Bombay HC: Whether third party has locus standi to plead on behalf of the real owner that it is he (real owner), who was to be benefited by the Benami transaction?

 It is, therefore, necessary to understand whether the evidence is sufficient to prove that the appellant was holding property Benami. The appellant's husband is not party to the suit and, therefore, he has not claimed himself to be the real owner of the property. To my mind and in terms of Section 4 of the Benami Transactions Act, the question, whether the property held Benami was for the benefit of real owner, can only be answered when the real owner either files a suit or raises a defence on this count. It is so because the intention behind the Benami transaction is known to the person in whose name the property has been purchased or the person who has purchased the property in the name of other. A third party has no locus to plead on behalf of the real owner that it is he (real owner), who was to be benefited by the Benami transaction, unless third party otherwise proves. {Para 12}

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Second Appeal No. 616/2007

Decided On: 26.04.2024

Badrunisa Vs. Sabdar Khan and Ors.

Hon'ble Judges/Coram:

Anil L. Pansare, J.

Citation: 2024:BHC-NAG:4870, MANU/MH/2715/2024.

Read full judgment here: Click here.

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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}

 IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

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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Whether the question of fact can be raised for the first time in second appeal?

 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}

 IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

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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Whether the court can grant specific performance of contract if plaintiff has prayed for grant of mandatory injunction?

Shri R.R. Deshpande learned Counsel for the respondents submits that prayer itself would show that plaintiff should have prayed for specific performance and when he makes a prayer for mandatory injunction the suit ought to be held to be hit by provisions of Clause (h) of Section 41 of the Specific Relief Act. Section 41(h) reads as follows:

41(h) when equally efficacious relief can certainly be obtained by any other usual mode of proceeding except in case of breach of trust. {Para 7}

8. There cannot be any dispute with the proposition that where equally efficacies relief can be had injunction cannot be granted. The law is well settled that mofussil pleadings are to be interpreted liberally. While doing so mere reading of the prayer clause would not do. The prayer clause will have to be read in the context of the pleadings and then interpreted to hold whether the relief is in fact one for injunction or specific performance. If the plaint is read as a whole it would be very clear that plaintiffs essentially filed suit for conveyance of the plots in favour of the plaintiffs which defendants had agreed to convey. Thus what plaintiffs essentially want is conveyance of plots in their favour. 

9. If the prayer is read in this context it would be clear that plaintiffs demanded the execution of the sale deed in their favour. Even while passing a decree for specific performance the Court would have even otherwise directed execution of the sale deed in favour of the plaintiff. Such a direction even in a suit for specific performance by the Court is nothing less than a mandate. The prayer clause in the instant case at the most could be said to be not very happily worded but the purport of the relief is one to seek specific performance. Simply because the words mandatory injunction are used it is not as such a suit for mandatory injunction but a suit for specific performance. The bar of Clause (h) would not apply in such cases.

 IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

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

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Supreme Court Declares Section 3(2) Of Benami Transactions Prohibition Act As Unconstitutional; 2016 Amendment Act To Have Only Prospective Effect

 18. Conclusion

18.1. In view of the above discussion, we hold as under:

a) Section 3(2) of the unamended 1988 Act is declared as unconstitutional for being manifestly arbitrary. Accordingly, Section 3(2) of the 2016 Act is also unconstitutional as it is violative of Article 20(1) of the Constitution.

b) In rem forfeiture provision Under Section 5 of the unamended Act of 1988, prior to the 2016 Amendment Act, was unconstitutional for being manifestly arbitrary.

c) The 2016 Amendment Act was not merely procedural, rather, prescribed substantive provisions.

d) In rem forfeiture provision Under Section 5 of the 2016 Act, being punitive in nature, can only be applied prospectively and not retroactively.

e) Concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, viz., 25.10.2016. As a consequence of the above declaration, all such prosecutions or confiscation proceedings shall stand quashed.

f) As this Court is not concerned with the constitutionality of such independent forfeiture proceedings contemplated under the 2016 Amendment Act on the other grounds, the aforesaid questions are left open to be adjudicated in appropriate proceedings.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 5783 of 2022 

Union of India (UOI) and Ors. Vs. Ganpati Dealcom Pvt. Ltd.

