OSTENSIBLE OWNERSHIP: A CRITICAL STUDY

Submitted By:

Palash Chakole

UID No.-UG16-31

II Year; Semester IV 2018

4.2 PROPERTY LAW

Submitted to:

Prof. (Dr.) Himanshu Pandey

MAHARASHTRA NATIONAL LAW UNIVERSITY, NAGPUR

Table of Contents

INTRODUCTION ..................................................................................................................... 3
PRINCIPLE BEHIND S.41 ....................................................................................................... 4
ESSENTIAL CONDITIONS OF S.41 ...................................................................................... 5
Ostensible Owner/Benamidar ................................................................................................ 6
Expressed or Implied consent of real owner .......................................................................... 8
Transfer for consideration ...................................................................................................... 9
Transferee acts in Good Faith ................................................................................................ 9
Reasonable Enquiry by Transferee ...................................................................................... 10
THE BENAMI TRANSACTION (PROHIBITION) ACT, 1988 ........................................... 12
Exceptions under the Act ..................................................................................................... 14
Motive .................................................................................................................................. 14
Burden of Proof.................................................................................................................... 15
THE CRITICAL ANALYSATION ......................................................................................... 16
Conclusion ............................................................................................................................... 17
Bibliography ............................................................................................................................ 18
Books and Statues ................................................................................................................ 18
Websites ............................................................................................................................... 18
Online Database ................................................................................................................... 18
INTRODUCTION
Property is one of the essential elements besides food & clothes to lead life for human being.
Besides essential need now a day‘s people are more interested in investing in
property. The people are more interested in investing property besides gold, the reason
being that it is always profitable as you can reside in the property or can give it on lease or
can sale it in higher price. The reason is that the rates of property are increasing day by day.
Many of the people purchase the property for one price & after 6 months or 1 year sale it for
higher price.

Ostensible Ownership is the concept which allows family members to purchase property in
the name of another member in the family for the future protection of the person. The
concept of ostensible owner is mentioned under sec 41 of Transfer of Property Act.

The rule of Section 41 of TPA 1988 is a deduction from the law of estoppel which is
enunciated in the Indian Evidence Act, Section 115. It forms an exception to the general rule
that a person cannot convey a better title than he has himself in the property (section 27, Sale
of Goods Act (III of 1930). The same rule applies to movable property, enunciated in the
Indian Contract Act. Sections 81, 82 and 94 of the Indian Trusts Act, 1882 (now repealed)
and the provisions of Section 281A of the Income Tax Act, 1961 (now repealed) dealt with
“benami transactions” without prohibiting them, but they only tried to identify the real owner
and the benami owner in these transactions.

These provisions came up for review before the Law Commission which felt that these
provisions must be repealed and they should be replaced by an independent legislation. The
Law Commission, after making a detailed study and examining the views and opinions of the
public, came to the conclusion that such transactions are carried out by people having funds
and wealth from sources not disclosed to the revenue authorities and with tainted funds to
acquire properties in the names of benamis (to avoid deletion and punitive actions). It is in
this background that the Benami Transactions (Prohibition of the Right to Recover Property)
Act, 1988 was enacted to come into effect from May 19, 1988 in all States, except Jammu
and Kashmir.
PRINCIPLE BEHIND S.41
Section 41 of the Transfer of Property Act, 1882 defines transfer of property by an ostensible
owner. It states:

41. Transfer by ostensible owner. – Where, with the consent, express or

implied, of the persons interested in immovable property, a person is the
ostensible owner of such property and transfers the same for
consideration, the transfer shall not be voidable on the ground that the
transferor was not authorized to make it:
Provided that the transferee, after taking reasonable care to ascertain
that the transferor has the power to make the transfer, has acted in good
faith.
This section enacts a rule of estoppel as against the real owner. The principle underlying this
section is that if two innocent persons are defrauded or cheated by one, who, after
transferring the property of one without his consent to another, is no longer present, and the
two persons enter into litigation with respect to the property transferred, then our of these two
apparently innocent persons, the one who, by his conduct or consent enabled the fraud to take
place, will suffer.

