The document discusses the Benami Transactions (Prohibition) Amendment Bill, 2015, which seeks to amend the Benami Transactions Act of 1988. The key points are: 1) The Bill aims to amend the definition of benami transactions, establish authorities to deal with such cases, and specify penalties. 2) A benami transaction is one where a property is held under a false name, with the real owner denying knowledge or being untraceable. 3) Certain exemptions like HUF properties are specified. Penalties for benami transactions and false information are increased. 4) Adjudicating authorities and an Appellate Tribunal will be set up to examine cases and hear appeals against confiscating

1. Kalpeshkumar L Gupta
Assistant Professor of Law
kalpesh.gupta@aurouniversity.edu.in
2016
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2. What does word Benami means?
Benami word is originated from Persia which means “No
Names” or “Without Name”
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3. Objectives of Act
An act to prohibit be benami transactions and the right to
recover property held benami and for matters connected
therewith or incidental thereto.
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4. Benami Transaction (Section 2(a))
…means any transaction in which property (2(c)) is
transferred to one person for a consideration paid or
provided by another person.
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5. Property (Section 2(c))
….means property of any kind, whether movable or
immovable, tangible or intangible and includes any rights
or interest in such property.
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6. Prohibition of benami transaction (Section 3)
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 upto 3 years or with fine
or both.
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Cont…

7. Plea of benami transaction whether heritable by heirs
of real owner.
An ostensible owner does not hold any interest or title over
the property in a benami transaction. The title lies with the
real owner. Upon his death, necessarily the property remains
as an estate of real owner and becomes liable for inheritance
according to law of succession governing the parties.
…the heirs of benamidar do have a legal right to set up a plea
of benami and to claim the property from the ostensible
owner (T. Jayamma v/s. Devamma, AIR 2004 Kant. 96).
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Cont…

8. Prohibition of the right to recover property
held benami (Section 4)
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 real
owner of such property.
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9. Property held benami liable to acquisition
(Section 5)
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 doubt, it is hereby declared that
no amount shall be payable for the acquisition of any
property under sub-section (1).
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10. Act not to apply in certain cases (Section 6)
Nothing in this act shall affect the provisions of Section
53 of the Transfer of Property Act, 1882 (Fraudulent
Transfer) or any law relating to transfer for an illegal
purpose.
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11. Power to make rules (Section 8)
Central Govt. may by notification in the official gazette, make
rules for carrying out the purpose of this Act.
Rules may provide for
- The authority competent to acquire properties under Sec.
5.
- The manner in which, and the procedure to be followed for
the acquisition of properties under Sec. 5.
- Any other matter which is required to be or may be
prescribed.
Rules not made till date 
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12. Changes in Benami Act will block black money in realty
(The Economics Times, March 13, 2015)
Govt. proposed amendment to Benami Transaction Act
will enable confiscation of such property, prosecution of
offenders as also help deal effectively with the menace of
black money within the country.
Earlier in 2011 new bill was introduced replacing old act
but bill lapses as 15th Loksabha dissolved. Property can be
transferred to Spouse/Siblings.
Budget proposed amendment in Income Tax Act to
prohibit “acceptance or payment of advance of Rs.
20,000 or more in cash for purchase of immovable
property.
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13. Benami definition to go stricter, may include only wife,
unmarried daughter
(The Economics Times, March 21, 2015)
The new law is likely to say that
property acquired in the name of any
other person —brother, sister, father,
mother, son —risks being confiscated
and would lead to jail time.
The legislation will lead to confiscation
of benami property and provide a
mechanism for this. The Benami
Transaction (Prohibition) Act was first
enacted in 1988 but has not been
notified due to some infirmities. Rules
under that law were never framed.
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14. The Benami Transactions (Prohibition) Amendment
Bill, 2015
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The Benami Transactions (Prohibition) Amendment Bill, 2015
cleared by cabinat. The Bill seeks to amend the Benami
Transactions Act, 1988. The Act prohibits benami
transactions and provides for confiscating benami
properties. *
* Economic Times, May 13, 2015
http://economictimes.indiatimes.com/news/politics-and-nation/cabinet-clears-bill-to-check-benami-
transactions-aimed-at-curbing-domestic-black-money/articleshow/47262290.cms