Hon'ble Judges/Coram:

N.V. Ramana, C.J.I., Krishna Murari and Hima Kohli, JJ.

Decided On: 23.08.2022

Citation: MANU/SC/1028/2022.

Read full Judgment here: Click here

 

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Whether the widow of one brother can claim Benami joint ownership of the property if it is in the name of another brother?

Furthermore, it is essential to observe that the present appellant's claim also does not fall within the exception (iii) to Section 2(9)(A) of the Prohibition of Benami Property Transactions Act, 1988 which reads to the effect as under:-

"2. Definitions.-In this Act, unless the context otherwise requires,--

(8) "benami property" means any property which is the subject matter of a benami transaction and also includes the proceeds from such property;

(9) "benami transaction" means,--

(A) a transaction or an arrangement--

(a) where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and

(b) the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration,

except when the property is held by--

(i) .

(ii) .

(iii) any person being an individual in the name of his spouse or in the name of any child of such individual and the consideration for such property has been provided or paid out of the known sources of the individual;

(iv) .",

as observed by this Court in Deepak Aggarwal & Anr. Vs. Shakuntala Devi (Supra), the benefit of the said provision also can only be considered to be in relation between the individual who has paid for the purchase of any property as consideration in the name of his spouse or in the name of the child of any such individual and can certainly not relate back to any other property or joint property or an HUF property or any trust property in relation to which there is only an averment made on behalf of the appellant in the written statement that the property in question was purchased with the funds of her deceased spouse or her father in law.

IN THE HIGH COURT OF DELHI

RSA No. 23/2019 and CM No. 4782/2019

Decided On: 21.07.2020

JAGRITI@GAYATRI Vs VIKAS SHARMA

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Whether the court must frame an issue and record evidence if the defendant takes plea of Benami joint owner of the property?

Reliance was also placed on behalf of the respondents on the verdict of this Court in Bhavna Khanna Vs. Subir Tara Singh decided on 01.02.2019 in CS (OS) No. 356/2016 with observations in para 23 thereof wherein it was observed to the effect:

"Be that as it may, the Benami Transactions (Prohibition) Act, 1988 which came into force on 5th September, 1988 i.e. much prior to the sale deed dated 16th December 2003, defined a benami transaction as a transaction in which property is transferred to one person for a consideration paid or provided by another persons. Section 3 thereof barred all persons from entering into benami transaction. Section 4 of the Act barred any defence in any suit, claim or action based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person. The claim of the defendant that out of total sale consideration of Rs. 55 Lacs, Rs. 39.5 was contributed by him but the sale deed of the property obtained in the exclusive name of his wife Dr. Rachana Khanna falls within the definition of benami transaction and which transaction was barred on the date of sale deed and the defendant is also barred from defending this suit on the plea of being the benami joint owner of the property. The said Act was, vide amendment of the year 2016, renamed as Prohibition of Benami Property Transactions Act,1988 and through there has been an overhaul of all the provisions of the earlier statute but the effect remains the same. Section 4 bars a defence in respect of any property held benami. The defence of the defendant in the present suit is thus barred by the said law and once the defence is barred, again permitted evidence to be led would be only at the cost of the valuable time of this Court and the Court ultimately after recording of evidence also will be bound to decide in accordance with law. It is for this reason that I say that the defence of the defendant of joint ownership does not raise any material proposition of fact or law for an issue to have been framed thereon."

IN THE HIGH COURT OF DELHI

RSA No. 23/2019 and CM No. 4782/2019

Decided On: 21.07.2020

JAGRITI@GAYATRI Vs VIKAS SHARMA

Hon'ble Judges/Coram:

Anu Malhotra, J.

Citation: MANU/DE/1402/2020

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Whether a person contributing money in the purchase of immovable property can claim title in it or can only recover money paid by him?

Merely because the money for purchase of plot underneath the property and/or for making construction thereon may have flowed from the

defendant No. 3/counter-claimant Ravinder Khanna to the defendants No. 1 & 2, does not make the property of the defendant No. 3/counter-claimant Ravinder Khanna in law and the right, if any of the defendant No. 3/counter-claimant Ravinder Khanna was only for recovery of the amounts so paid by him to defendants No. 1 & 2 with interest, if entitlement thereto is proved. The said question is no longer res integra. Reference in this respect may be made to K.L. Garg Vs. Rajesh Garg MANU/DE/0321/2013, Kalpana Balupuri Butta Vs. Pritendra Kumar Butta MANU/DE/2912/2018, Satya Prakash Vs. Natho Devi MANU/DE/2656/2018 and Satish Kumar Gupta Vs. Shanti Swaroop Gupta MANU/DE/2338/2018.

