Karnataka HC: Revision Allowed Where Benami Bar Clearly Applies

A bench of Justice Ravi V. Hosmani heard a civil revision petition challenging an order refusing to strike out a plaint under Order VII Rule 11(a) to (d) of the Code of Civil Procedure, 1908, arising from a dispute over alleged transfer of agricultural land and subsequent gift, and considered whether the bar under Section 4 of the Benami Transactions (Prohibition) Act, 1988 applied.

Decision Summary: The High Court allowed the revision petition, set aside the trial Court's order dated 26.09.2024 and held that the plaint in OS No.348/2022 was liable to be rejected under Order VII Rule 11 of the Code of Civil Procedure, 1908 because the plaint averments unequivocally disclosed a transaction attracting the bar in Section 4 of the Benami Transactions (Prohibition) Act, 1988. The Court relied on Sri Nimbanna v. Shivananda Kinnal and Anr. to the effect that where assertions in the plaint were unequivocal and attracted the bar under Section 4 of the Benami Transactions (Prohibition) Act, 1988, the trial Court would be justified in considering an application under Order VII Rule 11 of the Code of Civil Procedure, 1908 and nipping frivolous suits in the bud. The Court, in its reasoning, observed: "In view of above, unequivocal facts, there would be no need to allow suit clearly attracting bar under provisions of BT Act to proceed to trial. Trial Court was not justified in rejecting application on ground that whether the transaction was in fiduciary capacity required evidence. Therefore, it is held rejection of application by trial Court suffers from material irregularity."

The Court also quoted the plaint averments to demonstrate the nature of the claim: "On a complete and meaningful reading of entire plaint averments reveals, it is specific and unequivocal case of plaintiff that suit property along with another was purchased under registered sale deed dated 25.03.2022 exclusively in name of defendant no.1 even though entire consideration was paid by plaintiff along, as defendant no.1 was mother of plaintiff and he was very affectionate towards her and also out of respect, with agreement that she would revert back properties to him."

Background

The civil revision arose from OS No.348/2022 in which the plaintiff sought declaration and mandatory injunctions challenging a registered gift deed and seeking reconveyance in his favour. The defendants (petitioners in the revision) had filed IA No.II under Order VII Rule 11(a) to (d) of the Code of Civil Procedure, 1908 to reject the plaint on the ground that the plaint disclosed no cause of action and that the transactions fell within the definition of a benami transaction under Section 2(a) and were barred by Section 4 of the Benami Transactions (Prohibition) Act, 1988. The trial Court refused to reject the plaint, observing that the question whether the transaction was fiduciary and thus outside the bar of the Benami Transactions (Prohibition) Act, 1988 required trial.

On appeal, the High Court examined the plaint averments and concluded they constituted a specific and unequivocal case that the properties were purchased under a registered sale deed dated 25.03.2022 in the name of defendant no.1 though the consideration was paid by the plaintiff. The Court held that where plaint averments plainly disclosed a benami transaction, it was unnecessary to let such a suit proceed to trial and the trial Court erred in declining to consider the bar under Section 4 of the Benami Transactions (Prohibition) Act, 1988 at the threshold. The Court distinguished earlier precedents which treated questions under the Benami Transactions (Prohibition) Act, 1988 as mixed questions of law and fact requiring trial, noting that decisions such as Pawan Kumar v. Babulal since deceased through LRs and Ors. and Smt.Shaifali Gupta v. Smt.Vidya Devi Gupta and Ors. discussed the general principle that mixed questions ordinarily went to trial, but that Sri Nimbanna v. Shivananda Kinnal and Anr. supported consideration of the bar at the pleading stage where averments were unequivocal.

As a result, the High Court allowed IA No.II, set aside the impugned order dated 26.09.2024 and ordered that the plaint in OS No.348/2022 stood rejected. No interim directions were necessary, and pending applications were disposed of as unnecessary.

Case Details:
Case No.: CRP No. 100002 of 2025
NeutralCitation: NC: 2026:KHC-D:5306
Case Title: REKHA W/O RAMESH @ RAMANAGOUDA RUDRAGOUDAR & ANR. v. PAWANKUMAR
Appearances: 
For the Petitioner(s): Sri Arun L. Neelopant, Advocate
For the Respondent(s): Sri SB Hebballi, Advocate for C/R

Source: 2026 CaseBase(KAR) 107