C NARAYANAN Vs. GANGADHARAN

JUDGEMENT

(1.) The defendant in O.S. No. 349/83 on the file of the Subordinate Judge, Palghat is the revision petitioner.

(2.) The respondent instituted the suit for recovery of the property in dispute on the strength of title. The suit has been decreed, accepting the case of the plaintiff that the property belongs to him although it stands in the name of the petitioner-defendant. The petitioner-defendant has been found to be only a benamidar. A reference in this connection to the following excerpts from the judgment of this Court in Narayanan v. Gangadharan, (1988) 1 Ker LJ 601 : (1988) 1 Ker LT 933, (by this judgment this Court disposed of the appeal where the decree sought to be executed was under attack) is relevant.

(3.) Section 82 of the Trusts Act gives statutory recognition to benami transactions. In a transaction covered by this section the transfree holds the property for the benefit of the person paying or providing the consideration. It therefore follows that when once it is proved that the consideration for the transaction flowed from a person other than the transferee, than that person who provided the consideration and not the transferee, is the real owner of the property. A benami transaction does not vest any title in the benamidar but vests the title in the real owner. It is true that when the benamidar is in possession of the property standing in his name, he is in one way a trustee for the real owner, "he is only a name lender or an alias for the real owner." That is why it is always said that "where a transaction is once made out to be a mere benami, it is evident that the benamidar absolutely disappears from the title. His name is simply an alias for that of the person beneficially interested." The Supreme Court further observed that the cardinal distinction between a trustee known to English law and a benamidar lies in the fact that a trustee is the legal owner of the property standing in his name and cestui quo trust is only a beneficial owner, whereas in the case of a benami transaction the real owner has got the legal title although the property is in the name of the benamidar. It is by now a well settled proposition that the real owner can always deal with the property without reference to the benamidar.