Lekha G
The Calcutta High Court held that the amendment to Prohibition of Benami Property Transactions Act, 1988 shall not be treated as final and only be treated as provisional until the pendency of the petition.
The Petitioners contended that there is an unconscionable and illegal ‘retrospective applicability’ of the Act, leading to these proceedings.
Mr. Khaitan, the Counsel appearing on behalf of the petitioners referring to the judgment of the Division Bench in M/s. Ganpati Dealcom Pvt. Ltd v. Union of India (WPO No. 687 of 2017) contended that the respondent authorities cannot initiate any proceedings.
In other words, it was noted that while the 1988 Act entered the statute books, no procedural rules were framed under Section 8 of the 1988 Act for the declaration of the benami property, rendering the 1988 Act effective, merely on paper.
As a result, in spite of the Amendment Act of 2016 which introduced the definitions of “benami property” and “benami transaction”, in Sub-Sections of (8) and (9) of Section (2) of the 1988 Act, such amendment would not be applicable in respect of transactions pertaining to immovable properties, which predated the implementation of the Amendment Act of 2016.
Reliance was also placed on the judgement of the Bombay High Court in case of Joseph Isharat v. Rozy Nishikant Gaikwad and on the decision of the Gujarat High Court in Niharika Jain v. Union of India.
Justice Shekar B. Saraf opined that such judgments are not binding on this Court even though they have a persuasive effect and the Division Bench Judgment in M/s. Ganapati Dealcom Pvt. Ltd is binding upon this Court even though the operation of the said judgment has been stayed by the Supreme Court.
Accordingly, the Court was of the opinion that the writ petitioners are entitled to interim orders at this stage and passed the same based on the following directions-
Firstly, the reference referred to in Section 24 (5) of the 1988 Act shall not be treated as final and shall only be treated as provisional during the whole period, the writ applications are pending before this Court.
Secondly, subject to its result, the reference will be treated as final. Thereafter, time to pass the adjudication order under Section 26 (7) of the 1988 Act will start to run. Hence, it follows that the respondent authorities will not take any further steps in the matter till the disposal of these writ applications.
Thirdly, the writ petitioners shall not sell, otherwise transfer, deal with, encumber or part with possession of the subject properties till the disposal of these writ applications.
