In a major to blow to Benaami property, the Delhi High Court has ruled that property bought by husband in wife’s name with valid funding will not be considered as Benaami. This ruling came after the court set a trial on the same issue aside and said that a property cannot be said as benaami until insufficient or valid source of income for purchasing the same is not produced in the court and thus a husband cannot be dubbed benami for buying property in his wife’s name.
Justice Valmiki J Mehta was quoted saying, “In the present case, the existence of the properties in the name of the wife will fall as an exception to the prohibited benami transaction as it is legally permissible for a person to purchase an immovable property in the name of his spouse from his known sources”.
According to a clause of Section 2 of the amended Prohibition of Benami Property Transactions Act, 1988, the High Court stated that any property purchased will not be titled as benaami but husband will be the actual owner of the property despite the fact that property is entitled on to the wife’s name in the documents.
This ruling came as High Court was hearing the case filed by Manoj, a husband against the decision of the lower court for rejecting his plea in which he sought injunctions and certain other relief in regard with two other properties in Moti Nagar and Gurgaon localities.
Advocate Sufian Siddiqui, Manoj’s lawyer also argued that Benaami law despite being an exception the trial court rejected the plea for considering these properties as benaami even after producing evident proof of using valid funds by the owner to purchase the same.
The High court also termed this rejection as unfortunate and said that the lower court had “committed a grave and fundamental error in rejecting the suit” by considering the repealed clauses of the Benami Transactions [Prohibition] Act at the time of passing judgment in 2016.
Advocate Siddiqui welcomed the judgment and said that this decision will restore the confidence as the owners sometimes feel examined by the authorities for owning benaami property.