The Delhi High Court has held that if a person has purchased property in the name of his spouse from his known sources of income, he will be the owner, and not the wife in whose name the title deeds exist.
Justice Valmiki J Mehta made the observation while setting aside a trial court order, which ruled that the man cannot claim ownership of a property purchased in his wife’s name, as it is barred under the Benami Transactions (Prohibition) Act.
Advocate M Sufian Siddiqui, appearing for the man, said that the properties purchased by the husband at Delhi and Gurgaon were from his known sources of income, and did not fall under the definition of benami property, post amendment of the Act in 2016.
The HC agreed with the man’s contention and observed, “Unfortunately, the trial court has committed a grave and fundamental error in rejecting the suit” filed by the husband. It said the trial court ignored the fact that the previous Act was not applicable anymore.
“… As per the suit plaint/averments, in the present case the existence of the properties in the name of the respondent/defendant/wife will fall as an Exception to the prohibited benami transaction in view of Section 2(9)(A)(b) Exception (iii) inasmuch as it is legally permissible for a person to purchase an immovable property in the name of his spouse from his known sources, and in which position, the property purchased will not be a benami property but the property will be of the de jure owner/plaintiff/husband and not of the de facto owner (in whose name title deeds exist), being the respondent/defendant/wife in the present case,” it said.
The HC directed the trial court to decide afresh on whether the husband will have the benefit of the Act’s amendments.