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Person paying consideration for purchase of property is not owner but title holder

February 2, 2019[2019] 102 taxmann.com 29 (Delhi)
230 Views

CL : Persons making contribution for purchase of property are not owners of property but property in law is of persons in whose name title with respect thereto has been recorded

FACTS

• Plaintiff had instituted suit for partition of a property claiming that plaintiff and defendants to be having 1/5th undivided share therein under deed of purchase of subject property in favour of plaintiff and four defendants. Defendant No. 1, in opposition to application under Order XII Rule 6 of CPC stated that though sale deed by which property was purchased was in joint names of plaintiff and four defendants but entire sale consideration for purchase of property was paid equally by defendant No. 1 and by his brother.

Held that pleas of defendant No. 1 were not sustainable in law and were barred by Benami Transactions (Prohibition) Act, 1988 since renamed Prohibition of Benami Property Transactions Act, 1988. Plea of sale consideration having been contributed by defendant No. 1 and 'A', did not in law constitute defendant No. 1 and 'A' as owners of property and property in law was of persons in whose name title with respect thereto had been recorded i.e. plaintiff and defendants Nos. 1 to 4. Section 4 provides that no defence based on any right in respect of any property held benami, whether against person in whose name 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 real owner of such property. Defence of defendant No. 1 was thus not allowed under said law. A final decree for partition of property was also, thus, passed, of sale of property and of distribution of sale proceeds amongst parties as per share declared in preliminary decree for partition.

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