SUPREME COURT HOLDS APPELLANTS TO BE EXCLUSIVE OWNERS OF A DISPUTED PROPERTY BASED ON A FAMILY SETTLEMENT

A two-Judge Bench of the Supreme Court comprising of Justice Vikram Nath and Ahsanuddin Amanullah passed a Judgment dated 19-03-2024 in the matter of Jugal Kishore Khanna(D) Thr Lrs & Anr. vs. Sudhir Khanna & Ors. Civil Appeal No. 1591 / 2020 and 1592 / 2020, and held that the Appellants had been in possession of the property since the time it was purchased by them. Additionally, they had rented out the premises to the tenants and collected rent for the same and there were no objections to the collection of rent by the Respondents, who were Appellants’ family members, indicating that the Respondents had not claimed any right or title over any part of the Kamla Nagar Property during his lifetime.

FACTS:

i) That the aforesaid Appeal filed before the Supreme Court by one, Jugal Kishore Khanna (Deceased) through Legal Representatives, Shri Prabhat Khanna, Shri Rohit Khanna and Shri Manmohan Khanna (Appellants) against one, Sudhir Khanna (Respondent No. 1), Raman Khanna (Respondent No. 2), Shyama Khanna (Respondent No. 3), challenged the Order of the Hon’ble High Court of Delhi (High Court) which allowed the Regular First Appeal bearing RFA No. 439 of 2008, in respect of Kamla Nagar Property and dismissed the RFA No.483 of 2008 in respect of Malcha Marg Property filed against the Order dated 28.07.2008 of the Ld. Additional District Judge, Karkardooma Courts, Delhi (Trial Court).

ii) In 1941, Shri Roop Kishore Khanna (RKK) purchased a piece of land admeasuring 344 square yards and bearing No.15-D, Kamla Nagar, Delhi – 110007 (hereinafter referred to as the “Kamla Nagar Property”) in the name of his father Shri Tek Chand Khanna (TCK), and a residential house was constructed thereupon in 1950. Further, RKK also acquired another property measuring 375 square yards bearing No.D-56, Malcha Marg, Chanakyapuri, New Delhi – 110021 (hereinafter referred to as the “Malcha Marg Property”), which was constructed by the family in the name of Smt. Shyama Khanna, wife of Shri Attar Chand Khanna (ACK). The Appellants claimed that RKK provided the funds for the purchase and construction of the Malcha Marg Property, using income generated from the family’s Regal Cinema Business.

iii) Thereafter, RKK passed away in 1978, after which ACK claimed a share in the Kamla Nagar Property, asserting it to be joint family property. The Appellants asserted that in 1979, the LRs of RKK paid a sum of Rs.55,000/- (Rupees Fifty-Five Thousand only) through cheques to ACK as part of an oral settlement between the Parties for the purchase of ACK’s share in the Kamla Nagar Property. In 1983, following ACK’s demise, his LRs filed two suits – one claiming partition of properties at Shimla and another claiming partition of the Kamla Nagar Property.

iv) Further, the Trial Court, in its Order dated 28.07.2008, dismissed the Suit of Respondent No.1 concerning the Kamla Nagar Property but decided against the Appellants regarding the Malcha Marg Property, citing insufficient evidence to prove that it was purchased with joint family funds and hence, held that the Appellants were not entitled to claim partition in the Malcha Marg Property. Later on, Respondent No.1 challenged the Trial Court’s decision regarding the Kamla Nagar Property by filing RFA No.439 of 2008 before the High Court, while the Appellants contested the Trial Court’s decision regarding the Malcha Marg Property by filing RFA No.483 of 2008.

v) In a common Impugned Judgment dated 06.12.2013, the High Court allowed the appeal filed by Respondent No.1 [RFA No.439 of 2008] and dismissed the appeal filed by the Appellants [RFA No.483 of 2008]. The instant Civil Appeals emanate therefrom.

