High Court

Legal Reasoning

{1} FA 2959.24.odtrIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADFIRST APPEAL NO. 2959 OF 2024.M/s. Anil Electricalthrough ProprietorShri Anil Ramchandra GhadgeAge 49 years, Occ. Business and Agriculture,R/o. Ghorpadwadi, Taluka Rahuri,District Ahmednagar... Appellant.Versus1.Subhash Ramchandra GhadgeAge 60 yeaars, Occ. Business & Agri.R/o. Ghorpadwadi, Tq. Rahuri,District Ahmednagar.2.Mandakini Subhash Ghadge,Age 51 years, Occ. Agri.R/o. Ghorpadwadi, Tq. Rahuri,Dist. Ahmednagar... Respondents.Mrs. C.S. Deshmukh, Advocate for appellant.Mr. A.K. Gawali, Advocate for respondent Nos. 1 and 2. CORAM :S.G. CHAPALGAONKAR, J. RESERVED ON : 28.02.2025. PRONOUNCED ON : 08.05.2025. JUDGMENT :-1. Heard Mrs. Charuta Deshmukh learned advocate forappellant and Mr. A.K. Gawali, learned advocate for respondent nos. 1and 2.2.Present appeal takes exception to the order dated 21.9.2024passed by Civil Judge (S.D.), Amhednagar below Exh.17 in Special CivilSuit No. 99 of 2024, by which the plaint has been rejected in exercise of {2} FA 2959.24.odtpowers under Order 7 Rule 11 (d) of CPC. For sake of convenience,parties are referred as per their original status.3.The appellant/plaintiff instituted suit seeking declarationthat suit property has been purchased and developed by him. As such, heis lawful owner of the property. Similarly, sought relief of perpetualagainst defendants, in the alternative, plaintiff prayed for a decree forrecovery of amount of Rs. 1,14,40610/- against defendants towardsexpenditure incurred for development of suit property.4.It is contention of plaintiffs that under sale deed, which areexecuted in name of defendants suit property has been purchased.Consideration amount is paid by him. It is further contended that he is inpossession the suit property and made huge expenditure for itsdevelopment. The defendants are now obstructing his possession andlikely to deal with the property on the basis of mutation entries in theirname.5.The defendants caused their appearance in the suit and filedapplication under Order 7 Rule 11 of C.P.C. seeking rejection of plaint onthe ground that suit is barred in view of Section 4(1) of the BenamiTransactions (Prohibition) Act, 1988. The trial court accepted the plea ofdefendants and rejected the plaint.6.Smt. C.S. Deshmukh, Learned advocate for the appellantsubmits that plaintiff and defendant No.1 are real brothers. In view offiduciary relationship between them, plaintiffs purchased property in thename of defendant No.1. Such a transaction would not be hit by Section4 of Benami Transactions Prohibition Act, 1988. In view of sub clause {3} FA 2959.24.odt(b) of clause (iii) of Section 4, such transaction is protected. She wouldfurther urge that plaintiff has made alternative prayer for recovery ofamount towards the expenditure incurred on the suit land. Therefore,merely relying upon bar under Section 4 of the Benami Act, plaint couldnot have been rejected. In support of her contention, she relies upon theobservations of the Supreme Court in the matter of Pawan Kumar Vs.Babulal reported in AIR online 2019 SC 461. She would further submitthat partial rejection of plaint would not be permissible if one relief cannot be granted under law and alternative relief can be considered, then,rejection of plaint would not be proper. She would further rely uponjudgment of this Court in case of Sopan Sukhdeo Sabale vs, AssistantCommissioner AIR 2004 SC 1801.7.Per contra, Mr. Gawali, learned advocate for respondentssubmits that Section 4 of the Benami Transactions (Prohibition) Actprescribes no suit or claim or action to enforce rights in respect ofproperties held Benami against the person, in whose name property isheld or any other person shall lie by or on behalf of a person claiming tobe the real owner of such property. The prayer of declaration ofownership made by plaintiff is on the basis of Benami transaction and,therefore, the suit is barred under Section 4 of the Act. Hence, plaint isrightly rejected.8.Having considered submissions advanced, it can be observedthat the plaintiff and defendant No.1 are real brothers. Plaintiff assertsthat he purchased the suit property in the name of defendant andelaborates the details of finances made by him. He further states that hespent huge amount towards development of the land and raised {4} FA 2959.24.odtinfrastructure for irrigation and cultivation of land. Section 4 of theBenami Transactions Act, 1988 reads thus :-“4. Prohibition of the right to recover property held benami- (1) Nosuit, claim or action to enforce any right in respect of any property heldbenami against the person in whose name the property is held oragainst any other person