Tuesday, 31 March 2020

What material facts are to be pleaded by a party claiming property to be joint family property?

I may note that the requirement of pleading in a clear cut manner as to how the HUF and its properties exist i.e. whether because of pre 1956 position or because of the post 1956 position on account of throwing of properties into a common hotchpotch, needs to be now mentioned especially after passing of the Benami Transaction (Prohibition) Act, 1988 (hereinafter referred to as "the Benami Act") and which Act states that property in the name of an individual has to be taken as owned by that individual and no claim to such property is maintainable as per Section 4(1) of the Benami Act on the ground that monies have come from the person who claims right in the property though title deeds of the property are not in the name of such person. An exception is created with respect to provision of Section 4 of the Benami Act by its sub-section (3) which allows existence of the concept of HUF. Once existence of the concept of HUF is an exception to the main provision contained in sub-sections (1) and (2) of Section 4 of the Benami Act, then, to take the case outside sub-sections (1) and (2) of Section 4 of the Benami Act it has to be specifically pleaded as to how and in what manner an HUF and each specific property claimed as being an HUF property has come into existence as an HUF property. If such specific facts are not pleaded, this Court in fact would be negating the mandate of the language contained in sub-sections (1) and (2) of Section 4 of the Benami Act."

 The clear legal position is that a party which claims that a particular property is joint family property must specifically plead the origin of the HUF, whether pre 1956 or post 1956, and give sufficient particulars as to the creation of the HUF as well as the ownership of the property by the HUF.

IN THE HIGH COURT OF DELHI

CS (OS) 1214/2014

Decided On: 11.02.2020

 Rajeev Chawla  Vs. Deepak Chawla

Hon'ble Judges/Coram:
Prateek Jalan, J.




I.A. 15083/2017 (by the defendant under Order I Rule 10 of the CPC)

1. The plaintiff and the defendant are brothers. The present suit has been filed by the plaintiff for partition of a property, namely, E-64, Greater Kailash, Enclave-I, New Delhi-110048 [hereinafter, "E-64"], which he claims is jointly held by the two parties. The defendant has filed this application under Order I Rule 10 of the Code of Civil Procedure, 1908 ["CPC"], seeking impleadment of the parents of the parties.

2. The case of the plaintiff is that E-64 was purchased jointly in the names of the plaintiff, the defendant and their father [Sh. Surinder Kumar Chawla], and subsequently, the father of the parties transferred his 1/3rd share to the plaintiff by way of a registered gift deed dated 11.06.2010. The plaintiff thus claims 2/3rd share in E-64 and states that the defendant has 1/3rd share therein. An amendment of the plaint [which is not material for the present application] was permitted by an order dated 21.01.2015, following which the defendant filed an amended written statement, affirmed on 10.03.2015. The defendant pleaded inter alia that the plaintiff and the defendant were part of a joint Hindu Undivided Family ["HUF"] and that the suit property was purchased from the funds of the joint family. He also asserted that joint family funds were used to purchase two other properties-Shop No. 152, Bhagat Singh Market, Connaught Place, New Delhi [hereinafter, "Shop No. 152"] and Shop No. F-71, Bhagat Singh Market, Connaught Place, New Delhi [hereinafter, "Shop No. F-71"]. It is undisputed that Shop No. 152 is registered in the name of the plaintiff and Shop No. F-71 in the name of the mother of the parties. The defendant contended in the written statement that the partition suit was thus for partial partition of the joint family properties, which is not permissible under law.

3. The contention of the defendant to this effect is set out in paragraph 6 of the amended written statement, which is reproduced below:

"6. That the present suit is not maintainable and is liable to be dismissed. The plaint is based on a totally wrong, fabricated, fictitious and misconceived facts and cause of action. The correct facts of the case are as under:-

