Supreme Court - Daily Orders
Sri Nimbanna vs Shivananda Kinnal on 1 February, 2021
Bench: Indira Banerjee, Hemant Gupta
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Special Leave Petition (C) No.27426 of 2018
Sri Nimbanna ...Petitioner (s)
Versus
Shivananda Kinnal & Anr. ...Respondent (s)
ORDER
This petition for Special Leave to Appeal is against a final judgment and order dated 7th February 2017, passed by the Dharwad Bench of the High Court of Karnataka, dismissing the appeal filed by the Petitioner being R.F.A. No.100023/2016, and confirming an order dated 16 th November 2015, passed by the Principal Senior Civil Judge & JMFC, Hosapete, allowing the application being I.A. No.5/2015 filed by the Respondent and rejecting the plaint in the suit being O.S. No.556 of 2014, filed by the Petitioner.
2. The Petitioner filed the said suit being O.S. No.556 of 2014 in the court of the Principal Senior Civil Judge & JMFC at Hosapete, against the Respondent Nos. 1 and 2 [hereinafter referred to as the Defendant Nos. 1 and 2] praying, inter alia, for a declaration that the apparent joint right and possession of the Defendant No.1, of the suit premises, is null and void and also an injunction restraining the Defendants, their men, agents, servants Signature Not Verifiedassignees and all such other persons claiming under or though them, from Digitally signed by JAGDISH KUMAR in any manner interfering with the exclusive sole ownership of the Date: 2021.02.26 10:48:28 IST Reason: Petitioner and his joint family, over the suit premises.
3. On the face of the averments in the plaint, the suit properties had been purchased in the joint names of the Defendant Nos. 1 and 2 allegedly from funds of the Petitioner. The Petitioner contends that the Petitioner as the head of a joint family representing him and his brothers are absolute owners of the suit properties.
4. The Defendant No.1 filed an application in the said suit under Order VII Rule 11, Order VI Rule 16 and Section 151 of the Code of Civil Procedure [hereinafter referred to as “CPC”] for rejection of the plaint, inter alia, contending that the claim of the plaintiff in the plaint was prohibited by the Prohibition of Benami Property Transactions Act, 1988 [hereinafter referred to as “Act of 1988].
5. The expressions “Benami Property” and “Benami Transaction” have been defined in Section 2(8) and Section 2(9) of the said Act of 1988, which are set out hereinbelow for convenience:
“2(8) “benami property” means any property which is the subject matter of a benami transaction and also includes the proceeds from such property;
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 (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 (4 of 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.”
6. Section 3 of the Act of 1988 prohibits Benami Transactions and makes the same punishable with imprisonment as well as fine. Section 4 of the Act of 1988 provides as follows:
“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.”
7. Reference may also be made to Section 6 of the Act of 1988, which is set out hereinbelow:
“6. Prohibition on re-transfer of property by benamidar.—(1) No person, being a benamidar shall re-transfer the benami property held by him to the beneficial owner or any other person acting on his behalf.
(2) Where any property is re-transferred in contravention of the provisions of sub-section (1), the transaction of such property shall be deemed to be null and void.
(3) The provisions of sub-sections (1) and (2) shall not apply to a transfer made in accordance with the provisions of section 190 of the Finance Act, 2016 (28 of 2016).]”
8. On a perusal of the plaint, it is patently clear that the Petitioner has, in the plaint, pleaded that the suit properties belonged exclusively to the Petitioner as the head of the joint family, but the same had been purchased in the name of the Defendants. It is nowhere stated that the suit properties were purchased out of any joint family funds.
9. The Defendant No.1 filed a petition inter alia under Order VII Rule 11 of the CPC for rejection of the plaint contending:-
“2. Plaintiff has filed the present suit against me and his brother, who is defendant 2, seeking declaration that the apparent joint right and possession of mine in the suit properties as null and void and for injunction restraining me and defendant 2 not to interfere with the so-called exclusive sole ownership of the plaintiff and his joint family of the suit properties.
3. In the plaint, plaintiff is claiming that the suit property belongs exclusively to him and his family although the suit property has been purchased and standing in my name and that of the defendant 2. In other words, plaintiff is contending that I am only a name-lender. The said contention of the plaintiff is in the nature of benami transaction which is prohibited by the Benami Prohibition Act. Plaintiff cannot claim such a right and he cannot maintain the present suit on the said claim.
4. As the claim of the plaintiff in the plaint prohibited by the Benami Prohibition Act the plaint is liable to be rejected. Further, the plaint in the suit is manifestly, vexatious, and groundless and meritless in sense that it does not disclose any right to sue.
Moreover, the present suit is an abuse of the process of the Court and contrary to justice and against public policy. There is no chance of plaintiff succeeding in the suit. In view of this, the plaint is liable to be rejected.”
10. The Petitioner filed his Counter Affidavit stating that, read in its entirety, the suit does not attract the Act of 1988. In the Counter Affidavit, it is contended:
“..The following aspects of the case as a whole does not attract the provisions of the said Act, on the contrary bases the case in the aspects of rights generated under other laws taking it away from the said Act and they are as follows:
i) One of the joint holder i.e., defendant No.2 is described in the plaint as purchasing the schedule properties for the benefit of the joint family of plaintiff which brings within its sweep even the 1 st defendant. Because, throughout it is described in the plaint that his status was only in the nature of a legal adviser and in the said clear position he stands only in the nature of being included in a fiduciary capacity leading further to the result of he being only a trustee and such position exempts the prohibition of the Act u/s 4(3). Moreover this position can only be determined in the final evidence and not on the averments of plaint allegations.
ii) The other aspect in the plaint that the 1 st defendant’s deal with the minor defendant No.2 being void with respect to his share, even if any, is under totally a different legal position, distinct and separate from Benami Prohibition Act.
