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TABLE OF CONTENTSSYNOPSIS3Abstract3Research Questions3Research Methodology3Chapterisation Scheme3INTRODUCTION4I.SECTION 41: PRINCIPLE5ESSENTIAL CONDITIONS OF S. 417Ostensible Owner/ Benamidar7Express or Implied consent of real owner9Transfer for consideration11Transferee acts in Good Faith11Reasonable Enquiry by Transferee12II.THE BENAMI TRANSACTIONS (PROHIBITION) ACT, 198814Exceptions under the Act16Motive17Burden of Proof :17III.THE BENAMI TRANSACTIONS (PROHIBITION) BILL, 201119CONCLUSION22BIBLIOGRAPHY23BOOKS & STATUTES23WEBLINKS23

TABLE OF CASES Anoda Mohan, v. Nilphamari10 Beniram v. kundan Lal10 Beyas Singh v. Ram Janam Ahir12 Bhugwan v. Upooch8 Cairncross v Lorimer6 Ch. Gur Narayan v. Sheolal Singh3 Gurubaksh Singh v. Nikka Singh11 Hardev Singh v. Gurmail Singh7 Jayadayal Poddar v. Bibi Hazara8 Kannashi Vershi v. Ratanshi Nenshi7 Ladhibai v. Ravji Nagshi9 Lala Jagmohan Das v. Lala Indar Prasad11 Lickbarrow v. Mason9 Mazhar v. Mukhtar12 Mithilesh Kumari v. Prem Behari Khare16 Nageshar Prasad v. Raja Pateshri12 Nathubai v. Mulchand11 Rai Sunil Kumar v. Thakur Singh11, 16 Raj Ballav Dass v. Haripada18 Ramcoomar v. Macqueen5 Root v. French9 Shamsher Chand v. Mehr Chand10 Sheikh Bahadur Ali v. Sheikh Dhomu4 Tarabag Khan v. Nanak Chand10 Thakur Krishna v. Kanhayalal16 V. Satyanarayana Rao v. Leelavathy17

SYNOPSISAbstractThe word "benami" is a Persian word, "be" meaning without and "nam" meaning name. Section 2(1) of the Benami Transactions (Prohibition) Act, 1988, defines a Benami Transaction as "any transaction" in which property is transferred to one person for a consideration paid or provided by another person." In a Benami transaction, a person (real owner) acquires property without using his own name, but in the name of another. A Benamidar has no beneficial interest in the property that stands in his name; he represents, in fact, the real owner, and so far as their relative legal position is concerned, he is a mere trustee for him.[footnoteRef:2] Therefore, the Benamidar has the ostensible title to the property standing in his name but the beneficial ownership of the property does not vest in him but in the real owner. [2: Ch. Gur Narayan v. Sheolal Singh,AIR 1918 PC 140.]

Research Questions1. What is the provisional value of S.41 of the Transfer of Property Act, 1882?2. What is the relevance of The Benami Transaction (Prohibition) Act, 1988 with regard to S. 41 of the Transfer of Property Act, 1882?

Research MethodologyA descriptive and doctrinal research methodology was used for this project. Concerned statute and books of renowned authors were looked into for the compilation of the present study. Several websites were looked into for understanding the concept of present study. Moreover various articles and case laws were referred inorder to clear the law point at the present time. Referring to all the primary and secondary material mentioned above, the present study has been compiled and presented to the concerned.

Chapterisation SchemeChapter 1 Principle and Essentials of S. 41Chapter 2 The Benami Transaction (Prohibition) Act, 1988Chapter 3 The Benami Transaction (Prohibition) Bill, 2011

INTRODUCTION The Judiciary recognized Benami Transaction at a very early point of time. In an old decision of the Calcutta Court, a purchase in tile wife's name was held to be fictitious. The court held that the property vested in the person who actually paid the purchase money and not necessarily the person whose name was used." The law provided a substantive right to the purchaser of the property (in the name of the benamidar), to prove that he was the real owner of the property, and thereby get appropriate declaration of title and other relief.[footnoteRef:3] [3: Sheikh Bahadur Ali v. Sheikh Dhomu, 1Calcutts Sud R. Diw.Rep. 250.]

