Lateef Qureshi And Others Vs Ajeem Qureshi And Others (Madhya Pradesh High Court)
Summary: The Madhya Pradesh High Court at Jabalpur, in Lateef Qureshi and Others Versus Ajeem Qureshi and Others, considered whether a civil suit concerning properties purchased by a father in the names of his minor sons in 1968 and 1972 was barred by Section 4 of the Prohibition of Benami Property Transactions Act, 1988.
The revision petition under Section 115 of the Code of Civil Procedure challenged the Trial Court’s order dated 25 September 2025, by which the defendants’ application seeking rejection of the plaint had been dismissed. The Trial Court had held that the suit was not barred under the 1988 Act, taking into account the amended definition of “benami transaction” under Section 2(9).
The plaintiffs and defendants were members of the same family. According to the plaint, the father of defendants Nos. 9 and 10 had purchased the suit property in their names through two sale deeds, first in 1968 and again in 1972. At that time, the plaintiffs and defendants Nos. 11 and 12 had not been born. The defendants sought rejection of the plaint under Order VII Rule 11 CPC on the ground that the suit was barred by Section 4 of the 1988 Act.
Before the High Court, the applicants argued that the Trial Court had wrongly relied upon Section 2(9), since that provision was introduced by the 2016 amendment and could not have retrospective operation. It was submitted that the unamended provisions had to be considered because the transactions pre-dated the 1988 Act itself. The applicants further contended that the Hindu Undivided Family coparcenary exception under the unamended Section 4(3)(a) was unavailable because the parties were Muslims, while the purchases in the names of the sons did not constitute purchases by a trustee or person standing in a fiduciary capacity.
The plaintiffs, on the other hand, argued that the amended provisions should apply because the transactions occurred in 1968–1972, before enactment of the 1988 Act, whereas the suit was instituted in 2025 after the 2016 amendment. They further contended that the father had purchased the properties in the names of his minor sons and that the relationship between guardian and ward constituted a fiduciary relationship, thereby bringing the transaction within the protection of unamended Section 4(3)(b) as well.
The High Court considered the Supreme Court’s decision in Manjula And Others Vs D.A. Srinivas, (2026) 488 ITR 407. The Supreme Court, as quoted in the order, held that the 2016 amendments, insofar as they were declaratory, procedural, curative and machinery-oriented, operated retrospectively/retroactively, whereas penal provisions creating new offences or enhancing punishment could operate only prospectively. The High Court therefore held that the provisions relied upon in the present case, being declaratory, would apply retrospectively.
The High Court then examined amended Section 2(9), under which an exception is carved out where an individual acquires property in the name of a spouse or child. Since the transaction in the present case was alleged to have been made by the father in the names of his minor sons, the Court held that it fell within the exception under Section 2(9) and was therefore not hit by the 1988 Act.
The Court further held that even if the pre-amended provisions were considered, the transaction would still be protected by Section 4(3)(b). That provision excluded transactions where the person in whose name property was held was a trustee or another person standing in a fiduciary capacity and the property was held for the benefit of another person towards whom such fiduciary capacity existed.
For this purpose, the High Court relied upon Pawan Kumar v. Babulal, (2019) 4 SCC 367, in which the Supreme Court considered fiduciary relationships in the context of father and children and discussed the earlier decision in Marcel Martins v. M. Printer, (2012) 5 SCC 342. The quoted discussion explains that “fiduciary capacity” is not precisely defined in the 1988 Act but carries a recognised legal significance and encompasses relationships founded upon trust, confidence, good faith and an obligation to act for another’s benefit. The Supreme Court had also referred to CBSE v. Aditya Bandopadhyay, (2011) 8 SCC 497, for the meaning of fiduciary relationship.
Applying that principle, the High Court observed that the transaction in favour of minor children involved the relationship between guardian and ward, which was undisputedly fiduciary. It therefore concluded that the transaction was saved by unamended Section 4(3)(b).
The order also considered Om Prakash v. Jai Prakash, (1992) 1 SCC 710, which was held to have been relied upon on an issue concerning whether the prohibition under Section 4 applied to actions initiated before the coming into force of the Ordinance. The High Court found that reliance misplaced. It also referred to R. Rajagopal Reddy v. Padmini Chandrasekharan, (1995) 2 SCC 630, in relation to retrospectivity of the Benami law.