That there exists a joint Hindu undivided family. That the suit property was purchased from the funds derived by selling ancestral property bearing no. B-54, Kalkaji, New Delhi of the grandfather of the parties namely Late Sh. T.C. Chawla, further Late Sh. T.C. Chawla left over the jewellery, cash etc. all of these funds came into the HUF. That the intentions of the parties were through out to be undivided family for that purpose the property was purchased in the joint name further in order to get the tax benefits. That the nucleus of the family always existed as the property was of joint name. The father of the parties was given the agency of Bombay region but to keep the family intact the father came back to Delhi and purchased the property bearing no. 152 Bhagat Singh Market, Connaught Place New Delhi out of the Hindu Undivided family funds to run the family business of lotteries. That it is also worth to state that the property was purchased in the name of the plaintiff whereas the agency was in the name of the defendant and the name of the agency was Deepak agency. The defendant used to work at Deepak agencies alongwith the plaintiff and the father of the parties. Further when the lotteries were banned by the Government the parties decided to purchase a land for poultry farm which was purchased from the efforts of the defendant at pali sona road Faridabad Haryana further the same was later on disposed off. the plaintiff informed that his in laws were selling off their business which the family agreed to purchase. That for that business Rs. 25 lakhs was required. 10 lakhs was provided by the defendant in the business of the family. The cheque of Rs. 10 lakhs was provided to the in-laws of the plaintiff by the defendant for this business. The business was in the name of Rakheja chemist at kalkaji. The defendant used to devote all his time and efforts at this shop. That all the funds derived from this business used to be handed over to the father of the parties being the undivided family. The father used give pocket money to his sons. That the expenditure was from common funds. That through out the intention of the family was that the present suit property will be given fifty-fifty to both the plaintiff and defendant. It was also agreed that the plaintiff will retain the shop bearing no. 152 Bhagat Singh Market, Connaught Place New Delhi which exists in the name of the plaintiff and the property bearing no. F-71 Bhagat Singh Market, Connaught Place New Delhi will be of the defendant which presently exists in the name of the mother of the parties. That it is stated that the defendant now doing his business of property dealing from this shop only. it is stated that the plaintiff is also doing the business of property dealing. It is also stated that the property bearing no. F-71 Bhagat Singh market, Connaught Place New Delhi was earlier being purchased in the name of another brother who was younger to plaintiff and elder to the defendant namely Sanjeev Chawla but due to his unfortunate death the property was transferred in the name of the mother. The defendant is in adverse possession of the property bearing no. F-71 Bhagat Singh Market, Connaught Place New Delhi since more than 15 years ousting the right title & interest of the actual owner of the property. That the purpose was to keep one property for each son for their business in case they wanted to separate. The plaintiff also got a plot at Gurgaon from the funds of the family. That thus there are pool of properties in the HUF whereas the relief is pertaining to one property which is not permissible. The common pool of the property has to be the part of the present suit. That in this manner the defendant has been cheated. The efforts, money, income, years etc. spent by the defendant in the growth of the undivided family have all gone against him as he could not earn the benefit own his own name. Apart from the above facts, it is also pertinent to point out that the property bearing No. E-64, Greater Kailash-I, New Delhi was renovated, constructed & free hold out of the efforts & funds exclusively provided by the Defendant herein and neither the Plaintiff, nor the father of the parties, Sh. Surinder Kumar Chawla had made contribution towards renovation construction & free hold on the suit property. That the plaintiff and the father of the parties admitted in the alleged gift deed that the present property is undivided property. Thus the property being undivided from the undivided family cannot be gifted without the consent of the defendant. The gift deed itself is null and void ab intio and cannot be relied upon. That the defendant reserve its right to initiate the action against the gift deed and these two properties i.e. F-71 Bhagat Singh Market, Connaught Place New Delhi & 152 Bhagat Singh Market, Connaught Place New Delhi. That the present suit is also barred by order 2 rule 2 CPC as the relief qua these properties were not demanded by the plaintiff. That the sale deed in the name of the mother is hit by Benami transaction prohibition act 1988."

(Emphasis supplied)

The aforesaid contentions are reiterated in the reply to paragraphs 5 and 8 of the plaint.

