Property purchased in the wife’s name is not always a ‘Benami Transaction,’ according to the HC

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Keywords: Benami Property, Calcutta High Court, Benami transaction, Justice Tapabrata Chakraborty, Justice Partha Sarthi Chatterjee

According to the Calcutta High Court, property purchased in a wife’s name “cannot necessarily” be considered a benami transaction.

“In Indian society, if a husband supplies money for acquiring property in his wife’s name, this does not necessarily imply a benami transaction.” The source of money is, with no doubt, an important factor, but it is not a decisive one,” stated a division bench of Justices Tapabrata Chakraborty and Partha Sarthi Chatterjee in a ruling issued last week.[1]

The court was considering a case in which a son involved in a family asset dispute claimed his late father gave his mother a Benami property.

The son had failed to prove his charge, according to the HC. The court stated that proving that a transfer is a benami transaction always rests on the person asserting it.

According to the court, two types of benami transactions are usually recognized: the first type involves a person purchasing a property with his own money but in the name of another person with no purpose of benefiting the other person.[2]

The second form, known colloquially as a “benami transaction,” occurs when the owner of the property executes a deed of conveyance in favour of someone without intending to transfer title to the property. “In the latter case, the transferor continues to be the real owner,” the court stated.[3]

Written by- Satyanshu Sharma, College name- Rajiv Gandhi National University of Law, Patiala, Semester- 2^nd, An intern under Legal Vidhiya