Dismissed

H Mahantesh S/O H B Halaswamy v. K H Jagadeesh S/O K Halaswamy

Karnataka HC26 Jun 2024RSA/555/2013

Case brief

AI extract

What is this about?

Plaintiffs sought declaration and cancellation of a sale deed claiming property bought by their father in his first wife's name was joint family property. The High Court held Section 14 HSA makes it her absolute property and dismissed the second appeal, preserving the finding that possession can only be disturbed through due process.

What the court decided

AI extract

H Mahantesh S/O H B Halaswamy Vs K H Jagadeesh… — Succession and Inheritance | Karnataka HC (2024)

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NC: 2024:KHC:24278 RSA No. 555 of 2013

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 26^TH DAY OF JUNE, 2024

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BEFORE

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THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ REGULAR SECOND APPEAL NO. 555 OF 2013 (INJ)

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BETWEEN:

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H. MAHANTESH,

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S/O H.B. HALASWAMY, AGED ABOUT 25 YEARS, STUDENT, R/O ANJANEYA TEMPLE STREET, HOLALERE TOWN - 577 526.

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Digitally signed by PRAKASH N Location: HIGH COURT OF KARNATAKA

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SHIVU, S/O H.B. HALASWAMY, AGED ABOUT 14 YEARS, MINOR, REPRESENTED BY HIS NEXT FRIEND AND NATURAL GUARIAN BROTHER APPELLANT NO. 1 H. MAHANTESH 577526

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…APPELLANTS

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(BY SRI. R.S. RAVI, SENIOR ADVOCATE FOR SRI. R SHASHIDHARA., ADVOCATE)

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AND:

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K.H. JAGADEESH, S/O K. HALASWAMY, AGED ABOUT 36 YEARS, WORKING AT CHAMARAJA NAGAR AT A TEMPORRY AND PERMANENT, R/O ANJANEYA TEMPLE STREET, HOLALKERE TOWN - 577 526.

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HALAMMA

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W/O H.B. HALASWAMY, AGED ABOUT 72 YEARS, HOUSEHOLD WORK, R/O ANJANEYA TEMPLE STREET, HOLALKERE TOWN

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…RESPONDENTS

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(BY SRI. BASAVARAJAPPA N., ADVOCATE FOR C/R1; R2 SERVED AND UNREPRESENTED)

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THIS RSA IS FILED U/S. 100 OF CPC AGAINST THE JUDGEMENT & DECREE DATED 21.11.2012 PASSED IN R.A.NO.62/2011 ON THE FILE OF PRINCIPAL DISTRICT AND SESSIONS JUDGE, CHITRADURGA, ALLOWING THE APPEAL FILED AGAINST THE JUDGMENT AND DECREE DATED 28.7.2011 PASSED IN OS.NO.29/2007 ON THE FILE OF SENIOR CIVIL JUDGE, HOLALKERE.

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THIS APPEAL, COMING ON FOR HEARING, THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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The appellants are the plaintiffs in O.S. No.29/2007 filed before the Senior Civil Judge, Holalkere. The said suit had been filed seeking for declaration that the plaintiffs are the owners and in possession of the suit schedule properties, cancellation of sale deed executed by defendant No.2 favour of the defendant No.1 on 17.07.1999 as also a permanent injection

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NC: 2024:KHC:24278 RSA No. 555 of 2013

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restraining defendant No.1, from interfering with the peaceful possession and enjoyment of the plaintiff.

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The said suit came to be decreed by judgment and decree dated 28.07.2011. The plaintiffs and defendant No.2 were declared to be the owners in possession of the suit schedule property and the sale deed dated 17.07.1999 was cancelled. Furthermore, Defendant No.1 was restrained from interfering with the peaceful possession and enjoyment of the plaintiffs and defendant No.2.

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It is challenging the same, the defendant No.1 had filed a Regular Appeal in R.A. No.62/2011 which came to be allowed by the Prl. District & Sessions Judge, Chitradurga, on 21.11.2012. The First Appellate Court set aside the impugned judgment and decree passed by the trial Court and dismissed the suit.

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NC: 2024:KHC:24278 RSA No. 555 of 2013

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It is challenging these divergent findings that the

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plaintiffs are before this Court in the present second

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appeal seeking for the following reliefs:

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"THEREFORE, it is respectfully prayed that this Hon’ble court may kindly be pleased to set aside the judgment and decree passed by Principal District Court and Sessions Judge at Chitradurga in RA 62/2011 dated 21.11.2012, revering the judgment and decree passed by the learned Senior Civil Judge at Holalkere in OS 29/2007 dated 28.07.2011 and decreed the suit of the plaintiffs, by allowing this appeal in the interest of justice and equality".

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5. The above appeal was admitted on 30.06.2016 to answer the following substantial questions of law:

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i . Whether the lower appellate Court is justified in reversing the judgment and decree of the trial Court even though the plaintiff prove the fact that the suit schedule property is the joint family property of the plaintiffs and defendant No.2, in view of the provisions of Section 4(1)(3)(a) of the Benami Transactions (Prohibition) Act, 1988?

