Team  SoOLEGAL

MERE FINANCIAL ASSISTANCE TO PURCHASE A PROPERTY NOT THE ONLY FACTOR TO MAKE A TRANSACTION BENAMI: Supreme Court

Team SoOLEGAL 10 Apr 2019 12:14pm

MERE FINANCIAL ASSISTANCE TO PURCHASE A PROPERTY NOT THE ONLY FACTOR TO MAKE A TRANSACTION BENAMI: Supreme Court

Supreme Court had to decide upon a matter in which a lady had filed a suit against her brothers for benami transaction because her father had assisted them financially to purchase the properties. The Hon'ble was approached to decide the nature of the transaction, that is whether it is a benami transaction or not. The lady also claims a share in such property.

The Supreme Court bench held that the plaintiff is not subject to any right in the property in question and hence her claim does not stand legal. The reason being that the essential ingredients for a transaction to be termed as benami transaction are missing in the present case, thereby making the transaction a normal one. Also, the financial assistance was provided by the plaintiff's father to her for purchasing a residential house at Bangalore also. It said:

"It is true that, at the time of purchase of the suit properties, some financial assistance was given by Late G. Venkata Rao. However, as observed by this Court in the aforesaid decisions, that cannot be the sole determinative factor/circumstance to hold the transaction as benami in nature. The plaintiff has miserably failed to establish and prove the intention of the father to purchase the suit properties for and on behalf of the family, which were purchased in the names of defendant Nos. 1 to 3.......Therefore, the intention of Late G. Venkata Rao to give the financial assistance to purchase the properties in the names of defendant Nos. 1 to 3 cannot be said to be to purchase the properties for himself and/or his family members and, therefore, as rightly observed by the High Court, the transactions of purchase of the suit properties – Item Nos. I(a) to I(c) in the names of the defendant Nos. 1 to 3 cannot be said to be benami in nature. The intention of Late G. Venkata Rao was to provide the financial assistance for the welfare of his sons and not beyond that." 
The judgment in Binapani Paul v. Pratima Ghosh was also referred to by the bench holding that the source of money had never been the sole consideration, and is only merely one of the relevant considerations but not determinative in character.

Six circumstances to check whether the transaction is benami or not are as follows

Source from which the purchase money came;

Nature and possession of the property, after the purchase;

Motive, if any, for giving the transaction a benami colour;

Position of the parties and the relationship, if any, between the claimant and the alleged benamidar;

Custody of the title deeds after the sale;

Conduct of the parties concerned in dealing with the property after the sale.

The Supreme Court has thus observed that mere financial assistance to buy a property cannot be the sole factor to determine that whether the transaction is benami in nature or not. 

Tagged: Benami Transaction   Supreme Court   Property  
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