The law incorporated in Section 41 is based on the rules laid down by the Privy Council in
the leading case of Ramcoomar v. Macqueen1. Briefly, the facts and the law laid down in this
case were as follows:

Once Alexander had purchased some landed properties in Calcutta in the name of Bunnoo
Bibee who was his Mistress. Macqueen was one of the two children born to him by this
Mistress (Bunnoo Bibee). The sale-deed was in the name of Bunnoo Bibee and she also used
to manage the properties. Later on during the life of Alexander, Bunnoo Bibee sold the
properties to Ramdhone (father of Ramcoomar). After the death of Bunnoo Bibee, Macqueen
filed a suit against Ramdhone claiming the properties on the ground that her father Alexander
had left a will in her favour and that her father was the real owner, not Bunnoo Bibee who
was merely a benamidar. Ramdhone pleaded that he was a bona fide purchaser without
notice of the benami title of the seller (Bunnoo Bibee). The Calcutta High Court decided in
favour of Macqueen whereupon Ramcoomar (son of Ramdhone who was then substituted in

1
AIR. 1963 SC 1917.
place of his father) went in appeal to the Privy Council which reversed the judgment of his
Calcutta High Court and decided in favour of Ramcoomar. Allowing the appeal of
Ramcoomar, the Privy Council held that even assuming that Alexander was the real owner
and that Bunnoo Bibee was merely an apparent (ostensible) owner, since Alexander had
allowed (i.e. given implied consent to) Bunnoo Bibee to hold herself out as the real owner, he
or his representatives could not recover upon their secret title unless they could prove that
purchaser had direct or constructive notice of the real title. Delivering its judgment, the Privy
Council made following well-known observations :

“It is a principle of natural equity which must be universally applicable that, where one man
allows another to hold himself out as the owner of an estate and a third person purchases it
for value, from the apparent owner in the belief that he is real owner, the man who so allows
the other to hold himself out shall not be permitted to recover upon the secret title.”

The section is a statutory application of the law of estoppel, the general principle of which is
thus stated by the House of Lords in Cairncross v Lorimer:2

“If a man, either by words or by conduct, has initiated that he consents to an act which has
been done, and that he will offer no opposition to it, although it could not have been lawfully
done without his consent, and he thereby induces others to do that from which they might
have abstained - he cannot question the legality of the act he had so sanctioned - to the
prejudice of those who have so given faith to his words or to the fair inference to be drawn
from his conduct.”

This was the principle behind S. 41 of the Transfer of the Property Act, 1882, which relates to
the principle of Estoppel as has been provided in S. 115 of the Indian Evidence Act.

ESSENTIAL CONDITIONS OF S.41

Following conditions are necessary for the applicability of this section:-

i. There is transfer of an Immovable property by ostensible owner with express or

implied consent of the real owner,

ii. The transfer is for consideration

2
(1860) 3 Macq 827at p. 829.
 iii. The transferee has acted in good faith, and,

iv. The transferee has exercised reasonable care in finding out the transferor’s power to
make the transfer.3

Ostensible Owner/Benamidar

Starting from the first essential, it states that there need to be a transfer of property by the
ostensible owner. Ostensible literally means ‘apparent’ or ‘seeming’. An ostensible owner is
the person who apparently or seemingly appears to be the owner, though in reality he is not.
He is the person having all the indicas of the ownership without being the real owner. 4 A
Benamidar is an ostensible owner. The term ‘Ostensible’ excludes such persons who hold
possession of property professedly as agent, guardians or in any other fiduciary character.

According to Black Laws’ Dictionary :

‘Ostensible ownership’ means apparent ownership derived from conduct or words. Theory of
‘ostensible ownership’ estops an owner of property who clothes another with an apparent
title from the latter asserting his title against an innocent third party who has been induced to
deal with the apparent owner.5

The Benami Transaction (Prohibition) Act of 1988 provides that where a property is
transferred benami (i.e., in the name of another person), the person, in whose name the
property is held, shall become the real owner. The Benamidar represents in fact the real
owner, and is a mere trustee for him. So, if the property is purchased in the name of a
benamidar and the indicia of ownership are placed in his hands, the true owner can only get
rid of the effect of alienation by showing that it was made without his acquiescence and that
the purchaser took with notice of that fact6.

