Sunday 20 November 2022

Would Benami Prohibition Act hit the transaction if the sale deed was taken in the name of a few persons even though more persons contributed money?

 This takes me to consider the next question with regard to the benami transaction. The suit property was admittedly purchased by 11 persons by equally contributing towards consideration but sale deed was taken in the name of 5 persons only. It is therefore clear that those persons in whose favour the sale deed was executed had contributed towards consideration. It is not that plaintiffs alone paid the consideration but obtained the sale deed in defendants name. Essential ingredient of benami transaction is that the real owner must contribute the entire consideration. It was a simple case of obtaining the sale deed in the name of few though large members have contributed. Parties always intended that each one of the contributor would be joint owner to the equal extent. That is so evident from agreement Ex. 42. Further defendants had not raised a plea of benami at all in their pleadings. In the absence of such a plea being raised no issue in fact could arise. In a decision reported in Heirs of Vrajlal J. Ganatra v. Heirs of Parshottam S. Shah MANU/SC/1161/1996 : Judgment Today 1996 (4) S.C. 725, Supreme Court holds that the question whether sale is benami or not is a question of fact. If it is question of fact then such a question cannot be raised for the first time in Second Appeal. Further if the grounds of appeal before the District Court are seen it would be clear that in those grounds of appeal such a plea was not at all raised. Learned Judge of the First Appellate Court therefore had erred in holding the transaction to be a benami transaction and dismissing the suit. {Para 11}


Second Appeal No. 448 of 1996

Decided On: 07.10.2009

Shrikant Gopalkrushna Tare and Ors.  Vs.  Vasant Nagorao Mahalley and Ors.

Hon'ble Judges/Coram:

C.L. Pangarkar, J.

Citation: MANU/MH/1151/2009,2010(1) ALLMR 114.

Read full Judgment here: Click here

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