The rule of Section 41 of TPA 1988 is a deduction from the law of estoppel which is enunciated in the Indian Evidence Act, Section 115. It forms an exception to the general rule that a person cannot convey a better title than he has himself in the property (section 27, Sale of Goods Act (III of 1930). The same rule applies to movable property, enunciated in the Indian Contract Act. Sections 81, 82 and 94 of the Indian Trusts Act, 1882 (now repealed) and the provisions of Section 281A of the Income Tax Act, 1961 (now repealed) dealt with benami transactions without prohibiting them, but they only tried to identify the real owner and the benami owner in these transactions. These provisions came up for review before the Law Commission which felt that these provisions must be repealed and they should be replaced by an independent legislation. The Law Commission, after making a detailed study and examining the views and opinions of the public, came to the conclusion that such transactions are carried out by people having funds and wealth from sources not disclosed to the revenue authorities and with tainted funds to acquire properties in the names of benamis (to avoid deletion and punitive actions). It is in this background that the Benami Transactions (Prohibition of the Right to Recover Property) Act, 1988 was enacted to come into effect from May 19, 1988 in all States, except Jammu and Kashmir.

I. SECTION 41: PRINCIPLESection 41 of the Transfer of Property Act, 1882 defines transfer of property by an ostensible owner. It states:

41. Transfer by ostensible owner. Where, with the consent, express or implied, of the persons interested in immovable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorized to make it: Provided that the transferee, after taking reasonable care to ascertain that the transferor has the power to make the transfer, has acted in good faith.

This section enacts a rule of estoppel as against the real owner. The principle underlying this section is that if two innocent persons are defrauded or cheated by one, who, after transferring the property of one without his consent to another, is no longer present, and the two persons enter into litigation with respect to the property transferred, then our of these two apparently innocent persons, the one who, by his conduct or consent enabled the fraud to take place, will suffer.The law incorporated in Section 41 is based on the rules laid down by the Privy Council in the leading case of Ramcoomar v. Macqueen[footnoteRef:4]. Briefly, the facts and the law laid down in this case were as follows: [4: AIR. 1963 SC 1917.]

One Alexander had purchased some landed properties in Calcutta in the name of Bunnoo Bibee who was his Mistress. Macqueen was one of the two children born to him by this Mistress (Bunnoo Bibee). The sale-deed was in the name of Bunnoo Bibee and she also used to manage the properties. Later on during the life of Alexander, Bunnoo Bibee sold the properties to Ramdhone (father of Ramcoomar). After the death of Bunnoo Bibee, Macqueen filed a suit against Ramdhone claiming the properties on the ground that her father Alexander had left a will in her favour and that her father was the real owner, not Bunnoo Bibee who was merely a benamidar. Ramdhone pleaded that he was a bona fide purchaser without notice of the benami title of the seller (Bunnoo Bibee). The Calcutta High Court decided in favour of Macqueen whereupon Ramcoomar (son of Ramdhone who was then substituted in place of his father) went in appeal to the Privy Council which reversed the judgment of his Calcutta High Court and decided in favour of Ramcoomar. Allowing the appeal of Ramcoomar, the Privy Council held that even assuming that Alexander was the real owner and that Bunnoo Bibee was merely an apparent (ostensible) owner, since Alexander had allowed (i.e. given implied consent to) Bunnoo Bibee to hold herself out as the real owner, he or his representatives could not recover upon their secret title unless they could prove that purchaser had direct or constructive notice of the real title. Delivering its judgment, the Privy Council made following well-known observations :It is a principle of natural equity which must be universally applicable that, where one man allows another to hold himself out as the owner of an estate and a third person purchases it for value, from the apparent owner in the belief that he is real owner, the man who so allows the other to hold himself out shall not be permitted to recover upon the secret title.The section is a statutory application of the law of estoppel, the general principle of which is thus stated by the House of Lords in Cairncross v Lorimer:[footnoteRef:5] [5: (1860) 3 Macq 827at p. 829.]

If a man, either by words or by conduct, has initiated that he consents to an act which has been done, and that he will offer no opposition to it, although it could not have been lawfully done without his consent, and he thereby induces others to do that from which they might have abstained - he cannot question the legality of the act he had so sanctioned - to the prejudice of those who have so given faith to his words or to the fair inference to be drawn from his conduct.This was the principle behind S. 41 of the Transfer of the Property Act, 1882, which relates to the principle of Estoppel as has been provided in S. 115 of the Indian Evidence Act.

