Mr. Sadanand Kadam & Mr. Anil Dattatreya Parab vs The Initiating Officer BPU Mumbai

Headnote:(A) Prohibition of Benami Property Transactions Act, 1988 - Sections 2(9)(A), 24(3), 46 and 63 - Benami transaction - Definition - Property transferred to or held by a person and consideration provided by another person for the benefit of that other - Burden of proof - Initiating Officer must prima facie establish benami transaction; thereafter onus shifts to appellants - Provisional attachment - Previous approval of Approving Authority required before attachment - Approval taken prior to issuance of notice under Section 24(1) - Validity - Section 63 saves orders from invalidity due to mistake or omission if in substance and effect in conformity with intent of Act. (Paraas 11-12, 15-18, 20-23)

(B) Evidence - Documents such as diary recovered from son of benamidar - Not sufficient to prove that construction costs were borne by benamidar - Inconsistency in funds and inibility to explain source - Sale of property to benamidar for consideration far below market value - Payment made later with beneficial owner as guarantor - These factors indicate benami transaction. (Paraas 13-17)

Facts of the case:
The property in question, a land, was initially purchased by the alleged beneficial owner from a third party for a consideration of Rs. 1 Crore in May 2017. Construction of a resort was undertaken thereafter at a cost of approximately Rs. 4.13 Crores. In December 2020, when irrgularities in construction were reported in media and the beneficial owner became a Minister, the property was sold to the alleged benamidar for Rs. 1.1 Crore. The sale consideration was paid six months later, with the beneficial owner standing as guarantor for loan taken by benamidar. The Initiating Officer treated the transaction as benami and issued provisional attachment order, which was confirmed by the Adjudicating Authority.

Findings of Court:
The Tribunal held that the transaction fell within the definition of benami transaction under Section 2(9)(A) because the consideration for the property was provided by the beneficial owner and the property was held for his benefit. The construction cost was not proved to have been borne by the benamidar. The subsequent sale at an undervalue and the guarantee arrangement further supported the benami nature. Regarding procedural challenge, although the previous approval for provisional attachment was obtained before issuance of notice under Section 24(1), the defect was cured by Section 63 which validates proceedings if in substance and effect in conformity with the Act.

Issues: The main issues were whether the transaction was a benami transaction as defined under Section 2(9)(A) and whether the provisional attachment order was invalid due to approval being taken prior to notice.

Ratio Decidendi: The court ruled that a person claiming to be the true owner must prove that he provided the consideration from his own sources. Here, the benamidar failed to prove that he provided the consideration for purchase or construction. The sequence of events (purchase by beneficial owner, construction, sale after media exposure, undervalue consideration, guarantee) clearly indicated a benami arrangement. The procedural irregularity in timing of approval was saved by Section 63 because the substance of the proceeding was in accordance with the Act.

Result: Appeals dismissed.

Legal Category Hierarchy

1. Appeal under Section 46 of the Act of 1988 against confirmation of provisional attachment of property alleged to be benami. (Para 2 , 3 )

2. Dispute over whether transaction was benami and whether prior approval for attachment was procedurally valid. (Para 4 , 5 , 6 , 7 , 8 , 9 )

3. Appeals dismissed; order confirming provisional attachment upheld. (Para 25 )

4. What constitutes a benami transaction under Section 2(9)(A) of the Act?

A transaction where property is held by one person but consideration is provided by another for that other's benefit. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 )

5. Is the provisional attachment order invalid if approval was obtained before the notice under Section 24(1)?

No, the procedural defect is cured by Section 63 if the order is in substance in conformity with the Act. (Para 19 , 20 , 21 , 22 , 23 )

6. What is the burden of proof in benami proceedings?

Initial burden on revenue to establish case, but once prima facie evidence shown, onus shifts to claimant to prove bona fides. (Para 14 )

ORDER

16.10.2025

This order would address the appeals preferred by the appellants under Section 46 of the Prohibition of Benami Property Transactions Act, 1988 ( for short “the Act of 1988”) to challenge the order dated 13.11.2023 passed by the Adjudicating Authority confirming the Provisional Attachment Order (‘PAO’) and while answering the reference.

