IMPORTANT POINT
Notice of attachment of property involved in Benami transaction – Beneficial owner has right to reply to such notice.

IMPORTANT POINT

Notice of attachment of property involved in Benami transaction—Beneficial owner has right to reply to such notice.

ORDER (ORAL )

Suraj Govindaraj.—The petitioner is before this Court seeking for the following reliefs:

a. Issue a Writ, Order or direction in the nature of Certiorari to quash the impugned Order dated 30.07.2025 bearing No.DIN and letter No.ITBA/ COM/f/17/2025-26/1079090630(1) passed by the respondent No.1 vide Annexure-C in so far as petitioner is concerned.

b. Issue a Writ, Order or direction in the nature of certiorari to quash the notice dated. 26.08.2025 bearing case No. PBPTA/FR/177/MUM/2025/2121, issued by the respondent No.2, vide Annexure-D in so far as petitioner is concerned.

c. Pass any other order, which this Hon’ble Court may deem fit, including the cost of the Writ petition in the interest of justice and equity.

2. A notice had been issued to a Benamidar contending that the Benamidar was holding the property of the petitioner as a beneficial owner under sub-Section (1) of Section 24 of the Prohibition of Benami Property Transaction Act, 1988 (for short ‘the Act’). The Benamidar having replied to the notice, orders had been passed in terms of Annexure-C. It is challenging the same that the petitioner-beneficial owner is before this Court.

3. The submission of Shri Gangadhar J.M., learned counsel for the petitioner is that though the notice issued to the Benamidar was marked to the beneficial owner, there was no mention made in the said notice that the beneficial owner is required to reply to the said notice and it is in that background, he submits that the rights of the petitioner have been impinged upon, the principles of natural justice have been violated, orders have been passed without affording an oppertunity to the petitioner to reply to the show cause notice, which have affected the petitioner in terms of Annexure-C.

4. Shri M. Thirumalesh., learned counsel appearing for the revenue, would submit that there is no requirement for the revenue to specifically call upon the beneficial owner to reply to the notice issued to the Benamidar under sub-Section (1) of Section 24 of the Act. What is required is only for a copy to be marked to the beneficial owner, which has been done by the revenue. Once the beneficial owner receives the notice, it was for the beneficial owner if he wanted to so do, provide an explanation or submission within the time period specified for the Benamidar to reply to the notice under sub-Section (1) of Section 24 of the Act. It is in that background, he submits that the beneficial owner having received the notice, not having chosen to reply, cannot after orders are passed approach this Court alleging violation of natural justice.

5. Heard Shri Gangadhar J.M., learned counsel for the petitioner and Shri M.Thirumalesh., learned counsel for the respondents.

6. The short question that would arise for consideration is ‘whether there is a requirement specifically for the revenue to call upon the beneficial owner to reply to a notice issued to the Benaminar under sub-Section (1) of Section 24 of the Act’?.

7. Section 24 (1)(2) and 2(A) of the Act, are reproduced hereunder for easy reference.

24. Notice and attachment of property involved in Benami transaction.—

(1) Where the Initiating Officer, on the basis of material in his possession, has reason to believe that any person is a Benamidar in respect of a property, he may, after recording reasons in writing, issue a notice to the person to show cause within such time as may be specified in the notice why the property should not be treated as Benami property.

(2) Where a notice under sub-section (1) specifies any property as being held by a Benamidar referred to in that sub-section, a copy of the notice shall also be issued to the beneficial owner if his identity is known.

[(2A) The Benamidar, to whom a notice has been issued under sub-section (1), or the beneficial owner to whom a copy of such notice has been i