Etymology: Literally the word
Benami, used in legal terminology, is a Persian compound word Be (without) +
Nami (Name) that means "without name" or "no name". Benamidar means having
benami transfer in one’s name. The word is used to define a transaction in which
the real beneficiary is not the one in whose name the property is purchased. As
a result, the person in whose name the property is purchased is just a mask of
the real beneficiary. In other words it can be said benamidar, an ostensible
owner or Benami sale ostensible sale.
Technically “benami transaction” means a transaction or arrangement where a
property is transferred to, or is held by, a person for a consideration
provided, or paid by, another person. Under NAB Ordinance, 1999, a benamidar
means any person who ostensibly holds or is in possession or custody of any
property of an accused on his behalf for the benefit and enjoyment of the
In different Pakistan Laws the Benami transactions are protected and as such are
fully supported and recognized, except in few fresh legislation it is going to
put a few restrictions and make such transactions liable to legal consequences.
We may find a clue in the following lines by discussing different existing laws
one by one.
The Trust Act 1882 section 82,
82. Transfer to one for consideration paid by another - Where property is
transferred to one person for a consideration paid or provided by another
person, and it appears that such other person did not intend to pay or provide
such consideration for the benefit of the transferee, the transferee must hold
the property for the benefit of the person paying or providing the
[Nothing in this section shall affect the provisions of the Code of Civil
Code of Civil procedure Section 66 reads as:
66. (l) No suit shall be maintained against any person claiming title under a
purchase certified by the Court in such manner as may be prescribed on the
ground that the purchase was made on behalf of the plaintiff or on behalf of
someone through whom the plaintiff claims.
(2) Nothing in this section shall bar a suit to obtain a declaration that the
name of any purchaser certified as aforesaid was inserted in the certificate
fraudulently or without the consent of the real purchaser, or interfere with the
right of a third person to proceed against that property, though ostensibly sold
to the certified purchaser, on the ground that it is liable to satisfy a claim
of such third person against the real owner,
Transfer of Proper Act, 1882 deals with the ostensible owner as under:
41. Transfer by ostensible owner. Where, with the consent, express or implied,
of the persons interested in immovable property, a person is the ostensible
owner of such property and transfers the same for consideration, the transfer
shall not be voidable on the ground that the transferor was not authorised to
Provided that the transferee, after taking reasonable care to ascertain that the
transferor had power to make the transfer, has acted in good faith.
Proof of transaction to be a benami: Where any party asserts that the
transaction in the name of certain other person is a benami transaction, lies
upon him to prove it to be benami transaction/sale. under Article 118 of the
Qanun-e-Shahadat Order 1984, it is provided that if no evidence is lead the onus
of proof lies upon the one who fails this proposition is also known as onus
probandi. The apex courts of Pakistan has usually considered the following
points to ascertain whether the transaction is Benami one or otherwise.
• The source of income of the purchaser, to raise certain property.
• From whose custody the original title deed, bill and other documents came in
• Who is in possession of the suit property.
• What was the motive of benami transaction.
• Conduct of both parties regarding property in question.
In different countries the legislators have felt that this type of transactions
must be banned thus india has also took steps to ban such transactions and
declare it to be illegal. Thus the Benami Transactions (Prohibition) Act, 1988
was enacted by the Parliament which came into force on 19 May 1988 which was
restricted to the state of Jamu and Kashmir only. However, due to various
deficiencies in the Act, the rules required for operationalizing the Act were
not framed. To address these deficiencies, several years later, in 2011, the
Govt of India introduced "Benami Transactions (Prohibition) Bill, 2011".Purpose
It is the need of hour to defeat the face masks of criminals and culprits who
are otherwise using the proposition of benami to disguise the real source of
income and to convert black money to white money with a view to prevent law
enforcement agencies to clutch them. Though the Pakistan Law and Justice
Commission is currently working on Regulating the benami transaction, it
requires to be completed expeditiously and an effective law may be promulgated.
In the present scenario and observations of the Honourable Supreme court, in
Karachi Be-Amni suo motu Case, that the black money of Narcotics, real estate,
money laundering, weapons are being used in terrorism also. This fact draws
attention to an alarming situation and to bring an effective legislation to curb
the menace of the terror, narco and monetary crimes.