A) ABSTRACT / HEADNOTE

The present case arises from Special Leave Petition (Civil) No. 4673 of 2023, wherein the Supreme Court of India was called upon to determine the maintainability of a suit for partition, possession, declaration, mandatory and permanent injunction filed by a mother and her younger son against the elder son and his family. The dispute primarily revolved around whether the properties in question constituted Joint Hindu Family (JHF) properties or were benami properties within the meaning of Sections 2(8), 2(9) and 4 of the Benami Transactions (Prohibition) Act, 1988. The subsequent purchasers of some of the disputed properties, defendant nos. 5 and 6, had filed an application under Order VII Rule 11 of the Code of Civil Procedure, 1908, seeking rejection of the plaint on the ground that the suit was barred under the Benami Act. Both the trial court and the Madhya Pradesh High Court rejected their application, holding that the determination of whether the properties were benami or joint family properties was a mixed question of law and fact requiring evidence.

The Supreme Court upheld the lower courts’ findings, emphasizing that the plaintiffs’ pleadings described the suit properties consistently as joint family acquisitions and not as benami holdings. The Court reiterated that rejection of plaint under Order VII Rule 11(d) CPC is permissible only where, from the plaint itself, it is clear that the claim is barred by law, and not where factual adjudication is required. Importantly, the Court held that defendant no. 2 (Shaifali Gupta), not having filed an application under Order VII Rule 11 nor challenged the trial court’s rejection earlier, had acquiesced to jurisdiction and could not later claim to be aggrieved. The Court also clarified that Section 14 of the Hindu Succession Act, 1956, which confers absolute ownership upon property held by a female Hindu, does not bar suits for partition. Ultimately, the Supreme Court dismissed the Special Leave Petitions, affirming that the parties were free to contest the matter on merits.

Keywords: Benami transaction; Joint Hindu Family property; Maintainability of suit; Rejection of plaint; Order VII Rule 11 CPC; Hindu Succession Act, 1956; Discretionary jurisdiction under Article 136 Constitution of India; Acquiescence to jurisdiction; Subsequent purchasers.

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The dispute originated from the division of family assets alleged to have been purchased through the joint earnings and income of a Hindu Joint Family business. The father, late Shanti Prakash Gupta, originally managed a tailoring business which ceased by 1977. Thereafter, his widow and two sons commenced new ventures including Himalaya Tailors and later Hemi Textiles, both of which allegedly financed the purchase of immovable properties. These properties, though purchased in the names of different family members, were consistently claimed by the plaintiffs (the mother and younger son) as joint family acquisitions liable to partition.

The conflict intensified when Shaifali Gupta (defendant no. 2 and wife of the elder son) executed sale deeds in favour of subsequent purchasers (defendant nos. 5 and 6). This act was challenged by the plaintiffs as void, leading to initiation of a partition and declaration suit. In defence, the subsequent purchasers filed an application under Order VII Rule 11 CPC, asserting that the suit was barred under Section 4 of the Benami Transactions (Prohibition) Act, 1988. They argued that since properties stood exclusively in the names of certain individuals, they were their absolute properties, leaving no room for partition claims.

The trial court, however, dismissed the application holding that whether the properties were benami or constituted joint family assets required evidence. The High Court affirmed this finding, stressing that rejection of plaint at the threshold is limited to cases where statutory bar is ex facie evident. On further challenge, the Supreme Court was tasked with clarifying whether the plaint was indeed barred under the Benami Act or whether issues of benami and family property were to be determined during trial.

The case therefore represents a crucial intersection between property law, family law and procedural law. It addresses the balance between Order VII Rule 11 CPC and substantive prohibitions under the Benami Act, while reaffirming the jurisprudence that bar of law must be apparent from the plaint itself, not dependent upon evidence.

D) FACTS OF THE CASE

The plaintiffs, Smt. Vidya Devi Gupta (mother) and her younger son Sudeep Gupta, filed Regular Suit No. 630A/2018 against the elder son Sandeep Gupta (defendant no. 1), his wife Shaifali Gupta (defendant no. 2), their sons (defendants 3 and 4), as well as subsequent purchasers (defendants 5 and 6), among other family members. The plaintiffs claimed that the suit properties were acquired from the joint family nucleus and income of family businesses, namely Himalaya Tailors and Hemi Textiles. The properties, though registered in different family members’ names, were pleaded as joint family properties liable to partition and distribution.

