Delhi District Court
Dr. Hari Om Gupta vs Krishan Garg on 17 August, 2022
IN THE COURT OF SH MANISH SHARMA, ADJ-01 (WEST)
TIS HAZARI COURTS, DELHI
RCA DJ No. 167/19
In CS No. 1548/2018
Dr. Hari Om Gupta,
S/o Late Sh. Gopi Chand,
Permanent Resident of :
C-16, 1st Floor, Bhagwan Dass Nagar,
Rohtak Road, New Delhi-110026.
Currently Staying at :
B-509, Mahalaxmi Apartment,
Sector-2, Plot No.4,
Dwarka-110075. ... Appellant
versus
Krishan Garg,
S/o Late Sh. Gopi Chand,
R/o C-16, Ground Floor,
Bhagwan Dass Nagar,
Rohtak Road, New Delhi. ... Respondent
Appeal filed on : 23.12.2019
Judgment reserved on : 01.08.2022
Date of Judgment : 17.08.2022
JUDGMENT
1. This is plaintiff's appeal under section 96, CPC impugning order dt. 14.11.2019 of Ld. Civil Judge-05 (West), Tis Hazari Courts, Delhi, whereby and whereunder his plaint was rejected. For the sake of convenience, parties shall be referred to in this judgment as per their respective ranks in the suit.
RCA DJ No. 167/19 Dr. Hari Om Gupta v. Krishan Garg Page 1 of 152. Facts as set out in the plaint are as follows:
i. Plaintiff and defendant are real brothers. Together with their paternal uncle, namely Sh. Kale Chand, they jointly purchased a plot bearing no. 16 measuring 240 sq. yds in Block-G, situated at Bhagwan Dass Nagar, Rohtak Road, Delhi. Subsequently, the said plot was mutually divided equally between Kale Chand on the one hand and defendant and plaintiff on the other hand. Plaintiff and defendant thus became joint owners of half portion of the aforesaid property (towards plot no.15), that is, 120 sq. yds. (in short the 'Suit Property') ii. Plaintiff avers the suit property was jointly purchased by plaintiff and defendant in his elder brother's name (defendant); that they together shared cost of the land and registration charges; that they jointly raised construction of ground and first floors with their respective funds; that he (plaintiff) paid for construction of first floor, whereas defendant paid for ground floor construction.
iii. Thereafter, they entered into an agreement dt. 17.10.1979 in the presence of witnesses whereby defendant acknowledged to have received from the plaintiff half the price of the purchase amount of the plot, registration charges and funds for construction of first floor. In this agreement, they further agreed to raise construction of 2nd floor and 3rd floor.
iv. Prior to agreement dt. 17.10.1979, parties had mutually agreed to equally share the said property. They had also agreed to construct staircase and other structures in the property for their common use.RCA DJ No. 167/19 Dr. Hari Om Gupta v. Krishan Garg Page 2 of 15
v. It is claimed that they (plaintiff and defendant) are in occupation and possession of their respective shares till date.
vi. Defendant is now alleged to be illegally trying to cover back portion of property in question by constructing rooms for his personal use to plaintiff's prejudice and in violation of building byelaws and other rules and regulations. He has been building staircase and covering up front and back portions of the suit property. Consequently, relations between the plaintiff and defendant turned sour.
vii. On these averments, plaintiff seeks following reliefs in his plaint:
(a) declaration of ownership of his half share in the property in question as per agreement dt. 17.10.1979, (b) injunction to restrain the defendant from interfering with the use and enjoyment of the common portions of the property.