TRIAL COURT:

I) The Trial Court found in favour of the Appellants regarding the Kamla Nagar Property. The Court determined that the said Property belonged solely to the Appellants based on the evidence presented, including a family settlement and payment made towards the share of the Respondents. The Court concluded that the Respondents did not have a valid claim to the Property, and thus ruled in favour of the Appellants.

II) Regarding the Malcha Marg Property, while the Appellants raised objections to the Suit, the Trial Court did not make a specific decision regarding ownership, as there was no serious effort made by the Appellants to claim partition or ownership of the Property. Therefore, the Trial Court’s findings primarily focused on the Kamla Nagar Property in favour of the Appellants.

HIGH COURT:

Aggrieved by the Order dated 28.07.2008 of the Trial Court, the Respondent filed RFA No.439 of 2008 concerning Kamla Nagar Property and the Appellant filed RFA No.483 of 2008 concerning Malcha Marg Property, thereby challenging the dismissal of the Suit by the Trial Court.

a) The High Court, in its Order 06.12.2013, overturned the Trial Court’s decision regarding the Kamla Nagar Property. It ruled that the payment of Rs. 55,000/- made by the Appellants to the Respondents was not for the Respondents’ share in the Property but for some other purpose. The High Court also found that the Respondents had a 50% share in the Kamla Nagar Property and that the Appellant’s claim that the Property belonged solely to them was erroneous.

b) Regarding the Malcha Marg Property, the High Court upheld the Trial Court’s decision that it was not bought by Appellants with joint family funds and it, therefore, belonged exclusively to the Respondents.

c) Overall, the High Court’s finding differed from that of the Trial Court, leading to a reversal of the Trial Court’s decision in favour of the Appellants regarding the Kamla Nagar Property and a confirmation of the Trial Court’s decision regarding the Malcha Marg Property in favour of the Respondents.

SUPREME COURT:

ISSUES:

A) The issue before the Supreme Court in this case pertains to the validity of the Judgment and Order passed by the High Court of Delhi on 06.12.2013, regarding two properties: the Kamla Nagar Property and the Malcha Marg Property.

B) The primary question before the Supreme Court is to determine whether the High Court’s Judgment was legally sound and whether it correctly interpreted the facts and evidence presented before it. Specifically, the Supreme Court was tasked with reviewing the findings of the High Court regarding the ownership and division of the two Properties in question.

OBSERVATIONS:

1) Kamla Nagar Property: The Supreme Court found that the High Court’s Judgment regarding the Kamla Nagar Property needed interference. Further, the Bench noted that there was evidence indicating that the Appellants had paid Rs. 55,000/- to the Respondents’ side as part of a family settlement. The Apex Court also highlighted that the Respondents never claimed any right or title over any portion of the Kamla Nagar Property during their lifetime, despite the Appellants’ possession and collection of rent from tenants. Consequently, the Supreme Court set aside the High Court’s decision and restored the Judgment and Decree passed by the Trial Court, in favour of the Appellants, declaring them as the exclusive owners of the Kamla Nagar Property.

2) Malcha Marg Property: The Supreme Court upheld the findings of both the Trial Court and the High Court, which concluded that the Malcha Marg Property was not bought with joint family funds and thus belonged exclusively to the Respondents. Therefore, no interference was required with these findings.

CONCLUSION:

Based on the aforementioned facts, the Supreme Court upheld the Trial Court decision and set aside the High Court Order dated 06.12.2013, on the ground that the Appellants had exclusive title and ownership of the Kamla Nagar Property. The Apex Court accepted evidence of a family settlement and payment of Rs. 55,000 to the Respondents as valid proof of transfer of title of Property from the Respondents to the Appellants, thereby, establishing the Appellants’ rights in the said Property.

However, the Apex Court affirmed the Respondents’ exclusive ownership of the Malcha Marg Property, concurring with both lower Courts’ findings.

This decision clarifies property rights stemming from the descendants of Late Shri Tek Chand Khanna. Overall, the Judgment provides legal clarity on the disputed properties, delineating ownership based on substantial evidence presented during the trial.

 

Sakshi Raghuvanshi

Legal Associates

Hansen International Law Firm