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Benami Property - Case Laws
Showing 41 to 60 of 302 Records
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2023 (2) TMI 385 - MADHYA PRADESH HIGH COURT
Prohibition of Benami Property Transactions - Period of limitation - Petitioner, has filed an application for proposed amendment in the counter claim as rejected on ground of limitation - HELD THAT:- Once a suit is filed only then Court can examine whether pleadings made in the suit is barred by law or not and suit is to be dismissed or not. A person cannot be stopped from filing the suit. Bar is to be examined subsequently.
In view of aforesaid facts and circumstances of the case, it is found that trial Court has committed an error in dismissing the application filed under Order 6 Rule 17 of CPC on grounds of delay and on merits of the contents of application, therefore, order dated 20.09.2021 is quashed. Trial Court is directed to permit the petitioner to incorporate the said amendment in the counter claim.
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2023 (2) TMI 384 - PUNJAB AND HARYANA HIGH COURT
Benami transaction - whether the present transaction was benami or not? - HELD THAT:- Parties are ad idem that the suit property in question was purchased in the name of petitioner from the funds sent to the petitioner by husband of respondent No.1.
A bare reading of Section 4 shows that in order to establish that the present Suit is prohibited thereunder, or falls in the exception carved out under Section 2(9) of the Benami Act, evidence is required to be led. It is an established position in law that under Order 7 Rule 11 CPC, only averments made in the plaint have to be seen and nothing else can be considered while adjudicating upon such an application. In order to establish that the suit property is benami, and it was purchased out of funds sent by son of the petitioner, and it falls under the prohibition of Section 4, or falls in the exception under Section 2(9), evidence will have to be led. As such, in the present case, plaint could not have been rejected under Order 7 Rule 11 CPC.
Thus it is clear that there is no error in the order impugned herein. Accordingly, find no merit in the present Revision Petition and the same is hereby dismissed.
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2023 (2) TMI 219 - MADRAS HIGH COURT
Benami properties purchased - Whether the respondent had established that the properties were purchased in the name of the appellant from his funds? - HELD THAT:- Respondent negotiated the transaction and paid the sale consideration. P.W.6 is the lessee in the agricultural land bought in the name of the appellant and he would also state that he had been paying rents to the respondent. Though the appellant had claimed that the properties were purchased from the funds given by the father, she had not filed documents to substantiate the said claim. Further, the evidence of the appellant and D.W.2-her father appear to be improbable for one more reason.
The details of the properties and the nature of expenses and the amount of expenses incurred for purchase of the property, paying stamp papers and for construction, could not be stated by both the appellant and her father. Further, the appellant's father has three daughters. There is nothing to suggest as to why he chose only the appellant to purchase the properties in her favour. Therefore, we are of the view that the respondent had established that he had purchased the property from his funds in her name. Hence, for the above said reasons, we hold Point No.1 in favour of the respondent.
If the properties were purchased from the funds of the respondent, whether the respondent had rebutted the statutory presumption u/s 3(2) of the Benami Transactions (Prohibition) Act, 1988 that the purchase of properties in the name of the wife is presumed to be for her beneficial interest? - It is the case of the appellant that merely because the respondent was managing properties and paying taxes, it cannot be inferred that the properties were not purchased for the beneficial interest of the appellant. We are in agreement with the said proposition. It is the matter of common knowledge that in an Indian family, the husband normally looks after the property which is in the name of the wife. This alone cannot determine that the husband bought the property for his interest benami in the name of his wife. The Hon'ble Apex Court in [2015 (10) TMI 2780 - SUPREME COURT] and [1963 (12) TMI 31 - SUPREME COURT] had held that merely because the husband is managing the property, it cannot be held that the properties were purchased for his benefit.
We are of the view that the reason given by the respondent for purchase of the property in the name of the wife was to avoid wealth tax, cannot be countenanced. An illegality cannot be endorsed by the Court. Evasion of the tax is an illegality and that reason cited by the respondent cannot be accepted. We agree with the view taken by this Court in [2003 (3) TMI 777 - MADRAS HIGH COURT] (cited supra) on this aspect.
Whether the respondent has proved that the property was purchased by him for his interest in the name of the appellant and not for the beneficial interest of the appellant? - It is well established that the statutory presumption can be rebutted either by adducing independent evidence or by showing inherent improbabilities in the case of the person who is claiming benefit of presumption. It is not the case of the appellant that the property was purchased by the respondent for her beneficial interest. On the other hand, it is her case that she purchased the property with the use of funds provided by her father. As we have held already, the said version of the appellant is improbable. On the other hand, the respondent has clearly established that he had bought the property in the name of the appellant. While that being the case, the plea of the appellant that the respondent bought the property only for her beneficial interest, is a contrary stand. She herself has taken a stand which is contrary to the statutory presumption. We may also refer to the judgment cited by the appellant to impress upon us the guidelines issued by the Hon'ble Apex Court to determine whether particular transaction is benami or not.
