Section 4 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 4 closes the courtroom door to the person who says that property held in someone else's name is really his. It does this in two ways: no suit, claim or action to enforce a right in benami property, and no defence based on such a right.
As per the consolidated text consulted, section 4(1) says no suit, claim or action to enforce any right in property held benami shall lie by or on behalf of a person claiming to be the real owner. Section 4(2) says no defence based on such a right shall be allowed in any suit, claim or action by or on behalf of such a person. Both operate "against the person in whose name the property is held or against any other person". Sub-section (3) has been omitted and is shown as "[ *]".
How section 4 came to read this way
Section 4 is one of the old provisions of the Act. The Benami Transactions (Prohibition) Amendment Act, 2016 did not rewrite it; its section 7 only says that sub-section (3) of section 4 of the principal Act "shall be omitted". The gazette does not reproduce the omitted sub-section, and the consolidated copy prints "[ *]" in its place, so this article does not say what sub-section (3) provided. Sections 1 and 4 are not printed in full in the gazette; the wording of sub-sections (1) and (2) below is therefore taken from the consolidated copy. The 2016 changes were brought into force by notification; the date is not in the sources consulted.
If you are the person who paid for a property and now find that a claim to it is barred, or you are the person named in the deed facing such a claim, a legal dispute resolution review of the papers will show which side of section 4 you are on.
Sub-section (1): no suit, claim or action
The sub-section says: "No suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property."
Take it in parts:
- Who is barred? A person "claiming to be the real owner". The phrase also covers someone acting "on behalf of" such a person. The Act's own term for the person who paid is the "beneficial owner" (section 2(12)); section 4 uses the older phrase "real owner".
- What is barred? A "suit, claim or action" to enforce any right in the property. The three words together are wide: an ordinary civil suit is one form, but "claim" and "action" are not limited to a particular type of proceeding in the text.
- Against whom? Against the person in whose name the property is held, which is the benamidar in the language of the Act, or against "any other person". The bar is therefore not limited to a dispute between the two parties to the arrangement. A buyer from the benamidar, or any stranger, is equally protected from such a claim.
Sub-section (2): no defence
The sub-section says: "No defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property."
Sub-section (1) stops the real owner from starting a case. Sub-section (2) stops him from using the same right as a shield when someone else has started the case. If the benamidar sues for possession, for example, the person claiming to be the real owner cannot defend by saying, "the property is mine; you only hold it for me". Without sub-section (2), the claim barred by sub-section (1) could simply be raised as a defence instead.
| Position of the person claiming to be the real owner | Provision | Effect |
|---|---|---|
| He wants to start a suit, claim or action | Section 4(1) | No such suit, claim or action shall lie |
| He is a party against whom a suit, claim or action is brought | Section 4(2) | No defence based on the benami right shall be allowed |
What section 4 does not say
The section says nothing about the benamidar's own position, about the Government, or about what happens to the property itself. Those are dealt with elsewhere in the Act. Section 5 says that property which is the subject matter of a benami transaction is liable to be confiscated by the Central Government; see our article on section 5. Section 6 bars a re-transfer by the benamidar to the beneficial owner or a person acting on his behalf; see our article on sections 6 and 57. Section 3 prohibits entering into the transaction at all; see our article on section 3.
The text of section 4 itself contains no exception for the cases listed in section 2(9). Whether an arrangement is a "benami transaction" at all is a question of the definition, and the arrangements excepted from limb (A) of that definition are discussed in our article on section 2. Section 4 speaks of "property held benami".
Practical example
Kavita Rao pays for a flat in Nagpur and has it registered in the name of her cousin, Harish Pillai, who says he will keep it for her. Years later Harish refuses to hand it over. Under section 4(1), Kavita cannot bring a suit, claim or action against Harish to enforce a right in the flat as its real owner, and she cannot do so against anyone who bought it from him. If Harish files a suit and Kavita tries to answer by saying the flat was always hers, section 4(2) says that defence shall not be allowed.
A second example from the other direction: Imran Qureshi buys a shop from a person in whose name a building is held benami. If a person claiming to be the real owner sues Imran on that right, section 4(1) says the suit shall not lie, because it is a suit "against any other person". Whether Imran's own purchase is safe is a separate question that depends on the other provisions of the Act, which should be checked.
Other laws and later amendments
Section 4 names no other law. Where other sections of the Act refer to the Income-tax Act, 1961 or to the Code of Civil Procedure, 1908, check the current income-tax and procedural law for the corresponding provision. Later amendments to the Act are not in the sources consulted; check them before relying on this article.
Need help with a dispute over property held in another name?
If a claim to property is being resisted on the strength of section 4, or you are unsure how it affects a purchase, a transfer or a family arrangement, we can go through the documents and the timeline with you. Our legal dispute resolution team looks at the pleadings and the title papers together.
Key takeaways
- Section 4(1) bars any suit, claim or action by or on behalf of a person claiming to be the real owner.
- Section 4(2) bars any defence based on a benami right in a suit, claim or action by or on behalf of such a person.
- Both sub-sections apply against the person in whose name the property is held "or against any other person".
- Sub-section (3) was omitted and is shown as "[ *]"; this article does not say what it provided.
- Section 4 is read together with sections 3, 5 and 6, not on its own.
Read next
- Section 3: prohibition of benami transactions
- Section 5: benami property liable to confiscation
- Sections 6 and 57: re-transfer and transfers after notice
- Overview of the Benami Transactions Prohibition Act
Disclaimer: Based on a third-party consolidated text of the Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016, checked against the Gazette of India copy of that amending Act (11 August 2016), as consulted on 2 October 2026. The commencement notification, the rules and later amendments should be checked. This article is general information, not legal advice; check the official text before acting.