|
Advanced Search Options
Benami Property - Case Laws
Showing 1 to 20 of 300 Records
-
2024 (4) TMI 1049
Prohibition of Benami Transactions - provisional attachment order was confirmed - Who is the beneficial owner of property? - all the properties were purchased/ transferred prior to the amendment of 2016 in the Act of 1988 but properties were held by the benamidar even subsequent to the amendment - appellants submitted that perusal of the three tables would reveal that all those properties were purchased prior to the amendment in the Act, 1988 by the notification dated 01.11.2016 to amend various provisions of the Act of 1988.
As submitted that the appellant Sukh Lal Baiga purchased all the properties alleged to be benami from his own sources. He was working with Padam Kumar Singhania alleged to be the beneficial owner from the childhood and earning salary out of his work.
HELD THAT:- It is not in dispute that purchase of all the properties in the name of Sukh Lal Baiga is prior to the amendment of 2016 in the Act of 1988.
It is however a fact that all those properties were held by Sukh Lal Baiga even after the amendment. Holding of the properties even subsequent to the amendment of the year 2016 has a consequence and elaborately discussed in reference to the definition of “benami transaction” given under the amended provision of section 2 (9) by this Tribunal in the case of Suresh Bhageria Versus the Initiating Officer, DCIT (BPU-2), Mumbai [2024 (1) TMI 203 - APPELLATE TRIBUNAL FOR SAFEMA AT NEW DELHI]
It was held that if the benami transaction defined under section 2 (9) is to be applied, then it would be not only for transfer of the property but even its holding. The definition of benami transaction under the amended provisions was different than the un-amended provision.
The judgement quoted above deals with the first issue raised by the appellant where it has been held that if the property was purchased prior to the amendment of 2016 and is not held by the benamidar, then the judgement of the Apex Court in the case of “Union of India & Anr. Versus M/s. Ganpati Dealcom Pvt. Ltd [2022 (8) TMI 1047 - SUPREME COURT] would apply. However, if the property is held even after the amendment of 2016, then amended provision would apply. The detailed discussion of issue in the case of Suresh Bhageria (Supra) applies to the facts of this case.
In the light of the aforesaid and facts of this case, the first argument raised by the appellant cannot be accepted in the light of the detailed judgement of this Tribunal in the case of Suresh Bhageria (Supra).
Whether appellant Sukh Lal Baiga was having sufficient source to purchase the property from time to time? - The income of the appellant Sukh Lal Baiga and his further statement that all the properties referred in the schedule were purchased by Padam Kumar Singhania. The appellant Sukh Lal Baiga did not retract his statement though counsel for the appellant submitted that it has been questioned in the appeal but that cannot be taken to be a retraction. It is also a fact that the statement of different seller of the properties were also recorded and referred by the Adjudicating Authority. They have stated about payment of consideration by Padam Kumar Singhania for all the properties.
The statement of the seller have been corroborated by the evidence and the statement of Sukh Lal Baiga for purchase of property by Padam Kumar Singhania for which Sukh Lal Baiga was having no knowledge.
In the light of the facts given above, we find that material was brought by the respondents to prove a case of benami transaction for purchase of the properties.
Appellant questioned the statement of seller relied by the Adjudicating Authority without a chance of cross examination - An application to seek summoning of the witnesses to cross examination was not filed before the Adjudicating Authority. The statement of the seller was otherwise supplied to the appellant and has not been disputed. If the appellant was desirous of cross examination of those witnesses, he should have filed an application to summon them to provide an opportunity of cross examination before the Adjudicating Authority.
No such application was submitted by the appellant. The opportunity of cross examination is otherwise a part of natural justice but it is to be provided when statement of the witnesses are recorded before the Authority who is adjudicating the matter. It is not a case where the statement of witnesses were recorded by the Adjudicating Authority so as to allow cross examination of those witnesses as a course. The statement of witnesses were recorded during the course of investigation and there is no provision to provide cross examination by the Investigating Officer.
Hence, the allegation that Investigating Officer did not provide an opportunity of cross examination cannot be accepted. No one prevented the appellant to make an application to seek cross examination of the witnesses before the Adjudicating Authority. The appellant having failed to make an application to seek cross examination cannot now raise issue if the statement of witnesses have been relied after supplying a copy of those statement to the appellant.
In the light of the aforesaid, even the legal issue in reference to cross examination cannot be accepted and accordingly we do not find any force even in the third issue raised by the appellant.
We find a case for interference in the impugned order in reference to Aaditya Vikram Singhania holding him to be the beneficial owner only for the reason that he subsequently purchased benami properties in the year 2019. There is nothing on record to show that consideration of those properties was paid by Aaditya Vikram Singhania to purchase it in the name of Sukh Lal Baiga, otherwise mentioned in table C, rather the consideration was paid by Padam Kumar Singhania. Thus, for all the properties, he alone would be the beneficial owner and not Aditya Singhania.
Mere subsequent purchase of the property by Aaditya Vikram Singhania would however not affect the attachment but allegation of his being a beneficial owner of the property cannot be accepted and finding of the Adjudicating Authority to that extent is interfered and set aside with the declaration that beneficial owner of all the properties is Padam Kumar Singhania while benamidar to be Sukh Lal Baiga. The finding aforesaid would however not affect the attachment.
-
2024 (3) TMI 1147
Benami transaction - Jurisdiction by the Investigating Authority or the Adjudicating Authority under the Benami Act - Benami transaction - summons issued u/s 19 of Benami Act and the provisional order of attachment as well as extension of such order passed u/s 24 of the said Act challenged - petitioner argues that the respondent-Authorities do not have any jurisdiction to initiate a proceeding under the Benami Act - HELD THAT:- The petitioner obviously acted as a conduit, being owned by shareholders which were none other than shell companies having fictitious existence, for channelizing money from undisclosed sources, shown to have been advanced by Shakambhari and others, into tangible properties by the 37 purchases which are in issue. Taking a broad view of Section 2(9)(D), the purchase of the properties through consideration which came from fictitious sources squarely attracts the said provision to the present transactions. It is to be noted that sub-clause (D) does not merely restrict itself to non-traceable sources of consideration but also to “fictitious” sources of consideration. Hence, there is sufficient prima facie material to indicate that the transactions-in-question were arrangements in respect of properties where the person providing the consideration is fictitious.
