A Division bench of Kerala HC has recently re-affirmed the views of SC in landmark judgment of Java Dayal Peddar vs. Bibi Hazra, & held that The intention of the parties is a key factor in determining the nature of the transaction, which could be gathered from the relationship between parties, their conduct previous and subsequent to the transaction.
Facts
CC Joy (Appellant) had an illicit relation with his employee and has child with her. Later the same child was brought to home under the guise that the child was up for adoption. However upon coming to know the illicit relationship of her husband the wife filed for divorce. During subsistence of their marriage, several properties were acquired by them jointly and severally and after their separation. Both the parties filed for declaration that they were the beneficial owner and the opposite party was only a name lender in the property transaction & subsequently claimed injunction each other. The family court dismissed the plea for the same& dissolved their marriage.
Challenging this order husband filed matrimonial appeal before the Kerala HC.
Contention Made
Appellant (Husband): Those properties for his own benefit and not for the benefit of his wife. So, according to him, even if some properties stand in the name of Smt.Mini also, she has no right, title or interest over any of those properties, and she was only a name lender in the respective documents.
Respondent (wife): those properties for her own benefit, and not for the benefit of Sri.Joy. So, their contention is that the properties were purchased in 'benami' in the name of their spouse, and since the spouse being only a name lender and trustee, he/she will not get any right, title or interest over those properties.
Court Observation
The division bench observed the meaning, nature & essentials of the ‘Benami Transaction’:
Benami transfer or transaction means the transfer by or to a person who acts only as an ostensible owner in place of the real owner, whose name is not disclosed.
Further the bench re-affirmed the view of The Hon'ble Supreme Court in Java Dayal Peddar vs. Bibi Hazra (AIR 1974 Supreme Court 171) laid down the following tests to determine whether a transaction is benami or not.
- The source from which the purchase money came.
- The nature, motive and possession of the property after the purchase.
- The position of the parties and the relationship, if any, between the claimant and the alleged Benamidar& the custody of the title-deeds after the sale, and
- The conduct of the parties concerned in dealing with the property after the sale.
Court Judgment
When husband purchases property joining his wife as a name lender in the title document, , it cannot be said that the purchase was for the benefit of the wife, when there is clear evidence to prove the benami nature of the transaction. But when there is evidence to show that the husband purchased the property or executed document in favour of his wife, unless the contrary is proved, it will be treated as the property of the wife purchased for her benefit.
The intention of the parties is a key factor in determining the nature of the transaction, which could be gathered from the relationship between parties, their conduct previous and subsequent to the transaction, source of money for purchase, possession of the property, possession of the title documents, repayment of loan, etc.
Hence, all the matrimonial appeals has been disposed off & allowed by the HC.
Case: C.C Joy v. C.D Mini & Anr.
Citation: Mat. App. No. 242 of 2012.
Bench: Justice A.Muhamed Mustaque & Justice Sophy Thomas
Decided on: 13th June, 2022
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