ESSENTIAL CONDITIONS OF S. 41Following conditions are necessary for the applicability of this section:-i. There is transfer of an Immovable property by ostensible owner with express or implied consent of the real owner,ii. The transfer is for considerationiii. The transferee has acted in good faith, and,iv. The transferee has exercised reasonable care in finding out the transferors power to make the transfer.[footnoteRef:6] [6: Hardev Singh v. Gurmail Singh, AIR 2007 SC 1058.]

Ostensible Owner/ BenamidarStarting from the first essential, it states that there need to be a transfer of property by the ostensible owner. Ostensible literally means apparent or seeming. An ostensible owner is the person who apparently or seemingly appears to be the owner, though in reality he is not. He is the person having all the indicas of the ownership without being the real owner.[footnoteRef:7] A Benamidar is an ostensible owner. The term Ostensible excludes such persons who hold possession of property professedly as agent, guardians or in any other fiduciary character. [7: Kannashi Vershi v. Ratanshi Nenshi, AIR 1952 Kutch 85.]

According to Black Laws Dictionary :Ostensible ownership means apparent ownership derived from conduct or words. Theory of ostensible ownership estops an owner of property who clothes another with an apparent title from the latter asserting his title against an innocent third party who has been induced to deal with the apparent owner.[footnoteRef:8] [8: Blacks Law Dictionary, 6th ed., p. 1100.]

The Benami Transaction (Prohibition) Act of 1988 provides that where a property is transferred benami (i.e., in the name of another person), the person, in whose name the property is held, shall become the real owner. The Benamidar represents in fact the real owner, and is a mere trustee for him. So, if the property is purchased in the name of a benamidar and the indicia of ownership are placed in his hands, the true owner can only get rid of the effect of alienation by showing that it was made without his acquiescence and that the purchaser took with notice of that fact[footnoteRef:9]. [9: Bhugwan v. Upooch 10 WR 185.]

The Act provides that no suits, action or claim to enforce any right in respect of any property held benami against the person in whose name the property is held or any other person shall lie by the person claiming to be the real owner of the property. In other words, the real owner is now after the enforcement of the Act cannot claim the property from the benamidar by any suit, claim or action. The defence of being the real owner shall also not be allowed. However, an exception has also been given in the Act where the above stated rule will not apply:-1. Where the person in whose name the property is held is a coparcener in a Hindu Undivided Family and the property is held for the benefit of the co-parceners in the family, or2. Where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity, and the property is held for the benefit of another person for whom he is a trustee or towards whom he stands in such capacity.This means that now an ostensible owner or benamidar has become a real owner except where he is a coparcener in a Hindu Undivided Family or a trustee standing in a fiduciary capacity. Therefore, the law laid by Section 41 of the Transfer of Property Act stands modified except where benamidar is a co-parcener or a trustee standing in a fiduciary capacity. In Jayadayal Poddar v. Bibi Hazara,[footnoteRef:10] the SC observed that whether a person is ostensible owner is a subjective question depending upon certain facts and circumstances. Also the following considerations must be taken into account while deciding whether a person is ostensible owner or not: [10: AIR 1974 SC 171 ]

(i) Source of the purchase-money i.e. who paid the price?(ii) Nature of possession after the purchase i.e. who had the possession?(iii) Motive for giving benami colour to the transaction i.e. why the property was purchased in the name of the other person?(iv) Relationship between the parties i.e. whether the real owner and the ostensible owner were related to each other or were strangers or friends?(v) Conduct of the parties in dealing with the property i.e. who used to take care of and had control over the property?(vi) Custody of the title deeds.Express or Implied consent of real ownerIn the matter of Ladhibai v. Ravji Nagshi,[footnoteRef:11] it was observed that the express or implied consent to ostensible ownership means that some blame attaches to the real owner and that by some fault of his the world begins to believe that another person is the owner of the property. [11: AIR1950 Kutch 34 at p.35]

