The Calcutta High Court recently addressed a property dispute case involving a contentious question of whether a property transaction constituted a benami transaction.
The Division bench comprising Justice Tapabrata Chakroborty and Justice Partha Sarthi Chatterjee made an observation stating that in Indian society, when a husband provides the consideration money for purchasing property in his wife's name, it does not automatically indicate a benami transaction.
Although the source of money holds significance, it is not the sole determining factor. The crucial aspect to establish in a benami claim is the intention of the individual who supplied the consideration money, which becomes the vital fact to be proven by the party asserting the benami transaction.
Brief Facts:
The case involved a suit property purchased by the respondent-mother, Lila, who later became the absolute owner of the property. Lila bequeathed the property to her daughter, Sumita, citing abandonment and mistreatment by her husband, the appellant-son, Sekhar. In response, Sekhar filed a lawsuit seeking a declaration, partition, and permanent injunction, which was dismissed by the Civil Judge due to a lack of evidence. Dissatisfied with the decision, Sekhar appealed to the Bombay High Court.
Contentions of the Appellant:
It was argued that the Respondent was a mere housewife with no independent income and failed to disclose the details of her "stridhan" properties from which she acquired the property. On the other hand, the respondent maintained that for the transaction to be considered a benami transaction, the appellant needed to prove that although the property was purchased in her name, the consideration money was provided by him and not by her.
Observations by the Court:
The crucial issue before the court was whether the transaction in question, the purchase of the suit property, qualified as a benami transaction. The Bench referred to Section 2(a) of the Benami Transaction (Prohibition) Act, 1988, which defines a benami transaction as any transaction in which property is transferred to one person for a consideration paid or provided by another person.
The Court recognized two types of benami transactions in India. The first type occurs when a person buys a property using their own funds but registers it in someone else's name without intending to benefit that person. The second type occurs when the property owner transfers the property to another person without the intention of transferring the title. The High Court established factors guiding the determination of a benami transaction. These factors include the source of the purchase money, the possession of the property after the purchase, the motive behind the transaction, the relationship between the parties, the custody of title deeds, and the parties' conduct regarding the property after the sale.
In this case, the Court noted that the appellant failed to provide any evidence regarding the consideration money, the purchase of the property, or the payment of the consideration money. In contrast, the Respondent provided testimony and documents related to the property, demonstrating that she purchased it using her "stridhan" property and had the title deeds and municipal tax records in her name.
It was emphasized that if a husband provides the consideration money for a property acquired in his wife's name, it does not necessarily imply a benami transaction. The crucial factor is the intention of the person supplying the consideration money, which needs to be proven by the party asserting a benami transaction. The burden of proof rests with the party making the allegations.
The decision of the Court:
Based on the evidence presented, the court concluded that the appellant failed to discharge his burden of proving that the sale transaction was a benami transaction. Consequently, the court upheld the lower court's judgment and decree, stating that no error was made in its approach and decision.
Case Name: Sekhar Kr Roy v Lila Roy & Anr ()
Coram: Justice Tapabrata Chakroborty and Justice Partha Sarthi Chatterjee
Case No.: FA 109 of 2018
Advocates of the Appellant: Advs. Mr. Ayan Poddar, Mr. Soham Dutta, Mr. Kamran Alam.
Advocates of the Respondent: Advs. Mr. Sagnik Chatterjee, Mr. Sayan Mukherjee
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