3. Facts stated in the amended written statement may be taken note of:
The defendant filed his amended written statement where, he averred that suit is barred by Section 17 read with Section 49 of Indian Registration Act and also under Section 35 of Stamp Act; that the plaintiff's suit is barred by Prohibition of Benami Transaction Act,1988 and its amendment under Amendment Act, 2016; that plaintiff has no cause of action to file the suit and to claim relief of injunction; that the defendant is the absolute owner of the suit property measuring about 18X60 ft., which he purchased vide registered sale deed dt. 03.04.1967; that Plaintiff, being younger brother, was permitted to occupy built-up first floor of the suit property. However, he has not been residing for last more RCA DJ No. 167/19 Dr. Hari Om Gupta v. Krishan Garg Page 3 of 15 than 16 years; that the defendant is exclusive owner of the suit property which he built by his own funds; that the registered sale deed records payment details of sale consideration, and the plaintiff was minor on the dates of such payments; that the Plaintiff was a student at the time of construction of ground and first floor of the suit property having no source of income; that he is also not a party in the partition deed pertaining to the property; that plaintiff was barely 12 years of age when the defendant made payment for purchasing the suit property.
In a nutshell, defendant paid price of the plot, registration charges and construction cost. The defendant is obeying building byelaws. Thus, there is no requirement of open space in front or in back portion of the suit property. He is raising construction as per building byelaws and other rules and regulations. Further, the design of staircase is permitted by the MCD and there is no impediment in the construction carried out by the defendant. Defendant remained class-I Gazetted Officer throughout in the Government of India and is well aware of the responsibility and rules and regulations of building bye-laws.
4. Replication filed on 14.01.1997 wherein following facts were stated:
Plaintiff filed replication wherein he has stated that at the time of purchase of the plot, he was a minor. Plaintiff, though a student, was getting scholarship of about Rs. 75 per month when the plot was purchased, as he was meritorious in class 10th at Punjab University. He further stated that parties were having ancestral property (agricultural) at Village Jesaur Kheri, District Rohtak Haryana. The parties sold some of their land to purchase and construct the Suit Property. Plaintiff sold 3 Kanals and 4 RCA DJ No. 167/19 Dr. Hari Om Gupta v. Krishan Garg Page 4 of 15 Marla of the agricultural land and some shops to purchase the property. There was a clear understanding between them that once the plaintiff would attain majority the defendant would execute necessary documents to transfer half share in plaintiff's favour. Defendant's salary was almost equal to the plaintiff's scholarship at the time when they jointly purchased the suit property. Plaintiff also used to take tuition classes for his earning. He was a self-supporting person throughout and was never dependent on his elder brother. The defendant was also given an option to purchase plaintiff's share for Rs. 30,000/- to which he disagreed.
5. Learned Trial Court in the impugned order held that plaint was hit by Benami Transaction Act 1988 (in short the "Benami Act"). It was observed that section 4 (1) of the Benami Act prohibits institution of a suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person by or on behalf of a person claiming to be real owner of such property. However, this rule recognises two exceptions: (a) where the person in whose name the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of the coparceners in the family, and (b) where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity and the property is held for the benefit of another person for whom he is a trustee or towards whom he stands in such capacity.
6. Learned Trial Court opined that perusal of section 4 of Benami Transaction Act, 1988 shows that plaintiff's case did not fall in any of the aforesaid exceptions; that plaintiff merely stated in the plaint that property was registered in his elder brother's (defendant) name; that it is not RCA DJ No. 167/19 Dr. Hari Om Gupta v. Krishan Garg Page 5 of 15 pleaded in the plaint that defendant was in a fiduciary relationship with him or that the defendant held the property for his (plaintiff's) benefit.
7. Learned Trial Court discussed Satish Kumar v. Shanti Swaroop Gupta, 2018 SCC OnLine Del 9651 wherein a son had sued his father and his brother claiming that he was co-owner of a property which stood in his father's name, as he had financially contributed in its purchase and construction. Son's claim was held to be barred by Benami Transaction Act.
