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TMI Blog2022 (5) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 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. Consequently, the impugned order is set aside and quashed. - WRIT PETITION Nos.14695 of 2021 - - - Dated:- 8-3-2022 - WRIT PETITION Nos.14695, 11680, 11681, 13150, 13156, 13157, 13190, 13769, 13771, 13787, 13804, 13809, 13822, 13823, 14703, 14711, 14713, 14724, 17758, 17761, 17766, 17769, 17770, 17772, 17773, 17775, 17780, 17782, 20469, 20471, 20473, 20476, 20482, 20490, 20492, 20499, 20503, 20523, 23342, 23343, 23351, 23360 AND 23537 of 2021. THE HON BLE SRI JUSTICE UJJAL BHUYAN AND THE HON BLE DR. JUSTICE CHILLAKUR SUMALATHA Counsel for Petitioners: Sri C.V.Narasimham Counsel for the respondents: Mr.T.Suryakaran Reddy, Learned senior counsel and Additional Solicitor General of India assisted by Mr. B.Narasimha Sarma JUDGMENT Per Hon ble Sri Justice Ujjal Bhuyan Heard Mr.C.V.Narasimham, learned counsel for the petitioners and Mr.T.Suryakaran Reddy, learned senior counsel and Additional Solicitor Gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 2016 to the transactions in question. It is the contention of the petitioner that there can be no retrospectivity of the aforesaid Amendment Act of 2016 and hence the impugned order is ex facie bad in law being without jurisdiction. 8. At the outset, facts as pleaded by the petitioner may be adverted to. 9. Petitioner M/s. Nexus Feeds Limited is a company and is represented by its managing director Goluguri Ramakrishna Reddy. 10. It is stated that petitioner company had a turnover of Rs.360 crores during the financial year 2019-2020. Authorised share capital of the petitioner company is Rs.62,33,00,000-00. Entire authorised share capital is paid up with promoters holding 1,23,93,000 shares with other individuals and body corporates holding the balance shares. 11. During the years 2011-2012 and 2013-2014 petitioner company went for expansion of manufacturing activities and in order to raise capital, had taken loans from various banks besides raising share capital by issuing shares to interested individuals. 12. Petitioner company had also approached the third respondent for investment since he is in aqua farming and purchases aqua feed from the petitioner company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order, properties mentioned thereunder were provisionally attached for a period of 90 days from the last date of the month in which the notice under Section 24 (1) of the 1988 Act was issued i.e. from 31.12.2019 with the further direction that the attached property should not be transferred, converted, disposed or moved in any manner whatsoever until or unless specifically permitted to do so by the first respondent. The properties in question are as under: 1. The movable property, being 4,50,000 shares of M/s. Nexus Feeds Limited worth Rs.45,00,000/- allotted in FY 2011-12. 2. Proceeds thereof being corresponding Fixed Asset Building to the tune of equivalent amount acquired as against the share capital introduced in the books of M/s. Nexus Feeds Limited during the FY 2011-12 so routed through benami transaction. 17. Petitioner submitted reply to the first respondent on 17.01.2020. It was pointed out that though petitioner and the directors were not specifically asked to submit reply, being aggrieved persons, they had filed reply to the show cause notice. It was further pointed out that the said reply should be treated as an interim reply only as detailed reply would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onable doubt that the consideration has flown through the beneficial owner for its immediate or future benefit, direct or indirect; thereby conclusively falling within the ambit of Section 2 (9) (A) of the 1988 Act. By the aforesaid order, first respondent has continued with the provisional attachment of the property under Section 24 (4) (a) (i) of the 1988 Act till such time, order is passed by the adjudicating authority under Section 26 (3) of the 1988 Act. First respondent has further directed that the attached property shall not be transferred, converted, disposed or moved in any manner whatsoever until or unless specifically permitted to do so by him. Though we had extracted the properties attached as per the provisional attachment order, in the impugned order the following properties have been attached : Benami Property (Subject matter of Benami Transaction) 1. The movable property, being 4,50,000 shares of M/s. Nexus Feeds Limited worth Rs.45,00,000/- allotted in FY 2011-12 on 14.12.2011. 2. Proceeds thereof being corresponding Current Non- Current Assets added during the FY 2011-12 in the form of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n No.11680 of 2021 granted interim stay as prayed for by the petitioner subject to the condition that petitioner should not transfer 4,50,000 shares allotted by it in the Financial Year 2011-12 on 14.12.2011 in the name of respondent No.3. 