Case: PAWAN KUMAR Vs. BABULAL SINCE DECEASED THROUGH LRS

3. The appellant filed a suit for declaration of title with respect to premises in Kasbamain market which were more particularly described in the plaint and prayed that he be declared owner of the premises and that the sale deed dated 24.07.2006 executed by the first defendant in favour of the second defendant be cancelled. The material averments in the plaintA shop in said premises was held by the first defendant, namely, father of the appellant on rent from the erstwhile owner;(b)The first defendant having become old, it was the appellant who had been looking after the entire business;(c) The erstwhile owner had filed suit for possession which matter came right upto this Court;(d)There was a compromise between the erstwhile owner and the first defendant under which the premises where the shop is situate, were agreed to be sold in favour of first defendant;(e) The first defendant was not having enough money and as such it was the appellant who arranged all the money on his own after borrowing from money lenders on interest;(f) At the time of preparing the sale deed, the first defendant had indicated that the premises be taken in his name;(g)Even after purchase of the premises in the name of the first defendant, the appellant was conducting the business in the said shop;(h)The first defendant had executed a document on a stamp paper on14.03.2002 in the presence of witnesses which was verified byNotary Public acknowledging that the appellant had paid the entire consideration towards purchase of the premises.(i) The second defendant was also a tenant in the premises and after the purchase as aforesaid he was making payment of rent to the appellant.(j) Taking undue advantage of the old age and fragile health of the first defendant, the second defendant got written a document in his favour with respect to first floor of the disputed shop from the first defendant onthe case as aforesaid, Civil Suit No.126 of 2006 was filed by the appellant in the court of District Judge, Sikar.4. The second defendant filed his written statement denying the case pleaded by the appellant. Nine years later, the second defendant submitted an application under Order VII Rule 11 of the Code of Civil Procedure (for shortThe trial court allowed said application under Order VII Rule 11, CPC and by its order dated 23.09.2016 rejected the plaint. The relevant portion of true translation of the decision of the trial court was asIn this way in the present case, the Plaintiff in his Plaint has himself stated that he wants to purchase the disputed property in the name of his father from his own income or by the money which he had taken on interest. In my humble opinion under Section-4 of the Benami Transaction (Prohibition) Act, 1988 filing of present Suit is prohibited. Hence, the judgment of theCourt produced on behalf of the Applicant/Defendant are applicable on the present case. The Plaint of the Plaintiff is prohibited under Order-7 Rule-11(3) C.P.C.The appellant, being aggrieved filed SBRFA No.511 of 2016 in the High Court which appeal was dismissed by the High Court vide its judgment and order dated 18.08.2017. It was observed by the High Court asthe averments made in the plaint it is clear that plaintiff is seeking declaration in his name in respect of suit property with a clear stipulation that he purchased the said property from his own funds/sources in the name of his father and his father was not real owner of the suit property, the Act of 1988 provides that 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, shall lie by or on behalf of a person claiming to be the real owner of such property. It is not the case of the plaintiff that property in question was held by the defendant No.1 – father, for joint benefit/joint ownership. The suit was clearly hit by section 4 of the Act of 1988 and the learned trial court rightly allowed the application under Order 7 Rule 11 CPC.The decision rendered by the High Court is presently under appeal.

Court's reasoning:
12. It was, thus, concluded that the transaction was completely saved from the mischief of Section 4 of the Act by reason of the same falling under Sub-Section (3)(b) and that the Suit was not barred under the Act. This judgment was rightly relied upon by Mr. Abhishek Gupta, learned Advocate. On the other hand, the reliance placed by Mr. R.K. Singh on the decision in Om Prakash(1992) 1 SCC710 , in our view, is completely misplaced. The issue there was whether prohibition under Section 4 would apply in relation to actions initiated before the coming into force of the Ordinance or not? In any event of the matter, the issue whether the provisions of the Act are retrospective has already been settled R. Rajgopal Reddy through LRs. Vs. Padmini Chandrasekharaiah through LRs. (1995) 2 SCC 630 .  13. In the present case, the controversy has arisen in an application under Order VII Rule 11 CPC. Whether the matter comes within the purview of Section 4(3) of the Act is an aspect which must be gone into on the strength of the evidence on record. Going by the averments in the Plaint, the question whether the plea raised by the appellant is barred under Section 4 of the Act or not could not have been the subject matter of assessment at the stage when application under Order VII Rule 11 CPC was taken up for consideration. The matter required fuller and final consideration after the evidence was led by the parties. It cannot be said that the plea of the appellant as raised on the face of it, was barred under the Act. The approach must be to proceed on a demurrer and see whether accepting the averments in the plaint the suit is barred by any law or not.