Property purchased on benami name has taken away the property. Can I get it back?
One of my officers has bought a flat 9 years back with his money but because he was at sea, registered the flat in his bro wife’s name. He continued to pay the emi thro his account and completed the loan. 18 months back his brother sells off the flat and walks off with the money and he is homeless now.
I advised him to send a legal notice to his brother and sister in law demanding to transfer the funds gotten through the sale and after notice period expires to file a suit for recovery of the sale money by putting the facts before the temple of justice and by filing the proof of payment from his salary through the bank.
Would appreciate expert legal opinion to go about it as based on Indian legal system. This incident place is Bombay.
Will be watching for quick assistance to guide him better.
I know it is foolhardy to ask any further question after reading mr. Vijay’s detailed response.
But what if a suit is filed without uttering a single word about benami and instead allege cheating and fraud committed by his brother by saying that the brother has taken the loan from this officer on verbal assurance and it can all be proved that right from the advance for the flat to completing the emi payment to the bank is from this officer’s account?? Truth and facts are there and hence there must be a way out to nail his brother and sister in law like challenging them to prove the mode of payment or proof income to pay for the flat emi etc
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Tagged with: Fraud • Money • Sister In Law
Filed under: flat sale
Sorry Captain, the property purchased on benami name is lost forever as there exist The Benami Transactions (Prohibition) Act, 1988 wherein section 4 provides:
Prohibition of the right to recover property held benami. – (1) No suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property.
(2) No defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property.
(3) Nothing in this section shall apply -
(a) 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 coparceners in the family; or
(b) 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.
The facts of the present case are not covered under the exceptional cases as mentioned above as neither this was a Hindu undivided family property nor trust property.
More so section 3 of the Act prevents such benami transaction, read this, carefully, if some mindless judge dealing the petition for recovery of the benani transaction money he will surely like to use this provision against the petitioner before hearing the other facts of the case concerning the money transaction :-
3. Prohibition of benami transactions- (1) No person shall enter into any benami transaction.
(2) Nothing in sub-section (1) shall 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 or the unmarried daughter.
(3) Whoever enters into any benami transaction shall be punishable with imprisonment for a term which may extend to three years or with fine or with both.
(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, an offence under this section shall be non-cognizable and bailable.
Let this person request his brother to return the money like gentleman otherwise going to courts for its recovery will not serve the purpose.
EDIT: Yes if the approach taken by this brother in the court is that he had given money to his brother for buying house for the wife, for this purpose the official loan was taken by this person with all the documentary proof, money transfer etc, than a good case can be made out for recovery of the money from the brother & his wife, not the benami transaction.
Well done Vijay m. Now what is benami? or is there a simple word to describe benami? SORRY, NOT FAMILIAR WITH THAT WORD.