A transaction where a property is held in the name of another, with consideration paid by a different party, constitutes a benami transaction under Section 2(9)(A) of the Prohibition of Benami Property Transactions Act, 1988.

ORDER

27.01.2026

The batch of appeals have been preferred by the Benamidars and Beneficial Owner for challenge to the order dated 19.05.2022 passed by the Adjudicating Authority confirming the Provisional Attachment Order (‘PAO’) while answering the references.

Brief facts of the case:

2. The properties were purchased in the name of individuals on payment of consideration by M/s Padmavati Marbles Pvt. Ltd., thus, was taken to be a case of benami transaction and accordingly properties in the name of benamidars were provisionally attached.

Arguments of the Ld. Counsel for the appellants:

3.Ld. Counsel for the appellants submitted that the purchase of property was part of the business of M/s Padmavati Marbles Private Limited. An agriculture land was existing in the name of Reserved caste candidate and as per the provisions of the Revenue Laws of the State of Rajasthan, it could not have been purchased by the candidate other than of the Reserved caste. Looking at the rider under the laws, the land existing in the name of Reserved caste candidate was purchased in the name of the candidate of the same caste by inducing the money by the company under the business arrangement. It has taken to be a case of benami transaction ignoring the sequence of events and even the reason to purchase the property in the name of Reserved caste candidate. The agriculture land could not have been registered in the name of a general caste candidate or a candidate other than of the Reserved caste unless it is converted from agricultural to non-agricultural land. Ignoring the fact aforesaid coupled with the fact that the purchase of the property in the name of the Reserved caste candidate was entered prior to the amendment in the Prohibition of Benami Property Transactions Act, 1988 ( in short “the Act of 1988”)

4.By Amending Act of 2016 w.e.f. 01.11.2016, the definition of ‘benami transaction’ was amended and the provisions of Section 2 (9)(A) to (D) were inserted. The purchase of property prior to the Amending Act of 2016 could not have been made subject to the amended provisions in the light of the judgment of the Apex Court in the case ofUnion of India and anotherversus Ganpati Dealcom Pvt. Ltd.reported in2022 SCCOnLine SC 1064.The respondent ignored the aforesaid aspect and considered the case under the amended provisions of Section 2 (9)(A) of the Act of 1988. After the Sale Deed in the name of the private appellants of which consideration was paid by the company, the land was converted from agricultural to non-agricultural and was registered in the name of the company. Accordingly, a case was not made out to cause provisional attachment of the property followed by its confirmation. In fact, the appellants in whose name the properties were registered had acted in the fiduciary capacity and thus the matter would fall under one of the exceptions to Section 2 (9)(A) of the Act of 1988. The prayer was accordingly made to cause interference in the impugned order.

5. Ld. Counsel for the appellants was fair enough to refer to the order dated 15.12.2023 of this Tribunal in the case of M/s Prism Scan Express Pvt. Ltd. Appeal No. FPA-PBPT- 1079/Mum/2020. The interpretation of Section 2 (9)(A) of the Act of 1988 of the amended provision was given to hold its applicability even to the cases where transfer of the property had taken place prior to 01.11.2016, but the property was held by the benamidar even after the amendment of Section 2 (9)(A) of the Act of 1988. It was made applicable taking its prospective application. It is with fair admission that judgement in the case of Ganpati