Burden of Proof in Benami Transactions: “Burden lies upon the person asserting it,” says the Calcutta High Court

In a significant ruling, the Calcutta High Court affirmed the dismissal of a suit in a land dispute case, shedding light on the critical aspect of burden of proof in benami transactions. The court, in its judgment delivered by Hon’ble Justice Partha Sarathi Chatterjee and Hon’ble Justice Tapabrata Chakraborty, underlined the necessity of concrete evidence when asserting a benami transaction.

The court emphasized that the burden of proving a benami transaction rests upon the person asserting it. Quoting from the judgment, the court stated, “It is well settled that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it... The reason is that a deed is a solemn document prepared and executed after considerable deliberation, and the person expressly shown as the purchaser in the deed starts with the initial presumption in his favor that the apparent state of affairs is the real state of affairs.”

The case revolved around a property purchased by the plaintiff’s father in the name of his mother, who was alleged to be a mere name-lender. However, the plaintiff failed to present substantial evidence to support this claim, resulting in the dismissal of the suit. The court stressed the importance of tangible proof regarding the source of funds, payment of consideration money, and the intent of the alleged name-lender.

The judgment highlighted the significance of the intention of the party supplying the consideration money in determining a benami transaction. The absence of conclusive evidence and the failure to establish the true nature of the transaction weakened the plaintiff’s case.

In evaluating the legal framework surrounding benami transactions and property inheritance, the court referred to the Benami Transaction (Prohibition) Act, 1988, and the Hindu Succession Act, 1955.

This ruling serves as a reminder that meeting the burden of proof is crucial in disputes involving benami transactions. It underscores the need for solid evidence to substantiate allegations and emphasizes the pivotal role of intention in determining the true nature of property transactions.

Date of Decision: 7th June, 2023

Sri Sekhar Kumar Roy  vs  Smt. Lila Roy & Another