17. Even otherwise, the claim in the Counter-Claim is in the teeth of the bar contained in the Benami Transactions (Prohibition) Act, 1988, since known as the Prohibition of Benami Property Transactions Act, 1988. The Act, prior to its amendment and now, bars a suit, claim or action, to enforce any right in respect of any property held benami against the person in whose name the property is held or any other person, by or on behalf of a person claiming to be the real owner of such property.

IN THE HIGH COURT OF DELHI

CS (OS) 210/2016, 

Decided On: 15.01.2020

 Vinay Khanna  Vs.  Krishna Kumari Khanna

Hon'ble Judges/Coram:

Rajiv Sahai Endlaw, J.

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Guidelines of Supreme Court for determining whether a transaction is benami transaction

In the case of Thakur Bhim Singh (Supra) this Court in paragraph 18 observed and held as under:

18. The principle governing the determination of the question whether a transfer is a benami transaction or not may be summed up thus: (1) the burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money and (4) the question as to what his intention was has to be decided on the basis of the surrounding circumstances, the relationship of the parties, the motives governing their action in bringing about the transaction and their subsequent conduct, etc.

8.2. In the case of P. Leelavathi (Supra) this Court held as under:

9.2 In Binapani Paul case (Supra), this Court again had an occasion to consider the nature of benami transactions. After considering a catena of decisions of this Court on the point, this Court in that judgment observed and held that the source of money had never been the sole consideration. It is merely one of the relevant considerations but not determinative in character. This Court ultimately concluded after considering its earlier judgment in the case of Valliammal v. Subramaniam MANU/SC/0699/2004 : (2004) 7 SCC 233 that while considering whether a particular transaction is benami in nature, the following six circumstances can be taken as a guide:

(1) the source from which the purchase money came;

(2) the nature and possession of the property, after the purchase;

(3) motive, if any, for giving the transaction a benami colour;

(4) the position of the parties and the relationship, if any, between the claimant and the alleged benamidar;

(5) the custody of the title deeds after the sale; and

(6) the conduct of the parties concerned in dealing with the property after the sale. (Jaydayal Poddar v. Bibi Hazra (supra), SCC p. 7, para 6)

8.3. After considering the aforesaid decision in the recent decision of this Court in the case of P. Leelavathi (Supra), this Court has again reiterated that to hold that a particular transaction is benami in nature the aforesaid six circumstances can be taken as a guide.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 4805 of 2019 

Decided On: 09.05.2019

Mangathai Ammal  Vs.  Rajeswari and Ors.

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Whether property in the name of wife can be treated as ancestral property if husband has made part payment of sale consideration?

 The first reason which is given by the learned Trial Court while holding the suit properties as benami transactions is that part sale consideration was paid by Narayanasamy Mudaliar at the time of the purchase of the property vide Sale Deed Exh. B3. As held by this Court in catena of decisions referred to hereinabove, the payment of part sale consideration cannot be the sole criteria to hold the sale/transaction as benami. While considering a particular transaction as benami, the intention of the person who contributed the purchase money is determinative of the nature of transaction. The intention of the person, who contributed the purchase money, has to be decided on the basis of the surrounding circumstances; the relationship of the parties; the motives governing their action in bringing about the transaction and their subsequent conduct etc. It is required to be noted that Narayanasamy Mudaliar, who contributed part sale consideration by purchasing property at Exh. B3, might have contributed being the husband and therefore by mere contributing the part sale consideration, it cannot be inferred that Sale Deed in favour of the Defendant No. 1-wife was benami transaction and for and at behalf of the joint family. Therefore, the Trial Court as well as the High Court have committed a grave error in holding the suit properties as benami transactions/ancestral properties on the basis of the document at Exh. B3.

9.2. Similarly, merely because of the stamp duty at the time of the execution of the Sale Deed at Exh. B4 was purchased by Narayanasamy Mudaliar, by that itself it cannot be said that the Sale Deed at Exh. B4 in favour of Defendant No. 1 was benami transaction. 

