Delhi High Court
Mr. Adesh Kanwarjit Singh Brar vs Ms. Babli Brar & Others on 8 April, 2011
Author: V. K. Jain
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on: 31.3.2011
Judgment Pronounced on: 08.04.2011
+ I.A. Nos.4700/2011 (O.6 R.17 CPC) &
4016/2011 (O.7 R.11 CPC) in CS(OS)
No.647/2010.
Mr. Adesh Kanwarjit Singh Brar .....Plaintiff
- versus -
Ms. Babli Brar & Others .....Defendants
Advocates who appeared in this case:
For the Plaintiff: Mr. Sudhir Chandra Agrawala, Sr. Adv.
With Mr. Ranvir Singh, Mr. Ravi Shankar
Nanda and Mr. Shakil Akhtar, Advs.
For the Defendant: Dr. A.M. Singhvi and Mr. Sandeep Sethi,
Sr. Advs. with Ms. Jyoti Mendiratta,
Ms. Gurkirat Kaur, Ms. Sukanya
Hardika and Ms. Deesha Lodi Kakar,
Advs. for defendant Nos. 1 and 2.
Mr. Shoaib Haider for Mr. N. Waziri,
Adv. for GNCTD (Delhi Police).
CORAM:-
HON'BLE MR JUSTICE V.K. JAIN
1. Whether Reporters of local papers may
be allowed to see the judgment? Yes
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported Yes
in Digest?
V.K. JAIN, J
1. Late Harcharan Singh Brar, who died on 6 th
September, 2009, had two wives, namely Mrs. Jagir Kaur,
CS(OS)No. 647/2010 Page 1 of 32
who died in 1992 and Mrs. Gurbrinder Brar (defendant
No.2). The plaintiff Adesh Kanwarjit Singh Brar is the son
of late Shri Harcharan Singh Brar from his second wife Mrs.
Gurbrinder Brar, whereas defendant No.1 Ms. Babli Brar is
his sister. DefendantNo.3 Ms. Charanjit Kuar Brar is the
step sister of the plaintiff being the daughter of late Shri
Harcharan Singh Brar from his first wife Mrs. Jagir Kaur.
2. The case of the plaintiff is that late Shri Harcharan
Singh Brar was karta of Brar HUF, which owned
agricultural land measuring about 2000 acres in Village
Serainaga, District Muktsar, Punjab. It is further alleged
that on or about September 13, 1951, there was a partition
of the ancestral agricultural property, which formed a part
of the estate belonging to Brar HUF. Under the partition,
agricultural land was divided between the plaintiff,
defendant No.2 Mrs. Gurbrinder Brar, Mussammat Uttam
Kaur, mother of late Shri Harcharan Singh Brar and late
Shri Harcharan Singh Brar. It is further alleged that plot
No.6 in Block No.172 of Jarbagh measuring 1404 sq.yds.
was purchased and construction on the aforesaid plot was
raised from the funds contributed by the plaintiff, his father
late Shri Harcharan Singh Brar and his mother Mrs.
CS(OS)No. 647/2010 Page 2 of 32
Gurbrinder Kaur, defendant No.2 in the ratio of ¼, ¼ and ½
respectively. These funds were generated by sale of lands,
which had fallen to the individual shares of the plaintiff and
his parents after the partition effected in the year 1951. It
is further alleged that the lease deed was nominally
executed in favour of late Shri Harcharan Singh Brar, who
had lent his name for the purpose of completing the
formalities of execution of the lease deed.
3. It is also alleged that Shri Harcharan Singh Brar
has consistently been holding out by his conduct as well as
by his admission before Income-tax and Revenue authorities
as well as to the private parties that he was the owner only
to the extent of 1/4th share, the plaintiff held 1/2nd share
and defendant No. 2 held 1/4th share in Jor Bagh property.
The plaintiff also claims to be in possession of the ground
floor and first floor of the aforesaid property along with his
sons, whereas defendant No. 1 is stated to be in possession
of the second floor. It is further alleged that after death of
Shri Harcharan Singh Brar, during the course of family
discussion on 06th September, 2009, with respect to his
1/4th undivided share, defendant No. 1, for the first time,
claimed that in January, 1999, Shri Harcharan Singh Brar
CS(OS)No. 647/2010 Page 3 of 32
had executed a gift deed in her favour and she was the
owner of the entire property. The plaintiff thereupon
conducted an enquiry in the office of the Sub-Registrar and
came to know of the gift deed, executed by Shri Harcharan
Singh Brar in favour of defendant No. 1 on January 28,
1999, thereby gifting the entire Jor Bagh property to her. In
the Gift Deed, Shri Harcharan Singh Brar stated that the
suit property was his self-acquired property and he was its
absolute owner. The mutation in the name of defendant No.
