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TMI Blog2020 (2) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... med, pending final adjudication, vide Annexure P/2 dated 27.08.2019. Considering the sequence of events and the nature of challenge raised by the Appellants/writ Petitioners, in the light of the version put forth by the Respondents as discussed by the learned Single Judge, it is evident that no prejudice has been caused to the Appellants/Petitioners in any manner, because of the 'provisional attachment'. This is more so, in view of the submissions made by the learned counsel for the Appellants during the course of hearing, that the Petitioners/Appellants would undertake that they would not alienate the properties till the adjudication is finalized. If the Appellants do not have any intention to alienate the property, they need not feel worried about Annexures P/1 and P/2 'provisional attachment'. What will be the course of action to be ordered by the 2nd Respondent on culmination of the adjudication proceedings, is a matter which is still to be ascertained. How the properties of the Appellants/Petitioners, covered by the Annexure P/3, are going to be dealt with by 2nd Respondent is yet to be decided. Whether any provisions of the statute which are 'subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the effect that, as per the information gathered by the said Respondent, the above properties were to be held as 'benami properties' and hence the said properties were provisionally attached, till final adjudication. 4. On receipt of Annexure P/1, the Appellants submitted Annexure P/5 reply, explaining the facts and figures. It was pointed out that all the properties mentioned in the notice, except those items which were specifically pointed out as belonging to somebody else (as disclosed from Annexure P/4), were purchased prior to the Benami Transaction (Prohibition) Amendment Act, 2016 (for short, 'Amendment Act, 2016') which came into force only from 01.11.2016 and hence they cannot be proceeded against. The title deeds of the properties owned by the Appellants are produced as Annexure P/3. However, the 2nd Respondent, without any regard of the explanation offered by the Petitioners/Appellants issued Annexure P/2 order dated 27.08.2019, whereby Annexure P/1 provisional order was confirmed. This made the writ Petitioners to approach this Court by filing the writ petition seeking for a direction to quash Annexures P/1 and P/2 notices/proceedings. 5. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dment Act, 2016 was brought into force. The provision for 'confiscation' of the property is a substantive law, which can have only prospective application and cannot be of any retrospective effect. This is the law declared by the Rajasthan High Court referring to all the relevant provisions of law and the binding precedents. Reliance is also sought to be placed on Mangathai Ammal (supra). The learned counsel submits that substantial changes have been introduced to the old Act, which earlier contained only 9 provisions/sections. The drastic changes brought about as per Amendment Act, 2016 cannot be called as 'procedural' in nature and hence not retrospective. 8. It is pointed out that the Appellants had purchased the said properties using their own money and particulars of the sources and funds have already been passed on to the 2nd Respondent. Even in a case where the above properties are held to be benami, the proceedings can only be for 'acquisition' under the old Act and not for 'confiscation' under the Amendment Act, 2016. These vital aspects were omitted to be properly noted by the learned Single Judge who interpreted Sections 3, 5 and 8 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of old transactions i.e. prior to 01.11.2016 and also in respect of subsequent transactions, as the case may be. 10. The salient features of the statutory provisions, as pointed out by the learned counsel for the Respondents in this regard by way of Written Synopsis (supported by affidavit) are as given below: i) Sub section 1(3) of the PBPT Act, which remains unaltered by the Amendment Act, 2016, specifically make the provisions of sections 3, 5 and 8 of the PBPT Act from 05.09.1988 and states that the remaining provisions shall be deemed to have come into force on 19.05.1988. ii) Further, Section 3 of the PBPT Act imposes a punishment of imprisonment upto three years and/or fine for entering into a benami transaction prior to the date of commencement of the Amendment Act, 2016 and, thereafter punishment shall be in accordance with Chapter VII, containing section 53, 54 and 55, that enhanced penal consequences of entering into a benami transaction after the date of commencement of the Amendment Act, 2016 have consciously been made prospective by that amendment statue. iii) Section 5 of the Benami Transaction (Prohibition) Act, 1988 as applicable from 1988 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that