2022 (7) TMI 530 - HC - Benami Property

Benami transaction - 5th respondent exercising powers under Section 18(2) of the Benami Property Act has provisionally attached the properties - HELD THAT - Adjudicating Authority is empowered to make or cause to be made inquiries and to call for reports or evidence as it deems fit. It has also the authority to take into account all relevant materials besides reply of the noticee and thereafter to take a decision one way or the other holding the property not to be a benami property and revoking the attachment order or holding the property to be a benami property and confirming the attachment order. Considering the fact that petitioners before us are widows and facing stringent provisions of the Benami Property Act, it would meet the ends of justice if the Adjudicating Authority on receipt of application of the petitioners call for the relevant documents/evidence from authorised authorities including the Special Investigation Team and thereafter hand over copies of the same to the petitioners so as to enable them to make effective defence. Accordingly following directions are issued (i) Petitioners shall submit application(s) before the Adjudicating Authority within two (02) weeks from today mentioning therein the documents required for their defence and in whose custody the documents are being kept. (ii) On receipt of such application(s), the Adjudicating Authority shall requisition the relevant documents/evidence from the concerned authorities. (iii) On receipt of the documents/evidence by the Adjudicating Authority, petitioners or their authorised representative shall be permitted to go through the same and on their request, photo copies of such documents may be made available to the petitioners or their authorised representative. (iv) Thereafter, petitioners shall file their reply to the notice issued by the Adjudicating Authority (v) Adjudicating Authority shall consider their reply and all other materials on record and thereafter pass an order in terms of Sub- Section (3) of Section 26 of the Benami Property Act.

Summary

Issues:
1. Provisional attachment of properties under the Prohibition of Benami Property Transactions Act, 1988.
2. Handicapped defense due to unavailability of relevant documents.
3. Powers and procedures of the Adjudicating Authority under the Benami Property Act.

Issue 1: Provisional Attachment of Properties
The petitioners challenged orders passed by the 5th respondent under Section 24(4)(b)(i) of the Benami Property Act, provisionally attaching properties until adjudicated by the Adjudicating Authority under Section 26(3) of the Act. The Adjudicating Authority can provisionally attach properties for up to 90 days if the Initiating Officer believes the property may be alienated. The case was referred to the Adjudicating Authority under Section 24(5) after the provisional attachment.

Issue 2: Handicapped Defense
The petitioners, widows facing the stringent provisions of the Benami Property Act, were handicapped in their defense due to the unavailability of relevant documents seized by the Special Investigation Team. These documents, including sale deeds and link documents, were crucial for an effective defense. The court acknowledged the petitioners' predicament and directed the Adjudicating Authority to requisition the necessary documents from authorized authorities, including the Special Investigation Team, to enable the petitioners to make an effective defense.

Issue 3: Powers and Procedures of the Adjudicating Authority
The Adjudicating Authority, under Section 26(3) of the Benami Property Act, is empowered to consider replies, conduct inquiries, call for reports, and take into account all relevant materials before deciding on the status of the property. The court emphasized that the Adjudicating Authority should provide an opportunity for the benamidar, the Initiating Officer, and any other claimant to be heard before passing an order either revoking the attachment or confirming it as benami property.

In conclusion, the court issued directions for the petitioners to submit applications listing required documents, which the Adjudicating Authority must requisition and provide to the petitioners for an effective defense. The Adjudicating Authority will then consider the petitioners' replies and materials on record before passing an order under Section 26(3) of the Benami Property Act. The writ petitions were disposed of without costs, and pending miscellaneous applications were closed as a sequel to the judgment.