We are all aware of a famous phrase from Shakespeare, “what’s in a name?”, well the Law of the Land says “a lot !!”. And with that thought in mind, along with the essential need of curbing the increasing ‘Black money’ problem, acts like the ‘Benami Transactions Act’, our topic for today, was passed.
Benami Transactions Act, 1988, now known as Prohibition of Benami Property Transaction Act, 1988 after the amendment of 2016, is an Act dealing with the prohibition of certain kinds of transaction. ‘Benami’ literally means ‘without a name. Benami property meaning is that it means any property, the owner of which is different from the person who has consideration for buying it. It may be a movable or immovable, tangible or intangible asset without a legal owner. ‘Benami’ transaction is a type of transfer of property in which property is transferred to one person and the consideration of it is given by another person. This Act was introduced in order to check the problem of Indian black money. This property declares Benami transactions as void and the Government can recover such property without giving any compensation to the holders. This is a very short Act, consisting of only 9 sections but its impact is far-reaching.
The Benami transactions act is partly prospective and partly retrospective in nature. For this, we need to know what prospective law is and what retrospective law is. ‘Retrospective’ are usually those laws that are to take effect before the passing of the law. Thus, its effect exists on other laws before its passing. ‘Prospective’ laws have effects in the future but do not interfere with the laws made before the passing of the concerned Benami Transaction Act.
It was actually designed with the noble idea of holding all the black money from India. However, due to some in-build disputes, it could not be fully implemented before the amendment of 2016. Benami transactions are also used if they want to hide the true ownership of the Benami property from their creditors or from the bank. This is also caught and checked under this Act. It also has a provision in which the Benami property would automatically vest in the Government, thereby increasing the profit of the Government. Also, the Benami property vested in the Government may be given to the landless laborers in need. To cross-check, the Act prohibits resale of the Benami property from the benamidar to the real owner and such transfer would be null and void.
Whether a transaction is Benami or not, the burden of proof is on the person asserting to prove the same. Such things need to be proven based on legal evidence of a definite nature. It is a case of ‘men’s rea’ where the intention of the transaction is important, which is often shrouded by a thick veil. However, the question is largely based on fact. To determine whether a transaction is Benami or not, the following guidelines may be followed:
In case of doubt regarding the nature of the transaction (whether Benami or not), the ostensible title cannot be displaced except upon clear evidence. The primary test for Benami transactions is the source of the consideration money. However, if a female is accompanied by her husband, it cannot be presumed that it is a Benami transaction. Spouses and children are an exception to it. Also, there is nothing to doubt if the custody of the title deed is with the wife after the purchase. Thus, the Benami Act provides the grounds of offence as the above-given circumstances.
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