Husband supplies money for acquiring property in wife’s name doesn’t imply benami transaction

Sekhar Kumar Roy Vs Smt. Lila Roy & Another (Calcutta High Court)

Calcutta High Court held that if a husband supplies the consideration money for acquiring property in the name of his wife, such fact does not necessarily imply benami transaction.

Facts- One Sekhar Kumar Roy, the plaintiff/appellant presented the plaint contending inter alia that his father, Sailendra Kumar Roy, since deceased purchased the suit property by one registered deed of sale in 1969 in ‘benami’ of his wife, Smt. Lila Roy, defendant no. 1, since deceased.

Lila, who happened to be a house-wife, was a mere name lender and she did not contribute any single farthing towards consideration money since she had no independent income at the relevant time of purchase of the suit property. Sailendra got the building plan sanctioned in the name of Lila and by spending money from his own fund constructed two-storied building thereon. He thereafter died intestate on 29.5.1999 leaving behind his widow, Lila, the plaintiff as his son and one daughter, the defendant no. 2, namely Sumita Saha, who according to Section 8 of Hindu Succession Act have inherited 1/3rd share each of the suit property and Sekhar stayed in the suit property till 11.5.2011 and since then, he started leaving apart. Sekhar thereafter approached the defendants to effect partition of the suit property by metes and bounds but the defendants refuted the claim of partition of Sekhar and hence, the suit.

Conclusion- In India, two kinds of benami transactions are generally recognized. Where a person buys a property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami. In that case, the transferee holds the property for the benefit of the person who has contributed the purchase money, and he is the real owner. The second case which is loosely termed as a benami transaction is a case where a person who is the owner of the property executes a conveyance in favour of another without the intention of transferring the title to the property thereunder. In this case, the transferor continues to be the real owner.

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