Q. shop purchase by tenant from landlord, non freehold

Question

One of our client is a tenant of a shop for the last 30 years. The landlord has purchased this property 50 yrs ago from MCD on lease for 99 years. Now our client wants to purchase the said shop for Rs. 1Cr.

For the said transaction The Landlord is drafting an Agreement to sell, Power of attorney & Will as this cannot be registered as it is not a Freehold property.

Whether this transaction falls under Benami Law or not.

If yes, then if we transfer the lease deed in our favour then will it fall out of Benami Category.

Answer 1

In my view.. its not under benami law

Answer 2

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Answer 3

Surinder Ji, since your client is willing to buy the property, ideally it should be registered in his/her name. If that is not possible, then in terms of explanation to section 2(9), please get Agreement to sell, POA and Will etc registered and all applicable stamp duties and charges must be paid on that.

There is never any issue in getting lease deed registered in his/her favour. In that  case he should disclose and claim himself as a 'Lessee' only and not as an owner.