Learned Trial Court further held that the family settlement dt. 17.10.1979 was of no consequence as the property had been purchased in defendant's name. It was held that if one party had absolute title in his favour and the other party had no interest therein, then any title or interest in the said property could only be transferred by execution of a sale deed as per the provisions of Transfer of Property Act and Registration Act. Thus, the said family agreement dt. 17.10.1979 could not create any right in plaintiff's favour. It was reasoned that the said family agreement only provided that the defendant would transfer first floor of the property to the plaintiff. Thus, learned Trial Court was of the view that plaintiff could not claim any right, title or interest in the property on the basis of the said agreement without suing for specific performance of the agreement. It was also observed that the mere fact that defendant had executed GPA in plaintiff's favour and that plaintiff had been occupying the property since inception conferred no title in him in the property in question. Furthermore, learned Trial Court noted that plaintiff did not plead the source of purchase money; that it is only pleaded that plaintiff contributed to the purchase of land, without specifying as to how it was done, RCA DJ No. 167/19 Dr. Hari Om Gupta v. Krishan Garg Page 6 of 15 especially when he was a minor at the relevant time.
8. Sh. Rahul Shukla, learned counsel for the defendant argued that plaintiff's suit is barred under Benami Transaction Act, 1988; that proper remedy for the plaintiff was to sue for specific performance of agreement dt. 17.10.1979 and the suit is liable to be dismissed as the plaintiff is seeking declaration of the agreement dt. 17.10.1979; that the plaintiff was a minor having no source of income and he has not pleaded the source of funds from which the suit property was purchased; that he has given no description of the ancestral properties that were sold to purchase the property in question; that Plaintiff was a student and, as such, he could have had no source of income to purchase the property. It is in fact the defendant who had purchased the property from his own funds and plaintiff has no right in the Suit Property. He relied on following case laws:
1. Siddik Mahomed Shah vs. Mt. Saran & Ors, AIR 1930 PC 57(1).
2. Bachan Nahar Vs Nilima Mandal, (2008) 17 SCC 491.
3. N D Khanna Vs Hindustan Industrial Corporation, 20 (1981) DLT 236.
4. Anant Constructions Pvt. Ltd. Vs. Ram Nivas, 1994 (31) DRJ 205.
5. India Yamaha Motor Pvt Ltd. Vs Seema Bhatia, 2019 SCC ONLINE DEL 9554.
6. Jayadayal Poddar Vs Mst. Bibi Hazara & Ors, (1974) 1 SCC 3.
7. Thakur Bhim Singh Vs Thakur Kan, (1980) 3 SCC 72.
8. J M Kohli Vs Madan Mohan Sahni, 2012 SCC ONLINE DEL 2620.
9. Amar N. Gugnani Vs Naresh Kumar Gugnani, 2015 SCC ONLINE DEL 11248.
10. K.L. Garg Vs. Rajesh Garg, 2013 SCC ONLINE DEL 323.RCA DJ No. 167/19 Dr. Hari Om Gupta v. Krishan Garg Page 7 of 15
11. Satish Kumar Gupta Vs. Shanti Swaroop Gupta & Ors, 2018 SCC ONLINE DEL 9651.
12. Sahu Madho Das & Ors. Vs Pandit Mukand Ram & Anr, (1955) 2 SCR 22.
9. Sh. Apoorv Tripathi, learned counsel for the plaintiff, on the other hand, argued that Trial Court erred in rejecting the plaint under Order VII Rule 11 of CPC. Plaintiff, in his replication, very much pleaded that property in question had been purchased from the funds obtained by selling ancestral property. He submitted that the plaintiff had mentioned in the plaint that he contributed in purchasing he Suit Property, which was further elaborated in the replication. As the plaintiff was minor, he opted to purchase the property in defendant's name with an understanding that on attaining majority the defendant would give back/ transfer plaintiff's half share. The agreement dt. 17.10.1979 is a family settlement whereby defendant had acknowledged plaintiff's right in the suit property. Plaintiff is in occupation and possession of half portion of the property in question. The dispute arose in 1995-96 when defendant started raising constructing in the back portion of property. In 1996, defendant had filed a suit against the plaintiff and which he withdrew unconditionally and this amounts to abandoning the claim against the plaintiff. Ld. Counsel for the plaintiff relied upon the following judgments:
