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 Shewda, decided on 09.10.2015]

Source: Legal news India

Leave a Reply