22. Respondent Nos.1, 2 and 5 have filed common counter-affidavit through Mr. N. Srinivasa Rao, serving as respondent No.1 (Initiating Officer). 23. Answering respondents have narrated the background facts in the following manner: 23.1 A search and seizure operation was conducted by the Income Tax department in the case of the petitioner and its group concerns on 15.03.2017. A copy of the appraisal report was shared with the office of respondent No.1 in view of potential benami transactions. After perusal of the confidential appraisal report, approval under Section 23 of the 1988 Act, as amended, was obtained from the approving authority for conducting further enquiries. 23.2 As per the report, petitioner-company and its group concerns have generated unaccounted money by inflating the purchase cost of plant and machinery as well as showing bogus expenditures. The unaccounted money thus generated has been used to acquire properties in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act of 2016 is concerned, it is stated that by the Amendment Act of 2016 only the machinery provisions have been incorporated. Benami transactions were prohibited even under the un-amended 1988 Act. Reference has been made to the decision of the Chattisgarh High Court in Tulsiram vs. A.C.I.T. (2019) 112 TAXMAN.COM 129 (Chattisgarh) wherein it has been held that provisions of the Amendment Act, 2016 can be applied in respect of transactions carried out prior to 01.11.2016. Though the Calcutta High Court in the case of M/s. B.R.C. Construction Company Private Limited vs. Union of India (2017) S.C.C. Online Cal. 16142 had held that the Amendment Act of 2016 is prospective in nature, operation of the said judgment has been stayed by the Supreme Court in Union of India vs. M/s. Ganpati Dealcom Private Limited S.L.P. (C) No.2784 of 2020, Order dated 03.02.2020. Therefore, issue of applicability of the Amendment Act of 2016 retrospectively or otherwise, is pending before the Supreme Court. 25. Answering respondents have also denied the allegation of the petitioner that the impugned order is in violation of the principles of natural justice or that it is without any authority of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pective application to the Amendment Act of 2016. The legislative intent is explicit in that it was clarified that provisions of the Amendment Act of 2016 would be applicable from 01.11.2016. By the Amendment Act of 2016, definitions of benami property or benami transaction have been enlarged to a large extent, and therefore, retrospective application of such amended / enlarged provisions would infringe upon the rights of parties. Finally, it is contended that since the very jurisdiction of respondent No.1 in issuing the show-cause notice and passing of the impugned order dated 30.03.2021 has been questioned, besides violation of the principles of natural justice, the Writ Petition would be maintainable notwithstanding availability of alternative remedy under the statute. 30. After filing of the reply-affidavit by the petitioner, respondent Nos.1, 2 and 5 have filed additional counter-affidavit. In addition to justifying issuance of the show-cause notice and passing of the provisional attachment order, a detailed analysis of the 1988 Act as well as of the Amendment Act of 2016 has been provided whereafter it is contended that Sub-Section (2) of Section 3 would be applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which provisions of the Amendment Act, 2016 had come into force. 32.2 As per Section 173 of the Finance (No.2) Act, 2019, an Explanation was inserted in Section 23 of the 1988 Act. But it was made clear that the said Explanation would have effect from 01.11.2016 i.e. having retrospective effect. On the other hand, under Section 174 certain amendments were introduced in Section 24 of the 1988 Act w.e.f. 01.09.2019 i.e. prospectively. Similarly, amendments to Sections 26, 30, 46 and 47 of the 1988 Act were given effect to prospectively from 01.09.2019. Again, two new Sections were inserted in the 1988 Act prospectively, viz., 54A and 54B w.e.f. 01.09.2019. From this, he submits that if an Act is to be given effect to from a prior date i.e., retrospectively it is specifically mentioned or provided in the Act itself. Pointing out to amendments to Section 23 of the 1988 Act, he submits that Finance (No.2) Act, 2019 was very clear that the Explanation inserted by way of the amendment would be deemed to have been inserted with effect from a prior date i.e., retrospectively from 01.11.2016. He has also referred to Chapter VI of Finance (No.2) Act, 2019 whereby certain amendments to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Constitution of India which says that no person shall be convicted of any offence except for a violation of a law in force at the time of commission of the act charged as an offence. 