The Act provides that no suits, action or claim to enforce any right in respect of any property
held benami against the person in whose name the property is held or any other person shall
lie by the person claiming to be the real owner of the property. In other words, the real owner
is now after the enforcement of the Act cannot claim the property from the benamidar by any

3
Hardev Singh v. Gurmail Singh, AIR 2007 SC 1058.
4
Kannashi Vershi v. Ratanshi Nenshi, AIR 1952 Kutch 85.
5
Black’s Law Dictionary, 6th ed., p. 1100.
6
Bhugwan v. Upooch 10 WR 185.
suit, claim or action. The defence of being the real owner shall also not be allowed. However,
an exception has also been given in the Act where the above stated rule will not apply:-

1. Where the person in whose name the property is held is a coparcener in a Hindu
Undivided Family and the property is held for the benefit of the co-parceners in the
family, or

2. Where the person in whose name the property is held is a trustee or other person
standing in a fiduciary capacity, and the property is held for the benefit of another person
for whom he is a trustee or towards whom he stands in such capacity.

This means that now an ostensible owner or benamidar has become a real owner except
where he is a coparcener in a Hindu Undivided Family or a trustee standing in a fiduciary
capacity. Therefore, the law laid by Section 41 of the Transfer of Property Act stands
modified except where benamidar is a co-parcener or a trustee standing in a fiduciary
capacity.

In Jayadayal Poddar v. Bibi Hazara,7 the SC observed that whether a person is ostensible
owner is a subjective question depending upon certain facts and circumstances. Also the
following considerations must be taken into account while deciding whether a person is
ostensible owner or not:

(i) Source of the purchase-money i.e. who paid the price?

(ii) Nature of possession after the purchase i.e. who had the possession?

(iii) Motive for giving benami colour to the transaction i.e. why the property was
purchased in the name of the other person?

(iv) Relationship between the parties i.e. whether the real owner and the ostensible
owner were related to each other or were strangers or friends?

(v) Conduct of the parties in dealing with the property i.e. who used to take care of
and had control over the property?

(vi) Custody of the title deeds.

7
AIR 1974 SC 171
Expressed or Implied consent of real owner

In the matter of Ladhibai v. Ravji Nagshi,8 it was observed that the express or implied
consent to ostensible ownership means that some blame attaches to the real owner and that by
some fault of his the world begins to believe that another person is the owner of the property.

The real owner is not responsible, unless the apparent ownership of the transferor has been
permitted or created by him. He creates or permits the appearance of ownership either by
express words of consent, or by acts or conduct which imply consent. It is not necessary that
he should have been influenced by a fraudulent intention, for his liability rests upon his
having put the transferor in a position which enabled him to commit a fraud. This is on the
principle that 'when one of two innocent persons must suffer from the fraud of a third, he
shall suffer who, by his indiscretion, has enabled such third person to commit the fraud'. 9 The
same principle was stated in somewhat wider terms by J Ashurst in Lickbarrow v.
Mason,10as:

“wherever one of two innocent persons must suffer by the acts of a third, he who has enabled
such person to occasion the loss must sustain it.”

The consent of the real owner is express if it is given in clear words authorising him to make
the transfer. But such consent must not be brought about by a misapprehension of legal
rights. The consent is implied if the real owner knows that the benamidar is dealing with his
property as if it were his own but remains silent or acquisces. The real owner’s acquiescence
(silence) or inaction implies his consent. In Anoda Mohan, v. Nilphamari11, A purchased a
property in the name of his wife B. B's name was entered in the revenue records and she used
to deal with the property. After A's death B mortgaged the property to C who took it in good
faith believing that B had authority to make the transfer. It was held that since A himself had
entered B's name in the revenue record and since A allowed her to deal with the property,
there was an implied consent of A to hold out B as an ostensible owner authorising him to
transfer the property. Accordingly, the mortgage could not be avoided and the mortgagee was
protected under this section.

8
AIR1950 Kutch 34 at p.35
9
Root v. French, (1835) 13 Wendell 570
10
(1787) 5 Term Rep 683
11
AIR 1921 Cal. 549
In Beniram v. kundan Lal,12 it was held that Silence may be consent only where the real
owner is aware of his rights. Also it is not a mere acquiescence but something more from
which consent may be inferred. It is not a question of fact but of legal inference from the
facts found.