4. During the course of proceedings, and after trial had commenced, the defendant filed the present application for impleadment of the parents of the parties, alongwith I.A. 15084/2017 under Order VI Rule 17 of the CPC, for amendment of the written statement. I.A. 1461/2018, for interim relief in respect of properties-Shop No. 152 and Shop No. F-71, and I.A. 2273/2018, for framing additional issues, have also since been filed by the defendant. In I.A. 15084/2017, the defendant inter alia sought to amend the written statement, to seek the relief of partition with regard to Shop No. 152 and Shop No. F-71. In this regard, the case of the defendant in the amendment application was as follows:

"6. It is further respectfully submitted that the applicant/defendant would be entitled to independently bring a suit for partition of his 1/3rd share in the properties owned by the HUF viz. 152, Bhagat Singh Market, Connaught Place, New Delhi and F71 Bhagat Singh Market Connaught Place, New Delhi and the present suit property. The right to claim partition is a continuing cause of action and as such the relief prayed for is within limitation. The defense of the plaintiff with regard to such plea would be the same as stated by him in his rejoinder viz. that there was no joint family or nucleus from which the properties were purchased. The prayer for amendment would prevent multiplicity of proceedings. It is in furtherance of the principle that in every partition suit every defendant maybe a plaintiff and every plaintiff maybe a defendant. This prayer for amendment would not change the nature of the suit as the question whether the properties are joint family properties would have to be determined even as the case stands now. The applicant respectfully undertakes to pay the court fee as required by law for the relief prayed for. It is further respectfully submitted that the applicant/defendant claims his 1/3rd share in the properties owned by the HUF viz. 152, Bhagat Singh Market, Connaught Place, New Delhi, plot at Saraswati Kunj, Gurgaon and F71 Bhagat Singh Market, Connaught Place, New Delhi, total sale proceeds of Rs. 15 lakhs in the sale of a land (2½ acres) at Sohna Road and the present suit property on the basis that the properties were purchased from the nucleus of the joint family property and as such constitute joint family property whereas the plaintiff's case is that they were purchased from individual account. Hence, it is respectfully submitted that the present application is not an admission of the case of the plaintiff."

(Emphasis supplied)

5. The defendant therefore sought to amend the prayer clause in the written statement and seek the following reliefs:

"PRAYER

In the facts and circumstances above mentioned and in the light of the fact that the parties cannot live together in the suit property or be joint any further, the defendant most respectfully prays that this Hon'ble Court may most graciously be pleased to:

A. Dismiss the suit filed by the plaintiff with costs;

B. Pass a preliminary decree in favour of the defendant declaring that the defendant is entitled to 1/3rd share in the properties owned by the HUF, as on date, viz.

a. 152, Bhagat Singh Market, Connaught Place, New Delhi;

b. Plot at Saraswati Kunj, Gurgaon;

c. F71 Bhagat Singh Market, Connaught Place, New Delhi

d. Total sale proceeds of Rs. 15 lakhs in the sale of a land (2½ acres) at Sohna Road and

e. E64, Greater Kailash Enclave Part 1, New Delhi

C. Pass a consequential decree of perpetual injunction restraining the plaintiff and other defendants from interfering in the peaceful occupation of the 1/3rd share of the defendant no. 1 in the properties mentioned above.

D. Appoint a Commissioner to divide the properties by metes and bounds and put the defendant in separate possession of 1/3rd share and

E. Pass a final decree

F. Order costs of the suit in favour of the defendant and against the defendant.

G. Any other relief(s) as this Hon'ble Court deems fit and proper in the facts and circumstances of the case."

(Emphasis supplied)

6. The defendant's application for amendment of the written statement [I.A. 15084/2017] was dismissed by the learned Single Judge vide order dated 19.03.2018. The relevant observations of the Court in that order are as follows:

"xxxx xxxx xxxx

It is submitted by learned counsel for the defendant that these properties were mentioned in the written statement filed in October, 2014 and in the amended written statement filed in March, 2015 but because of maintaining harmony he did not take any action to partition these properties. However, admittedly property No. 152, Bhagat Singh Marg, Connaught Place is registered in the name of the plaintiff and property No. F71, Bhagat Singh Market, Connaught Place is registered in the name of the mother of the parties who is still alive. It is submitted by learned counsel for the plaintiff that there is no such plot at Saraswati Kunj ever purchased by the family. Qua sale proceeds of Rs. 15 lakhs in the sale of a land at Sohna Road it is submitted that this plot was in the name of the plaintiff and he sold it way back prior to filing of this suit.

