Benami Transaction defined and the relation between the terms benamidar and ostensible owner

According to The Black's Law Dictionary the term ostensible owner means "apparent owner".

Benamidar , benami property has a special sigificance today specially with respect to the scams we are having these days.

Meaning and definition:

The word 'Benami' has been originated from Persian vocabullary and it literally means ‘property without a name’.

Section 2(a) of the Benami Transactions (Prohibition) Act, 1988 states , "'Benami transaction' means any transaction in which property is transferred to one person for a consideration paid or provided by another person."

Under Section 2(c)of the Benami Transactions (Prohibition) Act, 1988 states," Property means property of any kind, whether movable or immovable, tangible or intangible, and includes any right or interest in such property."

The word benami property means the property which has purchased in the name of some person other than the person who has financed it. The person who has rendered the required money for the said purchase has not purchased it in his name but in the name of some other person's neme. The person who financed the property has not really purchase and/or purchased it to the benifit of the person on whose name he has purchased it.

The person on whose name the proerty has been purchased is called the benamdar and the property so purchased is called the benami property and the person who has financed the said purchased is referred to as the real owner.

Legal Significance :

1.The beneficial ownership vests on the real owner.
2.The benamidar bears the ostensible  title as described in the Tranfer of Property Act,1882.
3.There is no intention to benefit the person in whose name the transaction is made by the person who has financed the purchase of the said        benami property.
4.The name of that person, benamidar, is an alias for that of the person beneficially interested the real owner.

Purpose of  holding the benami property:

There are several purposes generally most of those are illegal ones and only to fulfill the illegal intentions of the people :

1.The benami transactions were made in order to find a way with the land ceiling laws, so the real owner can have more landed properties  than provided in the abovementioned laws.
2 The abovementioned transactions are made to transfer the property in the name of the relatives of the real owner or some other's name to evade taxation as provided by the tax laws.
3.Benami transactions were also used as a way to conceal black money obtained through corrupt practises.

Intoduction of the Benami Transactions (Prohibition) Act, 1988:

To irradicate the malpractices prevailent due to this practice Government of India introduced the Benami Transactions (Prohibition) Act, 1988.It is a piece of prohibitory legislation which has introduced to illucidate and/or to reduce and/or to prohibit the malpractices of this benami ,furzee transactions.
The Act allowed deals in the name of wife or unmarried daughter.

Punishment under the Act:

Section 3 of the Act penalise the person who has proved to be guilty under the with the imprisonment of a term which may extend upto three years or fine or both. The section prohibits the benami transaction. The section goes as follws:

" Section : 3. Prohibition of benami transactions-

(1) No person shall enter into any benami transaction.

(2) Nothing in sub-section (1) shall apply to the purchase of property by any person in the name of his wife or unmarried daughter and it shall be presumed, unless the contrary is proved, that the said property had been purchased for the benefit of the wife or the unmarried daughter.

(3) Whoever enters into any benami transaction shall be punishable with imprisonment for a term which may extend to three years or with fine or with both.

(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2of 1974), an offence under this section shall be non-cognizable and bailable."

Burden of proof:

According to the Benami Transactions (Prohibition) Act, 1988 the burden of proof lies o the persoon who is claming and/or asserting that the transaction is the kind of aforesaid transaction i.e benami transaction. While initially the person aeerting the same has established his contentions in the Court of Law the burden of proff shifts on the person on whom it has alleged that he has been part of benami transactions. The rules of onus probandi applies here.

Deficiencies in the aforementioned Act :

Due to lack of proper machianary the provisions of the Act could not be properly and/or strictly implemented.The scope of the Act was quite restricted for this restricted scope the Act  was unable to solve the problems,render justice and security to the people who were distress as a result of the benami transaction.The Act was also unable to able acquire the properties which were in hands of benamidar and therefore the Government could not been able to use those lands in fovour and/or for the benifit of the people at large. Though Section 5 of the Act had the clear provision for acquisition of the benami proprties.Section 5 of the Act states as follows:

"Section 5: Property held benami liable to acquisition:

(1) All properties held benami shall be subject to acquisition by such authority, in such manner and after following such procedure, as may be prescribed.
(2) For the removal of doubts, it is hereby declared that no amount be payable for the acquisition of any property under sub-section(1)."

It is nearly 2 and a half decade since the Act was passed, but it has made absolutely no impact or a very less impact which the Act has been able to create in the minds of the common people. The benami transactions are still excessively prevalent in the society. These widespread deals are one of the prime cause for proliferation of black money. Though the Act provides penalty and  strictly prohibits the benami deals no such strong  action has been taken against persons resorting to such deals freely ,to deter others from entering into the benami transaction.With passage of time it has become a curse upon the society.Now a days it is quite a common practice among the which has invoked a cause of concern for the concerned authority, the Government and the society as a whole.

Introduction of the Benami Transactions (Prohibition) Bill 2001:

The aforesaid Act was not enough to eradicate the issues which were prevalent due to the practice of benami transaction. Various concerning authorities were making various recommendations and keeping these recommendation in mind the Government has introduced Benami Transactions (Prohibition) Bill, 2011.  The Legislative Assembly introduced a new bill to eradicate  this problem from its root  The Benami Transactions (Prohibition) Bill, 2011 was introduced by the Ministry of Finance in the Lok Sabha on August 18, 2011 to enact a new legislation to prohibit benami transactions.  This Bill replaces the existing Benami Transactions (Prohibition) Act, 1988.

This new Benami Transactions (Prohibition) Bill 2011  offers a wider scope. With its wider scope the new bill will be a great help to deal with this social fallacy i.e. benami properties. Due to the narrow and ambiguous scope of the Act many such cases regarding benami properties could not be solved.But now with the wider and specific scope of the said such cases can be easily proved in the court of law.

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