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 4805 of 2019 

Decided On: 09.05.2019

Mangathai Ammal  Vs.  Rajeswari and Ors.

Hon'ble Judges/Coram:

L. Nageswara Rao and M.R. Shah, JJ.

Citation: AIR 2019 SC 2918

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Whether benami prohibition Act is applicable if father purchase property in the name of son?

In Sri Marcel Martins v. M. Printer and Ors. MANU/SC/0333/2012 : (2012) 5 SCC 342 it was held that Benami Transactions (Prohibition) Act, 1988 (for short, "the Act") would apply only in case property was held benami. In case Section 4(3) is applicable it could not be said that property was held benami as such the provision of the Act would not apply.

12. Section 2(a) of Act defined 'benami transactions' as under:

"2. Definitions - In this Act, unless the context otherwise requires,--

(a) benami transaction means any transaction in which property is transferred to one person for a consideration paid or provided by another person;

(b) ....."

Section 4 of the Act is reproduced as under:

"4. Prohibition of the right to recover property held benami-

(1) No suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property.

(2) No defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property.

(3) Nothing in this section shall apply,--

(a) where the person in whose name the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of the coparceners in the family; or

(b) where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity, and the property is held for the benefit of another person for whom fie is a trustee or towards whom he stands in such capacity.

(Emphasis supplied)

The bare reading of the aforesaid provision contained in Section 4(3) of the Act makes it clear that where a person in whose name a property is held as coparcener in a Hindu Undivided Family and the property is held for the benefits of the coparcener in the property, provisions of Section 4 containing prohibition of the right to recover the property held benami would not be applicable. The bar of the Act is not applicable to a transaction as contained in Section 4(3)(a) and (b). If the property is held in fiduciary capacity or is held as a trustee for the benefits of another person for whom he is a trustee or towards whom he stands in such capacity. Thus, the provision of Act could not be said to be applicable in the instant case.

13. In Vathsala Manickavasagam and Ors. v. N. Ganesan and Anr. MANU/SC/0612/2013 : (2013) 9 SCC 152, this Court considered the question whether the property was held benami or was joint family property. Where there was a tacit admission that the suit property was purchased by his father in his name for which he was not responsible, it was held to be joint family property.

IN THE SUPREME COURT OF INDIA

C.A. Nos. 4534-4535 of 2018 

Decided On: 26.04.2018

 Vinod Kumar Dhall  Vs. Dharampal Dhall and Ors.

Hon'ble Judges/Coram:

Arun Mishra and U.U. Lalit, JJ.

Citation: (2018) 16 SCC 645

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Whether averments made in the plaint can be presumed to be correct while deciding application for rejection of plaint?

 It is also settled law that while considering the question of whether a plaint deserves to be rejected as being barred by limitation, the averments made in the plaint in the entirety need to be looked at, presuming them to be correct. It has also been held by the Hon'ble Supreme Court in the case of Liverpool & London S.P. & I Association Ltd. v. M.V. Sea Success I and another reported in MANU/SC/0951/2003 : (2004) 9 SCC 512, that documents produced along with the plaint can be looked into while considering a question of rejection of plaint raised on behalf of the defendant.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Civil Revision Application No. 64 of 2015

Decided On: 22.03.2018

Rajendra  Vs  Harbanssingh and Ors.

Hon'ble Judges/Coram:

Manish Pitale, J.

Citation: 2018(6) MHLJ 78

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Whether plaint filed by brothers claiming interest in property purchased in the name of one brother can be rejected?