15. The Benami Transactions (Prohibition) Amendment
Bill, 2015
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The Bill seeks to:
(i) amend the definition of benami transactions,
(ii) establish adjudicating authorities and an Appellate
Tribunal to deal with benami transactions, and
(iii) specify the penalty for entering into benami
transactions.

16. The Benami Transactions (Prohibition) Amendment
Bill, 2015
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The Act defines a benami transaction as a transaction where a
property is held by or transferred to a person, but has been
provided for or paid by another person.
The Bill amends this definition to add other transactions which
qualify as benami, such as property transactions where: (i) the
transaction is made in a fictitious name, (ii) the owner is not
aware of denies knowledge of the ownership of the property,
or (iii) the person providing the consideration for the property
is not traceable.

17. The Benami Transactions (Prohibition) Amendment
Bill, 2015
17
The Bill also specifies certain cases will be exempt from the
definition of a benami transaction.
These include cases when a property is held by:
(i) a member of a Hindu undivided family, and is being held
for his or another family member’s benefit, and has been
provided for or paid off from sources of income of that
family;
(ii) a person in a fiduciary capacity;
(iii) a person in the name of his spouse or child, and the
property has been paid for from the person’s income;

18. The Benami Transactions (Prohibition) Amendment
Bill, 2015
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The Bill defines benamidar as the person in whose name
the benami property is held or transferred, and a beneficial
owner as the person for whose benefit the property is being
held by the benamidar.

19. The Benami Transactions (Prohibition) Amendment
Bill, 2015
19
Initiating
Officer
Approving
Authority
Administrator
Adjudicating
Authority
Appellate
Tribunal

20. The Benami Transactions (Prohibition) Amendment
Bill, 2015
20
If an Initiating Officer believes that a person is a benamidar,
he may issue a notice to that person. The Initiating Officer
may hold the property for 90 days from the date of issue of
the notice, subject to permission from the Approving
Authority. At the end of the notice period, the Initiating
Officer may pass an order to continue the holding of the
property.

21. The Benami Transactions (Prohibition) Amendment
Bill, 2015
21
If an order is passed to continue holding the property, the
Initiating Officer will refer the case to the Adjudicating
Authority. The Adjudicating Authority will examine all
documents and evidence relating to the matter and then pass
an order on whether or not to hold the property as benami.

22. The Benami Transactions (Prohibition) Amendment
Bill, 2015
22
Based on an order to confiscate the benami property, the
Administrator will receive and manage the property in a
manner and subject to conditions as prescribed.

23. The Benami Transactions (Prohibition) Amendment
Bill, 2015
23
The Bill also seeks to establish an Appellate Tribunal to hear
appeals against any orders passed by the Adjudicating
Authority. Appeals against orders of the Appellate Tribunal will
lie to the high court.

24. The Benami Transactions (Prohibition) Amendment
Bill, 2015
24
Under the Act, the penalty for entering into benami
transactions is imprisonment up to 3 years, or a fine, or
both. The Bill seeks to change this penalty to rigorous
imprisonment of one year up to seven years, and a fine
which may extend to 25% of the fair market value of the
benami property.

25. The Benami Transactions (Prohibition) Amendment
Bill, 2015
25
The Bill also specifies the penalty for providing false
information to be rigorous imprisonment of six months up to
five years, and a fine which may extend to 10% of the fair
market value of the benami property.

26. The Benami Transactions (Prohibition) Amendment
Bill, 2015
26
Certain sessions courts would be designated as Special
Courts for trying any offences which are punishable under
the Bill.

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