Topic: Section 6. Act not to apply in certain cases

Nothing in this Act shall affect the provisions of Section 53 of the Transfer of Property Act, 1882 (4 of 1882), or any law relating to transfer for an illegal purpose.


The object of the Benami Transaction (Prohibition) Act, 1988 is vest ownership rights in benamidar as against the real owner. It is not the intention of the Benami Act to protect such person from the creditors who allege diversion of funds by such persons in a fraudulent manner in order to escape their liability to the creditor. Therefore when it is alleged that the diversion of funds (movable property) by defendant No. 1 in favour of the other defendant was fraudulent and illegal section 6 of the Act Protects such a claim from the applicability of section 4; M/s PNB Finance Ltd. v. Shital Prasad Jain, AIR 1991 Del 13.