2. Definitions. –
In this Act, unless the context otherwise requires, –
(a) “Benami transaction” means any transaction in which property is transferred to one person for a consideration paid or provided by another person:
(b) “Prescribed” means prescribed by rules made under this Act;
(c) Property means property of any kind, whether movable or immovable, tangible or intangible, and includes any right or interest in such property.
(I) The definition of “benami transaction ” in clause (a) of section 2 is not restricted in its application to section 3 alone but also applies to Section 4 and 5 of Benami Transaction (Prohibition) Act, 1988. Parliament has conveyed its intention that the word benami transaction is not confined to one section alone and also that the definition would contain only one category tripartite of benami transaction. The parliament has choosen to confine the definition to one category only. The idea was to make the intention abundantly clear that parliament did not want to encircle the second category i.e. bipartite or sham transaction; Bhargavy P. Sumanthykutty v. Janaki Sathyabhama, AIR 1995 Ker 42.
(ii) The Benami Transactions (Prohibition) Act, 1988 is a piece of prohibitory legislation and it prohibits benami transactions subject to stated exception. A retrospective operation is not be given to a statute so as to impair existing rights or obligations. The presumption against retrospective operation is strong in cases in which the statute if operated retrospectively would prejudicially affect vested rights or the illegality of the past transactions, or impair contracts, or impose new duty, or attach new disability in respect of past transactions or consideration already passed and as defined in section 2(a) a transaction must be benami irrespective of its date of duration, i.e. the Benami Transactions (Prohibition) Act, 1988 is retrospective of its date or duration, i.e. the Benami Transactions (Prohibition) Act, 1988 is retrospective in operation; Mithilesh Kumari v. Prem Behari Khare, AIR 1989 SC 1247.
(iii) The principal governing the question whether a transfer is benami transaction or not may be summed up: (1) the burden of showing that a transfer is benami transaction lies on the person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary;(3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money, and (4) the question as to what his intention was has to be decided on the basis of the surrounding circumstances, the relationship of the parties, the motive governing their action in bringing about the transaction and their subsequent conduct etc; Raj ballav Das v. Haripada Das, AIR 1985 Cal 2.
(iv) The onus to prove that the transaction was benami is on the person who sets it. Mer suspicion is no evidence to hold any transaction to be benami one, but should be proved by direct evidence; Drigpal Singh v. Wife of Laldhari Ojha, AIR 1985 Pat110; see also Ram Narayan Dubey v. State of Bihar, AIR 1989 NOC 65 (Pat); Rahul Amin v. Chabbahan Bibi, air 1986 Cal 366; Urmila Dasi v. Probodhy Ch. Ghosh, AIR Cal 383.
(v) Property as per the definition in Behami Transaction (Prohibition) Act, 1988 would include any right or interest in such property and hence the right to purchase under the hire purchase agreement entered into by the second defendant with the third defendant or its predecessor in interest shall certainly come within the ambit of property; B. Rajagopal Reddy v. Padmini Chandrasekaran, AIR 1990m Mad 353.
(vi) Before the promulgation of the Benami Transactions (Prohibition of the Right to Recover Property) Ordinance and even before the Benami Transactions (Prohibition) Act was passed, two kinds of transaction were recognized by the courts in India. The first kind of benami transaction was called the real benami transaction in which when ‘A” sells a property to ‘B’ but the sale deed mentions’C’ as the purchaser. Here the real owner is ‘B’ and ‘C’ is only the benamidar. The second class or kind of transaction is the sham transaction in which one person purports to transfer his property to another without intending to pass the title to the transferee. This second type of transaction was ‘loosely’ called benami transaction. In the first type of transaction since there are three persons involved, it is also referred as tripartite benami transaction. The fundamental difference between the two categories of transactions is that in the former there is an operative transfer resulting in the vesting of title in the transferee, whereas in the latter there is no operative transfer and the transferor continues to retain title of the property notwithstanding execution of the documents; Bhargavy P. Sumathykutty v. Janaki Sathyabhama, AIR 1995 Ker 42.