2020 (5) TMI 519 - HC - Benami Property

Benami Property Transaction - petitioner Mallika Chamua in respect of 3(three) apartment properties and some other landed properties considered to be a benamidar of Dr. Durlav Chamua being the beneficial owner of the properties within the meaning of Section 2(10) and 2 (12) of the Benami Act of 1988 - petitioner Mallika Chamua and Bisakha Chamua are the daughters of Dr. Durlav Chamua while Smti. Dipika Chamua is his wife and the properties are being held by them as family members of Dr. Durlav Chamua - HELD THAT - Section 2(9) of the Benami Act of 1988 as amended in 2016 does not include a property held by an individual in the name of spouse or in the name of any children of such individual where a consideration thereof had been paid out of the known source of income of the individual concerned. From the meaning of the expression of benami transaction under Section 2(9) of the Benami Act of 1988 also, we have noticed that there is no conclusion arrived at by Income Tax authorities in the notice dated 06.03.2020 that the properties in question were procured by Dr. Durlav Chamua were not from his known source of income. A prima facie case has been made out against the notice dated 06.03.2020 under Section 24(1) of the Benami Act of 1988 as amended in 2016. Further considering the balance of convenience and irreparable loss that the petitioner may suffer, the notice dated 06.03.2020 under Section 24(1) of the Benami Act of 1988 in respect of the petitioner Mallika Chamua and all other related subsequent notices be stayed until further order(s). List on 19.06.2020.

Summary

Issues: Challenge to a notice under Section 24(1) of the Benami Act of 1988 as amended in 2016 regarding properties procured before the amendment.

Analysis:
The judgment pertains to a writ petition challenging a notice issued under Section 24(1) of the Benami Act of 1988 as amended in 2016. The notice required the petitioner to show cause as to why she should not be considered a benamidar of another individual in relation to certain properties. The petitioner contended that the properties mentioned in the notice were acquired before the 2016 amendment to the Benami Act. It was argued that the amended Section 3(3) of the Act, introduced in 2016, does not apply retrospectively to transactions prior to the amendment. Additionally, it was highlighted that the Act, prior to the amendment, did not consider the purchase of property in the name of a spouse or unmarried daughter as a benami transaction. The petitioner's counsel emphasized that the properties in question were acquired from known sources of income, as required under the amended Section 2(9) of the Act. The court noted that the Income Tax authorities had not determined that the properties were acquired from undisclosed income. Consequently, the court found a prima facie case against the notice dated 06.03.2020 under Section 24(1) of the Benami Act of 1988 as amended in 2016. As a result, the court ordered a stay on the notice and any related subsequent notices until further orders, considering the balance of convenience and potential irreparable loss to the petitioner.

This detailed analysis of the judgment showcases the court's interpretation of the Benami Act of 1988, particularly in light of the 2016 amendment, and its application to the properties in question. The court's decision to grant a stay on the notice pending further proceedings reflects a careful consideration of the legal arguments presented by the petitioner's counsel regarding the timing of property acquisitions and the provisions of the amended Act.