Court rules against oral family settlement and benami defense, directing defendants to vacate property and pay mesne profits
In a significant judgment delivered on January 9, 2026, the Delhi High Court (Division Bench comprising Justices Anil Kshetarpal and Harish Vaidyanathan Shankar) dismissed appeals by defendants challenging a Single Judge's decree in a property possession suit filed by their brother, Rajinder Kumar Sethi (deceased), through his legal representatives. The dispute pertained to a residential property located at A-8, Vishal Enclave, New Delhi.
The plaintiff, Rajinder Kumar Sethi, was declared the absolute owner of the suit property based on a perpetual lease deed dated May 11, 1971, and a subsequent conveyance deed dated January 5, 2011, converting the leasehold into freehold property. The plaintiff had also constructed a three-storey building on the property from his own funds. The defendants, who are the plaintiff’s elder brother and his family, had been occupying the first floor and parts of the second floor on an oral license granted out of love and affection, which was revoked in September 2006.
The defendants contested ownership claiming joint family property rights, oral family settlements dated October 25, 1970, and November 4, 1979, and asserted that construction of various floors was funded through joint family or business funds. They also pleaded adverse possession and challenged the valuation of mesne profits awarded by the trial court.
The Court thoroughly analyzed the evidence, including the plaintiff’s registered title documents, sanctioned building plans, occupancy certificates, house tax records, and statutory notices all in the plaintiff’s name. It found the defendants failed to substantiate claims of joint family property or any family settlement with credible documentary evidence or credible witness testimony. Notably, the defendants admitted permissive occupation and failed to prove hostile possession required for adverse possession claims.
The Court emphasized that mere oral assertions or joint bank accounts without corroborative documentation do not establish joint ownership or fiduciary relationship sufficient to invoke exceptions under Section 4 of the Benami Transactions (Prohibition) Act, 1988. The defendants’ attempts to circumvent the statutory bar on benami property claims by invoking vague allegations of fiduciary capacity were rejected.
Further, the Court upheld the award of mesne profits at Rs. 30,000 per month from November 4, 2006, until possession was delivered, noting the defendants’ failure to offer any rebuttal or evidence against this quantum. The suit was held to be within limitation as the license revocation notice was dated October 26, 2006, and the suit was instituted on November 6, 2006.
The judgment also dismissed the defendants’ counter-claim and upheld the trial court's findings on valuation and court fees. The Court concluded that the defendants had no legal right, title, or interest in the suit property and must surrender possession as directed.
This ruling reinforces the importance of registered title documents and the requirement of concrete evidence to establish joint family property claims or adverse possession. It also underscores the strict application of the Benami Act to prevent unauthorized claims on property held in another’s name.
Bottom Line:
Ownership of property - Claims of joint family property and oral family settlement must be substantiated with concrete evidence and specific pleadings; permissive possession cannot mature into adverse possession.
Statutory provision(s): Civil Procedure Code, 1908, Benami Transactions (Prohibition) Act, 1988 Section 4
Sandeep Sethi v. Rajinder Kumar Sethi Deceased, (Delhi)(DB) : Law Finder Doc Id # 2835434