These are the principles laid down not only for purchase of the property in the name of the wife but for determining whether the transaction is benami bought in the name of the third parties as well. But the real issue in this case, as stated earlier, is whether the presumption under Section 3(2) of the said Act has been rebutted by the respondent. We find that once the appellant herself has taken a stand that it was her own property purchased from the funds given by her father, which is now held to be improbable by us, the presumption under Section 3(2) of the Act cannot enure in her favour. We also accept the stand taken by the respondent that the properties were purchased in the appellant's name only because he felt that it would bring luck to him as admittedly 'Felshia' means luck. Therefore, we hold Point No.2 in favour of the respondent.
We find no reasons to interfere with the Judgment of the Trial Court. Accordingly, the Appeal Suit is dismissed.
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2023 (1) TMI 1335 - APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
Benami transaction - Beneficial owner of property - Provisional attachment order - scope of Amendment Act of 2016 - Amendment to Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 - HELD THAT:- The issue raised in these petitions is squarely covered by the judgment of this Court in Union of India & Anr. vs. Ganpati Dealcom Pvt. Ltd. [2022 (8) TMI 1047 - SUPREME COURT] as held Section 2 (9) (A) and Section 2 (9) (C) are substantive provisions creating the offence of benami transaction. These two provisions are significantly and substantially wider than the definition of benami transaction under Section 2 (a) of the unamended 1988 Act. Therefore, 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.
As petitioners contends that review of the said judgment is pending.
Since as of now the issue stands covered by the judgment in the case of Ganpati Dealcom Pvt. Ltd.(supra), we dismiss these special leave petitions for the same reasons and ground.
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2023 (1) TMI 1327 - SC ORDER
Scope of Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 - whether has a prospective effect? - As decided in M/S. GANPATI DEALCOM PVT. LTD.[2022 (8) TMI 1047 - SUPREME COURT] 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. As a consequence of the above declaration, all such prosecutions or confiscation proceedings shall stand quashed.
HELD THAT:- UPON perusing papers the Court made the following
Delay condoned.Application for oral hearing of the review petition is allowed.
List the review petition for open Court hearing on 15 March 2023 at 3.30 pm.
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2022 (12) TMI 990 - MADRAS HIGH COURT
Benami transaction - joint Hindu family of late karta possessed several immovable properties at Chennai, Madurai and Kumbakonam, apart from the properties owned in Malaysia - Entitlement to legal heirs of late karta of JHF - After the death of plaintiff's father, first defendant started managing the joint family properties in India and in Malaysia and was maintaining the entire accounts - Whether the suit properties are the joint family properties or absolute properties of late P.L.Ramanatha Chettiar ? - HELD THAT:- From this Will, it is clear that the interest in the partnership business and the properties movable and immovable, were bequeathed to his sons and daughters. There is absolutely no mention about the availability of properties which were acquired by him from his ancestors. It is a Will having no description of the properties to be shared. Similarly in Ex.D4 Will, there is no description of the properties sought to be disbursed. Through Ex.D11, whatever the properties possessed by L.P.L.Palaniappa Chettiar, were bequeathed to his sons and the legal heirs of the deceased son.
Grievances of the plaintiff is that the first defendant has not acted as per the conditions/clauses in the Will - Because of the first defendant's indifferent attitude, the second defendant, their mother, had to borrow heavy loan to celebrate her marriage. She was not provided with the customary gifts and presents from time to time as per the Chettiar Community. Marriage expenses, gifts and dowry were not properly taken care. Rs.2,00,000/- and jewelleries were also not given.
Plaintiff's claim that the first defendant had not acted in compliance to the conditions of the Will is one thing, and the challenge made to the very execution of the Will on the ground that the suit properties are ancestral joint family properties and therefore, the Will executed by their father P.L.Ramanathan @ P.L.Meenatchi Sundaram will bind only in respect of his share and will not extend to whole of the properties is another thing.
There is unimpeachable evidence to show that share in item nos.1 and 2 of the suit properties was bequeathed to plaintiff's father P.L.Ramanathan @ P.L.Meenatchi Sundaram through Ex.D11 Will. We have also seen that the properties bequeathed under D11 Will were self acquired properties of L.P.L.Palaniappa Chettiar . When the self acquired property of an individual is bequeathed to his son, son acquires the property only as self acquired property and not as ancestral property.
As relying on GOVINDBHAI CHHOTABHAI PATEL AND ORS. VERSUS PATEL RAMANBHAI MATHURBHAI [2019 (9) TMI 1681 - SUPREME COURT] held the self acquired property gifted by a father to his son will not be treated as ancestral property, but only as a self acquired property.
