Family Settlement, license, permissive possession
& OWNERSIP: LAW DISCUSSED
The
division bench of Delhi High Court has reiterated and reaffirmed the fact that
a registered document and its effect cannot be undermined on the strength of a
family settlement, howsoever, persuasive it may be. In a matter captioned as Sandeep
Sethi & Anr Vs Rajinder Kumar Sethi deceased through LRs RFA (OS)
05/2017, the Delhi high court has held as much. It is held to be well settled
that in the absence of material pleadings in the written statement, a plea of
either an oral family settlement or of the case, falling within the exception
to Section 4 of the Benami Act, is not legally tenable. Mere incantation
of the words “trustee” or “fiduciary” cannot, by itself, attract the statutory
exception. In absence of the cogent evidence, such a plea shall be untenable.
In
the above case, in a good measure, it is also deliberated that, if the defendant,
was a licensee, and he must be deemed to be always a licensee. It is not open
to him, during the subsistence of the license or in the suit for recovery of
possession of the property instituted after the revocation of the license to
set up a title to the property in himself or anyone else. The licensee‟s
obligation is to surrender possession upon termination of the license and, if
so advised, to pursue any independent remedy for declaration of title through
appropriate proceedings. In Sandeep Sethi (Supra), despite termination
of the license though notice issued and institution of the suit, the defendants
failed to surrender possession of the Suit property. The Plaintiff, therefore,
became entitled, as a matter of law, to recover possession.
The
ld single judge of Delhi High Court vide a common judgement dated 28.11.2016 in CS(OS)
2134/2006 & CC No. 990/2017, in Sandeep Sethi (Supra) was
pleased to decree the suit filed by the plaintiff against the Defendants in the
said suit, directing the Defendants to handover the possession of the entire
first floor and two rooms along with one bathroom on the second floor of the
Property bearing No. A-8, Vishal Enclave, New Delhi( In short “suit property”).
The counter claim filed by the defendant was dismissed.
In
intra court appeal, the hon’ble division bench had also adjudicated the appeal
vide a common judgment, since the parties to the disputes were common and the
appeals emanated out of an identical factual matrix, involving overlapping
parties and common questions of law.
FACTUAL
MATRIX
(i) The Plaintiff claimed to be the registered
owner of the Suit Property, which was originally leased from the Municipal
Corporation of Delhi [In short “MCD‟]
pursuant to a perpetual lease dated 11.05.1971.
(ii) The Plaintiff thereafter had constructed a three-storey building on the
said plot from his own funds and resources. The aforesaid property was
subsequently converted into free-hold in favour of the Plaintiff vide a
conveyance deed dated 05.01.2011.
(iii) The Plaintiff bore all the expenses relating
to the conversion, and on that basis, asserts exclusive ownership over the Suit
Property as his self-acquired property.
(iv) The Defendant, elder brother of the
Plaintiff, was allowed to use and occupy the first floor, and two rooms along
with one bathroom on the second floor of the Suit Property, purely out of
natural love and affection. No consideration was ever charged from the
Defendant for such use or occupation.
(v) The oral licence granted in favour of the
Defendant was revoked in September 2006. Upon revocation, the Defendant sought “15
days‟
time to shift, remove his belongings, and hand over the physical possession of
the premises.
(vi) However,
the Defendant failed to vacate the Suit Property. A legal notice dated
26.10.2006, was, thus, issued to the Defendant. The defendant, despite due
service of the aforesaid notice, neither replied thereto nor complied with its
terms. Hence, in terms of the notice, the licence to occupy the Suit Property
stood revoked, and the defendant was granted Seven (7) days to vacate the
premises, and handover vacant and peaceful possession to the Plaintiff.
(vii) As the defendant did not comply with the same,
therefore, the suit was instituted, before
Delhi High Court seeking the following reliefs:
(a)
A decree of possession be passed in
favour of the Plaintiff and against the Defendant in respect of the entire
first floor and two rooms and one bathroom on the Second Floor, as shown within
red lines in the site plan attached with the plaint, of the property bearing
No. A-8, Vishal Enclave, New Delhi.
(b)
A further decree of Rs. 2000/- on
account of damages and mesne profits be also passed in favour of the Plaintiff
and against the Defendant, for the period of 04.11.2006 till the date of filing
of the Suit.
(c)
A further decree @Rs. 1,000/- per day on such rate at which the court may
arrive at after holding enquiry under Order XX Rule 12 of the CPC be also
passed in favour of the Plaintiff and against the Defendant as damages and mesne
profits pendente lite and future till handing over of its physical and vacant
possession of the property in question. The Plaintiff undertakes to pay
deficient court fee at the time of decree.
(d) Cost of the suit may also be awarded in
favour of the Plaintiff against the Defendant.
