Registered Sale Deeds Carry Presumption of Ownership; Benami Plea Unsustainable Without Cogent Proof: Madras High Court Grants Partition

"When the Sale Deeds are in joint names of both the parties, it is the presumption that the Sale Deeds were purchased by the parties for a valuable consideration, unless the contrary is proved" –  Madras High Court delivered a significant judgment addressing a family dispute over partition of jointly purchased properties, and decisively ruled that mere allegation of benami holding without supporting evidence cannot rebut the legal presumption arising from registered ownership documents.

The Court, while decreeing the suit for partition, rejected the defendant's claim that he alone had funded the purchase of the suit properties, and held that registered sale deeds standing in joint names confer ownership in favour of the named purchasers unless rebutted by cogent evidence. The Court emphasized that Section 4 of the Benami Transactions (Prohibition) Act, 1988, barred the defendant’s defence.

"Burden Lies On Alleging Party to Prove Benami Nature of Transaction" – No Proof, No Claim

Defendant’s Oral Plea Fails as Court Upholds Evidentiary Value of Joint Title Documents

In this case, the plaintiffs, including M. Mani and legal heirs of his deceased brother Jayabalan, sought partition of a residential property at Royapuram (Schedule A) and agricultural lands in Madhavaram (Schedule B), which were purchased jointly between 1997 and 2000 in the names of the plaintiffs and the defendant, M. Rajendran.

The defendant contended that the plaintiffs were mere benamidars, and that he alone contributed the entire consideration from his transport business, M/s Sri Prabhu Transports. He alleged the inclusion of plaintiffs’ names in the sale deeds was nominal, not real.

However, Justice P. Dhanabal held that the defendant failed to discharge the legal burden to prove his exclusive contribution. Notably, he did not produce bank statements, tax records, or contemporaneous documentation for the crucial years (1997–2000) to show that the sale consideration came solely from him.

The Court observed:

“There is no recital in the document that the defendant alone contributed money. Per contra, there are recitals that both the purchasers paid money. Therefore, the defendant failed to prove his contention.” [Para 15]

Defendant’s Defence Barred Under Section 4 of the Benami Act – Presumption of Ownership Favours Name-Holders

The Court applied the settled legal principle that "once the document is registered in joint names, the presumption is that the consideration flowed from all parties unless the contrary is proved". Relying on the Supreme Court judgment in Valliammal (D) by LRs v. Subramaniam and Others, (2004) 7 SCC 233, the Court reiterated:

“Law presumes the purchaser to be the owner of the property purchased. Onus to prove that he is not the real owner but a benami holder lies on the person pleading so.” [Para 16]

Moreover, Section 4 of the Benami Transactions (Prohibition) Act, 1988, which prohibits any right or claim in respect of benami properties, squarely barred the defendant's plea. Since no credible evidence was adduced to support the allegation of benami holding, the Court held that the title of the plaintiffs cannot be displaced.

Observations on Conduct and Evidence – Defendant Failed to Corroborate Financial Contribution

Justice Dhanabal conducted a meticulous evaluation of both oral and documentary evidence. The defendant's failure to produce bank records from Dena Bank or any other financial documentation was held fatal to his defence. Further, his own admission during cross-examination that he had no such records from 1997–2000, and that he could not explain recitals in the sale deeds stating payment by both purchasers, significantly weakened his position.

The Court noted:

"Though the defendant in his evidence stated that he alone contributed Rs.27 lakhs to the 'B' Schedule properties, but in his income tax returns, he has not referred the above said payment of money." [Para 13]

Moreover, the Court took note of a mutual exchange of properties via settlement deeds between the 1st plaintiff and the defendant concerning other jointly purchased lands, which further supported the plaintiffs' version of previous co-ownership.

Partition Relief Granted – 1st Plaintiff Gets 1/2 Share in Residential Property, All Plaintiffs Get 3/4 Share in Agricultural Lands

After analysing the documentary evidence and pleadings, the Court concluded:

“It is clear that the Suit Schedule properties were jointly purchased by the parties and 'A' Schedule property was jointly purchased by the 1st Plaintiff and the defendant and the 'B' Schedule properties were purchased by the Plaintiffs and the defendant.” [Para 14]

The Court thus decreed:

• 1st Plaintiff is entitled to 1/2 share in the Royapuram (Schedule A) property
• Plaintiffs 1 to 3 jointly entitled to 3/4 share in the Madhavaram (Schedule B) agricultural properties
• No order as to costs, considering the familial relationship between parties.

Conclusion: Property Registered in Joint Names Cannot Be Disowned by Mere Allegation – Presumption of Ownership Prevails

The Madras High Court’s ruling fortifies the legal position that registered ownership under a sale deed creates a strong presumption of actual ownership, and such presumption can only be displaced through strict and cogent evidence. Mere oral assertions of having paid the entire consideration are insufficient, particularly when such claims are barred under the Benami Transactions (Prohibition) Act.

This judgment is a reaffirmation of judicial discipline in rejecting benami defences devoid of evidentiary support and reiterates the sanctity of registered documents in property law.

Date of Decision: 30.10.2025