The real owner is not responsible, unless the apparent ownership of the transferor has been permitted or created by him. He creates or permits the appearance of ownership either by express words of consent, or by acts or conduct which imply consent. It is not necessary that he should have been influenced by a fraudulent intention, for his liability rests upon his having put the transferor in a position which enabled him to commit a fraud. This is on the principle that 'when one of two innocent persons must suffer from the fraud of a third, he shall suffer who, by his indiscretion, has enabled such third person to commit the fraud'.[footnoteRef:12] The same principle was stated in somewhat wider terms by J Ashurst in Lickbarrow v. Mason,[footnoteRef:13]as: [12: Root v. French, (1835) 13 Wendell 570] [13: (1787) 5 Term Rep 683]

wherever one of two innocent persons must suffer by the acts of a third, he who has enabled such person to occasion the loss must sustain it.The consent of the real owner is express if it is given in clear words authorising him to make the transfer. But such consent must not be brought about by a misapprehension of legal rights. The consent is implied if the real owner knows that the benamidar is dealing with his property as if it were his own but remains silent or acquisces. The real owners acquiescence (silence) or inaction implies his consent. In Anoda Mohan, v. Nilphamari[footnoteRef:14], A purchased a property in the name of his wife B. B's name was entered in the revenue records and she used to deal with the property. After A's death B mortgaged the property to C who took it in good faith believing that B had authority to make the transfer. It was held that since A himself had entered B's name in the revenue record and since A allowed her to deal with the property, there was an implied consent of A to hold out B as an ostensible owner authorising him to transfer the property. Accordingly, the mortgage could not be avoided and the mortgagee was protected under this section. [14: AIR 1921 Cal. 549]

In Beniram v. kundan Lal,[footnoteRef:15] it was held that Silence may be consent only where the real owner is aware of his rights. Also it is not a mere acquiescence but something more from which consent may be inferred. It is not a question of fact but of legal inference from the facts found. [15: 21 All. 496 (p.c)]

Section 41 does not apply to minors, and a minors guardian who transfers the property of a minor cannot be treated as an ostensible owner with the consent of the minor, who by, reason of the disability of infancy, cannot give his consent. The doctrine of estoppel does not apply to minors, and still less will the court hold an infant estopped by the acts and omissions of others.In Shamsher Chand v. Mehr Chand, [footnoteRef:16] it was stated that this section does not apply to the minors and he appears to be immune from responsibility of his deception. [16: AIR 1947 Lah. 147 ]

In Tarabag Khan v. Nanak Chand,[footnoteRef:17] it was held that Attestation of the document by real owner does not by itself imply consent but if it is proved that the attestation took place in circumstances which involved knowledge of or consent to the transaction, it may be regarded as implied consent. [17: (1932) 138 I.C. 263]

Further, in Nathubai v. Mulchand,[footnoteRef:18] it was stated that religious endowments do not fall under this section as the property is vested in the shrine and no particular person can give consent, express or implied. [18: 3. Bom.L.R.535 at p.537]

Transfer for considerationThe principle protecting the transferee applies only where the transfer is for consideration. It does not apply to gifts or gratuitous transfers. Therefore, the real owner is not precluded from denying a gift made by an ostensible owner. However, if the transfer is with consideration it may be any kind of transfer of property e.g. it may be sale, exchange, mortgage or lease.Transferee acts in Good Faith This essential is based on the principle that He who seeks equity must do equity. It is necessary that transferee acts in good faith, i.e., he has purchased the property in the honest belief that transferor had power to transfer the property. Good-faith means bona fide intention.Where a person purchases property with full knowledge that the transferor is merely an apparent owner his intention is not bona fide and there is no good- faith on his part. Principles of equity, on which this section is based, protects the interest only of a bona fide purchaser. Thus, this section can protect the interest of only such purchaser whose own conduct is equitable and just. In the absence of good-faith, the Court may presume collusion between ostensible owner and the purchaser. Accordingly, if the transaction is a sham (false) one, Section 41 cannot apply because the transferee would then be in the knowledge of the reality.[footnoteRef:19] Where the parties live in the same village and have knowledge of the fact that another person and not the seller was in possession of the property, the Court may presume absence of good-faith. Similarly, knowledge of any previous dealings with the property or, knowledge of the defective title of the transferor deprives the purchaser of the protection under this section.[footnoteRef:20] In Gurubaksh Singh v. Nikka Singh,[footnoteRef:21] there was a partition of joint family property but there was also some dispute over the respective shares. While the objection and application for the correction of mistake was still pending, a part of the property was sold. The Supreme Court held that since parties lived in the same village and the facts established beyond reasonable doubt that the purchaser had knowledge of the disputed title of the seller, the purchaser had no good-faith. The Court observed that in the absence of good-faith on his part, the purchaser could not claim the benefit of Section 41. [19: Rai Sunil Kumar v. Thakur Singh, AlR 1984 Pat. 80.] [20: Lala Jagmohan Das v. Lala Indar Prasad, Al. 1929 Oudh. 160] [21: AIR 1963 SC 1917]

