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TMI Blog2024 (1) TMI 687X X X X Extracts X X X X X X X X Extracts X X X X ..... agency. And it is not in dispute that these petitioners were arrested some two years after the registration of the said criminal case. Where were they during the interregnum? Were they absconding then? Maybe, or may not be, which is not very pertinent for the present. The point is whether the initiating officer knew that the petitioners were in judicial custody when Sec 24(1) show cause notice was issued, and provisional attachment under Sec.24(3) was made? There is nothing on record to indicate it. What is the extent to which the initiating authority may have to travel for forming his opinion, and what is the extent to which he should spell out the grounds there for when an order of provisional attachment is made? - The scheme of the Prohibition of Benami Transaction Act is looked into, it makes benami transaction a crime, and besides providing for the confiscation of the property found to be held benami, it also provides that both the benamidars and the beneficiary are liable for criminal prosecution u/s 53 of the Act. An attachment of the property till an order of confiscation is made is only a preliminary step in that direction, and all that is required at that point in ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d explain why the provisional order of attachment is bad. To conclude, this Court does not find merit in these petitions and hence, all the writ petitions stand dismissed. - Justice N. Seshasayee For the Petitioner (in all WPs) : Mr.K.Ravi For the Respondents (in all WPs) : Ms.M.Sheela Special Public Prosecutor for R1 to R3 COMMON ORDER 1. These four writ petitions are filed either by M/s.Varficus Venture Private Limited (Previously - M/s.GEAPL Infrastructure Private Limited) or by its Directors, and what are in challenge are the provisional attachments made by the Initiating Officer under Section 24(3) of the Prohibition of Benami Property Transactions Act, 1988 (hereinafter would be referred to as Act). 1.2 The details are as below: W.P.No. Filed By Properties attached 18611 of 2023 M/s.Varficus Venture Private Limited (Previously - M/s.GEAPL Infrastructure Private Limited Plot No.173, Door No.24, Karpagam Garden, First Main Road, Adayar, Chennai- 600 020 19819 of 2023 M.Kumudhavalli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... criterion prescribed under Sec.24(3) of the Act, for provisionally attaching the properties of the suspected beneficiaries of a benami transaction is that the Initiating Officer should have to form an opinion that the property suspected to be held benami is at the risk of being alienated. The provisional order of attachment was made on 03.02.2023 when the petitioners were still in judicial custody, and the suspected benamidar, the co-accused of the petitioners herein, was also in judicial custody at the relevant time. When the suspected benamidar and his alleged beneficiaries are in judicial custody, it is inconceivable that the property could be alienated. In other words, the Initiating Authority has not applied his mind to the situation and has drawn an opinion without any rational basis, and the order did not disclose the grounds on which the initiating authority formed his opinion. (d) From the office of the adjudicating authority, the petitioners were given a portion of the order of the approving authority to the intended provisional attachment by the initiating officer. This approval in terms of the document provided is seen to have been given only on 20.04.2023, whereas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the initiating officer has referred the matter to the adjudicating authority and the matter is now pending before the adjudicating authority under Section 26 of the Act. The petitioners, however, have not appeared before the adjudicating authority as yet. Reliance was placed on a Division Bench decision of this Court in M/s.Marg Projects and Infrastructure Ltd Others Vs The Deputy Commissioner of Income Tax (Benami Prohibition) in W.A.Nos.1257 to 1261 of 2022 dated 30.06.2022, which directed the petitioners to appear before the adjudicating authority. The learned counsel appearing for the Department also relied on the ratio of Hon'ble Division Bench of this Court in Naveen Balaji and Others Vs The Deputy Commissioner of Income Tax Others in W.A.Nos.1054, 1007 of 2022 batch etc., and the decision of the learned Single Judge in Dinesh Chand Surana Vs Deputy Commissioner of Income Tax and Ors. [2018 SCC OnLine Mad 3969 ] and also judgment of the High Court of Kerala in Griffin Developers Private Limited Ors Vs The Union of India Others [2018 SCC OnLine Ker 11974] and the order of High Court of Madhya Pradesh in Simmant Kohli Vs Union of India in W. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2020; and (b) the order of provisional attachment made by the initiating authority on 03.02.2023, when they were still in judicial custody, which makes alienation impossible on the date the order of attachment was passed. 6. The respondents step into the scene only after the registration of the case in Cr.No:.92 of 2020, but they are not the investigating agency. And it is not in dispute that these petitioners were arrested some two years after the registration of the said criminal case. Where were they during the interregnum? Were they absconding then? Maybe, or may not be, which is not very pertinent for the present. The point is whether the initiating officer knew that the petitioners were in judicial custody when Sec 24(1) show cause notice was issued, and provisional attachment under Sec.24(3) was made? There is nothing on record to indicate it. 7. Turning to the next point, what is the extent to which the initiating authority may have to travel for forming his opinion, and what is the extent to which he should spell out the grounds there for when an order of provisional attachment is made? The scheme of the Prohibition of Benami Transaction Act is looked into, it ma ..... 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