1. M. Printer Vs. Marcel Martins, ILR 2002 Kar 3757/(2001) SCC Online 224.
2. Marcel Martins Vs. M Printer, (2012) 5 SCC 342.
3. Pawan Kumar Vs. Babulal, (2019) 4 SCC 367.
4. Ramakrishnan and Ors Vs. Guruswamy, MANU/TN/3238/2017.RCA DJ No. 167/19 Dr. Hari Om Gupta v. Krishan Garg Page 8 of 15
5. Valliammal Vs. Subrmaniam, (2004) 7 SCC 233.
6. New Holland Tractors India Pvt. Ltd Vs. Raja Industrial Works and Ors, MANU/DE/2977/2005.
7. Popat and Kotecha Property Vs. State Bank of India Staff Association, (2005) 7 SCC 510.
8. Kale and Ors. Vs. Deputy Director of Consolidation, AIR 1976 SC
807.
9. Vimla Moonga Vs. Ramlubhai and Ors, MANU/DE/0933/2014.
10. Subraya MN Vs. Vittala MN, (2016) 8 SCC 705.
DISCUSSION:
Before reaching to conclusion, it is necessary to discuss the relevant sections the Benami Transaction Act 1988 and Indian Trust Act 1882.
Section 4 of the Benami Act reads as under:
"4. Prohibition of the right to recover property held benami (1) No suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property.
(2) No defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property. (3) Nothing in this section shall apply:
(a) where the person in whose name the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of the coparceners in the family; or
(b) where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity, and the property is held for RCA DJ No. 167/19 Dr. Hari Om Gupta v. Krishan Garg Page 9 of 15 the benefit of another person for whom he is a trustee or towards whom he stands in such capacity."
Repealed Sections 81, 82 and 94 of the Indian Trusts Act, 1882 (repealed by section 7 of Benami Act)read as under:
"81. Where the owner of property transfers or bequeaths it and it cannot be inferred consistently with the attendant circumstances that the intend to dispose of the beneficial interest therein, the transferee or legatee must hold such property for the benefit of the owner or his legal representative.
82. Where property is transferred to one person for a consideration paid or provided by another person, and it appears that such other person did not intend to pay or provide such consideration for the benefit of the transferee, the transferee must hold the property for the benefit of the person paying or providing the consideration.
Nothing in this session shall be deemed to affect the Code of Civil Procedure, section 317, or Act No. XI of 1859 (to improve the law relating to sales of land for arrears of revenue in the Lower Provinces under the Bengal Presidency), section 36.
94. In any case not coming within the scope of any of the proceeding sections, where there is no trust, but the person having possession of property has not the whole beneficial interest therein, he must hold the property for the benefit of the persons having such interest, or the residue thereof (as the case may be), to the extent necessary to satisfy their just demands."
It will be fruitful to refer the judgment of Hon'ble Supreme Court in Marcel Martins Vs. M printer And Ors (2012)5 SCC 342. In this case the Hon'ble Supreme Court recognised section 4(3)(b) as an exception to prohibition of right to recover Benami Property. It was held "44. The cumulative effect of the above circumstances when seen in the light of the substantial amount paid by late Shri C.F. Martins, the father of the RCA DJ No. 167/19 Dr. Hari Om Gupta v. Krishan Garg Page 10 of 15 parties, thus puts the appellant in a fiduciary capacity visàvis the said four persons. Such being the case the transaction is completely saved from the mischief of Section 4 of the Act by reason of the same falling under Subsection 3(b) of Section 4. The suit filed by the respondents was not, therefore, barred by the Act as contended by the learned counsel for the appellant. The view taken by the High Court to that effect is affirmed though for slightly different reasons".