Crucially, some properties were sold by defendant no. 2 (Shaifali Gupta) to defendants 5 and 6 (Deepak Lalchandani and Surya Prakash Mishra). The plaintiffs challenged these sales as void since the properties allegedly belonged to the joint family and could not be alienated unilaterally. In response, defendants 5 and 6 moved an application under Order VII Rule 11 CPC, seeking rejection of the plaint on the basis that the claims were barred by the Benami Transactions (Prohibition) Act, 1988. They argued that since the properties stood in individual names, they must be treated as personal properties of such individuals, thereby rendering the partition suit non-maintainable.

The trial court rejected the application on 25.02.2019, relying on Popat and Kotecha Property v. State Bank of India Staff Association (2005) 7 SCC 510, holding that whether properties were benami or joint family assets was a question of fact requiring evidence. The High Court in Civil Revision No. 324/2019 upheld this view on 26.09.2022.

Aggrieved, defendant no. 5 (a purchaser) and defendant no. 2 (Shaifali Gupta) separately filed Special Leave Petitions before the Supreme Court. Notably, defendant no. 2 had not previously challenged the trial court’s rejection of the application, raising the issue of whether she could now claim to be aggrieved. The Supreme Court examined whether the plaint disclosed any bar under Section 4 of the Benami Act or Section 14 of the Hindu Succession Act, 1956, and whether subsequent purchasers had locus standi to raise objections under Order VII Rule 11 CPC.

E) LEGAL ISSUES RAISED

i. Whether the plaint was liable to be rejected under Order VII Rule 11(d) CPC on the ground that the suit was barred by Section 4 of the Benami Transactions (Prohibition) Act, 1988?

ii. Whether the subsequent purchasers (defendants no. 5 and 6) had the locus standi to move an application under Order VII Rule 11 CPC for rejection of the plaint?

iii. Whether the plaint properties, though standing in the names of individual family members, could be treated as Joint Hindu Family properties for the purposes of partition?

iv. Whether Section 14 of the Hindu Succession Act, 1956, which grants absolute ownership to Hindu females over property held by them, bars institution of a partition suit?

v. Whether the Supreme Court, exercising its discretionary jurisdiction under Article 136 of the Constitution of India, ought to interfere with concurrent findings of the trial court and High Court rejecting the application under Order VII Rule 11 CPC?

F) PETITIONER / APPELLANT’S ARGUMENTS

The counsels for the petitioners, defendant no. 2 (Shaifali Gupta) and defendant no. 5 (a subsequent purchaser), contended that the suit was not maintainable in view of Section 4 of the Benami Transactions (Prohibition) Act, 1988. It was argued that properties which were purchased and stood exclusively in the names of certain family members, particularly in the name of defendant no. 2, were her absolute properties and could not be subjected to claims of partition. By virtue of Section 14 of the Hindu Succession Act, 1956, any property in the possession of a Hindu female is held by her as a full owner, thereby ousting the claim of joint family ownership. Consequently, the plaintiffs’ claims were barred both under the Benami Act and under the Succession Act.

The petitioners relied on the statutory prohibition under Section 4(1) and 4(2) of the Benami Act, which states that no suit or claim can be instituted to enforce any right in respect of benami property. Their position was that since the properties stood in individual names, any assertion of joint family ownership amounted to a claim over benami holdings, which is expressly prohibited. They further argued that permitting such claims would defeat the legislative intent of the Benami Act, which is to prevent fictitious ownership arrangements and to protect titles standing in the name of recorded owners.

The petitioners also contended that the High Court erred in affirming the trial court’s finding that the issue required evidence. They asserted that from the averments in the plaint itself, the bar of law was evident, and therefore the plaint should have been rejected at the threshold under Order VII Rule 11(d) CPC. Reliance was placed upon the principle laid down in Popat and Kotecha Property v. State Bank of India Staff Association (2005) 7 SCC 510, where the Supreme Court held that a plaint can be rejected where ex facie barred by law. The petitioners argued that the Court must not allow litigations based on untenable causes of action to proceed to trial, as doing so would prolong litigation unnecessarily.