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ii . Whether the lower appellate Court is justified in reversing the judgment and decree of the trial Court, when the suit schedule property is purchased by the plaintiff's father even before the said Act came into force?

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iii . Whether the lower appellate Court is justified in reversing the judgment and decree of the trial Court in the facts and circumstances of the case?

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NC: 2024:KHC:24278 RSA No. 555 of 2013

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Sri. R.S. Ravi, learned Senior counsel appearing for the plaintiffs would submit that;

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6.1. The plaintiffs are the sons of one Sri. H.B. Halaswamy from his second wife Smt. Sarojamma, Halamma, the first wife is defendant No.2 in the suit. The father of the plaintiff had purchased the property in the name of defendant No.2, the consideration having been paid by the father of the plaintiffs and as such property would be joint family property, defendant No.2 not having any funds or resources to buy the suit schedule property.

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6.2. When the property is a joint family property, defendant No.2 could not have sold the property in favour of defendant No.1 under a sale deed dated 17.07.1999 defendant No.1 being the son of the brother of defendant No.2.

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6.3. The property having been purchased benami in the name of defendant No.2, the source of

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funds being that of father of the plaintiffs, the property would have to enure to the benefit of the family and there would be no individual and exclusive right of defendant No.2 to deal with the property, let alone sell the property to defendant No.1.

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6.4. This he submits has not been taken into consideration by the trial Court in a proper manner. The trial Court had not taken into consideration the effect of Section 4(1)(3)(a) of the Benami Transactions (Prohibition) Act, 1988, which would render such a transaction in the name of the Benami holder to that in favour of the joint family.

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6.5. Lastly, he submits that even if the relief of declaration and cancellation are not to be granted, the trial Court having come to categorical conclusion that the plaintiffs are in possession of the suit schedule property and

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the trial Court having granted an order of injunction the First Appellate Court ought not to have disturbed the said finding. Once the plaintiffs are in possession, then the defendant could not interfere with the possession or disturb the plaintiffs without taking recourse to due process of law.

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Respondent No.1 though entered appearance through a caveator, the said counsel has not been appearing in the matter and as such this Court vide order dated 05.06.2024 had observed that if none were to appear for respondent No.1, the matter would be taken up for consideration in his absence. Respondent No.2 has been served and has chosen to be unrepresented.

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Heard Sri R.S. Ravi, learned Senior counsel for the appellant. Perused the papers, judgment and exhibits.

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NC: 2024:KHC:24278 RSA No. 555 of 2013

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Section 4 of the Benami Transactions (Prohibition) Act, 1988 as it stood on the date of which the subject transaction took place that is 17.7.1999, is

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reproduced hereunder for easy reference:

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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 behalf of a person claiming to be the real owner of such property.

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(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.

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(3) Nothing in this section shall apply,--

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(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

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(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.

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10. In terms of sub-section (1) of Section 4 no suit claims or action to enforce any rights in respect of

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any property held Benami against the persons in whose name the property is held, shall lie.

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However, in terms of sub-section (3) of section 4 nothing in the said section would apply to a person in whose name the property is held is a coparcener in Hindu Undivided family and the property is held for the benefit of the coparcener in the family.

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11. The Benami Transactions (Prohibition) Act, 1988 has undergone a complete overhaul in the year 2016, firstly the Act itself is renamed as “the Prohibition of Benami Property Transactions Act, 1988” and subSection 3 of Section 4 has been deleted. In terms of the exceptions to sub-Section (9) any person being an individual ha purchased a property in the name of his spouse or in the name of any child of such individual and the consideration of such purchase having been provided or paid out of known sources of individuals would not amount to Benami property. Thus, the exception carved out of by Sub-section (3), hence be done away with. Sub-section (9) of the

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NC: 2024:KHC:24278 RSA No. 555 of 2013

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Section 2 of the Act post amendment reads as

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under:

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2.****

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(9) “benami transaction” means,—

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(A) a transaction or an arrangement—

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(a) where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and

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(b) the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration,

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except when the property is held by—

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(i) a Karta, or a member of a Hindu undivided family, as the case may be, and the property is held for his benefit or benefit of other members in the family and the consideration for such property has been provided or paid out of the known sources of the Hindu undivided family;

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(ii) a person standing in a 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, a depository or a participant as an agent of a depository under the Depositories Act, 1996 (22 of 1996) and any other person as may be notified by the Central Government for this purpose;

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(iii) any person being an individual in the name of his spouse or in the name of any child of such individual and the consideration for such property has been provided or paid out of the known sources of the individual;

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(iv) any person in the name of his brother or sister or lineal ascendant or descendant, where the names of brother or sister or lineal ascendant or descendant and the individual appear as jointowners in any document, and the consideration for such property has been provided or paid out of the known sources of the individual; or

