India : Land deals

In recent times, India has seen a wave of protests against corruption and black money spearheaded by various social activists. There is a strong impression that a big chunk of the black money gets invested in the real estate bought in the name of friends or family members. As per a draft on

National Anti-corruption Strategy, September 2010, prepared by the Central Vigilance Commission, “Most of the wealth which is accumulated through corrupt means gets invested in benami immovable property, gold and jewellery, high value consumer goods and other conspicuous consumption.”  

Adarsh Housing Society Scam in 2010 unearthed around 35 flats under benami ownership and the Bombay High Court has sought the interventions of the Central Bureau of Investigation. In February 2011, the state government investigators suspected that a trust supported by Karmapa Ugyen Trinley Dorje may hold benami property worth Rs. 20 crore in and around Dharmasala region of Himachal Pradesh. In addition to that, over 200 more such cases are pending in the courts regarding the disputes of benami properties in Himachal Pradesh.

On July 1 this year, the transfer of land acquired by Chhattisgarh home minster’s son, which was being taken to set up a 1200 MW power plant in Gaud village, was cancelled by the district collector of Janjgir Champa district, ruling it was “benami” and “illegal”. He had ordered that the land be restored to tribal farmers. A raid headed by the Income Tax department on July 8 in Gwalior, Madhya Pradesh, recovered benami property worth Rs.1500 crore from leading traders and businessmen.

More recently, the Bhartiya Janata Party has alleged Uttar Pradesh government to be involved in a Rs.5000 crore scam in the land acquired earlier from farmers in Noida for industrial development.  Benami transactions are not only restricted to real estate but also ownership issues have been highlighted in several sectors like petrol pumps and gas agencies and the vastly debated 2G scam. All this is possible due to the absence of comprehensive rules and regulations in this regard. Though the Parliament had sanctioned a law in 1988 prohibiting the benami deals, but the law was never fully implemented.

In the wake of recent agitations against corruption, the government has finally decided to tighten the grip on benami deals by amending the law prohibiting the benami deals. It will give the government the authority to take possession of any property that is declared as ‘benami’. But to truly fight against it, India needs strong political will to take action against those who indulge in such activities. No need to say people indulging in such shady deals are wealthy, resourceful and powerful people. And it would surely require more than a set of laws to tame them.