32.7 In support of his above submissions, learned counsel for the petitioner has submitted a compilation of judgments from which particular reliance have been placed on the following decisions, viz., Joseph Ishrat vs. Roxy Nishikant Gaikwad 2017 (3) T.M.I. 1618 (Bombay High Court), Niharika Jain vs. Union of India 2019 (7) T.M.I. 1001, Union of India vs. M/s. Ganpati Dealcom Private Limited (3 supra), Mangathai Ammal vs. Rajeshwari 2019 (5) T.M.I. 1086 (S.C.) and R. Rajagopal Reddy vs. Padmini Chandrasekharan 1995 (2) S.C.C. 630. 32.8 Mr.C.V.Narasimham, learned counsel for the petitioner, submits that the Rajasthan High Court in Niharika Jain (7 supra) and the Calcutta High Court in M/s. Ganpati Dealcom Private Limited (3 supra), have clearly held that the Amendment Act of 2016 is prospective and cannot be applied retrospectively to transactions which took place prior to 01.11.2016. He therefore submits that on this count alone, this Court may set aside and quash the impugned order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith rigorous imprisonment for a term which shall not be less than one year but which may extend to seven years and shall also be liable to fine which may extend to 25% of the fair market value of the property. 33.4 On the above basis, he would like to emphasize that for the offence of benami transaction prior to 01.11.2016 the penalty provided for in the 1988 Act has been retained. But, for the offence of benami transaction post 01.11.2016, the penalty has been enhanced. Therefore, his submission is that provisions of the Amendment Act of 2016 would be applicable to a transaction which took place prior to 01.11.2016. But the offence of benami transaction post 01.11.2016 may invite a stiffer penalty. 33.5 Mr.T.Suryakaran Reddy, learned Senior Counsel, has also drawn the attention of the Court to the provisions of Section 5 of the 1988 Act as well as under the Amendment Act of 2016 and submits that, in substance, both the provisions provide for confiscation of property held benami. 33.6 Learned Additional Solicitor General of India submits that only a provisional attachment order has been passed. Matter is at an interlocutory stage. Adjudicating authority is yet to adjudicate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vely and in a comprehensive manner. It was, therefore, felt that a bill to replace the Ordinance should be brought out as a comprehensive law on benami transactions touching all aspects. Accordingly, Law Commission was requested to examine the subject in all its ramifications. Law Commission submitted its 130th report making certain recommendations. Law Commission recommended as follows: i. Benami transactions should cover all kinds of property; ii. Entering into a benami transaction after the commencement of the new law would be declared as an offence with the exception that transactions entered into by the husband or father for the transfer of properties in the name of the wife or unmarried daughter for their benefit; iii. Voluntary organizations should be authorized to file complaints against benami transactions and District Judges should be designated as Tribunals; iv. As both the benamidars and the true owner are equal participants to a criminal transaction, by prohibiting the true owner s right to recover property held benami as was provided in the Ordinance would be construed as undue enrichment to the benamidar. Therefore, it was suggested that such property sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to mean any transaction in which property was transferred to one person for a consideration paid or provided by another person. 42. Section 3 prohibited benami transactions. As per Sub- Section (1), no person shall enter into any benami transaction. The exception to benami transaction found place in Sub-Section (2). It clarified that the prohibition under Sub- Section (1) would not apply to purchase of property by any person in the name of his wife or unmarried daughter; and securities held by a depositary. Since benami transaction was declared as an offence with immediate coming into force of the said Act, Sub-Section (3) provided that anyone entering into benami transaction would be punished with imprisonment for a term which may extend to three years or with fine or with both. According to Sub-Section (4), an offence under Section 3 i.e. offence of benami transaction would be non-cognizable and bailable. 43. Thus, Section 3 not only prohibited benami transaction barring the exceptions carved out in Sub-Section (2) but also made it a non-cognizable and bailable offence punishable with imprisonment for a term which may extend to three years or with fine or with both. 44. