Laws Related to Cheque Bounce in India – Procedure, Punishment, and Legal Remedies

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Cheque Bounce Laws And Punishment  In today's world of banking transactions, cheques are a trusted medium of payment for most people and institutions. With the increasing use of cheques, incidents of cheque bounce have also become common. Due to lack of information, many people are either unable to take proper legal action in cases of cheque bounce or have to face unfair legal action. To regulate cases of cheque dishonour, a law came into force in 1881, which is known as the Negotiable Instruments Act. Let us know the important provisions related to this Act. What is Cheque Bounce? Meaning and Legal Definition A cheque bounce case is filed under Section 138 of the Negotiable Instruments Act, 1981. If someone has given you a cheque and you deposit it in the bank to get it cashed, then sometimes due to some reasons the bank dishonours the cheque, due to which the person depositing the cheque does not receive the amount mentioned on the cheque. This is called cheque bounce in commo...
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Benami Property Act 2016 – Meaning, Rules, Punishment, and Ownership

Benami Property Act

benami property act and law



What is benami property?

1. Benami property is such property for which the payment is made by one person, but it is registered in the name of another person. Such property may be purchased in the name of wife, children or any relative. The person in whose name such property is purchased is called "benamidar". Benami property can be in the form of movable or immovable property or financial documents.
2. If a person buys shares in the name of another person, then that too will be considered as benami property. Apart from this, making fixed deposits in bank accounts in others name is also considered as benami property.

What does the Act say?

Parliament passed the Benami Transactions Prohibition Act in August 2016. After it came into effect, the existing Benami Transactions Act 1988 has been renamed as Benami Property Transactions (Prohibition) Act, 2016. The amended Act came into force from 01 November 2016.

Provision of Punishment and Penalty

1. Under the new law, there is a provision of imprisonment of 1 to 7 years and a penalty of 25% of the market value of the property for doing benami transactions. If someone gives wrong information about benami property, then there is a provision of penalty of up to 10% of the market value of the property and imprisonment of 6 months to 5 years.
2. The amended law also gives the power to confiscate and seal benami properties.

Which property is not considered as benami property?

1. If someone purchases property in the name of his wife or children and the payment for it has been made from known sources of income, then it will not be considered as benami property.
2. If there is joint ownership of any property with siblings or some other relatives, for which payment has been made from known sources of income, then it will also not be considered as benami property.

Other important facts

1. If you buy any property in the name of your wife or children, then buy it through cheque, bank transfer or other traceable methods whose proof you can show in your income. Make sure to show such transactions in your income tax return as well. By doing this, that property can be kept out of the purview of benami.
2. Some property-related cases can become very complicated due to benami transactions. According to Section 4 of the Benami Property Transactions (Prohibition) Act, 2016, no case or claim can be made against the person in whose name the property is held to claim benami property. This section also makes it clear that in any case or claim regarding a benami property, no defence can be taken against the person in whose name the property is held.

Why Benami Property Is a Problem in India

Benami property has long been used to hide black money, avoid taxes, and conceal assets. It allows people to enjoy property rights while keeping their identity hidden. This makes it difficult for the government to trace real ownership and leads to widespread corruption and illegal wealth accumulation.

Real-Life Example (Short Case Study)

A businessman buys a large plot of land but registers it in the name of his driver. Later, the driver tries to sell the land claiming ownership. When the case reaches court, it is revealed that the land was a benami transaction, and the property is seized by the government under the Benami Property Act.

How to Avoid Benami Transactions

• Always purchase property in your own name or in the name of close relatives with proof of payment.
• Make payments through cheque, bank transfer, or other traceable methods.
• Report such transactions in your Income Tax Return to keep everything legal.
• Maintain proper documentation to show the source of income used.

Section 4 – No Legal Claim on Benami Property

According to Section 4 of the Benami Property Transactions (Prohibition) Act, 2016, no claim can be made against the benamidar (the person in whose name the property is held). Even in court, no one can defend or demand ownership by saying the property was bought in someone else’s name. This ensures that true ownership cannot be established through illegal means.

Conclusion

The Benami Property Act is a strong step towards transparency and accountability in property dealings. Understanding the law and avoiding benami transactions not only keeps you on the right side of the law but also helps build a cleaner economic system.

Highlights of This Article:

This article explains:
• What is benami property and its meaning in English
• Who is a benamidar and what is a benami account
• Details of the Benami Property Act 2016 and Benami Transaction Act
• Difference between the Benami Property Transactions Act 1988 and the amended law
• Provisions, punishment, and penalty under Benami Property Act
• Rules about ownership, income tax, and real-life examples
• Importance of Benami Property Act in India for transparency
Location: Hyderabad, Telangana, India

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