In Mazhar v. Mukhtar,[footnoteRef:22] it was stated that the usual search is for a period of 12 years and when there are no circumstances whatever to indicate that the search of the registration office should be made for a longer period the transferee need not make such a search. [22: AIR 1938 All 64]

Reasonable Enquiry by TransfereeGood-faith or bona fide intention of the transferee is not enough. To attract the provisions of this section the transferee must also have exercised reasonable care in ascertaining the title and authority of the transferor. Reasonable care means that care which a man of ordinary prudence should take while making inquiries regarding the title of an immovable property. But it is not possible to lay down any general rule regarding the nature of enquiry to be made by the transferee which may be called as 'reasonable care' for all the cases. The standard of enquiry expected from the transferee depends upon the facts and surrounding circumstances which may vary according to the different circumstances of each case.[footnoteRef:23] However, the enquiry made by the purchaser must be diligent and not superficial or casual. Some specific circumstance or fact should be pointed out as a starting point of an enquiry which might have led to some result. [23: Beyas Singh v. Ram Janam Ahir, AIR 1961 Pat. 16]

Revenue records are not records of title. In Nageshar Prasad v. Raja Pateshri,[footnoteRef:24] A was the real owner of the property. In the revenue records, instead of a name of B was entered by mistake. B mortgaged the property to C who accepted the mortgage relying on the revenue register. A denied the transfer on the ground that B was not authorized to mortgage the property. C claimed the benefit of this section on the ground that he had taken reasonable care in ascertaining the title of B by inspecting the revenue records. The Privy Council held that since he had not exercised reasonable care in enquiring about the authority of B, he cannot get the benefit of this section. The court observed that if C had made further enquiries, he could have found that Bs name was entered into the register by mistake and A had already raised an objection against the wrong entry of Bs name in the register. [24: (1915) 20 Cal.W.N.265,34 I.C. 673 P.C.]

II. THE BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988According to the Law Commission of India there can be four main factors for the advent of Benami Transactions in India.[footnoteRef:25] [25: 57th Report of Law Commission of India, para 1.7.]

First of the reasons can be the existence of a Joint Hindu Family System, which might had induced a desire to make secret provisions,[footnoteRef:26] leading to the practice of benami. [26: West and Buhler, Hindu Law, 4thedn, pp. 157, 563.]

Second, can be to defraud the creditors, when K.K. Bhattacharya observes that since the first establishment, the British Government, in the exercise of its legislative functions, have time to time made attempts to check the inveterate practice obtaining in India of holding property by one person in the name of another but the practice, having its origin in the dishonest motive of defrauding creditors of their just and lawful dues, had been prevalent here since a long time that the legislature can not altogether put an end to it by a drastic enactment declaring it to be absolutely illegal.[footnoteRef:27] [27: K.K. Bhattacharya, Joint Hindu Family, (Tagore Law Lectures) (1884-85), pp. 469- 470.]

Third, can be the scheme to evade taxes hence changing the focus from individual being a victim to the state being the victim. Fourth, according to Pollock, practices of this kind naturally grow up in a state of society where there is an appreciable risk, from one generation to another, of hostile conquest or confiscations.[footnoteRef:28] [28: Pollock, Law of Fraud, misrepresentation mistake (1894) pp. 83- 84.]

