In a major decision by the Delhi High Court, a man will retain the ownership of the purchased property even if it is bought in the name of his spouse. However, the purchase has to be done through known sources of income. In an observation by Justice Valmiki J Mehta, it was stated that the property would belong to the man and not the wife in whose name the title deeds exist. The observation was made by Justice Mehta while setting aside a trial court order which said that the man cannot claim ownership of a property purchased in his wife’s name, as it is barred under the Benami Transactions Act. According to The Indian Express, 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 Act 2016.
The Delhi High Court said that it was to be proved during the trial that whether the property was purchased through known or unknown sources of income. It couldn’t be dubbed benami if the husband bought it in his wife’s name.
The HC termed the trial court decision as “unfortunate” and maintained that court has committed a “grave and fundamental error in rejecting the suit” filed by the husband. It also said that the trial court ignored the fact that the previous Act was not applicable anymore.
The Delhi HC in its judgement said that as per the suit plaint or averments, in the present case the existence of the properties in the name of the respondent or defendant or wife will fall as an Exception to the prohibited benami transaction in view of Section 2(9)(A)(b) Exception (iii) in as much 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.