Mere financial assistance to buy property cannot be termed as Benami Transaction.

The Supreme Court has observed that mere financial assistance to buy a property cannot be the sole determinative factor/circumstance to hold the transaction as benami in nature.

 

The Court delivered the reasoning in the matter of Smt. P Leelavathi (by LRs) v. V Shankarnaryana Rao (by LRs) (Civil Appeal 1099/2008), decided on 09.04.2019.

 

CHALLENGE

 

The issue in the appeal arises out of a suit filed by appellant against her brothers. Question raised was whether the transactions can be said to be benami in nature merely because some financial assistance has been given by the father to his sons (defendants) to purchase the properties, subject matter of the suit. The suit was filed by his daughter, claiming share in the properties.

 

HELD

 

Answering the issue in the appeal the bench first referred to judgment in Binapani Paul v. Pratima Ghosh that had held that the source of money had never been the sole consideration, and is only merely one of the relevant considerations but not determinative in character. The bench also reiterated the observations made in Valliammal v. Subramaniam, which delineated six circumstances to check whether the transaction is benami or not. The circumstances are:

  1. The source from which the purchase money came;
  2. the nature and possession of the property, after the purchase;
  3. Motive, if any, for giving the transaction a benami colour;
  4. Position of the parties and the relationship, if any, between the claimant and the alleged benamidar;
  5. Custody of the title deeds after the sale;
  6. Conduct of the parties concerned in dealing with the property after the sale.

The bench took note that the father of the Appellant had given financial assistance to the plaintiff (his daughter) and her husband to purchase the residential house at Bangalore and therefore must also have given the financial assistance to sons and helped them in purchase of the properties. The Appellant in the present matter miserably failed to establish and prove the intention of the father to purchase the suit properties for and on behalf of the family, which were purchased in the names of defendant.

Concluding the observations the bench held that as none of the other ingredients to establish the transactions as benami transactions, were satisfied in this case, except that some financial assistance was provided by father, it was held that plaintiff has no right to claim share in these properties.