Hence, this Court does not find that there is ex facie erroneous assumption of jurisdiction by the Investigating Authority or the Adjudicating Authority under the Benami Act sufficient to displace the legitimate opinion formed in writing by the Investigating Authority, which justifies the reference to the Adjudicating Authority after issuance of notice and passing of provisional assessment order, which was continued subsequently.
For an adjudication of merits on the issues involved in the present case as indicated above, a full-fledged enquiry on factual assessments based on appreciation of evidence is required, which is entirely unwarranted at the instance of the writ court, since a comprehensive procedure is provided in Section 26 of the Benami Act, which is, as the Madhya Pradesh High Court held, in the nature of a self-contained code.
Thus, no ground to interfere with the impugned notice u/s 24 or the provisional orders passed therein, particularly, since the matter has already been referred to the Adjudicating Authority and is under consideration before it within the contemplation of Section 26 of the Benami Act. The appropriate remedy before the petitioner is to participate in the said proceedings, and to have its defence vindicated there. In any event, even thereafter, the petitioner has two stages of remedies – one, a hearing before confiscation and the other by way of an appeal under Sections 30 and 31 of the Benami Act, if aggrieved by the decision of the Adjudicating Authority.
-
2024 (3) TMI 1060
Benami transaction - petitioner has called in show cause notice issued u/s 24(1) of the Prohibition of Benami Property Transactions Act, 1988 and Provisional Attachment Order issued u/s 24(3) of Act of 1988 - petitioners submits that the show cause notice and provisional attachment order are called in question mainly on the ground that the alleged benami transaction has taken place prior to 01/11/2016, the date when Act of 1988 stood amended - HELD THAT:- The ‘provisional assessment order’ as name suggests, is ‘provisional’ in nature . The ‘adjudicating authority’ is best suited to decide the question of Benami nature of the property. We find substance in the argument of learned ASG that show cause notice is a detailed notice running in several pages containing several factual basis and it is within the province of ‘adjudicating authority’ to decide whether property is ‘Benami’ in nature and whether petitioners are liable for any action under the Act of 1988.
The Division Bench declined interference against show cause notice and PAO and permitted the petitioner to raise all relevant aspects before adjudicating authority under Section 26 of the Act of 1988. We deem it proper to follow the same course. The petitioners can avail the remedies under the Act of 1988 and take all possible factual and legal grounds before the ‘adjudicating authority’.
Needless to mention that judgment of Advance Infra Developers (P) Ltd [2023 (12) TMI 620 - MADRAS HIGH COURT] and other judgments can be relied upon by the petitioners before the ‘adjudicating and appellate authority’ (if required) to impress upon it to take a different view than the view taken by Appellate Authority in M/s. Prism Scan [2024 (1) TMI 203 - APPELLATE TRIBUNAL FOR SAFEMA AT NEW DELHI] We have no doubt that if relevant grounds are taken and judgments are cited, the said authorities will consider and decide the matter on its own merits in accordance with law.
We find no reason to entertain these petitions despite availability of statutory alternative remedies. The petitioners may avail the said remedy.
-
2024 (3) TMI 1002
Benami transaction - Beneficial owner of property - Provisional attachment order - scope of Amendment Act of 2016 - Constitutional validity - Amendment to Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 - retrospective or prospective effect - Attachment of property
As decided by HC [2022 (5) TMI 262 - TELANGANA HIGH COURT]Section 2 (9) (A) and Section 2 (9) (C) can only have effect prospectively. Central Government has notified the date of coming into force of the Amendment Act of 2016 as 01.11.2016. Therefore, these two provisions cannot be applied to a transaction which took place prior to 01.11.2016. Admittedly, in the present case, the transaction in question is dated 14.12.2011. That being the position, we have no hesitation to hold that the show cause notice dated 30.12.2019, provisional attachment order dated 31.12.2019 and the impugned order dated 30.03.2021 are null and void being without jurisdiction.
HELD THAT:- Delay of 624 days in filing this special leave petition is condoned.
The issues raised in this petition are squarely covered by a judgment rendered by a three-Judge Bench of this Court in Union of India & Anr. Vs. Ganpati Dealcom Pvt. Ltd. [2022 (8) TMI 1047 - SUPREME COURT] wherein held Section 3(2) of the unamended 1988 Act is declared as unconstitutional for being manifestly arbitrary. Accordingly, Section 3(2) of the 2016 Act is also unconstitutional as it is violative of Article 20(1) of the Constitution.
In rem forfeiture provision under Section 5 of the unamended Act of 1988, prior to the 2016 Amendment Act, was unconstitutional for being manifestly arbitrary. The 2016 Amendment Act was not merely procedural, rather, prescribed substantive provisions. In rem forfeiture provision under Section 5 of the 2016 Act, being punitive in nature, can only be applied prospectively and not retroactively.
Concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, viz., 25.10.2016.
Hence, the special leave petition is disposed of in the aforesaid terms.
-
2024 (1) TMI 907
Prohibition of Benami Property Transactions - Attachment order passed u/s 24(3) of the Benami Transactions (Prohibition) Amendment Act - as decided by HC [2022 (9) TMI 524 - GUJARAT HIGH COURT] Authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, viz., 25.10.2016 and as a consequence thereof, all such prosecutions and confiscation proceedings which had been initiated came to be quashed.
HELD THAT:- There is a gross delay of 370 days in filing this special leave petition. Moreover, the issues which arise in this case are covered by the judgment of this Court in Union of India & Anr. vs. M/s Ganpati Dealcom Pvt. Ltd. [2022 (8) TMI 1047 - SUPREME COURT].
In the circumstances, the special leave petition is dismissed both on the ground of delay as well as on merits.
-
2024 (1) TMI 687
Provisional attachments made by the Initiating Officer u/s 24(3) of the Prohibition of Benami Property Transactions Act - HELD THAT:- There are two facts: (a) the Judicial Custody of the petitioners, who are also the directors of the company based on the case registered and (b) the order of provisional attachment made by the initiating authority on 03.02.2023, when they were still in judicial custody, which makes alienation impossible on the date the order of attachment was passed.
The respondents step into the scene only after the registration of the case but they are not the investigating agency. And it is not in dispute that these petitioners were arrested some two years after the registration of the said criminal case. Where were they during the interregnum? Were they absconding then? Maybe, or may not be, which is not very pertinent for the present. The point is whether the initiating officer knew that the petitioners were in judicial custody when Sec 24(1) show cause notice was issued, and provisional attachment under Sec.24(3) was made? There is nothing on record to indicate it.