1 was also carried out by L&DO on the basis of the gift
deed, executed in her favour. The plaintiff has sought
declaration, declaring the gift deed dated January 28, 1999
as null and void and not binding on him. He has also
sought a declaration that he is the owner of half of the land
and building at 6, Jor Bagh, New Delhi and that the
mutation of the aforesaid property in the name of defendant
No. 1 is also null and void. He has further sought partition
of the aforesaid property and an injunction restraining
defendant No. 1 from creating any third party interest
therein.
4. IA No. 4016/2011 has been filed by defendant No.
1 under Order 7 Rule 11 of CPC, whereas IA No. 4700/2011
CS(OS)No. 647/2010 Page 4 of 32
has been filed by the plaintiff, seeking amendment of the
plaint.
5. It is claimed in IA No. 4016/2011 that the prayers
made in the plaint are ex facie barred under the provisions
of the Benami Transactions (Prohibitions) Act, 1988 and,
therefore, the plaint is liable to be rejected. It is further
alleged that since the plaintiff has not challenged the
perpetual lease deed dated 29th May, 1952, whereby Jor
Bagh property was transferred in the sole name of Shri
Harcharan Singh Brar and that relief have now become
barred by limitation, the plea of Benami transaction claimed
by the plaintiff is untenable.
6. In IA No. 4700/2011, the plaintiff has sought
permission to add the following paragraphs as para 10-A:
"That the suit property is in nature of joint
property being partly owned by the father
of plaintiff Shri Harcharan Singh Brar, the
mother of the plaintiff Mrs Gurbinder
Singh Brar (Defendant No. 2 herein( and
the plaintiff in the ration of ¼, ¼ and ½.
Further, that the plaintiff‟s father Shri
Harcharan Singh Barar whose name
appears in the perpetual lease deed dated
May 29, 1952 held the suit property for the
benefit of all the joint owners and as such
purchase of the suit property in the name
of Shri Harcharan Singh Brar was in trust
and for the benefit of the joint purchasers
who were his wife (defendant No. 2) and
CS(OS)No. 647/2010 Page 5 of 32
minor son (plaintiff herein). It is also
relevant to mention that at the time of
purchase of the suit property, the plaintiff
was minor (5 years old) and, therefore, the
father of the plaintiff Shri Harcharan Singh
Brar held the suit property to the extent of
50% of the suit property in fiduciary
capacity in trust and for the benefit of his
minor child (the plaintiff herein) and the
defendant No. 2 to the extent of 25% of the
suit property."
7. The plaintiff has contested IA No. 4016/2011,
whereas IA No. 4700/2011 has been opposed by the
defendants.
8. Order 7 Rule 11 of CPC, to the extent it is relevant,
provides that the plaint shall be rejected where the suit
appears from the statement made in the plaint to be barred
by any law.
9. The Court while considering an application for
rejection of the plaint can look into only the averments
made in the plaint and the documents filed by the plaintiff.
The defence taken by the defendant is not to be considered
while examining such an application and validity of the
documents filed by the plaintiff also cannot be examined at
this stage.
10. In Avtar Singh Narula & Anr. Vs. Dharambir
Sahni & Anr. 150 (2008) DLT 760 (DB), this Court reiterated
CS(OS)No. 647/2010 Page 6 of 32
that the power to reject the plaint has to be exercised
sparingly and cautiously though it does have the power to
reject the plaint in a proper case.
In Popat and Kotecha Property v. State Bank of
India Staff Assn. 2005 7 SCC 510, Supreme Court noted
that the real object of Order 7 Rule 11 of the Code of Civil
Procedure is to keep irresponsible law suits out of the
Courts and discard bogus and irresponsible litigation. It was
further held that dispute questions cannot be decided at the
time of considering an application filed under Order 7 Rule
11 of CPC.
11. Section 4(1) of the Benami Transactions
(Prohibitions) Act, 1988, to the extent it is relevant, provides
that no suit to enforce any right in respect 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.
Benami transaction has been defined in Section 2(a) of the
Act to mean any transaction in which property is
transferred to one person for a consideration paid or
provided by another person.