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 1988 Act instead of enacting a new law. According to the Finance Minister, the Standing Committee had suggested a new Bill to replace the 1988 Act. 1988 Act, a small Act, provided for acquisition of property. But when there is acquisition of property, compensation has to be paid. That apart, there was no vesting of such acquired property in the Government though it was an acquisition in favour of the Government. But the entire procedure of acquisition was absent. If the Rules provided for such procedure, then it would have been a case of excessive delegation. From 1988 the Rules had not been framed. The 1988 Act also provided for prosecution. Therefore, if the recommendation of the Standing Committee for repealing the 1988 Act and for recreation of a new law in its place would have been accepted, it would have amounted to granting immunity to all people who had acquired benami properties between 1988 and 2016. This is because the penal provisions of the 1988 Act would have stood repealed. In the event of recreating a new law with such penal provisions, it could only be applied to properties which are benami and entered into after 2016. Since penal laws cannot be made retrospec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the individual appear as joint- owners in any document, and the consideration for such property has been provided or paid out of the known sources of the individual; or (B) a transaction or an arrangement in respect of a property carried out or made in a fictitious name; or (C) a transaction or an arrangement in respect of a property where the owner of the property is not aware of, or, denies knowledge of, such ownership; (D) a transaction or an arrangement in respect of a property where the person providing the consideration is not traceable or is fictitious; Explanation.-For the removal of doubts, it is hereby declared that benami transaction shall not include any transaction involving the allowing of possession of any property to be taken or retained in part performance of a contract referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882), if, under any law for the time being in force,- (i) consideration for such property has been provided by the person to whom possession of property has been allowed but the person who has granted possession thereof continues to hold ownership of such property; (ii) stamp duty on such transaction or ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffences and prosecution and includes three sections i.e. 53, 54 and 55. Sub-Section (2) of Section 53 provides for a stiffer penalty with imposition of fine not being an optional penalty. Sub-Section (4) of the principal Act has been omitted. 53. For a better appreciation of Section 3 of the 1988 Act as amended by the Amendment Act of 2016, we may reconstruct Section 3 as it stands today post amendment as under: 3. Prohibition of benami transactions. (1) No person shall enter into any benami transaction. (2) Whoever enters into any benami transaction shall be punishable with imprisonment for a term which may extend to three years or with fine or with both. (3) Whoever enters into any benami transaction on and after the date of commencement of the Benami Transactions (Prohibition) Amendment Act, 2016, shall, notwithstanding anything contained in Sub-Section (2), be punishable in accordance with the provisions contained in Chapter VII. 54. As per Section 7 of the Amendment Act of 2016, Sub- Section (3) of Section 4 of the principal Act has been omitted. Sections 5 and 6 of the principal Act have been substituted in entirety as per Section 8 of the Amendment Act o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Section (3), the Initiating Officer may, after making such enquiries and calling for such reports or evidence, shall within a period of 90 days from the date of issue of notice under Sub-Section (1), pass an order provisionally attaching the property with prior approval of the approving authority till passing of order by the adjudicating authority under Sub-Section (3) of Section 26 or till the Initiating Officer may decide not to attach the property as specified in the notice with the prior approval of the approving authority. As per Sub-Section (5), in a case where the Initiating Officer passes an order continuing the provisional attachment of the property, he shall within 15 days from the date of the attachment draw up the statement of the case and refer it to the adjudicating authority. 58. Section 25 deals with manner of service of notice under Sub-Section (1) of Section 24. 59. This brings us to Section 26 providing for adjudication of benami property. Sub-Section (1) provides for issuance of notice to the persons mentioned therein including benamidar, beneficial owner etc., by the adjudicating authority upon receipt of reference under Sub-Section (5) of Section 24. Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions, rule making power etc. 65. Central Government issued three notifications on 25.10.2016. As per the first notification, the adjudicating authority appointed under Sub-Section (1) of Section 6 of the Prevention of Money Laundering Act, 2002 and the Appellate Tribunal established under Section 25 of that Act would discharge the functions of the adjudicating authority and the Appellate Tribunal under the 1988 Act until adjudicating authorities are appointed and Appellate Tribunal is established under the 1988 Act. Further, by the second notification, Central Government appointed 01.11.2016 as the date on which provisions of the Amendment Act of 2016 would come into force. The third notification provides for the notified income tax authorities exercising powers and performing functions of the adjudicating authority under the 1988 Act. 66. In exercise of the powers conferred by Section 68 of the 1988 Act, as amended, the Central Government has made a set of rules called The Prohibition of Benami Property Transactions Rules, 2016 (referred to hereinafter as the Rules ). 67. Having dealt with the 1988 Act, the Amendment Act of 2016 and the related notifications issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealt with in paragraphs 49 and 50 of this judgment. Since the specific allegation and finding of the respondents against the petitioners is that the transaction entered into by the petitioner with the third respondent on 14.12.2011 is a benami transaction within the meaning of Section 2 (9) (A) read with Section 2 (9) (C) of the 1988 Act as amended by the Amendment Act of 2016, we may once again analyze the said provisions. 69.1 Admittedly, these two provisions were not in the statute either on the date when the 1988 Act was enacted or when the transaction took place on 14.12.2011. It has been brought into the statute book vide the Amendment Act of 2016. Question for consideration is whether the aforesaid definitions can be applied to the above transaction which took place on 14.12.2011? 70. As per Section 2 (9) (A), a benami transaction would mean a transaction or an arrangement (a) where a property is transferred to or is held by a person and the consideration for such property has been provided or paid by another person; and (b) the property is held for the immediate or future benefit, direct or indirect of the person who has provided the consideration barring the four ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, inasmuch as if a transaction or an arrangement comes within the ambit of the aforesaid two provisions, then it would be a benami transaction which is not only prohibited under Sub-Section (1) of Section (3) but is also an offence punishable under Sub-Sections (2) and (3) thereof as well as under Section 53 of the 1988 Act as amended. It is interesting to note that under Sub-Section (2) of Section (3), the penalty for the offence of benami transaction is imprisonment which may extend to three years or with fine or with both. However, Sub-Section (3) of Section (3) clarifies that whoever enters into any benami transaction after coming into force of the Amendment Act of 2016 i.e., after 01.11.2016, shall be punished in accordance with Section 53 notwithstanding anything contained in Sub-Section (2) which provides for a stiffer penalty of rigorous imprisonment for a term which shall not be less than one year but which may extend to seven years and shall also be liable to fine which may extend to twenty five percent of the fair market value of the property. We may, even at the cost of repetition, mention that it is not the case of the respondents that the transaction in question is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that creates, defines and regulates rights and liabilities. Right conferred on a party to prefer an appeal against an order is a substantive right conferred by a statute which remains unaffected by subsequent changes in law, unless modified expressly or by necessary implication. Procedural law establishes a mechanism for determining those rights and liabilities and a machinery for enforcing them. Right of appeal being a substantive right always acts prospectively. It is trite law that every statute is prospective unless it is expressly or by necessary implication made to have retrospective operation. 24. Right of appeal may be a substantive right but the procedure for filing the appeal including the period of limitation cannot be called a substantive right, and an aggrieved person cannot claim any vested right claiming that he should be governed by the old provision pertaining to period of limitation. Procedural law is retrospective meaning thereby that it will apply even to acts or transactions under the repealed Act. 25. Law on the subject has also been elaborately dealt with by this Court in various decisions and reference may be made to a few of those decisions. This Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the law in force at the time of commission of the offence. Sub-Section (3) of Section (3) of the 1988 Act as amended by the Amendment Act of 2016 takes care of the second part of Article 20 (1) by clarifying that for committing the offence of benami transaction after the date of coming into force of the Amendment Act of 2016 i.e. from 01.11.2016, the offender would face a higher penalty notwithstanding the penalty provided in Sub-Section (2) of Section (3). 