Factors to be considered for treating a transaction as Benami laid down

Supreme Court: Talking about the considerations to be kept in mind while determining the nature of a purchase transaction of immovable property by a husband in the name of his wife, the bench of Ranjan Gogoi and N.V. Ramana, JJ said that purchase of property by a husband in the name of his wife is a specie of Benami purchase that had been prevalent in India since ancient times on account of the position of Hindu women to succession until the enactment of the Hindu Succession Act, 1956 and the amendments made thereto from time to time.

Noticing that such practice has been recognised recognition in the explanation clause to Section 3 of the Benami Transactions (Prohibition) Act, 1988, the Court said that such purchase was made by the husband in order to provide the wife with a secured life in the event of the death of the husband as a Hindu widow had a limited right to the estate of the deceased husband under the Hindu Women’s Right to Property Act, 1937. The Court held that this feature needs to be kept in mind while determining the question relating to benami transaction along with other facts and circumstances such as (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, it 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.  [Om Prakash Sharma v. Rajendra Prasad Shewda2015 SCC OnLine SC 932, decided on 09.10.2015]

 

Join the discussion

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.