 The first and foremost of the circumstance relevant to the question at hand is the fact that the property in question was tenanted by Smt. Stella Martins-mother of the parties before us. It is common ground that at the time of her demise she had not left behind any Will nor is there any other material to suggest that she intended that the tenancy right held by her in the suit property should be transferred to the Appellant to the exclusion of her husband, C.F. Martins or her daughters, Respondents in this appeal, or both. In the ordinary course, upon the demise of the tenant, the tenancy rights should have as a matter of course devolved upon her legal heirs that would include the husband of the deceased and her children (parties to this appeal). Even so, the reason why the property was transferred in the name of the Appellant was the fact that the Corporation desired such transfer to be made in the name of one individual rather than several individuals who may have succeeded to the tenancy rights. A specific averment to that effect was made by Plaintiffs-respondents in para 7 of the plaint which was not disputed by the Appellant in the written statement filed by him. It is, therefore, reasonable to assume that transfer of rights in favour of the Appellant was not because the others had abandoned their rights but because the Corporation required the transfer to be in favour of individual presumably to avoid procedural complications in enforcing rights and duties qua in property at a later stage. It is on that touchstone equally reasonable to assume that the other legal representatives of the deceased-tenant neither gave up their tenancy rights in the property nor did they give up the benefits that would flow to them as legal heirs of the deceased tenant consequent upon the decision of the Corporation to sell the property to the occupants. That conclusion gets strengthened by the fact that the parties had made contributions towards the sale consideration paid for the acquisition of the suit property which they would not have done if the intention was to concede the property in favour of the Appellant. Superadded to the above is the fact that the parties were closely related to each other which too lends considerable support to the case of the Plaintiffs that the Defendant-appellant held the tenancy rights and the ostensible title to the suit property in a fiduciary capacity vis-à-vis his siblings who had by reason of their contribution and the contribution made by their father continued to evince interest in the property and its ownership. Reposing confidence and faith in the Appellant was in the facts and circumstances of the case not unusual or unnatural especially when possession over the suit property continued to be enjoyed by the Plaintiffs who would in law and on a parity of reasoning be deemed to be holding the same for the benefit of the Appellant as much as the Appellant was holding the title to the property for the benefit of the Plaintiffs.

25. The cumulative effect of the above circumstances when seen in the light of the substantial amount paid by late Shri C.F. Martins, the father of the parties, thus puts the Appellant in a fiduciary capacity vis-à-vis the said four persons. Such being the case the transaction is completely saved from the mischief of Section 4 of the Act by reason of the same falling under Sub-Section 3(b) of Section 4. The suit filed by the Respondents was not, therefore, barred by the Act as contended by the Learned Counsel for the Appellant. The view taken by the High Court to that effect is affirmed though for slightly different reasons.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6645 of 2003

Decided On: 27.04.2012

 Marcel Martins  Vs. M. Printer and Ors.

Hon'ble Judges/Coram:

T.S. Thakur and Gyan Sudha Misra, JJ.

Citation: (2012) 5 SCC 342.

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Whether property purchased in the name of member of family will amount to benami transaction?

 I now come to the second additional substantial question of law pertaining to the stand of the appellant that claim of the plaintiff's title and not the title of the defendants over the suit property was barred under Section 4 of the Benami Transaction (Prohibition) Act, 1988. The said submission, in my view, cannot at all be accepted since acquisition of the land in the name of a member of a family from the joint family property cannot be regarded as a benami transaction within the meaning of Section 2 of the Benami Transaction (Prohibition) Act, 1988. Benami transaction has been defined under Section 2(a) of the Benami Transaction (Prohibition) Act, 1988 as any transaction in which property is transferred to one person and a consideration is paid or provided by another person. In the present case, the consideration has been found to have been provided by the joint family fund which cannot be treated as fund of another person. In my view, therefore, the said provision does not have any application at all in the present facts and circumstances. This is also to be noted that the plaintiff claimed his title purely on the basis of the family arrangement and not aa benamidar and, therefore, the suit cannot be said to be hit by Benami Transaction (Prohibition) Act, 1988. The said question is also answered accordingly.
IN THE HIGH COURT OF PATNA

Second Appeal No. 229 of 2002

Decided On: 04.07.2018

 Narendra Prasad Singh Vs. Ram Ashish Singh and Ors.

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THE BENAMI TRANSACTIONS (PROHIBITION) AMENDMENT ACT, 2016

https://drive.google.com/file/d/10OebQS8Dbx1HbqZW-eIVKGKUo2Rr7_yC/view?usp=sharing

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Whether a person can claim that property standing in the name of wives of his nephews are belonging to him?

It is apparent that as per clause (1) of section 4 of BTA, no suit to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie on the plea that the property is held benami, with the exception that where the person, in whose name the property is held, is a 'coparcener' in the Hindu Undivided Family and the property is held for the benefit of the coparceners of the property or where the person in whose name the property is held is a trustee or stands in a fiduciary capacity to another.

