2017 (8) TMI 1562 - HC - Benami Property

Benami nature of the property - Prohibition of Benami Property Transactions Act - restraining the appellant from transferring or changing the nature of property till passing of an order by Adjudicating Authority under the Prohibition of Benami Property Transactions Act - sole argument of appellant is that the documents necessary to submit response was not supplied by the Initiating Officer therefore, the proceedings have been conducted in an arbitrary manner - HELD THAT - We do not find any merit in the present appeal. It is the Adjudicating Authority who is to decide the question of Benami nature of the property. The proceedings under Section 24 of the Act contemplates the issuance of show cause notice as to why the property specified in the notice should not be treated as Benami property. However, the substantive order of treating the property as Benami is required to be passed by Adjudicating Authority under Section 26 of the Act only. Therefore, the appellant is at liberty to take all such plea of law and facts as may be available to the appellant before the Adjudicating Authority. The Adjudicating Authority shall decide the Benami nature of the property in accordance with law.

Summary

Issues:
Challenge to order restraining property transfer under Prohibition of Benami Property Transactions Act, 1988.

Analysis:
The appeal in question challenges an order passed by a learned Single Bench, which restrained the appellant from altering the property's nature until the Adjudicating Authority under the Prohibition of Benami Property Transactions Act, 1988, issued a decision. The appellant's contention revolves around the lack of documents provided by the Initiating Officer, leading to alleged arbitrary proceedings. However, it is acknowledged that all necessary documents have now been submitted before the Adjudicating Authority, scheduled for a hearing on 23.08.2017.

The appellant's primary argument is centered on the perceived denial of a fair opportunity to contest the initiation of proceedings due to the alleged lack of essential documents. Additionally, the appellant seeks direction for the Adjudicating Authority to address the objections raised before making any final determinations. However, the Court finds no merit in the appeal, emphasizing that the Adjudicating Authority holds the responsibility to determine the property's Benami nature. The Act mandates the issuance of a show cause notice under Section 24, with the final decision on the property's classification as Benami falling under the Adjudicating Authority's jurisdiction as per Section 26.

Conclusively, the appellant is granted the freedom to present all legal and factual arguments before the Adjudicating Authority, which is entrusted with the task of deciding the property's Benami status in adherence to the law. The judgment underscores the importance of due process and the authority vested in the Adjudicating Authority to make determinations regarding Benami properties.