(e)
Any other or further order which this
Hon’ble Court may deem fit and proper in the facts and circumstances of the
case may also be passed in favour of the Plaintiff and against the Defendant.”
Defendant’s
version
The
written statement was filed by the defendant while, raising a counter- claim on the following
grounds:
(i)
While the execution of the lease deed dated 11.5.1971 is not in dispute, the defendant
denies exclusive owner of the plaintiff in Suit Property.
(ii)
It was claimed that the ground floor of the Suit property was constructed out
of the joint funds of the Plaintiff and the Defendant, whereas the first and
the second floors were constructed solely by the Defendant using his own
resources, pursuant to a family arrangement under which those floors were to
belong exclusively to him.
(iii)
The defendant had also disputed the Plaintiff‟s
assertion that the entire expenditure for conversion of the property from
leasehold to freehold was borne exclusively by the Plaintiff.
(iv)
The suit is not maintainable, not valued
properly, it is barred by limitation, and is also barred by the law of adverse
possession.
COUNTR
CLAIM
In
the counter claim, it was averred by the defendant, that upon the demise of the
father of the parties, both the sons i.e. the Plaintiff and the Original
Defendant, inherited his estate and business, a substantial portion of which
was joint in nature.
It
is also contended that the Plaintiff, Defendant, and their father jointly
participated in the auction, and upon being declared successful, the property
was purchased in the name of the Plaintiff, at the instance of their father, in
order to circumvent the terms and conditions of the auction, which prohibited
participation by a person already owning property in Delhi.
The
initial amount of Rs.10,300/-, as well as the subsequent instalments, are
stated to have been paid out of joint funds. It was also claimed that the Plaintiff
had mortgaged the Suit Property to obtain a loan, and thereafter in November
1976, applied for sanction of building plans for construction of the ground
floor. Upon approval, a dwelling unit was built using joint funds, and that was
reflected in the occupancy certificate dated 16.05.1981.
Both
the families had shifted to the newly constructed ground floor on 04.11.1979. It
is also claimed by the defendant that prior thereto, the parties were residing
together in another property bearing No. B-1, Radhey Puri, Delhi, which
admittedly belongs to the defendant, and whose ownership and possession are not
in dispute.
It
was further averred that under the family arrangement, the Plaintiff was to
assist the defendant in securing sanction of building plans, and in the
installation of water and electricity meters in the name of defendant. It was
agreed between the parties that the first and second floors of the Suit
Property would be constructed by the Defendant from his own funds, and that, in
the event of sale of the Suit Property, the sale proceeds would be divided
equally between the two brothers.
The
Defendants claimed to have utilised the funds received from the sale of his Vivek
Vihar Property, as well as the drawings from his business, towards the
construction of the first and second floors, for which sanction was allegedly
granted on 24.03.1988.
The
Defendants pleads that the records of the MCD reflected his name and that of
his son, were got noted as owners and occupants of the first and second floors
of the Suit Property, since, they alone, interacted with municipal authorities.
The reliance is placed on a notice dated 13.10.1989, which is stated to confirm
their use and occupation of the said portions. In mid- 2003, at the request of
the Plaintiff, the Plaintiff‟s son was permitted to
use a part of the second floor, for the purpose of storage.
The
Defendants while providing a detailed narrative of the family‟s
movements, stated that after partition, the family initially stayed at Jammu
with their maternal uncle, thereafter, moved to Karnal and subsequently settled
in Delhi. During this period, several premises were taken on rent, following
which, the parties shifted to Radhey Puri and throughout, the parties are said
to have lived jointly as a family.
ISSUES
FRAMED
The
following issues were framed on 04.07.2007 in the suit-
“1.
Whether the plaintiff is entitled to a decree of possession in respect of A-8,
Vishal Enclave, New Delhi, as claimed?OPP
2.
Whether the plaintiff is entitled to damages/mesne profits of Rs.2000/-from the
defendant till the period of filing of the suit and @ Rs.l000/- per day for the
period after filing of the suit from the defendant as claimed or damages/mesne
profits at any other rate? OPP
3. Whether the suit is
barred by limitation? OPD
4. Whether the suit has
not been properly valued and liable to be dismissed for want of court fee?
OPD''
The following issues were framed in the
counter claim:
"1.
Whether the defendant is entitled to decree of declaration that he was the
owner of 1st and 2nd floor and proposed owner of land
underneath A-8, Vishal Enclave, New Delhi?
2.
Whether the defendant is entitled to mandatory injunction as claimed in the
counter claim for removal of obstructions of plaintiff and his agents and
servants etc in use and occupation of 1st and 2nd Floor
of the property by the defendant?
3.
Whether there was any family settlement as claimed by the defendant dated
25.10.1970 and 4.11.1979? OPD.