The Court ultimately held that, from either perspective, the suit did not appear to be barred by the 1988 Act. The Trial Court was therefore correct in rejecting the application under Order VII Rule 11 CPC. Finding no ground for interference with the impugned order, the High Court dismissed the civil revision.
Cases Discussed
- Manjula And Others Vs D.A. Srinivas, (2026) 488 ITR 407 — considered on the retrospective operation of the 2016 amendments, with declaratory, procedural, curative and machinery-oriented provisions held to operate retrospectively/retroactively while penal provisions operate prospectively.
- Pawan Kumar v. Babulal, (2019) 4 SCC 367 — relied upon for the fiduciary relationship between father and children and the application of unamended Section 4(3)(b).
- Marcel Martins v. M. Printer, (2012) 5 SCC 342 — considered in the discussion of the scope and meaning of “fiduciary capacity” under Section 4(3)(b).
- CBSE v. Aditya Bandopadhyay, (2011) 8 SCC 497 — referred to for the meaning and characteristics of a fiduciary relationship.
- Om Prakash v. Jai Prakash, (1992) 1 SCC 710 — distinguished as concerning whether Section 4 applied to actions initiated before the coming into force of the Ordinance.
- R. Rajagopal Reddy v. Padmini Chandrasekharan, (1995) 2 SCC 630 — referred to regarding the retrospectivity of the Benami law.
FULL TEXT OF THE JUDGMENT/ORDER OF MADHYA PRADESH HIGH COURT
The present Revision under Section 115 of Code of Civil Procedure has been filed challenging the Order dated 25.09.2025 passed by the Trial Court whereby the application for rejection of plaint has been dismissed by the Trial Court holding that the suit is not barred under the Prohibition of Benami Properties Act, 1988 (for short, Act of 1988) as amended up to date by holding that in view of Section 2(9) of the said Act of 1988, the transaction in question does not fall within the purview of benami transaction and therefore, the suit is not barred.
2. A suit has been filed by the plaintiff/respondents against the defendants who all are members of the same family on the assertion that the father of the defendants No.9 & 10 has purchased the suit property in the name of defendants No.9 & 10 firstly in the year 1968 and again in the year 1972 by two different sale deeds. At that time when the plaintiffs and defendants No.11 & 12 had not been born and during that period, the father of the plaintiffs who was also the father of the defendants No.9 & 10 had purchased the suit property in the name of defendants No.9 & 10.
3. An application was filed by the defendants seeking rejection of plaint on the ground of it being barred by the Act of 1988 contending therein that the suit for recovery of any Benami property is barred in terms of Section 4 of 1988. The said application has been rejected by the Trial Court.
4. Learned counsel for the applicant has vehemently argued before this Court that the Trial Court has wrongly relied upon Section 2(9) of the Act of 1988 because the said provision has been inserted by the Amendment Act of 2016 and the Amendment Act of 2016 would not be having any retrospective effect. It is argued that the unamended provisions of the Act will have to be seen and as per Section 4(3) of the unamended provision, the property held by Hindu in coparcenary was saved but the parties in the present suit are Muslims. Therefore, if the unamended provisions are seen, then the transaction is not saved by Section 4(3) as per the unamended provisions. It is argued that the parties being Muslims, Section 4(3)(a) would not be applicable and the property having been purchased in the name of sons, therefore it is not a purchase by a trustee or any person standing in a fiduciary capacity and therefore, the transaction was not saved in terms of unamended Section 4(3) of Act of 1988 and at that time, Section 2(9) was not in existence. Therefore, the suit is hit by the Act of 1988, if the unamended Act is seen as it stood prior to 2016 amendment.
5. Per contra, learned counsel for the respondent/plaintiffs has vehemently argued that the unamended provisions of the Act will not be applicable and the amended provisions of the Act will be applicable. It is argued that if the transaction in question had been carried out between 1988 to 2016, then it could be argued that which of provisions would be applicable. Even in case the suit had been filed between 1988 to 2016 then also it was open to be argued that which of the provisions would be applicable. However in the present case, the transactions took place between 1968 to 1972 when the Act had not been enacted at all, and the suit has been filed in the year 2025 when the amendment has already been carried out and therefore, it would be the amended provisions which would apply.
6. It is further argued that the property was purchased by father in name of minor sons and therefore it would be purchase made by a person in fiduciary capacity and even as per unamended Section 4(3), the purchase made by a person in fiduciary capacity was saved. Hence, even if the unamended provisions apply then also the transaction is saved and there were no reasons to reject the plaint.
