2024 (3) TMI 1002 - SCH - Benami Property

Benami transaction - Beneficial owner of property - Provisional attachment order - scope of Amendment Act of 2016 - Constitutional validity - Amendment to Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 - retrospective or prospective effect - Attachment of property As decided by HC 2022 (5) TMI 262 - TELANGANA HIGH COURT Section 2 (9) (A) and Section 2 (9) (C) can only have effect prospectively. Central Government has notified the date of coming into force of the Amendment Act of 2016 as 01.11.2016. Therefore, these two provisions cannot be applied to a transaction which took place prior to 01.11.2016. Admittedly, in the present case, the transaction in question is dated 14.12.2011. That being the position, we have no hesitation to hold that the show cause notice dated 30.12.2019, provisional attachment order dated 31.12.2019 and the impugned order dated 30.03.2021 are null and void being without jurisdiction. HELD THAT - Delay of 624 days in filing this special leave petition is condoned. The issues raised in this petition are squarely covered by a judgment rendered by a three-Judge Bench of this Court in Union of India Anr. Vs. Ganpati Dealcom Pvt. Ltd. 2022 (8) TMI 1047 - SUPREME COURT wherein held Section 3(2) of the unamended 1988 Act is declared as unconstitutional for being manifestly arbitrary. Accordingly, Section 3(2) of the 2016 Act is also unconstitutional as it is violative of Article 20(1) of the Constitution. In rem forfeiture provision under Section 5 of the unamended Act of 1988, prior to the 2016 Amendment Act, was unconstitutional for being manifestly arbitrary. The 2016 Amendment Act was not merely procedural, rather, prescribed substantive provisions. In rem forfeiture provision under Section 5 of the 2016 Act, being punitive in nature, can only be applied prospectively and not retroactively. Concerned 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. Hence, the special leave petition is disposed of in the aforesaid terms.

Summary

The Supreme Court condoned a delay of 624 days in filing a special leave petition. The issues raised were covered by a judgment in Union of India & Anr. Vs. Ganpati Dealcom Pvt. Ltd. The special leave petition was disposed of accordingly, and pending applications were also disposed of.