7. From a reading of Section 4 of the Act, it is obvious that for a valid claim raised by the plaintiff, to bring the case in the exception provided in clause (a) of sub-Section (3) of Section 4 of the BTA, following three requisites are essential to be pleaded:-

(i) Existence of a Hindu Undivided Family;

(ii) Defendants in whose name the suit property are held, are a coparceners of the said Hindu Undivided Family; and

(iii) Suit property is held by the defendants for the benefit of the coparceners in the family.

8. In the instant case, the defendants are the wives of the nephew of the plaintiff and thus they are not the coparceners under the definition of Hindu Undivided Family and thus exception carved out by the BTA is not available to the plaintiff in the present case as the exception contained in Section 4 (3) (a) of the BTA restricts its benefits only to property held by a coparcener in a Hindu Undivided Family as opposed to any 'Member' of such family. It is so, because coparceners are recognized by law to jointly by birth inherit rights in the joint property of the family property and in the event such property stands in one of their names for the benefit of others, the BTA is declared to not come in the way. Such benefit however cannot be extended to all/any members of such family who do not have any vested right in the property. The plaintiff, being the brother of deceased father in law of the defendants is not a coparcener in the Hindu Undivided Family of his deceased brother. In view of the fact that requisite (ii) noted above is not fulfilled, exception contained in Section 4(3)(a) of the Act has no application in the instant case.

13. In view of the aforesaid settled law, the defendants in whose names the suit property stands as per the pleadings of the plaintiff himself, they are absolute owners of the suit property by virtue of section 14(1) of Hindu Succession Act, 1956. The plaintiff himself has pleaded in his plaint that the suit property was purchased in the names of wives of his nephew out of love and affection and if such fact is admitted in the plaint itself, it is not necessary for this court to go on trial to find out the fact or to lift the veil to come to the conclusion which is necessary for the parties by determining the question raised in the plaint. In my considered opinion once the plaintiff has admitted in his pleadings that the property had been purchased for the benefit of the defendants, he cannot be turned around at this stage and file a suit claiming himself as real owner/co owner of the property in question. Accordingly, I hold that the suit filed by the plaintiff is barred under BTA and Order 7 Rule 11(d) CPC and thus the same is accordingly rejected. Ordered accordingly. File be consigned to record room."

(underlining added)

4. I completely agree with the conclusions of the trial court contained in the impugned judgment, inasmuch as, there is no entitlement to claim a right in a property which is benami by virtue of Section 4(1) of the Act. Benami property means a property which is purchased in the name of one person and funds are paid for purchase by another person with the intention that the benami owner is only a nominal owner and the actual owner is the person who has paid the funds. The Benami Act was passed in the year 1988 to nullify benami transactions as most of the benami transactions had their roots in illegalities, including existence of unaccounted or illegal moneys. The only two exceptions to the bar contained in Sub-Sections (1) and (2) of Section 4 of the Benami Act are as per Section 4 (3) of the Benami Act when firstly where there exists an Hindu Undivided Family (HUF) and the property is in the name of a coparcener and secondly where the property is purchased by a person standing in a fiduciary capacity or as a trustee. In the present case the exception which is pleaded by the appellant/plaintiff to avoid the application of the provision of Section 4(1) of the Benami Act is the existence of HUF and which will not apply because respondents/defendants being females are not coparceners and the exception under Section 4(3) of the Benami Act applies if the property claimed to be an HUF is in the name of a coparcener.

IN THE HIGH COURT OF DELHI

RFA No. 852/2017

Decided On: 10.10.2017

Lalsa Prasad Singh Vs.  Chanderwala and Ors.

Hon'ble Judges/Coram:

Valmiki J. Mehta, J.

Citation: AIR 2018(NOC) 684 DELHI

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Whether husband can treat property purchased in name of wife as his own?