Therefore, this Court finds that shares which the plaintiff's father P.L.Ramanathan @ P.L.Meenatchi Sundaram got under the Ex.D11 Will, would be treated as his self acquired property and in respect of his self acquired property, he is entitled to bequeath the property through a Will to his son, namely, the first defendant and the first defendant got the properties as self acquired properties. Therefore, through Ex.P4 Will, plaintiff's father P.L.Ramanathan @ P.L.Meenatchi Sundaram had excluded his wife, plaintiff and second defendant from claiming any share in his properties, especially, item nos.1 & 2 of the suit properties. Thus, this Court finds that the plaintiff is not entitled to claim share in the suit properties claiming that the suit properties are the ancestral joint family properties and she is a co-parcener. Thus, this issue is answered that the suit properties are the self acquired and absolute properties of late P.L.Ramanatha Chettiar and not the joint family properties.
Whether there are and were businesses of the family at Kumbakonam run under the name and style of Palaniappan Bankers and Palaniappa Jewellers and whether the first defendant is liable to account for the profits in the said business ? - Though it is claimed in the pleadings that there was business of family at Kumbakonam run under the name and style of Palaniappan Bankers and Palaniappa Jewellers and the first defendant was liable to account for the provisions in the said business, no evidence is produced by either side to show the running of the businesses. Therefore, this Court finds answer to this issue in negative.
Whether the plaintiff is in joint possession of the suit properties ? - Whether the Court Fees paid under the Section 37(2) of Court Fees Act is maintainable ? - The evidence available in this case shows that the plaintiff is not in physical possession of any of the suit properties. She resides in U.S.A. and conducts this case through her power of attorney PW1. There is also evidence to show that there are about 272 residential flats in item no.2 of the suit properties. Therefore, this Court finds that the plaintiff is not in possession of the suit properties and Court fee paid under Section 37 (2) of the Court fees Act claiming to be in joint possession is not correct for issue nos.5 & 6.
Whether sale in the name of the ninth defendant is hit by lis pendens? - Before purchasing this property, it is seen that Exs.D2, D10 paper publications were made in the newspaper. After purchasing item no.2 of the suit properties, 8th and 9th defendants had entered into Ex.D4 agreement for sale. It is now claimed by the 9th defendant that 272 residential units had been constructed in the land. The learned counsel for the 9th defendant submitted that the 9th defendant's interest has to be protected as 9th defendant is a bonafide purchaser for value after taking necessary steps by issuing paper publications. No one objected to the purchase by 9th defendant. Ex.D3 sale deed was executed on 10.01.2008 during the pendency of the suit and therefore, it is no doubt that this sale in favour of the 9th defendant is hit by lis pendens. The right of pendente lite purchaser in item no.2 of the suit properties is subject to the right available to the owner of the property. Accordingly, this issue is answered.
Whether the suit is barred for non-joinder of proper and necessary parties ? - Now it is found that the claim of partition in item no.1 of the suit properties by defendants 5 to 7 is barred by the Prohibition of Benami Property Transactions Act, 1988. Therefore, the other legal heirs of P.L.Palaniappa Chettiar are not proper and necessary parties to this suit. Similarly, the sale in favour of the 8th defendant and subsequent construction of flats by the 9th defendant had taken place after the institution of the suit. Therefore, the impleadment of the buyers of the flats is not necessary for the reason that the sale transaction is hit by the principle of lis pendens and therefore, they are not proper and necessary parties. Accordingly, this issue is answered.
Whether the suit is barred for partial partition ? - Even as per the admitted evidence of PW1, he claims that there are certain other joint family properties, but they are not shown as suit properties. Even in respect of item nos.3 to 5 of the properties, there is no evidence produced to show that these properties are in possession and enjoyment of the family. The defendants have also not given the details of the properties, which are not included. Therefore, it is held that the suit is not hit by partial partition.
Suit barred by limitation - The plaintiff has filed the suit presuming that the suit properties are joint family properties and as a co-owner, she is entitled for partition. She had issued Ex.P5 notice before the institution of the suit. There is no plea of ouster taken by the defendants. She has subsisting right as per Ex.D11 Will. Therefore, this suit cannot be held as barred by limitation.
Apart from the claim of partition as co-parcener, the plaintiff is also entitled for partition as per clause 4(g) of Ex.D11 Will. - The executors and trustees, namely, R.M.Thenammai and Valliappan @ Palaniappan @ Sinnavalieppan A/L Valliappa Chettiar have every right to enforce the terms of the Will as intended by the testator. Though this Will is not useful to advance the case of the plaintiff for partition, this Will is certainly useful to enforce her claim under the Will, if the executors fail to exercise their duties, responsibilities and powers.