Finally, the petitioners claimed that as subsequent purchasers, defendants no. 5 and 6 had every right to challenge the maintainability of the suit, since their property interests would be directly affected by the partition claims. They contended that the rejection of their application deprived them of their proprietary rights without consideration.

G) RESPONDENT’S ARGUMENTS

The counsels for the respondents (the mother and younger son) countered the petitioners’ submissions by asserting that the plaint never described the properties as benami. Rather, the pleadings consistently stated that the acquisitions were made out of joint family nucleus and income derived from joint family businesses. They emphasized that properties purchased in the names of family members out of joint family funds fall within the exceptions carved out under Section 2(9)(A) Exception (ii) of the Benami Act, which excludes transactions made in the name of a spouse or child from the definition of benami, provided consideration is paid out of known family sources. Thus, the suit was not barred under the Act.

The respondents further argued that the plea under Section 14 of the Hindu Succession Act, 1956 was never raised before the trial court or the High Court and was being introduced for the first time before the Supreme Court. Hence, such a plea was barred by the doctrine of waiver and could not be entertained at the SLP stage. They maintained that Section 14 does not create any bar against institution of a suit for partition; it merely confers absolute ownership over property possessed by a Hindu female. If the property is part of joint family assets, its alienation by one member cannot extinguish partition rights of others.

On the procedural point, respondents emphasized that Order VII Rule 11 CPC requires that the bar of law must be evident from the plaint itself, without reference to any defence or evidence. They relied on Pawan Kumar v. Babu Lal (2019) 4 SCC 367, wherein the Supreme Court held that when the bar of law is dependent upon disputed facts requiring evidence, the plaint cannot be rejected at the threshold. In this case, the determination of whether the properties were joint family assets or benami properties required adjudication on evidence, and therefore the application under Order VII Rule 11 was rightly dismissed.

The respondents also stressed that defendants 5 and 6, being subsequent purchasers, lacked the necessary locus standi to move such an application. They could not claim knowledge of the nature of the properties when in the hands of the original owners. Since they purchased pendente lite, their rights were subject to the outcome of the pending suit under the doctrine of lis pendens as per Section 52 of the Transfer of Property Act, 1882. Therefore, their attempt to seek rejection of the plaint was legally untenable.

H) RELATED LEGAL PROVISIONS

i. Order VII Rule 11, Code of Civil Procedure, 1908 – Provides grounds for rejection of plaint, including where the suit appears from the plaint itself to be barred by law.

ii. Section 2(8) and 2(9), Benami Transactions (Prohibition) Act, 1988 – Defines benami property and benami transaction.

iii. Section 4, Benami Transactions (Prohibition) Act, 1988 – Bars suits or claims in respect of benami properties.

iv. Section 14, Hindu Succession Act, 1956 – Declares that property possessed by a Hindu female shall be held by her as full owner.

v. Article 136, Constitution of India – Confers discretionary power on the Supreme Court to grant special leave against judgments, decrees, or orders.

vi. Section 52, Transfer of Property Act, 1882 – Doctrine of lis pendens, making transfers during pendency of litigation subject to the final decision.

I) JUDGEMENT

The Supreme Court dismissed both Special Leave Petitions, affirming the concurrent findings of the trial court and the High Court. Justice Pankaj Mithal, delivering the judgment, emphasized that the bar under Section 4 of the Benami Act was not evident from the plaint, since the properties were throughout described as joint family assets. The determination of whether they were benami properties or not was a matter of evidence, not capable of being decided at the threshold.

The Court held that defendant no. 2 (Shaifali Gupta), having never filed an application under Order VII Rule 11 CPC or challenged the trial court’s rejection earlier, had acquiesced to the trial court’s jurisdiction and could not later claim to be aggrieved. As for defendants 5 and 6, being subsequent purchasers, the Court ruled that they lacked the necessary locus standi to challenge the maintainability of the suit. Their rights, if any, were subject to the principle of lis pendens.

