In very recent judgment passed by the supreme court of India on date April 9th 2019 there is a sensational discussion among the legal learners and throughout the nation by the judgment being passed that mere financial assistance with welfare motive wont amount to benami transaction. This article deals with case laws P. Leelavathi vs Shankar narayana Rao in which this decree was passed. The Supreme court judgment also gave six guide lines in judging whether an alleged transaction is Benami in nature or not. This article also endeavor the facts, issues and the judgment of this case in brief and lucid manner. It Comprehend the legal sections and case laws to understand the benami transition prohibition act 1988 which was amended in 2016.
WHAT IS BEANAMI PROHIBITION ACT 1988?
Benami in hindi means “without name”. The benami transaction act 1988 came into force on 19-5-1988. This concept was alien to India and benami was not considered as illegal offence before 1988. According to this act 3 yrs of imprisonment or fine or both. The landmark judgment is Takur bhim singh v Takur kan singh. There are other relevant case as such Smt Surabalini debi v Phanindra Mohan Majumda and Petherpermal chetty v Muniandiservai taking these case laws the government of India released act must be amended to cover all aspects.
Short analysis of benami transaction prohibition act 2016:
Sec 1(8) defines benami property
Sec 1(9) defines benami transaction
It provides 4 authorities as follows:
1) The initiative officer
2) The Approving authority
3) The Administer
4) Adjudicating authority
Sec 24: The Initiating officer attaches the property as benami property for period of not exceeding 90 days and issues notice to benamidars and beneficial owner
Sec 26: The Adjudicating authority step in within period of 30 days from the issue given to benamidar and beneficial owner and will give a judgment order after hearing the case
Sec 27: Once it is concluded a benami property then it is confiscated.
Appeals can be made on reasonable ground within 45 days of order.
Sec 53: Punishment is issued can be imprisonment for 7 years or fine or both in according with 2016 amendment
CASELAW : LEELAVATHI V SHANKARNARAYANA RAO
BENCH : JUSTICE L.NAGESWAR RAO
: JUSTICE MR SHAH
CASE NO : CA No 1099 of 2008 9-4-2019
Petitioners advocate: Anjana Chandra Shekar
APPELANT : P. LEELAVATHI
RESPONDANT : Shankar Narayana RAO
FACTS OF THE CASE:
Father Venkata Rao died leaving his property to 3
V.Shankarnarayana Rao 2) srinivasa 3)V. Surendranath and one
daughter 3) P.Leelavathi
All of the 3 sons and daughter died leaving the case over
Venkata Rao gave financial assistance to plaintiff and
purchase a site No 32/1, civil station Bangalore with welfare
Learned trail court dismissed suit holding that
this property is self
acquired property of G.VENKATA RAO and plaintiff entitled ¼
share of rupees 400/_.
Feeling aggrieved they appealed to High Court
where they passed
the judgment as not a benami but self acquired property .It was
held that benami transaction act 1988 is retroactive in application
Case laws quoted:
1) Thakur bhim singh v Thakur Kan singh
2) Binapani Paul v Pratima Ghosh and ors
3) Jayadayal podder v Bibihazra
ISSUES OF THE CASE:
Whether vacant site no
32/1, civil station Bangalore is self
acquired or benami property
Mr. GV Chandra
Shekar, Learned counsel on behalf of appellant of
High Court concluded purchasing of property on behalf of 3 sons
is considered benami.
High Court has not dealt
the totality of the circumstance. Hence
the impugned judgment is appealed to supreme court.
JUDGEMENT BY SUPREME COURT:
Mere Financial assistance given by V.Venkata rao is observed for the purpose of welfare of 3 sons and daughters but not in bad motive. The was held by supreme court by this face mere financial aid doesn’t amounts to benami and plaintiff previously received maintenance by V.Venkata Rao, Hence the case was dismissed holding plaintiff has no right to claim ¼ share and transaction is not a benami transaction.
GUIDELINES IN DETRIMING BENAMI TRANASACTIONACCORDING TO THIS CASE LAW:
1) Source from which the monetary factor came for the purchase.
2) The nature and possession of property after the purchase.
3) Motive for giving any transaction of benami nature.
4) The position of the parties and their relationship
5) The custody of the title deeds after sale.
6) The conduct of the parties concerned with the property after the