12. The plea of the applicant/defendant No. 1 is that
CS(OS)No. 647/2010 Page 7 of 32
since the case setup by the plaintiff is that plot No. 6, Jor
Bagh was leased by L&DO in the sole name of Shri
Harcharan Singh Brar though half of the consideration for
acquisition of the plot came from his funds, the plaintiff is
setting up a benami transaction which is hit by Section 4(1)
of Benami Transactions (Prohibitions) Act, 1988.
13. Sub-Section (3) of Section 4 of Benami
Transactions (Prohibitions) Act, 1988 provides that nothing
in this Section shall apply 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. Relying upon the aforesaid
provision, it was contended by the learned counsel for the
plaintiff that since Shri Harcharan Singh Brar, being father
of the plaintiff, stood in a fiduciary capacity viz-a-viz the
plaintiff, who at the time of acquisition of plot No. 6, Jor
Bagh was about five-year-old and the half of the aforesaid
property was acquired for the benefit of the plaintiff, the suit
is not hit by the prohibition contained in Section 4 of
Benami Transactions (Prohibitions) Act, 1988.
14. The learned senior counsel for the plaintiff has also
CS(OS)No. 647/2010 Page 8 of 32
relied upon Section 88 of Indian Trusts Act, 1882, which, to
the extent it is relevant, provides that where a person,
bound in a fiduciary character to protect the interests of
another person, by availing himself of that character, gains
for himself any pecuniary advantage or enters into any
dealings under circumstances in which his own interests
are or may be adverse of such other person, thereby and
gains for himself a pecuniary advantage, he must hold the
advantage so gained by him for the benefit of such other
person. Illustration (h) to the Section states that if a
guardian buys up for himself encumbrances on his Ward‟s
estate at an undervalue, he holds, for the benefit of Ward,
the encumbrances so bought and can only charge him with
what he has actually paid.
It would be appropriate to note here that though
the provisions of Section 81, 82 and 94 of Indian Trusts Act,
1988 were repealed by Benami Transactions (Prohibitions)
Act, 1988, the provisions of Section 88 were not repealed.
15. If the plaintiff is able to bring his case within the
purview of sub-Section (3) of Section 4 of Benami
Transactions (Prohibitions) Act, 1988 and/or Section 88 of
Indian Trusts Act, 1888, it would be difficult to say that the
CS(OS)No. 647/2010 Page 9 of 32
suit is barred by Section 4 (1) of Benami Transactions
(Prohibitions) Act, 1988 and, therefore, the plaint is liable to
be rejected on this ground.
16. It is alleged that in the plaint and is otherwise an
undisputed fact that plot No. 6 Jor Bagh was leased on 29th
May, 1952. It is also alleged in the plaint that the plaintiff is
aged about 61 years. If the plaintiff was aged about 61 years
in the year 2010 when the suit was filed, he would be three-
year-old when Plot No. 6, Jor Bagh was leased by from
L&DO in the year 1952. The plaintiff thus was a minor and
of a very tender age when this plot was acquired from
L&DO. It has been pleaded and is otherwise an admitted
case that Shri Harcharan Singh Brar was father of the
plaintiff. Thus, the plaintiff has pleaded that he is the son of
late Shri Harcharan Singh Brar and was about three-year-
old when plot No. 6, Jor Bagh was acquired from L&DO. As
noted earlier, the plaintiff has pleaded that half of the
consideration for purchase of the aforesaid plot was paid
out of the funds generated by sale of lands which fell in his
share in the partition held on September 30, 1951.
17. For the purpose of deciding an application under
Order 7 Rule 11 of CPC, the averments made in the plaint
CS(OS)No. 647/2010 Page 10 of 32
have to be taken as correct and it is not permissible for the
Court to go into the plea taken by the defendants in the
written statement and/or the documents filed by them.
18. Admittedly, the parties to the suit, being Hindus,
are governed by the provisions of a Hindu Minority and
Guardianship Act, 1956. Section 6 of the aforesaid Act, to
the extent it is relevant, provides that the natural guardian
of Hindu minor, in respect of the minor‟s person as well as
in respect of minor‟s property is the father. Shri Harcharan
Singh Brar, therefore, was the natural guardian of the
plaintiff when Plot No. 6, Jor Bagh, New Delhi was acquired
from L&DO. In my view, if the child is aged about 3/5
years, it would be difficult to dispute that the father, being
his natural guardian, stands in a fiduciary capacity vis-a-vis
the minor child.
