Delhi High Court
Gagandeep Kaur vs Rattandeep Singh Grover & Ors on 2 July, 2025
Author: Purushaindra Kumar Kaurav
Bench: Purushaindra Kumar Kaurav
$-
* IN THE HIGH COURT OF DELHI AT NEW DELHI
BEFORE
HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV
+ CS(OS) 461/2021, I.A. 12522/2021 and I.A. 15734/2021
Between: -
1. GAGANDEEP KAUR
W/O GAGANDEEP SINGH
R/O F-168 D, 2ND FLOOR
RAJOURI GARDEN, NEW DELHI- 110027
2. SMT. PAMINDER JUNEJA
W/O SH. NAVJEET JUNEJA
R/O 8, CAMP ROAD, GERRARDS CROSS SL 97PE,
LONDON; U.K
PLAINTIFFS
(Through: Mr. Rajat Aneja, Mr. Aditya Sharma, Mr. Anant Chaitanya
Dutta and Mr. Sanjay Mishra, Advs. for P-1.
Ms. Mohna M. Lal, Ms. Geetali Hazarika and Mr. Nikhil Anand, Advs. for
P-2.)
AND
1. RATTANDEEP SINGH GROVER
S/O LATE SH. CHANCHAL SINGH GROVER
R/O H.NO 64, NORTH AVENUE ROAD PUNJABI BAGH,
NEW DELHI -110026
2. VIRAJ VEER SINGH
S/O RATTANDEEP SINGH GROVER
S/O LATE SH. CHANCHAL SINGH GROVER
R/O H.NO 64, NORTH AVENUE ROAD PUNJABI BAGH
NEW DELHI -110026
Signature Not Verified Signature Not Verified
Signed By:PRIYA Signed
Signing Date:04.07.2025 By:PURUSHAINDRA
17:25:58 1 KUMAR KAURAV
....DEFENDANTS
(Through: Mr. Rajesh Yadav, Senior Advocate with Mr. Arvind K. Gupta,
Mr. Abhiesumat Gupta, and Mr. Arun Bhattacharya, Advocates.)
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% Reserved on: 02.05.2025
Pronounced on: 02.07.2025
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JUDGMENT
I.A.-18546/2022( APPLICATION UNDER ORDER VII RULE 11 (A),
(B), (C) & (D) CPC ON BEHALF OF THE DEFENDANT NO.1 AND 3,
SEEKING REJECTION OF PLAINT)
The present application has been filed by defendant nos. 1 and 2
under Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereinafter
referred to as “CPC“), seeking rejection of the plaint, mainly on two
grounds-: i. absence of cause of action; ii) plaint is barred by law under the
Prohibition of Benami Property Transactions Act, 1988. (Benami Act, 1988).
2. The present suit has been instituted by the plaintiffs seeking a
declaration that late Sh. Chanchal Singh was the de facto owner of the suit
properties as detailed in paragraph 3 of the plaint. Based on this assertion,
the plaintiffs have prayed for partition of the said properties and has further
sought a declaration that the Gift Deed dated 24.12.2020, executed in favour
of defendant no. 1, as well as, the Gift Deed executed in favour of defendant
no. 2, be declared as null and void to the extent of the plaintiff’s 1/4th share
in the suit properties.
Signature Not Verified Signature Not Verified
Signed By:PRIYA Signed Signing Date:04.07.2025 By:PURUSHAINDRA 17:25:58 2 KUMAR KAURAV
3. Before delving into the merits of the present application, it is
important to understand the pedigree of the parties indicating the current
status of each party as on date. The pedigree chart is reproduced below:
Late Sh. Chanchal Singh Grover – late Smt. Rajinder Kaur
(Wife)(Deceased defendant)│
┌─────────────────────┬───────────────────┐Gagandeep Kaur Smt. Paminder Juneja Rattandeep Singh Grover
(Plaintiff No.1) (Daughter) (Plaintiff No.2) (Daughter) (Son / defendant No. 1)│
Viraj Veer Singh
(Grandson / defendant No. 2)Comparison of Party Status: Old vs New Memo of Parties
Status in Old Status in New
Name of Party
Memo MemoGagandeep Kaur Plaintiff Plaintiff No. 1
Paminder Juneja defendant No. 3 Plaintiff No. 2
Rattandeep Singh Grover defendant No. 1 defendant No. 1
Deleted from the
Rajinder Kaur defendant No. 2
case on her deathdefendant No. 2
Viraj Veer Singh Not a party
(Newly Added)
4. The pleadings in the plaint insofar as are relevant for deciding of the
present application are set out below:-
i. Both plaintiffs are daughters of late Sh. Chanchal Singh, and
defendant No.1 is his son. defendant No.2 is the son of defendantSignature Not Verified Signature Not Verified
Signed By:PRIYA Signed
Signing Date:04.07.2025 By:PURUSHAINDRA
17:25:58 3 KUMAR KAURAV
No.1. All the parties are Class-I legal heirs of late Sh. Chanchal
Singh.
ii. Late Sh. Chanchal Singh used to run chit fund businesses under the
names Gursant Trading and Chit Fund Pvt. Ltd. and Sahib Chits
(Delhi) Pvt. Ltd. at 4636, Ganesh Bazar, Cloth Market, Fatehpuri,
Delhi. Out of the aforesaid business he had earned substantial income.
iii. Out of his earnings, late Sh. Chanchal Singh purchased various
immovable properties, either in his name or in the names of defendant
No.1 and late Smt. Rajinder Kaur, either jointly or solely.
iv. late Sh. Chanchal Singh passed away intestate on 02.01.2008. The
properties acquired from his income are part of the family estate.
v. The plaintiffs are not claiming any properties for which they have
executed relinquishment deeds. The present partition suit concerns
only the remaining properties, referred to as “Suit Properties”.
vi. The Suit Properties include:-
½ portion of Residential Plot No. 64, North Avenue Road, Punjabi
Bagh (West), New Delhi – 555.55 sq. yds.