Brief facts of the case:

2. The appeal has been filed by Mr. Sadanand Kadam taken as benamidar and Mr. Anil Dattatreya Parab to be a beneficial owner of the property of the land bearing Survey No. 446 at Village Murud Dapoli. The fact on record shows that the benamidar, Mr. Sadanand Kadam was involved in Cable Network distribution business and even ventured into the hospitality business. He has claimed ownership of the alleged benami property in Village Murud Dapoli. The fact on records shows that the land in question was purchased by Mr. Anil Dattatreya Parab from Mr. Vibhas Sathe by making full and final payment of Rs.1 Crore on 12.05.2017. The Sale Deed was then executed after two years on 19.06.2019. The construction of the resort on the land was started by the beneficial owner in the year 2017-2018 itself. He became Minister in Maharashtra Government in December, 2019. The land aforesaid was sold by the beneficial owner, Mr. Anil Parab to the benamidar in December, 2020 when the news was flashed about the irregularity in construction of the resort. The land was immediately sold thereupon to Mr. Sadanand Kadam for a consideration of Rs. 1.1 Crore in 2020. Though, in the meanwhile the construction of the resort was carried out where around a sum of Rs. 5 Crores was spent. The Initiating Officer considered it to be a case of benami transaction where Mr. Anil Parab was taken the beneficial owner while Mr. Sadanand Kadam to be the benamidar. It was for the reason that the expenses towards construction on the land was incurred by the beneficial owner, Mr. Anil Parab but the land was then registered in the name of the benamidar, Mr. Sadanand Kadam. For the reason of payment of consideration on construction by the beneficial owner and the land was then registered in the name of benamidar making out a case of benami transaction under Section 2(9)(a) of the Act of 1988 as amended by the Amending Act of 2016.

3. The Initiating Officer caused notice for provisional attachment of the property and after compliance of the provisions of the Section 24(4) of the Act of 1988. The reference was sent to the Adjudicating Authority. It provided an opportunity of hearing to both the parties and passed impugned order confirming the PAO and answering the reference. The appellants are aggrieved by the order passed by the Adjudicating Authority and accordingly these appeals.

Arguments of the Counsel for the appellants:

4. Ld. Counsel appearing for the beneficial owner and benamidar submitted that the Initiating Officer has wrongly taken transaction of the land to be out of the benami transaction. It has been erroneously confirmed by the Adjudicating Authority. In fact, Mr. Sadanand Kadam (benamidar) intended to purchase the land in village Murud Dapoli but due to unavailability of source/fund, he made a request to Mr. Anil Dattatreya Parab to purchase the land and accordingly the land was purchased by Mr. Anil Dattatreya Parab for a consideration of Rs.1 Crore. The payment aforesaid was made on 12.05.2017 but Registered Sale Deed was executed almost after a period of two years on 19.06.2019. It was in the name of Mr. Anil Dattatreya Parab. The construction of the resort was undertaken in the intervening period of 2017- 18. According to the Ld. Counsel for the appellant the construction cost was borne by Mr. Sadanand Kadam (benamidar). It was for the reason that he alone intended to purchase the land but in absence of the availability of funds in the year 2017, it was purchased and registered in the name of Mr. Anil Dattatreya Parab on the request of Mr. Sadanand Kadam due to his close association with the b

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2025 Supreme(Online)(ATFP) 13434

APPELLATE TRIBUNAL FOR FORFEITED PROPERTY
Munishwar Nath Bhandari, Chairman, Gopal Chandra Mishra, Member
Mr. Sadanand Kadam & Mr. Anil Dattatreya Parab – Appellant
Versus
The Initiating Officer BPU Mumbai – Respondent
FPA-PBPT-3248/MUM/2023 & FPA-PBPT-3249/MUM/2023

A transaction is benami under Section 2(9)(A) of the PBPT Act 1988 where property is held by one person but consideration provided by another for that other's benefit. Provisional attachment with prior approval taken before notice is saved by Section 63 if substance is compliant.

Legal Category Hierarchy

Table of Contents

4. What constitutes a benami transaction under Section 2(9)(A) of the Act?

5. Is the provisional attachment order invalid if approval was obtained before the notice under Section 24(1)?

6. What is the burden of proof in benami proceedings?

2025 Supreme(Online)(ATFP) 13434

APPELLATE TRIBUNAL FOR FORFEITED PROPERTYMunishwar Nath Bhandari, Chairman, Gopal Chandra Mishra, MemberMr. Sadanand Kadam & Mr. Anil Dattatreya Parab – AppellantVersusThe Initiating Officer BPU Mumbai – RespondentFPA-PBPT-3248/MUM/2023 & FPA-PBPT-3249/MUM/2023

A transaction is benami under Section 2(9)(A) of the PBPT Act 1988 where property is held by one person but consideration provided by another for that other's benefit. Provisional attachment with prior approval taken before notice is saved by Section 63 if substance is compliant.

Legal Category Hierarchy

Table of Contents

4. What constitutes a benami transaction under Section 2(9)(A) of the Act?

5. Is the provisional attachment order invalid if approval was obtained before the notice under Section 24(1)?

6. What is the burden of proof in benami proceedings?

APPELLATE TRIBUNAL FOR FORFEITED PROPERTY
Munishwar Nath Bhandari, Chairman, Gopal Chandra Mishra, Member
Mr. Sadanand Kadam & Mr. Anil Dattatreya Parab – Appellant
Versus
The Initiating Officer BPU Mumbai – Respondent
FPA-PBPT-3248/MUM/2023 & FPA-PBPT-3249/MUM/2023