shall lie by or on behalf of a person claimingto be the real owner of such property. (2) No defence based on anyright in respect of any property held benami, whether against theperson 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 personclaiming to be the real owner of such property. (3) Nothing in thissection shall apply,-- (a) where the person in whose name the propertyis held is a coparcener in a Hindu undivided family and the property isheld for the benefit of the coparceners in the family; or (b) where theperson in whose name the property is held is a trustee or other personstanding in a fiduciary capacity, and the property is held for the benefitof another person for whom he is a trustee or towards whom he standsin such capacity. 9.A bare reading of aforesaid provision stipulates that thereare two exceptions as indicated in sub-clause (iii) (b) of Section 4. Sub-clause (b) protects when property is held by a person as a trustee orother person standing in fiduciary capacity. The term “Fiduciary capacity”has been widely interpreted by Corpus Juris Secondum, as under :-“32. The term “fiduciary” has been explained by Corpus JurisSecundum as under: “A general definition of the word whichis sufficiently comprehensive to embrace all cases cannot wellbe given. The term is derived from the civil or Roman law. Itconnotes the idea of trust or confidence, contemplates goodfaith, rather than legal obligation, as the basis of thetransaction, refers to the integrity, the fidelity, of the party {5} FA 2959.24.odttrusted, rather than his credit or ability, and has been held toapply to all persons who occupy a position of peculiarconfidence toward others, and to include those informalrelations which exist whenever one party trusts and relies onanother, as well as technical fiduciary relations. The word‘fiduciary’, as a noun, means one who holds a thing in trustfor another, a trustee, a person holding the character of atrustee, or a character analogous to that of a trustee withrespect to the trust and confidence involved in it and thescrupulous good faith and condor which it requires; a personhaving the duty, created by his undertaking, to act primarilyfor another’s benefit in matters connected with suchundertaking. Also more specifically, in a statute, a guardian,trustee, executor, administrator, receiver, conservator or anyperson acting in any fiduciary capacity for any person, trustor estate.”10.Generally the term fiduciary applies to any person whooccupies the position of peculiar confidence towards another. Taking noteof aforesaid defence, the Supreme Court in case of Rajgopal Reddi Vs.Padmni Chandrashekharan (1999)2 SCC 630, observed as under :-“Where the matter comes within the purview of Section 4(3) of the Act,an aspect which must be gone into on the strength of evidence onrecord. Going by the averments in plaint, the question whether the plearaised by the appellant is barred under Section 4 of the Act or not couldnot have been the subject matter of assessment at the stage whenapplication under Order 7 Rule 11 CPC was taken up for consideration.The matter required fuller and final consideration after the evidencewas led by the parties. It cannot be said that plea of the appellant asraised on the face of it, was barred under the Act.”The Supreme Court of India, relying upon the observationsrecorded in the case of R. Rajgopal Reddi vs. Pandmini {6} FA 2959.24.odtChandrashekharan, set aside the order of rejection of plaint in case ofPawan Kumar (supra).11.Apart from aforesaid aspect of the matter, in the presentcase, the plaintiff has claimed alternative relief of recovery of amount,being amount of investment made by him in the suit property. In thelight of such alternative relief, even assuming that the plaintiff is notentitled to raise claim as to declaration of ownership, owing to bar ofSection 4 of the Benami Transactions act, the trial is required to renderdecision of alternative prayer. Therefore, the threshold rejection of plaintin exercise of power under Order 7 Rule 11 of CPC cannot becountenanced. The trial court nowhere deals with the alternative prayerincorporated in the plaint while entertaining application under Order 7Rule 11 of CPC and merely referring to bar under section 4 of the BenamiTransactions Act, 1988 rejected the plaint.12.in the result, the appeal deserves to be allowed. Hence,following order :-O R D E R [a]The impugned order dated 21.9.2924 is quashed and set aside;[b]Special Civil Suit No. 99 of 2024 is restored to its original position before the Civil Judge (S.D.), Ahmednagar.[c]Parties to appear before the said court on 16th June, 2025.[d]Appeal stands disposed of accordingly.[S.G. CHAPALGAONKAR, J] grt/-