.--For the removal of doubts, it is hereby declared that benami transaction shall not include any transaction involving the allowing of possession of any property to be taken or retained in part performance of a contract referred to in section 53A of the Transfer of Property Act, 1882, if, under any law for the time being in force,--
(i) consideration for such property has been provided by the person to whom possession of property has been allowed but the person who has granted possession thereof continues to hold ownership of such property;
(ii) stamp duty on such transaction or arrangement has been paid; and
(iii) the contract has been registered."
14. Therefore, it is seen that the appellant/plaintiff could have succeeded in creating an exception of the suit property not being a benami property only if there was an existence of an HUF as provided in either Section 2(9)(A) Exception (i) or 2(9)(A) Exception (iv) i.e. the existence of an HUF or the property exists in the name of a lineal ascendant with the name of the appellant/plaintiff shown as an owner in a document, but on both these aspects, the appellant/plaintiff has RFA No. 12/2019 Page 14 of 15 miserably failed to make necessary averments in the suit plaint. The suit plaint, therefore, completely lacks cause of action.
15. I may note that I have given additional reasoning in this judgment to sustain the impugned judgment of the trial court by exercising powers under Order XLI Rule 24 CPC.
16. In view of the aforesaid discussion, I do not find any merit in the appeal. The appeal is dismissed with costs of Rs. 25,000/- ,and these costs shall be deposited by the appellant/plaintiff with the website www.bharatkeveer.gov.in within a period of six weeks from today.
17. The appeal is accordingly dismissed and disposed of JANUARY 08, 2018/ib VALMIKI J. MEHTA, J RFA No. 12/2019 Page 15 of 15