78. Learned Additional Solicitor General had argued that Sub-Section (2) of Section (3) provides for penalty for committing the offence of benami transaction prior to coming into force of the Amendment Act of 2016 i.e. prior to 01.11.2016. While this may be true, the fact remains that the charge against the petitioner is not of indulging in benami transaction as per the definition of benami transaction under Section 2 (a) of the unamended 1988 Act; rather the charge is specific; petitioner had indulged in benami transaction as defined under Section 2 (9) (A) read with Section 2 (9) (C) of the 1988 Act as brought in by the Amendment Act of 2016. Admittedly, these two provisions were not there when the transaction in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shnu Thakur Vs. State of Maharashtra (1994) 4 SCC 602 , one of the questions which fell for consideration before the Supreme Court was whether the 1993 amendment amending Section 157 (2) of the Code of Criminal Procedure, 1973 (Cr.P.C) by modifying Section 20 (4) (b) and adding a new provision as Section 20 (4) (b), would be applicable to the pending cases i.e. whether it was retrospective in operation? Issue before the Supreme Court was whether such amendment would apply to pending cases i.e. those cases which were pending investigation on the date when the amendment came into force and charge sheet or challan had not been filed. It may be mentioned that by way of the aforesaid amendment, the maximum period during which an accused under the Terrorist and Disruptive Activities Act, 1987 (TADA) could be kept in custody pending investigation was reduced from one year to 180 days besides enabling the prosecution to seek extension of time for completion of the investigation. Evidently, this provision was beneficial to the accused and the Designated Court had held that the amendment would operate retrospectively and would apply to the pending cases in which investigation was not complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t value under Sub-Section (1A) inserted in Section 23 of the Land Acquisition Act, 1894 by the Land Acquisition (Amendment) Act, 1984 had to be ordered in every case where the reference was pending before the reference Court on the date of commencement of the Amending Act. Constitution Bench noted that a statute dealing with substantive rights differs from a statute which relates to procedure or evidence or is declaratory in nature inasmuch as while the statute dealing with substantive rights is prima facie prospective unless it is expressly or by necessary implication made to have retrospective effect, a statute concerned mainly with matters of procedure or evidence or which is declaratory in nature has to be construed as retrospective unless there is a clear indication that such was not the intention of the legislature. A statute is regarded retrospective if it operates on cases or facts coming into existence before its commencement in the sense that it affects the character or consequences of transactions previously entered into or of other past conduct. It was further held the above principles are equally applicable to amendatory statutes. Like original statutes they will not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent clearly implied to the contrary. Indeed there is a presumption that an amendment shall operate prospectively. 83. The above principles were reiterated by the Supreme Court in Videocon International Limited Vs. Securities and Exchange Board of India (2015) 4 SCC 33 . The issue for determination before the High Court was whether amendment to Section 15Z of the Securities and Exchange Board of India Act, 1992 by the Securities and Exchange Board of India (Amendment) Act, 2002 would operate prospectively or retrospectively. The question was whether post amendment an appeal would lie to the High Court or not. The High Court took the view that such appeals filed after coming into force of the amended Section 15Z would not be maintainable. This view was questioned before the Supreme Court. Supreme Court proceeded on the basis of two well established principles. Firstly, while provisions of a statute dealing merely with matters of procedure may have retrospective effect, provisions which touch upon an existing right are not to be applied retrospectively in the absence of express enactment or necessary intendment. Secondly, right of appeal is a substantive right. Supreme Court refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an Explanation. But it has been clarified that such insertion shall be deemed to have come