Benami property: unexplained payments and lack of contemporaneous evidence support treating nominal owner as benamidar, sustaining attachment.

Determination of benami status turned on contemporaneous transactional facts: timing of LLP incorporation, minimal capital contribution, mismatch between recorded cheques and encashments, absence of sale-deed or contemporaneous evidence for alleged prior advance, and a post-attachment memorandum not relied on at acquisition. The legal principle applied treats unexplained payments furnished by beneficial persons as funds used to acquire immovable property in the name of another, making the nominal owner a benamidar and the payors beneficial owners; accordingly the attachment under the Prohibition of Benami Property Transactions regime was confirmed.

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Issues: Whether the three immovable properties purchased in the name of M/s EPC Developers LLP are benami and whether the Adjudicating Authority correctly confirmed the attachment and reference under the Prohibition of Benami Property Transactions Act, 1988.

Analysis: The determination rests on recorded facts about the LLP's incorporation, its nominal capital contribution, timing of purchases immediately after incorporation, and the funding for the Rs.71 lakh consideration. The sale deeds, bank account records and encashment status of the cheques show only two cheques (Rs.10 lakhs and Rs.15 lakhs) were encashed while seven cheques were recorded in the transaction, leaving an unexplained shortfall of Rs.46,10,000. The purported prior advance of Rs.42 lakhs by one appellant to the seller's group was not reflected in the sale deeds or contemporaneous transaction documentation, and a memorandum of understanding executed after search and attachment was not shown to have existed or been relied on at the relevant time. These factual findings supply the basis to treat the unexplained payments as funds used by the beneficial owners for acquisition in the name of the LLP, and to uphold the attachment confirmed by the Adjudicating Authority under the statutory scheme.

Conclusion: The three properties are held to be benami; M/s EPC Developers LLP is a benamidar and the appellants are beneficial owners. The Adjudicating Authority's confirmation of attachment is upheld.

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