Consolidation authorities have jurisdiction to deal with benami transactions, as strictly understood, and also with sham transactions which are void. However, if the sham transactions are voidable, the consolidation authorities would have no power to deal with the same and it would be within the jurisdiction of the Civil Court to do so.

HANSARIA,C. J.

( 1 ) THIS reference to the Full Bewnch has been made by a learned single Judge to decide whether the view expressed principally in Kailash Chandra Sahu v. Mahani Charan Mohanty, (1988) 62 CLT 261, by a learned single Judge of this Court which was approved by a Division Bench of this Court in Ramachandra v. Suresh Chandra, 1988 (1) OLR 185, that consolidation authorities have no jurisdiction to decide a question relating to benami nature of transaction is correct or not.

( 2 ) TO answer the reference, it would be apposite at the very outset to know what is meant by a "benami" transaction, as it would appear from what is being stated later that, in fact, there is no clash in the view taken in the aforesaid decisions and the one which the learned Judge making the reference had taken in Civil Revision No. 351 of 1983 (Hrudananda Panda v. Dhirendra Behura, disposed of on 30-4-1985), which view, the learned Judge felt is correct despite what was held in the aforesaid two decisions. The discussion to follow would show that both the views are correct and can stand together, if note is taken about what is really meant by 'benami' transaction.

( 3 ) THE word 'benami' really denotes two classes of transactions which differ from each other in their legal character and instance. The following passage from paragraph 14 of Bhim Singh v. Kam Singh, AIR 1980 SC 727, brings out the distinction between the two classes of transactions at page 732 :-"two kinds of benami transactions are generally recognised in India. Where a person buys a property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami. In that case, the transferee holds the property for the benefit of the person who has contributed the purchase money, and he is the real owner. The second case which is loosely termed as a benami transaction is a case where a person who is the owner of the property executes a conveyance in favour of another without the intention of transferring the title to the property thereunder. In this case, the transferor continues to be the real owner. The difference between the two kinds of benami transactions referred to above lies in the fact that whereas in the former case there is an operative transfer from the transferor to the transferee though the transferee holds the property for the benefit of the person who has contributed the purchase money, in the latter case, there is no operative transfer at all and the title rests with the transferor notwithstanding the execution of the conveyance. "

( 4 ) THE second type of transaction was characterised as sham transaction in Sree Meenakshi Mills Ltd. v. Commissioner of Income-tax, AIR 1957 SC 49, which further stated in its paragraph 30 that the first type of transaction signifies one which is real in the sense that the sale of a property in the name of, say, X as the purchaser is genuine, but the real purchaser is B, X being his benamidar. It was then observed in this paragraph that the fundamental difference between the two classes of transactions is that whereas in the former there is an operative transfer, in the latter, there is none such; the transfer continuing to retain the title notwithstanding the execution of the transfer deed. So, in what follows, we shall call the first type of transaction as 'benami' and the second as 'sham'.

( 5 ) NOW, let us see whether the consolidation authorities have jurisdiction to deal with the case of a transaction being 'benami', as distinguished from 'sham'. To answer this, it would be apposite to understand the true character of these two types of transactions. The benami transaction is one which evidence an operative and valid transfer resulting in the passing of title in the transferee, whereas in the sham transaction, there is no valid transfer of interest, though ostensibly the deed incorporating the transaction seeks to clothe the transferee with the title in t