Iii) The clear position under Section 45 of T.P. Act that, the transferee holds right in proportion to the funds supplied by them individually and the plaint averments making it clear that no fund was supplied by the 1st defendant makes his right “nil” and this position under T.P. Act is not taken away by the Benami Prohibition Act.
4. All the above said aspects being yet to be proved and set up in a final evidence, the plaint cannot be simply rejected on its bare averments and wrongly applying only the prohibition under Benami Prohibition Act.”
11. By a judgment and order dated 16th November 2015, the Principal Senior Civil Judge & JMFC, Hosapete allowed the said application filed by the Defendant No.1 inter alia under Order VII Rule 11 of the CPC and rejected the plaint as barred by law.
12. By the judgment and order impugned, the Dharwad Bench of the High Court of Karnataka has affirmed the aforesaid judgment and order of the Principal Senior Civil Judge & JMFC, Hosapete and rejected the Regular First Appeal No.100023 of 2016 filed by the Petitioner therefrom.
13. The Court of the Principal Senior Civil Judge and the High Court have concurred in their finding that on the face of the averments in the plaint, the suit is barred by law and /or in other words barred by Section 4 of the Act of 1988.
14. Learned Counsel appearing on behalf of the Petitioner, Colonel Balasubramanian, has rightly submitted that, while dealing with an application filed under Order VII Rule 11(d) of the CPC, the plaint has to be read as a whole and a stray sentence in the plaint ought not to be read in isolation, and out of context.
15. The contention of the Petitioner that the Respondent No.1 was holding the property as a trustee, in fiduciary capacity, and the property held by him could not, therefore, be treated as Benami, in view of Section 4(3)(b) of the Benami Act, is inconsistent with the pleadings in the plaint. The argument that, from a plain reading of the plaint, it is clearly inferable that the plaintiff had asserted the properties as joint family properties is not correct. That was not the case, made out in the plaint.
16. It is true, as argued by Colonel Balasubramanian, that a plaint can be rejected on consideration of the averments in the plaint, but not the allegations made by the Defendant in defence.
17. The High Court has in its judgment and order impugned before us, discussed the plaint in detail, paragraph-wise. The plaintiff claims to have made investments in the suit properties purchased in the name of the Defendants. As observed by the High Court, it is not even the case of the plaintiff that joint family funds have been invested in the property. Rather it is the case of the plaintiff that the property was purchased from the funds of the plaintiff.
18. As held by this Court in Popat and Kotecha Property v. State Bank of India Staff Association1 , clause (d) of Rule 11 of Order VII CPC applies only in those cases 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.
19. In Pawan Kumar v. Babulal since Deceased through L.Rs. and Ors.2, this Court referred to and relied upon Popat and Kotecha Property (supra). This Court however, found on facts, that going by the averments in the plaint in that case, the question whether the plea raised by the Appellant was barred under Section 4 of the Act of 1988 or not, could not have been the subject matter of assessment, at the stage when the application under Order VII Rule 11 of the Code of Civil Procedure had been taken up for consideration.
1. (2005) 7 SCC 510
2. (2019) 4 SCC 367
20. The contention of the Petitioner, that the High Court has passed its final judgment and order dated 7 th February 2017, impugned in this Special Leave Petition, mechanically, without appreciating the issues, is devoid of merit. There is nothing in the impugned judgment of the High Court or of the Trial Court, wherefrom it may be inferred that the Courts overlooked any part of the pleadings in the plaint or read any part of the plaint in isolation and out of context.
21. In our considered view, there is no infirmity in the order of the Trial Court and impugned judgment of the High Court rejecting the plaint under Order VII Rule 11 of the CPC for the reasons discussed above. Substantial justice has been done by nipping in the bud, a suit which is ex facie barred by law, thereby saving precious judicial time as also expenditure and inconvenience to the parties to the suit. The impugned judgment does not call for interference under Article 136 of the Constitution of India.
22. Special Leave Petition is accordingly dismissed.
.….......………………........J. [Indira Banerjee] ......……………….…........J. [Hemant Gupta] New Delhi;
February 01, 2021
ITEM NO.30 Court 14 (Video Conferencing) SECTION IV-A
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s). 27426/2018
(Arising out of impugned final judgment and order dated 07-02-2017 in RFA No. 100023/2016 passed by the High Court Of Karnataka Circuit Bench At Dharwad) SRI NIMBANNA Petitioner(s) VERSUS SHIVANANDA KINNAL & ANR. Respondent(s) Date : 01-02-2021 This petition was called on for hearing today. CORAM : HON'BLE MS. JUSTICE INDIRA BANERJEE HON'BLE MR. JUSTICE HEMANT GUPTA For Petitioner(s) Col. Balasubramanian, Sr. Adv.
Mr. H. Chandra Sekhar, AOR Ms. Rekha Chandrasekhar, Adv.
For Respondent(s) Mr. Nikhil Jain, AOR Mr. Sanket M. Yenagi, Adv.
Mr. Satya Prakash, Adv.
UPON hearing the counsel the Court made the following O R D E R The Special Leave Petition is dismissed in terms of the signed order.
Pending application(s), if any, stand disposed of.
(JAGDISH KUMAR) (BEENA JOLLY)
COURT MASTER (SH) COURT MASTER (NSH)
(Signed order is placed on the file)