VALMIKI J. MEHTA, J. (ORAL)

1. The subject suit is a suit for partition and rendition of accounts. There are four plaintiffs in the suit. The plaintiffs No. 3, 4 and 2 are respectively the widow, daughter and the son of late Sh. Gopal Kishan Dass. Plaintiff No. 1 is the daughter of Sh. Bal Kishan Das father of Sh. Gopal Kishan Dass. Sh. Gopal Kishan Dass was the son of Sh. Bal Kishan Dass. Sh. Gopal Kishan Dass died in the year 1984. Sh. Bal Kishan Dass himself died in the year 1991. As per the averments in the suit-plaint, the properties which are mentioned in Schedules ‘B’ and ‘C’, being the immovable properties and the companies who own these properties, are joint properties and they are liable to be partitioned. The plaint contains the averments that late Sh. Banwari Lal, grandfather of Sh. Gopal Kishan Dass and the father of Sh. Bal Kishan Dass carried on his sole proprietorship business in the name of ‘M/s. Bhana Mal Gulzari Mal’. Sh. Bal Kishan Dass is stated to be the only son of late Sh. Banwari Lal. As per para 6 of the plaint since all the properties mentioned in Schedules ‘B’ and ‘C’ of the plaint have come into existence from the funds, monies and nucleus of the estate of late Sh. Banwari Lal, it is therefore pleaded on behalf of Sh. Bal Kishan Dass that his sons and daughters have inherited the same equally. There are then averments in the plaint of the defendants no. 1 to 6 misappropriating the capital, assets and profits of the defendants No. 7 to 12 companies to the exclusion of the plaintiffs and also mis-managing the properties. Para 11 refers to the plaintiffs as shareholders in the movable and immovable properties mentioned in the Schedules to the plaint. Accordingly, partition is sought by the plaintiff no. 1 claiming to have a 1/8th share, plaintiff no. 2 having a 1/3rd share out of the 1/8 share and the plaintiffs no. 3 and 4 having rights similar to the plaintiff no. 2.

2. In the written statements filed on behalf of different defendants, dismissal of the suit is prayed for as it is averred that plaintiffs have no right in the suit properties. In the written statements it is pleaded that the immovable properties are in fact the immovable properties of the companies which own these properties. The rights of the plaintiffs to claim partition is denied because the companies are being managed by the majority of the shareholders and that the plaintiffs are not the majority shareholders of the companies. In fact, except plaintiff No. 3 who owns nominal shareholding, the other three plaintiffs do not have any shareholding whatsoever in the defendants No. 7 to 12 companies. It is further pleaded that the defendants No. 7 to 12 companies are incorporated under the Companies Act, 1956 and therefore they cannot be a subject matter of partition i.e in effect pleading is that a company's property cannot be said to be the property of a shareholder. Basically what is pleaded in the written statement is that the properties are of the companies, none of the plaintiffs except plaintiff no. 3 is shareholder in these companies, even the plaintiff no. 3 has only a nominal shareholding, the companies were incorporated in fact under the Companies Act of 1913 and this position of the companies owning the properties prevail since 1959 onwards i.e over many decades. It is therefore prayed that the suit be dismissed.

3. Issues in this case were framed on 18.2.2008 However, nothing substantial has happened because only affidavits by way of the evidence of the plaintiffs were filed but their cross-examination is yet to begin. This suit came up on 9.7.2012 before this Court for filing of amended memo of parties on the death of defendant No. 2. There was no date fixed for leading of evidence. Considering the averments in the plaint, the plaintiffs were put to notice that the suit in fact as per the averments as existing would be barred either in view of the fact that there is no averment that there existed a Hindu Undivided Family between the parties or because of the provisions of the Benami Transactions (prohibition) Act, 1988 (in short ‘Benami Act’). I may note that unfortunately the defendants have not taken up either of these two basic pleas in the written statement of the suit being barred either on account of the Benami Act or on account of the fact that it is not pleaded that there exists an HUF between the parties. Since however the issue of Benami Act is a legal issue and issue with regard to existence of an HUF is an issue which only concerns reading of the plaint to find out whether the same contains the ingredients of cause of action, I have looked into both these aspects. Counsel for the plaintiffs was put to notice on 9.7.2012, and thereafter today this case is being taken up for hearing. Following is the order dated 9.7.2012:-

