Benami property law: cash routed through a third-party account was treated as benami consideration and attachment upheld in principle.

Cash handed over for deposit in a third-party account and later retransferred through banking channels was treated as property capable of forming benami consideration under the Prohibition of Benami Property Transactions Act, 1988. The Tribunal found that the proprietor who received and deposited the cash acted as a benamidar lending his name, because the beneficial owner supplied the consideration and the arrangement involved holding property for another's benefit. It rejected the argument that the transaction was merely sham and outside the Act. The attachment was upheld in principle, with the quantum modified.

---

---

Issues: Whether cash handed over for deposit in a third party account, followed by retransfer through banking channels, constituted benami property and a benami transaction under the Prohibition of Benami Property Transactions Act, 1988, so as to justify attachment of the bank balance.

Analysis: The Tribunal held that cash falls within the wide definition of property under the Act and can constitute consideration for purposes of a benami arrangement. It found that the cash was handed over by the beneficial owner to the proprietor of the concern, who deposited it in his account and thereafter returned the amount to the appellant through banking channels. On that reasoning, the proprietor was treated as a benamidar who lent his name, and the transaction was held to satisfy both elements of the statutory definition of benami transaction, namely transfer or holding of property for another's benefit and provision of consideration by another person. The Tribunal distinguished the authorities relied upon by the appellant and rejected the submission that the transaction was merely sham and outside the Act.

Conclusion: The transaction was held to be benami, and the attachment was upheld in principle, though the quantum was modified.

---