Considering the facts, the defendant knew these properties existed in the name of others even prior to filing of the written statements stated above and rather has noted these facts in his written statement filed in 2014 and so amended in 2015 but did not take any action for declaration or for cancellation of suit ownership documents, hence no case is made out for proposed amendments due to such delay as he failed to claim partition of the properties inspite of due diligence. Moreso the trial has started and no case is made for amendment of the written statement at this stage when cross examination of plaintiff's witness is going on.

The application stands dismissed."

(Emphasis supplied)

7. The defendant challenged the aforesaid order by way of FAO(OS) 73/2018. The defendant's appeal was dismissed by the judgment of the Division Bench dated 08.02.2019. The Division Bench affirmed the order of the learned Single Judge with the following observations:

"7. We are not impressed by the submission made by the learned counsel for the appellant for the reasons stated by the learned Single Judge. We find that in the written statement at page 51 of the paper book, the appellant-defendant in para 6, has stated as under:-

xxxx xxxx xxxx

That the defendant reverse its right to initiate the action against the gift deed and these two properties i.e. F-71 Bhagat Singh Market, Connaught Place New Delhi & 152 Bhagat Singh Market, Connaught Place New Delhi. That the present suit is also barred by order 2 rule 2 CPC as the relief qua these properties were not demanded by the plaintiff. That the sale deed in the name of the mother is hit by the Benami transaction prohibition act 1988."

8. The aforesaid shows, a reference was made to the properties F-71, Bhagat Singh Market, Connaught Place, New Delhi and 152, Bhagat Singh Market, Connaught Place, New Delhi. He has also stated that he reserves his right to initiate action against the Gift Deed qua these two properties. Admittedly, no prayer with regard to partition of these properties was sought by the appellant-defendant in the written statement. That apart, the plea with regard to Property No. S-214, Greater Kailash, Part-I, New Delhi is concerned, the appellant-defendant has, in his application for amendment has stated as under:-

xxxx xxxx xxxx

"In spite of due diligence of the defendant, while mentioning the properties that were sold, one property was left out in the narration of facts viz. First Floor S-214, Greater Kailash 1, New Delhi. Further, the written statement has also mentioned about initiating action against the remaining properties viz. 152, Bhagat Singh Market, Connaught Place, New Delhi, plot at Saraswati Kunj, Gurgaon, and F71, Bhagat Singh Market, Connaught Place, New Delhi and total sale proceeds of Rs. 15 lakhs in the sale of a land (2½ acres) at Sohna Road."

9. On a specific query when was the property S-214, Greater Kailash, Part-I, New Delhi sold, the learned counsel for the appellant-defendant states it was in the year 1994. In other words, the appellant-defendant was privy to the information with regard to the properties of which he is seeking amendment. The suit was filed in the year 2014. Learned counsel for the respondent-plaintiff is right in contending that no facts have been averred that the appellant-defendant lacked knowledge of the property/properties and related transactions because of which he could not incorporate the averments as now being sought by way of amendment.

10. That apart, we find that the learned counsel for the appellant defendant had conceded to the fact that the trial has commenced. If that be so, the learned Single Judge was justified in denying the amendments sought in the written statement. The said conclusion is in conformity with the provisions of Order 6 Rue 17 CPC. We do not see any merit in the appeal. The same is dismissed."

(Emphasis supplied)

8. The defendant carried the matter to the Supreme Court in SLP(C) 7107/2019. As considerable emphasis has been placed by learned counsel for the defendant upon the terms of the order dated 26.07.2019 passed by the Supreme Court, the order is set out in full hereinbelow:

"We are not inclined to interfere in this Special Leave Petition. The Special Leave Petition is dismissed accordingly.

However, it will be open to the petitioner to persuade the Trial Court that the written statement on record is comprehensive enough to consider, granting of relief to the petitioner at the end of the trial.

Pending applications, if any, stand disposed of."

