Benami property finding upheld where company funds paid for land in employees' names; later land permission cancellation was irrelevant.

Property purchased in the names of an employee and his family members was held to be benami where the consideration came from the company's funds, the employee had no independent means matching the transactions, and he produced no loan records, showing that the company was the beneficial owner. Subsequent cancellation of the Collector's permission for transfer of tribal land did not affect that character or invalidate the benami proceedings, because the later administrative review did not alter the underlying funding and acquisition pattern. The provisional attachment and adjudicatory findings were therefore maintained.

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Issues: (i) Whether the purchase of tribal lands in the names of the employee and his family members, on the basis of funds provided by the company, constituted a benami transaction under the Prohibition of Benami Property Transactions Act, 1988. (ii) Whether the subsequent cancellation of the Collector's permission for transfer of tribal land affected the benami proceedings and the validity of the attachment order.

Issue (i): Whether the purchase of tribal lands in the names of the employee and his family members, on the basis of funds provided by the company, constituted a benami transaction under the Prohibition of Benami Property Transactions Act, 1988.

Analysis: The record showed that the lands were purchased in the names of a low-paid employee and his family members, while the consideration moved from the company's funds into the relevant bank account and was used for the purchases. The employee had no independent means commensurate with the transactions, produced no loan documentation, and stated that he merely signed papers at the company's instance. The arrangement satisfied the ingredients of a property held by one person where consideration is provided by another for the latter's benefit, bringing the case within the statutory definition of benami transaction and supporting the finding of the company as the beneficial owner.

Conclusion: The transaction was rightly treated as benami, and the company was correctly treated as the beneficial owner.

Issue (ii): Whether the subsequent cancellation of the Collector's permission for transfer of tribal land affected the benami proceedings and the validity of the attachment order.

Analysis: The cancellation of permission granted under the land revenue regime did not alter the character of the underlying funding and acquisition pattern, nor did it neutralize the admitted flow of company funds through the employee's account for acquisition of the lands. The tribunal held that the legality or survival of the Collector's permission order did not determine whether the property was benami, and that the statutory bar against re-transfer of benami property also supported continuation of the proceedings. The provisional attachment and adjudicatory findings were therefore unaffected by the later review order.

Conclusion: The cancellation of the Collector's permission did not help the appellant, and the benami proceedings remained sustainable.

Final Conclusion: The appeal failed on merits and the attachment-based adjudication was maintained.

Ratio Decidendi: Where consideration for property is supplied by one person and the property is acquired in the names of others who lack independent financial means, the transaction falls within the benami definition; later cancellation of a separate administrative permission does not displace that statutory character.

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