What is the extent to which the initiating authority may have to travel for forming his opinion, and what is the extent to which he should spell out the grounds there for when an order of provisional attachment is made? - The scheme of the Prohibition of Benami Transaction Act is looked into, it makes benami transaction a crime, and besides providing for the confiscation of the property found to be held benami, it also provides that both the benamidars and the beneficiary are liable for criminal prosecution u/s 53 of the Act. An attachment of the property till an order of confiscation is made is only a preliminary step in that direction, and all that is required at that point in time is the existence of a suspicion that the property could be involved in a benami transaction.
Here is a situation where a FIR is laid against the petitioners in Cr.No:.92 of 2020 on 23.11.2020, the Income Tax Department has taken a couple of years to believe that that the property could be involved in a benami transaction. When a show cause notice under Sec.24(1) is issued, it is based only on this prima facie suspicion, and this suspicion is sufficient for the initiating authority to form an opinion on provisional attachment. Set in the context, Sec.24(1) notice does not conclude anything as to affect the right of the petitioners. Indeed, the Act provides lots of checks and balances within its scheme in order to ensure that right to property of the citizen is not invaded and trampled upon by the statutory functionaries. At the first stage, it issues a show cause notice u/s 24(1), and waits for the response of the suspected benamidar and the beneficiaries. They have ample opportunity to show cause and to establish that there is no basis for the initial suspicion of these authorities.
Till a decision is taken on the show cause notice issued under Sec.24(1) of the Act, the property which might face confiscation in an eventuality of final adjudication enabling it, the property must be secured for purposes associated with the working of the Act. It will be silly for an initiating authority to let an alienation of a benami property even as it tries to fix responsibility on the suspects. A provisional order of attachment needs to be understood in that context. It is not same as an order of attachment before judgement under Order XXXVIII Rule 5, 6 CPC. There the attachment is made not with any intent to secure it for a possible confiscation for the benefit of revenue administration of the State, but only to secure the interest of a creditor-plaintiff. Therefore, the standard required for an order under Order XXXVIII Rule 5,6 CPC are more stringent since it neither involves a crime, nor it involves the interest of the State.
The provisional attachment made by the initiating officer cannot be termed as bad in law. He has done that which the statute contemplates. And, this attachment is only provisional. Admittedly, the matter is now pending before the Adjudicating Authority. The petitioners have all the opportunities to approach the adjudicating officer and explain why the provisional order of attachment is bad.
To conclude, this Court does not find merit in these petitions and hence, all the writ petitions stand dismissed.
-
2024 (1) TMI 541
Prohibition of Benami Property Transaction - Applicability of provisions of Section 5 of the Amended Act, 2016 - funds infused into the shell companies by multiple layering in the guise of share capital or loan - Initiating Officer had reasons to believe that the arrangements made by the respondent with various shell companies is a benami transaction within the meaning of Section 2 A (9) of the Prohibition of Benami Property Transactions Act, 1988 - as contended on the side of the appellants that Section 5 of the Prohibition of Benami Property Transactions Act, 1988, as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 will have retrospective effect and therefore, the common order passed by the Tribunal, to the contrary, is liable to be interfered with.
HELD THAT:- Today, when the matters were taken up for hearing, the learned counsel appearing for both sides in unison, submitted that a batch of appeals challenging the very same impugned order of the Appellate Tribunal, was disposed of, by this court, by passing a detailed judgment [2023 (12) TMI 620 - MADRAS HIGH COURT] wherein as opinioned that as on date, the decision of the Hon'ble supreme court in Union of India v. Ganapati Dealcom Pvt Ltd [2022 (8) TMI 1047 - SUPREME COURT] holds the field and hence, the arguments advanced on the side of the appellants that the provisions of Section 5 of the Amended Act, 2016 have to be applied retrospectively, cannot be countenanced.
It is to be noted that in the Review Petition [2023 (1) TMI 1327 - SC ORDER] filed by the Department to review the order passed by the Honourable Supreme Court in Union of India vs. Ganapati Dealcom Pvt Ltd [2022 (8) TMI 1047 - SUPREME COURT] delay was condoned and the application for oral hearing of the review petition was allowed, however, no stay order was granted. In such circumstances, pendency of the review of the decision in Union of India vs. Ganapati Dealcom Pvt. Ltd, cannot be a ground to interfere with the order passed by the Tribunal. It is also well settled that mere pendency of the Review Petition will not be a ground to assail the orders impugned in the appeals.
-
2024 (1) TMI 540
Prohibition of Benami Property Transactions - whether transactions are prior to the coming into force of Prohibition of Benami Property Transactions (PBPT) Act, 1988 as amended in 2016 i.e. 25.10.2016? - HELD THAT:- In the light of the judgments passed in the present matters by the Hon’ble High Court, Calcutta at Kolkata [2023 (3) TMI 1446 - CALCUTTA HIGH COURT] the appeals are disposed of with following conditions:-
(i) It is however made clear that finding recorded by the Adjudicating Authority, either of facts or on law, would not be binding on either of the parties rather they would be at liberty to take up factual and legal issues in future, if so required, in the appropriate proceedings. This order is not to be taken in confirmation of the impugned order.
(ii) It is also made clear that independent to the action taken by the Initiating Officer referring Benami Transactions of a period prior to the amendment by the Amending Act of 2016, if the Department has legal right under the law to take the proceedings, treating the amendment by the Amending Act of 2016 to be prospective, this order would not come in their way. It is however made clear that any such action should not offend the judgment of the Apex Court in the case of “Union of India & Anr. Versus M/s. Ganpati Dealcom Pvt. Ltd.” [2022 (8) TMI 1047 - SUPREME COURT].
In case, the Apex Court reviews its judgment having bearing on this appeal, the appellant would be at liberty to take appropriate remedies, which would may even a Review Petition before this Tribunal. In view of the above, the applications are allowed and the appeals are disposed of with the aforesaid directions/conditions.