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(B) a transaction or an arrangement in respect of a property carried out or made in a fictitious name; or

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(C) a transaction or an arrangement in respect of a property where the owner of the property is not aware of, or, denies knowledge of, such ownership;

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(D) a transaction or an arrangement in respect of a property where the person providing the consideration is not traceable or is fictitious;

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Explanation.—For the removal of doubts, it is hereby declared that benami transaction shall not include any transaction involving the allowing of possession of any property to be taken or retained in part performance of a contract referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882), if, under any law for the time being in force,—

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(i) consideration for such property has been provided by the person to whom possession of property has been allowed but the person who has granted possession thereof continues to hold ownership of such property;

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(ii) stamp duty on such transaction or arrangement has been paid; and

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(iii) the contract has been registered.

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12. The exception which was earlier made out in sub-

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section (3) Section 4 have been expanded in the said Sub-section (9) of Section 2.

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Thus, by way of the amendment now coming into effect, the transaction in the present case of H.B. Halaswamy, purchasing the property in the name of his wife defendant No.2-Halamma, cannot be said to be a Benami Transaction.

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NC: 2024:KHC:24278 RSA No. 555 of 2013

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Thus, I answer the substantial question No.1 by holding that the Benami Transactions (Prohibition) Act, 1988 would not be applicable to the present case requiring the property to be held to be joint family property merely on the basis that the father of the plaintiff purchased the property in the name of defendant No.2 as a Benami. There being no dispute that defendant No.2 is the first wife of H.B. Halaswamy.

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In view of my answer to substantial question No.1, substantial question No.2 would not be required to be considered, since the Act itself is not applicable.

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There is one other question which arose during the course of argument, which is formulated as under:

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“ Whether the plaintiffs i.e., children of H.B. Halaswamy, can claim right, title or interest in the property brought in the name of their step motherdefendant No.2, by their father in view of the explanation to Section 14 of the Hindu Succession Act, 1956?”.

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NC: 2024:KHC:24278 RSA No. 555 of 2013

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17. Section 14 of the Hindu Succession Act, 1956 reads

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as under:

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14. Property of a female Hindu to be her absolute property.―

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(1) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner. Explanation.―In this sub-section, “property” includes both movable and immovable property acquired by a female Hindu by inheritance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner whatsoever, and also any such property held by her as stridhana immediately before the commencement of this Act.

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(2) Nothing contained in sub-section (1) shall apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property.

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A perusal of the explanation to Sub-section (1) of Section 14 would indicate firstly that it applies to all properties both movable and immovable property. Secondly the methodology of acquisition being whether by inheritance or devise, at a partition or in lieu of maintenance or arrears of maintenance or by

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NC: 2024:KHC:24278 RSA No. 555 of 2013

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gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner whatsoever would be held by the female Hindu as full owner.

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Thus, by way of said explanation any acquisition of the property by a female Hindu by any means whatsoever as included in explanation or otherwise would amount be the absolute property of the female Hindu. This fiction having been created by the explanation and sub-Section (1) to Section 14. The property having been purchased by H.B. Halaswamy in the name of defendant–who is his wife, the defendant No.2 being a female Hindu, in terms of Section 14, any property purchased in her name by anybody would be an absolute property unless it is shown otherwise.

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In the present case, there is clear and categorical admission that it is the father of the plaintiff who had

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NC: 2024:KHC:24278 RSA No. 555 of 2013

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purchased the property in the name of his first wifedefendant No.2 and that the defendant No.2 has enjoyed the property to the exclusion of all others. That being so, in terms of explanation to Sub-section (1) Section 14, the property being the individual absolute property, the plaintiffs cannot, in my considered opinion, contend that the property is the joint family property since the father has purchased it.

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Hence, I answer substantial question of law now framed by holding that a property purchased in the name of the female Hindu, becomes the absolute property of the female Hindu and no claim could be made in relation thereto that it is a joint family property.

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There is only question remaining to be answered which would be in so far as possession of the property is concerned, the plaintiffs’ claiming that

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NC: 2024:KHC:24278 RSA No. 555 of 2013

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they are in possession, the trial Court has come to a conclusion that they are in possession, the First Appellate Court on the ground that the relief of declaration has been denied has denied the relief of injunction to the plaintiff.

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On facts, when there is a clear and categorical finding that the plaintiffs are in possession, any such possession can be disturbed only by recourse to law. If defendant No.1 wishes to take possession of the property, he can only do so, by approaching the appropriate Court for appropriate relief.

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Substantial questions of law having answered against the appellant, the appeal stands dismissed .

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Sd/JUDGE

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TMP/SR

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List No.: 2 Sl No.: 40

H Mahantesh S/O H B Halaswamy v. K H Jagadeesh S/O K Halaswamy

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What the court decided

H Mahantesh S/O H B Halaswamy v. K H Jagadeesh S/O K Halaswamy

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