An Analysis of Transfers by Ostensible Owner and Benami Transactions

“Ostensible” means “seeming or stated to be real or true, but not necessarily real or true”. The word “Ostensible Ownership” means the “apparent ownership”. The object of the legal concept of ostensible ownership is to protect the purchaser (transferee), who believes that he purchases the property from the actual owner. An apparent owner has all the indicia of possession without being the genuine owner. Section 41 of the Transfer of Property Act, 1882 governs the transfer by ostensible owner. It is an exception to the general principle "Nemo Dat Quod Non Habet" which means that a person cannot transfer a better title to property than what they possess. When the transferee claims protection under this section, the onus of proof lies on the transferee to prove that the transferor was the ostensible owner, and that transferee acted in good faith and with reasonable care. This section governs the provisions regarding transfer by ostensible owners. It is an exception to the general principle of "Nemo Dat Quod Non Habet," which means that a person cannot transfer a better title to property than what they possess. Benami transactions are unlawful in India and are often exploited for illegal purposes. The intention behind the transaction is the key component in the difference between ostensible ownership and Benami transactions. In India, the ostensible owner is popularly known as “Benamidar” which means holding the property “without the name”.