Paramjit Singh v. Ms Gagan Singh @ Mannu (2025) 302 Taxman 65 (Delhi)(HC)

Prohibition of Benami Property Transactions Act, 1988
S. 4 : Prohibition of right to recover property held benami-Fiduciary capacity-Joint ownership suit property-known sources-Absence of documents evidencing existence of a fiduciary relationship and existence of corpus of funds made available by plaintiff from his/her known sources-Claim of ownership is barred. [S. 2(9)(A)(ii)]

Plaintiff filed suit against defendant for seeking mandatory injunction in respect of property in favour of plaintiff restraining defendant from creating any third-party interest qua suit property. Plaintiff stated that though title deed of suit property was standing in exclusive name of late R, father of defendant no. 1 herein; however, said property was purchased in name of late R in a fiduciary capacity for benefit and enjoyment of family of late S-Plaintiff claimed joint ownership of suit property on basis of averments that substantial contribution towards sale consideration was paid by plaintiff’s father. He claimed that in view of this averment claim of plaintiff of joint ownership was saved under proviso (ii) to section 2(9)(A)(ii). It was noted that plaintiff had not proved existence of any common bank account of partnership firm which provided funds to late R for purchase of suit property and there was no document on record evidencing any trail of payment from late S to late R as partners for purchase of suit property. With introduction of phrase known sources post 2016 in Benami Act, party asserting benami ownership has to establish that consideration for immovable property was paid from known sources of benamidar. In absence of documents evidencing existence of a fiduciary relationship and existence of corpus of funds made available by plaintiff from his/her known sources to defendant, plaintiff could not invoke proviso (ii) of section 2(9)(A). Accordingly the  plaintiff’s claim of ownership was barred under section 4.

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