As found that item nos.1 & 2 of the suit properties are the self acquired properties of the first defendant through Ex.P4 Will executed by his father P.L.Ramanathan @ P.L.Meenatchi Sundaram and therefore, this Court finds that the plaintiff is not entitled for the relief of partition or for that matter any other relief.
Since the defendants 5 to 7's claim is barred by the provisions of the Prohibition of Benami Property Transactions Act, 1988, they are also not entitled for claiming partition of their 3/8 share in item no.2 of the suit properties as a counter claim. The suit as well as the counter claim of the defendants 5 to 7 are dismissed.
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2022 (12) TMI 779 - GAUHATI HIGH COURT
Prohibition of Benami Property Transactions - attaching the properties of the petitioners provisionally until passing of the order by the Adjudicating Authority u/s 26 (3) of the Act - primary contention of the petitioners is that an incorrect and illegal conclusion has been arrived at by the authorities that the petitioner in each of the three cases were benami holders of property or its beneficiary - grounds of violation of the principles of natural justice have also been taken as, according to the petitioners, their replies were not properly considered and they were not given an effective opportunity to defend themselves - Allegation of recording the statement of the petitioners in duress has also been made - HELD THAT:- Though contentious issues have been raised in these petitions which require elaborate deliberations, this Court is of the opinion that in view of the clear law laid down by the Hon’ble Supreme Court in the case of Ganpati Dealcom Pvt. Ltd. [2022 (8) TMI 1047 - SUPREME COURT] such deliberations are not at all required, as the same would otherwise, cause prejudice to either of the parties.
As in view of the undisputed fact that the transactions in question in these cases being of a period prior to 2016, the amendment of the Act made in the year 2016 would not be applicable and therefore, the impugned notices under Section 24 of the Act are not sustainable in law. Accordingly, the impugned notices are set aside and the writ petitions are allowed.
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2022 (12) TMI 568 - TELANGANA HIGH COURT
Prohibition of Benami Property Transactions - provisional order of attachment - HELD THAT:- As it is evident that this Court took the view that Section 2(9)(A) and 2(9)(C) of the Benami Property Act inserted by the Amendment Act of 2016 are prospective in nature because these two provisions have significantly and substantially widened the definition of ‘benami transaction’ than as was there in the unamended Benami Property Act of 1988.
Taking note of the fact that Central Government had notified the date of coming into force of the Amendment Act of 2016 as 01.11.2016, this Court held that these two provisions cannot be applied to a transaction which took place prior to 01.11.2016. In that case, the transaction was dated 14.12.2011. Therefore, the show cause notice, provisional attachment order as well as the adjudicating order were declared null and void being without jurisdiction and consequently, quashed.
In Ganpati Dealcom Pvt. Ltd. [2022 (8) TMI 1047 - SUPREME COURT] which went to the Supreme Court from a decision of the Calcutta High Court, the question which was considered by the Supreme Court was whether the Benami Property Act as amended by the Amendment Act of 2016 has a prospective effect? While examining this question, Supreme Court went into the constitutionality of the original Act i.e., Benami Property Act.
Supreme Court came to the conclusion that Section 3 (criminal provision), Section 2(a) (definition clause) and Section 5 (confiscation proceedings) of the Benami Property Act are overly broad, disproportionately harsh and without adequate safeguards. Though such provisions were in a dormant condition, nonetheless, Supreme Court declared Sections 3 and 5 of the Benami Property Act as unconstitutional from inception.
Supreme Court has declared that the Amendment Act of 2016 is not merely procedural but prescribes substantive provisions. Therefore, concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to coming into force of the 2016 Amendment Act i.e., 25.10.2016. As a consequence, all such transactions or confiscation proceedings prior to 25.10.2016 shall stand quashed. Supreme Court has also clarified that in rem forfeiture provision under Section 5 of the Amendment Act of 2016 being punitive in nature can only be applied prospectively and not retroactively.
In view of the finality of the law declared by the Supreme Court, the provisional attachment order dated 27.12.2021 cannot be sustained. Accordingly, the same is hereby set aside and quashed.
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2022 (11) TMI 1438 - CALCUTTA HIGH COURT
Notice u/s 24(1) of the Prohibition of Benami Property Transactions Act, 1988 - constitutionality of Sections 3 and 5 of the 1988 Act - HELD THAT:- The issue involved in these writ petitions are covered in favour of the petitioners by a recent judgment in the case of Union of India & Anr. Vs. M/s. Ganpati Dealcom Pvt. Ltd [2022 (8) TMI 1047 - SUPREME COURT] as held that Section 3(criminal provision) read with Section 2(a) and Section 5(confiscation proceedings) of the 1988 Act are overly broad, disproportionately harsh, and operate without adequate safeguards in place. Such provisions were still-born law and never utilized in the first place. In this light, this Court finds that Sections 3 and 5 of the 1988 Act were unconstitutional from their inception. Thus WP are disposed of by setting aside the impugned notices under Section 24(1) of the Prohibition of Benami Property Transactions Act, 1988 and all subsequent proceedings on the basis of the aforesaid notices are quashed and all legal consequences will automatically follow.
