The court emphasized that the proceedings under section 24 of the Act only require a recording of prima facie opinion as to the benami nature of the transaction and that the principles of natural justice and fair play depend on the facts and circumstances of each case and are subject to statutory provisions.

JUDGMENT

(Prayer: Writ Appeals filed under Clause 15 of the Letters Patent to set aside the common order dated 25.10.2021 passed in W.P.Nos.8150, 8149, 8148, 8147 & 8146 of 2020.)

Common Judgment

R. Mahadevan, J.

1. These writ appeals arise from a common order dated 25.10.2021 passed by the learned Judge in a batch of writ petitions viz., W.P.Nos.8150, 8149, 8148, 8147 & 8146 of 2020, filed by the appellants herein.

2. The relief sought in the aforesaid writ petitions is to issue a writ of certiorari to call for the records from the file of the first respondent pertaining to the orders dated 29.01.2020 passed under section 24(4) of the Prohibition of Benami Property Transactions Act, 1988 (hereinafter referred to as “the Act”) and quash the same as illegal, arbitrary and without jurisdiction.

3.1. According to the appellants, they are involved in the business of real estate and developing infrastructure projects including ports, SEZ's, hotels, malls, etc. In the month of November, 2017, a search was conducted in the business premises of the appellants consequent to the search in the case of Mrs.V.K.Sasikala. During the course of the same, various documents were impounded and sworn statements were recorded. Consequently, the appellants received show cause notices dated 01.11.2019 issued by the first respondent under section 24(1) alleging that they are benamidars for the identified beneficial owner viz., Mrs.V.K.Sasikala with respect to their shares held in M/s. Digital Accelerators Limited and they were called upon to reply on or before 18.11.2019 as to why they should not be held to be benamidars. In response, the appellants raised objections to the proposal to treat the shares as benami properties stating that the transactions were reversed. Subsequently, the first respondent by communication dated 05.12.2019, directed the appellants to produce the required documents, to which, the appellants relied on the letter dated 14.12.2019 submitted by M/s.Digital Accelerator Ltd and requested the first respondent to consider the same as response.

3.2. The appellants further averred that in such circumstances, without furnishing the documents, which have been relied upon by the first respondent and without providing any opportunity to the appellants to cross examine the witnesses, the first respondent has passed the orders dated 29.01.2020 under section 24(4) of the Act, for continuance of the provisional attachment of the properties till the order of the Adjudicating Authority is passed under section 26(3) of the Act. Subsequently, they made reference to the second respondent under section 24(5) of the Act on 30.01.2020. Following the same, the second respondent has issued notices dated 12.02.2020 under section 26(1) calling upon the appellants to appear for enquiry.

3.3. In such circumstances, the appellants invoked the jurisdiction under Article 226 of the Constitution of India by filing writ petitions, to quash the orders passed by the first respondent under section 24(4) of the Act. However, the learned Judge has dismissed all the writ petitions along with other cases, vide the order dated 25.10.2021. Therefore, these writ appeals by the appellants/writ petitioners.

4.1. Mr.R.Sivaraman, learned counsel for the appellants in all the appeals, submitted that the appellants were not at all involved in the alleged transactions, which the first respondent are treating as benami transactions. According to the learned counsel, the shareholders have not received any consideration which was to be received on or before 30.04.2017 as per the Memorandum of Understanding and hence, the shares were not transferred and the shareholders continue to hold the shares in M/s.Digital Accelerator Limited. With respect to the original share certificate found with the third party, it is submitted that the certificates were given as surety for the materials stored at M/s.Digital Accelerator Limited and hence, the entire transactions are only commercial in nature a