4. Whether the counter claims have not been
properly valued and are liable to be dismissed for want of proper court-fee?
5.
Whether the counter claims of the defendant are barred under Benami Transaction
Act? OPD
6. Relief"
EVIDENCE
The
Plaintiff placed reliance on the partnership deed to demonstrate that the
original parties were partners in a firm, thereby seeking to negate the
existence of any Joint Hindu Family [hereinafter referred to as :JHF‟].
During cross-examination, DW1 admitted
that, on the date of auction, no registered property stood in the name of Sh.
Trilok Chand Sethi. The Defendant also placed on record, a letter issued by MCD
concerning unauthorised construction further acknowledged that the Vivek Vihar
property had been sold by his father, who thereafter purchased a flat in
Mumbai. DW1 also admitted that he was unable to produce any document to show
that his father had ever paid house tax in respect of the Suit Property or
borne any charges for converting the property from leasehold to freehold. The
only document produced by DW1 in support of construction, was an invoice for
200 bags of cement, issued in his own name. The DW1 deposed that the Suit
Property was purchased in an auction, conducted in the year 1970. According to
him, the original parties, their father, and an old friend of the Plaintiff,
went for the MCD auction. The father was allegedly made aware of the terms and
conditions of bidding, including the stipulation that a bidder should not own
any other property in Delhi. A copy of these terms and conditions has been
exhibited. DW1 further stated that the property bearing No. D-253 Vivek Vihar,
which was in the name of the original Defendant, was sold after the parties
shifted to the Suit Property on 04.11.1979. A copy of the passbook, duly exhibited
and was relied upon, to show, that funds from their joint account were used to
pay household expenses relating to the Suit Property. A copy of the ration card
of the Plaintiff was also exhibited. DW1 further deposed that, pursuant to an
alleged agreement of 1970, and subsequent family arrangements of 1974, and
04.11.1979, the first and second floors of the Suit Property were always
intended to belong to the original Defendant.
Decision by the single judge
Upon
consideration of the pleadings and evidence on record, the Suit was decreed in
favour of the Plaintiff on the following grounds:
(A)
That the Plaintiff successfully proved
his ownership of the Suit Property, by virtue of the perpetual lease deed dated
11.05.1971 and conveyance deed dated 05.01.2001.The plaintiff had also established
that the sanctioned building plans, occupancy certificate, house tax records,
electricity and water meters stood in his name. The Defendants failed to adduce
any evidence to substantiate the existence or implementation of any family
settlement. Furthermore, the Defendant did not place on record any documentary
proof, to show that any expenditure was incurred by the original Defendant
towards the construction of the ground, 1st or 2nd floors.
Although reliance was placed on a bank passbook, the same did not establish
payment of electricity or water charges, as claimed. Consequently, the
Plaintiff was held to be the absolute owner of the Suit Property, and entitled
to its possession.
(B).
That accordingly, the issue no.1 in the
suit and issue nos. 1 and 3 in the counter-claim were decided in the Plaintiff‟s
favour. The ld single judge had also observed that there was no
cross-examination or rebuttal by the Defendant with respect to the rate of
damages/mesne profits claimed by the Plaintiff. Considering the relationship
between the parties, damages/mesne profits @ Rs.30,000/- per month, were granted
in favour of the Plaintiff and against the Defendant.
(C).
That on the point of limitation, the Defendants failed
to establish adverse possession over the Suit Property. No evidence or anything
was produced to show that the suit was barred by limitation. Since, the license
of the Defendant was revoked by a legal notice dated 25.10.2006, and the suit
was filed on 06.11.2006, the Suit was held to be well within the period of
limitation.
(D) That, the onus pertaining to the issue no 4
in the suit was on the Defendant, however, the Defendant failed to discharge
it. The suit had been valued by the Plaintiff in accordance with the market
value of the Suit Property. The issue is, therefore, decided in favour of the
Plaintiff and against the Defendant.
(E) That with regard to the issue no.2 in the
counter-claim, the Defendant relied on photographs of the gym, allegedly run by
Sh. Ajay Sethi, son of the Plaintiff, at the Suit Property, to establish the
obstructions in the Defendant‟s use and occupation of
the premises. However, in view of the Plaintiff having established his
ownership and the Defendant having failed to prove any right, title, or
interest in the Suit property, the said contention was rejected.
(F) That pertaining to valuation of the Court
Fee, in respect of the counter-claim, the ld Single Judge held that the Counter
Claims had been properly valued in terms of para 25 of the plaint.
Consequently, this issue was decided in favour of the Defendant and against the
Plaintiff.
(G) Lastly, with regard to the issue no.5 in
the counter-claim, in view of the bar contained under Section 4(2) of the
Prohibition of Benami Property Transactions Act, 1988 [“the Benami Act‟],
this issue was decided in favour of the Plaintiff and against the Defendant.