-
2024 (1) TMI 384
Prohibition of Benami Property Transaction - scope of provisions of Section 5 of the Amended Act, 2016 - HELD THAT:- This court judgment on 17.11.2023, [2023 (12) TMI 620 - MADRAS HIGH COURT] is of the opinion that as on date, the decision of the Hon'ble supreme court in Union of India v. Ganapati Dealcom Pvt Ltd [2023 (1) TMI 1327 - SC ORDER] holds the field and hence, the arguments advanced on the side of the appellants that the provisions of Section 5 of the Amended Act, 2016 have to be applied retrospectively, cannot be countenanced. pendency of the review of the decision in Union of India vs. Ganapati Dealcom Pvt. Ltd, cannot be a ground to interfere with the order passed by the Tribunal. It is also well settled that mere pendency of the Review Petition will not be a ground to assail the orders impugned in the appeals. In this context, it is useful to refer to the decision of the Honourable Supreme Court in Union Territory of Ladakh and others vs. Jammu and Kashmir National Conference and another [2023 (9) TMI 1407 - SUPREME COURT] as held High Courts will proceed to decide matters on the basis of the law as it stands. It is not open, unless specifically directed by this Court, to await an outcome of a reference or a review petition, as the case may be. it is also not open to a High Court to refuse to follow a judgment by stating that it has been doubted by a later Coordinate Bench. In any case, when faced with conflicting judgments by Bench of equal stength of this Court, it is the earlier one which is to be followed by the High Courts, as held by a 5 Judge Bench in National Insurance Company Limied v. Pranay Sethi [2017 (10) TMI 1276 - SUPREME COURT]
Following the earlier order passed by this Court, all these civil miscellaneous appeals are disposed of, leaving it open to the appellants herein to proceed further on the basis of the outcome of the Review Petition filed by them before the Honourable Supreme Court.
-
2024 (1) TMI 203
Prohibition of Benami Property Transactions - transfer of shares prior to the Amending Act of 1916 - Adjudicating Authority has confirmed the Provisional Attachment Order - a contest was made for the respondents who submitted that if anyone is holding a property after the amendment by the Amending Act, 2016 though transfer of property is prior to 01.10.2016, such a transaction would fall in the definition of “Benami Transaction” as given under section of 2 (9) (A) of the Act of 2016 - HELD THAT:- Detailed finding on each issue has been given. Thus, it is not correct to state that the respondent failed to prove benami transaction rather it is the appellant Companies failed to show and prove the financial sources or the source of inducement of finances after the year 2013-2014 other than by co-appellant.
It is also submitted that appellant Companies rightfully invested in the shares of B.I.L. and otherwise they were investing in other shares also. The argument aforesaid was made without clarifying as to from where the finance came in the Companies because inducement of finance in the Companies in rightful manner could not be proved by the appellants to show their innocence, but they utterly failed in doing so. A company having no business activity could get corporate finance on higher premium. M/s Futurage Corporate Care Private Limited has shown wholesale business but had no activity of purchase and sale for wholesale to carry out the activities. No expenses were shown to have incurred towards salaries/wages, payment of indirect taxes, electricity, rent etc. They were mere paper companies.
The clear conclusion from the survey and subsequent investigation was that control over the two appellant companies was acquired in the year 2014-15 and finances were infused into the companies at the instance of Shri Suresh Bhageria for the purpose of engaging in benami transactions in the shares of B.I.L. and other group companies of the Bhageria group. In fact, the two companies had no activity other than investment in B.I.L. and other Bhageria group companies.
In view of the above, we do not find the respondent failed to prove Benami transaction as per the provision of PBPT Act.
The appellant had disclosed the sources with relevant information and was accepted by the Tax Authorities. Thus, inducement of funds said to be in the shape of corporate shares on a higher premium could not have been questioned.
We find that assessment of income by the income tax authority remain on different footing. They remain concerned about the income and tax payment. The Tax Authorities conducted survey subsequently to detect benami transaction. The assessment of income does not regularize benami transaction, rather it will take its own course. If income of someone is assessed and thereupon found to be out of benami transaction, the action under the Act of 1988 can be taken.
All the facts on record are surrounding and pointing towards active role of Suresh Bhageria to first induce the funds into the Companies and then to get purchase of shares of B.I.L. apart from other companies of the group and thereby, it could not be inferred that Initiating Officer was predetermined to make out a case.
The appellant had further referred to the statement of Director of Erstwhile shareholder of the company during course of survey. It was submitted by the counsel for the appellant that they ceased to be shareholder at the time of survey in December, 2018. Thus, their statements could not have been relied upon.
According to the appellant, the statement of Erstwhile shareholder was irrelevant whereas, we find it be relevant. It is to find out the financials of the two appellant Companies from the year 2013-2014 onwards and to draw conclusion about the Benami Transaction. The statements of the then Directors were relevant and rightly relied by the respondents.
In fact, the material available on record and perused by us is sufficient to show close connection between Suresh Bhageria, the promoter of B.I.L. group with M/s Prism Scan Express Pvt. Ltd. and M/s Futurage Corporate Care Private Limited and reason of investment in shares of B.I.L. and other companies as benamidars. The appellant has failed to show any business activities of the appellant companies in the year 2013-14 and subsequently to get corporate shareholders on premium. The inducement of funds was itself through Benami Transactions, otherwise Corporate Share would not have been given on higher premium of a Company having no business activity. The money induced therein was used to purchase shares of BIL and other Companies.
We are unable to accept the argument of the appellant that the inferences have been drawn on extraneous consideration.
In the instant case, there was transfer of shares prior to the Amending Act of 1916, but such shares were held by the appellant Companies even after the amendment and therefore it would fall within the definition of “Benami Transaction”.
In the instant case, the Director of appellant Company, i.e. M/s Prism Scan Express Pvt. Ltd. and M/s Futurage Corporate Care Private Limited have denied knowledge about their shareholding or even interest in the Company and thereby the respondent have rightly applied section 2 (9) (A) (C ) of the Act. At this stage, it was submitted that initially show cause notice was not issued in reference to sub-section A rather it was under sub-section (B) and (C ) of section 2 (9).
The show cause notice can be given by referring to a particular provision but after appropriate proceedings, if a case is made out under other provision then an order passed thereupon would not be illegal. Thus, we do not find any substance in any of the arguments.
As further submitted that despite a mandate of section 24 (1) of the Act of 1988, the reasons to believe recorded in writing was not supplied to the appellant. We have gone through the record and find that a copy of the reasons to believe was not only supplied to the appellant but it has been enclosed with the appeal. In view of the above, the argument for alleged violation of Act is not made out.
The argument has been raised that Rule 5 of Rules, 2016 was not complied for attachment. It provides the manner of attachment.
We find arguments to be of no substance as the attachment of the property was made after following the rules and therefore the appellant failed to specify specific rule, alleged to have violated for attachment of the property. Thus, even the last argument raised by the appellant cannot be accepted.
