Law:

Section:

Section 4 of the Benami Transactions (Prohibition of the Right to Recover Property) Act, 1988 - Benami transaction - Whether where a transaction is claimed to be benami, burden of proof lies on person making such claim and it must be proved that purchase money came from a person other than person in whose favour property is transferred, which could be ascertained from circumstances and relationship of parties and motive governing their action in bringing about transaction - Held, yes - Whether it would be wrong to throw out a suit regarding a property allegedly held benami at a preliminary stage merely on strength of section 4 without examining relevant evidence and circumstances of transaction - Held, yes FACTS One S, who died on 22-8-1981, was the mother of the plaintiff and defendant Nos. 1, 2 and 4. The plaintiff filed a suit of partition of the suit property against the defendants, alleging that the property in question, held in the name of S, was actually joint family property. On the other hand, defendant No. 4 claimed that the property was the self-acquired property of S who had bequeathed it to defendant No. 4 by a will. The defendants contended that in view of provisions contained in section 4 of the Benami Transactions (Prohibition of the Right to Recover Property) Act, the suit deserved to be dismissed at the preliminary stage itself. HELD The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction. The governing principle for determining the question whether a transaction is benami or not is to prove that the purchase money came from a person other than the person in whose favour the property is transferred. In fact, the purchase is prima facie to be inferred. The intention of the person who contributed towards the money has to be inferred from the circumstances and relationship of the parties and the motive governing their action in bringing about the transaction and their subsequent conduct. In the instant case, it was yet to be proved by reliable evidence as to whether the property in suit was purchased benami or not and what was the intention of the parties when the same was…

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