Testamentary claims based on benami transactions are legally barred and subject to retrospective statutory confiscation.

The Respondent (Plaintiff) filed a suit seeking a declaration of ownership of agricultural lands based on a Will dated 20.04.2018 executed by late K. Raghunath

The Plaintiff admitted in the plaint that he funded the purchase of these properties in Raghunath's name because he was legally barred from purchasing agricultural land under the Karnataka Land Reforms Act

The Appellants (Defendants), who are the legal heirs of the deceased, moved an application under Order VII Rule 11 CPC for rejection of the plaint, arguing the suit was barred by the Prohibition of Benami Property Transactions Act, 1988 ("Benami Act") and that the Plaintiff was an accused in the murder of the testator

The Trial Court rejected the plaint

the High Court reversed this, restoring the suit

1. Whether the 2016 Amendments to the Benami Act operate retrospectively regarding the procedural and machinery provisions for confiscation.

2. Whether an employer-employee relationship constitutes a "fiduciary capacity" to exempt a transaction from the Benami Act.

3. Whether the disqualification of a murderer under Section 25 of the Hindu Succession Act, 1956, applies to testamentary succession (Wills).

4. Whether a plaint can be rejected under Order VII Rule 11 CPC when "clever drafting" is used to obscure a statutory bar.

The Court applied Order VII Rule 11 and Order XIV Rule 2 of the CPC regarding the rejection of plaints and preliminary issues

It interpreted Sections 2(9), 3, 4, and 27 of the Benami Act (as amended in 2016), noting that while penal provisions are prospective, curative and procedural provisions are retrospective

The "Mischief Rule" from Heydon’s Case was applied to interpret the 2016 amendments

The Court further applied Section 25 of the Hindu Succession Act, 1956, and the equitable maxim nullus commodum capere potest de injuria sua propria (no man can take advantage of his own wrong)

The Court found that although the Plaintiff couched the suit as a testamentary claim, the "meaningful reading" of the plaint revealed an admission of a prohibited benami transaction intended to circumvent land reform laws

The Court clarified that the 2016 amendments are retrospective regarding adjudication and confiscation because they are procedural and curative

It rejected the Plaintiff's claim of a "fiduciary relationship," ruling that an employer-employee link is commercial and does not fit the restricted statutory exceptions under Section 2(9)

Regarding Section 25 of the Hindu Succession Act, the Court held that the bar on murderers inheriting property is a matter of public policy applying to both intestate and testamentary succession; thus, the Plaintiff's alleged involvement in the testator's murder (suppressed in the pleadings) was a material fact that hit the root of the case

The Court held that the transaction was benami and the suit was barred by law

Consequently, because the transaction was judicially determined to be benami, the properties were declared liable to confiscation

The Court directed the Central Government to appoint an Administrator and take over the suit properties within eight weeks. It concluded that "human ingenuity" cannot be used to disguise illegal transactions and that the judicial process will not protect rights founded on prohibited acts