APPEAL BEFORE DIVISION
BENCH
In
light of these findings, the ld single judge of Delhi high court was pleased to
decree the suit, in favour of the Plaintiff, and the Counter Claim stood
dismissed accordingly.
CONTENTION
OF THE PARTIES IN APPEAL
The
defendant had impugned the judgment and decree in appeal by challenging the
said judgment and decree with the following pleas.
(i) The Plaintiff could be said to be
holding the Suit Property in a fiduciary capacity, only, as a member of
the Hindu Joint Family, and that the Suit Property was initially purchased, and
subsequently, developed by construction of various floors, out of common and
joint family funds.
(ii)
The ld single judge erred in failing to return any findings on a crucial
argument raised on behalf of the Defendants, viz the averments of the
Defendants in the counter-claim, having not been specifically denied or
challenged by the Plaintiff, stood admitted, yet were completely ignored in the
Impugned Judgement. In this regard, the Appellants specifically rely upon the
averments pertaining to utilisation of joint funds, payments allegedly made for
acquisition of the Suit Property by Late Sh. T.C. Sethi, from joint funds, expenditure
incurred towards construction of the dwelling unit from joint funds, the
alleged common business agreement of 1970, and the family arrangement dated
04.11.1979.
(iv) It is settled law that the burden
of proof to establish the quantum and justification of mesne profits, lies upon
the party claiming the same. The Impugned Judgement, it is urged, has awarded
mesne profits without any evidence on record, and solely on the ground of
suggestion being made by the counsel of the Plaintiff.
(v)
The ld Single Judge erred in awarding interest on an alleged amount termed as
mesne profits. It is pointed out that the suit remained pending for several
years, partly due to delays occasioned during mediation proceedings, and also
because the Impugned Judgement remained reserved for a considerable period, for
which the Defendants cannot be faulted.
(vi) The Defendants contend that it was an admitted
fact that the land standing in the name of the father of the erstwhile parties
stood acquired shortly prior to the date of auction by MCD. This fact assumes
significance, in light of the terms of the auction, which stipulated that
ownership of any other property would render the bid liable to rejection. It is
for this reason, inter alia, that the bid was recorded in the name of the
younger son, i.e., the Plaintiff. According to the Defendants, this crucial
aspect has been completely overlooked by the ld Single Judge.
(vii) The ld single judge have erred in
ignoring the fact that everything including houses/residencies/ businesses,
income & expenditure etc. were joint and derived from a common source of funds
namely, joint family business. This fact, it is contended, was not denied in
the pleadings and stood admitted in evidence.
(vii)
The Defendants further contend that the provisions of the Benami Act, and the
settled law thereunder, have been ignored by the ld Single judge. The Plaintiff
could only be said to be holding the Suit Property in a fiduciary capacity, as
part of the Hindu Family, and that the Suit Property was purchased and
developed out of common funds.
(viii)
The ld Single judge , inequitably noted the sale of the Vivek Vihar property by
the Defendant, and the purchase of an alternative property at Dhanu Road,
Maharashtra, while completely ignoring the comparative monetary values involved
in these transactions.
(ix) The Defendants assert that joint bank account
of the business was used for making payment for all property tax, electricity,
water, repayments of loan, and construction related payments. This, according
to them, was consistent with the understanding that the Suit Property was
joint, and that steps would subsequently be taken to record joint ownership in
official records, pursuant to the family arrangement.
(x)
It is further pertinent to note that that even the Plaintiff has utterly failed
to show any source of his funds for the construction, which he claims to have
undertaken from his own resources. It is submitted that the Plaintiff had no
known source of income at the relevant time, whereas, the Defendants had
demonstrated availability of funds through sale of properties, constitute facts
which were allegedly ignored by the ld single judge.
(xi) wrongful reliance was placed by the
ld single judge upon the judgement in Hemaji AIR 2012 SC 1987, as the
facts of that case were entirely distinguishable, and the law laid down,
therein, was not applicable to the present matter.
(xii)
The ld single judge failed to apply the law laid down by the Apex Court
in, Marcel Martins v. M. Printers AIR 2009 SC 103. The circumstances, in
which the Suit Property was purchased in the name of the Plaintiff, assumes
great importance while determining whether the Plaintiff held the property in a
fiduciary capacity vis-à-vis the Defendants. On this basis as well, the Defendants
assert that the Suit property was acquired and developed from common funds.
(xiii) It is wrong to have accepted the Plaintiff‟s
contention that the jewellery belonging to his wife was sold to finance
construction of the Suit Property. This claim, according to the Defendants,
stood completely demolished, during the Defendant‟s
cross-examination on 25.10.2010, wherein he admitted that no documentary proof
such as income tax returns or bank statements was available, to establish the
availability of funds or the existence of such jewellery.