Section 41 does not apply to minors, and a minor’s guardian who transfers the property of a
minor cannot be treated as an ostensible owner with the consent of the minor, who by, reason
of the disability of infancy, cannot give his consent. The doctrine of estoppel does not apply
to minors, and still less will the court hold an infant estopped by the acts and omissions of
others.

13
In Shamsher Chand v. Mehr Chand, it was stated that this section does not apply to the
minors and he appears to be immune from responsibility of his deception.

In Tarabag Khan v. Nanak Chand,14 it was held that Attestation of the document by real
owner does not by itself imply consent but if it is proved that the attestation took place in
circumstances which involved knowledge of or consent to the transaction, it may be regarded
as implied consent.

Further, in Nathubai v. Mulchand,15 it was stated that religious endowments do not fall under
this section as the property is vested in the shrine and no particular person can give consent,
express or implied.

Transfer for consideration

The Principle protecting the transferee applies only where the transfer is for consideration. It
does not apply to gifts or gratuitous transfers. Therefore, the real owner is not precluded from
denying a gift made by an ostensible owner. However, if the transfer is with consideration it
may be any kind of transfer of property e.g. it may be sale, exchange, mortgage or lease.

Transferee acts in Good Faith

This essential is based on the principle that “He who seeks equity must do equity”. It is
necessary that transferee acts in good faith, i.e., he has purchased the property in the honest

12
21 All. 496 (p.c)
13
AIR 1947 Lah. 147
14
(1932) 138 I.C. 263
15
3. Bom.L.R.535 at p.537
belief that transferor had power to transfer the property. Good-faith means bona fide
intention.

Where a person purchases property with full knowledge that the transferor is merely an
apparent owner his intention is not bona fide and there is no good- faith on his part. Principles
of equity, on which this section is based, protects the interest only of a bona fide purchaser.
Thus, this section can protect the interest of only such purchaser whose own conduct is
equitable and just. In the absence of good-faith, the Court may presume collusion between
ostensible owner and the purchaser. Accordingly, if the transaction is a sham (false) one,
Section 41 cannot apply because the transferee would then be in the knowledge of the
reality.16 Where the parties live in the same village and have knowledge of the fact that
another person and not the seller was in possession of the property, the Court may presume
absence of good-faith. Similarly, knowledge of any previous dealings with the property or,
knowledge of the defective title of the transferor deprives the purchaser of the protection
under this section.17 In Gurubaksh Singh v. Nikka Singh,18 there was a partition of joint
family property but there was also some dispute over the respective shares. While the
objection and application for the correction of mistake was still pending, a part of the
property was sold. The Supreme Court held that since parties lived in the same village and
the facts established beyond reasonable doubt that the purchaser had knowledge of the
disputed title of the seller, the purchaser had no good-faith. The Court observed that in the
absence of good-faith on his part, the purchaser could not claim the benefit of Section 41.

In Mazhar v. Mukhtar,19 it was stated that the usual search is for a period of 12 years and
when there are no circumstances whatever to indicate that the search of the registration office
should be made for a longer period the transferee need not make such a search.

Reasonable Enquiry by Transferee

Good-faith or bona fide intention of the transferee is not enough. To attract the provisions of
this section the transferee must also have exercised reasonable care in ascertaining the title
and authority of the transferor. Reasonable care means that care which a man of ordinary
prudence should take while making inquiries regarding the title of an immovable property.
But it is not possible to lay down any general rule regarding the nature of enquiry to be made
16
Rai Sunil Kumar v. Thakur Singh, AlR 1984 Pat. 80.
17
Lala Jagmohan Das v. Lala Indar Prasad, Al. 1929 Oudh. 160
18
AIR 1963 SC 1917
19
AIR 1938 All 64
by the transferee which may be called as 'reasonable care' for all the cases. The standard of
enquiry expected from the transferee depends upon the facts and surrounding circumstances
which may vary according to the different circumstances of each case.20 However, the
enquiry made by the purchaser must be diligent and not superficial or casual. Some specific
circumstance or fact should be pointed out as a starting point of an enquiry which might have
led to some result.

