2019 (8) TMI 414 - Other - Benami Property

Benami transaction - beneficial owner - alleged cash/banking transaction trail of AMPL that huge amount of cash was deposited in the bank account of the benamidar, M/s. AMPL and within no time the same got routed through bank account of DMPL to reach its final destinations - Section 2(9) of the Prohibition of Benami Property Transactions Act, 1988. HELD THAT - The transfer of money through RTGS in the account of the appellant, who after due enquiry,returned the money next day, in our view is not a benami transaction falling within the definition as prescribed under the Act. From the above, it is clear that there was no benami transaction so far as the appellant is concerned so there is no question of the appellant becoming the beneficial owner. No material has been placed before us nor available on record proving that the appellant has entered into any benami transaction or in any way a beneficial owner. It is the limited grievance of the appellant before this Tribunal is that when the Authority has come to the findings that the Initiating Officer has not said anything substantial against the present appellant and that the appellant has nothing to do with the M/s. Apsara Merchandise Pvt. Ltd. or the amount lying in the bank account of benamidar which is not legally claimed by the appellant, the Adjudicating Authority ought to have held that the appellant is not a Beneficial Owner with regards to the amount of ₹ 28,10,625/- lying in the aforesaid account of SBI and attached by the Initiating Officer and that the appellant‟s name ought to have been removed as a Beneficial Owner - It is clear from the impugned order that the learned Adjudicating Authority, on the basis of material, facts and circumstances has held that the Initiating Officer has not said anything substantial against the appellant and also has considered the plea of the appellant that it is not claiming the amount lying in the bank account of benamidar.The most important aspect is also that the Initiating Officer has not challenged the aforesaid findings of the learned Adjudicating Authority. The appellant is not a Beneficial owner within the meaning of the definitions defined under Sections 2(12) of PBPT Act, 1988 - appeal allowed.

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Allegations of benami transactions and beneficial ownership.
3. Validity of the provisional attachment order.
4. Determination of whether the appellant is a beneficial owner under the PBPT Act.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The appellant filed an application for condonation of a two-day delay in filing the appeal. The respondent did not object to this application. The delay was condoned in the interest of justice based on the grounds mentioned in the application.

2. Allegations of Benami Transactions and Beneficial Ownership:
The respondent alleged that the appellant was a beneficiary of funds routed through the bank accounts of M/s. Apsara Merchandise Pvt. Ltd. (AMPL), a non-traceable company, via M/s. Daintree Metals Pvt. Ltd. (DMPL). The appellant contested these allegations, asserting no connection or dealing with AMPL and denying any beneficial ownership of the alleged benami property.

3. Validity of the Provisional Attachment Order:
The respondent initiated a reference before the Adjudicating Authority under Section 24(5) of the PBPT Act for the confirmation of the Provisional Attachment Order dated 25.01.2017. The order prohibited the State Bank of India (SBI) from delivering ?28,10,625/- lying in a specified account. The appellant was named as defendant no. 8 in these proceedings.

4. Determination of Whether the Appellant is a Beneficial Owner under the PBPT Act:
The appellant argued that the money received as an advance for ceramic tiles was returned after verifying the credentials of the party. The appellant contended that this transaction did not fall within the definition of a "benami transaction" under Section 2(9) of the PBPT Act, 1988. The respondent, however, maintained that the appellant was a beneficial owner based on the cash/banking transaction trail and statements from Mr. Abhay Sultania, who controlled AMPL and DMPL.

Judgment Analysis:

Upon examining the material and arguments presented, the Tribunal referred to Section 2(9) and Section 2(12) of the PBPT Act, defining "benami transaction" and "beneficial owner," respectively. The Tribunal noted that the appellant returned the money the next day after due inquiry, indicating no benami transaction as per the Act's definitions.

The Tribunal observed that the Adjudicating Authority had not specifically concluded that the appellant was a beneficial owner. The Authority had noted that the Initiating Officer did not provide substantial evidence against the appellant. The appellant also claimed no connection with the money in the bank account in question.

The Tribunal concluded that the allegations against the appellant were based on presumptions without substantial proof. No prima facie evidence was presented to continue the attachment. Thus, the Tribunal held that the appellant was not a beneficial owner under Section 2(12) of the PBPT Act. Consequently, the Tribunal modified the impugned order to remove the appellant's name as a beneficial owner. However, since the appellant did not claim the attached amount, the attachment would continue.

Conclusion:
The appeal was allowed, and the appellant was declared not a beneficial owner. The attachment order remained in force, but the appellant's name was removed from the list of beneficial owners. No costs were awarded.

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