Report No. 57
In the light of the above discussion, we recommend the enactment of a separate law containing the following legislative provisions:-
"1(1) No suit 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 be instituted in any court by or on behalf of a person claiming to be the real owner of such property.
(2) In any suit, 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, shall be allowed in any court by or on behalf of a person claiming to be the real owner of such property.
(3) Nothing in this section shall apply-
(a) whether the person in whose name the property is held is a manager of, or a co-parcener in, a Hindu undivided family, and the property is held for the benefit of the co-parceners 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.
2. The following provisions are hereby repealed, namely,-
(a) section 82 of the Indian Trusts Act, 1882;
(b) section 66 of the Code of Civil Procedure, 1908;
(c) section 281A of the Income-tax Act, 1961.
3. Nothing in this Act shall-
(a) affect the provisions of section 53 of the Transfer of Property Act, 1882, or the law relating to transfers for an illegal purpose, or
(b) apply in relation to any property held benami at the commencement of this Act."
This Report has not been signed by Mr. Justice V.R. Krishna Iyer. When the draft of the Report was fully discussed and approved by the Commission, Mr. Justice Iyer was a Member of the Law Commission and participated in the discussions. However, before the Report, as finalised and approved, could be typed for the signatures of the Members of the Commission, Mr. Justice Iyer left the Commission to join the Supreme Court. He has authorised us to state that he fully agrees with the approach and recommendations of the Report.
We desire to place on record our warm appreciation of the valuable assistance, to have received from Mr. Bakshi, Member-Secretary of the Commission, in the preparation of this Report. At all stages of the study of this problem, Mr. Bakshi took an active part in our deliberations.
P.B. Gajendragadkar, Chairman.
P.K. Tripathi, Member.
S.S. Dhavan, Member.
S.P. Sen-Varma, Member.
P.M. Bakshi, Member-Secretary.
Dated: 7th August, 1973.