2003 A I H C 2234 ::(2003) 102 DLT 932 ::(2003) 2 RecCivR 839 ::(2003) 2 BankCas 247 ::(2003) 67 DRJ 174 ::(2003) 128 Taxman 130 ::(2003) 175 Taxation 506

Delhi High Court

Hon'ble Judge(s): S. Mukerjee , J

Benami Transactions (Prohibition) Act (45 of 1988) , S.4(3)(b)— Right to recover property held benami - Prohibition against - When applicable - Mother paying to son for purchase of property in her name - Son purchasing in his own name by transgressing directions given by mother - Transaction is benami - Prohibition applies. After the repeal of Sections 81 and 82 of the Indian Trusts Act 1882, it is only those instances of fiduciary capacity such as property of partnership firm held in the name of one of the partners, or property which Mr. X wanted Mr. Y to buy in the name of Mr. X, but in violation of that instruction, Mr. Y has bought the property in his (Y's) own name. In such a case Mr. Y being in fiduciary capacity and a trustee of Mr. X, the provisions of Section 4(3) (b) will ensure that prohibition of Benami Transaction does not stand in the way of a legal proceeding by Mr. X to enforce any right in respect of the said property. The distinction is subtle, but significant. If Mr. X asks Mr. Y to purchase in his own name certain property, of which consideration has been paid by Mr. X, then that is a benami transaction. On the other if Mr. X were to ask Mr. Y to buy the property in the name of Mr. X, but for any reason Mr. Y purchases the property in his own name (viz. Name of Mr. Y), then the relationship of trustee and fiduciary capacity is available i....