View source for Benāmi (India)

{{infobox 
| nameofpractice =Benāmi
| flagemoji =🇮🇳
| definition =In Hindu law, a transaction or property made or held under a fictitious name or that of a third party, who acts as ostensible owner on behalf of the real owner
| location =India
| imagemap =India map.png
| clusters =
[[:Category:Market|Market]] – [[:Category: Functional ambivalence| Functional ambivalence]] – [[:Category: Gaming the system| Gaming the system]] – [[:Category: Camouflage| Camouflage]] – [[:Category: Intermediation| Intermediation]] 
| categories =
[[:Category:India|India]] – [[:Category: South Asia| South Asia]] – [[:Category: Hindu law| Hindu law]] – [[:Category: Property| Property]] – [[:Category: Ownership| Ownership]] – [[:Category: Third party| Third party]] – [[:Category: Concealment| Concealment]] – [[:Category: Triangle| Triangle]] 
| authorofpiece =Kalindi Kokal
| authorinstitution =Max Planck Institute for Social Anthropology, Halle-Saale, Germany
| authorwebsite =[https://www.eth.mpg.de/kokal Profile page at MP]}}
<big>'''By Kalindi Kokal, Max Planck Institute for Social Anthropology, Halle-Saale, Germany'''</big>
[[Category:Market]] 
[[Category: Functional ambivalence]] 
[[Category: Gaming the system]] 
[[Category: Camouflage]] 
[[Category: Intermediation]] 
[[Category:India]] 
[[Category: South Asia]] 
[[Category: Hindu law]] 
[[Category: Property]] 
[[Category: Ownership]] 
[[Category: Third party]] 
[[Category: Concealment]] 
[[Category: Triangle]] 
[[Category:Entry]] 
[[Category: Volume 2]] 
{| class="wikitable"
|- 
|style="font-size:1.1em;"| A ''benāmi'' transaction is one where a person purchases a property in the name of another without intending to transfer any beneficial interest in the property to the other person. The person in whose name the property is bought is known as the ''benāmidār'' and the person who advanced the consideration for the property (and is the real owner) is described as the holder of beneficial interest in the property (Law Commission of India 1988<ref>Law Commission of India. 1988. 'One Hundred Thirtieth Report on Benami Transactions - A Continuum.' 130. Law Commission of India. http://lawcommissionofindia.nic.in/101-169/report130.pdf.</ref>; Mitra 2010, 448–49<ref>Mitra, A.  2010. Law of Possession And Ownership Of Property. Allahabad: Sodhi Publications.</ref>). The term ''benāmi'' can be broken up to literally translate as ‘without name’ (''be'' being ‘without’, and ''nām'' being ‘name’). The origin of the expression ‘''benāmi''’ is also traced back to the Persian language, in which the term means ‘fictitious’ (Mitra 2010, 448<ref>Mitra, A.  2010. Law of Possession And Ownership Of Property. Allahabad: Sodhi Publications.</ref>). A ''benāmidār'' comes very close to the practice of [[stróman]] in Hungary (see this volume), acting like the latter to conceal the identity of the true owner of the property, primarily from state agencies.
|}
Prior to 1988, ''benāmi'' transactions were a part of Indian law.   However, in May 1988 following recommendations made by the Law Commission of India, the President of India passed an Ordinance entitled ‘Benami Transactions (Prohibition of the Right to Recover Property) Ordinance, 1988’ whereby ''benāmi'' transactions ceased to be recognised as legal. A law entitled the ‘The Benami Transactions (Prohibitions) Act, 1988’ (‘The Act’) was brought into force soon thereafter. The Act defines ''benāmi'' transactions as ‘… any transaction in which property is transferred to one person for a consideration paid or provided by another person’(Government of India 1988, sec. 2 (a)<ref>Government of India. 1988. Benami Transaction (Prohibition)_ Act, 1988 - Benami Transaction_Prohibition_ Act1988.pdf. http://finmin.nic.in/law/Benami%20Transaction_Prohibition_%20Act1988.pdf.</ref>).

