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Report No. 57

5.4. Statutory provisions reinforcing benami.-

There are statutory provisions-(i) re-inforcing benami, or (ii) modifying it, or (iii) of a special nature. The Indian Trusts Act1 contains a general provision, under which, where property is transferred to one person for a consideration paid or provided by another person, and it appears that such other person did not intend to provide such consideration for the benefit of the transferee, the transferee must hold the property for the benefit of the person who paid or provided the consideration. The effect of this provision is to re--inforce the doctrine of benami.

A "resulting trust" arises in such cases; and it is not readily rebutted-as in England-by the presumption of advancement where the transfer is in favour of the wife or child of the person who provided the consideration. Rather, where the transfer is in favour of the wife or child, the courts are more ready to give effect to this provision (of the Trusts Act) than in other cases.

1. Section 82, Trusts Act.

Benami Transactions Back

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