The word „fiduciary‟ used in Section 3(2)(b) of
Benami Transactions (Prohibitions) Act, 1988, has not been
defined either in this Act or in Indian Trusts Act. Black‟s
Law Dictionary (8th Edn.) defines fiduciary relationship
amongst others as a relationship between guardian and
ward. It also includes a relationship where one person
assumes control and responsibility over other. It is further
CS(OS)No. 647/2010 Page 11 of 32
stated that one is said to act in a "fiduciary capacity" when
the business which he transacts or the monies or
properties, which he handles, is not his own or for his own
benefit but for the benefit of another person. Walker has
defined „fiduciary‟ as under:
"A „fiduciary‟ is a person in a positing of
trust, or occupying a position of power and
confidence with respect to another such
that he is obliged by various rules of law to
act solely in the interest of the other,
whose rights he has to protect. He may not
make any profit or advantage from the
relationship without full disclosure. The
category includes trustees, Company
promoters and directors, guardians,
solicitors and clients and other similarly
placed."
If there is a transaction, involving a conflict of
interest and duty in the person in whom confidence is
reposed by another person, fiduciary relationship springs
into existence. The law, in my view, reposes faith in the
father, vis-à-vis the minor child, by appointing/recognizing
him as the guardian of his child. The fiduciary relationship
between a minor child and his father is thus created on
account of their very relationship and a statutory
recognition of the father as natural guardian of the child.
Moreover, it cannot be disputed that it is the father who, as
CS(OS)No. 647/2010 Page 12 of 32
his natural guardian exercises control on the child and is
primarily responsible for his welfare. He is under a moral
obligation to protect and safeguard the interest of his minor
child. The law does not permit him to misuse his position
as guardian of the child by using the funds of the child to
acquire a property in his own name. If he does so, he
betrays the trust which law reposes in him, by vesting him
with the position of guardian of his child. A child of
three/five years, who in law is in the custody and care of his
father, he being his natural guardian, is incapable of even
understanding and appreciating a property transaction not
to talk of taking a rational view with regard thereto. It is the
father, who being the natural guardian not only of the
person, but also of the property of the minor child, has to
deal with the property of the minor. While doing so, the
father is duty bound to act in the best interests of the minor
and it is this relationship of trust and confidence which
creates the fiduciary relationship between them. It,
therefore, appears to me that since there was a fiduciary
relationship between the plaintiff and Shri Harcharan Singh
Brar, he was duty bound to act in the best interest of the
plaintiff and could not have abrogated the funds of the
CS(OS)No. 647/2010 Page 13 of 32
plaintiff to his personal use by obtaining lease deed of the
entire plot in his sole name. If the father of a minor child,
who lacks not only legal capacity to contract, but also the
maturity and rationale required for handling his property,
misuses the confidence reposed in him and acquires the
property in his sole name, despite paying half of the
consideration from the funds belonging to the minor child
which he controls on account of his being the natural
guardian of the minor, he holds the property to the extent it
is acquired from the funds of the minor, for the benefit of
the minor, his position towards the minor being akin to that
of a trustee.
19. It was contended by the learned senior counsel for
the applicant/defendant that since trust of immovable
property can be setup only by way of a registered
instrument or by a Will, as provided in Section 5 of Indian
Trusts Act, 1982, and no such instrument was executed in
this case, it cannot be said that Shri Harcharan Singh Brar
was a trustee for the plaintiff. I, however, find no merit in
this contention. A careful perusal of Clause (b) of sub-
Section 3 of Section 4 of the Benami Transactions
(Prohibition) Act, 1988 would show that it excludes, from
CS(OS)No. 647/2010 Page 14 of 32
the operation of Section 4(1) and 4(2), two types of
transactions, firstly where the person holding the property
is a trustee for another person and the other where the
person holding the property though not trustee in the strict
sense of the expression, stands in a fiduciary capacity vis-à-
vis the person for whose benefit the property is held by him.
In Sarabjit Singh Anand and Others v. Manjit
Singh Anand and others, 2008 INDLAW DEL 1289 the
Court was of the view that the word "trustee" in Clause (b)
of sub-Section 3 of Section of the Benami Transactions
(Prohibition) Act, 1988 can also imply existence of a relation
of active confidence or a fiduciary one and, therefore, the
exception is not limited to a trustee of a registered trade
trust and covers even persons other than trustees but
sharing a fiduciary relationship. Hence, a transaction in
which the property is acquired by a person, who stands in a
fiduciary capacity vis-à-vis another person also constitutes
an exception to sub-Section (1) and (2) of Section 4. It
would be pertinent to note here that in that case, the
property was alleged to have been purchased by the parents
in the name of a major son. Still the Court was of the view
that the transactin before it was a benami transaction as
CS(OS)No. 647/2010 Page 15 of 32
pleaded, which was saved by Section 4 (3) (b) of the Act and,
therefore, the plaint may not be rejected.
