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Mere Financial Assistance To Buy Property Cannot Be Termed Benami Transaction

In CIVIL APPEAL NO. 1099 OF 2008, Smt. P. Leelavathi vs V. Shankarnarayana Rao, the plaintiff claimed share of some properties in possession of her brothers alleging that though the properties are in her brothers name, they are not self acquired by her brothers, rather their father had actually paid the money and therefore the properties being benami transactions of her father, she had rights to the same. 

On appeal, the Supreme Court referring to various transactions observed 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 and 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. The source of the money has never been the sole consideration but not determinative in character. Finally referring to Valliammal v. Subramaniam (2004), the court observed that in considering whether a particular transaction is benami in nature, the following six circumstances can be taken as a guide:
(1) the source from which the purchase money came;
(2) the nature and possession of the property, after the purchase;
(3) motive, if any, for giving the transaction a benami colour;
(4) the position of the parties and the relationship, if any, between the claimant and the alleged benamidar;
(5) the custody of the title deeds after the sale; and
(6) the conduct of the parties concerned in dealing with the property after the sale.

The Court decided that based on the above observations hat the plaintiff has failed to prove that the purchase of the suit properties – Item Nos. I(a) to I(c) in the names of defendant Nos. 1 to 3 were benami in nature mere financial assistance to buy a property cannot be the sole determinative factor/circumstance to hold the transaction as benami in nature.

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