(xiv)
The Defendants relied upon
evidence led by the Defendant No.2 while contending that the only gold in the
household was either bought or inherited by the father of the erstwhile
parties, and a portion thereof was sold to repay a loan taken by the father of
the parties from one Mr. K.C. Kapoor, at the time of auction bidding.
(xv)
In fact, both the Plaintiff and his son
admitted that during matrimonial disputes between son and the daughter-in-law,
the daughter-in-law had taken away her entire jewellery/stridhan, as well as
the jewellery belonging to the wife of the Plaintiff, sometime during
2007-2008. This fact, supported by police records, clearly demonstrates that no
jewellery was available for sale to finance construction, and that any
jewellery purchased thereafter, could only have been acquired after completion
of construction from funds, allegedly provided by the Defendants.
(xvi) The Defendants further contend
that the ld single judge failed to consider the mandate of the statutory
provisions, especially Section 2(15) read with Section 35 of the Code of Civil
Procedure, 1908, regarding filing of suit for partition and possession of an
immovable property.
According to the
Defendants, these averments go to the very root of the matter and establish the
counter-claim in their favour.
PLEA
OF THE PLAINTIFF/RESPONDENT
Per
contra, the learned counsel for the Respondent/Plaintiff has made the following
submissions:
1.
It is averred that the Plaintiff has
duly proved his ownership of the Suit Property by placing on record and
exhibiting the perpetual lease deed, Conveyance deed Occupancy Certificate, house tax receipts,
assessment orders and various notices. In contrast, the Defendants failed to
produce any document/record or prove the existence of any family settlement qua
the Suit Property or otherwise.
2. The Plaintiff contends that the Defendants
failed to prove that the first and second floors of the Suit Property were
constructed by his own funds or that the conversion from leasehold into
freehold was not funded solely by the Plaintiff.
3.
The reliance placed by the Defendants
on the Partnership Deed dated 06.04.1964 is misconceived, as the said
Partnership Deed itself records that- “AND whereas the party No.1 Sh. Rajendra
Kumar Sethi was carrying on the business under the sole proprietorship and with
effect from 01.04.1964 the party no.2, i.e., Sushil Kumar Sethi has been taken
as a partner by Shri Rajendra Kumar in the firm under the name and style of M/s
Tara Rubber Industries”.
4. This makes it amply clear that the
Plaintiff had an independent source of income and did not require partnership
funds to purchase the Suit Property. It has also been referred in the written
statement, that the Plaintiff was also involved in the sale and purchase of
properties, that further justify the generation of independent funds by the
Plaintiff.
5. The Plaintiff has also contended that the
Appellant also called for the voluminous records through RTI from the MCD and a perusal of the same showed that the bid
amount was paid by and in the name of Plaintiff. Moreover, the Plaintiff has
also been given a no Objection Certificate for mortgaging the Suit Property to
Delhi Administration for loan etc.
6.
As regards the existence of the family
arrangement dated 25.10.1970 and 04.11.1979, neither did the Appellant produce
any supporting document nor were the 20 witnesses produced were able to prove
any sort of family settlement.
7. Furthermore, Sh. Trilok Chand Sethi in his
lifetime executed a Will and property bearing no. D-253, Vivek Vihar, Delhi was
bequeathed to the original Defendant. Further, in line with the said Will, a
release Deed dated 20.05.1978 was
executed by the Plaintiff in favour of the Defendant, since at that point of
time a Will could not be given any effect, without grant of probate, and hence
a relinquishment/ release deed ought to have been executed. This itself negates
the existence of any family settlement.
8. It is also contended that the Defendant
owns multiple properties such as B-1 and 2, Radhey Puri from where it is
deriving rent, a plot of land at Vivek Vihar, a flat at Dhanu Road, Mumbai and
Appellantis a member of Varun Co-op. House Building Society, whereas the
Plaintiff has in his name only one property i.e. the Suit property, thereby
rendering the plea of family settlement improbable.
9. Even prior to the setting up of M/s Tara
Rubber Industries vide Partnership Deed dated 01.04.1964, the Plaintiff was
having his sole proprietorship and even after that he was engaged in the
business of buying and selling of properties thereby generating sufficient
income and revenue to purchase the Suit Property in auction, through his own
funds. The Defendants merely contended without any substantiation, that, he,
along with his father had invested his monies for the said purchase. No
corresponding proof could be furnished through any account statements,
passbooks or record.
