By TIOL News Service

NEW DELHI, APR 13, 2019: THE issue at hand is whether any financial assistance given by father to sons in the purchase of property does not per se render such transaction to be benami in nature. NO is the verdict.

Thus it was also held that partition cannot be demanded or a share be claimed in certain property which is not self-acquired property of the father & have in fact been purchased by the sons through separate sale deeds.

Facts

THE present petition was filed by the now-deceased plaintiff seeking partition of and 1/4th share in property acquired by her father. The plaintiff's father carried on businesses in his own name as well as in the names of his sons. At the time of his death, he possessed a large estate comprising of several immovable properties & bank deposits. The plaintiff had pled that all the properties which were subject matter of the suit had been purchased by her father, by virtue of which she was entitled to a 1/4th share in the said properties. The plaintiff claimed that the respondents herein (her brothers) had refused to give her a 1/4th share. The plaintiff then served a notice to the defendents seeking partition and an amicable settlement. She claimed that the defendents failed to do so.

The defendent's claimed that the properties in question were exclusively owned by them in their individual rights and were not owned by their deceased father. They also claimed that their deceased father and themselves did not come from an affluent background and that most of the properties claimed by the plaintiff were non-existent. It was further claimed that the remaining property was not as bountiful as claimed by the plaintiff. They also claimed that the plaintiff & her spouse had enjoyed many financial favors during the lifetime of their father. The defendents also claimed that the house in which they lived had been ransacked by the plaintiff, who made some wrongful gains from the same. Thus it was claimed that the plaintiff had not made out a valid case, as per Section 2 of Benami Transactions (Prohibition of Right to Recover Property) Ordinance, 1988.

The Trial Court dismissed the plaintiff's suit on grounds that while some properties claimed by her were not self-acquired by her father, whereas others were properties of the defendents. It was also held that the value of some of the remaining assets was far too low so as to be partitioned. On appeal, the High Court sustained the findings of the Trial Court.

On appeal, the Apex Court was of the view that,

++ the High Court has rightly come to the conclusion that the plaintiff has failed to prove that the purchase of the suit properties – Item Nos. I(a) to I(c) in the names of defendant Nos. 1 to 3 were benami in nature. It is true that, at the time of purchase of the suit properties – Item Nos. I(a) to I(c), some financial assistance was given by Late G. Venkata Rao. However, that cannot be the sole determinative factor/circumstance to hold the transaction as benami in nature. The plaintiff has miserably failed to establish and prove the intention of the father to purchase the suit properties for and on behalf of the family, which were purchased in the names of defendant Nos. 1 to 3. It is required to be noted that, as such, the plaintiff – daughter has not stepped into the witness box and that the evidence on behalf of the plaintiff has been given by her husband who, as such, can be said to be an outsider, so far as the joint family is concerned. Apart from that, it has come on record that the plaintiff and her husband were maintained by Late G. Venkata Rao. The financial assistance was also given to the plaintiff and her husband to purchase the residential house at Bangalore. Late G. Venkata Rao, therefore, provided a shelter to his daughter and, as observed herein above, also gave the financial assistance to purchase the residential house at Bangalore. It has also come on record that Late G. Venkata Rao even purchased the share certificates and his daughter original plaintiff was also given certain number of shares. Therefore, considering such facts and circumstances of the case, Late G. Venkata Rao also must have given the financial assistance to defendant Nos. 1 to 3 – sons and helped them in purchase of the properties. Therefore, the intention of Late G. Venkata Rao to give the financial assistance to purchase the properties in the names of defendant Nos. 1 to 3 cannot be said to be to purchase the properties for himself and/or his family members and, therefore, as rightly observed by the High Court, the transactions of purchase of the suit properties – Item Nos. I(a) to I(c) in the names of the defendant Nos. 1 to 3 cannot be said to be benami in nature. The intention of Late G. Venkata Rao was to provide the financial assistance for the welfare of his sons and not beyond that. None of the other ingredients to establish the transactions as benami transactions, as held by this Court in the decisions, are satisfied, except that some financial assistance was provided by Late G. Venkata Rao. In the facts and circumstances of the case and considering the evidence on record, the purchase of the suit properties – Item Nos. I(a) to I(c) in the names of defendant Nos. 1 to 3 cannot be said to be benami transactions and, therefore, as rightly observed and held by the Trial Court and confirmed by the High Court, the plaintiff has no right to claim 1/4th share in the suit properties – Item Nos. I(a) to I(c) which were purchased by the sons in their names by separate sale deeds. Hence the High Court's finding are upheld.

(See 2019-TIOL-162-SC-BENAMI)