-
2023 (12) TMI 1023
Benami Property Transaction - Scope of provisions of Section 5 of the Amended Act, 2016 - HELD THAT:- Today, when the matters were taken up for hearing, the learned counsel appearing for both sides in unison, submitted that a batch of appeals [2023 (12) TMI 620 - MADRAS HIGH COURT] cases, challenging the very same impugned order of the Appellate Tribunal, was disposed of, by this court, by passing a detailed judgment as on date, the decision of the Hon'ble supreme court in Union of India v. Ganapati Dealcom Pvt Ltd. [2022 (8) TMI 1047 - SUPREME COURT] holds the field and hence, the arguments advanced on the side of the appellants that the provisions of Section 5 of the Amended Act, 2016 have to be applied retrospectively, cannot be countenanced.
Further, it is to be noted that in the Review Petition (Civil)[2023 (1) TMI 1327 - SC ORDER] filed by the Department to review the order passed by the Honourable Supreme Court in Union of India vs. Ganapati Dealcom Pvt Ltd. delay was condoned and the application for oral hearing of the review petition was allowed, however, no stay order was granted. In such circumstances, pendency of the review of the decision in Union of India vs. Ganapati Dealcom Pvt. Ltd, cannot be a ground to interfere with the order passed by the Tribunal. It is also well settled that mere pendency of the Review Petition will not be a ground to assail the orders impugned in the appeals.
-
2023 (12) TMI 621
Prohibition of Benami Property Transaction - Initiating Officer issuing provisional attachment of the property order u/s 24(3) of the PBPT Act - Petitioner submitted that despite repeated requests by the petitioners, no material has been supplied to them and no opportunity of personal hearing was provided before passing of the order under Section 24(4) of the PBPT Act - as argued petitioners to the effect that the provisional attachment order passed by the Initiating Officer under Section 24(3) of the PBPT Act is illegal as the petitioners were asked to submit response/reply to the notice under Section 24(1) and (2) of the PBPT Act up to 15.05.2023 but without waiting for reply, the Initiating Officer passed the provisional attachment order on 01.05.2023
HELD THAT:- From bare perusal of the provisions of Section 24 of the PBPT Act, it is clear that the Initiating Officer is not required to wait or consider the response/reply filed pursuant to the notice under Section 24(1) & (2) of the PBPT Act before passing the provisional attachment order. The only requirement for the Initiating Officer is to seek approval of the approving authority before passing the provisional attachment order under Section 24(3) of the PBPT Act and from the provisional attachment order dated 01.05.2023, it is clear that prior approval of the approving authority was obtained by the Initiating Officer. Hence, the said argument of the learned counsel for the petitioner being bereft of merits is rejected.
So far as argument of the learned counsel for the petitioners that the Initiating Officer, at the time of issuance of show cause notice under Section 24(1) & (2) of the PBPT Act, did not record any reason to believe, is concerned, it is to be noticed that the Initiating Officer in the show cause notice dated 28.04.2023 has specifically recorded the reasons to believe. In such circumstances, we do not find any merit in the above argument of the learned counsel for the petitioners.
Section 2(9)(A)(a) of the PBPT Act provides that where a property is transferred or held by a person and the consideration for such property is paid by another person, then the said transaction means Benami transaction.
The stand of the respondents is that the petitioner-company is a shell company, however, immovable properties are purchased in its name not from company’s funds or its capital but from the funds made available by the petitioner No.2 from the income earned through other businesses.
The Initiating Officer, after taking into consideration the material available with it and the response filed on behalf of the petitioners, recorded its prima facie opinion in the order dated 28.07.2023 passed under Section 24(3) of PBPT Act.
Having gone through the above reasons recorded by the Initiating Officer, we are of the opinion that submissions of learned counsel for the petitioners referring to Section 2(9) of the PBPT Act are without any basis, hence rejected.
The judgment rendered in M/s Shri Kalyan Building’s case [2021 (10) TMI 343 - RAJASTHAN HIGH COURT] is of little help to the petitioners because in that case the petitioners approached this Court after passing of the order by the adjudicating authority under Section 26(3) of the PBPT Act and the appellate tribunal, where the petitioners had remedy to prefer appeal, was not functional, however, no such situation exists in the present case. Apart from that, the findings recorded by the learned Single Judge in M/s Shri Kalyan Building’s case is based on that facts and, therefore, the same are not binding.
As per the provisions of Section 24 of the PBPT Act, the Initiating Officer is required to record its prima facie satisfaction before referring the matter to the adjudicating authority.
Considering the provisions of Section 24 of the PBPT Act, the Division Bench in Dinesh Chand Surana Vs. Deputy Commissioner of Income Tax (Benami Prohibition) Chennai & Ors [2022 (9) TMI 1134 - MADRAS HIGH COURT] as held that part, it is important to note that the proceedings under section 24 only require a recording of prima facie opinion as to the benami nature of the transaction and the respondent is required
As decided in Abhay Nigam & Ors. vs. Union of India & Ors., [2021 (6) TMI 1044 - MADHYA PRADESH HIGH COURT] If Scheme ingrained in Sec. 24 and 26 of the Act of 1988 is compared with the PML Act, it will be clear that the Scheme is almost pari materia. For this reason also, we deem it proper to hold that "adjudicating authority" is best suited and statutorily obliged to consider the validity of provisional attachment order and the case put forth by the present appellants.
No case for interference made. Hence, all these writ petitions fail and are hereby dismissed.
-
2023 (12) TMI 620
Prohibition of Benami Property Transaction - Applicability of provisions of Section 5 of the Amended Act, 2016 - funds infused into the shell companies by multiple layering in the guise of share capital or loan from other Marg Group of Companies had actually flown only from Marg Limited directly and finally, one of the shell companies would re-invest the funds so routed in immovable properties - Initiating Officer had reasons to believe that the arrangements made by the respondent with various shell companies is a benami transaction within the meaning of Section 2 A (9) of the Prohibition of Benami Property Transactions Act, 1988 - as contended on the side of the appellants that Section 5 of the Prohibition of Benami Property Transactions Act, 1988, as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 will have retrospective effect and therefore, the common order passed by the Tribunal, to the contrary, is liable to be interfered with.
HELD THAT:- In view of the above, this court is of the opinion that as on date, the decision of the Hon'ble supreme court in Union of India v. Ganapati Dealcom Pvt Ltd [2022 (8) TMI 1047 - SUPREME COURT] holds the field and hence, the arguments advanced on the side of the appellants that the provisions of Section 5 of the Amended Act, 2016 have to be applied retrospectively, cannot be countenanced.
