The judgment established the legislative intent and the effect of The Benami Transactions (Prohibition of the Right to Recover Property) Ordinance, 1988 on the rights of real owners in benami transactions.

1. The defendant in O.S. No. 349/83 on the file of the Subordinate Judge, Palghat is the revision petitioner.

2. The respondent instituted the suit for recovery of the property in dispute on the strength of title. The suit has been decreed, accepting the case of the plaintiff that the properly belongs to him although it stands in the name of the petitioner - defendant. The petitioner-defendant has been found to be only a benamidar. A reference in this connection to the following excerpts from the judgment of this Court in Narayanan & Others v. Gangadharan (1988 (1) KLJ. 601: 1988 (I) KLT. 933), (by this judgment this Court disposed of the appeal where the decree sought to be executed was under attack) is relevant.

"There is no evidence in this case to show that the plaintiff wanted to benefit the defendants when he provided funds for purchase of landed properties. On the other hand, the evidence is overwhelming in this case to the effect that money was sent by the plaintiff to the defendant in OS. No. 349 of 1983 for the specific purpose of purchasing landed properties in the name of the plaintiff, but, instead, he purchased the properties in the name of himself and his other brothers with the fund so provided by the plaintiff Therefore it has to be held that the plaintiff is the beneficial owner and he is entitled to recover possession of the plaint schedule properties from the defendants in these suits. In our view this is a case where S.82 of the Indian Trusts Act squarely applies,"

3. S.82 of the Trusts Act gives statutory recognition to benami transactions. In a transaction covered by this Section the transferee holds the property for the benefit of the person paying or providing the consideration. It therefore follows that when once it is proved that the consideration for the transaction flowed from a person other than the transferee, then that person who provided the consideration and not the transferee, is the real owner of the property. A benami transaction does not vest any title in the benamidar but vest the title in the real owner. It is true that when the benamidar is in possession of the property standing in his name, be is in one way a trustee for the real owner; "he is only a name leader or an alias for the real owner". That is why it is always said that "where a transaction is once made out to be a mere benami, it is evidence that the benamidar absolutely disappears from the title. His name is simply an alias for that of the person beneficially interested". (See Controller of Estate Duty v. Aloke Mitra (1981 (2) SCC.121). The Supreme Court further observed that the cardinal distinction between a trustee known to English law and a benamidar lies in the fact that a trustee is the legal owner of the property standing in his name and cestui que trust is only a beneficial owner, whereas in the case of a benami transaction the real owner has got the legal title although the property is in the name of the benamidar. It is by now a well settled proposition that the real owner can always deal with the property without reference to the benamidar.

4. It is in this backdrop the dispute between the parties requires to be decided. The execution petition from which this revision arises, according to the petitioner judgment debtor, is not maintainable in view of the prohibition contained in S.2 (1) of The Benami Transactions (Prohibition of the Right to Recover Property) Ordinance. 1988, for short, The Ordinance.

5. I shall read the Section.

"2 (1) No suit, claim or action to enforce any right in respect of any property held benami against, the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property".

The Section says that no suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person