Fiduciary capacity exception applied to cash kept for safe custody, defeating a benami characterization.

Cash found in lockers in the names of alleged benamidars was held not to constitute a benami transaction, because the recorded statements showed that the locker holders did not claim ownership and the alleged beneficial owners ed the cash as theirs and stated it was kept with employees for safe custody. The tribunal applied the statutory exception for property held in a fiduciary capacity under the Prohibition of Benami Property Transactions Act, 1988, and read fiduciary capacity broadly to cover relationships based on trust and confidence. On those facts, the safe-custody arrangement fell within the exception, so the attachment was not confirmed.

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Issues: Whether cash found in lockers held in the names of the alleged benamidars constituted a benami transaction or fell within the statutory exception for property held in a fiduciary capacity for safe custody.

Analysis: The cash was found during search and survey proceedings and the recorded statements of the alleged benamidars and alleged beneficial owners consistently showed that the holders of the lockers did not claim ownership over the cash, while the persons said to be the beneficial owners accepted that it belonged to them and had been kept with employees for safe custody. The definition of benami transaction under section 2(9)(A) of the Prohibition of Benami Property Transactions Act, 1988 contains an exception where property is held by a person standing in a fiduciary capacity for the benefit of another. The expression fiduciary capacity was understood in its wider legal sense, extending to relationships founded on trust and confidence, and the facts were held to fit the safe-custody exception rather than a benami arrangement.

Conclusion: The cash was held in a fiduciary capacity and did not amount to a benami transaction; the refusal to confirm the attachment was upheld.

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