Rajendra Law Office is a prominent law firm in Chennai, with expertise in a diverse range of legal matters. The firm has a team of experienced and knowledgeable lawyers who are dedicated to providing comprehensive legal solutions to clients. Among the many areas of law that the firm specializes in, is the Benami Transactions (Prohibition) Act. The Act prohibits illegal Benami transactions, and those who engage in such transactions can face severe legal consequences. With the help of the experienced lawyers at Rajendra Law Office, clients can navigate the complex legal landscape surrounding Benami transactions and seek appropriate remedies.
ADVOCATES FOR BENAMI TRANSACTIONS (PROHIBITION) ACT CASES
What are Benami Transactions?
Benami means without a name. It is a property transaction where the transfer of property is in name only. There will be no actual intention of transfer of beneficial interest.
Benamidar or name lender
Benamidar or name lender will have only the property title. But the real owner will enjoy the beneficial interest of the property. Consulting leading Lawyers from top law firms will solve all the issues in a short span of time.
Find the best Lawyer in Chennai for Benami Transactions Cases
The concept of Benami transactions is of 2 types in India.
In the first type, a person buys property with his own personal funds. But he buys the property in the name of another individual.
Here the person buying the property does not have any intention to benefit the other person. This type of property transaction is a benami transaction. The transferee holds the property for the real owner who gave money.
The intention of transferring property title
In the second type, a person already a property owner executes a conveyance to another person. The property owner does not have any intention of transferring the property title. Here the transferor remains to be the real owner.
The main difference between 2 types of Benami transactions
In the first case, there is an operative transfer from the transferor to the transferee. The transferee holds property for the benefit of the individual who shelled out the money.
In the second case, there is no operative transfer at all. The title vests with the transferor.
What are the parameters to determine Benami transactions?
The Supreme Court has laid out certain parameters to find out Benami transactions:
The person who states a transfer as a Benami transaction has to prove the same
Sale is Prima facie
· It may get proved that the sale amount is from a person other than the transferee. Then the sale is Prima facie considered as for the benefit of the individual who gave money. Unless there exists contrary evidence.
· The intention of the person who gives sale money determines the true character of a transaction
· Intent gets determined on the basis of related circumstances, relationships & motives.
Benami Transactions (Prohibition) Amendment Act, 2016
Before 1988 Benami transactions were not illegal in India. There was no punishment or bar under any law for entering Benami transactions.
Earlier the said properties were not confiscated by govt. But, real owners were not allowed to recover property from Benamidar.
Punishment for Benami transaction in India
Earlier no law existed to control Benami transactions in India. Benami Transactions (Prohibition) Act, 1988 came into existence.
The 1988 Act got enacted with the goal to disallow such transactions. The 1988 Act prohibited and punished persons entering into Benami transactions.
imprisonment up to 3 years or fine or both
Punishment is imprisonment for up to 3 years or a fine or both. The act prohibited property recovery from benamidar by the real owner.
Properties in custody by Benami were responsible for confiscation as per law.
Yet, certain rules of the 1988 Act could not see proper implementation. The reasons owed to the infirmities of legislation.
Several rules of the act could not see the light of the day.
No effective action for confiscation of property
No proper mechanism/process for confiscation of Benami property was in existence. Thus no effective action for confiscation of the property could happen earlier.
Development in Benami Act 2016
To overcome the drawbacks of the 1988 act, an amendment got passed for the same.
The Benami Transactions (Prohibition) Amendment Act, of 2016 got replaced by the 1988 act.
It came with various authorities and provisions to confiscate Benami’s property.
Punishment is stringent
This act’s goal was to curb Benami transactions. In the 2016 Act, the punishment is stringent with widened scope.
As per the 2016 act, Benami property is the subject matter of the Benami transaction. It includes proceeds of the property too.
A transaction that falls under the scope of a Benami Transaction
The following transaction falls under the scope of the Benami transaction
- A person can hold or transfer property to another person. And the property held by another person can be for immediate or future benefit.
- Transaction made under the fictitious name
- The owner denies or is not aware of the property ownership
- The person giving money to buy property is not traceable
Authorities under the 2016 Amendment Act
The following authorities will have the same powers as the Civil court. They follow the Civil procedure code
- Initiating Officer
- Approving authority
- Administrator
- Adjudicating authority
Process of Benami Property attachment
- Initiating officer may suspect a person a Benamidar of a property. Then the officer issues notice to Benamidar and also the beneficial owner when identified.
- Approving authority can direct initiating officer to attach the property for 90 days. It happens when a suspected person will alienate property during the notice period
- With the approval of authority, Initiating officer conducts the inquiry, and examines the evidence and related material. This gets done within 90 days of notice
- There can be a provisional attachment. An order gets passed till the adjudication order of adjudicating authority. There may be a revocation of the provisional attachment order too.
- There can be no provisional attachment. Adjudicating Authority passes attachment order. Authority can decide not to attach property.
- When an attachment order or provisional attachment exists, the initiating officer draws a case statement. He refers the case to adjudicating authority within 15 days of attachment.
Adjudication of Benami property
Initiating officer completes the reference with the adjudicating officer. Adjudicating authority issues notice to Benamidar, the beneficial owner and any interested party.
the claim of a property or joint owners
Notice is also given to any person who makes a claim of a property or joint owners. This gets done within 30 days.
All document pieces of evidence and supporting documents need submission. A notice period of 30 days for the same is allowable for submission.
Consideration of evidence, reply and materials gets done. A hearing opportunity gets granted.
benami confirming the attachment order
Initiating officer passes an order holding property. He may pass as not benami Transaction and revoke the attachment order. Otherwise, he can pass the order as Benami confirms the attachment order.
The adjudicating officer has to pass an order. Within 1 year from the reference date of initiating officer, this order gets passed.
Benami property Confiscation
Adjudicating authority can consider any property as benami. It gives an opportunity for a hearing.
After hearing confiscation order gets passed for the attached property.
Appellate tribunal
An appeal against this order gets appealed to the appellate tribunal. Then confiscation happens after the appellate tribunal order.
Property bought from Benamidar by another person before notice will not get confiscated.
Any third person’s right to defeat the purpose of the Act is void. All property titles & rights vest with the Central government.
Meanwhile, It is free of all encumbrances. No compensation is payable in this dispute.
Administrator role in Confiscated property
Lawyers for Appeals in Benami Transaction Cases
A person not satisfied by adjudicating authority order can appeal with an appellate tribunal.
In fact, The time limit is within 45 days of the authority order.
best attorneys for Appeals in Benami transaction cases
Appeal against the appellate tribunal is allowable with the High Court within 60 days. Contact the best attorneys for Appeals in Benami transaction cases.
