{"id":245646,"date":"2021-03-16T13:00:28","date_gmt":"2021-03-16T07:30:28","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=245646"},"modified":"2021-03-19T10:47:58","modified_gmt":"2021-03-19T05:17:58","slug":"benami-transaction","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2021\/03\/16\/benami-transaction\/","title":{"rendered":"Chh HC | Principles governing determination whether a transfer is a Benami transaction has been reiterated; Petition allowed"},"content":{"rendered":"

Chhattisgarh High Court<\/strong>: Rajendra Chandra Singh Samant J., allowed the petition and quashed the order.<\/p>\n

The facts of the case are such that the petitioner and respondent 1 both are members of the aboriginal tribe. An agreement to sale was executed by respondent 1 for the sale of his property to the petitioner for a paid consideration. The petitioner made payment of full consideration, subsequent to which the sale deed was executed. On the basis of this sale, the property purchased was mutated in the name of the petitioner in the year 1988. Later respondent 1 filed an application under Section 170-B of M.P. Land Revenue Code, before the Sub-Divisional Officer (Revenue) Kondagaon, on grounds of sale deed being fraudulent which has been made Benami, and stating that the actual beneficiary of the sale is non-tribal person Praveen Kumar, which was thereby rejected. Respondent 1 preferred an appeal before the Court of Additional Collector Jagdalpur, District Bastar which came to be dismissed. Respondent 1 then preferred a revision petition before the Court of Commissioner, Bastar Division which was allowed and ordered that the disputed property be revested to respondent 1 and the mutation in records be done accordingly. The petitioner then made a petition before the Chhattisgarh Board of Revenue which dismissed the petition on the ground of maintainability under Section 50 (1)(c) of the Chhattisgarh Land Revenue Code. Assailing this dismissal, an instant petition under Article 227 of the Constitution of India has been filed to quash the order passed by Commissioner Bastar Division and by the Chhattisgarh Board of Revenue.<\/p>\n

Counsel for the petitioners submitted that it was erroneously considered that the land of a tribal cannot be purchased by a non-tribal person. It was also stated that the statement of Praveen Kumar in the enquiry was not appreciated in which he stated about the transaction. He further submitted that the registered sale deed stands in his name and the petitioner persistently led claim over the property in dispute. Hence, the order of the Commissioner is illegal, arbitrary and unsustainable.<\/p>\n

Counsel for the respondents submitted that the transaction in question is very clearly a Benami transaction which was done with intention to bypass the legal provision of the Chhattisgarh Land Revenue Code. It was further submitted that there is evidence present in the enquiry establishing that Praveen Kumar was the person behind the petitioner, who had made the purchase of the landed property in dispute.<\/p>\n

The Court relied on judgment Bhaiji v. SDO, <\/em>(2003) 1 SCC 692<\/a> and observed that the sale transaction between members of aboriginal tribes can also be questioned under Section 170-B of the Chhattisgarh Land Revenue Code.<\/p>\n

The Court further relied on judgment P. Leelavathi (D) by LRs v. V. Shankarnarayana Rao<\/em>, 2019 SCC OnLine SC 489<\/a> and observed that:<\/p>\n

\u201cIn the case of Thakur Bhim Singh (supra), it is observed and held by this Court that while considering a particular transaction as benami, the intention of the person who contributed the purchase money is determinative of the nature of transaction. It is further observed by this Court as to what the intention of the person who contributed the purchase money, has to be decided on the basis of the surrounding circumstance; the relationship of the parties; the motives governing their action in bringing about the transaction and their subsequent conduct etc.\u201d<\/em><\/strong><\/p>\n

\u201cThe principle governing the determination of the question whether a transfer is a benami transaction or not may be summed up thus: (1) the burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) 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 motives governing their action in bringing about the transaction and their subsequent conduct, etc.\u201d<\/em><\/strong><\/p>\n

\u201cIn Binapani Paul case (supra), this Court again had an occasion to consider the nature of benami transactions. After considering a catena of decisions of this Court on the point, this Court in that judgment observed and held that the source of money had never been the sole consideration. It is merely one of the relevant considerations but not determinative in character. This Court ultimately concluded after considering its earlier judgment in the case of Valliammal v. Subramaniam <\/em>(2004) 7 SCC 233<\/a> that while considering whether a particular transaction is benami in nature, the following six circumstances can be taken as a guide:<\/em><\/strong><\/p>\n

\u201c(1) the source from which the purchase money came;<\/em><\/strong><\/p>\n

(2) the nature and possession of the property, after the purchase;<\/em><\/strong><\/p>\n

(3) motive, if any, for giving the transaction a benami colour;<\/em><\/strong><\/p>\n

(4) the position of the parties and the relationship, if any, between the claimant and the alleged benamidar;<\/em><\/strong><\/p>\n

(5) the custody of the title deeds after the sale; and<\/em><\/strong><\/p>\n

(6) the conduct of the parties concerned in dealing with the property after the sale.\u201d<\/em><\/strong><\/p>\n

\u00a0<\/em><\/strong>The court thus held that the learned Commissioner while passing the impugned order has not given consideration to all the evidence present in the enquiry made before the Sub- Divisional Officer. Hence, this can not be said to be a proper exercise of a jurisdiction vested with the Commissioner for passing the impugned order.<\/p>\n

In view of the above, petition was allowed.[Sona Ram v. Dev Singh,\u00a0 2021 SCC OnLine Chh 499<\/b><\/a>, decided on 03-03-2021]<\/p>\n

\n

Arunima Bose, Editorial Assistant has reported this brief.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Chhattisgarh High Court: Rajendra Chandra Singh Samant J., allowed the petition and quashed the order. 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Facts of the case were such that petitioners are daughters of respondent who had sold his property to other respondents. 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