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BENAMI
TRANSACTION ACT
5TH September, 1988
ACT, 1988
(45 OF 1988) |
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An act to prohibit benami transactions and the right to
recover property held benami for matters connected therewith or
incidental thereto
Be it enacted by Parliament in the Thirty ninth year of the public
of India as follows:-
1. Short, title, extent and commencement. (1) This act may
be called the Benami Transactions (Prohibition) Act, 1988.
2. It extends to the whole of India except the state of Jammu and
Kashmir.
3. The provisions of sections 3, 5 and 8 shall come in to
force of once, and the remaining provisions of this act shall be
deemed to have come in to force on the 19th day of May, 1988.
2. Definitions :- In this act, unless the context otherwise
requires:- |
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(a) “Benami Transaction” means any transaction in which property
is transferred to one person for a consideration paid or provided
by another person.
(b) “Prescribed” means prescribed by ruled made under this act.
(c) “Property” means property of any kind, whether movable or
immovable, tangible or intangible, and includes any right or
interest in such property.
3. Prohibition of benami transactions: - (1) person shall
enter in to any benami transaction.
(2) nothing in sub section (1) shall apply to :-
(a) 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;
(b) the securities held by a:
(i) depository as registered owner under subsection (1) of section
10 of the Depositories Act, 1996
(ii) Participant an s an agent of a depository.
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Explanation: - The expressions “depository” and “participants
shall have the meanings respectively assigned to them in clauses
(e) and (g) of subsection (1) of section 2 of the depositories
Act, 1996.
(3) Whoever enters in to 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 (2 of 1974), an offence under this section shall
be non cognizable and bailable.
4. Prohibition of the right of recover property held benami :-
(1)No suit, claim or action of 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, 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.
5. Property held benami liable to acquisition :- (1) All
properties held benami shall be subject to acquisition by such
authority, in such manner and after following such procedure, as
may be prescribed.
(2) For the removal of doubts, it is hereby declared that on
amount shall be payable for the acquisition of any property under
sub section (1).
6. Act not to apply in certain cases:- Nothing in this Act
shall affect the provisions of section 53 of the Transfer of
Property Act, 1882 (4 of 1882), or any law relating to transfer
for an illegal purpose.
7. Repeal of provisions of certain Acts. :- (1) Section 81,
82 and 94 of the Indian Trusts Act, 1882 (2 of 1882), section 66
of the code of civil Procedure, 1908 (5 of 1908), and section 281A
of the income tax Act, 1961 (43 of 1961), are hereby repealed.
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(2) For the removal of doubts, it is hereby
declared that nothing in subsection (1) shall affect the continued
operation of section 281A of the Income Tax Act, 1961 (43 of
1961), in the state of Jammu and Kashmir.
8. Power of make rules:- (1) The central Government
may, by notification in the Official Gazette, make rules for
carrying out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the
foregoing power, such rules may provide for all or any of the
following matters, namely:-
(a) the authority competent to acquire properties under section 5;
(b) the manner in which, and the procedure to be followed for ,
the acquisition of properties under section 5;
(c) any other matter which is required to be, or may be,
prescribed.
(3) Every rule made under this act shall be laid, as soon as may
be after it is made, before each House of Parliament, while it is
in session for a total period of thirty days which may be
comprised in one session or in two or more successive sessions,
and if, before the expiry of the session immediately following the
session or the successive session aforesaid, both Houses agree in
making any modification in the rule or both Houses agree that the
rule should not be made, the rule shall thereafter have effect
only in such modified form or be of no effect, as the case may be;
so, however, that any such modification or annulment shall be
without prejudice to the validity of anything previously done
under that rule.
9. Repeal and saving :- (1) The Benami Transaction
(Prohibition of the Right to Recover Property) Ordinance, 1988
(Ordinance 2 of 1988), is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken
under the said Ordinance shall be deemed to have been done or
taken under the corresponding provisions of this Act.
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