Calcutta High Court Ruling: Husband's property in wife's name not always Benami

The Calcutta High Court has recently made a significant ruling regarding benami transactions, stating that a transaction in which a man buys property in his wife's name cannot always be labeled as a benami transaction. The division bench of Justice Tapabrata Chakraborty and Justice Partha Sarthi Chatterjee emphasized that in Indian society, if a husband provides the funds for acquiring property in his wife's name, it does not necessarily indicate a benami transaction. The court emphasized that while the source of money is an important factor to consider, it is not the sole determinant in establishing whether a transaction is benami.

The court's ruling came in response to a case in which a son accused his father of giving a benami property to his mother. However, the court ruled that the son failed to prove his claim that the property in question was benami. The court reaffirmed the well-settled principle that the burden of proving a transfer as a benami transaction lies with the person making the assertion.

The court also provided clarification on the two recognized types of benami transactions. The first type involves a person purchasing a property with their own funds but registering it in someone else's name without any intention of benefiting that person. The second type, which the court loosely referred to as a benami transaction, occurs when the property owner executes a conveyance in favor of another person without intending to transfer the title to the property. In this latter case, the transferor remains the true owner of the property.

In the specific case that the Calcutta High Court was hearing, a person had acquired a property in 1969 in his wife's name. At the time of the purchase, the wife was a homemaker with no personal income. Her husband registered the land in her name and constructed a two-storey house on it. Following the husband's demise in 1999, the wife, son, and daughter inherited one-third of the property each, according to succession laws.

The son resided in the house until 2011 but sought to divide the property among himself, his mother, and sister when he moved out. However, his proposal was not accepted by the other two parties. Consequently, the son took the matter to court, alleging a benami transaction.

To further complicate the situation, the mother, frustrated by her son's actions, executed a gift deed transferring her share of the property to her daughter before her passing in 2019. Taking all these circumstances into account, the High Court dismissed the son's claim of a benami transaction.

This ruling by the Calcutta High Court provides valuable guidance on benami transactions and clarifies that the involvement of a husband in purchasing property in his wife's name does not automatically constitute a benami transaction. It reinforces the importance of considering the overall circumstances and burden of proof when determining the nature of a property transfer.

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Calcutta High Court Ruling: Husband's property in wife's name not always Benami

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