2022 (9) TMI 524 - HC - Benami Property

Prohibition of Benami Property Transactions - Attachment order passed under Section 24(3) of the Benami Transactions (Prohibition) Amendment Act - petitioner is seeking for writ of certiorari to declare the provisions of Benami Transactions (Prohibition) Amendment Act, 2016 being prospective and consequently the notices issued to the petitioner and quashing of the orders passed pursuant to the same - HELD THAT - As held by the Hon ble Apex Court 2022 (8) TMI 1047 - SUPREME COURT that 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. We are of the considered view prosecution and initiation of proceedings in the instant case being pursuant to the Amendment Act the declaration made by the Hon ble Apex Court in paragraph 18(e) would squarely be applicable and as such, impugned attachment order stands quashed and all consequential proceedings initiated thereto. We also make it clear that question which has been kept open by the Hon ble Apex Court in paragraph 18.1(f), would squarely be applicable to the facts on hand also.

Summary

Issues:
1. Quashing of attachment order under Section 24(3) of the Benami Transactions (Prohibition) Amendment Act, 2016 and consequential proceedings.
2. Declaration of the provisions of the Benami Transactions (Prohibition) Amendment Act, 2016 as prospective.
3. Validity of notices issued to the petitioner and orders passed pursuant to the Act.

Analysis:
1. The petitioner sought the quashing of the attachment order under Section 24(3) of the Benami Transactions (Prohibition) Amendment Act, 2016 and all related proceedings. The Honorable High Court considered the arguments presented by the advocates for both parties and referred to a judgment by the Honorable Apex Court in a related matter. The Apex Court had declared that authorities cannot pursue criminal prosecution or confiscation proceedings for transactions predating the enactment of the 2016 Act, thereby leading to the quashing of such initiated proceedings. Consequently, the High Court quashed the impugned attachment order and all associated proceedings in the instant case.

2. The petitioner contended that the provisions of the Benami Transactions (Prohibition) Amendment Act, 2016 should be considered prospective. The High Court noted that the Apex Court had deemed certain sections of the Act, including Section 3(2) and Section 5, as unconstitutional due to being arbitrary and violative of the Constitution. The Apex Court also clarified that the 2016 Amendment Act introduced substantive provisions and that the in rem forfeiture provision under Section 5 of the Act, being punitive, should only apply prospectively. Therefore, the High Court aligned with the Apex Court's decision and applied the same principle to the instant case, leading to the quashing of the attachment order and related proceedings.

3. The petitioner further sought a writ of certiorari to challenge the notices issued and orders passed under the Act. The High Court, after thorough consideration, concurred with the Apex Court's ruling that criminal prosecution or confiscation proceedings for transactions predating the enactment of the 2016 Act cannot be pursued. Consequently, the High Court allowed the Special Civil Application, quashed the impugned attachment order, and made no order as to costs, ensuring compliance with the legal principles established by the Apex Court.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the High Court's decision based on the legal principles established by the Honorable Apex Court.