20. It was also contended by the learned senior
counsel for the defendant that neither any trusteeship nor
any fiduciary relationship has been pleaded by the plaintiff
and, therefore, no such plea can be set up during
arguments. I, however, find no merit in this contention.
The fiduciary capacity of father vis-à-vis a minor child arises
on account of their relationship and the father being
statutorily recognized/appointed as the guardian of the
minor child. Such capacity need not be expressly pleaded
in so many words when the facts which give rise to such a
capacity have been pleaded by the person setting up a
fiduciary capacity. As noted earlier, it has been pleaded
that the plaintiff was 61 years old at the time of filing of the
suit, which would mean that he was about 3 years old when
lease deed in favour of late Shri Harcharan Singh Brar was
executed by the L&DO. It has also been pleaded that late
Shri Harcharan Singh Brar was father of the plaintiff and
half of the consideration for purchase of Jor Bagh Plot came
from the funds of the plaintiff. It has also been pleaded that
the lease deed was obtained by late Shri Harcharan Singh
CS(OS)No. 647/2010 Page 16 of 32
Brar in his sole name despite half of the consideration
having come from the coffers of the plaintiff. Therefore, it
was not necessary for the plaintiff to say in so many words
that there was a fiduciary relationship between him and late
Shri Harcharan Singh Brar.
21. Illustration (h) to Section 88 of the Indian Trusts
Act, 1882 clearly shows that the guardian of a ward holds
the position of a fiduciary vis-à-vis the ward and is duty
bound to protect his interest. If he avails any pecuniary
advantage for himself by virtue of his fiduciary character,
the advantage so gained by him is held by him for the
benefit of the ward. As noted earlier, the father of a minor
child is his natural guardian. The expression „ward‟ as
defined in Guardians and Wards Act, 1890 means a minor
for whose person or property or both there is a guardian.
Since a Hindu father is the natural guardian not only for the
person but also for the property of his minor child, it cannot
be disputed that the relationship of a father and a minor
son is that of a guardian and a ward. Consequently, the
provisions of Section 88 of Indian Trusts Act would apply to
such a relationship and a father, in his fiduciary character
as the guardian of a minor child is duty bound to protect
CS(OS)No. 647/2010 Page 17 of 32
his interest and cannot gain any advantage for himself at
the costs of and to the detriment of his child. If the father
obtains any financial advantage, to the detriment of his
minor child, that advantage accrues to the benefit of the
minor child and not his father. In fact, the provisions of
Section 88 of Indian Trusts Act when read with illustration
(h) indicate in no uncertain terms that a father stands in a
fiduciary capacity vis-à-vis his minor child. The suit,
therefore, is not hit by Section 4 of the Benami Transactions
(Prohibition) Act, 1988.
22. In Canbank Financial Services Ltd. v.
Custodian and others, (2004) 8 SCC 355, Supreme Court
held that the list of persons specified in Section 88 of the
Trusts Act is not exhaustive and that the heart and soul of
the matter is that wherever as between two persons one is
bound to protect the interests of the other and the former
availing of that relationship makes a pecuniary gain for
himself, the provisions of Section 88 would be attracted
irrespective of any designation, which is immaterial. It is
difficult to dispute that the father of a Hindu child being
natural guardian not only of his person but also of his
property is duty bound to protect the financial interest of
CS(OS)No. 647/2010 Page 18 of 32
his child and would be covered in the expression "other
person bound in a fiduciary character to protect the interest
of another person" used in Section 88 of the Indian Trusts
Act. In fact, there cannot be any reasonable dispute about
this proposition when the matter is examined in the light of
illustration (h) to this Section.
In P.V. Shankara Kurup v. Leelavathy Nambiar,
(1994) 6 SCC 68, Supreme Court, inter alia, observed as
under:-
"3....That apart under Section 88 of the
Indian Trusts Act, 1882, an agent or
other person bound in a fiduciary
character to protect the interests of the
principal and the former would hold the
property for the benefit of the principal or
the person on whose behalf he acted as
an agent. The question of benami,
therefore, does not arise, though Section
4 of the Benami Transactions
(Prohibition) Act, prohibits such a plea.
Sub-section (3)(b) provides that:
"Nothing in this section shall
apply,--
(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."
