2020 (5) TMI 277 - AT - Benami Property

Benami transactions - Provisional Attachment - Whether Single Member Bench can hear the appeals filed under the said Act and pass such orders as deem fit to meet the ends of justice? - HELD THAT - Direction in the order dated 15-5-2019 was that no further steps shall be taken on the notice issued by the I.O. Liberty was granted to the respondent to initiate the proceedings on the basis of fresh reference, if registered and they may proceed by registering the second reference in accordance with law. In the said order dated 15-5-2019, the respondent had also undertook that if necessary the respondent shall proceed with in accordance with law after serving the notice under section 24 (1) of the said Act. The second order dated 13-8-2019, a clear order that has been passed with the direction that no further steps shall be taken by the respondent in view of the impugned order . Here also there is a mention of/reference to impugned order. The relevant portion of the impugned order has already been clarified in the preceding para no.39. Not in agreement with the learned counsel for the appellants that a Single Member Bench cannot clarify the orders passed by Division Bench in the given facts and circumstances of the appeals. The appellants cannot be allowed to take the advantage of an order which does not meant to be interpreted in the way now the appellants are interpreting. If the interpretation of the orders dated 15-5-2019 13-8-2019 are allowed to be interpreted the way the appellants are interpreting then it would amount to stall the investigations and scuttle the power given under the statue to the statutory authority under the said Act. In view of the discussions and after perusal of the judgments cited by both the parties it is held that the Single Member Bench can clarify the orders passed by the Division Bench under the relevant provisions of the said Act discussed above in the given facts and circumstances of the case and also by following the doctrine of necessity. It is clarified that no bar has been imposed in the orders dated 15-5-2019 13-8-2019 on the respondent to proceed with investigations/calling for documents from the appellants in accordance with law. It is further clarified that for the same, the respondent has to register a fresh reference as per law provided under the said Act and to follow the procedure as directed in the order dated 15-5-2019. Accordingly clarified.

Issues Involved:
1. Validity of the applications filed by the appellants.
2. Interpretation and scope of the interim orders dated 15-5-2019 and 13-8-2019.
3. Authority of a Single Member Bench to clarify/review/modify orders passed by a Division Bench.
4. Compliance with the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act).

Detailed Analysis:

1. Validity of the Applications Filed by the Appellants:
The appellants filed applications dated 31-07-2019 seeking urgent directions to refrain the respondent from issuing further notices and calling for documents. The applications were taken up for hearing on 13-08-2019, and an interim order was passed directing that no further steps shall be taken by the respondent in view of the impugned order. The appellants contended that the respondent had issued notices on 09-04-2019, 01-07-2019, and 19-07-2019, despite the interim stay granted on 15-05-2019. The appellants sought relief to ensure compliance with the interim order and to prevent further notices from being issued.

2. Interpretation and Scope of the Interim Orders Dated 15-5-2019 and 13-8-2019:
The interim order dated 15-05-2019 directed that no further steps shall be taken on the notice issued by the Initiating Officer (I.O.), while allowing the respondent to initiate proceedings based on fresh references if registered. The order dated 13-08-2019 reiterated that no further steps shall be taken by the respondent in view of the impugned order. The appellants argued that these orders prevented the respondent from issuing any further notices calling for documents. However, the respondent contended that the orders did not restrict their ability to conduct further inquiries and investigations in accordance with the law, provided that fresh references were registered.

3. Authority of a Single Member Bench to Clarify/Review/Modify Orders Passed by a Division Bench:
A legal question was raised regarding the authority of a Single Member Bench to review, modify, or clarify orders passed by a Division Bench. The respondent argued that a Single Member Bench is empowered to hear appeals and pass orders under the PBPT Act, citing various provisions and judgments. The appellants contended that a Single Member Bench does not have the authority to interpret or modify orders passed by a Division Bench. The tribunal examined relevant provisions of the PBPT Act, including sections 31, 36, 40, 46, and 71, and concluded that a Single Member Bench can clarify orders in the given facts and circumstances, following the doctrine of necessity.

4. Compliance with the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act):
The tribunal emphasized the importance of compliance with the PBPT Act and the statutory powers granted to the Initiating Officer and Adjudicating Authority. The tribunal clarified that the orders dated 15-05-2019 and 13-08-2019 did not bar the respondent from proceeding with investigations or calling for documents, provided that fresh references were registered in accordance with the law. The tribunal held that the appellants' interpretation of the orders would stall investigations and undermine the statutory authority's powers under the PBPT Act.

Conclusion:
The tribunal clarified that the orders dated 15-05-2019 and 13-08-2019 did not impose a bar on the respondent from conducting investigations or calling for documents, provided that fresh references were registered as per the law. The tribunal affirmed that a Single Member Bench has the authority to clarify orders passed by a Division Bench in the given circumstances, following the doctrine of necessity. The appeals were listed for hearing on 30th July, 2020.

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