2024 (1) TMI 384 - HC - Benami Property

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.

Summary

Issues Involved:
- Interpretation of Section 5 of the Prohibition of Benami Property Transactions Act, 1988 as amended in 2016
- Retrospective application of the amended provisions

Interpretation of Section 5 of the Act:
The appellants challenged the order of the Appellate Tribunal, arguing that Section 5 of the Prohibition of Benami Property Transactions Act, 1988, as amended in 2016, should have retrospective effect. The Tribunal relied on the decision of the Supreme Court in Union of India vs. Ganapati Dealcom P Ltd., which held that the provisions under Section 5 of the 2016 Act, being punitive in nature, can only be applied prospectively. The Tribunal set aside the order of the Adjudicating Authority regarding benami transactions prior to the 2016 Amendment Act. The Telengana High Court also held that the amended provisions cannot be applied to transactions before the Act came into force in 2016. However, the Supreme Court dismissed an appeal against this decision, stating that the issue is covered by the Ganapati Dealcom case.

Retrospective Application of Amended Provisions:
The High Court held that as of the present date, the decision in Union of India vs. Ganapati Dealcom Pvt Ltd. stands, and the provisions of Section 5 of the Amended Act, 2016 cannot be applied retrospectively. The pendency of a review petition does not warrant interference with the Tribunal's order. The Court emphasized that mere pendency of a review petition is not a valid ground to challenge the orders. Referring to a Supreme Court decision, the Court stated that High Courts should decide matters based on existing law without waiting for outcomes of references or review petitions. The appellants were given liberty to proceed based on the outcome of the review petition before the Supreme Court.

In conclusion, the Civil Miscellaneous Appeals were disposed of, leaving it open for the appellants to act based on the Review Petition outcome. No costs were awarded, and all connected Miscellaneous Petitions were closed.