“1. Subject of course to hearing the counsel for the parties further, I find, prima facie, that the suit lacks cause of action besides the same being barred by the Benami Transactions (Prohibition) Act, 1988. This is observed because the immovable properties to which claims have been laid by the plaintiffs are in the name of the companies. If the properties are in the name of the companies, ownership of those properties will naturally vest with the companies. In law there is a difference of identity between the companies and its shareholders, directors and so on. Further, all that seems to be stated in the plaint is that these companies have been floated out of the nucleus of a sole proprietorship business of the father of the parties. In law, even if that be so, there is no cause of action in the plaint as to how such properties or the shares of these companies can be at all claimed by the plaintiffs, more so because the companies were floated in the lifetime of the father-Sh. Bal Kishan Das.

2. Since there is lack of clarity in the plaint, it is necessary at this stage to direct the plaintiffs to remain present in person in Court so that their statements can be recorded under Order 10 CPC in order to get clarity with respect to the averments of the plaint, and also with respect to cause of action if any as alleged in the plaint.

3. List for further proceedings on 29 August, 2012. Plaintiffs will be present in Court on the next date of hearing.”

4. Under the traditional Hindu Law if any male member of a family inherited any property from any of his three immediate paternal ancestors, the properties in his hands were HUF properties. After passing of the Hindu Succession Act, 1956, this position has however ceased. After passing of the Hindu Succession Act, 1956, if a male member receives any property from any of the three immediate ancestors, he receives the property as a self-acquired property and not as an HUF property. Only if the plaint contains averments that the property is inherited by a person prior to passing of the Hindu Succession Act, 1956 and therefore the property in fact has the character of an HUF property, would the properties be HUF properties and that too provided that there are averments made in the plaint that the properties continue to be HUF properties and there existed an HUF which continued, otherwise, the suit would be barred in terms of the judgments of the Supreme Court in the cases of Commissioner of Wealth Tax, Kanpur v. Chander Sen, AIR 1986 SC 1753 and Yudhishter v. Ashok Kumar, AIR 1987 SC 558, once it is found that the properties did not remain HUF properties because companies having separate/distinct entities were floated. In these two judgments, the Supreme Court has laid down the ratio that after passing of the Hindu Succession Act, 1956, a male member when receives a property from any of his paternal ancestors, then, the property is received by him as a self-acquired property and not as an HUF property to which his three generations below him i.e his son, grandson and great grandson would have a right. The only exception is that if there existed an HUF prior to passing of Hindu Succession Act, 1956, then such HUF continues after passing of the Hindu Succession Act, 1956. I note that the plaint does not even contain averments that the shareholding of the defendants no. 7 to 12 companies are HUF properties. As per para 4 of the plaint Sh. Bal Kishan Dass with his son incorporated six companies and which took over the capital and assets of M/s Bhana Mal Gulzari Mal. There is however no averment in the plaint that even after incorporation of the companies there existed an HUF of the family. Companies are legal entities and are not members of an HUF. A company has a distinct personality from its shareholders. Individual persons are the owners of shares and not the owners of the properties of a company and which properties are the properties of the companies.

5. Looking at the admitted averments in the plaint, I asked the counsel for the plaintiffs to point out to me if there is an averment that there existed a Hindu Undivided Family before the year 1956 or there existed Hindu Undivided family/Joint Hindu Family after the year 1956 or there are averments that the properties were inherited by late Sh. Bal Kishan Dass before passing of the Hindu Succession Act, 1956 and therefore the properties in his hands were HUF properties or at least that there existed ‘ancestral’ properties, however, in spite of repeated endeavours, counsel for the plaintiffs was not able to point out any such averment in the plaint. In fact the plaint is conspicuously silent qua the existence of any HUF/Joint Hindu Family or with regard to late Sh. Bal Kishan Dass inheriting the properties as an HUF/Joint Hindu Family properties. In fact the basic averments in the plaint are only that the properties in question, and which are owned by the defendants no. 7 to 12-companies, were in fact companies which were constituted out of the funds/nucleus of late Sh. Banwari Lal, father of late Sh. Bal Kishan Dass. In fact so much so that I must state that except in the Annexure ‘A’ to the plaint there is not even averment in the plaint with respect to the year of death of late Sh. Banwari Lal.