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2022 (11) TMI 606 - DELHI HIGH COURT
Benami transactions - Scope of amendemnt by the Benami Transactions (Prohibition) Amendment Act, 2016 which came into effect on 01st November 2016 - HELD THAT:- The Supreme Court in the judgment of Ganpati Dealcom [2022 (8) TMI 1047 - SUPREME COURT] has at paragraph no.92 recorded the concession made by the Union of India that the offence under Section 53 of the Act of 2016 is prospective and would only apply to those transactions which were entered into after amendment came into force i.e., 01st November, 2016. The Supreme Court at paragraph nos. 94 and 130(e) of the said judgment has categorically held that the Act of 2016 which contains the criminal provisions is applicable only prospectively and quashed the prosecution proceedings.
It is admitted in the present case that the alleged benami transactions undertaken by the Petitioner were entered prior to 01st November 2016. In light of the law as declared by the Supreme Court in Ganapati Dealcom [2022 (8) TMI 1047 - SUPREME COURT] the present writ petition is allowed. The Show Cause Notice dated 04th April, 2022 shall stand quashed.
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2022 (11) TMI 173 - TELANGANA HIGH COURT
Prohibition of Benami Property Transactions - provisional attachment order - As challenged the transaction for which the provisional attachment order was passed and subsequently affirmed by the adjudicating authority took place on 20.12.2014 much prior to coming into force of the Benami Transactions (Prohibition) (Amendment) Act, 2016 - HELD THAT:- This issue has already been decided by this Court in the case of Nexus Feeds Limited Vs. Assistant Commissioner of Income Tax [2022 (5) TMI 262 - TELANGANA HIGH COURT] The views expressed by this Court has since been affirmed by the Supreme Court in the case of Union of India Vs. Ganpati Dealcom Pvt. Ltd. [2022 (8) TMI 1047 - SUPREME COURT]
Thus impugned order of the adjudicating authority are hereby set aside and quashed.
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2022 (11) TMI 114 - TELANGANA HIGH COURT
Prohibition of Benami Property Transactions - Attachment, adjudication and confiscation orders - respondent No.5 exercising powers under Section 18(2) of the Benami Property Act has provisionally attached the properties mentioned in the aforesaid orders - petitioner submits that the relevant documents were seized by Special Investigation Team led by the Assistant Commissioner of Police following encounter on 08.08.2016 in which the petitioner’s brother viz., Nayeemuddin, who was the petitioner in [2022 (7) TMI 530 - TELANGANA HIGH COURT] was killed. The seized documents include several sale deeds as well as link documents - HELD THAT:- Adjudicating Authority is empowered to make or cause to be made inquiries and to call for reports or evidence as it deems fit. It has also the authority to take into account all relevant materials besides reply of the notice and thereafter, to take a decision one way or the other holding the property not to be a benami property and revoking the attachment order or holding the property to be a benami property and confirming the attachment order.
Considering the fact that petitioner before us is the sister of late Nayeemuddin, who was the petitioner in [2022 (7) TMI 530 - TELANGANA HIGH COURT] being killed in encounter, and facing stringent provisions of the Benami Property Act, it would meet the ends of justice if the adjudicating authority, on receipt of application of the petitioner, calls for the relevant documents/evidence from the authorities including the Special Investigating team and thereafter hand over copies of the same to the petitioner so as to enable her to make effective defence.
Directions: - Petitioner shall submit application before the Adjudicating Authority within two (02) weeks from today mentioning therein the documents required for her defence and in whose custody the documents are being kept.On receipt of such application, the Adjudicating Authority shall requisition the relevant documents/evidence from the concerned authorities.
On receipt of the documents/evidence by the Adjudicating Authority, petitioner or her authorised representative shall be permitted to go through the same and on their request, photocopies of such documents may be made available to the petitioner or her authorized representative.Thereafter, petitioner shall file her reply to the notice issued by the Adjudicating Authority
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2022 (10) TMI 1222 - APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
Benami transaction - Beneficial owner of property - Provisional attachment order - scope of Amendment Act of 2016 - Amendment to Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 - HELD THAT:- The issue raised in these petitions is squarely covered by the judgment of this Court in Union of India & Anr. vs. Ganpati Dealcom Pvt. Ltd. [2022 (8) TMI 1047 - SUPREME COURT] as held Section 2 (9) (A) and Section 2 (9) (C) are substantive provisions creating the offence of benami transaction. These two provisions are significantly and substantially wider than the definition of benami transaction under Section 2 (a) of the unamended 1988 Act. Therefore, 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.
