Centre files review petition in SC against judgment striking down provisions of Benami Act

New Delhi [India], January 31 : The Centre has filed a review petition in the Supreme Court against the top court judgement which struck down some provisions of the Benami Transactions (Prohibition) Act of 1988 and the 2016 amendments to the Act.
Solicitor General Tushar Mehta on Tuesday mentioned the plea before a bench headed by Chief Justice of India DY Chandrachud. He sought an urgent hearing on the review petition. He also urged for an open court hearing of the case.
The court said that it would list the matter.
Centre has sought a review of the judgement, which was delivered in August 2022 by a three-judge bench of the apex court.
In August 2022, the top court ruled that the forfeiture provision under Section 5 of the 2016 Act, being punitive in nature, can only be applied prospectively and not retroactively and declared some provisions of the Benami Transactions (Prohibition) Act of 1988 and the 2016 amendments to the Act unconstitutional.
The top court has declared that the forfeiture provision under Section 5 of the unamended Act of 1988, prior to the 2016 Amendment Act, was unconstitutional for being manifestly arbitrary.
The court has noted that this brings us to the last aspect as to the retroactive operation of confiscation (forfeiture) under Section 5 read with Chapter IV of the 2016 Act.
It is the argument of the Union of India that civil forfeiture being in the domain of civil law is not punitive in nature and therefore, it does not attract the prohibition contained under Article 20(1) of the Constitution.
The 2016 Act, which amends the 1988 Act, expanded the 1988 Act to 72 sections (from 9 sections), divided into eight chapters.
Section 5 has been modified and it presently stands as "Property held benami liable to confiscation. -- Any property, which is the subject matter of benami transaction, shall be liable to be confiscated by the Central Government."
The 2016 Act provides for provisional attachment of the property where the concerned officer has genuine reason to believe, based on the material gathered, that the person in possession of the property held in benami may alienate the property.
"Such provisional attachment cannot be taken recourse to every time. Recourse under Section 24(3) of the 2016 Act should be exercised in exceptional circumstances after previous approval of the Approving Authority. Such interim provisional attachment is strictly limited by time," the court said.
The court had noted that the response by the Government and the Law Commission to curb benami transactions was also not sufficient as it was conceded before this Court that Sections 3 and 5 of the 1988 Act in reality, dehors the legality, remained only on paper and were never implemented on the ground.

The court had held that Section 3(2) of the unamended 1988 Act is declared as unconstitutional for being manifestly arbitrary and, Section 3(2) of the 2016 Act is also unconstitutional as it is violative of Article 20(1) of the Constitution.
As per Section 3 (2) whoever enters into any benami transaction shall be punishable with imprisonment for a term which may extend to three years or with fine or with both.
The court order came on Centre appeal challenging the Calcutta High Court order.
The Calcutta High Court in 2019 said ruled that the 2016 amendment cannot be given retrospective effect since there is no express provision granting retrospectively.
The court had opined that such reading down was mandated to ameliorate the harsh consequences of confiscatory laws which otherwise would have allowed the State agencies to take over the property without seriously pursuing the criminal prosecutions.
The Benami Act empowers the authorities to provisionally attach properties. The amendment to Benami Act, 2016 was designed to curb black money and was passed by parliament in August 2016, came into effect in November 2016.
The "benami property" means any property which is the subject matter of a benami transaction and also includes the proceeds from such property and "benami transaction" means,-- a transaction or an arrangement where a property is transferred to, or is held by, a person, and the consideration for such property has been provided or paid by, another person.