into force from the first day of November, 2016. In other words, the Explanation should be read as part of the Amendment Act of 2016, which came into force with effect from the first day of November, 2016, Section 23 being part of the Amendment Act of 2016. However, as per Section 174 of the Finance (No.2) Act, 2019, Section 24 of the 1988 Act brought into the statute book by way of the Amendment Act of 2016 has been further amended but with effect from the first day of September, 2019. There were other amendments also which were given effect to from the first day of September, 2019. Therefore, when the Finance (No.2) Act, 2019 sought to give retrospective effect to the amendment of Section 23, it was made expressly clear that the amendment to Section 23 by way of insertion of the Explanation shall be deemed to have been given effect to from the first day of November, 2016 i.e. on the date when Section 23 was given effect to. 86. A Division Bench of the Calcutta High Court in Ganpati Dealcom (supra) has held that the Amendment Act of 2016 cannot have retrospective application; it is pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attachment of immovable properties under Section 24 (4) (b) of the 1988 Act. Contention made by the petitioner was that Section 24 of the 1988 Act, as amended by the Amendment Act of 2016, would not have retrospective effect and would only be prospective i.e. with effect from 01.11.2016 onwards. It was in that context, learned Single Judge of the Chattisgarh High Court in Tulsiram (1 supra) held that the provisions of the Amendment Act of 2016 would have no existence by itself without the provisions of the 1988 Act and therefore the entire 1988 Act inclusive of the amended provisions would apply irrespective of the period of purchase of the alleged benami property. We are afraid, in view of the line of reasoning which we have adopted, we can accept the view expressed by the learned Single Judge of Chattisgarh High Court. In fact, as noticed, the challenge was made to the applicability of Section 24 retrospectively. We have already examined the provisions of Section 24 of the 1988 Act as introduced by the Amendment Act of 2016. It provides for notice and attachment of property involved in benami transaction. The circumstances and the procedure to be followed before issuing show cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 020 in G.Tuhin Kumar Vs. State Bank of India 2020 (4) ALD 598 contending that by the said judgment a coordinate Bench of this Court had taken the view that the Amendment Act of 2016 has no retrospective application. A reply memo has been filed by the respondents submitting that no reliance should be placed on the said decision as it is not applicable to the facts of the present case. Since the aforesaid decision in G.Tuhin Kumar (16 supra) was submitted after the hearing was over, we have not considered the same. 89. A three Judge Bench of the Supreme Court in R.Rajagopal Reddy case (9 supra) considered the question as to whether Section 4 (1) of the 1988 Act could be applied to suit, claim or action to enforce any right in property held benami against person in whose name such property is held or any other person if such proceeding is initiated by or on behalf of a person claiming to be the real owner thereof prior to coming into force of Section 4 (1) of the 1988 Act. While answering this question, Supreme Court held that Section 4 or for that matter the 1988 Act as a whole is not a piece of declaratory or curative legislation. It creates substantive rights in favour of bena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not specifically frame the issue as to whether the sale deeds / transactions in favour of defendant No.1 were benami transactions or not. Notwithstanding the same, the trial Court and the High Court held that the sale deeds / transactions in favour of defendant No.1 were benami transactions; whereafter relief of partition was granted in favour of the plaintiffs. Supreme Court analyzed the contours of benami transactions and also considered its earlier decision in Binapani Paul Vs. Pratima Ghosh (2007) 6 SCC 100. After noting that the 1988 Act came to be amended in the year 2016, Supreme Court held as follows: 12. It is required to be noted that the benami transaction came to be amended in the year 2016. As per Section 3 of the Benami Transaction (Prohibition) Act 1988, there was a presumption that the transaction made in the name of the wife and children is for their benefit. By Benami Amendment Act, 2016, Section 3(2) of the Benami Transaction Act, 1988 the statutory presumption, which was rebuttable, has been omitted. It is the case on behalf of the Respondents that therefore in view of omission of Section 3(2) of the Benami Transaction Act, the plea of statutory presum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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