Revenue records are not records of title. In Nageshar Prasad v. Raja Pateshri,21 A was the
real owner of the property. In the revenue records, instead of a name of B was entered by
mistake. B mortgaged the property to C who accepted the mortgage relying on the revenue
register. A denied the transfer on the ground that B was not authorized to mortgage the
property. C claimed the benefit of this section on the ground that he had taken reasonable
care in ascertaining the title of B by inspecting the revenue records. The Privy Council held
that since he had not exercised reasonable care in enquiring about the authority of B, he
cannot get the benefit of this section. The court observed that if C had made further enquiries,
he could have found that B’s name was entered into the register by mistake and A had already
raised an objection against the wrong entry of B’s name in the register.

20
Beyas Singh v. Ram Janam Ahir, AIR 1961 Pat. 16
21
(1915) 20 Cal.W.N.265,34 I.C. 673 P.C.
THE BENAMI TRANSACTION (PROHIBITION) ACT, 1988
According to the Law Commission of India there can be four main factors for the advent of
Benami Transactions in India.22

 First of the reasons can be the existence of a Joint Hindu Family System, which might
had induced a desire to make secret provisions,23 leading to the practice of benami.

 Second, can be to defraud the creditors, when K.K. Bhattacharya observes that since
the first establishment, the British Government, in the exercise of its legislative
functions, have time to time made attempts to check the inveterate practice obtaining
in India of holding property by one person in the name of another but the practice,
having its origin in the dishonest motive of defrauding creditors of their just and
lawful dues, had been prevalent here since a long time that the legislature can not
altogether put an end to it by a drastic enactment declaring it to be absolutely illegal. 24

 Third, can be the scheme to evade taxes hence changing the focus from individual
being a victim to the state being the victim.

 Fourth, according to Pollock, ‘practices of this kind naturally grow up in a state of

society where there is an appreciable risk, from one generation to another, of hostile
conquest or confiscations.’25

The Benami Transactions (Prohibition of the Right to Recover Property) Act, 1988 was
enacted to come into effect from May 19, 1988 in all States, except Jammu and Kashmir.

This Act made engaging in benami transaction a criminal offence, and denied any legal
recognition to benami transactions. The implementation of the Act was part of a larger policy
of the Parliament to minimize inequalities in income and eliminate inequalities in status,
facilities and opportunities not only amongst groups of people residing in different areas or
engaged in different vocations." The state directed its policy towards ensuring that the
ownership and control of the material resources of the community are so distributed as best to
sub-serve the common good and that the operation of the economic system does not result in

22
57th Report of Law Commission of India, para 1.7.
23
West and Buhler, ‘Hindu Law’, 4thedn, pp. 157, 563.
24
K.K. Bhattacharya, Joint Hindu Family, (Tagore Law Lectures) (1884-85), pp. 469- 470.
25
Pollock, ‘Law of Fraud’, misrepresentation mistake (1894) pp. 83- 84.
concentration of wealth and means of production to the common detriment. Some of the
following provisions of the Act of 1988 have been reproduced herein below:

 A “Benami Transaction” has been defined under Section 2(a) of the Act to mean a
transaction in which a person (transferor) transfers property to another person
(transferee) for a consideration paid or provided by a third person.

 The transferee in the above case is only a “benami” (name lender) for the third person,
who is the real owner. The consideration is really paid or provided for by the third
party i.e., the real owner only.

 No person shall enter into any benami transaction. There is a total prohibition and ban
on it. However, Section 3(2) made clear that the prohibition does not apply to a
person who buys property in the name of his wife and unmarried daughter. The law
will presume that the purchasing the property was made only for the benefit of the
wife or unmarried daughter, unless the contrary is proved.

 The act of carrying out such a benami transaction has been made into a cognisable
offence punishable up to three years imprisonment or with fine or with both. All
parties to the transaction are held to be offenders under Section 3(3) of the Act.

 The real owner of the property legally loses all his right and interest in the property
against the benami owner and cannot legally file a suit, make a claim or take action
against the benami owner to take over the property. There is a total prohibition against
the real owner asserting his ownership rights against the benami owner26.

 The property owned and held in the name of the benami owner is liable to be acquired
by the government through a competent authority (appointed under the Act for this
purpose) without paying any compensation whatsoever27.