 The plaintiff and the defendant were living as wife and husband when the alleged benami transaction took place in the year 1976. As pointed out earlier, there was no misunderstanding between them at the relevant point of time. When the claim of the defendant, the husband, having purchased the property in the name of his wife by paying his money, it cannot be inferred that the wife is only a "benami". The burden is more on the defendant to establish the benami when the relationship of the parties is that of husband and wife. In this case, the only reason given by the defendant for the purchase of the property in the name of the plaintiff is to avoid Income Tax. We have earlier pointed out that the defendant was not an assessee at the time of the transaction and even after that. Hence, the reason given by the defendant, in our considered view, is an invented and afterthought for the purpose of sustaining the suit. The recital in the sale deed is also relevant. Nowhere in the document, it is stated that the property is purchased by the defendant for and on behalf of the plaintiff. Similar question came up for consideration before a learned single Judge of this Court in the judgment in KISTAPPA NAICKER AND OTHERS Vs. ELUMALAI 89 LW 571 and the learned single Judge has held as follows:-

"It has been repeatedly held by this Court that when a husband purchased the property in the name of his wife by paying his own money, from that alone, no inference can be drawn that the wife was only the benamidar, and having regard to the nature of the relationship between the parties, and the normal tendency of the husband to benefit the wife either by payment of money or by purchase of property in her name, the allegation of benami can be established only by proving the motive for such benami purchase."
40. The motive, as alleged by the defendant, is to avoid Income Tax. Such reason cannot be considered as an acceptable one as the motive pleaded is to avoid the legal liability which would not amount to a discharge of the burden of proof of benami. Hence, in our considered view, the motive as pleaded by the defendant cannot be accepted and in the absence of discharging the onus of proof of motive, we hold that the plaintiff is not a "benami".

41. Coming to the relationship of the parties prior to July 1987 and since July 1987, nowhere it is stated in the evidence that the transaction was benami and nowhere it is claimed by the defendant that the transaction was on his behalf, prior to July 1987. The said plea was set in motion only after misunderstanding arose between the parties. The conduct of the parties is also relevant to consider whether a transaction is benami or not. When the defendant himself has raised the question of benami transaction only after July 1987 after the plaintiff left the house complaining of cruelty at the hands of the defendant, it would be unreasonable to hold that the defendant has discharged the onus of benami transaction. The evidence on record reveal that the plaintiff contributed her personal earnings whereas, the defendant's contribution is through her brother and father. The amounts were deposited in the name of the plaintiff. Her bank account was operated by the defendant and his father. In such circumstances, whatever was given to the plaintiff must be treated for her own benefit. For all the above discussions, we hold that the defendant has not discharged the onus of benami transaction as well as motive for the benami transaction.

IN THE HIGH COURT OF MADRAS

O.S.A. Nos. 139 to 141 of 1998

Decided On: 04.03.2003

George Thomas Vs. Srividya

Hon'ble Judges/Coram:
S. Jagadeesan and D. Murugesan, JJ.

Citation: AIR 2003 Madras 290

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When suit filed by brother for recovery of property held benami is not tenable as per benami prohibition Act?

Now   coming   to   the   substantial   question   of   law   at   serial
No.(1) framed by this Court as to the maintainability of the suit in
view of Section 4 of the Benami Transactions (Prohibition) Act, 1988,
the undisputed factual position is that the plaintiff claimed 1/3rd share
in the suit property on the ground that he has contributed an amount
26­9­2016:

of Rs.4,000/­ in the total consideration of Rs.12,000/­ for which the
property was purchased in the name of the defendant.  The registered
sale­deed dated 19­3­1981 is in the name of the appellant­defendant.
The  Benami  Transactions  (Prohibition) Act was  brought  into force
with effect from 19­5­1988.  The preamble to the Act shows that it is
to prohibit benami transactions and the right to recover property held
benami and for matters connected therewith or incidental thereto.  
11. Section   4   of   the   said   Act   being   relevant,   is   reproduced
below :
“4. Prohibition   of   the   right   to   recover   property   held
benami.­­
(1) No suit, claim or action to enforce any right in respect of
any property held benami against the person in whose name
the property is held or against any other person shall lie by or
on behalf of a person claiming to be the real owner of such
property.
(2) No defence based on any right in respect of any property
held benami, whether against the person in whose name the
property is held or against any other person, shall be allowed
in   any   suit,   claim   or   action   by   or   on   behalf   of   a   person
claiming to be the real owner of such property.
(3) Nothing in this section shall apply,­­
(a) where the person in whose name the property is held is a

