In a landmark ruling on the Benami Transactions (Prohibition) Act, the Supreme Court has declared that individuals claiming ownership of benami properties cannot pursue civil or criminal proceedings against the nominal owners. This decision was delivered by Justices BR Gavai and Sandeep Mehta.
The Court emphasized that under Sections 4(1) and 4(2) of the Benami Act, any individual who has made investments in property under someone else’s name cannot file a civil lawsuit to recover the property. This statutory bar extends to criminal proceedings as well.
The case at hand involved a respondent who purchased property in the name of the appellant due to her employment in the government sector. Despite financing the purchase, the property was registered in the appellant’s name. When a dispute over profits arose, the respondent lodged a criminal complaint under Sections 406 and 420 of the IPC, alleging that her share of the profits was not returned.
However, the Supreme Court ruled that the Benami Act explicitly prohibits such actions. The ruling stated, “Since the complainant is barred from suing the accused for a civil wrong regarding these benami transactions, it logically follows that criminal prosecution on the same grounds is also impermissible.”
This judgment reaffirms that the legal framework of the Benami Act prevents both civil and criminal claims on the same set of facts regarding benami properties. Consequently, the criminal proceedings initiated against the appellant were quashed, reinforcing the comprehensive prohibition outlined in the Benami Act.