The Court also rejected the plea under Section 14 of the Hindu Succession Act, 1956, holding that it did not create any bar against suits for partition. It clarified that the section only conferred absolute ownership upon Hindu females but did not exclude partition claims by other family members.

By relying upon Pawan Kumar v. Babu Lal (2019) 4 SCC 367 and Popat and Kotecha Property v. SBI Staff Association (2005) 7 SCC 510, the Court reiterated that the plaint can only be rejected where the statutory bar is ex facie apparent. Since the case involved disputed questions of fact, it was to be adjudicated at trial. The Court therefore dismissed the petitions, holding that no prejudice was caused to the petitioners, and no miscarriage of justice warranted interference under Article 136 of the Constitution.

a. RATIO DECIDENDI

The central ratio decidendi of this case rests on the interpretation of Order VII Rule 11(d) CPC in the context of the Benami Transactions (Prohibition) Act, 1988 and the Hindu Succession Act, 1956. The Supreme Court clarified that rejection of a plaint at the threshold is permissible only where, upon a plain reading of the plaint, the claim is ex facie barred by statute. If the question of maintainability depends upon disputed facts requiring evidence, the plaint cannot be dismissed at the preliminary stage.

The Court held that the plaint in this case consistently pleaded that the properties were acquired from the nucleus of joint family funds and income derived from joint family businesses. Such properties, even if registered in the names of individual family members, fall within the exceptions under Section 2(9)(A) of the Benami Act, which excludes properties purchased in the names of close relatives out of known family sources. Consequently, the bar under Section 4 of the Benami Act was not attracted merely from the plaint’s averments.

Further, the Court observed that the petition by defendant no. 2 (Shaifali Gupta) was not maintainable as she had not earlier challenged the trial court’s rejection and had chosen to contest the matter on merits. Having acquiesced to jurisdiction, she was not an aggrieved person entitled to invoke appellate jurisdiction. As for defendants 5 and 6 (subsequent purchasers), they were not competent to raise the plea of benami bar, as they could not claim knowledge of the character of the property in the hands of original owners, and their rights were subject to the doctrine of lis pendens under Section 52 of the Transfer of Property Act, 1882.

The Court reaffirmed the legal principle established in Pawan Kumar v. Babu Lal (2019) 4 SCC 367 that a plaint can be rejected only when the bar of law is evident on the face of the plaint and not when factual determination is required. Thus, the ratio decidendi is that in cases involving allegations of benami property versus joint family property, the maintainability of the suit depends on evidence and cannot be pre-emptively barred under Order VII Rule 11 CPC.

b. OBITER DICTA

While the Court’s primary holding was confined to the rejection of the plaint, certain wider observations were made in obiter dicta that carry persuasive significance.

Firstly, the Court observed that Section 14 of the Hindu Succession Act, 1956, often misunderstood as creating a bar to partition suits, does not prevent other family members from seeking partition of joint family properties. The section only confers absolute ownership on Hindu females over property possessed by them, thereby abrogating their earlier limited estate rights under Hindu law. However, if such property itself forms part of joint family assets, its possession by a female member does not immunize it from partition claims. This clarification strengthens the doctrinal understanding of women’s property rights under Hindu law.

Secondly, the Court remarked that subsequent purchasers pendente lite cannot take an active role in challenging the maintainability of a suit by invoking statutory bars such as the Benami Act. Their rights, if any, remain subject to the principle of lis pendens. This observation underlines the protective function of Section 52 of the Transfer of Property Act, 1882 in preventing third-party purchasers from disturbing ongoing family disputes.

Thirdly, the Court indirectly reaffirmed the judicial restraint required under Article 136 of the Constitution. It emphasized that the Supreme Court, while exercising its extraordinary discretionary jurisdiction, would not interfere with concurrent findings of lower courts unless there was manifest miscarriage of justice. This obiter serves as a caution against indiscriminate invocation of Article 136 to challenge procedural orders where no substantial injustice is demonstrated.

