THE BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988 (45 OF 1988)[1]
THE
BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988
An
Act to prohibit benami transactions and the right to recover properly held
benami and for matters corrected therewith or incidental thereto.
Be
it enacted by Parliament in the Thirty-ninth Year of the Republic of India as
follows:-
1.
Short title, extent and commencement-
(1) This Act may be called the Benami Transactions (Prohibition) Act, 1988.
(2)
It extends to the whole of India except the State of Jammu and Kashmir.
(3)
The provisions of sections 3, 5 and 8 shall come into force at once, and the
remaining provisions of this Act shall be deemed to have come into force on the
19th day of May, 1988.
2.
Definitions- In this Act, unless the
context otherwise requires,--
(a)
benami transaction means any transaction in which property is transferred to
one person for a consideration paid or provided by another person;
(b)
prescribed means prescribed by rules made under this Act;
(c)
property means property of any kind, whether movable or immovable, tangible or
intangible, and includes any right or interest in such property.
3.
Prohibition of benami transactions-
(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 of the unmarried daughter.
(3)
Whoever enters into any benami transaction shall be punishable with
imprisonment for a term which may extend to three years or with fine or with
both.
(4)
Notwithstanding anything contained in the Code of Criminal Procedure, 1973, an
offence under this section shall be non-cognizable and bailable.
4.
Prohibition of the right to recover property held benami- (1) 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 the real owner of such property.
(2)
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 suit, claim or action by or on behalf of a person
claiming to be the real owner of such property.
(3)
Nothing in this section shall apply,-
(a)
where the person in whose name the property is held is a coparcener in a Hindu
undivided family and the property is held for the benefit of the coparceners 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.
5.
Property of benami liable to
acquisition- (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 doubts, it is hereby declared that no amount shall be
payable for the acquisition of any property under sub-section (1).
6.
Act not to apply in certain cases-
Nothing in this Act shall affect the provisions of section 53 of the Transfer
of Property Act, 1882 (4 of 1882.), or any law relating to transfer for an
illegal purpose.
7.
Repeal of provisions of certain Acts-
(1) Sections 81, 82 and 94 of the Indian Trusts Act, 1882 (2 of 1882.), section
66 of the Code of Civil Procedure, 1908 (5 of 1908.) and section 281A of the
Income-tax Act, 1961 (43 of 1961.), are hereby repealed.
(2)
For the removal of doubts, it is hereby declared that nothing in sub-section
(1) shall affect the continued operation of section 281A of the Income-tax Act,
1961 (43 of 1961.) in the State of Jammu and Kashmir.
8.
Power to make rules- (1) The Central
Government may, by notification in the Official Gazette, make rules for
carrying out the purposes of this Act.
(2)
In particular, and without prejudice to the generality of the foregoing power,
such rules may provide for all or any of the following matters, namely:-
(a)
the authority competent to acquire properties under section 5;
(b)
the manner in which, and the procedure to be followed for, the acquisition of
properties under section 5;
(c)
any other matter which is required to be, or may be, prescribed.
(3)
Every rule made under this Act shall be laid, so soon as may be after it is
made, before each House of Parliament, while it is in session for a total period
of thirty days which may be comprised in one session or in two or more
successive sessions, and if, before the expiry of the session immediately
following the session or the successive sessions aforesaid, both Houses agree in
making any modification in the rule or both Houses agree that the rule should
not be made, the rule shall thereafter have effect only in such modified form
or be of no effect, as the case may be; so, however, that any such modification
or annulment shall be without prejudice to the validity of anything previously
done under that rule.
9.
Repeal and saving- (1) The Benami
Transactions (Prohibition of the Right of Recover Property) Ordinance, 1988
(Ord.2 of 1988.) is hereby repealed.
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