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Whether husband can treat property purchased in name of wife

Whether husband can treat property purchased in name of wife as his own?

 

 The plaintiff and the defendant were living as wife and husband when the alleged benami transaction took place in the year 1976. As pointed out earlier, there was no misunderstanding between them at the relevant point of time. When the claim of the defendant, the husband, having purchased the property in the name of his wife by paying his money, it cannot be inferred that the wife is only a "benami". The burden is more on the defendant to establish the benami when the relationship of the parties is that of husband and wife. In this case, the only reason given by the defendant for the purchase of the property in the name of the plaintiff is to avoid Income Tax. We have earlier pointed out that the defendant was not an assessee at the time of the transaction and even after that. Hence, the reason given by the defendant, in our considered view, is an invented and afterthought for the purpose of sustaining the suit. The recital in the sale deed is also relevant. Nowhere in the document, it is stated that the property is purchased by the defendant for and on behalf of the plaintiff. Similar question came up for consideration before a learned single Judge of this Court in the judgment in KISTAPPA NAICKER AND OTHERS Vs. ELUMALAI 89 LW 571 and the learned single Judge has held as follows:-

"It has been repeatedly held by this Court that when a husband purchased the property in the name of his wife by paying his own money, from that alone, no inference can be drawn that the wife was only the benamidar, and having regard to the nature of the relationship between the parties, and the normal tendency of the husband to benefit the wife either by payment of money or by purchase of property in her name, the allegation of benami can be established only by proving the motive for such benami purchase."
40. The motive, as alleged by the defendant, is to avoid Income Tax. Such reason cannot be considered as an acceptable one as the motive pleaded is to avoid the legal liability which would not amount to a discharge of the burden of proof of benami. Hence, in our considered view, the motive as pleaded by the defendant cannot be accepted and in the absence of discharging the onus of proof of motive, we hold that the plaintiff is not a "benami".

41. Coming to the relationship of the parties prior to July 1987 and since July 1987, nowhere it is stated in the evidence that the transaction was benami and nowhere it is claimed by the defendant that the transaction was on his behalf, prior to July 1987. The said plea was set in motion only after misunderstanding arose between the parties. The conduct of the parties is also relevant to consider whether a transaction is benami or not. When the defendant himself has raised the question of benami transaction only after July 1987 after the plaintiff left the house complaining of cruelty at the hands of the defendant, it would be unreasonable to hold that the defendant has discharged the onus of benami transaction. The evidence on record reveal that the plaintiff contributed her personal earnings whereas, the defendant's contribution is through her brother and father. The amounts were deposited in the name of the plaintiff. Her bank account was operated by the defendant and his father. In such circumstances, whatever was given to the plaintiff must be treated for her own benefit. For all the above discussions, we hold that the defendant has not discharged the onus of benami transaction as well as motive for the benami transaction.

IN THE HIGH COURT OF MADRAS

O.S.A. Nos. 139 to 141 of 1998

Decided On: 04.03.2003

George Thomas Vs. Srividya

Hon'ble Judges/Coram:
S. Jagadeesan and D. Murugesan, JJ.

Citation: AIR 2003 Madras 290

https://www.lawweb.in/2017/10/whether-husband-can-treat-property.html



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 1 Replies

Nitish Banka (lawyer)     21 January 2018

Posted by: nitish788  Categories: Uncategorized 
 

 

A Benami property is a property wherein the person who actually pays the consideration of the property (purchaser), purchases the property in the name of other person (benamidar), however the purchaser did not intends to make that other person beneficiary of the propertyThe sole purpose of Benami transaction is to facilitate the purchaser to hide him from the transaction for a various number of reasons like protecting himself from creditors, legal heirs, evading taxes etc.

Legality

Benami transaction may seem improper but they are not purely illegal unless it is a sham transaction wherein the transfer of the property actually does not takes place but takes place only on the papers. However with the enactment of Benami prohibition act, 1988, section 3(3) of the said act makes the person entering into the Benami transaction as a punishable offence, though according to section 3(2) of the said act there are exceptions which makes benami transaction as legal, mainly

  • If the property is purchased in the name of wife or unmarried daughter.
  • Any coparcener in HUF.
  • In the name of trustee, holding a fiduciary capacity.

However the transfer of title in the property may not be said to be illegal in spite prohibition in Benami prohibition act, 1988

Legal Advice-Click here

By Adv. Nitish Banka

B.E LLB(HONS)

9891549997

Practicing Advocate District and High courts in Delhi/NCR


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