KARACHI: The Federal Government after finalizing the agreement with the IMF has decided to activate the Benami Transactions Laws in the country. Any property proved to be acquired or held by benami transaction will be punished under the Benami Transactions Prohibition Act, of 2017. Person or persons found guilty of the offense of benami transaction or holding benami property shall be punished with rigorous imprisonment for a term of one year or above extending up to seven years and is liable to pay a fine of twenty-five percent of the fair market value of the subject benami property.

Aga Faquir Mohammad, a renowned senior advocate while talking to Daily National Courier stated that Federal Government to criminalize the holding of benami property (ostensible property) and to ensure transparency in property transactions enacted the “Benami Transactions (Prohibition) Act, 2017” published in the official Gazette on 17th February’ 2017 and enforced the said act by issuing “Benami Transactions (Prohibition) Rules, 2019” on 11th March 2019.

 “Benami transaction” means a transaction that has been undertaken by someone in the name of another person. While “Benamidars” means a person or a fictitious person; a company; a firm; an association of persons or a body of individuals, whether incorporated or not, and every artificial juridical person in whose name the benami property is transferred or held and includes a person who lends his name but acquires no interest in the property, though he may possess indicia of ownership. Benami Transaction is any transaction where a property is transferred to or is held by a person and consideration for the property is provided or paid by another person and that property is held for the benefit (direct or indirect) of the person who has provided the consideration. The person purchasing the property in the name of some other person never intends such property to be vested in the ostensible owner.

Benami transaction includes a transaction or arrangement in respect of (i) a property carried out or made in a fictitious name; (ii) a property where the owner of the property is not aware of or denies knowledge of such ownership, and (iii) a property where the person providing the consideration is not traceable or is fictitious. To establish benami status of a transaction, two essential elements must exist: (i) there must be an agreement, express or implied, between the ostensible owner and the purchaser of the property in the name of the ostensible owner for the benefit of the person who must make payment of the consideration and (ii) transaction was entered between the real purchaser and seller to which ostensible owner was not the party.