House Property at 720 Road No., Katra Neel, Chandni Chowk – 50.16
sq. m.
House Nos. 752-753-754, Road No., Katra Neel, Chandni Chowk –
17.19 sq. m.
House No. 579, Gali Ghanteshwar, Chandni Chowk.
Plot No.2, Meera Kunj, Nilothi Extension (Farm House), Chander
Vihar – 1000 sq. yds.
Signature Not Verified Signature Not Verified
Signed By:PRIYA Signed
Signing Date:04.07.2025 By:PURUSHAINDRA
17:25:58 4 KUMAR KAURAV
A-201, Vikas Tower, Vikaspuri, Delhi.
Shops No. 10 and 12, 2nd Floor, TDI Mall, Vishal Enclave, New
Delhi.
Bank accounts and fixed deposits in the name of late Sh. Chanchal
Singh.
Assets of the two chit fund companies: Gursant Trading and Chit
Fund Pvt. Ltd. and Sahib Chits (Delhi) Pvt. Ltd.
vii. A probate petition under Section 276 of the Indian Succession Act is
pending before the Court. It is claimed that late Smt. Rajinder Kaur
(formerly defendant No.2) executed an unregistered Will dated
14.08.2020.
Submissions On Behalf Of Defendant No.1 and 2
5. The submissions of Mr. Rajesh Yadav, learned senior counsel
appearing on behalf of the applicants /defendant Nos. 1 and 2, are as
follows-
5.1 It is submitted that plaintiffs own pleadings reveal that the properties
in question were either self-acquired by the defendants after the demise of
late Sh. Chanchal Singh or stood in the names of defendant No.1 or late Smt.
Rajinder Kaur. In either circumstance, the claim attracts the express bar of
the Benami Act 1988.
5.2 It is submitted that in respect of Property No. 64, North Avenue Road,
Punjabi Bagh:
i. The pleadings made by the plaintiffs in paragraph No. 2(a) have
been extensively read and clarified. It is stated that ½ share in the
aforesaid property was purchased by late Mrs. Rajinder KaurSignature Not Verified Signature Not Verified
Signed By:PRIYA Signed
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17:25:58 5 KUMAR KAURAV
through a registered sale deed dated 05.02.1992. Therefore, at the
time of execution of the gift deed in favour of defendant No. 1,
namely Mr. Rattan Singh Grover, she was the absolute owner of the
said ½ share, without any encumbrances.
ii. As per paragraph No. 6 of the plaint, the plaintiffs have admitted that
late Mrs. Rajinder Kaur was a director in companies and had an
independent source of income. Therefore, the property in question
cannot be considered to have been purchased from the known
sources of late Sh. Chanchal Singh, as alleged.
iii. Since the sale deed dated 05.02.1992, being the primary document of
ownership in favour of late Mrs. Rajinder Kaur, remains
unchallenged, a challenge to the gift deed dated 24.12.2020 cannot
be sustained. Reliance is placed on the judgments in Md. Noorul
Hoda vs. Bibi Raifunnisa1 and Surinder Kaur vs. Ram Narula &
Ors2.
5.3 It is submitted that in respect of property at 720, Road No., Katra
Neel, Chandni Chowk, admeasuring 50.16 square meters:
i. Referring to paragraph No. 2(c) of the plaint, it is submitted that the
plaintiffs have not provided specific details or the status of the said
property, which is admittedly unknown to them. Since no such
identifiable property exists, the suit concerning this property is not
maintainable.
1 (1996) 7 SCC 767 2 (2013) SCC OnLine Del 4377 Signature Not Verified Signature Not Verified Signed By:PRIYA Signed Signing Date:04.07.2025 By:PURUSHAINDRA 17:25:58 6 KUMAR KAURAV 5.4 Similarly, it is submitted that with regard to Property Nos. 752-753- 754, Katra Neel, Chandni Chowk: i. Referring to paragraph No. 2(d) of the plaint, it is submitted that
defendant No. 1 and late Mrs. Rajinder Kaur were the absolute joint
owners of the said property, which they purchased from their own
sources of income. The sale deed dated 31.01.2013, executed by
Vipin Wahi, evidences this self-acquired ownership. Therefore, no
cause of action arises for the present suit. The sale consideration was
paid jointly by defendant No. 1 and late Mrs. Rajinder Kaur.
Subsequently, late Mrs. Rajinder Kaur gifted her share, of her own
volition, to defendant No. 1 via a registered gift deed dated
05.01.2021. Hence, the plaintiffs have no right, title, or interest to
challenge the ownership of defendant No. 1 and defendant No.2
(Viraj Veer Singh).
ii. It is further submitted that this property was purchased more than 8
years after the demise of late Sh. Chanchal Singh. No evidence has
been adduced to show that funds belonging to late Sh. Chanchal
Singh were used for this purchase. Moreover, the sale deed dated
31.01.2013 has not been challenged by the plaintiffs.
5.5 As regards Property No. 579, Gali Ghanteshwar, Chandni Chowk, it is
submitted that:
i. Reference is made to paragraph No. 2(f) of the plaint. It is submitted
that the said property was sold by late Sh.. Chanchal Singh to late
Mrs. Rajinder Kaur during his lifetime for valid sale consideration
through a registered sale deed dated 14.06.2005. Consequently, lateSignature Not Verified Signature Not Verified
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Signing Date:04.07.2025 By:PURUSHAINDRA
17:25:58 7 KUMAR KAURAV
Mrs. Rajinder Kaur became the lawful and exclusive owner of the
property, which thus qualifies as her self-acquired asset.
ii. The plaintiff, having admitted the transaction, cannot now challengethe valid and legal title of defendant No.2.
