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Report No. 57

1.5. Meaning of 'benami transaction'.-

Purchase or holding of properties in the name of another is known, in India, as a benami transaction. This custom has been recognised by Indian Courts for a long-time. Literally, the word "benami" means 'without name'. The essential legal characteristic of these transactions is that there is no intention to benefit the person in whose name the transaction is made. The name of that person, popularly known as the 'benamidar', as the Privy Council pointed out,1-2 is simply an alias for that of the person beneficially interested. The benamidar has the ostensible title to the property standing in his name; but the beneficial ownership of the property does not vest in him but in the real owner.

1. Pether Perumal v. Muniandy, 1908 ILR 35 Cal 551 (558) (Privy Council).

2. Gurnarain v. Sheolal, AIR 1918 PC 140.

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