6. Therefore, the net effect of reading of the plaint is that there is no averment of existence of a Hindu Undivided Family/Joint Hindu Family prior or after the year 1956. There is also no averment that properties were inherited by Sh. Bal Kishan Dass as HUF or ancestral properties although they were inherited prior to coming of Hindu Succession Act, 1956 into existence. Accordingly, the suit-plaint which only talks of the properties being purchased out of the funds of the business of late Sh. Banwari Lal, cannot be said to have ingredients for seeking partition of the properties of a Hindu Undivided Family/Joint Hindu Family. In fact, as already stated above, there is even no averment that the shareholdings of the defendants No. 7 to 12 companies are the shareholdings of any HUF and no claim/relief is claimed as regards the shareholdings of the defendants Nos. 7 to 12 companies. The suit is therefore barred in terms of the judgments of the Supreme Court in the cases of Commissioner of Wealth Tax (supra) and Yudhishter (supra) as stated above, and especially after passing of the Hindu Succession Act, 1956.

7. The second issue is that whether as per the averments in the suit-plaint, the suit is barred by the provisions of Section 4 of the Benami Act. As per Section 4 of the Benami Act what is apparent is real i.e if a property stands in the name of a particular person, then that person is the owner of the property, subject of course to the exceptions contained in Sub sub Sections (a) and (b) of Sub-Section 3 of Section 4 of the Benami Act. These exceptions are that a property can stand in the name of another person and yet rights can be claimed by another person, provided that there exists an HUF and the property is held in the name of a coparcener/member of the HUF. The second exception is that though the property is in the name of another person than the person who has claimed rights in the same, the person claiming has right provided that the property has been purchased in the exercise of fiduciary obligations/relations as a trustee. A reference to the plaint shows that admittedly there is no case set-up of the plaintiffs having rights because the defendants have purchased the property in exercise of the fiduciary obligation or as a trustee. In fact, the properties are of the companies, and a company is not a coparcener or a member of an HUF. As already stated above, the plaint does not even whisper of the existence of a Hindu Undivided Family or a Joint Hindu Family. There are 42 immovable properties which are stated in Schedule ‘C’ of the plaint. All these 42 properties are in the name of the defendants no. 7 to 12-companies. There are 12 tenancies which are mentioned of different properties in UP, Jaipur, Alwar, Indore etc and which tenancies are also tenancies which are in the names of the companies. In fact, counsel for the defendants informs me that tenancies are tenancies protected under various Rent Acts and it cannot be said that the tenancies would be of any alleged Hindu Undivided Family even assuming such averments are made in the plaint otherwise these tenancies will be lost. Schedule ‘E’ also mentions five immovable properties and out of five immovable properties four properties are in the names of defendants no. 7 to 12, except property no. 2 in the Schedule at Soami Nagar and which is in the name of wife of defendant no. 3. In sum and substance, actually it can be said that really almost all the properties, and which would in fact be more than 99.9% of the disputes between the parties, are in the names of the defendants no. 7 to 12-companies, and that too since many decades i.e since 1959 onwards. The suit therefore quite clearly is also barred by the provisions of Section 4 of the Benami Act.

8. As per the provisions of Order 12 Rule 6 CPC, a Court is entitled to pass judgment on the basis of admitted facts which emerge. As per section 2(2) of the cpc decree includes dismissal of the suit. Order 12 Rule 6 CPC therefore can also be invoked on behalf of the defendants to seek dismissal of the suit on the basis of admitted averments which existed. The object of Order 12 Rule 6 CPC is not to allow unnecessary trial in cases where the plaint admittedly does not make out the cause of action or the suit in fact is barred by law. It is not necessary that there has to be rigors of a trial in every case and that a litigant must undergo tribulations for long pendency of a suit running into decades. In view of the fact that the plaint fails to disclose any cause of action and is hit by the ratio of judgments of the Supreme Court in the cases of Commissioner of Wealth Tax (supra) and Yudhishter (supra), as also the provisions of Section 4 of the Benami Act, the suit of the plaintiffs is accordingly dismissed, leaving the parties to bear their own costs. Decree sheet be prepared.