extent they would be retrospective in their application being curative in nature. In order to understand as to whether the present amendment is a curative legislation, the observations of Hon'ble Supreme Court in the case of R Rajgopal Reddy vs. Padmini Chandrasekharran reported in (1995) 2 SCC 630 can be seen at para 17, 18: 17. As regards, reason No-3, we are of the considered view that the Act cannot be treated to be declaratory in nature. Declaratory enactment declares and clarifies the real intention of the legislature in connection with an earlier existing transaction or enactment, it does not create new rights or obligations. On the express language of Section 3, of the Act cannot be said to be declaratory but in substance it is prohibitory in nature and seeks to destroy the rights of the real owner qua properties held benami and in this connection it has taken away the right of the real owner both for filing a suit or for taking such a defence in a suit by benamidar. Such an Act which prohibits benamis transactions and destroys rights flowing from such transaction as existing earlier is really not a declaratory enactment. With respect, we disagree with the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submitted, wrongly held to be an Act declaratory in nature for it was not passed to clear any doubt existing as to the common law or the meaning of effect of any statute. The conclusion however that Section 4 applied also to past benami transactions may be supportable on the language used in the Section. 18. No exception can be taken to the aforesaid observations of learned author which in our view can certainly be pressed in service for judging whether the impugned section is declaratory in nature or not. Accordingly, it must be held that Section 4 or for that matter the Act as a whole is not a piece of declaratory or curative legislation. It creates substantive rights in favour of benamidars and destroys substantive rights of real owners who are parties to such transactions and for whom new liabilities are created by the Act. viii) Even on the aspect relating to whether a procedure can be prescribed for reaching an object which was earlier intended to, the Hon'ble Supreme Court in the case of Kapur Chand Pokhraj vs State of Bombay reported in AIR 1958 SC 993 at Para 9 held as under: 9. .... In Maxwell's Interpretations of Statutes, the following pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application alone. xii) Any law which makes engaging in certain activity a punishable offence, cannot be given retrospective effect because of the constitutional bar on retrospective criminal law. Therefore, Benami Transaction (Prohibition) Act, 1988 (the original act, 1988) was amended and not repealed. The consequence of this is that all benami transactions which have taken place between 1988 and the commencement of the Benami Transaction (Prohibition) Amendment Act, 2016 (i.e. Amendment Act, 2016) can be proceeded against. Since the original Act already prohibits benami transactions and makes it a punishable offence, benami transaction which have taken place from 1988 to 31.10.2016 will be proceeded against the original Act, 1988. Punishment in such cases will be to the extent provided by the law in force at time when the offence of benami transaction was committed and in the original Act, a maximum punished of imprisonment up to three years and/or fine has been provided. xiii) In the context of the challenge to the retrospective application of the prescribed procedure brought into the statute by the Amendment Act, 2016, it is relevant to note that the Hon'ble Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or from the Land Revenue Authorities and Bank statements were obtained from the Banks concerned, besides recording the statements of the Appellants herein. 13. The outcome of the scrutiny done with reference to above materials has been given in Annexure P/1, to the effect that the Appellants were not having sufficient income to purchase the above properties. It was even beyond the knowledge of the Appellants that some of such properties were registered in their names. Show cause notice was issued to the Appellants on 02.05.2019, which was served on 09.05.2019 and pursuant to their request, notice was also served on the Appellants in 'Hindi', by post, on 04.06.2019. On submitting a reply to the show cause notice, it was considered and the 2nd Respondent found that the particulars furnished by the Appellants did not reconcile with the materials on record. It was accordingly, that a prima facie finding was rendered to the effect that the matter required to be proceeded further; thus passing Annexure P/1 order of provisional attachment in terms of the mandate under Section 24 (5) of the Act of 1988. Annexure P/1 provisional attachment was later confirmed, pending final adju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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