7. Heard learned counsel for the parties at length.
8. In the present case, the transactions are between 1968 to 1972 in the name of minor sons by the father and the suit has been filed in the year 2025. The question of retrospectivity of 2000 amendment has been considered time and again by various courts. In Union of India v. Ganpati Dealcom (P) Ltd., (2023) 3 SCC 315, the matter was decided in a particular manner but the said order was thereafter recalled in R.P.No.359/2023 by the Hon’ble Supreme Court. However, very recently the matter has been decided by the Hon’ble Supreme Court in the case of Manjula v. D.A. Srinivas, (2026) 488 ITR 407 and it has been held that declaratory, procedural, curative and machinery oriented provisions will apply retrospectively whereas the penal provisions creating new offences for enhancing punishments will apply only prospectively. The Hon’ble Apex Court held as under:-
“22.12. Applying the above principles, it is clear that the 2016 amendments were enacted to cure the mischiefs and omissions in the original legislation, which had become largely unworkable in practice. The legislative intent to make the statute effective is manifest. The prohibition against benami transactions already existed. No period of limitation was prescribed either under the original Act or under the amended Act for initiating action against benami property or against persons involved in such transactions. Action for confiscation or prosecution may therefore be taken whenever the transaction comes to the notice of the competent authorities.
22.13. Further, when a lis comes before a court disclosing a benami transaction, the court is duty-bound to consider the applicability of the Act and enforce the statutory prohibition. The amended provisions merely introduced a complete machinery for attachment, adjudication and appeals. Though attachment and adjudication were elaborately structured for the first time, these provisions are essentially procedural and regulatory, intended to ensure fairness and avoid arbitrary action before confiscation. Unless the amendment is given retroactive operation, the very object of making the legislation workable would be defeated.
22.14. The appellate remedies introduced are beneficial safeguards providing checks against arbitrary exercise of power, and beneficial procedural provisions ordinarily operate retrospectively. So far as penal consequences are concerned, enhanced punishment cannot be retrospectively imposed; however, the machinery provisions enabling adjudication, confiscation and enforcement, being curative and procedural, can apply retrospectively.
22.15. Accordingly, we hold that the 2016 amendments, in so far as they are declaratory, procedural, curative and machinery-oriented, operate retrospectively/retroactively, while penal provisions creating new offences or enhancing punishment can operate only prospectively.”
9. Therefore, it is clear that the provisions which are sought to be relied in the present case being declaratory, therefore they will apply retrospectively as per the aforesaid judgment of the Hon’ble Apex Court.
10. As per the amended Section 2(9), Benami transaction has been defined and as per the exceptions laid down in clause iii, it carves out exception when the individual in the name of spouse or in the name of any child has acquired any property.
11. The transaction in question was allegedly made by Father in name of his minor sons, therefore, it would fall within exception clause of Section 2 (9) and it is not hit by the Act of 1988.
12. Even as per the pre-amended provisions, Section 4(3) which has now been deleted was as under:-
“(3) Nothing in this section shall apply-
(a) where the person in whose name the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of the coparceners in the family; or
(b) where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity, and the property is held for the benefit of another person for whom he is a trustee or towards whom he stands in such capacity.”
13. As per Section 4(3)(b) there was exclusion when the properties held in trust or a person is standing in a fiduciary capacity. The transaction in this case being in favor of minor children, then it becomes a relationship between guardian and ward. The relationship between guardian and ward is undisputedly a fiduciary relationship. The law relating to fiduciary relationships was considered in detail by the Hon’ble Supreme Court in Pawan Kumar v. Babulal, (2019) 4 SCC 367 which was a case of father and children and the Hon’ble Apex Court held as under:-
“10. While considering the question whether the case of the plaintiffs would come within the purview of sub-section (3) of Section 4 of the Act, the matter was dealt with by this Court as under: (Marcel Martins case [Marcel Martins v. M. Printer, (2012) 5 SCC 342 : (2012) 3 SCC (Civ) 98] , SCC pp. 350-53, paras 28-38)
“28. The critical question then is whether sub-section (3) of Section 4 saves a transaction like the one with which we are concerned.