9. Mr. Sriram J. Thalapathy, learned counsel for the defendant, contends that the liberty granted to the defendant by the Supreme Court while dismissing his petition, necessitates impleadment of the parents of the parties. He submits that the case of the defendant regarding existence of a joint family, and the properties forming part of the joint family properties, cannot be adjudicated in the absence of their father, who is also a coparcener of the joint family. Further, as Shop No. F-71 is admittedly registered in the name of the mother of the parties, Mr. Sriram submits that the impleadment of both the parents is necessary for a complete adjudication of the suit. In support of the case of the defendant, that the properties [including E-64, Shop No. F-71 & Shop No. 152] were purchased from joint family funds, Mr. Sriram relies upon the income tax returns of the plaintiff which demonstrate purchase of immovable properties in his name when he was still a student or soon after, and during the period when he did not declare income sufficient to finance the properties in question. He further submits that the mother of the parties is not engaged in any business or profession, from which she could have generated the income to fund the purchase of Shop No. F-71. Mr. Sriram therefore urges that the defendant has made out a prima facie case in support of his contentions, for which purpose the presence of the proposed parties to the suit would be necessary.

10. Mr. Manan Batra, learned counsel appearing for the plaintiff, submits that the defendant has not demonstrated even a prima facie case for the relief sought. He contends that there is no evidence of the existence of a separate HUF, and the documents showing common residence and the financial status of the individuals, in whose names the properties were purchased, is insufficient basis for such a plea. Mr. Batra relies upon the judgment of this Court in Sh. Surinder Kumar vs. Sh. Dhani Ram & Ors. MANU/DE/0126/2016 : AIR 2016 Del 120 and Rajiv Tandon & Anr. (Sh) vs. Smt. Rashmi Tandon MANU/DE/0785/2019 : (2019) 174 DRJ 158 [CS(OS) 501/2016, decided on 28.02.2019], in support of his contention.

11. Having heard learned counsel for the parties, I am of the view that the present application is entirely misconceived. The application for impleadment of the parents was evidently filed alongwith the application for amendment of the written statement. In the event the amendments had been allowed, the parents of the parties would have been necessary parties to the suit. However, the amendment has been disallowed by this Court, against which the Supreme Court has declined to interfere. The observation of the Supreme Court in the concluding part of the order dated 26.07.2019-that the defendant would be at liberty to persuade this Court that the written statement on record is comprehensive enough to consider granting of relief to him at the end of the trial-cannot be read so as to negate completely the fact that the amendment sought was in fact disallowed. The liberty granted is to seek relief on the basis of the present pleadings, and not to reconstitute the suit altogether. To permit impleadment of new parties at this stage would require filing of further pleadings and set back the trial of the suit considerably. One of the factors that is noticed in the judgments of this Court, rejecting the defendant's application for amendment, is that the suit was already at the stage of trial. Mr. Sriram's reading of the order of the Supreme Court, in my view, seeks to achieve exactly what this Court did not permit, and which the Supreme Court also declined to grant. This interpretation of the order of the Supreme Court therefore does not commend to me.

12. Mr. Batra's reliance on the judgments of this Court in Sh. Surinder Kumar (supra) and Rajiv Tandon (supra) is also well founded. In Surinder Kumar (supra), a Coordinate Bench held inter alia as follows:

"7. On the legal position which emerges pre 1956 i.e. before passing of the Hindu Succession Act, 1956 and post 1956 i.e. after passing of the Hindu Succession Act, 1956, the same has been considered by me recently in the judgment in Sunny v. Raj Singh [MANU/DE/3560/2015] decided on 17-11-2015. In this judgment, I have referred to and relied upon the ratio of the judgment of the Supreme Court in Yudhishter case [MANU/SC/0525/1986 : (1987) 1 SCC 204] and have essentially arrived at the following conclusions:

(i) If a person dies after passing of the Hindu Succession Act, 1956 and there is no HUF existing at the time of the death of such a person, inheritance of an immovable property of such a person by his successors-in-interest is no doubt inheritance of an 'ancestral' property but the inheritance is as a self-acquired property in the hands of the successor and not as an HUF property although the successor(s) indeed inherits 'ancestral' property i.e. a property belonging to his paternal ancestor.