10. The judgement of Marcel Martins (supra),
was further relied by this Hon‟ble
Court in Promila Gulati v Anil Gulati, 2015 (149) DRJ 195 Ramesh Advani v Hiro Advani & Anr
CS(OS) 1828/2012, has held that for a party to successfully fall under the
exception of Section 4 of the Benami Act, a specific pleading coupled with
evidence proving the same ought to be present. It is imperative that a pleading
of relationship of trust in a fiduciary capacity is taken and further the Court
shall have to take into consideration the factual context in which the question
arises for it is only in factual backdrop that the existence or otherwise of a
fiduciary relationship can be deduced in a given case.
11. Lastly, it is contended that the Defendants
have never initiated any proceedings i.e., suit for implementation of an oral
family settlement or any other claim raised by the Defendants in the written
statement/counter-claim in spite of lapse of over three decades, clearly
indicating that the defence raised is an afterthought, lacking bona fides, and
intended merely to cloud the real issues in the matter.
FINDINGS AND ANALYSIS
(IN APPEAL)
The
hon’ble Division bench on the basis of the arguments advanced and based on
record have returned the findings as under:
(1)
The primary contention of the Defendants that the Plaintiff is not the
exclusive owner of the Suit Property is wholly untenable. The Plaintiff has
conclusively proved his title, by placing on record the documents like
Perpetual Lease Deed dated 11.05.1971, Conveyance Deed dated 05.01.2001
converting the property from leasehold into freehold, Occupancy Certificate, No
Objection Certification, house tax records, assessment orders and statutory
notices issued exclusively in his name. These documents constitute
unimpeachable evidence of ownership. In contrast, the Defendants have not
produced a single title document, conveyance, sanction letter, or statutory
record evidencing any ownership rights in their favour, over any portion of the
Suit Property.
(2)
The Defendants assertion that the Suit Property was purchased from joint family
or joint business funds, is equally devoid of merit. Significantly, the
Defendant after having taken a stand in his written statement, that property
was not purchased in name of their father, T.C. Sethi, because he was already
owner of some other property in Delhi, admitted during cross-examination that
no registered property stood in the name of the father of the parties on the
date of auction. No bank statements, account books, vouchers, or payment
receipts evidencing contribution by the Defendants or their father towards the
auction price were produced. Even the passbook relied upon by the Defendant
does not reflect any payment towards the auction consideration or construction
costs. Mere oral assertions of “joint funds”, unsupported by contemporaneous
documentary records, cannot displace registered title documents.
(3)
What is of significance is that the Defendants themselves placed reliance on
the Partnership Deed dated 06.04.1964. Ironically, the said document completely
undermines their own averment, as it categorically records that the Plaintiff
was carrying on business as a sole proprietor prior to the constitution of the
partnership and that the Defendant was inducted subsequently as a partner. This
clearly establishes that the Plaintiff had an independent source of income even
prior to the partnership and negates the existence of any JHF or any joint
family nucleus. Joint Hindu Family and Joint Hindu Family property are distinct
and separate. The mere existence of a JHF does not necessarily lead to
existence of a JHF property. Once the existence of a JHF is not established,
the presumption of a Joint Hindu Family Property does not arise.
(4)
It is well settled that even if there is an existence of Joint Hindu Family (JHF),
it does not ipso facto render all the properties as joint family properties.
Instead, the claimant must establish that the property in question was acquired
with the aid of the joint family funds, particularly, by demonstrating the
existence of a sufficient nucleus capable of supporting such acquisitions. It
reinforces the importance of substantiating claims, regarding the nature of
property within joint Hindu families. It is clear that without concrete evidence
of a joint family nucleus, any presumption of a property as joint family-owned
is legally impermissible.
(5)
The Defendants‟ case hinges substantially on
alleged oral family settlements dated 25.10.1970 and 04.11.1979. However, no
written memorandum, contemporaneous document, or corroborative evidence was
produced to prove the existence of an oral family settlement. None of the
witnesses examined were able to establish either the precise terms, the manner
of implementation, or even the very existence of such alleged family
settlements. Additionally, the Defendants have failed to produce any documents
to prove that they ever asserted themselves as co-owner in the Suit Property,
unlike the Plaintiff. Significantly, no suit or proceedings were ever
instituted for enforcement of the purported settlements, for more than three
decades, which conduct is wholly inconsistent with the existence of any
concluded or acted-upon family arrangement.
(6)
It is a settled principle of law, that, although, a family settlement may be
oral, its existence must be proved by cogent, reliable and convincing evidence,
demonstrating not only consensus ad idem, but, also acceptance and
implementation by the parties. The Defendants, however, have failed on all
counts. Moreover, the long and uninterrupted conduct
of the parties, coupled with the absence of any mutation, change in possession,
or assertion of rights in consonance with the alleged settlement, clearly
negates the plea raised. An unsubstantiated oral family settlement cannot be permitted
to defeat or override duly executed and subsisting title documents.
Accordingly, the plea of family settlement remains a mere bald assertion,
unsupported by evidence, and having remained unsubstantiated, was rightly
rejected by the ld single judge.