The Law Commission, after making a detailed study and examining the views and opinions of the public, came to the conclusion that such transactions are carried out by people having funds and wealth from sources not disclosed to the revenue authorities and with tainted funds to acquire properties in the names of benamis (to avoid deletion and punitive actions). It is in this background that the Benami Transactions (Prohibition of the Right to Recover Property) Act, 1988 was enacted to come into effect from May 19, 1988 in all States, except Jammu and Kashmir.This Act made engaging in benami transaction a criminal offence, and denied any legal recognition to benami transactions. The implementation of the Act was part of a larger policy of the Parliament to minimize inequalities in income and eliminate inequalities in status, facilities and opportunities not only amongst groups of people residing in different areas or engaged in different vocations." The state directed its policy towards ensuring that the ownership and control of the material resources of the community are so distributed as best to sub-serve the common good and that the operation of the economic system does not result in concentration of wealth and means of production to the common detriment. Some of the following provisions of the Act of 1988 have been reproduced herein below: A Benami Transaction has been defined under Section 2(a) of the Act to mean a transaction in which a person (transferor) transfers property to another person (transferee) for a consideration paid or provided by a third person. The transferee in the above case is only a benami (name lender) for the third person, who is the real owner. The consideration is really paid or provided for by the third party i.e., the real owner only. No person shall enter into any benami transaction. There is a total prohibition and ban on it. However, Section 3(2) made clear that the prohibition does not apply to a person who buys property in the name of his wife and unmarried daughter. The law will presume that the purchasing the property was made only for the benefit of the wife or unmarried daughter, unless the contrary is proved. The act of carrying out such a benami transaction has been made into a cognisable offence punishable up to three years imprisonment or with fine or with both. All parties to the transaction are held to be offenders under Section 3(3) of the Act. The real owner of the property legally loses all his right and interest in the property against the benami owner and cannot legally file a suit, make a claim or take action against the benami owner to take over the property. There is a total prohibition against the real owner asserting his ownership rights against the benami owner[footnoteRef:29]. [29: Rai Sunil Kumar v. Thakur Singh, AIR 1984 Pat 80.]

The property owned and held in the name of the benami owner is liable to be acquired by the government through a competent authority (appointed under the Act for this purpose) without paying any compensation whatsoever[footnoteRef:30]. [30: Thakur Krishna v. Kanhayalal, AIR (1961) All 206.]

However, the onus of proving whether a transaction is benami is only on the person who alleges that it is such. The person should prove that the consideration was not paid or provided for by the transferee and in fact the consideration was actually paid or provided for by a third party who is alleged to be the real owner[footnoteRef:31]. [31: Mithilesh Kumari v. Prem Behari Khare, AIR 1989 SC 1247.]

This being a legal requirement, the Act has not become very effective in curbing or prohibiting benami transactions or punishing the persons involved. This is a serious restriction in the application of the Act[footnoteRef:32]. [32: Ibid.]

Exceptions under the ActAccording to, the Benami Transaction (Prohibition) Act, 1988, Benami transactions are prohibited but there are certain exceptions to this rule and they are as following: The property may be purchased by a person in the name of his wife or unmarried daughter. The property which is held by a coparcener in a Hindu Undivided Family and the property held for the benefit of the other coparceners of the family will not amount to a Benami transaction. The property held by a trustee or other person who, in a fiduciary capacity has the benefit of another person for whom he has a trustee will also normally not amount to a Benami transaction. Fiduciary capacity means being in a position of a trustee and being in a position where the person can be stated to have duties of good faith, trust, confidence and transparency and one who must exercise a high standard of care in managing another persons money or property.These were the few exceptions as been provided for in the Benami Act. These exceptions are been governed by S. 41 of the Transfer of Property Act, 1882 as the Benami Transaction (Prohibition) Act, 1988 is inapplicable to them.Motive For the purpose of deciding whether a transaction is of benami nature, the motive of the person advancing the consideration for the transaction is the most relevant factor. This view was expressed by the Supreme Court in a case in which the claim was for partition by the daughter of the property of her father. Her brothers refuted this claim saying that the properties in question were purchased by their father in their names and were their personal properties. The court held that the transaction was in the nature of a benami purchase. The Supreme Court reversed this decision because the lower court had not taken into consideration of the intention of the father who provided the consideration and the totality of the circumstances.[footnoteRef:33] [33: V. Satyanarayana Rao v. Leelavathy, AIR 2007 SC 2637.]

Burden of Proof :The burden of proof is on the person who sets up the benami and, if the burden is not discharged, the ostensible title will prevail. Although the initial burden of proof was on the person alleging that a transaction was benami, the practice was that even a slight quantity of evidence to show that it was a Benami Transaction sufficed to-shift the presumption, as Benami Transaction were very familiar in India. The true character of the transaction was determined by the intention of the person who contributed the purchase money. The intention was determined based on the relationship of the parties, the motive for the transaction, the custody of the title deeds, the payment of considerations and actual possession of the property in dispute.[footnoteRef:34] [34: Solil Paul, Mulla, The Transfer of Property Act, New Delhi: Butterworths, 1999 at 291.]

