Whether Father can succeed in title if his son name is in the property papers?

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Shubham Budhiraja[1]

Mr. A, father, purchased two properties from his Income in the name of minor sons as owners in papers. The sons later on sold the property to Mr. B. Mr. A filed suit for declaration of title seeking setting aside of the sale deed made by sons to Mr. B. Mr. A deposes his statement, statement of the tenant who deposed that Mr. A was in possession of property and he used to pay him rent. Sons in their WS admitted that they were minor had no source of Income. The trial court and High court dismissed the suit on the ground that Mr. A had benami transaction and thus suit is barred by virtue of Section 4(1) of Benami Property act. Hon’ble Supreme Court allowed the suit and declared Mr. A as owner of said properties on basis of exception craved by Section 4(3) holding that source from where the purchase money came and the motive why the property was purchased benami are by far the most important tests for determining whether the sale standing in the name of one person, is in reality for the benefit of another.[2]

 

(I)                 6 circumstances which can be taken as a guide to determine the nature of the transaction:

 

(a)        the source from which the purchase money came;

(b)        the nature and possession of the property, after the purchase;

(c)         motive, if any, for giving the transaction a benami colour;

(d)        the position of the parties and the relationship, if any, between the claimant and the alleged benamidar;

(e)        the custody of the title deeds after the sale; and

(f)          the conduct of the parties concerned in dealing with the property after the sale. (Jaydayal Poddar v. Bibi Hazra [(1974) 1 SCC 3] , SCC p. 7,

 

(II)              The above indicia are not exhaustive and their efficacy varies according to the facts of each case. Nevertheless, the source from where the purchase money came and the motive why the property was purchased benami are by far the most important tests for determining whether the sale standing in the name of one person, is in reality for the benefit of another.


[1] Advocate, Delhi High Court [LLB, ACS, BCOM(H)], Budhirajalawchambers@gmail.com,  +011-45059142

[2] CIVIL APPEAL NO. 4078 OF 2022, 05/09/2022

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