Benami prohibition does not bar land reform authorities from examining the true character of a transfer.

The statutory bar in section 4 of the Benami Transactions (Prohibition) Act, 1988 prevents a real owner from asserting benami claims against an ostensible owner, but it does not stop a third party from contending that the apparent transferee is only a benamidar. Read with sections 22 and 23 of the Orissa Land Reforms Act and the analogous protective provisions in Regulation 2 of 1956, the competent land reform authority may examine the true character of the transfer to determine whether it is hit by the statutory prohibition. The revisional authority's contrary view was held erroneous, and the matter was remanded for findings on the sale deed and further action according to law.

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Issues: Whether the revenue authorities under the Orissa Land Reforms Act had jurisdiction to determine the real character of the transfer and decide whether the apparent purchaser was only a benamidar, notwithstanding the Benami Transactions (Prohibition) Act, 1988.

Analysis: The prohibition under section 4 of the Benami Transactions (Prohibition) Act, 1988 bars a suit, claim, action, or defence by the real owner against the ostensible owner, but it does not bar a third party from asserting that the apparent transferee is only a benamidar. The scheme of sections 22 and 23 of the Orissa Land Reforms Act, read with the analogous protective provisions in Regulation 2 of 1956, requires the competent authority to examine the real character of the transaction and determine whether the transfer was in substance made in favour of a person hit by the statutory prohibition.

Conclusion: The Orissa land reforms authorities had jurisdiction to enquire into the benami nature of the transfer, and the revisional authority erred in holding otherwise. The order of the revisional authority was quashed and the matter was remanded for a finding on the nature of the sale deed and further action in accordance with law.

Ratio Decidendi: The statutory bar against benami claims under the Benami Transactions (Prohibition) Act, 1988 does not prevent a statutory authority from determining the true nature of a transfer where such determination is necessary to enforce the transfer restrictions under the relevant land reform law.

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