5.6 In relation to Plot No. 2, Meera Kunj, Nilothi Extension and Flat No.
A-201, Vikas Tower, Vikaspuri, it is submitted:
i. It is submitted that the property was purchased on 17.09.1997 by
defendant No. 1 for valid sale consideration of Rs.1.90 lakh from
Mr. Hari Om Aggarwal. Since then, defendant No. 1 has been the
lawful owner and is in possession of the same.
ii. No evidence has been filed by the plaintiff to demonstrate any
financial contribution from late Sh. Chanchal Singh.
iii. Even if such a claim is presumed, the same is barred under the
Benami Act, 2016 (amended).
iv. The present case does not fall under any of the exceptions carved out
under Section 4(3) of the Benami Act 1988.
5.7 With respect to shops No. 10 and 12, 2nd Floor, TDI Mall, Vishal
Enclave, New Delhi, it is submitted:
i. It is submitted that these shops were never purchased by late Mr.
Chanchal Singh in the name of late Mrs. Rajinder Kaur.
Furthermore, no details of these shops are provided in the plaint. It is
the case of the defendants that neither defendant No. 1 nor late Mrs.
Rajinder Kaur had any connection with the said shops.
5.8 Further, it is also submitted that the plea of a Hindu Undivided Family
(HUF) has been raised for the first time in the replication and finds noSignature Not Verified Signature Not Verified
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Signing Date:04.07.2025 By:PURUSHAINDRA
17:25:58 8 KUMAR KAURAV
mention in the original plaint. No details have been provided about the
constitution, creation, members, or assets forming part of the alleged HUF.
This plea is clearly an afterthought and is inconsistent with the plaintiffs
own claim that late Sh. Chanchal Singh was the de facto owner of the
properties in his individual capacity. Reliance is palced on the decision in
the case of Sagar Gambhir v. Sukhdev Singh Gambhir3, Sagar Gambhir
vs. Sukhdev Singh Gambhir (Deceased) through LRs & Anr4 and Anchit
Sachdeva & Anr. vs. Sudesh Sachdeva & Ors5.
5.9 Additionally, reliance is also placed on Ramesh Advani v. Hiro
Advani6, to submit that a declaratory suit which seeks to set aside alienations
such as Gift Deeds is not maintainable in the absence of possession and
proper valuation for court fees and jurisdiction. It is submitted that
declaratory reliefs affecting title to immovable property must satisfy the
requirements of possession and proper court fee needs to be paid.
5.10 Conclusively, it is submitted that the suit, as framed, is not
maintainable either in fact or in law. It is barred under the provisions of the
Benami Act, 2016 (amended), discloses no cause of action, and is not
properly valued for court fees and jurisdiction. Accordingly, the plaint is
liable to be rejected under clauses (a), (b), (c), and (d) of Order VII Rule 11
of the CPC. In support of these submissions, defendant Nos.1 and 2 placed
reliance on Suhrid Singh @ Sardool Singh v. Randhir Singh7; Sagar
Gambhir, and Ramesh Advani v. Hiro Advani8.
3
2016 SCC OnLine Del 2748
4
2017 SCC OnLine Del 7305
5
2024 SCC OnLine 8768
6
2013 SCC OnLine Del 2603
7
(2010) 12 SCC 112
8
2013 SCC OnLine Del 2603
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17:25:58 9 KUMAR KAURAV
Submissions On Behalf Of The Plaintiffs
6. Per contra, the submissions of Mr. Rajat Aneja and Ms. Mohna M.
Lal, learned counsel appearing on behalf of the plaintiffs are as follows-
6.1 At the outset, it is submitted that the plaint must be read holistically
and in its entirety, rather than in a fragmented or isolated manner, which
could distort the context and true intent of the pleadings. It is a well-settled
principle of law that an application under Order VII Rule 11 CPC is
confined strictly to the contents of the plaint and cannot delve into disputed
questions of facts. Any alleged inconsistencies or contradictions within the
plaint, are matters to be adjudicated during trial and cannot form the basis
for rejection at the threshold. At this preliminary stage, all averments in the
plaint are required to be presumed as true.
6.2 It is submitted that the plaintiffs have categorically pleaded in the
plaint that late Sh. Chanchal Singh, father of the parties, was the sole
contributor and operator of a chit fund business including entities such as
Gursant Trading and Chit Fund Pvt. Ltd. and Sahib Chits (Delhi) Pvt. Ltd,
which generated income which was used to purchase various properties. The
properties were purchased in the names of defendant No.1 (his son) and late
Smt. Rajinder Kaur (his wife), in a fiduciary capacity and not as absolute
owners, solely for the purposes of accounting and to reduce income tax
liability, while the beneficial interest always remained with late Sh.
Chanchal Singh and, by extension, the family as a whole.
6.3 It is further submitted that neither defendants had any independent
source of income at the time when these properties were acquired as
defendant No.1 was merely aged around 17-21 year, nor did they contribute
to the chit fund or to the consideration for any of the properties. The
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plaintiffs have specifically asserted that the entire business activity,
including the chit fund operation, was conducted and managed solely by late
Sh. Chanchal Singh , and the financial flows used for acquisition of
properties originated from this business. This has been pleaded not merely in
general terms, but with reference to specific properties, years, and
transactions.
