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2024 (11) TMI 624 - AT - Benami PropertyProhibition of Benami Property Transaction - attachment order of gold and silver articles from lockers - identification of beneficial locker holders - HELD THAT - The conduct of the parties speaks for itself. If the things would have been bona fide, the SVPL should have disclosed that lockers in the name of Shiv Daga belongs to the appellant and could have produced the request letter for change of name at the time of investigation by the I.O. SVPL has shown it to be their bona fide mistake for non disclosure but, other than the aforesaid lame excuse, no other justification could be given. The excuse was not acceptable not only for the reason that when search and seizure was made in reference to few lockers, the onus was on the SVPL and also on the appellant to immediately submit the true facts if it was true and not to cook up the story subsequently. The facts on record show how the things changed when the SVPL try to come to rescue of the appellant. The Company is equally responsible for the benami transaction because they did not take KYC documents despite the fact that it became mandatory in the year 2016 and continued the locker in the name of Shiv Daga. This highlights the conduct of SVPL. The fact now remains about the request letter given by the appellant to change the name from Shiv Daga to Shiv Narayan Baheti starting from the year 2013. The reminder was given even in the year 2015. It ishowever a fact that name was changed subsequent to the search and seizure. The only reason for delaying the change of the name was in absence of the payment which is shown to have been paid in the year 2019 without putting any documents as to show what was the arrangement between appellant and the SVPL for operation of lockers and what was the rent decided amongst them. We have already highlighted the conduct of SVPL who is trying to support the appellant because their mis-doings are also highlighted for not taking KYC in the year 2016, otherwise the things would have been settled in the year 2016 itself. To cover up the defaults, they said to have accepted the payment. The appellant has not placed on record even the agreement between him and the SVPL to justify delay in change of the name. In fact the appellant and SVPL were hand in glove to mis-lead the respondent. In any case, the fact further remains that the appellant argued the case at length but failed to disclose the source of acquisition of gold and silver and in absence of it, the view cannot be taken in favour of the appellant. The appellant was under obligation not only to prove that lockers were belonging to him but to prove ownership of the gold and silver to disclose the means for acquisition of it, but there is total failure of the appellants to do so. Thus, we are unable to take a view favourable to the appellant on the facts. Whether no notice under section 24 (1) of the Act of 1988 was given to the appellant and thus the entire proceeding would vitiate? - As we have gone through the record and find that notice under section 24 (1) was given to Shiv Daga and 24 (2) was given to SVPL. On the service of show cause notice, the SVPL disclosed that lockers belong to the appellant. When information aforesaid given in the midstof the proceedings, the appellant was summoned who not only appeared but also made the written submission. No violation of section 24 (1) because purpose of issuance of the notice is to call upon the reply and in fact it was given to the appellant if he claims to be Shiv Daga by himself. It is not that respondent did not issue notice under section 24 (1) rather it was sent in the name of Shiv Dagaat the address of the appellant and if the name of the appellant is Shiv Narayan Baheti alias Shiv Daga then the compliance of section 24 (1) was made and otherwise the appellant made representation of his case before the IO. Thus, the attachment followed by reference cannot be held to be illegal. It is more so when the appellant was given full opportunity of hearing before the Adjudicating Authority to canvas his case but the order of the confirmation was made when appellant failed to make out a case. Thus, full opportunity of hearing was provided to the appellant and thereby the proceeding would not vitiate on the ground taken by him. Appeal dismissed.
Issues Involved:
1. Legitimacy of the attachment of gold and silver articles under the Prohibition of Benami Property Transaction Act, 1988. 2. Applicability of the amended provisions of the Act of 1988 to transactions prior to the 2016 amendment. 3. Compliance with procedural requirements under Section 24 of the Act of 1988. 4. Ownership and identity issues related to the lockers and their contents. Detailed Analysis: 1. Legitimacy of the Attachment of Gold and Silver Articles: The appeal challenged the order confirming the attachment of gold and silver articles valued at Rs. 1,23,27,770/- under the Prohibition of Benami Property Transaction Act, 1988. The appellant contended that the articles were not benami properties as they belonged to him, arguing that the lockers were opened in the name of "Shiv Daga," a name derived from the appellant's and his sister's names. However, the tribunal found contradictions in the appellant's explanations regarding the identity of "Shiv Daga." The tribunal noted the lack of KYC documentation and discrepancies in signatures, suggesting potential forgery. The tribunal concluded that the appellant's narrative was inconsistent and unsupported by evidence, thereby justifying the attachment as a benami transaction. 2. Applicability of the Amended Provisions of the Act of 1988: The appellant argued that the amended provisions of the Act of 1988, introduced by the Amending Act of 2016, should not apply as the lockers were opened in 1998, and the articles were placed in 2013. The tribunal, however, noted the absence of evidence proving that the articles were placed in the lockers before the amendment. Furthermore, the tribunal highlighted that the name change on the locker occurred in 2019, post-amendment, and thus the amended provisions were applicable. The tribunal also referenced the Supreme Court's judgment in "Union of India & Anr. Versus M/s. Ganpati Dealcom Pvt. Ltd.," which was under review, indicating that the appellant's reliance on it was misplaced. 3. Compliance with Procedural Requirements under Section 24: The appellant claimed that the proceedings were vitiated due to the absence of notice under Section 24(1) and 24(2) of the Act of 1988. The tribunal examined the records and found that notice under Section 24(1) was issued in the name of "Shiv Daga" at the appellant's address, and Section 24(2) notice was given to SVPL. The tribunal determined that the appellant, claiming to be "Shiv Daga," effectively received the notice and had the opportunity to present his case. The tribunal concluded that the procedural requirements were met and that the appellant was afforded a full opportunity to be heard. 4. Ownership and Identity Issues Related to the Lockers and Their Contents: The tribunal scrutinized the appellant's claim of ownership over the lockers and their contents. It found inconsistencies in the appellant's narrative about the lockers being opened for his sister's valuables and the subsequent claim that "Shiv Daga" was an alias. The tribunal noted the appellant's failure to respond to public notices and the lack of transparency from SVPL during the investigation. The tribunal emphasized the appellant's inability to substantiate the source of the gold and silver, which further undermined his ownership claim. Consequently, the tribunal upheld the view that the lockers and their contents were involved in a benami transaction. In conclusion, the tribunal dismissed the appeal, finding no merit in the appellant's arguments and affirming the legality of the attachment under the amended provisions of the Prohibition of Benami Property Transaction Act, 1988.
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