As petitioners contends that review of the said judgment is pending.
Since as of now the issue stands covered by the judgment in the case of Ganpati Dealcom Pvt. Ltd.(supra), we dismiss these special leave petitions for the same reasons and ground.
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2022 (10) TMI 531 - DELHI HIGH CCOURT
Benami Transaction - application under Order VII Rule 11 of the CPC rejected - whether the suit property was actually purchased from the funds of the HUF or whether the suit property was treated as an individual property of the father of the parties or as an HUF property? - defendant no.1 submits that there is a discrepancy in the name of the HUF occurring in various documents - HELD THAT:- Under Section 4(1) of the unamended Benami Act, a suit cannot be filed on the ground that the property was held benami against a person in whose name the property is held. An exception to Section 4(1) of the unamended Benami Act is provided in Sub-Section (3) of Section 4 which states that provisions of Section 4 would not apply in cases where the property is held in the name of a coparcener in an HUF and the property is held for the benefit of the coparceners in the family.
As clearly been averred that the HUF received a sum of Rs.19.90 lacs on 21st June, 1991 from the redemption of the HUDCO Tax Saving Bonds held by the HUF. A reference has also been made to various documents with regard to the same and they have been filed along with the plaint. It has clearly been averred that late Shri Surinder Singh Chowdhary, as the karta of the HUF, purchased the suit property from the funds of the HUF. The suit property was purchased for a consideration of Rs.5,40,000/- vide sale deed dated 18th August, 1992, soon after a sum of Rs.19.90 lacs was received by the HUF from the sale of HUDCO Bonds. It has also been specifically pleaded that the late Shri Surinder Singh Chowdhary, being the karta of the HUF was holding the suit property on behalf of HUF for the benefit of all the coparceners. Along with the plaint, the plaintiff has also filed TDS certificates issued by the tenant in the suit property in favour of the HUF.
The plaintiff has made the necessary averments in the plaint and filed documents along with the plaint in support of his case that the suit property was purchased from the funds of the HUF. Further, the plaintiff has also pleaded that the suit property was held by the father of the parties in his capacity as the karta for the benefit of the coparceners. The plaintiff has made the necessary averments in the plaint so as to fall within the exception provided under Section 4 (3) (a) of the unamended Benami Act. Therefore, the plaint cannot be outrightly rejected under the provisions of under Order VII Rule 11 of the CPC. At the stage of Order VII Rule 11 of the CPC, the Court cannot go into the veracity of the pleas taken in the plaint or its truthfulness. The same can only be tested in a trial.
The scope of an application under Order VII Rule 11 of the CPC is limited only to the extent whether or not in terms of averments made in the plaint and the documents filed along with the plaint, the suit is maintainable. Needless to state that the plaintiff would have to prove in the trial, whether the suit property was actually purchased from the funds of the HUF or whether the suit property was treated as an individual property of the father of the parties or as an HUF property. At this stage, the Court cannot prejudge whether the plaintiff would be in a position to prove the same or not. The issues can only be determined after a proper trial. At this stage, it cannot be said that the present suit is vexatious or the plaint is barred by any law.
Thus no grounds have been made out for rejection of the plaint under the provisions of Order VII Rule 11 of the CPC. There is no merit in the application and the same is dismissed.
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2022 (10) TMI 530 - MADRAS HIGH COURT
Benami Prohibition transaction - order of attachment has come to be passed by the Officials of the Income Tax Department attaching the salary of the petitioner for appropriation as against the dues arising from order of assessment - HELD THAT:- To be noted that the order u/s 24 (4) of the PBPT Act has been passed by R1, which is stated to be pending in appeal before the Tribunal. That order is irrelevant to the lis in the present writ petition since the garnishee notice has been issued by the assessing authority under the Income Tax Act to secure the demand arising from the income tax assessment order.
This writ petition is hence not maintainable for want of proper parties being arrayed. However, bearing in mind the profile of the petitioner, the Deputy Commissioner of Income Tax, Central Circle, 3(4), Chennai is impleaded suo motu as R3, for whom Mr.ANR Jayaprathap, learned Junior Standing Counsel accepts notice. Let the cause title be amended to reflect this impleadment.
No notice is thought necessary to either R1 and R2 and it would suffice that learned Standing Counsel for the Income Tax Department, who has taken notice for R3, be heard.
