Back
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
I. P. MUKERJI, MD. NIZAMUDDIN, JJ.
M/s. Ganpati Dealcom Pvt. Ltd. – Appellant
Versus
Union of India & Another – Respondents
APO. No. 8 of 2019 with WP. No. 687 of 2017
Decided On : 12-12-2019
Benami Transactions - Prohibition - The Benami Transactions (Prohibition) Act, 1988, Section 3, 5, 8 - The Benami Transactions (Prohibition) Amendment Act, 2016 - The court discussed the provisions of the Benami Transactions (Prohibition) Act, 1988 and its amendment in 2016, highlighting the changes in the definition of benami property and transaction, punishment for contravention, and the procedure for acquisition of benami property. The court emphasized that the amendment did not have retrospective effect and could not be used to allege contravention or initiate prosecution for a transaction that occurred before the amendment came into force.
Fact of the Case:
The appellant, Ganpati Dealcom Pvt. Ltd., purchased a property in 2011, and the respondent authority alleged that the transaction was benami under the Benami Transactions (Prohibition) Act, 1988, as amended in 2016. The appellant contended that the show-cause notice issued under the amended Act for an alleged offence committed before the amendment was invalid.
Finding of the Court:
The court ruled that the show-cause notice under the amended Act for a transaction in 2011 was invalid as the amendment did not have retrospective effect. The court quashed the notices issued by the respondents, emphasizing that the rights accrued to the appellant under the 1988 Act could not be extinguished by the 2016 amendment.
Issues: The main issue was the validity of the show-cause notice issued under the amended Benami Transactions (Prohibition) Act, 1988 for a transaction that occurred before the amendment came into force.
Ratio Decidendi: The court held that the 2016 amendment did not have retrospective effect and could not be used to allege contravention or initiate prosecution for a transaction that occurred before the amendment came into force. The court emphasized that the rights accrued to the appellant under the 1988 Act could not be extinguished by the 2016 amendment.
Final Decision: The appeal was allowed, and the impugned judgment and order were set aside. The show-cause notices were quashed and set aside, with the clarification that the respondents could take proper steps in accordance with the law.
Judgment :
I.P. Mukerji, J.
1. Ganpati Dealcom Pvt. Ltd., the appellant writ petitioner was incorporated on 7th September, 2007. Its registered office is at 101, Balaram Dey Street, Kolkata - 700006.
2. On 2nd May, 2011 it purchased the property numbered 9, Sarat Chatterjee Avenue, Kolkata. The sellers were diverse individuals. The total consideration was Rs.9,44,00,000/-. The property was large, the land area being 8 cottahs and 13 chittaks. The building standing on it was up to the third floor having a total area of 6336.5 sq. ft. of which the ground floor had 1965.5 sq. ft., the first floor 1965.5 sq. ft., the second floor 1965.65 sq. ft. and the third floor 440 sq. ft. Prior to the purchase of this property six individuals appeared to have been allotted shares in the appellant. They were Nakul, Neha, Shruti, Ritu, Rajesh and Ashok Kumar Goenka, all living in Kamdhenu Building, 4A Ray Street, Kolkata - 700020. Nakul, Neha and Shruti were allotted substantial shares, 4,881 for Nakul, 15,214 for Neha and 10,048 for Shruti. Each of the others was allotted 200 to 300 shares.
3. At the time when this transaction was made The Benami Transactions (Prohibition) Act, 1988 was in force.
Some material provisions of the Act need to be set out:-
1. Short title, extent and commencement-
...................................
(3) The provisions of sections 3, 5 and 8 shall come into force at once, and the remaining provisions of this Act shall be deemed to have come into force on the 19th day of May, 1988.
2. Definitions- In this Act, unless the context otherwise requires,--
(a) benami transaction means any transaction in which property is transferred to one person for a consideration paid or provided by another person;
(c) property means property of any kind, whether movable or immovable, tangible or intangible, and includes any right or interest in such property.
3. Prohibition of benami transactions- (1) No person shall enter into any benami transaction. (2) Nothing in sub-section (1) shall apply to the purchase of property by any person in the name of his wife or unmarried daughter and it shall be presumed, unless the contrary is proved, that the said property had been purchased for the benefit of the wife of the unmarried daughter. (3) 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. (4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, an offence under this section shall be non-cognizable and bailable.
5. Property of benami liable to acquisition- (1) All properties held benami shall be subject to acquisition by such authority, in such manner and after following such procedure as may be prescribed. (2) For the removal of doubts, it is hereby declared that no amount shall be payable for the acquisition of any property under sub-section (1).
8. Power to make rules-
(1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:--
(a) the authority competent to acquire properties under section 5;
(b) the manner in which, and the procedure to be followed for, the acquisition of properties under section 5;
(c) any other matter which is required to be, or may be, prescribed.
(3) Every rule made under this Act shall be laid, so soon as may be after it is made, before each House of Parliament, while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have e
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
