Case Number
SPECIAL LEAVE PETITION (CIVIL)/4673/2023; SPECIAL LEAVE PETITION (CIVIL)/4674/2023
Case Title
Smt. Shaifali Gupta vs. Smt. Vidya Devi Gupta & Ors.
Headnote
The Supreme Court affirmed the principle that a plaint cannot be rejected under Order VII Rule 11 of the Code of Civil Procedure (CPC) if the issue of whether it is barred by law, such as the Benami Transaction (Prohibition) Act, 1988, is a disputed question of fact. The Court held that whether a property is benami or a joint family property acquired from a common nucleus is a matter to be decided based on evidence adduced during the trial, not on a preliminary reading of the plaint alone. The Court also clarified that subsequent purchasers of a property generally lack the standing to move an application for rejection of a plaint in a family partition suit, as they have no personal knowledge of the property’s original nature. The petitions were dismissed, allowing the suit to proceed on its merits.
Short Summary
The Supreme Court dismissed petitions seeking the rejection of a family property partition suit under Order VII Rule 11 CPC. The petitioners, including a subsequent purchaser, argued the suit was barred by the Benami Act. The Court held that whether the properties are benami or joint family assets is a question of fact that requires evidence and cannot be decided at the preliminary stage. It ruled that the plaint, on its face, did not disclose a bar by law, and therefore, the trial must proceed on its merits.
Court
Supreme Court of India
Type
Judgment
SCR Citation
NA
Neutral Citation
2025 INSC 739
Disposal Nature
Special Leave Petitions Dismissed
Case Type
SPECIAL LEAVE PETITION (CIVIL)
Law Type
Civil Law, Property Law, Family Law, Procedural Law
Judgment Authored by
Hon’ble Justice Pankaj Mithal*
Hon’ble Justice Ahsanuddin Amanullah
Date of Judgment
May 20, 2025
Case Start Date
NA
Case Arising From
The special leave petitions were filed against a judgment and order of a High Court, which had dismissed a civil revision petition. The revision petition, in turn, was filed against an order of a trial court (court of first instance) dated February 25, 2019. The trial court had rejected an application filed under Order VII Rule 11 of the Code of Civil Procedure. This application sought the dismissal of a partition suit on the ground that it was barred by the Benami Transaction (Prohibition) Act, 1988. Both the trial court and the High Court refused to reject the plaint, leading the defendants to approach the Supreme Court.
Background and Facts
The case involves an intra-family dispute over several properties. The plaintiffs, a mother (Smt. Vidya Devi Gupta) and her younger son (Shri Sudeep Gupta), filed a suit for partition against the elder son (Sandeep Gupta) and his wife (Smt. Shaifali Gupta). The plaintiffs claimed that all the suit properties were purchased from the funds of a joint family tailoring business, which was started in 1982, and therefore, they were joint Hindu family properties.
Some of these properties were later sold by the elder son’s wife (defendant No. 2) to third parties (defendants No. 5 and 6). These subsequent purchasers filed an application under Order VII Rule 11 of the CPC, arguing that the suit was not maintainable because it was barred by the Benami Transaction (Prohibition) Act, 1988. The plaintiffs contested this, stating that the properties were joint family properties, not benami, and thus the Act did not apply.
Timeline
- 1982: Two brothers (plaintiff No. 2 and defendant No. 1) started a joint family tailoring business.
- 2018: The mother and the younger son filed a suit for partition (Regular Suit No. 630A/2018).
- Date Not Mentioned: Subsequent purchasers (defendants No. 5 and 6) filed an application under Order VII Rule 11 CPC to reject the plaint.
- February 25, 2019: The trial court rejected the application under Order VII Rule 11 CPC.
- September 26, 2022: The High Court dismissed the civil revision filed by the subsequent purchasers, upholding the trial court’s order.
- 2023: The present special leave petitions were filed in the Supreme Court.
- May 20, 2025: The Supreme Court dismissed the special leave petitions.
Parties Involved
- Petitioners:
- Smt. Shaifali Gupta (Defendant No. 2, wife of the elder son)
- Deepak Lalchandani (Defendant No. 5, a subsequent purchaser)
- Respondents: Smt. Vidya Devi Gupta & Ors. (Plaintiffs and other defendants)
Procedural History
- Lower Court/Subordinate court/Tribunals Decisions: The court of first instance rejected the application under Order VII Rule 11 CPC, holding that the question of whether the properties were joint family properties was a matter of evidence and could not be decided at the threshold based on the plaint alone.
- Appeals: The subsequent purchasers filed a Civil Revision before the High Court, which was dismissed. The High Court affirmed that the issue required evidence and the suit was not liable to be rejected at the preliminary stage. The present special leave petitions were filed against the High Court’s order.
Issues Framed
Not explicitly framed, but the central issue is whether the plaint in a partition suit, which claims properties to be joint family assets, can be rejected under Order VII Rule 11 CPC on the ground that it is barred by the Benami Transaction (Prohibition) Act, 1988.