Since the petitioner has availed the statutory remedy of appeal, it is appropriate that necessary orders in regard to interim protection are also obtained from the appellate authority. It would not be appropriate for this Court to intervene only for the purpose of grant of interim protection, as such interim protection, if any, would fall within the discretion of the appellate authority.
We are not inclined to intervene in the matter and the impugned order of attachment is left undisturbed. However, liberty is granted to the petitioner to move the Assessing and/or the Appellate authorities under the IT Act, as he may be advised, seeking appropriate interim protection. Such stay application, if and when filed, shall be disposed by the Authority within a period of three weeks from date of receipt thereof, after hearing the petitioner.
The petitioner would submit that his salary is the only source of income and that he does not have financial resources to meet any portion of the demand impugned before the Appellate authority. He would also cite family exigencies, including the upkeep of a special child and paucity of funds in this regard.
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2022 (10) TMI 19 - TELANGANA HIGH COURT
Constitutional validity - Amendment to Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 - Benami property transaction - Scope of Amendment Act of 2016 Punishment of imprisonment for offence - HELD THAT:- Supreme Court in M/S. GANPATI DEALCOM PVT. LTD. [2022 (8) TMI 1047 - SUPREME COURT] observed that once Sections 3 and 5 of the Benami Property Act were declared as unconstitutional, it would mean that the Amendment Act of 2016 would in effect create new provisions and new offences as the offences under Section 3(1) for the transactions entered into between 05.09.1988 (when the original Act received the presidential assent) and 25.10.2016 (when the Amendment Act of 2016 was notified), the law cannot retroactively invigorate a still-born criminal offence. Thereafter, it was categorically held that the Amendment Act of 2016 containing criminal provisions would be applicable only prospectively.
Criminal provisions under the Benami Property Act were arbitrary and incapable of application, the law through the 2016 amendment could not retroactively apply for confiscation of those transactions entered into between 05.09.1988 to 25.10.2016 as the same would amount to punitive punishment.
It has declared that the Amendment Act of 2016 is not merely procedural but prescribes substantive provisions. Therefore, concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to coming into force of the 2016 Amendment Act i.e., 25.10.2016. As a consequence, all such transactions or confiscation proceedings shall stand quashed. Supreme Court has also clarified that in rem forfeiture provision under Section 5 of the Amendment Act of 2016 being punitive in nature can only be applied prospectively and not retroactively.
In view of above, impugned order dated 27.04.2022 passed by respondent No.1 is hereby set aside.
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2022 (9) TMI 1356 - TELANGANA HIGH COURT
Benami Property Transactions - Retrospective application of law enacted in the year 2016 - primary challenge made is that the transactions which have been classified by the respondents as benami transactions and the property accrued therefrom, which have been classified by the respondents as benami property, were acquired prior to 25.10.2016 or 01.11.2016 - HELD THAT:- The issue before us is no longer res integra not only in view of the law laid down by this Court in Nexus Feeds Limited [2022 (5) TMI 262 - TELANGANA HIGH COURT] but in view of the law declared by the Supreme Court in Union of India v. Ganpati Dealcom Pvt. Ltd. [2022 (8) TMI 1047 - SUPREME COURT]
This Court took the view that Section 2(9)(A) and 2(9)(C) of the Act inserted by the Amendment Act of 2016 are prospective in nature because these two provisions have significantly and substantially widened the definition of ‘benami transaction’ than as was there in the unamended Benami Property Act of 1988.
Taking note of the fact that Central Government had notified the date of coming into force of the Amendment Act of 2016 as 01.11.2016, this Court held that these two provisions cannot be applied to a transaction, which took place prior to 01.11.2016. In that case, the transaction was dated 14.12.2011. Therefore, the show cause notice, provisional attachment order as well as the adjudicating order were declared null and void being without jurisdiction and consequently, quashed.
Supreme Court has declared that the Amendment Act of 2016 is not merely procedural but prescribes substantive provisions. Therefore, concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to coming into force of the 2016 Amendment Act i.e., 25.10.2016. As a consequence, all such transactions or confiscation proceedings shall stand quashed. Supreme Court has also clarified that in rem forfeiture provision under Section 5 of the Amendment Act of 2016 being punitive in nature can only be applied prospectively and not retroactively.
In view of finality of the law declared by the Supreme Court, the impugned show cause notices, provisional attachment orders as well as the adjudicating orders passed by the various authorities under the Benami Property Act as amended by the Amendment Act of 2016 impugned in the batch of writ petitions cannot be sustained.
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2022 (9) TMI 1134 - MADRAS HIGH COURT
Benami transaction - Notice and attachment of property involved in benami transaction - Scope of interim order of this court - allegation of violation of the principles of natural justice - HELD THAT:- It is pertinent to mention herein that applicability of the principles of natural justice and fair play, depends on the facts and circumstances of each case and is subjected to statutory provisions.
