2023 (6) TMI 914 - HC - Benami Property

Benami transaction - burden of proof - principle of preponderance of probability that although the suit property was purchased in name of Wife but the consideration money was paid or provided by her husband (deceased) - whether the transaction i.e. the purchase of suit property under registered deed of sale by Wife is benami transaction? - Dispute raised by the son to claim 1/3 share in the property - HELD THAT - As Court is required to bear in mind the well-settled principles to the effect that the burden of showing that a transfer is a benami transaction always lies on the person who asserts it. In the Indian society, if a husband supplies the consideration money for acquiring property in the name of his wife, such fact does not necessarily imply benami transaction. Source of money is, no doubt, an important factor but not a decisive one. The intention of the supplier of the consideration money is the vital fact to be proved by the party who asserts benami. In other words, even if it is proved that Sailendra paid the consideration money, the plaintiff must further prove that Sailendra really intended to enjoy the full benefit of the title in him alone. In the case before us, Sekhar could not bring any evidence even to show what was amount of consideration money and how the consideration money was paid and how the suit property was purchased and even he could not prove who paid the consideration money. He could not produce any document relating to the suit property. Title deed and all documents relating to the suit property were all along in the custody of Lila and Lila all along paid municipal tax and got the suit property mutated in her name and Sekhar could not bring any evidence on record to lead any prudent man to infer that his father had a motive to create benami in name of his mother or Sailendra intended to enjoy the full benefit of the title in him alone. Judgments relied upon by the appellant in spite of having unquestionable value of the proposition laid down therein, shall not come in aid of the appellant in the factual matrix of the case at hand. We are inclined to hold that learned Court below has correctly held that Sekhar has failed to discharge his burden to prove that subject sale transaction is benami transaction and we have not found any wrong in the approach and decision of the learned Court below and we are of the view that judgment and decree impugned cannot be annihilated.

Summary

Issues Involved:
1. Whether the transaction of purchasing the suit property by Lila is a benami transaction.
2. Burden of proof regarding the benami nature of the transaction.
3. Applicability of Section 8 of the Hindu Succession Act, 1955.

Summary:

Issue 1: Whether the transaction of purchasing the suit property by Lila is a benami transaction.
The plaintiff/appellant, Sekhar, claimed that his father, Sailendra, purchased the suit property in 1969 in the name of his wife, Lila, who had no independent income and was a mere name lender. Lila, however, asserted that she purchased the property from her 'stridhan' property and became the absolute owner under Section 3 of the Benami Transaction (Prohibition) Act, 1988. The court noted that there is a presumption in law that the person who purchases the property is the owner, and this presumption can be displaced only by proving that the person named in the document is not the real owner but a benami. The court concluded that Sekhar failed to prove that the transaction was benami, as he did not provide any documentary evidence to support his claim.

Issue 2: Burden of proof regarding the benami nature of the transaction.
The court emphasized that the burden of proving a benami transaction lies on the person asserting it. Sekhar did not produce any documents to prove that Sailendra paid the consideration money or had the intention to benefit from the property. Lila, on the other hand, provided evidence that she purchased the property from her 'stridhan' and paid municipal taxes, maintaining possession and control over the property. The court cited the Supreme Court judgment in Jaydayal Poddar (Deceased) thr. Lrs. vs. Mst. Bibi Hazra, which states that the burden of proving a benami transaction must be strictly discharged by the person asserting it.

Issue 3: Applicability of Section 8 of the Hindu Succession Act, 1955.
Lila contended that Section 8 of the Hindu Succession Act, 1955, which deals with the succession of property, does not apply as she was the absolute owner of the property. The court found that Sekhar's claim to a 1/3rd share under Section 8 was not substantiated since he failed to prove that the property was benami and that Sailendra intended to retain ownership.

Conclusion:
The court affirmed the judgment and decree of the lower court, which dismissed Sekhar's suit for declaration, partition, and permanent injunction. The court held that Sekhar failed to discharge his burden of proof to establish that the transaction was benami. Consequently, the appeal was dismissed, and the judgment and decree of the lower court were upheld. The parties were ordered to bear their own costs.