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2018 (9) TMI 153 - HC - Benami PropertyBenami Property - Jurisdiction - power of IO to pass orders of Provisional attachment - Section 24(3) of the Prohibition of Benami Property Transactions Act, 1988 - petitioners contend that the Adjudicating Authority had already passed an order under Section 26 (3) of the Act holding that the properties (amounts) in question are not benami properties and, therefore, it is not open for the IO to once again pass orders attaching the same - whether the IO was barred from issuing a fresh show cause notice under Section 24(1) of the Act? Held that:- A plain reading of sub-section (3) of Section 24 of the Act indicates that the IO may issue an Order of Provisional Attachment if he is of the opinion that the person in possession of the property held benami would alienate such property during the period specified in the notice; that is, the time provided by the IO for the noticee to show cause as to why such property should not be treated as a benami property - It is, at once, clear that an order under Section 24(3) of the Act is only for the purposes of provisionally attaching the property till the IO completes his inquiry pursuant to the show cause notice issued under Section 24(1) of the Act. It is also relevant to note that an Order of Provisional Attachment under Section 24(3) of the Act cannot exceed period of ninety days from the date of issuance of the show cause notice under Section 24(1) of the Act. It is apparent that the Adjudicating Authority had set aside the Provisional Attachment Orders passed under Section 24(3) and 24(4)(a)(i) of the Act only on the ground that the IO had not followed the procedure in terms of the scheme of Section 24 of the Act. The Adjudicating Authority had not examined the issue whether the properties (amounts) in question were benami properties in terms of Section 2(8) of the Act - this Court finds no reason which would preclude the IO from issuing a fresh show cause notice and curing the procedural defect as observed by the Adjudicating Authority. The principles analogous to res judicata do not apply, as the Adjudicating Authority has not taken any decision on the merits of the matter; that is, he has not decided whether the sums deposited in the bank accounts of the petitioners were benami properties of Sh Nitin Jain. It is well settled that if an order is set aside on account of violation of the principles of natural justice or on account of any procedural defect in the decision making process, the concerned authority is not precluded from re-initiating the proceedings after curing the procedural defects. This is, of course, subject to the condition that the fresh proceedings are (a) within the jurisdiction of the authority; and (b) are not barred by limitation - In the present case, there is no dispute that the IO has the jurisdiction to issue a show notice under Section 24(1) of the Act. There is also no dispute that such notice is not barred by limitation - this Court is unable to accept that the IO (respondent no.3) was in any manner precluded from issuing the show cause notice. Petition dismissed.
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