Plea That Property Belongs Exclusively To One Spouse Despite Joint Title Is Barred Under Section 4 Benami Transactions Act: Madras High Court

Benami Plea Barred Between Spouses in Joint Property Dispute: In a significant ruling clarifying the legal bar on benami claims in matrimonial property disputes, the Madras High Court upheld the preliminary decree for partition passed in favour of a husband claiming 50% share in a jointly purchased property with his wife. The Court emphatically held that a plea of exclusive ownership based on contribution of funds is barred under Section 4 of the Benami Transactions (Prohibition) Act, 1988, where the registered title is joint.

The Division Bench comprising Justice N. Sathish Kumar and Justice R. Sakthivel dismissed the appeal filed by the wife, Dr. R. Rathna Devi, against the judgment of the III Additional Principal Judge, Family Court, Chennai, in O.S. No. 328 of 2019, which had declared the husband, R. Sathish, entitled to half share in the suit property purchased during their marriage.

“Both Parties Declared Half Share in Income Tax Returns — Claim of Sole Ownership Unsustainable”

The key issue in the case revolved around the ownership of a residential property purchased in June 2000 under a registered sale deed in the joint names of the husband and wife. The wife (appellant) asserted that she alone paid the full purchase consideration of ₹16,00,000 — including ₹6.5 lakhs from her bank account and ₹9.5 lakhs through a housing loan allegedly repaid entirely by her.

However, the Court noted that both spouses declared equal ownership (50%) in the property in their Income Tax Returns:

“On a careful perusal of the said documents, it is clear that both of them have declared their entitlement in the suit property… exactly half share in the suit property while filing their Income Tax Returns.” [Para 14]

The Court further observed that although the wife relied on bank statements to show she repaid the loan, no cogent proof was produced to establish that she alone made all payments. In fact, the husband produced evidence of EMI payments of ₹6,700 monthly, with no rebuttal through contrary bank records by the appellant.

Plea of Benami Barred Under Section 4 — No Trust or Fiduciary Claim Pleaded

The High Court firmly rejected the wife’s defence that the property was only registered jointly but was benami in favour of the husband, as she allegedly funded the entire transaction.

The Bench held that such a plea squarely falls under the bar of Section 4(2) of the Benami Transactions (Prohibition) Act, 1988, which prohibits any defence claiming real ownership contrary to the registered title, unless the property is held in fiduciary capacity.

“Virtually, the defence set up by the defendant is a plea of benami. Such plea is barred under Section 4 of the Benami Transactions (Prohibition) Act, 1988… There is no plea that the plaintiff stood as a trustee or was holding the property in fiduciary capacity.” [Para 16]

Thus, the Court held that having jointly held the title, the wife could not claim exclusive ownership by asserting the property was purchased only with her funds, especially without pleading any exception under the Act.

Attempt to Introduce Divorce and Domestic Violence Orders as Additional Evidence Rejected

During the pendency of the appeal, the wife filed C.M.P. No. 2800 of 2026 under Order XLI Rule 27 CPC, seeking to introduce:

• A divorce decree passed in her favour under the Hindu Marriage Act, and

• A protection order under the Domestic Violence Act awarding her ₹26,21,500.

The Court declined to admit these documents, holding them irrelevant to adjudication of proprietary rights in the partition suit:

“Decree and judgment of the Family Court granting divorce on the ground of cruelty is no way relevant… Similarly, the order under the Domestic Violence Act can be enforced separately… the documents are not required.” [Para 10]

This reinforces the principle that matrimonial allegations and reliefs cannot cloud or override property rights based on title and law.

Court Emphasises Legal and Factual Consistency

The Court was critical of the inconsistent stand taken by the appellant, highlighting how her own tax declarations contradicted her claim of sole ownership:

“Having declared only half share in the Income Tax Returns, for the purpose of the civil case, a different stand is taken by the appellant.” [Para 12]

The Bench also noted that there was no documentary proof substantiating her claim that her mother funded the purchase, nor any material showing that the husband was merely a name lender.

Dismissing the appeal, the Court upheld the trial court’s preliminary decree, declaring the husband’s entitlement to 50% share in the jointly purchased property and confirmed that:

“We do not find any merit in this Appeal. Accordingly, this Appeal is dismissed. No costs.” [Para 17]

The judgment reiterates that registered joint ownership cannot be undone by vague assertions of sole funding, especially where both parties have acted consistently in tax filings and legal documents. It also strengthens the legal position that benami claims between spouses are not maintainable, unless clear fiduciary relationships are pleaded and proved.

Date of Decision: 04 February 2026