Benami Defence Cannot Override Registered Ownership: Delhi High Court Buries 35-Year-Old Family Settlement Claim Over Property Dispute

"Registered Title Cannot Be Displaced By Bald Pleas of Oral Family Settlement" —  In a resounding reaffirmation of the sanctity of registered title and documentary ownership, the Delhi High Court dismissed three connected appeals in a long-running family property dispute, stating that "no amount of vague oral assertions or belated claims of family settlement can unsettle a registered title deed". The decision, delivered by a Division Bench of Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar, upheld the 2016 judgment in favour of the late Rajinder Kumar Sethi, who had sought possession and mesne profits from his elder brother and other family members occupying portions of a property in Vishal Enclave, New Delhi.

"Once a registered title deed exists in favour of a person, the onus lies heavily on the person who alleges benami ownership or a family settlement to rebut that title with cogent, admissible evidence," the Court declared, while dismissing all three Regular First Appeals (RFA (OS) Nos. 5, 6 & 10 of 2017).

"Vague Claims of Joint Hindu Family Property Cannot Defeat Documented Ownership"

Refusing to entertain the defence that the property was either benami or joint family property, the Court clarified that “a joint Hindu family does not automatically mean the property is joint family property.” There must be evidence of joint family nucleus or pooled resources, and not merely a shared surname or ancestral ties.

“The existence of a Hindu joint family does not raise a presumption that a property purchased by a family member is joint family property,” the Court observed, noting that the plaintiff had an established source of income independent of the alleged joint business and had purchased the property in 1971 in his sole name.

Oral Settlement From 1970 Rejected: "No Suit, No Mutation, No Evidence for 35 Years"

The cornerstone of the defendants’ argument was an alleged oral family settlement in 1970, according to which they claimed ownership over the first and second floors of the property. The High Court was unsparing in its rejection of this plea:

“There is not a single contemporaneous document, nor any attempt to mutate the property in their name for over three decades… If there truly was a family settlement, why was it never enforced?”

The Court pointed out that even in earlier proceedings—including a suit filed in 1978—there was no whisper of any such settlement, further weakening the credibility of the defence.

“Benami Claims Barred by Law Unless Exception Is Proven”

The Court made it clear that under Section 4 of the Benami Transactions (Prohibition) Act, 1988, the defendants were barred from asserting any benami defence, especially when they failed to prove that the plaintiff held the property in any fiduciary capacity.

“The plea of benami is not only vague and unsupported, but is also barred by law. No exception to Section 4(1) was either pleaded or proved,” the Bench held, emphasizing that the burden of proving a benami transaction is a heavy one, and cannot rest on suspicion or loose family arrangements.

“Supervising Construction Doesn’t Create Ownership”: Court Rejects Claim of Building the House

In a last-ditch attempt to claim interest in the property, the defendants argued that they had constructed the upper floors at their own expense. But the Court noted that apart from a solitary receipt for cement bags, there was no documentary proof — no construction bills, sanctioned plans, or records of labour payment.

“Mere supervision of construction work, or family presence during the building process, does not translate to ownership rights,” the judgment held. The Court further noted that all municipal records, tax documents, and utility bills stood in the plaintiff's name, reflecting exclusive ownership.

“Relationship of Love Is Not Ownership in Law”: License Revoked, Possession Ordered

The occupation by the elder brother and his family was initially permitted “out of natural love and affection,” but once the licence was revoked in 2006, their continued possession became unlawful.

“The plaintiff had every right to revoke the gratuitous licence. The moment that happened, the occupation became unauthorized, and suit for possession was rightly decreed,” the Court ruled.

“Mesne Profits Awarded at ₹30,000/month Are Justified”: No Ground for Enhancement or Reduction

The High Court upheld the mesne profits of ₹30,000 per month granted by the Single Judge, finding the amount fair and reasonable in view of the property's location and the family context. It declined the request for enhancement to ₹1 lakh/month and found no error in the rate fixed.

“There is no perversity or legal infirmity in the manner of assessment,” the Court said, underlining that mesne profits are intended to be compensatory, not punitive.

All Appeals Dismissed: “Litigation Was a Desperate Attempt to Frustrate Title”

In dismissing the appeals, the Court gave a final and emphatic conclusion:

“The defendants have failed to establish any enforceable right. The entire defence rests on unsubstantiated assertions and cannot override documentary title. The findings of the Trial Court are legally sound and based on a correct appreciation of evidence.”

A Caution Against Loose Benami Allegations in Family Property Disputes

This ruling offers a decisive judicial pronouncement on how registered title and documentary evidence will prevail over oral family arrangements, vague benami claims, or sentimental assertions in property disputes. It sets a precedent against using prolonged possession and familial relationships as tools to defeat legal ownership.

Date of Decision: 09 January 2026