The proceedings under Section 24 of the Prohibition of Benami Property Transactions Act, 1988, require a recording of prima facie opinion as to the benami nature of the transaction. The Act mandates the respondent authorities to furnish necessary documents and provide an opportunity of being heard to the appellants only at the stage of adjudication proceedings. There is no provision under the Act to provide an opportunity to the appellants to cross-examine the witnesses at the preliminary stage.

JUDGMENT

(Common Prayer in all W.As.: 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.2813, 8352, 2817, 2820, 2814, 2815 & 2818 of 2020.)

Common Judgment

R. Mahadevan, J.

1. All these writ appeals are filed by the appellants, questioning the validity of the common order dated 25.10.2021 passed by the learned Judge in W.P.Nos. 2813, 8352, 2817, 2820, 2814, 2815 & 2818 of 2020.

2. The necessary facts leading to the filing of these appeals would run thus:

2.1.1. The appellants in W.A. Nos. 1054, 1047, 1049, 1050, 1051 & 1052 of 2022, are engaged in the jewellery business by running "Pondicherry Sri Lakshmi Jewellery" with various branches. In the year 2000, they started a Private Limited Company to render foreign exchange and travel related services in the name and style of M/s.Bonjour Bonheur Private Limited (in short, "the Company") and the main share holders were the family members. Thereafter, in the year 2009, the Company also ventured into the business of hotel and hospitality by promoting the resort in the name and style of "Ocean Spray", for which, the land belonging to one of the promoter Director viz., Mr.K.Nagarajan, was leased to the company and the constructions were made, after borrowing loans from banks and financial institutions.

2.1.2. While so, a search was conducted in the premises of the Pondicherry Sri Lakshmi Jewellery, 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. Subsequently, the appellants received notices under Section 153C of the Income Tax Act, 1961 (in short, “the I.T. Act”) for reassessment.

2.1.3. Pending the reassessment proceedings, the appellants were issued with show cause notices under Section 24(1) of the Prohibition of Benami Property Transactions Act, 1988 (in short, “the Act”) on 01.11.2019 from the office of the first respondent, alleging that they are benamidars for the identified beneficial owner, Mrs.V.K.Sasikala with respect to their shares in the Company and they were called upon to reply on or before 18.11.2019 as to why they should not be held to be benamidars.

2.1.4. Upon receipt of the same, the appellants sent communications asking for the material documents and the sworn statements of Mr.Naveen Baalaji, Mrs.V.K.Sasikala, Mrs.Krishnapriya and Mr.Senthil reserving their right to cross examine the aforesaid persons. In response, the first respondent supplied only a part of the documents, through mails. Despite the repeated reminders, the sworn statement of Mrs.Krishna Priya and a part of sworn statement of Mrs.V.K.Sasikala were not provided to the appellants. That apart, no opportunity was provided to cross examine the witnesses, whose statements have been relied upon by the first respondent for initiating the proceedings against the appellants.

2.1.5. In such circumstances, when the appellants were about to file their preliminary submissions based on the available materials, on 22.01.2020, the office of the first respondent refused to accept the same, stating that an order under section 24(4) of the Act has already been passed on 20.01.2020 confirming the provisional attachment of the property and the same was served on them only on 27.01.2020. Challenging the said order passed under section 24(4) of the Act, the appellants preferred WP.Nos.2813 to 2815, 2817, 2818 and 2820 of 2020.

2.2. According to the appellant in WA.No.1007 of 2022, pursuant to the search conducted in the group cases of Mrs.V.K.Sasikala, a search was conducted in his premises on 28.11.2017. During the course of the same, statements were recorded from various parties, based on which, notices under section 153C for the assessment years 2012-13 to 2018-19 were issued to the appellant. Subsequently, the first respondent issued a show cause notice under section 24(1) of the Act on 01.11.2019, alleging that he is a benamidar for the identified