However, Hon'ble Delhi High Court distinguished this judgment in Amar N. Gugnani Vs. Naresh K. Gugnani, 2015 SCC OnLine Del 11248:
"11. Before I turn to the arguments urged on behalf of the plaintiff and the judgment of the Supreme Court in the case of Marcel Martins (supra), I would at this stage refer to a judgment delivered by this Court in the case of J M Kohli Vs. Madan Mohan Sahni & Anr in RFA No.207/2012 decided on 07.05.2012. In this judgment this Court has had an occasion to consider the intendment of the passing of the Benami Act as reflected from Section 7 of the Benami Act. Section 7 of the Benami Act repealed the provisions of Sections 81, 82 and 94 of the Indian Trusts Act, 1882 (in short 'the Trusts Act') and which provisions of the Trusts Act gave statutory recognition and protection to the benami transactions by calling such transactions protected by a relationship of a trust. It bears note that benami transactions were very much legal within this country before the passing of the Benami Act and the relationship of a benamidar to the owner was in the nature of a trust/fiduciary relationship because it was the Trust Act which contained the provisions of Sections 81, 82 and 94 giving statutory recognition to the benami ownership of the properties being in the nature of trust. In J M Kohli's case (supra), this Court has held that the expression "fiduciary relationship" and a relationship of a trustee cannot be so interpreted so as to in fact negate the Benami Act itself because all benami transactions actually are in the nature of trust and create a fiduciary relationship and if the expression "trustee" or "fiduciary relationship" is interpreted liberally to even include within its RCA DJ No. 167/19 Dr. Hari Om Gupta v. Krishan Garg Page 11 of 15 fold a typical benami transaction, then it would amount to holding that there is no Benami Act at all. Putting in other words, since Section 7 of the Benami Act repealed certain provisions, hence, the relationship of trust comprised in such provisions necessarily would be excluded from the sweep of the expression trust/fiduciary relationship found in Section 4(3)
(b) of the Benami Act because what is excluded by Section 7 of the Benami Act cannot be got included in Section 4(3)(b) of the Benami Act...."
"14. Let me at this stage refer to the judgment of the Supreme Court in the case of Marcel Martins (supra) and which judgment has been very strenuously relied upon by the learned senior counsel for the plaintiff to argue that the judgment passed by this Court in J M Kohli's case (supra) will not hold the field but it is the ratio in the case of Marcel Martins (supra) which will hold the field. Let us therefore examine the facts in the case of Marcel Martins (supra), again keeping in mind, that it depends upon the facts of each case as to whether the relationship is in the nature of a fiduciary relationship which is exempted by Section 4(3)(b) of the Benami Act and only which is in the nature of exception to the Benami Act. Surely Section 4(3)(b) of the Benami Act, and which is an exception, cannot have an effect of in fact repealing the entire Benami Act......."
"16. ...A reading of the judgment in the case of Marcel Martins (supra) shows that on the facts of the said case it was held that there was a fiduciary relationship and a relationship in the nature of trust, inasmuch as, actually all the parties were to be the owners but for the fact that the Corporation had desired, and which is in fact in the nature of compulsion by the Corporation and as per its policy, the property by the Corporation was not transferred in the name of all the legal heirs of Smt. Stella Martins but only in the name of one legal heir. Such transactions compassed in the case of Marcel Martins (supra), and which were brought about on the direction of a third party, is different from a voluntary transaction where a person voluntarily gives money for property to be purchased in the name of another person and in which case such a transaction where A pays money for the property to be purchased in the name of B, this by itself will necessarily be a benami transaction under Section 2(a) of the Benami Act which states that any transaction in RCA DJ No. 167/19 Dr. Hari Om Gupta v. Krishan Garg Page 12 of 15 which property is transferred to one person for a consideration paid or provided by another person, such a transaction is a benami transaction, and such benami transactions are subject matter of prohibition of Sections 4(1) and 4(2) of the Benami Act..."
Thus, Hon'ble Delhi High Court held that it depends on facts of each case to ascertain whether there is fiduciary relation, which is exempted by Section 4 (3) (b) of the Benami Act. It further distinguished the facts of Marcel Martin and opined that for creating bar of Benami Act, it is necessary that the payment shall be voluntarily given.