Areas of Debate
- What is the scope of inquiry for a court when considering an application under Order VII Rule 11 CPC?
- Can a suit be rejected as being barred by the Benami Act at the preliminary stage when the plaint itself asserts that the properties are joint family properties and not benami?
- Do subsequent purchasers of a property have the standing to file an application for rejection of a plaint in a family partition suit?
Cases Cited by petitioner/appellant/plaintiff
NA
Cases Cited by respondent/defendant
NA
Acts/Rules/Orders Referred
- Code of Civil Procedure, 1908 (CPC)
- Type: Act
- Order VII Rule 11: This rule allows a court to reject a plaint on several grounds, including if the suit appears from the statement in the plaint to be barred by any law. The Court held that this power can only be exercised if the bar is evident from the plaint itself, without looking at the defendant’s case.
- Benami Transaction (Prohibition) Act, 1988
- Type: Act
- Section 4: This section bars any suit, claim, or action to enforce a right in a property held benami against the person in whose name the property is held. The Court clarified that this bar applies only if the property is proven to be benami, which is a question of fact to be decided at trial.
- Section 2(9)(A): This section provides exceptions to what constitutes a benami transaction, including property held by a person in a fiduciary capacity or by a member of a Hindu Undivided Family for the benefit of the family.
- Hindu Succession Act, 1956
- Type: Act
- Section 14: This section provides that property possessed by a female Hindu is held by her as a full owner. The petitioners raised this point for the first time in the Supreme Court, but the Court held that this section does not bar a suit for partition and, in any case, the plea was not raised in the lower courts.
Acts/Rules/Orders Governing the Case
- Code of Civil Procedure, 1908
- Benami Transaction (Prohibition) Act, 1988
Literature Citation
NA
Appearances
- Advocates:
- For the Petitioner(s): Shri Navin Pahwa, Senior Counsel
- For the Respondents: Shri Kavin Gulati, Senior Counsel
- Witnesses: NA
- Other Persons: NA
Prayer
The petitioners prayed for the rejection of the plaint filed in the partition suit, arguing it was barred by law.
Evidence & Findings
NA
Petitioner/Appellant/Plaintiff/Accused Arguments
The petitioners (defendants) argued that the suit was barred by the Benami Act. Their main contentions were:
- The suit is barred by Section 4 of the Benami Act.
- Some properties stand in the exclusive name of defendant No. 2 (a female Hindu) and should be treated as her personal property under Section 14 of the Hindu Succession Act, making them not amenable to partition.
- Since the properties are in the names of different individuals, no party can claim joint ownership.
Respondent/Defendant/Opponent/State Arguments
The respondents (plaintiffs) argued that the application for rejection of the plaint was rightly dismissed. Their key arguments were:
- The plaint clearly states that the properties are joint family properties purchased from a common family fund, not benami properties.
- Whether a property is benami or falls under an exception is a disputed question of fact that can only be decided after evidence is led at trial.
- The plea regarding Section 14 of the Hindu Succession Act was never raised in the lower courts and cannot be raised for the first time in the Supreme Court.
- The application under Order VII Rule 11 was moved by subsequent purchasers who have no knowledge of the family’s internal affairs and are not the right persons to raise this issue.
Ratio Decidendi
- An application for rejection of a plaint under Order VII Rule 11 CPC must be decided based solely on the averments made in the plaint. The court cannot consider the defendant’s case or any other material at this stage.
- A suit cannot be rejected as being barred by the Benami Act at the preliminary stage if the plaint itself asserts that the properties are joint Hindu family assets and not benami. The question of whether a property is benami is a triable issue that depends on evidence.
- A party who has not filed an application for rejection of the plaint in the trial court and has chosen to contest the suit on merits has acquiesced to the court’s jurisdiction and cannot later challenge the maintainability of the suit at a higher forum.
- Subsequent purchasers of a property, who lack personal knowledge of the nature of the property in the hands of the original owners, are not the appropriate persons to seek the rejection of a family partition suit on grounds like the Benami Act.
Final Decision
The special leave petitions are dismissed. The Supreme Court found no error in the decisions of the lower courts to reject the application under Order VII Rule 11 CPC and held that the suit should proceed to trial on its merits.
Legal Jargons and Maxims
- Order VII Rule 11 CPC: A provision in the Code of Civil Procedure that allows a court to reject a plaint (the initial document that starts a civil suit) at the outset if it does not disclose a cause of action, is barred by law, or has other specified defects.
- Benami: A term used to describe a transaction or property where a property is transferred to one person, but the payment for it is made by another person. The person in whose name the property is held is the benamidar, while the person who paid for it is the real owner.
- Joint Hindu Family (JHF): A concept in Hindu law where a family, consisting of all persons lineally descended from a common ancestor, holds property jointly.
- Nucleus: In the context of a Joint Hindu Family, it refers to the initial joint family property or funds from which other properties are acquired.
Exhibits
NA