coparcener in a Hindu undivided family and the property is
held for the benefit of the coparceners in the family; or
(b) where the person in whose name the property is held is a
trustee or other person standing in a fiduciary capacity, and
the property is held for the benefit of another person for
whom he is a trustee or towards whom he stands in such
capacity.”
In terms of sub­section (1) of Section 4 of the said Act, no suit, claim
or action to enforce any right in respect of any property held benami
against the person in whose name the property is held or against any
other person shall lie by or on behalf of a person claiming to be the
real owner of such property.  
12. The suit in question was filed on 11­4­1990, i.e. after coming
into force of the said Act on 19-­5­-1988.   It is not the case of the
plaintiff that the property was covered by any of the exceptions under
clause   (a)   or   (b)   of  sub­section   (3)   of   Section   4.     The   suit   was,
therefore,   clearly   covered   by   the   prohibition   contained   in
sub­section   (1)   of   Section   4,   reproduced   above.   The   suit   was,
therefore, not maintainable.  No doubt, this question was not raised
before the Trial Court, but it was raised before the lower Appellate
Court, which has not considered it.  The question of maintainability of

the suit on the basis of sub­section (1) of Section 4 of the said Act is
purely a question of law, which can be decided by this Court in the
second appeal.  It is, therefore, held that the suit, as framed, was not
maintainable in view of sub­section (1) of Section 4 of the said Act.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
Second Appeal No.409 of 2003
Shri Ashok s/o Wasudeorao Marchettiwar,

V
Arun s/o Wasudeorao Marchettiwar,

Coram : R.K. Deshpande, J.
    Dated  : 15th & 26thSeptember, 2016
Citation: 2016(6) ALLMR541,2017(1) MHLJ 414

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Whether son becomes owner of property if property is purchased in his name by his father?

 It is the case of the defendant no.1 that his father
purchased property in his name and therefore, he became the
absolute owner. We are unable to accept this proposition
because it has come in the evidence that the father Narayan
came from Karnataka to Goa in Portuguese regime and at the
relevant time outsiders were not allowed to take/purchase
immovable property. It has also come on record that the
defendant no.1 and other sons and daughters born and
brought up at Goa. Therefore, it appears that Narayan
purchased the property in the name of defendant no.1
because of the rider. Therefore, it cannot be said that merely
because the property was purchased in the name of the
defendant no.1 he become sole and absolute owner.

IN THE HIGH COURT OF BOMBAY AT GOA
FIRST APPEAL NO. 146 OF 2010
SHRI RAMNATH NARAYAN PAI,

Versus
SHRI EKNATH NARAYAN PAI,




Coram:- F. M. REIS &
K. L. WADANE, JJ

Date of pronouncing the Judgment : 16.09.2015
Citation; AIR 2016(NOC)262 BOM

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When burden of proof in respect of benami transaction in anti corruption case is on prosecution?

 Needless to say that this Court on a series of decisions have laid down the guidelines in finding out the benami nature of a transaction. Though it is not necessary to cite all those decisions, it will suffice to refer to the rule laid down by Bhagwati, J. as he then was in Krishnanand Agnihotri v. State of M.P. MANU/SC/0134/1976 : 1977CriLJ566 . In that case, it was contended that the amounts lying in fixed deposit in the name of one Shanti Devi was an asset belonging to the appellant and that Shanti Devi was a benamidar of the appellant. The learned Judge speaking for the Bench has disposed of that contention holding thus:
It is well settled that the burden of showing that a particular transaction is banami and the owner is not the real owner always rests on the person asserting it to be so and this burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact. The essence of benami is the intention of the parties and not unoften, such intention is shrouded in a thick veil which cannot be easily pierced through. But such difficulties do not relieve the person asserting the transaction to be benami of the serious onus that rests on him nor justify the acceptance of mere conjectures or surmises as a substitute for proof.
Equivalent Citation: AIR1993SC313, 1993CriLJ308, 1992(2)Crimes1197(SC), JT1992(4)SC436, 1992(2)SCALE120, (1992)4SCC45, 1992(2)UJ613
IN THE SUPREME COURT OF INDIA
Criminal Appeal No. 354 of 1990
Decided On: 17.02.1992
Appellants:M. Krishna Reddy
Vs.
Respondent: State Deupty Superintendent of Police, Hyderabad
Hon'ble Judges/Coram:
S.R. Pandian and R.M. Sahai, JJ. 

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