Benami Act Bars Claim of Ownership Without Documents Showing Fiduciary Property Purchase | HC

Case Details: Paramjit Singh vs. Ms Gagan Singh @ Mannu - [2024] 168 taxmann.com 140 (Delhi)

Judiciary and Counsel Details

• Manmeet Pritam Singh Arora, J.
• P.S. Bindra, Sr. Adv., Asutosh Lohia, Rohit Saraswat, Gaurav Anand, Sharan Mehta & Karan Sharma, Advs. for the Appellant.
• Rakesh Munjal, Sr. Adv., Rakesh Kumar, Sunil, Rajat Sharma & R.P.S. Rana, Advs. for the Respondent.

Facts of the Case

The plaintiff filed a suit seeking a mandatory injunction in respect of the property (‘suit property’) in favour of the plaintiff restraining the defendants from creating any third-party interest qua the suit property.

The plaintiff stated that defendant no. 1’s father, late R and the plaintiff’s father, late S, were first cousins and had common businesses all over the world. They invested jointly in several immovable properties across the country, and the suit property was also purchased from the joint funds accrued from the said businesses.

The plaintiff further stated that though the title deed of the suit property was standing in the exclusive name of late R, the father of defendant no. 1 herein; however, said property was purchased in the name of late R in a fiduciary capacity for the benefit and enjoyment of the family of late S.

He stated that the family of late S had remained in exclusive possession of the second floor along with the terrace and received a share in the rentals collected from the tenants of the ground floor and the first floor. The plaintiff claimed joint ownership of the suit property on the basis of averments that the plaintiff’s father paid a substantial contribution towards sale consideration. He claimed that the plaintiff’s claim of joint ownership was saved under proviso (ii) to section 2(9)(A)(ii).

High Court Held

The Delhi High Court held that the plaintiff has admitted that the title documents of the suit property record that late R is the absolute owner of the suit property. The plaintiff has failed to file or produce any document to substantiate his claim that any fiduciary relationship existed between late S and late R or that any part of the purchase consideration was provided by late S.

The claim of joint investments between late S and late R is a bald averment unsubstantiated by even a sliver of a document. The plaintiff has not filed any written deed evidencing any fiduciary relationship between late S and late R. The plaintiff has filed no documents to show that S and R were carrying on any business together and/or held joint funds and/or held any joint investments, which could have formed the corpus for purchasing the suit property.

In the absence of documents evidencing the existence of a fiduciary relationship and existence of corpus of funds made available by the plaintiff from his/her known sources to defendant, the plaintiff cannot invoke proviso (ii) of section 2(9)(A) and the claim of the plaintiff would be barred under section 4 of the Benami Act.

List of Cases Referred to

• Pankaja v. Yellappa (2004) 6 SCC 415 (para 5.7)