 However, the onus of proving whether a transaction is benami is only on the person
who alleges that it is such. The person should prove that the consideration was not

26
Rai Sunil Kumar v. Thakur Singh, AIR 1984 Pat 80.
27
Thakur Krishna v. Kanhayalal, AIR (1961) All 206.
 paid or provided for by the transferee and in fact the consideration was actually paid
or provided for by a third party who is alleged to be the real owner28.

This being a legal requirement, the Act has not become very effective in curbing or
prohibiting benami transactions or punishing the persons involved. This is a serious
restriction in the application of the Act29.

Exceptions under the Act

According to, the Benami Transaction (Prohibition) Act, 1988, Benami transactions are
prohibited but there are certain exceptions to this rule and they are as following:

 The property may be purchased by a person in the name of his wife or unmarried
daughter.

 The property which is held by a coparcener in a Hindu Undivided Family and the
property held for the benefit of the other coparceners of the family will not amount to a
Benami transaction.

 The property held by a trustee or other person who, in a fiduciary capacity has the benefit
of another person for whom he has a trustee will also normally not amount to a Benami
transaction. Fiduciary capacity means being in a position of a trustee and being in a
position where the person can be stated to have duties of good faith, trust, confidence and
transparency and one who must exercise a high standard of care in managing another
person’s money or property.

These were the few exceptions as been provided for in the Benami Act. These exceptions are
been governed by S. 41 of the Transfer of Property Act, 1882 as the Benami Transaction
(Prohibition) Act, 1988 is inapplicable to them.

Motive
For the purpose of deciding whether a transaction is of benami nature, the motive of
the person advancing the consideration for the transaction is the most relevant factor. This
view was expressed by the Supreme Court in a case in which the claim was for partition by
the daughter of the property of her father. Her brothers refuted this claim saying that the

28
Mithilesh Kumari v. Prem Behari Khare, AIR 1989 SC 1247.
29
Ibid.
properties in question were purchased by their father in their names and were their personal
properties. The court held that the transaction was in the nature of a benami purchase. The
Supreme Court reversed this decision because the lower court had not taken into
consideration of the intention of the father who provided the consideration and the totality of
the circumstances.30

Burden of Proof
The burden of proof is on the person who sets up the benami and, if the burden is not
discharged, the ostensible title will prevail. Although the initial burden of proof was on the
person alleging that a transaction was benami, the practice was that even a slight quantity of
evidence to show that it was a Benami Transaction sufficed to-shift the presumption, as
Benami Transaction were very familiar in India. The true character of the transaction was
determined by the intention of the person who contributed the purchase money. The intention
was determined based on the relationship of the parties, the motive for the transaction, the
custody of the title deeds, the payment of considerations and actual possession of the property
in dispute.31

The burden of showing that a transfer is a benami transaction lies on the person who asserts
that it is such a transaction.

1. If it is proved that the purchase money came from a person other than the person in whose
favor 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.

2. The true character of the transaction is governed by the intention of the person who
contributed the purchase money.

3. The question as to what the 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.32

Based on the above conditions, the Supreme Court set aside the decision of the High Court
and passed a decree directing the defendant to deliver the possession of the suit house to
plaintiffs.

30
V. Satyanarayana Rao v. Leelavathy, AIR 2007 SC 2637.
31
Solil Paul, Mulla, ‘The Transfer of Property Act’, New Delhi: Butterworths, 1999 at 291.
32
Raj Ballav Dass v. Haripada, AIR 1985 Cal 2
THE CRITICAL ANALYSATION
Under Transfer of property act it is clearly mentioned that when the one person
pays consideration & purchases the property in the name of another person the later is
considered as ostensible owner & the transaction is benami transaction. Whereas,
under the Benami Transaction Act it is prohibited. Now it is question arises that
why it is permitted in one & prohibited in the other act.

There are many reasons behind purchasing the property in the name of another person. One
of the reasons may be to avoid the payment of tax, to convert black money or to hide the
earnings. To prevent that the Benami Transaction Act, 1988 is enacted. But the exception
under benami transaction act clearly mentions that, Benami transaction prohibition shall
not apply to the purchase of property by any person in the name of his wife or unmarried
daughter and it shall be presumed, unless the contrary is proved, that the said property had
been purchased for the benefit of the wife of the unmarried daughter.