6.4 Moreover, it is submitted that the plaint clearly avers that the
scheduled properties were purchased from joint family funds. The properties
remained in joint possession, and taxes were consistently paid from joint
family funds. The family-run companies were closely held private limited
entities, managed exclusively by family members, with no involvement of
third-party outsiders. Under settled principles of Hindu law, where the Karta
or co-parceners acquire property with the aid and assistance of joint family
assets or efforts, the source of funds becomes the determining factor, and
such matters can only be adjudicated upon evidence at trial. The burden to
prove self-acquisition lies on the person asserting it, and such a claim must
demonstrate that the property was acquired without any aid from joint
family resources. It is, therefore, an admitted and pleaded fact that the
family functioned as a joint family, and all such issues are triable and cannot
be dismissed at the threshold.
6.5 Further it is submitted that the defendants have failed to provide
critical documents such as income tax returns, bank statements, account
books, and documents related to the source of funds despite notice dated
19.03.2022 under Order VIII Rule 12 CPC. This non-disclosure warrants
that the claims in the plaint be tested at trial and should not be dismissed at
the preliminary stage.
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17:25:58 11 KUMAR KAURAV
6.6 In addition, it is submitted that that the Benami Act, 2016 (amended),
does not bar the present claim, as the properties were held in fiduciary
capacity or in trust for the family. The case falls within the exception under
Section 4(3)(b) of the Benami Act, 1988 as late Sh. Chanchal Singh stood in
a fiduciary and trustee-like relationship to the defendants and purchased the
properties using known sources of income derived from his chit fund
enterprise, for the benefit of all family members, not just for the name-
holders.
6.7 Furthermore, it is also submitted that the Benami Act, 2016
(amended), is not retrospective in its operation. The plaintiffs claim pertains
to transactions that occurred prior to the enforcement of the Benami Act,
1988 and in some cases, even before the 2016 amendment. In this regard,
reliance is placed on the judgment of the Supreme Court in P. Rajagopal v.
State of Tamil Nadu9, where it was categorically held that the provisions of
the Benami Act, 1988 are not retrospective and cannot be applied to
transactions which took place prior to the coming into force of the Act.
Therefore, any plea raised by the defendants invoking the bar of the Benami
Act must be rejected in light of the plaintiffs case, which is based on
transactions that are alleged to have occurred well before the Act or its
amendments came into force. Accordingly, the present suit, which asserts
the real ownership of properties purchased in the name of family members
by late Sh. Chanchal Singh using his own funds, is not barred under the
Benami Act.
6.8 Coming on to the issue of Court fees it is submitted that the plaintiffs
have clearly averred in paragraph 14 of the plaint that they are in
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constructive possession of the suit properties, and accordingly, a fixed Court
fee has been paid as per Schedule II, Article 17(VI) of the Court Fees Act,
1870. It is well-settled in law that, where, plaintiffs are in constructive
possession, only a fixed Court fee is payable, and the plaint cannot be
rejected under Order VII Rule 11 CPC on the ground of definciency of
Court Fee. Ad valorem Court fee becomes applicable only when there is a
specific plea of “ouster,” which is not the case here.
6.9 Conclusively, it is emphasized that the grounds raised in the present
application cannot be adjudicated at the preliminary stage of deciding an
application under Order VII Rule 11 of the CPC, as they involve disputed
questions of fact that require trial and evidence. In support of these
submissions, plaintiffs placed reliance on the decisions in Ramesh B. Desai
v. Bipin Vadilal Mehta10, Kasthuri and Others vs. Baskaran and
Another11, G. Subramani vs. V. Rajasekaran and Another12, Chandra vs.
Reddappa Reddy13, Salem Advocate Bar Association Tamil Nadu vs.
Union of India14, Metson Education and Development Association (P) Ltd
vs. The Church of South India Trust Association15, Pawan Kumar vs.
Babu Lal16, P. Rajagopal vs. State of Tamil Nadu17, Sarabjit Singh Anand
vs. Manjit Singh Anand & Others18, Popat and Kotecha Property vs. State
9
(1994) 6 SCC 632
10
(2006) 5 SCC 638
11
2003 SCC OnLine Mad 550
12
2013 SCC OnLine Mad 1796
13
2011 SCC OnLine Mad 715
14
2003 1 SCC 49
15
2008 1 CTC 521
16
2019 4 SCC 367
17
2019 5 SCC 403
18
2008 SCC OnLine Del 27
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Bank of India Staff Association19, Smt. Prakash Wati vs. Dayawanti &
Others20, Jagdish Prasad vs. Joti Pershad21, Geeta Tandon vs. Dr. Sunil
Gomber & Anothre22, and Manoj Arora vs. Mamta Arora23.
Analysis
7. I have heard learned counsels appearing for the parties and perused
the records.
8. Before proceeding to the analysis of the facts of the case, it is
important to briefly discuss the scope of Order VII Rule 11 of CPC.
Although, the principles governing the scope of an application of this nature
have been a subject matter of various pronouncements, it is imperative to
note that at this stage, while deciding an application under Order VII Rule
11 CPC, the Court is required to examine only the averments made in the
plaint. The scope of such an application is limited solely to determine
whether, on the basis of the plaint as it stands, and on a comprehensive
reading thereof a cause of action is disclosed or if the suit is barred by any
law. No reference can be made to the written statement or any defence
raised, as the assessment must be confined strictly to the pleadings of the
plaintiffs.