In the instant case it is an admitted position that plaintiff was a minor at the time the property in question was purchased. It is plaintiff's case that the property had been purchased in the name of his elder brother (defendant) since he was not competent to contract. In my opinion, in such a circumstance where the relation is a fiduciary one, it may not defeat the scheme of the Benami Act. Section 7 of Benami Act has repealed the provision of section 81, 82 and 94 of the Indian trust Act 1882. The provisions of sections 7 and 4 (3) (b) of Benami Act shall have to be read in consonance with each other. It is correct that expressions 'trustee' or 'fiduciary relationship', if interpreted liberally, would defeat the purpose of Benami Act. But in the present case plaintiff was a minor and, in the absence of his parents, he would naturally have had utmost faith in his elder brother and resultantly the property, as a whole, was purchased his elder brother's name. The defendant too acknowledged this fact in the agreement dt. 17.10.1979.
In the case at hand from a bare reading of the plaint, I am unable to make out voluntary nature of the transaction on the part of the plaintiff.
RCA DJ No. 167/19 Dr. Hari Om Gupta v. Krishan Garg Page 13 of 15This is for the very simple reason that at the relevant time plaintiff was a minor, and which is an admitted fact. Thus, for the transaction in question, whether the plaintiff had consented or not is/ was hardly of any consequence. Moreover, the Ld. Trial Court erred in ascertaining that the Suit is barred under section 4 Benami Act at the stage of Order VII Rule 11 CPC.
In my opinion to ascertain fiduciary relation between the parties, it is essential to appreciate evidence and the plaint cannot be rejected under Order VII Rule 11 CPC. In Hon'ble Supreme Court held in Pawan Kumar Vs Babulal (2019) 4 SCC 367 the question the plea whether the Suit is barred under section 4 of the Act or not is not the subject matter of assessment at the stage when application under order 7 Rule 11 CPC was taken up for consideration. Thus, it is required to be ascertained whether there exists fiduciary relation between the parties, which can only be done after appreciation of facts and evidence.
Next, I do not think that there was any requirement of plaintiff specifically pleading in his plaint that his elder brother acted in 'fiduciary capacity'. Order VI Rule 2 of CPC requires that pleading shall contain statement in a concise form of material facts. In the present lis, plaintiff has very much pleaded that he had got purchased the property in defendant's name as he was a minor. It will be insignificant if it was not pleaded in the plaint that the defendant stood in a 'fiduciary relationship' towards the plaintiff or he held the property for plaintiff's benefit. The defendant also acknowledged this fact in the agreement dt. 17.10.1979.
RCA DJ No. 167/19 Dr. Hari Om Gupta v. Krishan Garg Page 14 of 15Further, the judgments Satish Kumar v. Shanti Swaroop Gupta, 2018 SCC OnLine Del 9651 an K.L. Garg Vs. Rajesh Garg & Ors relied upon the Ld. Trial Court are not applicable on the set of facts of the instant lis and are not therefore applicable. In these judgments the plaintiff (s) had contributed in the purchase of the property whereas in the given situation the plaintiff has stated to have jointly purchased the suit property with his elder brother. Plaintiff is claiming to have equal share in the property which he jointly purchased with his elder brother and this fact is duly acknowledged by the defendant in agreement dt. 17.10.1979. In the given situation the plaintiff is also claiming to be a minor which is not the situation in the aforesaid judgments.
Thus, it can be concluded that the Suit cannot be rejected at the stage of deciding the defendant's application under order VII rule 11 CPC. Whether the plaintiff's claim is barred under Benami Act and he had fiduciary relation with the defendant requires trial which could be decided only after appreciation of facts and evidence.
This appeal stands allowed. Impugned order dt. 14.11.2019 of learned Trial Court rejecting the plaint is reversed. There shall be no order as to costs. Trial Court shall now proceed in the suit as per law. Appeal file be consigned to record room. Trial court record be sent back along with a copy of this judgment.
Announced in the open court on (Manish Sharma) this 17th day of August, 2022. Additional District Judge-01 (West) Tis Hazari Courts, Delhi RCA DJ No. 167/19 Dr. Hari Om Gupta v. Krishan Garg Page 15 of 15