Understanding the Benami Transaction

Benami transaction, being a transaction where somebody recompenses for the property but does not get hold of it in his personal name.

The person in whose name such property is purchased is called “Benamidar” and the property so purchased is called the benami property.

Despite the fact a benami property is purchased in the name of someone else, the person who sponsored the transaction is considered to be the real owners.

Two Essential Elements of Benami Transaction

Two essential elements must exist to establish the benami status of a transaction:

  1. There must be an agreement, express or implied between the seller and the purchaser for the purchase of the property in the name of the ostensible owner for the benefit of such person; and
  2. Transaction was entered into between the real purchaser and the seller to which the ostensible owner was not party.

Now I am sure you have understood what is benami transaction. For more information please refer to this judgement of Sindh High Court, (2024 CLC 95 Sindh).

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