9. This Court in Meena Vohra v. Master Hosts (P) Ltd.24, had an
occasion to discuss the underlying objective of order VII Rule 11 CPC and
held:
“11. The real object of Order VII Rule 11 CPC is to keep out
irresponsible lawsuits from the Courts and it provides for an19
2005 7 SCC 510
20
1990 SCC OnLine Del 213
21
1974 SCC OnLine Del 214
22
2023 SCC Online Del 2067
23
2018 SCC OnLine Del 10423
24
2025 SCC OnLine Del 1758Signature Not Verified Signature Not Verified
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17:25:58 14 KUMAR KAURAV
independent remedy for the defendant no.1/applicant to challenge the
maintainability of the suit itself, irrespective of his right to contest the
same on merits. The Supreme Court in Sopan Sukhdeo Sable v. Asstt.
Charity Commr.9, held as under:
“17. .. The real object of Order 7 Rule 11 of the Code is to keep out of
courts irresponsible law suits. Therefore, Order 10 of the Code is a tool
in the hands of the courts by resorting to which and by a searching
examination of the party, in case the court is prima facie of the view
that the suit is an abuse of the process of the court, in the sense that it is
a bogus and irresponsible litigation, the jurisdiction under Order 7
Rule 11 of the Code can be exercised.
***
20….Rule 11 of Order 7 lays down an independent remedy made
available to the defendant no.1/applicant to challenge the
maintainability of the suit itself, irrespective of his right to contest the
same on merits. The law ostensibly does not contemplate at any stage
when the objections can be raised, and also does not say in express
terms about the filing of a written statement. Instead, the word “shall”
is used, clearly implying thereby that it casts a duty on the court to
perform its obligations in rejecting the plaint when the same is hit by
any of the infirmities provided in the four clauses of Rule 11, even
without intervention of the defendant no.1/applicant. In any event,
rejection of the plaint under Rule 11 does not preclude the
plaintiff/non-applicants from presenting a fresh plaint in terms of Rule
13.””
10. Furthermore, in Hardesh Ores (P) Ltd. v. Hede & Co.25 the Supreme
Court has held that it is not permissible to cull out a sentence or a passage
and to read it in isolation. It is the substance and not merely the form, which
has to be looked into. The plaint has to be construed as it stands, without
addition or subtraction of words. If the allegations in the plaint prima
facie show a cause of action, the Court cannot embark upon an enquiry
whether the allegations are true in fact. Therefore, a roving inquiry akin to
appreciation of evidence is not contemplated at the stage of Order VII Rule
11 of the CPC.
25 (2007) 5 SCC 614 Signature Not Verified Signature Not Verified Signed By:PRIYA Signed Signing Date:04.07.2025 By:PURUSHAINDRA 17:25:58 15 KUMAR KAURAV
11. In the case of Amiteshwar Singh v. Kamal Nain26, this Court
observed that the plaintiff had sufficiently pleaded that the suit property was
held by the father of the parties in his capacity as karta, for the benefit of the
co-parceners. These pleadings were found as adequate to sustain the civil
suit. Consequently it was held therein that the plaint could not be rejected
summarily under the provisions of Order VII Rule 11 of the CPC. It was
thus held that at that stage, the Court was not empowered to assess the
veracity or truthfulness of the allegations in the plaint; such matters are to be
tested during trial.
12. In Pawan Kumar, the Supreme Court was dealing with a case where
the trial court had allowed an application under Order VII Rule 11 of the
CPC, and the High Court had affirmed that decision. The matter reached the
Supreme Court following the rejection of the plaint on the ground that the
suit was barred under Section 4 of the Benami Act, 1988. In that case, the
trial Court had held that the suit was barred because the plaintiff had
admitted in the plaint that he had purchased the property in the name of his
father using his own income or borrowed funds. The High Court concurred,
observing that Section 4 of the Benami Act, 1998 prohibited any suit, claim,
or action to enforce a right in respect of property held benami, against the
person in whose name the property is held. As there were no averments in
the plaint suggesting that the property was held by the father (defendant no.
1) for the joint benefit or as part of joint ownership, the High Court found
that the suit was clearly barred under Section 4.
26
2022 SCC OnLine Del 3345
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13. However, the Supreme Court in the aforesaid judgment, upon
examining the 2004 scheme of the Benami Act and relying on the principle
laid down in Marcel Martins27, found that the defendant’s plea was entirely
misplaced. In paragraph 13 of the judgment, the Court held as under:
“13. In the present case, the controversy has arisen in an application
under Order 7 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
7 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…”
14. It is thus evident that Clause (d) of Rule 11 of Order VII of the CPC
applies only to cases where the statements made by the plaintiff in the plaint,
without any doubt or dispute, clearly show that the suit is barred by any law
in force. If the question of applicability of any legal bar is itself a subject
matter of contest between the parties, it could only be resolved after
affording the parties the opportunity to lead evidence and appreciation
thereof.
Interpretative Scope of Unamended Section 4 of the Benami Transactions
(Prohibition) Act, 1988 at the Stage of Consideration Under Order VII
Rule 11 CPC
15. In the present case, the father of the plaintiffs and defendant No. 1
passed away on 02.01.2008. The amendment to Section 4 of the Benami
Act, 1988 came into effect on 01.11.2016. It is therefore understood that
27
(2012) 5 SCC 342
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sub-section (3) of Section 4, as it stood prior to the amendment, would be
applicable to the facts of the present case. This is further supported by the
plaintiffs’ pleadings, which indicate that some of the properties were
purchased prior to 1988, i.e., before the enforcement of the Benami Act
itself, while others were acquired after its enactment. Notably, none of the
properties involved in the civil suit were purchased after 01.11.2016. It is
thus evident that the provisions of the Benami Act,1988 do not apply to the
present set of facts as the amendment does not operate restrospectively.