Section 7 does not repeal Section 88 of
Trust Act. When an agent was employed
CS(OS)No. 647/2010 Page 19 of 32
to purchase the property on behalf of his
principal and does so in his own name,
then, upon conveyance or transfer of the
property to the agent, he stands as a
trustee for the principal. The property in
the hands of the agent is for the principal
and the agent stands in the fiduciary
capacity for the beneficial interest he had
in the property as a trustee. The
petitioner has acted as an agent, as a
cestui que trust, is a trustee and he held
the property in trust for the respondent
in his fiduciary capacity as an agent or
trustee and he has a duty and
responsibility to make over the
unauthorised profits or benefits he
derived while acting as an agent or a
trustee and properly account for the
same to the principal."
Since Section 88 of the Indian Trusts Act refers not
only to an agent but also to any other person, who is bound
in fiduciary character to protect the interest of another
person and the father does hold such a character vis-à-vis
his minor child, the question of benami does not arise in
respect of a transaction where property is purchased by the
father in his own name though from the funds of his minor
child.
In Sunitha v. Ramesh, 2010 (3) KLT 501, a
Division Bench of Kerala High Court while considering
relationship of husband-wife, inter-alia, observed that
trustees, executors, administrator, director of a corporation
or society, medical or religious adviser, husband and wife,
ward and guardian, agent and principal etc. can safely be
held to be a fiduciary relation for the purpose of Section 51©
of the Code of Civil Procedure. As observed by Kerala High
Court in Treesa Irish W/o Milton Lpez v. the Central
Public Information Officer, the Appellate Authority, the
Central Information Commission and Union of India, ilr
2010 (3) Kerala 892, at the heart of fiduciary relationship
lie reliance, de facto control and dominance and a fiduciary
relationship exists when confidence is reposed on one side
and there is resulting superiority and influence on the
other. Since father holds a domain position vis-à-vis his
minor child and exercises not only dejure but also de facto
control on him as well as his property and practically takes
all decisions on behalf of his minor child, a fiduciary
relationship definitely exists between them.
In Firm Makhanlal Girwarlal v. Harnarain and
Others, AIR 1960 MP 56, the Court was of the view that
there exists fiduciary relationship between father and son, it
is manifested in Section 8 of Hindu Minority and
Guardianship Act, 1956.
23. The learned counsel for the defendant has relied
upon the decision of this Court in Anil Bhasin v. Vijay
Kumar Bhasin and others, 102(2003) DLT 932 where the
case of the plaintiff was that defendant No.3, son of late
Smt. Raj Rani Bhasin held the property as the trustee and
stood in a fiduciary relationship qua his mother. During the
course of the judgment, this Court observed that it is only
those instances of fiduciary capacity such as property of
partnership firm held in the name of one of the partners or
property which Mr. X wanted Mr. Y to buy in the name of
Mr. X but in violation of that instruction, Mr. Y buys it in
his own name. This judgment does not consider the
relationship of a father vis-à-vis his minor child. In the
present case, the property is alleged to have been purchased
by the father in his own name using the funds of his minor
child who on account of his tender age and being in control
and under guardianship of his father was incapable of
looking after his own interest and whose interest the father
was duty bound to protect and preserve. This judgment
was distinguished by this Court in Sarabjit Singh Anand
and Others (supra) and it was pointed out that in this case
the benami transaction was undertaken in the year 1997
i.e. after enforcement of the Benami Transaction
(Prohibition) Act, 1988. Consequently, the prohibition
under Section 3(1) of the Act was in force at that time. In
this case, the Court did not say that with the repeal of
Sections 81 and 82 of the Indian Trusts Act, the party
relying upon a benami transaction (in cases where Section
4(3)(a) and (b) is invoked) cannot be permitted to prove the
said benami transaction and the existence of conditions
4(3)(a) and 4(3)(b) of the Act. The Court was of the view that
in Anil's case (supra), the Court gave only illustrations
while dealing with what constitute acting in a fiduciary
capacity and the observations of the Court constitute merely
an obiter since the Court was not dealing with all possible
situations in which a person can be said to be acting in or
be placed in a fiduciary capacity in relation to another.
24. The learned counsel for the defendant has next
referred to the decision of this Court in Ram Prakash
Kathuria v. Ved Prakash Kathuria and other, 2007 V
AD (Delhi) 694, wherein it was alleged that the property
was purchased by defendant No.3 (son of Smt. Sita Devi)
out of his own funds though in the name of Smt. Sita Devi.
