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What makes a transaction benami under the law?

PLJ 2010 SC 846 · Lahore High Court

This Supreme Court case involved a husband and wife, Ghulam Murtaza and Asia Bibi, who jointly purchased several properties during their marriage, some of which were later transferred into the wife's name. After the couple separated, the wife sued claiming ownership of the properties, while the husband filed competing suits arguing that his wife was merely a "benami," meaning she held the properties only in name while he was the true owner because he had paid for them. The trial court and first appellate court agreed with the husband, but the Lahore High Court reversed those decisions, finding the evidence had been misread. The Supreme Court upheld the High Court's ruling.

The Court explained that a transaction is not automatically "benami" just because one person paid the money while property was registered in someone else's name. Key factors include the source of funds, who holds the title documents, who possesses and controls the property, and most importantly, the motive behind the arrangement. If a person deliberately places property in another's name intending genuinely to transfer ownership, it is not benami, even if that person provided the money. The Court found the husband failed to prove his wife was a benami titleholder, especially since she managed the properties and paid for one deed herself. The judgment matters because it clarifies that spouses cannot later claim sole ownership of jointly acquired property simply because a relationship breaks down, protecting the genuine intentions behind family property arrangements.

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