It is to be noted that in the Review Petition [2023 (1) TMI 1327 - SC ORDER] filed by the Department to review the order passed by the Honourable Supreme Court in Union of India vs. Ganapati Dealcom Pvt Ltd [2022 (8) TMI 1047 - SUPREME COURT] delay was condoned and the application for oral hearing of the review petition was allowed, however, no stay order was granted. In such circumstances, pendency of the review of the decision in Union of India vs. Ganapati Dealcom Pvt. Ltd, cannot be a ground to interfere with the order passed by the Tribunal. It is also well settled that mere pendency of the Review Petition will not be a ground to assail the orders impugned in the appeals.
-
2023 (9) TMI 200
Benami transaction - Prosecuting the petitioner u/s 55 of the Prohibition of Benami Property Transaction Act, 1988 - petitioner was standing in front of a certain lodge with a black bag in his hand, he was intercepted by the Inspector of Police, and he searched the bag and found cash worth Rs. 34,60,000/- inside it - petitioner under Section 131(1A) of the Income Tax Act, the Deputy Commissioner of Income Tax, the second respondent in this case, referred the matter to Benami Prohibition Wing of the Income Tax Department - HELD THAT:- Today the petitioner has made conflicting statement regarding the ownership of the property. First he made a statement that it belonged to Sultan Foumi, later he changes his statement and states that it is his own money. Now it is this inconsistency that has prompted the authority to grant sanction under Section 55 of the Act for prosecuting the petitioner.
After weighing the rival submissions, this Court considers that it is too premature stage for this Court to interfere with the decision of the first respondent to accord sanction for prosecution under Section 55 of the Act.
So far as certain contradictory statements alleged to have been made by the petitioner is concerned, its merits can be decided only post prosecution. The fact of the matter is that, here is the petitioner who is found to possess unexplained cash which he tries to explain through conflicting versions. Whether a person Sultan Foumi exists itself now comes under the scanner, since the response of the petitioner to the notice under Sec.24(1) of the Act seems to suggest something different. Could Sultan Foumi be a fictitious character? It is for the petitioner to explain.
The stage is too pre-mature for this Court go by the version of the petitioner. Consequently, this Court does not consider there is merit in this writ petition, and hence dismissed
-
2023 (8) TMI 1104
Benami transaction - true owner of property - Whether application for setting aside the sale can be entertained, which is not supported by any affidavit, but based on a report of the Administrator/Official Liquidator? - HELD THAT:- It has been an established practice of this Court that the Official Liquidator does not file an affidavit accompanied by a judge's summons. He only files a “report” which is of course signed and sealed by him at the end of every page. This is a practice which has been followed by this Court for decades. The Learned Judge felt that even an Official Liquidator should follow the same practice as being done by a private litigant by filing an affidavit together with a judge's summons.
We would like to recall a latin maxim at this point – “Cursus curiae est lex curiae”. The meaning of this latin maxim is that “the practice of the Court is the law of the Court”. Following this maxim, Coke C.J. in Burrowes Vs. High Commission Court held that the Court should always adopt the practice which has been prevailing before it.
We hold that the practice developed by this Court of the Official Liquidators or Administrators filing a report instead of an affidavit, has to be followed till a new procedure is introduced. We answer the first question accordingly.
Whether in view of the provisions of the Benami Transactions (Prohibition) Act, 1988, the Company can be said to be the owner of the property, though the property is shown to be under ownership of the true owners throughout? - In order to apply the plea of Benami, there has to be a sale/a conveyance. Title must pass from the existing owner to an other person who is a benamidar for the other. The transaction in the present case required 3 persons namely, the vendor, the benamidar/ostensible owner and the actual owner. The effect of the Benami Act, is that the relationship between the ostensible owner & the real owner is snapped. In this case, as pointed out by the Learned Judge in his order of reference, there is no transfer at all. On receipt of monies, the owner executes a Power of Attorney in favour of the employees of the Company. The transfer in favour of the customers is done by the employee as a Power of Attorney agent of the original owner. Therefore, the question of benami does not arise here. It is at best “a Power of Attorney Sale” which we shall address later.
In the case before us, the powers of attorney were executed in the last decade of the previous millennium and therefore, the argument based on Suraj Lamps [2011 (10) TMI 8 - SUPREME COURT] necessarily has to fail. This makes it clear that neither the Act as it stood in 1988 nor its subsequent avatar apply to the provision of the Benami Act as to the transactions among the landowner, powers of attorney & the company. We answer the second question accordingly.
Whether in absence of a petition under Sections 542 and 543 of the Companies Act, the transaction in favour of third party can be questioned by way of simple company application or company is required to file a civil suit to challenge the sale in competent Court having jurisdiction with permission of Company Court ? -. The powers of the Company Court under section 446 (1) and (2) are necessary for answering the question. If a winding up petition is pending and a Provisional Liquidator is appointed, the Company Court ipso facto would have jurisdiction to entertain all the proceedings that are covered under Sections (a) to (d) of Section 446 (2). This principle has been laid down at least five (5) decades ago in Sudarsan Chits (I) Ltd vs O. Sukumaran Pillai & Ors [1984 (8) TMI 242 - SUPREME COURT]
We answer this question stating that a combined reading of Section 446 read with Section 456 of the Companies Act, shows that the Company Court will have jurisdiction to deal with the issue relating to a transaction alleged to be in favour of a third party. The caveat to this proposition is that the jurisdiction of the Company Court, commences one year prior to the date of presentation of the company petition. The said power cannot be exercised by a Company Court for the transactions which have been concluded & to which the company is a party and if the title has vested in third parties, one year prior to the presentation of the petition.
What is the effect of Civil Court decree which has attained finality? - Whether in absence of positive evidence of false misrepresentation, a finding can be recorded of fraud and misrepresentation, without trial only on basis of Administrator/Provisional Liquidator? - As seen from Section 446 of the Companies Act, the power of the Company Court is wide. Therefore, the Company Court can always decide on the validity of a decree when it is presented before it. Whether the decree is binding on the Company and consequently on the official liquidator are matters which have to be gone into at the time of the Trial. We add, the Company Court has the power not only to entertain suits or other proceedings but it can also decide the said suit or proceeding after taking evidence.
Whether the Company Court has the jurisdiction to determine question of title of land falling outside jurisdiction of this Court in view of Clause 12 of Madras High Court Letters Patent? - The answer to this question lies under Section 10 of the Companies Act of 1956. If a Company is registered within the jurisdiction of a High Court exercising its jurisdiction under the Companies Act of 1956, then necessarily by virtue of Section 10 of the Act, the Company Court has the power to determine the title of the land of properties falling outside the Ordinary Original Jurisdiction of the Court.