29. Sub-section (3) to Section 4 extracted above is in two distinct parts. The first part comprises clause (a) to Section 4(3) which deals with acquisitions by and in the name of a coparcener in a Hindu undivided family for the benefit of such coparceners in the family. There is no dispute that the said provision has no application in the instant case nor was any reliance placed upon the same by the learned counsel for the respondent-plaintiffs.
30. What was invoked by Mr Naveen R. Nath, learned counsel appearing for the respondents was Section 4(3)(b) of the Act which too is in two parts viz. one that deals with the trustees and the beneficiaries thereof and the other that deals with the persons standing in a fiduciary capacity and those towards whom he stands in such capacity. It was argued by Mr Nath that the circumstances in which the purchase in question was made in the name of the appellant assumes great importance while determining whether the appellant in whose name the property was acquired stood in a fiduciary capacity towards the respondent-plaintiffs.
31. The expression “fiduciary capacity” has not been defined in the 1988 Act or any other statute for that matter. And yet there is no gainsaying that the same is an expression of known legal significance, the import whereof may be briefly examined at this stage.
32. The term “fiduciary” has been explained by Corpus Juris Secundum as under:
‘A general definition of the word which is sufficiently comprehensive to embrace all cases cannot well be given. The term is derived from the civil or Roman law. It connotes the idea of trust or confidence, contemplates good faith, rather than legal obligation, as the basis of the transaction, refers to the integrity, the fidelity, of the party trusted, rather than his credit or ability, and has been held to apply to all persons who occupy a position of peculiar confidence toward others, and to include those informal relations which exist whenever one party trusts and relies on another, as well as technical fiduciary relations.
The word “fiduciary”, as a noun, means one who holds a thing in trust for another, a trustee, a person holding the character of a trustee, or a character analogous to that of a trustee with respect to the trust and confidence involved in it and the scrupulous good faith and candor which it requires; a person having the duty, created by his undertaking, to act primarily for another’s benefit in matters connected with such undertaking. Also more specifically, in a statute, a guardian, trustee, executor, administrator, receiver, conservator or any person acting in any fiduciary capacity for any person, trust or estate.’
33. Words and Phrases, Permanent Edn. (Vol. 16-A, p. 41) defines “fiducial relation” as under:
‘There is a technical distinction between a “fiducial relation” which is more correctly applicable to legal relationships between parties, such as guardian and ward, administrator and heirs, and other similar relationships, and “confidential relation” which includes the legal relationships, and also every other relationship wherein confidence is rightly reposed and is exercised.
Generally, the term “fiduciary” applies to any person who occupies a position of peculiar confidence towards another. It refers to integrity and fidelity. It contemplates fair dealing and good faith, rather than legal obligation, as the basis of the transaction. The term includes those informal relations which exist whenever one party trusts and relies upon another, as well as technical fiduciary relations.’
34. Black’s Law Dictionary (7th Edn., p. 640) defines “fiduciary relationship” thus:
‘Fiduciary relationship.—A relationship in which one person is under a duty to act for the benefit of the other on matters within the scope of the relationship. Fiduciary relationships— such as trustee-beneficiary, guardian-ward, agent-principal, and attorney-client—require the highest duty of care. Fiduciary relationships usually arise in one of four situations: (1) when one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first, (2) when one person assumes control and responsibility over another, (3) when one person has a duty to act for or give advice to another on matters falling within the scope of the relationship, or (4) when there is a specific relationship that has traditionally been recognised as involving fiduciary duties, as with a lawyer and a client or a stockbroker and a customer.’
35. Stroud’s Judicial Dictionary explains the expression “fiduciary capacity” as under:
‘Fiduciary capacity.—An administrator who [had] received money under letters of administration and who is ordered to pay it over in a suit for the recall of the grant, holds it “in a fiduciary capacity” within the Debtors Act, 1869 so, of the debt due from an executor who is indebted to his testator’s estate which he is able to pay but will not, so of moneys in the hands of a receiver, or agent, or manager, or moneys due on an account from the London agent of a country solicitor, or proceeds of sale in the hands of an auctioneer, or moneys which in the compromise of an action have been ordered to be held on certain trusts or partnership moneys received by a partner.’