This definition in itself has been the basis of much debate (Joseph 1989<ref>Joseph, T. P. 1989. 'Whether Sham Transactions Come within the Purview of S.4 of the Benami Transactions (Prohibition) Act 1988 -- Some Thoughts on 1989(1) KLT 767.' Kerala Law Times 2 (Journal Section): 5–7.</ref>, Bhaskaran Nambiar 1989<ref>V. Bhaskaran Nambiar. 1989. Ouseph Chacko v. Raman Nair, 1989 (1) Kerala Law Times 767. Kerala High Court.</ref>) which has resulted in the nature of ''benāmi'' transactions and their validity being largely decided by case law. The Supreme Court of India has construed that the word ''benāmi'' is used to denote two classes of transactions, which differ from each other in their legal character and incidents. ‘Where a person buys a property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called ''benāmi''. In that case, the transferee holds the property for the benefit of the person who has contributed the purchase money, and he is the real owner. The second case, which is loosely termed as a ''benāmi'' transaction is a case where a person conveys in favour of another without the intention of transferring the title to the property thereunder. In this case, the transferor continues to be the real owner’ (Supreme Court of India 1979<ref>Supreme Court of India. 1979. Bhim Singh vs Kan Singh, 1980 All India Reporter 727. Supreme Court.</ref>). The difference between the two kinds of ''benāmi'' transactions referred to above lies in the fact that in the first case there is an operative transfer from the transferor to the transferee, where the latter holds the property for the benefit of the person who has contributed the purchase money. In the second situation there is no operative transfer at all and the title rests with the transferor despite the execution of conveyance.  One common feature, however, in both of these cases is that the real title is divorced from the ostensible title and they are vested in different persons. (Mitra 2010, 448, 451<ref>Mitra, A.  2010. Law of Possession And Ownership Of Property. Allahabad: Sodhi Publications.</ref>)

While deciding whether a transaction is ''benāmi'' or not, the court considers the motive of the person taking the sale deed in the name of another; the custody of the sale deed; the passing of consideration, and the possession of property. Additionally, the court also pays attention to the relationship between the parties; the reason for the transaction; the source of the consideration; and the circumstances surrounding such a transaction.

''Benāmi'' transactions, however, have always been part of property ownership practices amongst both Hindus and Muslims in India, and particularly within the affluent class (Derrett 1962, 865<ref>Derrett, J., Duncan, M.1962. 'Fictitious Transfers (Benami) and the Presumption of Advancement.' International & Comparative Law Quarterly 11 (3): 864–872. doi:10.1093/iclqaj/11.3.864.</ref>). One reason why such transactions remain prominent is because of the customary belief that certain persons are ‘luckier’ than others (See also Law Commission of India 1988, 37<ref>Law Commission of India. 1988. 'One Hundred Thirtieth Report on Benami Transactions - A Continuum.' 130. Law Commission of India. http://lawcommissionofindia.nic.in/101-169/report130.pdf.</ref>) and therefore it is thought that properties bought in the names of such persons are more likely to remain secure and bring increased wealth.  In such cases the nominated ''benāmidār'' is often a female individual with close relations (sister, mother, wife or daughter) or a minor child. Simultaneously, such investments also act (albeit unintentionally), as a source of financial security for women who traditionally enjoy little other protection. Later this provision was incorporated in the Act under Section 3 (2), which allows a person to buy property in the name of his wife or unmarried daughter, on the presumption that the property has been purchased for the benefit of the wife or the unmarried daughter (Government of India 1988, sec. 3 (2)<ref>Government of India. 1988. Benami Transaction (Prohibition)_ Act, 1988 - Benami Transaction_Prohibition_ Act1988.pdf. http://finmin.nic.in/law/Benami%20Transaction_Prohibition_%20Act1988.pdf.</ref>). The law applies the ‘doctrine of advancement’ as understood under English Law in this scenario, which prevents the father or husband from reclaiming the property on the grounds that either the wife or the unmarried daughter was a ''benāmidār''.

