HC: A husband can’t claim sole right to joint property despite paying EMIs

The Delhi High Court ruled that a husband cannot claim exclusive ownership of jointly acquired property, despite paying EMIs, under the Benami Act.

Husband cannot assert exclusive ownership over a property jointly acquired and registered in the name of both spouses, solely on the basis that he paid the EMIs, Delhi High Court ordered on September 22.

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A bench of justices Anil Kshetarpal and Harish Vaidyanathan Shankar delivered the verdict while dealing with the appeal filed by a wife against the family court’s December 2017 order.

“Once the property stands in the joint names of the spouses, the husband cannot be permitted to claim exclusive ownership merely on the ground that he alone provided the purchase consideration. Such a plea would contravene Section 4 of the Benami Act, which imposes an absolute bar against the enforcement of rights in respect of property held benami,” the court maintained.

As per the case details, the couple got married in 1999 and jointly purchased a house in 2005 in Mumbai. However, they began living separately in 2006, and the husband subsequently filed for divorce the same year, citing cruelty and desertion. The flat was, however, sold by the bank as the loan amount was not paid, but after the dues were adjusted, a sum of ₹1.09 crore was released to HSBC Bank. While the divorce proceedings were ongoing, the husband filed an application in 2012 seeking the ₹1.09 crore from the bank.

The wife then challenged the family court’s order by approaching the Delhi High Court, arguing that the sale proceeds should be equally divided between both parties. In December 2017, the high court directed that 50% of the amount be released in the husband’s favour. Later, in 2019, it ordered the Registrar General (RG) to place the remaining 50% in a fixed deposit with UCO Bank.

Although the wife moved the Supreme Court against the high court’s 2019 order, her petition was dismissed in January 2020. The Supreme Court, however, directed that the issue of her share in the proceeds be decided along with the husband’s appeal against the family court’s January 2019 decision, which had dismissed his divorce petition.

In her petition before the high court, the wife claimed that 50% of the surplus amount belonged to her, asserting that it formed part of her stridhan (a woman’s absolute and exclusive property as per Hindu Law) and, therefore, she had exclusive ownership over it.

However, the husband opposed the petition, contending that he alone had borne the entire cost of the property, including all EMI payments.

Ruling in the woman’s favour, the court held that once a property is registered in the joint names of both spouses, the husband cannot claim exclusive ownership solely on the basis that he paid the entire purchase consideration. It said the husband’s claim would contravene Section 4 of the Prohibition of Benami Property Transactions Act, 1988, which bars a person claiming to be the real owner of the property from instituting any suit, claim or action to enforce rights against any other person in whose name the property stands.

“The provision clearly stipulates that no person claiming to be the real owner of a property standing in another’s name can either institute proceedings or raise a defence asserting such ownership. Thus, the combined effect of the presumption of equal ownership between spouses and the statutory prohibition under Section 4 is that the Appellant (husband) is prevented from contending that the amount from the sale of the joint property belongs to him alone.”

The bench therefore ordered the registrar general to release the money kept in the UCO Bank fixed deposit within two months.

The court, in its ruling released later, however, rejected the wife’s claim that 50% of the surplus amount was part of her stridhan and exclusively hers, concluding that a property jointly purchased at the time of marriage cannot be treated as stridhan, since it is not a gift exclusively made to the wife.

“A jointly acquired property, purchased in the name of both spouses, is by its very nature a joint asset and cannot fall within the ambit of stridhan, since it is not a gift exclusively made to the wife but rather an acquisition contributed to and held by both parties,” the order stated.