(7)
The assertion that the ground floor was constructed from joint funds, whereas
the first and second floors were allegedly constructed exclusively by the
Defendants, is wholly unsupported by cogent and credible evidence. Apart from a
solitary receipt pertaining to purchase of 200 bags of cement, the Defendants
failed to produce any material substantiating the alleged expenditure, such as
construction bills, contractor agreements, labour payments records, sanctioned
building plans in the Defendant‟s name, or bank
statements evidencing withdrawals for construction purposes.
(8)
It is trite law that the burden of
proving financial contribution towards construction squarely lies upon the
party asserting such a claim. Mere assertions, uncorroborated by documentary
evidence, do not discharge this burden. Conversely, the sanctioned building
plans, electricity and water connections, as well as the municipal records,
stand exclusively in the name of the Plaintiff, thereby clearly indicating both
ownership and control over the property. Further, it is well settled that mere
occupation, supervision of construction, or participation in management does
not, in law, confer any proprietary or ownership rights in immovable property.
In the absence of proof of title or demonstrable financial contribution leading
to the creation of an enforceable interest, the Defendants‟
claim is legally untenable. The ld single judge, therefore, rightly rejected
the said plea, holding that possession or supervision, without more, cannot be
elevated to a claim of ownership.
(9)
As regards the plea that the Plaintiff
did not exclusively bear the expenses of conversion, the Defendants led no
evidence to show any contribution on their part. On the contrary, DW-1
categorically admitted in cross-examination that no proof of payment towards
conversion charges was available or could be produced by the Defendants,
thereby amounting to failure to substantiate their stand. The conveyance deed
stands solely in the name of the Plaintiff, and in law, once the conveyance
deed stands duly executed and registered solely in the name of the Plaintiff, a
strong presumption of legality, title and exclusive financial contribution,
arises in favour of the Plaintiff. Mere denial or speculative assertions are
insufficient to discharge such onus, particularly, in the absence of
documentary evidence. Thus, the Defendants plea remains unsupported and legally
untenable.
(10)
The reliance placed by the Defendants on Marcel
Martins (supra) is misplaced and clearly distinguishable. The decision
therein was rendered in the peculiar factual matrix of that case, resting upon inferences
drawn from admitted conduct and surrounding circumstances, none of which are
present in the instant case. The ratio of the said judgement, therefore, cannot
be mechanically transplanted to the present facts, which are dissimilar and
devoid of any foundational evidence warranting such interference. On the
contrary, the judgements in Promila Gulati (Supra) and Ramesh Advani
(supra), unequivocally mandate strict and specific pleadings, coupled with
cogent proof, particularly where exceptions to statutory prohibitions are
invoked. These authorities underscore that vague assertions or omnibus pleas
are insufficient to displace statutory presumptions or to bring a case within
the narrow exceptions carved out by law. In the present case, there is a
conspicuous absence of any specific pleading or evidence establishing the
existence of a fiduciary relationship, circumstances giving rise to trust or
confidence, and the legal obligation on the Plaintiff to hold the property for
the benefit of the Defendants.
(11)
It is well settled that in the absence of
material pleadings in the written statement, a plea of either an oral family
settlement or of the case falling within the exception to Section 4 of the
Benami Act is not legally tenable. Mere incantation of the words “trustee” or
“fiduciary” cannot, by itself, attract the statutory exception. Notably,
despite examining as many as twenty witnesses, the Defendants failed to elicit
any credible evidence to substantiate the alleged family settlement, which
forms the very bedrock of their defence. The entire defence, therefore, rests
on conjecture and unsubstantiated assertions.
(12)
It is apparent that the said defence
taken by the Defendants is barred by Section 4 of
the Benami Act. The operative part of the law reads as under: “4. Prohibition
of the right to recover property held benami- (1)… (2) No defence based on any
right in respect of any property held as 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.”
It
was therefore concluded by the division bench that in the present case, the
Plaintiff cannot, by any stretch of imagination, be said to have been standing
in a fiduciary capacity vis-a-vis the Defendant, nor can the Plaintiff be
construed as a trustee. Even assuming such a plea is raised, the same is required
to be established through specific and unambiguous pleadings and proof, both of
which are conspicuously absent. However, the bar/prohibition under the Benami
Act, cannot be circumvented merely by paying lip service to the concept of
fiduciary capacity, as such an approach would defeat the very object and
legislative intent of the statute. Permitting such defences, on the basis of
bald and unsubstantiated pleas would amount to allowing statutory prohibitions
to be rendered illusory, thereby subjecting the ostensible owner to prolonged
and vexatious litigation at the instance of a person claiming to be the
so-called “real owner”. Such an outcome would not only undermine the sanctity
of registered title but would also run counter to the express mandate of section
4 of the Benami Act.