(ii) The only way in which a Hindu Undivided Family/joint Hindu family can come into existence after 1956 (and when a joint Hindu family did not exist prior to 1956) is if an individual's property is thrown into a common hotchpotch. Also, once a property is thrown into a common hotchpotch, it is necessary that the exact details of the specific date/month/year, etc. of creation of an HUF for the first time by throwing a property into a common hotchpotch have to be clearly pleaded and mentioned and which requirement is a legal requirement because of Order 6 Rule 4 CPC which provides that all necessary factual details of the cause of action must be clearly stated. Thus, if an HUF property exists because of its such creation by throwing of self-acquired property by a person in the common hotchpotch, consequently there is entitlement in coparceners, etc. to a share in such HUF property.

(iii) An HUF can also exist if paternal ancestral properties are inherited prior to 1956, and such status of parties qua the properties has continued after 1956 with respect to properties inherited prior to 1956 from paternal ancestors. Once that status and position continues even after 1956; of the HUF and of its properties existing; a coparcener, etc. will have a right to seek partition of the properties.

(iv) Even before 1956, an HUF can come into existence even without inheritance of ancestral property from paternal ancestors, as HUF could have been created prior to 1956 by throwing of individual property into a common hotchpotch. If such an HUF continues even after 1956, then in such a case a coparcener, etc. of an HUF was entitled to partition of the HUF property.

xxxx xxxx xxxx

11. I may note that the requirement of pleading in a clear cut manner as to how the HUF and its properties exist i.e. whether because of pre 1956 position or because of the post 1956 position on account of throwing of properties into a common hotchpotch, needs to be now mentioned especially after passing of the Benami Transaction (Prohibition) Act, 1988 (hereinafter referred to as "the Benami Act") and which Act states that property in the name of an individual has to be taken as owned by that individual and no claim to such property is maintainable as per Section 4(1) of the Benami Act on the ground that monies have come from the person who claims right in the property though title deeds of the property are not in the name of such person. An exception is created with respect to provision of Section 4 of the Benami Act by its sub-section (3) which allows existence of the concept of HUF. Once existence of the concept of HUF is an exception to the main provision contained in sub-sections (1) and (2) of Section 4 of the Benami Act, then, to take the case outside sub-sections (1) and (2) of Section 4 of the Benami Act it has to be specifically pleaded as to how and in what manner an HUF and each specific property claimed as being an HUF property has come into existence as an HUF property. If such specific facts are not pleaded, this Court in fact would be negating the mandate of the language contained in sub-sections (1) and (2) of Section 4 of the Benami Act."

To the same effect is the decision in Rajiv Tandon (supra), wherein several prior judgments have also been cited.

13. The clear legal position is that a party which claims that a particular property is joint family property must specifically plead the origin of the HUF, whether pre 1956 or post 1956, and give sufficient particulars as to the creation of the HUF as well as the ownership of the property by the HUF. The pleadings contained in the written statement in the present case are insufficient to meet this standard even for the purposes of a prima facie determination. Further, as mentioned hereinabove, the defendant in the written statement has specifically reserved his right to initiate action in respect of the gift deed dated 11.06.2010, and the two properties being Shop No. F-71 and Shop No. 152. This has in fact been reiterated in paragraph 6 of the preliminary submissions extracted above, as well as in paragraphs 5 and 8 of the reply on merits. The defendant's attempt to expand the scope of the present suit by impleadment of the parents is inconsistent with this reservation contained in the written statement, of which amendment has been specifically disallowed.

14. In the suit as presently constituted, the parents of the parties are neither necessary nor proper parties, as neither is any relief sought against them nor is their presence required for complete and effective adjudication of the lis. They cannot therefore be impleaded in exercise of powers under Order I Rule 10 of the CPC.

15. In the facts and the circumstances aforesaid, the present application is entirely without merit. It is dismissed with costs of ` 30,000/- payable to the plaintiff through learned counsel. The costs be paid within two weeks.

CS(OS) 1214/2014 with I.A. 1461/2018 (by the defendant under Order XXXIX Rules 1 & 2 of the CPC) & I.A. 2273/2018 (by the defendant under Order XIV Rule 5 of the CPC)

List on 13.05.2020.


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