Apart from this exception, the Act proceeds on the basis that the whole purpose of ''benāmi'' transactions is to conceal from strangers, and from the Government in particular, the identity of the actual owner and beneficiary of the property. More specifically, as the Law Commission of India points out in their report that preceding the enactment of this Act, ''benāmi'' transactions were always undertaken with the intention of either circumventing tax laws such as wealth tax, gift tax and income tax, or to overcome socially beneficent legislation enacted by the state and central governments in India for an equitable redistribution of property (Law Commission of India 1988, 38<ref>Law Commission of India. 1988. 'One Hundred Thirtieth Report on Benami Transactions - A Continuum.' 130. Law Commission of India. http://lawcommissionofindia.nic.in/101-169/report130.pdf.</ref>).

For example, under section 35 of the Bombay Tenancy and Agricultural Lands Act, 1948, it was provided that on ‘Tiller’s day’, on April 1st, 1957, all tenants of agricultural property should become eligible to become owners of the land. Subject to some provisions of the said Act, such transfer of title from landlord to tenant became inevitable. However, decades after the Bombay Tenancy and Agricultural Lands Act, 1948 was passed, a survey in Borsad Taluka of Kaira District in the state of Gujarat revealed thousands of concealed tenancies that had been retained under the guise of ''benāmi'' transactions; the then owners having transferred the property to the names of the then tenants, while continuing to retain a beneficial interest in the property (Law Commission of India 1988, 36<ref>Law Commission of India. 1988. 'One Hundred Thirtieth Report on Benami Transactions - A Continuum.' 130. Law Commission of India. http://lawcommissionofindia.nic.in/101-169/report130.pdf.</ref>). In recent times, it is not uncommon to find cases of ''benāmi'' transactions in the purchase of tribal land by non-tribal individuals. In this instance the objective is to overcome an order by the Supreme Court of India that made it unconstitutional to purchase land belonging to Scheduled Caste (SC) and Scheduled Tribes (ST) by members of communities who were neither SC or ST; companies were also included in this ruling (Misra and Radhakrishnan 2012<ref>Misra, D., Radhakrishnan., K.S. 2012. State of Rajasthan & Ors. vs Aanjaney Organic Herbal Pvt. Ltd., 10 Supreme Court Cases 283. Supreme Court.</ref>; Agency 2012<ref>Agency. 2012. 'Ban on India Inc Acquiring SC, ST Land - Indian Express.' The Indian Express, September 21. http://archive.indianexpress.com/news/ban-on-india-inc-acquiring-sc-st-land/1005539/.</ref>).

While ''benāmi'' transactions remain commonplace, very little research has been conducted into the nature and importance of such transactions in the present day. Recently, as the Government of India has set its focus on curtailing the flow of ‘black money’ (defined as income from undeclared illegally earned sources) into the country, ''benāmi'' transactions have received renewed attention from the Indian legislature. A new Bill to limit the instances of such transactions and make them more visible was introduced by the Indian parliament in August 2015 (Deshpande 2015<ref>Deshpande, T.  2015. 'Bill Summary- Benami Transactions.pdf.' PRS Legislative Research. http://www.prsindia.org/uploads/media/Benami/Bill%20Summary-%20Benami%20Transactions.pdf.</ref>; The Hindu 2015<ref>The Hindu. 2015. 'Tackling Benami Deals,' May 22. http://www.thehindu.com/features/homes-and-gardens/tackling-benami-deals/article7235410.ece.</ref>).

The new bill is unlikely to end the practice of ''benāmi'' as these transactions exist where customary beliefs and practical efficiency coincide, and at the same time are reinforced by the dynamics of social structures that actually facilitate such transactions. Section 24 of the new Bill on benāmi transaction provides for the appointment of an ‘Initiating Officer’, who is entitled to investigate transactions he suspects to be ''benāmi'' (Parliamentary Legislative Research 2016<ref>Parliamentary Legislative Research. 2016. 'PRS | Bill Track | The Benami Transactions (Prohibition) (Amendment) Bill, 2015.'  http://www.prsindia.org/billtrack/the-benami-transactions-prohibition-amendment-bill-2015-3789/.</ref>). The nature of ''benāmi'' transactions often makes them socially legitimate within communities, thus making it very challenging to trace such transactions; in most instances they are carried out between people connected through close family relations or complex networks of reciprocities. As the monetary value of land increases rapidly in India, the government needs to devise more strategic initiatives to regulate this practice rather than trying to ban it completely.