Relyingupon Section 3 of the Benami Transaction
(Prohibition) Act, 1988, this Court held that the basis of the
suit was ill founded. This judgment, however, does not
apply to a transaction where the property is acquired by the
father in his own name from the funds of the minor child. If
the property is acquired by the father or mother in the name
of a minor child, the child may not be said to be acting in a
fiduciary capacity vis-à-vis his parent, but, where the
property is acquired by the parents in his/her name from
the funds of the minor child, the parent acquiring the
property in his/her name does act in a fiduciary capacity
vis-à-vis the child.
25. The learned counsel for the defendant has also
referred the decision of this Court in Aarti Sabharwal v.
Jitender Singh Chopra & Ors., 162 (2009) DLT 38 where
the property was alleged to have been held by the mother as
benami for her son. During the course of the arguments, it
was contended before this Court that the mother was
holding the property in fiduciary capacity for the son. The
Court noted that this was neither pleaded nor substantiated
even prima facie nor any document filed along with the
plaint and from a reading of plaint, no case was made out to
show that mother was in fact holding the property in any
fiduciary capacity for defndantNo.1, who was her son.
There is nothing on record to indicate that the defendant
No.1 in that case was a minor child. There is nothing in the
judgment to indicate that the property was purchased by
the mother from the funds of the son. On the other hand,
in the case before this Court, there is a specific averment in
this regard in the plaint and the plaintiff has also filed a
number of documents in support of his claim that half of
the consideration for purchase of Jor Bagh plot was paid
from the funds owned by him. Therefore, this judgment
does not help the defendant in any manner.
26. Learned counsel for the defendant has lastly
referred to the decision of Supreme Court in a. Rajagopal
Reddy (dead) by L.Rs. and others v. Padmini
Chandrasekharan (dead) by L.Rs., AIR 1996 SC 238
wherein it was held that Section 4 of the Benami
Transaction (Prohibition) Act, 1988 does not have
retrospective application. This judgment, to my mind, has
not applicability to the facts of the present case.
27. For the reasons given in the preceding paragraphs,
it cannot be said that the suit is barred by Section 4 of the
Benami Transaction (Prohibition) Act, 1988.
28. As regards the plea that the plaintiff has not
challenged the lease deed executed by L&DO in the name of
late Shri Harcharan Singh Brar, the contention of the
learned counsel for the plaintiff was that he need not
challenge the lease deed, since has already sought a
declaration that the plaintiff is the owner of ½ of the suit
property, in order to obtained the reliefs. The application
does not indicate under which provision of law, the reliefs
claimed by the plaintiff are not available to him without
challenging the lease deed executed by L&DO in favour of
late Shri Harcharan Singh Brar. Therefore, the plaint is not
liable to be rejected on this ground.
29. For the reasons given in the preceding paragraphs,
I find no merit in I.A. No.4016/2011 and the same is hereby
dismissed.
30. As regards I.A. No.4700/2011, the plaintiff by way
of proposed amendments wants to specifically plead that
late Shri Harcharan Singh Brar held the suit property for
the benefit of all the joint owners and the purchase was in
trust and for the benefit of the plaintiff and defendant No.2.
He also wants to specifically plead that he was 5 years old
at the time of purchase of the aforesaid property. He
further wants to plead that late Shri Harcharan Singh Brar
held the suit property in fiduciary capacity in trust and for
the benefit of the plaintiff to the extent of 50% and benefit of
defendant No.2 to the extent of 25% of the property.
31. It is settled proposition of law that an amendment
should generally be allowed, unless it is shown that
permitting the amendment would be unjust and would
result in prejudice to the opposite party which cannot be
compensated by cost or would deprive him of a right which
has accrued to him with the lapse of time. Errors or
mistakes, if not fraudulent, should not be made a ground
for rejecting the application for amendment of plaint or
Written Statement. If there is no undue delay, no
inconsistent cause of action is introduced and no vested
interest or accrued legal right is affected and the application
for amendment is not mala fide or will not prejudice the
opposite party, the amendment should ordinarily be
allowed.
