Benami share transfer found where nominal payment, deferred consideration, and continued transferor control showed effective ownership remained unchanged.

Transfer and holding of listed shares were treated as benami where the apparent transferee paid only a nominal upfront amount, the balance consideration remained contingent and unpaid for a prolonged period, and the shares continued to be subject to lien or pledge in favour of the transferor. The tribunal noted the transferor's continued effective control, the absence of independent business activity or clear source to fund the deferred payment, and the lack of commercially convincing safeguards. On those facts, the arrangement satisfied the statutory indicia of benami holding under Section 2(9)(A), and the Provisional Attachment Order was restored.

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Issues: Whether the transfer and holding of 2.5 crore shares of Responsive Industries Ltd. under the MoU and Share Purchase Agreement constituted a benami transaction under Section 2(9)(A) of the Prohibition of Benami Property Transactions Act, 1988, and whether the Provisional Attachment Order deserved to be restored.

Analysis: The arrangement involved transfer of valuable listed shares to the benamidar on a nominal upfront payment, with the bulk of the consideration remaining contingent and unpaid for a substantial period. The shares were transferred subject to lien or pledge in favour of the transferor, the original title document remained with the transferor, and the benamidar had no independent business activity or apparent source to discharge the deferred consideration. The surrounding conduct, timing of the transactions, absence of commercially convincing safeguards, and the continued effective control of the shares supported the conclusion that the transfer was not an ordinary sale on credit but an arrangement designed to keep the shares under the control of the transferor while placing them in another entity's name. The documents relied upon by the respondents did not displace the statutory indicia of benami holding, and the transfer satisfied both the funding and benefit elements of Section 2(9)(A).

Conclusion: The transaction was held to be benami, and the Provisional Attachment Order was restored.

Ratio Decidendi: A transfer of property will be treated as benami where the apparent transferee pays only a nominal part of the consideration, the balance is contingent and not genuinely intended to be recovered in the ordinary course, and the property remains under the effective control and benefit of the transferor through contractual restraints such as lien or pledge.

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