36. Bouvier’s Law Dictionary defines “fiduciary capacity” as under:
‘What constitutes a fiduciary relationship is often a subject of controversy. It has been held to apply to all persons who occupy a position of peculiar confidence towards others, such as a trustee, executor, or administrator, director of a corporation or society, medical or religious adviser, husband and wife, an agent who appropriates money put into his hands for a specific purpose of investment, collector of city taxes who retains money officially collected, one who receives a note or other security for collection. In the following cases debt has been held to be not a fiduciary one: a factor who retains the money of his principal, an agent under an agreement to account and pay over monthly, one with whom a general deposit of money is made.’
37. We may at this stage refer to a recent decision of this Court in CBSE v. Aditya Bandopadhyay [CBSE v. Aditya Bandopadhyay, (2011) 8 SCC 497 : 6 SCEC 25] , wherein Raveendran, J. speaking for the Court in that case explained the terms “fiduciary” and “fiduciary relationship” in the following words: (SCC pp. 524-25, para 39)
‘39. The term “fiduciary” refers to a person having a duty to act for the benefit of another, showing good faith and candour, where such other person reposes trust and special confidence in the person owing or discharging the duty. The term “fiduciary relationship” is used to describe a situation or transaction where one person (beneficiary) places complete confidence in another person (fiduciary) in regard to his affairs, business or transaction(s). The term also refers to a person who holds a thing in trust for another (beneficiary). The fiduciary is expected to act in confidence and for the benefit and advantage of the beneficiary, and use good faith and fairness in dealing with the beneficiary or the things belonging to the beneficiary. If the beneficiary has entrusted anything to the fiduciary, to hold the thing in trust or to execute certain acts in regard to or with reference to the entrusted thing, the fiduciary has to act in confidence and is expected not to disclose the thing or information to any third party.’
It is manifest that while the expression “fiduciary capacity” may not be capable of a precise definition, it implies a relationship that is analogous to the relationship between a trustee and the beneficiaries of the trust. The expression is in fact wider in its import for it extends to all such situations as place the parties in positions that are founded on confidence and trust on the one part and good faith on the other.
38. In determining whether a relationship is based on trust or confidence, relevant to determining whether they stand in a fiduciary capacity, the court shall have to take into consideration the factual context in which the question arises for it is only in the factual backdrop that the existence or otherwise of a fiduciary relationship can be deduced in a given case. Having said that, let us turn to the facts of the present case once more to determine whether the appellant stood in a fiduciary capacity vis-à-vis the respondent-plaintiffs.”
11. The factual aspects of the matter were, thereafter, considered and in paras 42 and 43 it was observed: (Marcel Martins case [Marcel Martins v. M. Printer, (2012) 5 SCC 342 : (2012) 3 SCC (Civ) 98] , p. 354)
“42. … That conclusion gets strengthened by the fact that the parties had made contributions towards the sale consideration paid for the acquisition of the suit property which they would not have done if the intention was to concede the property in favour of the appellant.
43. … Reposing confidence and faith in the appellant was in the facts and circumstances of the case not unusual or unnatural especially when possession over the suit property continued to be enjoyed by the plaintiffs who would in law and on a parity of reasoning be deemed to be holding the same for the benefit of the appellant as much as the appellant was holding the title to the property for the benefit of the plaintiffs.”
12. It was, thus, concluded that the transaction was completely saved from the mischief of Section 4 of the Act by reason of the same falling under sub-section (3)(b) and that the suit was not barred under the Act. This judgment was rightly relied upon by Mr Abhishek Gupta, learned advocate. On the other hand, the reliance placed by Mr R.K. Singh on the decision in Om Prakash [Om Prakash v. Jai Prakash, (1992) 1 SCC 710], in our view, is completely misplaced. The issue there was whether prohibition under Section 4 would apply in relation to actions initiated before the coming into force of the Ordinance or not? In any event of the matter, the issue whether the provisions of the Act are retrospective has already been settled [R. Rajagopal Reddy (Vivek Jain) v. Padmini Chandrasekharan, (1995) 2 SCC 630].”
14. Therefore, though the Hon’ble Supreme Court in the case of Manjula (Supra) has now conclusively held that the amendment would be retrospective except in penal provisions, but even if the unamended provisions are seen, then also the transaction would be saved in terms of unamended Section 4(3)(b) of Act of 1988.
15. Hence, from any angle the suit does not seem to be barred by law under Act of 1988 and therefore, the trial court has rightly rejected the application under Order 7 Rule 11 of CPC.
16. Consequently, no grounds are made to interfere with the impugned order. The Revision fails and is dismissed.