16. Support for the aforesaid position can be drawn from the decision in
Rajgopal Reddy, where the Supreme Court, while interpreting the provisions
of the Benami Act, 1988, held that benami transactions were a legally
recognized mode of holding immovable property prior to the enactment of
the Act. These transactions were commonly practiced, and upon proof of
relevant facts, courts would grant relief in such suits. The Parliament, acting
on the recommendations of the Law Commission, enacted the Benami Act,
1988 to prohibit such transactions. A benami transaction typically involves
the purchase of property in the name of another person who does not pay the
consideration but merely lends his name, while the real purchaser the one
who provides the consideration remains the actual and beneficial owner. In
order to prohibit such arrangements and bar the enforcement of rights over
benami property, the Benami Act, 1988 was enacted.
17. However, under Section 4(3) of the Benami Act, 1988, certain
exceptions were carved out. Since the pre-amendment provisions of Section
4 (prior to the 2016 amendment) are central to the present controversy, the
unamended version of Section 4 is reproduced below in its entirety:
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“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 held of a person
claiming to be the real owner of such property.
(2) No defence based on any right in respect of any property held
benami, whether against the person 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 person claiming to be the real owner of such
property.
(3) Nothing in this section shall apply,-
(a) where the person in whose name the property is held is a
coparcener in a Hindu undivided family and the property is held for
the benefit of the coparceners in the family; or
(b) where the person in whose name the property is held is a trustee
or other person standing in a fiduciary capacity, and the property is
held for the benefit of another person for whom he is a trustee or
towards whom he stands in such capacity.”
18. Based on the aforesaid submissions, defendant No. 1 contends that the
suit is barred by the Benami Act, 1988. In contrast, the plaintiff maintains
that the suit falls within the exceptions outlined in Section 4(3)(b) of the
Act, which covers , for instance, a case wherein a husband purchases
property in the name of his wife for the benefit of the family. The plaintiff
further asserts that late Sh. Chanchal Singh, in his fiduciary role, acquired
the properties using income from his chit fund business for the collective
benefit of all family members. Thus, the claims qua such properties were not
banned by the unamended Section 4 of the Benami Act of 1988.
19. In order to understand the development and application of law
regarding the benami transactions, it could be divided in the following three
time zones:
i. The first stage pertains to the period prior to the enactment of the
Benami Transactions (Prohibition) Act, 1988. As noted above,
benami transactions were a legally recognized mode of holding
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immovable property during this period. The Supreme Court, in the
case of Rajgopal Reddy, affirmed this position and held that the
provisions of the 1988 Act do not have retrospective application.
Therefore, transactions that took place before the enactment of the
Act were governed by the prevailing legal position of that time,
wherein a suit qua property held by one in the name of ancestor was
not prohibited. In Controller of Estate Duty, Lucknow v. Aloke
Mitra28, the Court further held that where a property was purchased
by a husband in the name of his wife, and the wife had no
independent source of income, the presumption was that the husband
was the real owner of the property.
ii. The second phase spans from the enactment of the Benami Act, 1988
till the 2016 amendment to the same Act. During this period from
1988 to 2016, though benami transactions were prohibited by law,
however, Section 3(2) of the Benami Act, as it stood prior to
amendment of 2016, provided an exception inter-alia for purchase of
property by the husband in the name of his wife. Further, prior to its
omission in the year 2016, exceptions were provided in Section
4(3)(a) and (b) of the Benami Act, i.e., purchase of property by an
HUF and purchase of property by a person standing in fiduciary
capacity. Thus, if a property was purchased by the husband in the
name of the wife, it was presumed that it was for the benefit of the
wife. However, the husband could disprove such presumption.
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iii. The third time zone commences from 2016 onwards. In 2016, the
Benami Act was further amended extensively by way of the Benami
Transactions (Prohibition) Amendment Act, 2016. Section 3(2) of
the Benami Act was deleted. However, under the definition of
prohibited benami transactions in Section 2(9) of the Benami Act as
amended in 2016, various exceptions have been provided. Such
exceptions as provided in Section 2(9) of the Benami Act includes
purchase of property by an individual in the name of spouse or in
the name of any child and the payment of consideration for such
property has been provided or paid out of the known sources of such
individual; property held by a karta or member of HUF provided the
property has been held for the benefit of other members in the family
and consideration for such property has been provided or paid out of
the known sources of the HUF; persons standing in 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, etc.
20. As noted hereinabove, in light of the respective dates of acquisition of
the immovable properties forming part of the suit property, the present case
is governed by two stages: the period prior to the enactment of the Benami
Transactions (Prohibition) Act, 1988, and the second stage, i.e., from 1988
until the Amendment Act of 2016 came into force. Thus, it can be observed
that the transactions pertain to a time frame during which the exceptions to
the prohibition of benami acquisitions were in force. While the plaintiffs
claim that the suit properties fall within such exceptions and are therefore
not prohibited under the Benami Act, 1988. Thus, the suit is barred by law.
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21. As already discussed above, in the case of Pawan Kumar, the
exercise of power under Order VII Rule 11 of the CPC in the context of the
Benami Act, 1988 has been considered by the Supreme Court. It was held
that the question as to whether a matter falls within the purview of Section
4(3) of the Act is an aspect that must be adjudicated upon the strength of the
evidence on record. A similar view has been expressed by this Court in the
case of Neeru Dhir v. Kamal Kishore Dhir29. Paragraph 12 of the said
judgment reads as under:
“12. The plea taken by Mr. Chawla, learned counsel for the appellants
that the bar placed under Section 4 of the Benami Act would not apply
retrospectively, is no longer res integra. The said proposition had come
up before the Supreme Court in R. Rajagopal Reddy (dead) by
LRs v. Padmini Chandrasekharan (dead) by LRs reported as (1995) 2
SCC 630, wherein Justice S.B. Majmudar, speaking for the other
members of a three Judge Bench had arrived at a conclusion that
Section 4(1) of the Benami Act does not have any retrospective
application. By the same analogy, any amendment to the said
enactment by virtue of Act 43 of 2016, that came into effect on
01.11.2016, cannot acquire retrospectivity in a case like the present
one where the suit was instituted by the appellants well before the said
date, in February, 2016. We therefore have no hesitation in accepting
the submission made by learned counsel for the appellants that the
amended Benami Act, wherein sub-section (3) of Section 4 was omitted,
would not apply to the instant case. Instead, the unamended Act, which
included subsection (3) to Section 4, would govern the case.”