After taking note of the entire aspects, the learned Judge, while disposing WP directed the respondent to furnish the certified copy of the sworn statement recorded from the appellant during the course of survey proceedings, to him, within a period of one week. While doing so, the learned Judge has rightly rejected the relief sought by the appellant seeking any other sworn statements recorded during the search on 09.03.2017, as the same is absolutely vague, besides the said proceedings were not conducted by the respondent viz., Deputy Commissioner of Income Tax (Benami Prohibition), but by the Investigation Wing
Therefore, it cannot be said that there is violative of principles of natural justice, as alleged by the appellant.
Allegation levelled by the appellant that the orders under section 24(4) were passed in total disrespect to the interim order of this court - During the course of argument, respondent drew the attention of this court to the documents enclosed in the additional typed set of papers which disclose that the Deputy Commissioner of Income Tax (Benami Prohibition) has placed the draft of section 24(4) orders before the Approving Authority for approval and after obtaining approval from the approving authority, passed the orders under section 24(4) of the PBPT Act. In the mean while, the appellant filed WP and obtained an order of interim stay which was communicated to the respondent by the learned senior standing counsel only on 25.05.2018, according to the counter affidavit filed by them. Such being the factual matrix, this court finds merit and acceptance in the contention made on the side of the respondent that the initiating officer came to aware of the order of interim stay granted by this court only after passing the orders under section 24(4) of the PBPT Act and hence, there is no deliberate or wilful disobedience of the order of this court.
It is important to note that the proceedings under section 24 only require a recording of prima facie opinion as to the benami nature of the transaction and the respondent is required to furnish the documents, particulars or evidence and provide an opportunity of being heard to the appellants only at the stage of adjudication proceedings.
Accordingly, the first respondent, after making enquiry and calling for reports or evidence and taking into account all the relevant materials, has, with the prior approval of the Approving Authority, passed the orders dated 23.05.2018 under section 24(4), continuing the provisional attachment of the properties till the passing of the order by the Adjudicating Authority under section 26(3), which are purely provisional in nature. While passing such orders as an interim measure to protect the interest of Revenue, there is no hastiness or procedural violation on the part of the respondent, as alleged by the appellant. Having noted the same in proper perspective, the learned Judge has rightly dismissed the writ petitions filed by the appellant challenging the said orders passed by the respondent under section 24(4) of the PBPT Act, however, granting liberty to the appellant to raise all the contentions before the adjudicating authority.
Thus, the overall appreciation of the factual matrix as well as the legal principles stated above, would compel this court to come to an irresistible conclusion that the appellant has not made out any ground to interfere with the order of the learned Judge as well as the orders impugned in the writ petitions, at this stage. Accordingly, all the appeals stand dismissed.
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2022 (9) TMI 524 - GUJARAT HIGH COURT
Prohibition of Benami Property Transactions - Attachment order passed under Section 24(3) of the Benami Transactions (Prohibition) Amendment Act - petitioner is seeking for writ of certiorari to declare the provisions of Benami Transactions (Prohibition) Amendment Act, 2016 being prospective and consequently the notices issued to the petitioner and quashing of the orders passed pursuant to the same - HELD THAT:- As held by the Hon’ble Apex Court [2022 (8) TMI 1047 - SUPREME COURT] that 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 and as a consequence thereof, all such prosecutions and confiscation proceedings which had been initiated came to be quashed.
We are of the considered view prosecution and initiation of proceedings in the instant case being pursuant to the Amendment Act the declaration made by the Hon’ble Apex Court in paragraph 18(e) would squarely be applicable and as such, impugned attachment order stands quashed and all consequential proceedings initiated thereto. We also make it clear that question which has been kept open by the Hon’ble Apex Court in paragraph 18.1(f), would squarely be applicable to the facts on hand also.
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2022 (8) TMI 1467 - SC ORDER
Benami transaction - indulgence in prohibited transactions - second appellant passed an order provisionally attaching the property of the respondent company under Section 24(4)(b)(i) of the Act pending adjudication by the first appellant - period of limitation for filing an appeal - HELD THAT:- In terms of our order [2022 (4) TMI 1575 - SUPREME COURT] it is stated that the appellants have preferred an appeal under Section 46 of the Prohibition of Benami Property Transactions Act, 1988.
In view of the aforesaid position, we clarify that the observations made in the impugned judgment on merits would not, in any way, affect the decision of the appeal and would not be treated as findings on merits. Further, it will be open to the appellants to rely upon the judgment of “Union of India v. Ganpati Dealcom Pvt Ltd.” [2022 (8) TMI 1047 - SUPREME COURT]
Recording the above, the appeal is allowed in the aforesaid terms, without making any comments on the merits.
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