Under the Income tax act, there is a provision of ‗clubbing of income33, the result of this is
that, even though the person purchases the property in the name of family member it will be
taxed & there are no chance of hiding the income therefore, Benami transactions are
permitted to certain extent as mentioned under exception of definition of Benami
Transaction.

Therefore, the Concept of Ostensible Ownership under Sec 41 is subject the

provisions of Benami Transaction‘ under Sec 3 of Benami Transactions (Prohibition of the
Right to Recover Property) Act, 1988.

After study of Provisions under Benami Transaction Act, 1988, it is clear that the provisions
of the aforesaid Act are inadequate to deal with benami transactions as the Act, inter alia,—

(i) does not contain any specific provision for vesting of confiscated property with the
Central Government;
(ii) does not have any provision for an appellate mechanism against an action taken by
the authorities under the Act, while barring the jurisdiction of a Civil Court;
(iii) does not confer the powers of the Civil Court upon the authorities for its
implementation.

33
Sec 64 of Income tax Act, 1995- Income of individual to include income of spouse, minor child, etc. 1 2[ 3[
(1)] In computing the total income of any individual, there shall be included all such income as arises directly or
indirectly
Conclusion
The legislation of 1988 prohibits all the Benami transactions subject to few exceptions. It has
made such transactions a criminal offense. The Act of 1988 has prohibited Benami
transactions retrospectively and is intended to curb the menace of tax evasion, defrauding
creditors, escaping abolition of Zimandari statutes and compulsory nationalization.

Researcher is of the view that there should be some implementing agency at the local levels,
to check benami transactions (when they are with dishonest motives). More benami
transactions will come to light with local monitoring agencies. Otherwise, it is only (if at all)
when the real owner and benamidar fall out that the benami transaction comes to light. In
addition these agencies should look after the interests of the weaker sections of society
(usually the benamidar) who have limited access to law. The 130th Law Commission Report
made some useful suggestions in this regard. The report recommended the involvement of
voluntary in enforcement of laws, as that would help achieve a constitutional culture of
obedience to laws. Certain authorized non-government organizations should be empowered
to lay a complaint before a tribunal. The tribunal can investigate the complaint and then
provided the appropriate redressal. As an alternative, the report recommended that Liaison
Officers attached to Gram Nayalayas, should be given the duty to supervise the enforcement
of the Act and to lay a complaint before a tribunal.
Bibliography

Books and Statues

 Singh Avtar (Dr.), Textbook on The Transfer of Property Act, 3rd ed., Universal Law
Publishing Co., New Delhi, 2013.

 Tripathi, G. P. (Dr.), The Transfer of Propert Act, 17th ed., Central Law Publications,
Allahabad, 2011.

 Mallick M. R., A Commentary on Transfer of Property Act, 2nd ed., Eastern Law House,
Calcutta, 2001.

 Mitra B. B., Commentary on Transfer of Property Act, 11th ed., Delhi Law House, Delhi,
2009.

 Sinha R. K., The Transfer Of Property ,15th ed., Central Law Agency, Allahabad, 2014.

 Gour Hari Singh, Commentary on Transfer of Property Act, 11th ed., Delhi Law House,
Delhi, 2009.

 The Transfer of Property Act, 1882

 The Benami Transactions (Prohibition) Act, 1988

Websites
 http://saarclaw.org/expert_talk_detail.php?eid=1021

 http://admis.hp.nic.in/himpol/Citizen/LawLib/C025.HTM

 http://en.wikipedia.org/wiki/Benami_Transactions_(Prohibition)_Act,_1988

 http://www.prsindia.org/uploads/media/Benami/Benami%20Transaction%20(Prohibition)%20Bi
ll.%202011.pdf

 http://lawexplainedindia.wordpress.com/2013/05/09/benami-transaction-defined-and-the-
relation-between-the-terms-benamidar-and-ostensible-owner/

 http://www.lawnotes.in/Section_41_of_Transfer_of_Property_Act,_1882

 http://lawmirror.com/search/search.php?q=section+41+transfer+of+property+act.&sel=headno
te&page=1

Online Database
 SCC Online
 Hein Online
 Lexis Nexis