Sanju Kumar (law Student) 22 November 2023

Is benami act. 2016 hit

Hello all,

I have a legal question and appreciate a quick help.

'A' executed a registered agreement for sale in favor of 'B'. 'C' has provided or paid consideration directly to 'A' s bank account by way of a bank transfer on behalf of 'B'. Disputes arose between 'A'& 'B' and B filed a suit for specific performance against 'A'. Now 'A' as a defendant saying that the Transaction is hit under section 2(9) (A)(a) of the Benami Transaction (Prohibition) Amendment Act, 2016 as the payment is provided by C on behalf of B directly to A by way of bank transfer. (transaction from 'C' to 'A'.). Please advice.

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T. Kalaiselvan, Advocate (Advocate) 22 November 2023

There are four categories of “benami transactions”; transaction or arrangement, where consideration provided by person other than the transferee or the person, in whose name property is held. transaction or arrangement in respect of property carried out in a fictitious name; transaction or arrangement in respect of property where owners denies knowledge of ownership or not aware of ownership; property transaction or arrangement in, where person providing consideration is not traceable.

Note: (i) if any transaction dose not fall within the scope of any of these four sub-clauses, it is not a “benami transaction” and property involved is not a “benami property”.

(ii) “benzamide” may be any person-individual or HUF or Firm or Company or AOP or BOI or Artificial Juridical Person.

(iii) any property which is subject matter of any of four transaction is a “benami property”.

(iv) “beneficial owner” may be any person-individual or HUF or Firm or Company or AOP or BOI or Artificial Juridical Person.

You may first ascertain the facts and consult an advocate in the local and proceed as suggested.