Benami law can’t be applied retrospectively: SC

The Supreme Court ruled that the Benami law cannot be applied retrospectively and said Section 3 of the 2016 amendment Act is unconstitutional.

The Supreme Court ruled the amended Benami Transactions (Prohibition) Act, 1988, which came into effect in 2016, applied only prospectively.
Section 3(3) of the 2016 amendment enhanced the three-year imprisonment to seven years and added a fine of up to 25% of the property’s fair market value.
The court held that the concerned authorities could not initiate or continue criminal prosecution or confiscation proceedings for transactions entered into before the coming into force of the 2016 Act.

It is an Act to prohibit Benami transactions and give the right to recover properly held Benami.
Definitions of Benami transaction:

A Benami transaction is any transaction in which property is transferred to one person for consideration paid or provided by another.
In other words, a transaction in which the real beneficiary is not the one in whose name the property is purchased.
Penalty:

Under this Act, no person shall enter into any Benami transaction.
Whoever enters into any Benami transaction shall be punishable with imprisonment for a term that may extend to three years, with a fine, or both.
The penalty for providing false information is rigorous imprisonment of six months to five years and a fine which may extend to 10% of the fair market value of the Benami property.
Confiscation of property:

The Act also states that the government can confiscate Benami properties without payment of compensation.
The term “property” now covers movable, immovable, tangible and intangible properties.

Property of Benami liable to acquisition:
All properties held by Benami should be subject to acquisition by such authority, in such manner and after following such procedure as may be prescribed.

Persons indulging in Benami transactions may face up to 7 years of imprisonment and a fine.
Furnishing false information is punishable by imprisonment for up to 5 years and a fine.
Properties held by Benami are liable for confiscation by the government without compensation.
Four authorities to conduct inquiries or investigations regarding Benami transactions are (i) Initiating Officer, (ii) Approving Authority, (iii) Administrator and (iv) Adjudicating Authority.
The initiating officer may pass an order to continue holding property and refer the case to the adjudicating authority, who will then examine the evidence and give an order.
The Act gives the Initiating Officer the power to enquire into any person, place, documents or property during an investigation.
The Appellate Tribunal will hear appeals against orders of the adjudicating authority. The High Court can hear appeals against orders of the Appellate Tribunal.

Content Source: The Hindu