Benami property claims fail where company-owned land lacks strict proof of name-lending and attachment becomes unsustainable.

A company holding property in its own name cannot be treated as a benamidar merely because promoters or shareholders funded it or later transferred shares, since the company is a distinct juristic person and its assets are not the shareholders' assets. Strict proof of a benami transaction is required, and shifting statements alone are insufficient. Where land was resumed under the Rajasthan Land Revenue Act, converted to commercial use, and a registered lease deed was issued to the company, the attachment could not be sustained against the property as benami property. The benami proceedings, attachment, and confirmation orders were therefore quashed and the property was ordered to be restored to the company.

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Issues: (i) Whether a company holding property in its own name can be treated as a benamidar and its shareholders as beneficial owners under the Benami Act; (ii) Whether the attachment of the property remained sustainable after the land stood resumed and then converted into commercial use under the Rajasthan Land Revenue Act.

Issue (i): Whether a company holding property in its own name can be treated as a benamidar and its shareholders as beneficial owners under the Benami Act.

Analysis: The statutory definition of benami transaction requires transfer or holding of property in one name while consideration is provided by another, but the Court held that a company is a distinct juristic person. Property purchased and held in the company's own name is the company's property, and monies infused by promoters or shareholders become part of the company's capital and net worth. Mere shareholding does not make shareholders owners of the company's assets, nor does it convert the company into a benamidar or the shareholders into beneficial owners within the meaning of the Benami Act. Strict proof was required, and the material relied upon by the authorities, including shifting statements, was insufficient to establish a benami transaction.

Conclusion: The company could not be treated as benamidar and its shareholders could not be treated as beneficial owners on the facts found.

Issue (ii): Whether the attachment of the property remained sustainable after the land stood resumed and then converted into commercial use under the Rajasthan Land Revenue Act.

Analysis: The land was subjected to proceedings under Section 90B of the Rajasthan Land Revenue Act, 1956, thereafter converted from agricultural to commercial use, and a registered lease deed was issued in favour of the company. On these facts, the Court held that the impugned attachment could not survive because the property, as dealt with by the authorities, was no longer amenable to treatment as benami property. The Court also noted that the proceedings were initiated after a long delay and were based on an unreliable foundation, which reinforced the illegality of the action.

Conclusion: The attachment and confirmation orders were unsustainable.

Final Conclusion: The impugned benami proceedings were quashed, the attachment was set aside, and the property was directed to be restored to the company.

Ratio Decidendi: Property purchased and held in the name of a company cannot, merely because of its shareholder structure or subsequent share transfers, be treated as benami property in the absence of clear proof that the company is only a name-lender for another person.

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