Evolution of Jurisprudence on Law of Benami Transactions in India

Benami Transactions are dealings in which consideration for the property is provided by one person and the said property is held in the name of another person i.e. Benamidar. However, there is no intention on part of the real owner (the person who provided the consideration) to transfer any kind of beneficial interest or possession to the Benamidar. Benamidar serves merely as an alias whereas the actual control is exercised by the real owner. Nowadays, Benami transactions are entered into to evade taxes, unjustly enjoy social support schemes that are available to certain members of the society or to defraud creditors. As a result, Benami transactions have become a major source of corruption and a source of black money in India. In an attempt to curb this issue, the Central Government in August 2016 passed, The Benami Transactions (Prohibition) Amendment Act, 2016 prohibiting Benami transactions and providing enforcement machinery for the same. This paper attempts to provide an analysis of the evolution of law relating to Benami transactions in India, beginning from the time when Benami transactions were legal in India to Amendment Act in 2016 prohibiting them completely