The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction.1. If it is proved that the purchase money came from a person other than the person in whose favor the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary.2. The true character of the transaction is governed by the intention of the person who contributed the purchase money.3. The question as to what the intention was has to be decided on the basis of the surrounding circumstances, the relationship of the parties, the motives governing their action in bringing about the transaction and their subsequent conduct, etc.[footnoteRef:35] [35: Raj Ballav Dass v. Haripada, AIR 1985 Cal 2]

Based on the above conditions, the Supreme Court set aside the decision of the High Court and passed a decree directing the defendant to deliver the possession of the suit house to plaintiffs.

III. THE BENAMI TRANSACTIONS (PROHIBITION) BILL, 2011It has a term of imprisonment of up to three years or fine or both. It is nearly 22 years since the Act was passed, but it has made absolutely no impact. The benami deals are widespread and are one of the main cause for proliferation of black money. Though the Act provides that there would be no benami deals, no visible action has been taken against persons resorting to such deals freely.This is because of lack of proper machinery to implement the Act. There have been no instances to show that in exercise of power conferred under section 5, properties held benami have been acquired by the Government or confiscated to indicate the deterrence of the legislation. The Act does not inculcate fear of any kind for those, who are dealing in benami names. The adverse impact of benami transactions on the country's economy is large. It bifurcates income earning activities into fragments leading to loss of tax revenue. These have been resorted to commit frauds and cheating. These lead to substantial litigation, where the burden of proving benami is on the Government, but it does not get discharged substantially because the facts are in the knowledge of respective parties. Apart from this, the Central Vigilance Commission (CVC) has also been lobbying for a law to confiscate benami transactions for more than a decade now. A draft anti-corruption strategy drawn up by the CVC had recommended dovetailing enforcement of this law to the unique identification project. Owing to the infirmities in the existing Act, formulation of rules was not possible without a comprehensive legislation by repealing the Act.As a consequence of the above and due to the pressure on the Government to act against corruption, the Government has recently approved a proposal to bring a new legislation for stricter control over benami transactions. A new Benami Transactions (Prohibition) Bill 2011 shall replace the existing Act, plugging the loopholes in the existing law. The new Bill contains elaborate provisions dealing with the definition of benami transaction and benami property, prohibited benami transactions, consequences of entering into a prohibited benami transaction and the procedure for implementing the benami law.The Benami Transactions (Prohibition) Bill, 2011 has been introduced by the Ministry of Finance on August 18, 2011. It brings the following conclusions: The Benami Transactions (Prohibition) Bill, 2011 was introduced by the Ministry of Finance in the LokSabha on August 18, 2011 to enact a new legislation to prohibit benami transactions. This Bill replaces the existing Benami Transactions (Prohibition) Act, 1988. The Bill defines benami transaction as an arrangement where (a) property is held by a person (other than in fiduciary capacity) on behalf of another person who has paid for it; or (b) the transaction is made for a property in a fictitious name; or (c) the owner of the property is not aware of or denies knowledge of such ownership. A benamidar is a person or fictitious person in whose name the property is held or transferred. The Bill prohibits all persons from entering into benami transactions. Any property held in benami shall be confiscated by the central government. Once a property is confiscated, all rights and title of such property shall vest completely in the central government and no compensation shall be payable. These provisions do not apply to any transaction entered into by an individual in the name of his spouse, brother or sister, or any lineal ascendant or descendant may not be considered benami. The Bill restricts the right of any person who is claiming to be the real owner to recover such property. In addition, no person shall be able to re-transfer such property to the beneficial owner. The authorities for the purpose of this Act shall include; (a) Initiating Officer who is an Assistant Commissioner of Income Tax , (b) Approving Authority who is a Joint Commissioner of Income Tax, and (c) Administrator who is an Income Tax Officer. These authorities shall have same powers as vested in a civil court while trying a suit in matters such as inspection, production of documents, issuing commissions, etc. The Bill provides that the Adjudicating Authority and the Appellate Tribunal established under the Prevention of Money laundering Act, 2002, shall also be the same for the purposes of this Act. If the Initiating Officer has reason to believe that a property is held benami, he may issue a notice to the benamidar and call for documents and reports for inquiry. The Initiating Officer may issue a notice, after the approval from the Approving Officer, to provisionally attach any property, which he has reason to believe is held benami. The Initiating Officer or the Adjudicating Authority may impound or retain any books of accounts that it may feel is required for the inquiry, for a period not exceeding three months from the date of attachment of the property. The Adjudicating Officer, after hearing the person whose property is attached, may make an order for the confiscation of the property held benami. The Administrator shall have the power to receive and manage the property which has been confiscated. The Administrator shall issue the notice for the surrender or forcible takeover of possession of the benami property. Any person aggrieved by an order of the Adjudicating Officer shall appeal to the Appellate Tribunal. Any person aggrieved by the Appellate Tribunal in turn may appeal to the High Court. Any person who enters into benami transactions, or abets or induces another person to enter into such transactions shall be punishable with an imprisonment for six months to two years, and liable to a fine of up to 25 per cent of the fair market value of the property held in benami. In addition, any person who wilfully gives false information shall be liable to an imprisonment of three months to two years and a fine of up to 10 per cent of the market value of the property. The Bill provides for Special Courts to try such cases.[footnoteRef:36] [36: http://www.prsindia.org/billtrack/the-benami-transactions-prohibition-bill-2011-1911/]