We have to note that Letters Patent has been treated as a parliamentary statute and it is held to be in force till it is replaced by another parliamentary statute. Companies Act of 1956 is a parliamentary statute and it has conferred the power on the company courts under section 10 of the Companies Act. We hold in this case, though the properties in this case are situated in the state of Telangana and Andhra Pradesh, as the company was registered within the jurisdiction of this Court, the Company Court has the jurisdiction to deal with the said issues.
-
2023 (8) TMI 1103
Benami Transaction - True owner of property - Whether the Trial Court was right in concluding that Items 1 to 3 of suit properties were belonged to Ramasamy Chettiar, though the sale deeds dated 27.10.1948 stood in the name of Sowdammal? - HELD THAT:- We have considered contents of Ex.A2, sale deed, which clearly shows that consideration for the said sale was paid by Ramasamy Chettiar on behalf of the Sowdammal. There is a specific endorsement to the effect made by the Sub-Registrar, which is an Official act done under Section 58 of the Registration Act.
We find force in the contention of the respondents to the effect that Ramasamy Chettiar, who was the head of the joint family having seven children would not have intended to benefit his wife alone. The fact that he was forced to sell away the property in 1961 to get the 1st defendant married is projected as a pointer. When we look at the totality of the circumstance and evidence of the D.W.1, the eldest daughter of Ramasamy Chettiar and Sowdammal, we find that we have to agree with the Trial Court in its conclusion that the property was purchased by Ramasamy Chettiar out of his own funds and he was intend benefit Sowdammal / his wife through the said purchase.
No doubt, there was some ancestral property but it is not shown that it had yielded necessary income for the purchase. Therefore, we should necessarily proceed on the finding that the property was self acquisition of Ramasamy Chettiar. Once it is held that the property was a self-acquisition of Ramasamy Chettiar, the plaintiff and the defendants 1 to 6 along with Sowdammal would each be entitled to 1/8th share. The 1/8th share of Sowdammal would devolve, on her death, on her heirs depending on her intestacy or otherwise.
Validity of the Will left by the Sowdammal - Whether the Will dated 05.06.1995 has been proved to be true and valid ? - As rightly pointed out by the learned counsel for the plaintiff the signatures made at the time of execution of the Will are vastly different from the signatures made before the Sub-Registar.
We are unable to persuade ourselves to agree with the contention of defendants 2, 9 and 10 regarding execution of the Will. Despite being a registered instrument, the Court is not precluded from examining the suspicious circumstances.
As rightly pointed out by the learned counsel for the plaintiff Sowdammal, who was the mother of at least seven children would not have, but for very strong reason, executed a Will excluding six of her children from inheriting her property. We do not find any explanation either in the Will or in the evidence of D.W.2 and D.W.3.
As we have already pointed out that the disinheritance of at least six of the heirs and preference to a daughter-in-law and married grand daughter by itself is a suspicious circumstance. We are unable to find any evidence that would justify such exclusion by Sowdammal. The above coupled with differences in signatures found in the document compel us to conclude that the Will has not been proved in accordance with law and the same cannot be said to be valid and binding on the other heirs. Once we reach a conclusion that the Will has not been proved, the share of Sowdammal in Items 1 to 3 namely, 1/8th will also devolve under Section 15 of the Hindu Succession Act under which her children will get an equal share. Therefore, the plaintiff will get 1/7th share in Items 1 to 3.
Purchase of Item 4 and the character of 5th item of Schedule 1 and 1st Item of Schedule 2 - Whether the ancestral nucleus found to be in existence earned a sufficient income to leave a surplus to enable purchase of Items 4 and 6 of the 1st schedule in the name of the defendants 2 and 9 respectively ? -Since Ramasamy Chettiar was alive at that time, a purchase by a junior member of a joint family does not entail the same presumption as purchase in the name of the Karta. Therefore, person claiming the property to be joint family property will have to establish by cogent and convincing evidence that the purchase was made out of the funds from the joint family properties.
We also find that the nucleus that was available was only a house property, which would not have generated so much of income to enable purchase of Item 4 in the name of the 2nd defendant. Apart from the above, the 2nd defendant has also produced evidence in the form of sales tax returns Ex.B15 and assessment orders under Exs.B18, 19, 20 and 21 to show he has been doing some business at that time. We are therefore, inclined to accept the finding of the Trial Court regarding the character of Item 4 of the suit schedule properties.
6th item of the suit schedule properties was purchased under two sale deeds - Whether it is shown to the plaintiff to plead that Item 6 belonged to the joint family ? - Item 6 is the absolute property of the 9th defendant and the plaintiffs are not entitled to any share in the suit properties. The Trial Court has granted 1/7th share to the plaintiff in Item No.5 of Schedule 1 and Item 1 of Schedule 2, which are admittedly joint family properties.
Defendants 2, 9 and 10 is unable to pick holes in the findings of the Trial Court with reference to those properties, since the character of those properties has been admitted. The Trial Court granted 1/7th share treating the children of Ramasamy Chettiar as coparceners in view of the advent of Hindu Succession (Amendment) Act 39 of 2005. We therefore, affirm the said findings of the Trial Court.
a) the plaintiff is declared entitled to 1/7th share in Item 1 to 3 and 5 of Schedule 1 and Item 1 of Schedule 2. There will be a preliminary decree for partition as above.
b) the parties will be entitled to move the Trial Court for determination of mense profits.
c)The Trial Court's decree stands confirmed in respect of Item No.5 of Schedule 1 and Item 1 of Schedule 2.
-
2023 (8) TMI 493
Benami Transactions - real/absolute owner - rights of bona fide purchaser of the property for valuable consideration - whether the plaintiff is the absolute owner of the suit property in consequence that the defendant, her men and agents are to be restrained from in any way interfering with the plaintiff's peaceful possession and enjoyment of the suit property? - Trial Court arrived at a conclusion that the property was purchased by the plaintiff in the name of his wife / 1st defendant and it was purchased for her benefits - HELD THAT:- The suit was instituted for declaration and permanent injunction. Though the plaintiff was in possession of the Suit property the Trial Court found that the plaintiff purchased the property for the benefit of the 1st defendant, who is none other than his wife and from out of their relationship two sons were born and at a later point of time there was a dispute between the plaintiff and the 1st defendant and subsequently, the 1st defendant lived separately.