32. Since I am of the view that a fiduciary capacity in
such a transaction arises on account of relationship which a
father has with a minor child and considering that all the
facts necessary to constitute a fiduciary capacity have
already been pleaded by the plaintiff, the proposed
amendment is merely by way of elucidation in order to plead
the case of the plaintiff more specifically and in express
words. Therefore, I see no reason to refuse the proposed
amendment. No new case is sought to be set up by the
proposed amendment. Since the facts constituting
foundation of the proposed amendment have already been
pleaded, neither the defendants will be taken by surprise
nor will any prejudice be caused to them by allowing the
proposed amendment. It was contended by the learned
counsel for the defendant that the amendment cannot be
allowed if it has the effect of taking away a vested right,
which has accrued in favour of opposite party due to
passage of time. The case of the plaintiff is that he came to
know of the gift deed executed by late Shri Harcharan Singh
Brar in favour of defendant No.1 only after the death of Shri
Harcharan Singh Brar on 6 th September, 2009. If this is so,
the suit may not be barred by limitation even if the
proposed amendment is allowed. No additional relief is
being sought by way of proposed amendment. In any case,
it is not possible at this stage to say that the proposed
amendment will have an effect of taking away some vested
right, which have accrued to the defendant on account of
omission of the plaintiff to plead these facts in the initial
pleadings.
33. Section 16(c) of the Specific Relief Act, 1963
provides that specific performance of a contract cannot be
enforced in favour of a person, who fails to aver and prove
that he has performed or has always been ready and willing
to perform the essential terms of the contract which are to
be performed by him, other than terms of the performance
of which has been prevented or waived by the defendant.
Despite the provisions of Section 16(c) having been held to
be mandatory, an amendment to plead that the plaintiff had
performed or had always been ready and willing to perform
the essential terms of the contract, which were required to
be performed by him has been allowed in a number of
cases.
In Gajanan Jaikishan Joshi vs. Prabhakar
Mohanlal Kalwar, (1990) 1 SCC 166 in his suit for
specific performance of the agreement, the
plaintiff/appellant had not pleaded that he was willing to
perform his part of the contract. The defendant filed written
statement taking a plea that the suit was not maintainable
for non-compliance of the provisions of Section 16(c) of
Specific Relief Act. When the matter was listed for
arguments on the preliminary issue as to whether the suit
was maintainable, the plaintiff/appellant applied for leave to
amend the plaint by incorporating an amendment in the
plaint that he was and had always been ready and willing to
perform his part of the agreement. The application was
rejected by the trial court and a revision filed against that
order was dismissed by the High Court. Allowing the appeal
filed by the plaintiff, Supreme Court observed that no fresh
cause of action was sought to be introduced by the
amendment applied for and all that the plaintiff sought to
do was to complete the cause of action for a specific
performance for which relief he had already prayed. The
Court was of the view that since no fresh cause of action
was sought to be introduced by the amendment, there was
no question of causing any injustice to the
defendant/respondent. In taking this view, the Court relied
on its earlier decision in (1957) 1 SCR 595, where the Court
was of the view that all amendments ought to be allowed
which satisfy the two conditions: (a) not working injustice to
the other side, and (b) of being necessary for the purpose of
determining the real questions in controversy between the
parties. The Court was of the view that the amendments
should be refused only where the other party cannot be
placed in the same position as if the pleading had been
originally correct, but the amendment would cause him an
injury which could not be compensated in costs. In Shri
Lakhi Ram (Dead) Through Lrs. v. Shri Trikha Ram &
Ors., (1998) 2 SCC 720, similar amendment was allowed
during the course of an appeal filed by the defendant who
had contended that the suit was barred by Section 16(c) of
Specific Relief Act as the plaintiff did not aver in the plaint
that he was ready and willing to perform his part of the
contract. The High Court, however, set aside the order of the
appellate court allowing the amendment. During the course
of arguments, in the appeal filed by the plaintiffs against the
decision of the High Court, it was contended on behalf of the
defendant that amendment by introducing averments under
Section 16(c) of Specific Relief Act cannot be granted in a
suit which is defective on account of absence of such
averments. Allowing the appeal filed by the plaintiff and
setting aside the decision of the High Court, Supreme Court
held that the amendment inserting the relevant averments
under Section 16(c) of the Specific Relief Act does not
change the cause of action and would be a legally
permissible exercise.
34. I.A. no. 4700/2011 is, therefore, allowed, subject
to payment of Rs.25000/- as costs. Amended plaint has
taken on record.
35. The application stands disposed of.
CS(OS) No.647/2010
Written statement to the amended plaint can be
filed within four weeks. Replication, if any, thereto can be
filed within two weeks thereafter. The parties shall appear
before the Joint Registrar on 25th May, 2011 for
admission/denial of documents.
The matter be pleaded before the Court on 31st
May, 2011 for framing of issues and disposal of all pending
applications.
(V.K. JAIN)
JUDGE
APRIL 08, 2011
BG/VKM