22. The same Division Bench in Sukruti Dugal v. Jahnavi Dugal30, has
held that at the stage of deciding an application under Order VII Rule 11 of
the CPC, the Court has to assume that all averments made in the plaint are
true and the entire plaint must be read as a whole to determine whether it
discloses any cause of action. The opinion of the Court that the plaintiff may
29
2020 SCC OnLine Del 2506
30
2020 SCC OnLine Del 241
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not ultimately succeed in the suit, cannot be the basis for rejecting the plaint.
Relevant observations are set out as under:
“12. As can be seen from the aforesaid discussion, a plaint cannot be
rejected on the basis of allegations levelled by the defendant in the
written statement or for that matter, in an application moved under
Order VII Rule 11 CPC, for seeking rejection of the plaint. In exercise
of its powers under Order VII Rule 11 CPC, the court is required to
look into the averments made in the plaint, which alone are germane.
The entire plaint must be read as a whole to determine as to whether it
discloses a cause of action. In undertaking the said exercise, the court
is not expected to consider a particular plea and instead, the averments
made in the plaint in entirety, have to be taken to be correct. Since a
cause of action comprises of a bundle of facts, the same are required to
be proved by the plaintiff only at the time of the trial. Only the material
facts are required to be stated in the plaint without referring to the
evidence except in circumstances where the pleadings relate to
misrepresentation, fraud, undue influence, wilful default etc. As long as
the court is satisfied that the plaint discloses some cause of action that
requires determination, the plaint ought not to be rejected. At the end
of the day, the court must be mindful of the fact that the underlying
object of Order VII Rule 11 CPC is to nip in the bud, irresponsible
and vexatious suits. At the same time, the opinion of the court that the
plaintiff may not ultimately succeed in the suit, ought not to form the
basis for rejecting the plaint.”
23. In view of the aforesaid legal position, the plea that the suit is barred
under Section 4 of the Benami Act, 1988 cannot be adjudicated at the stage
of an application under Order VII Rule 11 of the CPC. The factual matrix of
the present case must be examined after affording the parties the opportunity
to lead evidence or the question of applicability of the legal bar or the
exceptions envisaged in the Benami Act, 1988 is a triable issue and can not
be adjudicated in a summary manner. The plaint clearly contains assertions
that the properties in question were not purchased exclusively for the benefit
of the person in whose name they stand, but for the benefit of the entire
family, including the plaintiffs.
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Factual Matrix of the Instant Case.
24. At this juncture, it is pertinent to refer to the specific pleadings in the
plaint, which clearly state that the suit property was purchased exclusively
from the known funds of late Sh. Chanchal Singh and was intended for the
benefit of the entire family. Repeated assertions to this effect have been
made in the plaint, specifically in paragraph numbers 2, 2(a) to 2(h), 4 to 9,
and 11:
“2. (a) …..The said immovable property was purchased in the year 1992 by
late Sh. Chanchal Singh jointly in his own name and in the name of
defendant No.2, out of his known sources of income. Half portion was held
by late Sh. Chanchal Singh on his own name and other half portion was
held by late Sh. Chanchal Singh in the name of his wife i.e defendant
No.2. The said property was purchased not for the benefit of defendant
No.2 only but for the benefit of entire family including the Plaintiff…
c. House property at 720 Road No.. Katra Neel, Chandni Chowk
admeasuring 50.16 Square meters: The said property was purchased by late
Sh. Chanchal Singh in the name of defendant No.2, out of his known sources
of income. The said property was purchased by late Sh. Chanchal Singh
not for the benefit of defendant No.2 only but for the benefit of entire
family including the Plaintiff. The exact details and status of the property
is not known to the Plaintiff since the defendant No. 2 had refused to
share it with the Plaintiff.
g. Plot No.2, Meera Kooi. Nilothi Extension (Farm House). Chander Vihar,
Delhi, admeasuring 1000 square yards and A-201, Vikas Tower, Vikaspuri.
Delhi: The said properties were purchased by late Sh. Chanchal Singh in the
name of defendant No.1, out of his known sources of income. The said
properties was purchased not for the benefit of the defendant No.1 only
but for the benefit of entire family including the Plaintiff. The exact details
and status of the properties is not known to the Plaintiff since the
defendant No.1 had refused to share it with the Plaintiff.
h. Shop No. 10 and 12. 2nd floor. TDI Mall. Vishal Enclave. New Delhi: The
said Property was purchased by late Sh. Chanchal Singh in the name of
the defendant No.2, out his known sources of income. The said properties
was purchased not for the benefit of the defendant No.2 only but for the
benefit of entire family including the Plaintiff. The exact details and status
of the properties is not known to the Plaintiff since the defendant No. 2 had
refused to share it with the Plaintiff.
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9. That it is further pertinent to mention here that late Sh. Chanchal Singh
was a man having a fme sense of business and late Sh. Chanchal Singh had
earned handsomely from the businesses he ran. Though the defendant No.1
was inducted as one of the directors in the Companies ran by late Sh.
Chanchal Singh but the entire business was operated himself by late Sh.