Collectively, these obiter dicta contribute to a nuanced understanding of property law, women’s succession rights, and procedural propriety in litigation concerning family assets.

c. GUIDELINES

From the reasoning in this case, certain implicit guidelines can be distilled for future application:

i. Scope of Order VII Rule 11 CPC – A plaint can only be rejected at the threshold where the statutory bar is ex facie apparent from the pleadings. Courts must not engage in factual inquiry at this stage.

ii. Interpretation of Benami Act in Family Disputes – Properties acquired in the names of family members from joint family income may fall within the exceptions under Section 2(9)(A) of the Benami Act. Such disputes cannot be summarily dismissed as barred under Section 4.

iii. Acquiescence to Jurisdiction – A party who has not challenged an adverse procedural order earlier, and has instead chosen to contest the case on merits, cannot later claim to be aggrieved by that order in higher courts.

iv. Locus Standi of Subsequent Purchasers – Purchasers pendente lite do not have the right to seek rejection of plaints in partition suits. Their interests are subordinate to the outcome of the litigation by operation of Section 52 of the Transfer of Property Act, 1882.

v. Role of Section 14, Hindu Succession Act – This provision does not bar suits for partition of joint family property; it only converts a woman’s limited estate into an absolute estate. Courts should not misinterpret it as a prohibition against partition actions.

vi. Limits of Article 136 Jurisdiction – The Supreme Court will not ordinarily interfere under Article 136 against concurrent findings of fact and procedural orders unless a grave miscarriage of justice is demonstrated.

These guidelines provide clarity to lower courts, litigants, and practitioners regarding the interplay between substantive property laws and procedural law in family disputes.

J) CONCLUSION & COMMENTS

This judgment reinforces the fundamental distinction between questions of law evident on the face of the plaint and mixed questions of law and fact requiring adjudication. By refusing to allow rejection of the plaint at the threshold under Order VII Rule 11 CPC, the Supreme Court safeguarded the principle that issues requiring evidence must proceed to trial rather than being summarily dismissed.

The ruling also significantly clarifies the scope of the Benami Transactions (Prohibition) Act, 1988 in the context of family disputes. By holding that properties purchased in the names of family members out of joint family income fall within statutory exceptions, the Court prevented the misuse of the Benami Act as a shield to defeat genuine partition claims. This interpretation maintains a balance between prohibiting fraudulent benami holdings and protecting legitimate family arrangements.

Another important aspect is the Court’s treatment of Section 14 of the Hindu Succession Act, 1956. The observation that it does not bar partition suits restores coherence to the jurisprudence on women’s property rights. It ensures that while female Hindus enjoy absolute ownership over property they possess, such ownership cannot negate other coparcenary claims where the property itself is derived from joint family sources.

The judgment also upholds procedural discipline by ruling that subsequent purchasers pendente lite lack the standing to seek rejection of plaints and that parties who have acquiesced to jurisdiction cannot later challenge it. These findings discourage opportunistic litigation and protect the integrity of judicial proceedings.

From a broader perspective, the case underscores the Court’s reluctance to exercise its extraordinary jurisdiction under Article 136 of the Constitution in the absence of manifest injustice. This restraint strengthens judicial hierarchy by affirming the finality of concurrent findings by trial and appellate courts in procedural matters.

Overall, the decision contributes meaningfully to the jurisprudence on civil procedure, property law, and family law. It offers clarity to courts, reinforces litigants’ rights to have disputed facts adjudicated on evidence, and prevents misuse of statutory provisions as procedural weapons.

K) REFERENCES

a. Important Cases Referred

i. Popat and Kotecha Property v. State Bank of India Staff Association, (2005) 7 SCC 510.

ii. Pawan Kumar v. Babu Lal, (2019) 4 SCC 367.

b. Important Statutes Referred

i. Code of Civil Procedure, 1908 – Order VII Rule 11.

ii. Benami Transactions (Prohibition) Act, 1988 – Sections 2(8), 2(9), 4.

iii. Hindu Succession Act, 1956 – Section 14.

iv. Transfer of Property Act, 1882 – Section 52.

v. Constitution of India – Article 136.