Permissive
possession is distinct from adverse possession
The
very basis of the claim of adverse possession shall be hostile possession to
the knowledge of true owner. In Sandeep Sethi (Supra), the defendants
have themselves admitted permissive occupation of the Suit Property. Such
permissive possession, being referrals to a
license, can never mature into adverse possession, unless there is clear,
cogent and unequivocal evidence of hostile possession brought to the knowledge
of the true owner. It is also bore out of record that the licence, stood
revoked by notice dated 26.10.2006, and the suit for recovery of possession was
instituted on 06.11.2006, well within the prescribed period of limitation. In the
absence of any foundational proof, the plea of adverse possession is legally
untenable and therefore the division bench has held that the said plea has
rightly been rejected by the ld single judge.
So
far as reliance by the defendants upon various documents, including a copy of
the pass-book reflecting a joint saving bank account held by the plaintiff and
the defendant, and thereby the claim of the defendant that the common funds
were utilised for payment of all the expenses relating to the Suit Property at
the most indicates that the account was jointly held, but it does not in any
manner show, nor does it establish, that the funds from the said account were
utilised either for the purchase of the Suit property or for the construction
carried out thereon. The plea of joint funding for construction is therefore
held to be far- fetched.
Interestingly,
the terms and conditions of auction, filed along with amended written
statement, categorically stipulates that, under no circumstances, would a
change in the name of the intending purchaser be permitted. That being so, the
said document does not aid the case of defendant in any manner. This condition
clearly negates the defendant‟s plea and reinforces
the Plaintiff‟s case. The relinquishment deed
executed by the Plaintiff further
fortifies the Plaintiff‟s stand, as the same is
executed only to give effect to a Will, under which another property stood
bequeathed in favour of the original defendant. This circumstance, clearly
demonstrates that there was no pre-existing family settlement, as alleged by
the defendants. The remaining documents relied upon by the defendants, such as
the ration card of the plaintiff, the death certificates of the father and
mother of the parties and other allied documents, are not in dispute, and does
not directly relate to the claim of the plaintiff, hence, do not warrant any further consideration. The
court therefore held that the remaining documents exhibited by the defendants,
as well as the examination of as many as twenty witnesses, bear no relevance to
the core controversy involved in the present dispute and do not carry any
persuasive or probative value, hence, rejected.
So
far as the challenge raised by the defendants to the award of mesne profits is
concerned, it is devoid of merit. It is so, because, once, the defendants were
held to be unauthorised occupants post revocation of licence, the liability to pay
mesne profits followed as a necessary corollary and legal consequence. The judicial
discretion in determining the quantum of mesne profits, was accordingly
exercised while considering the location of the property, the nature of
occupation, and the relationship between the parties. It was also held by the
division bench that the rate so awarded cannot be characterised as arbitrary,
perverse or excessive. Conversely, the Plaintiff‟s
appeal seeking enhancement of mesne profits was also rightly rejected in the
absence of evidence to justify a higher rate.
There
is likewise no infirmity in the findings of the ld Single Judge with respect to
the valuation of the suit, the payment of court-fees, and the valuation of
counter-claim. These findings are supported by the pleadings and the evidence
on record and call for no interference.
The
defence set up by the Defendants is founded on conjectures, afterthoughts, and
unsubstantiated allegations, whereas in sharp contrast, the Plaintiff has
established his case through registered title documents, statutory and
municipal records, and consistent oral and documentary evidence and that cannot
be ignored.
CONCLUSION
In light of the
foregoing discussion, the hon’ble Division bench has held that no illegality,
perversity or incorrect view arrived at by the ld single judge and that no incorrect
approach was adopted by the ld Single Judge in the Impugned Judgement, so as to
justify appellate interference. It was further observed that the defendants
have failed to establish any right, title or interest therein. The
counter-claims were rightly dismissed, and the decree of possession and mesne
profits warrants no interference. The findings of the ld single judge are based
on a proper appreciation of evidence and a correct application of law.
Appeals, therefore,
were dismissed.
What is a take away
therefore, from the aforesaid judgment is that the law as regards family
settlement based on full dress trial have thoroughly been analysed , while placing
reliance on several documents and examining hordes of witnesses and it has been
conclusively held that all such aspects shall have of no consequence, in the
backdrop of undisputed registered documents of title existing in favour of the
plaintiff. Conjectural setting up of a plea of joint fundings for construction,
shall fall apart, in the face of the clear title. Once, the title of the
plaintiff remains unimpeached, as a corollary thereto, the consequential relief
such as mesne profit shall inevitably follow and accordingly it was also upheld
by the division bench.
------
Anil K Khaware
Founder
& Senior Associate
Societylawandjustice.com
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