Admittedly, the suit property was purchased in the name of the 1st defendant and the sale deed was marked as Ex.A1 and Patta was marked as Ex.A2, which also stand in the name of the 1st defendant. The transaction and execution of sale deed in favour of the 1st defendant has not been hit by the provision of the Benami Transactions (Prohibition) Act, since the plaintiff is the husband of the 1st defendant.
This being the facts and circumstances considered by the Trial Court, this Court do not find any infirmity or perversity in respect of the judgment and decree passed [2017 (1) TMI 1814 - DISTRICT COURT, CHENGALPET]
Accordingly, the judgement and decree passed by the District Court, Kancheepuram District at Chengalpet stands confirmed and consequently, the Appeal Suit is dismissed. No costs.
-
2023 (8) TMI 68
Benami transactions - property is joint hindu family - real owner - trial Court held that the plaintiff was not able to prove that there was any nucleus of the joint family property from which they have purchased the suit property - HELD THAT:- The suit land has been purchased in the name of the plaintiff and defendant No.2 jointly. However, the finding of both the Courts is that at the relevant time the plaintiff was a minor and that there was no nucleus or ancestral joint family property from which the amount was received to purchase the suit property. There was no evidence whatsoever that the family owned ancestral property, as such, the Court held that the property is not the ancestral property. The suit property is held to be purchased by the defendant No.2.
Since both the Courts below have held that the suit property is individual property of the defendant No.2 and not a joint family property, the issue of sale of the suit property for legal necessity does not survive.
In view of the judgment of the 3 Judges Bench of R.Rajagopal Reddy [1995 (1) TMI 67 - SUPREME COURT] and in the case of Dattaram Govindrao Kale . [2023 (8) TMI 2 - BOMBAY HIGH COURT] the defence of benami transaction taken prior to the Act coming into force is available and the Benami Transactions [Prohibition] Act is not retroactive to that extent.
-
2023 (8) TMI 67
Benami transaction - parallel proceedings under Income-tax - cash which is said to belong to the petitioner and was seized from the hands of the petitioner's friend, was taxed in the hands of the petitioner for the Assessment Year 2021-2022 - writ filled seeking adjustment of cash that was seized from the hands of the petitioner's friend - meanwhile fourth respondent has initiated proceeding under Section 263 - HELD THAT:- The prayer of the petitioner for a Mandamus cannot be countenanced without an application by the petitioner under first proviso to Section 132 of the Income Tax Act, 1961, although there could be a corresponding duty on the part of the respondents to appropriate the amount that was seized on 20.06.2020, if an application is made. If the aforesaid seized amount is to be treated as an asset of the petitioner and adjusted u/s 132 of the Income Tax Act, 1961, the petitioner has to first file an application as is contemplated under the aforesaid provision.
Considering the fact that a parallel proceedings is also pending before the fifth respondent under the Prohibition of the Benami Property Transactions Act, 1988, pursuant to the order passed by this Court in W.P.No.9868 of 2023, direct the petitioner to file appropriate application before the third respondent in accordance with the provisions of Sections 132B of the Income Tax Act within a period of 7 days from the date of receipt of a copy of this order. The third respondent shall dispose the same within a period of 8 days thereafter.
Considering the fact that the parallel proceedings is also likely to be heard and disposed by the fifth respondent on 01.08.2023 under the Prohibition of the Benami Property Transactions Act, 1988, the third respondent shall endeavour to pass orders as expeditiously taking note of the order to be passed by the fifth respondent.
-
2023 (8) TMI 2
Benami transaction - real owner of property - beneficial wight in suit property - property is the self acquired property of defendant no.2 - Defendant no.1 purchased the property before the act came into force - HELD THAT:- The Hon’ble Supreme Court in the case of R. Rajagopal Reeddy, [1995 (1) TMI 67 - SUPREME COURT] has held that the plaint would not lie under section 4(1) of the Benami Transactions (Prohibition) Act for a claim to enforce any right in respect of any property held benami, against the person in whose name the property is held after coming into effect of the Act, even if the transactions were prior in point of time. Also under section 4(2) of the Act if a suit is filed by plaintiff who claims to be owner of the property on the basis of ownership document and claims ownership on the basis that the property is in his name, after the coming in force of the Act no defence would be permitted or allowed in any such suit, claim or action by or on behalf of the person claiming to be the real owner of such property held benami. Section 4(2) restricts the defence of a pre-existing right.
Such a provision the Hon’ble Supreme Court has held in the case of R. Rajagopal Reddy (supra), cannot be retrospective or retroactive by necessary implication. However, what is prohibited is the defence to be taken on that day when the act came into force. Thus, even if the transaction is prior in point of time, defence based by the owner of the property who holds the property benami in the name of some other person is not permissible under section 4(2) of the Benami Transactions (Prohibition) Act after the Act comes into force.
In the instant case, the defence is taken much prior to the coming into force of the Benami Transactions (Prohibition) Act and the defence once allowed cannot be subsequently taken away. The defence was taken in the year 1982 much before the act came into force.
In the instant case, the defence of benami transaction by defendant no.2 in favour of plaintiff is taken by the person (defendant no.1), who has purchased the property before the act came into force. On the date of the act coming into force there was no property in the name of the plaintiff, as such, whether a plea of declaration of ownership on the basis of sale deed in its favour prior to the coming into force of the Benami Transactions (Prohibition) Act can be maintained by the plaintiff against the purchaser of the property from the real owner who purchased the property benami in the name of the plaintiff, is itself doubtful.
Defence was taken by defendant no.1 of benami transaction by defendant no.2 in favour of the plaintiff and that the defendant no.2 being the real owner of the property was entitled to sell the suit property to the defendant no.1 was taken much prior to the coming into force of the Benami Transactions (Prohibition) Act and in view of the judgment of the 3 Judges bench of R. Rajagopal Reddy (supra), the defence of benami transaction taken prior to the coming into the act is available and the Benami Transactions (Prohibition) Act is not retroactive to that extent.
The Prohibition of Benami Property Transactions Act, 1988 is not applicable to the instant case.
Next Question of Law raised for the appellant that the permission was required to be taken under section 8 of the Guardianship Act from the mother of the appellant is also not tenable in view of the fact that the property is the self acquired property of defendant no.2 and the appellant plaintiff had no right in the suit property, thus the question of taking permission from the district court under section 8 of the Guardianship Act does not arise.
........
|