Chanchal Singh. The defendant No.1 only assisted late Sh. Chanchal Singh
in his businesses. The reason for appointing the defendant No.1 as director
in the Companies run by late Sh. Chanchal Singh was only to create more
accounted income and to reduce burden of tax. Therefore, the income which
though were shown in the name of the defendant No.1 belonged to late Sh.
Chanchal Singh. It is pertinent to mention here that if the books of
accounts and bank statements of late Sh. Chanchal Singh, defendant No.1
and 2 be called the trail of money routing in the bank accounts of the
defendant No.1 and 2 can be traced easily, which will ultimately establish
that the funds if any had came from the account of late Sh. Chanchal
Singh only.
10. That from the above it is clear that late Sh. Chanchal Singh was a de-
facto owner of the Suit Properties in as much as the entire sale
consideration was paid out of the known sources of late Sh. Chanchal Singh.
Further, at the time when the substantial properties were purchased by late
Sh. Chanchal Singh (Punjabi Bagh Property, Nilothi Property, Fatehpuri
Property etc.) the defendant No.I and 2 had no independent source of
income of their own and were dependent upon late Sh. Chanchal Singh only.
late Sh. Chanchal Singh had purchased the Suit Properties not only for the
benefit of the de-jure owner but for the benefit of the entire family.
Therefore, no person either the defendant No.I or 2 can claim to be the
exclusive owner of the Suit Properties. Further, the Plaintiff being the co-
owner of the Suit Properties therefore have constructive possession of the
Suit Properties. The Possession of the defendant No.I and 2 is the possession
for and on behalf of all the co-owners including the Plaintiff.”
25. It is the plaintiffs’ case that the properties purchased by the deceased
father of the plaintiffs and defendant No. 1 in the name of his wife were
intended for the benefit of the entire joint family. Regarding the properties
purchased in the name of defendant No. 1, the plaintiffs contend that
defendant No. 1 had no independent source of income, and that late
Chanchal Singh utilized income derived from chit fund companies to
finance these purchases. It is also the case of the plainitiffs that the
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properties acquired in the name of RatanDeep Singh were also meant for the
benefit of the entire family. These issues involve mixed questions of law and
fact, which cannot be conclusively decided at the preliminary stage without
allowing the parties to lead evidence. The following averments in the plaint
must therefore be examined in detail.
26. Additionally, the plaintiffs have alleged that the defendants have
wilfully withheld material documents. A legal notice dated 19.03.2022 was
issued under Order XII Rule 8 of the CPC, calling upon defendant No. 1 to
produce relevant documents. According to the plaintiffs, the response
received was vague and evasive. It is further submitted that the income tax
return for the year 1997-1998 in the name of defendant No. 1 reflects
“Chanchal (HUF)”, which prima facie supports the plaintiffs’ contention that
the family was undivided and that an HUF existed in the name of the
deceased father. Thus, the contentions qua the existance of HUF and
utilisation of HUF funds also remain open till evidence is led and
detrrmination of the same is carried out. The decisions relied upon by the
defendants are distinguishable on facts or were rendered after evidence had
been adduced.
27. In light of the above facts and legal principles, the issue of whether
the properties sought to be partitioned were benami in nature and whether
the consideration was paid by late Chanchal Singh requires full adjudication
after the parties are allowed to lead evidence. Resolution of other ancillary
issues will depend on this pivotal question. The Court, therefore, finds no
ground to reject the suit under Order VII Rule 11 of the CPC.
28. Moreover, it is a settled principle of law that there cannot be any
partial rejection of the plaint under Order VII Rule 11 of the CPC. Either the
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plaint has to be rejected as a whole or there can be no rejection at all. In this
regard reference may be made to the judgment of the Supreme Court
in Madhav Prasad Aggarwal v. Axis Bank Limited31 and Roop Lal
Sathi v. Nachhattar Singh Gill32, which has been followed in Dr. Ramesh
Chander Munjal v. Dr. Suraj Munjal33.
29. The above proposition of law is also reiterated by the Supreme Court
in its recent decision in Central Bank of India v. Prabha Jain34, which held
as follows:
“23.Even if we would have been persuaded to take the view that the
third relief is barred by Section 17(3) of the SARFAESI Act, still the
plaint must survive because there cannot be a partial rejection of the
plaint under Order 7 Rule 11CPC. Hence, even if one relief survives,
the plaint cannot be rejected under Order 7 Rule 11CPC. In the case
on hand, the first and second reliefs as prayed for are clearly not
barred by Section 34 of the SARFAESI Act and are within the civil court’s
jurisdiction. Hence, the plaint cannot be rejected under Order 7 Rule
11CPC.
24.If the civil court is of the view that one relief (say relief A) is not
barred by law but is of the view that relief B is barred by law, the civil
court must not make any observations to the effect that relief B is
barred by law and must leave that issue undecided in an Order 7 Rule
11 application. This is because if the civil court cannot reject a plaint
partially, then by the same logic, it ought not to make any adverse
observations against relief B.”
30. Accordingly, the application is dismissed.
31. Needless to state any observations made herein are only for the
purposes of deciding the present application and would have no bearing on
the final adjudication of the suit.
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CS(OS) 461/2021, I.A. 12522/2021 and I.A. 15734/2021
32. List this matter before the concerned Joint Registrar for taking up
further steps in accordance with the extant rules on 04.09.2025.
33. Keeping in view the facts and circumstances of the case, and in light
of the stay order dated 11.10.2021 operating against the suit properties
mentioned in para 2 of the plaint except for properties 2(a) and 2(b), the
Court directs that the evidence be recorded at the earliest. Let the process be
completed within six months from today.
(PURUSHAINDRA KUMAR KAURAV)
JUDGE
JULY 02, 2025/p
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