CONCLUSION The legislation of 1988 prohibits all the Benami transactions subject to few exceptions. It has made such transactions a criminal offense. The Act of 1988 has prohibited Benami transactions retrospectively and is intended to curb the menace of tax evasion, defrauding creditors, escaping abolition of Zimandari statutes and compulsory nationalization.Researcher is of the view that there should be some implementing agency at the local levels, to check benami transactions (when they are with dishonest motives). More benami transactions will come to light with local monitoring agencies. Otherwise, it is only (if at all) when the real owner and benamidar fall out that the benami transaction comes to light. In addition these agencies should look after the interests of the weaker sections of society (usually the benamidar) who have limited access to law. The 130th Law Commission Report made some useful suggestions in this regard. The report recommended the involvement of voluntary in enforcement of laws, as that would help achieve a constitutional culture of obedience to laws. Certain authorized non-government organizations should be empowered to lay a complaint before a tribunal. The tribunal can investigate the complaint and then provided the appropriate redressal. As an alternative, the report recommended that Liaison Officers attached to Gram Nayalayas, should be given the duty to supervise the enforcement of the Act and to lay a complaint before a tribunal.

BIBLIOGRAPHYBOOKS & STATUTES Singh Avtar (Dr.), Textbook on The Transfer of Property Act, 3rd ed., Universal Law Publishing Co., New Delhi, 2013. Tripathi, G. P. (Dr.), The Transfer of Propert Act, 17th ed., Central Law Publications, Allahabad, 2011. Mallick M. R., A Commentary on Transfer of Property Act, 2nd ed., Eastern Law House, Calcutta, 2001. Mitra B. B., Commentary on Transfer of Property Act, 11th ed., Delhi Law House, Delhi, 2009. Sinha R. K., The Transfer Of Property ,15th ed., Central Law Agency, Allahabad, 2014. Gour Hari Singh, Commentary on Transfer of Property Act, 11th ed., Delhi Law House, Delhi, 2009. The Transfer of Property Act, 1882 The Benami Transactions (Prohibition) Act, 1988

WEBLINKS http://saarclaw.org/expert_talk_detail.php?eid=1021 http://admis.hp.nic.in/himpol/Citizen/LawLib/C025.HTM http://en.wikipedia.org/wiki/Benami_Transactions_(Prohibition)_Act,_1988 http://www.prsindia.org/uploads/media/Benami/Benami%20Transaction%20(Prohibition)%20Bill.%202011.pdf http://lawexplainedindia.wordpress.com/2013/05/09/benami-transaction-defined-and-the-relation-between-the-terms-benamidar-and-ostensible-owner/ http://www.lawnotes.in/Section_41_of_Transfer_of_Property_Act,_1882 http://lawmirror.com/search/search.php?q=section+41+transfer+of+property+act.&sel=headnote&page=1