IMPORTANT POINT
The court established that the issuance of a show cause notice under the Benami Transactions Act requires sufficient material to justify a 'reason to believe', and that mere statements without supporting evidence are insufficient for such proceedings.

JUDGMENT :

1. Heard Shri J.N. Mathur, learned Senior Counsel assisted by Shri Mudit Agarwal and Ms. Aishwarya Mathur, learned Counsel for the petitioner, Shri Surya Bhan Pandey, learned Senior Advocate/Deputy Solicitor General of India assisted by Dr. Ravi Kumar Mishra representing the respondent no.1/Union of India and Shri Neerav Chitravanshi and Shri Kushagra Dixit, learned Counsel for the respondent nos. 2 and 3.

2. By the present writ petition, primarily the petitioner has challenged the show cause notice dated 05.01.2023 issued under 24(1) of The Prohibition of Benami Property Transactions Act, 1988 (hereafter referred to as 'Benami Transactions Act 1988') and provisional attachment order dated 05.01.2023 issued under Section 24(3) of the Benami Transactions Act,1988. Petitioner has sought for further reliefs, but, at the very initial stage, learned counsel for the petitioner states that the main challenge is to the aforesaid show cause notice dated 05.01.2023 and the provisional attachment order dated 05.01.2023. In case the relief is granted to the said extent rest of the consequential orders and further actions would by themselves stand non-est and void.

3. By the impugned notice under challenge, the respondents-authorities have proposed to treat the constructions being raised by the petitioner on her Plot No.35 Srijan Vihar Colony, Gomti Nagar, Lucknow, to be a benami transaction, being carried out by the petitioner on behalf of respondent no.5, her son-in-law. The plot in question was purchased by the petitioner by a sale deed dated 23.04.2016. The Benami Transactions Act,1988 was amended w.e.f. 25.10.2016. The sale deed of the petitioner is admittedly prior to the said amendment.

4. The Supreme Court has considered the validity of the Benami Transactions Act,1988 in the case of Union of India Vs. Ganpati Dealcom Ltd. & others; (2023) 3 SCC 315 and in Paragraph 127, the Supreme Court has given the following findings:

"127. In view of the above discussion, we hold as under:

127.1. Section 3(2)(sic Section 3) 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(I) of the Constitution.

127.2. In rem forfeiture provision under Section 5 of the unamended 1988 Act, prior to the 2016 Amendment Act, was unconstitutional for being manifestly arbitrary.

127.3. The 2016 Amendment Act was not merely procedural, rather, prescribed substantive provisions.

127.4. In rem forfeiture provision under Section 5 of the 2016 Act, being punitive in nature, can only be applied prospectively and not retroactively.

127.5. The authorities concerned 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.

127.6. As this Court is not concerned with the constitutionality of such independent forfeiture proceedings contemplated under the 2016 Amendment Act on the other grounds, the aforesaid questions are left open to be adjudicated in appropriate proceedings."

5. Thus, the purchase of the said land being prior to coming into force of the amendment to the Benami Transactions Act, 1988, no proceedings with regard to the same can be initiated by the department. The said fact is also admitted by the respondents in their show cause notice. The respondents have only initiated proceedings with regard to the constructions of residential house being raised by the petitioner on the said plot. The department claims that the petitioner is a Benamidar of the said constructions while the son-in-law of the petitioner, namely Sri Indramani Tripathi, is the beneficial owner of the said constructions. However, petitioner disputes the same by claiming that the department did not have any material to reach the said con