The Supreme Court on Tuesday agreed to hear the petition filed by the Central government, seeking review of its August, 2022 verdict that struck down certain provisions of the Benami Transactions (Prohibition) Amendment Act, 1988 on the grounds of being manifestly arbitrary.
Solicitor General Tushar Mehta mentioned the matter before the Bench of Chief Justice of India (CJI) D.Y. Chandrachud and Justice P.S. Narasimha, seeking an open court hearing in the case. The Bench agreed to hear the matter.
The ASG contended that the Apex Court, by way of its August 23, 2020 judgment, had struck down certain provisions of the Benami Act, which were not even under challenge. He contended that a lot of orders were being passed after this Supreme Court verdict.
On August 23 last year, a three-judge bench of the Apex Court, comprising the then CJI N.V. Ramana, Justice Krishna Murari and Justice Hima Kohli had ruled that Benami Transactions (Prohibition) Amendment Act 2016 could not be applied retrospectively.
It had further noted that the 2016 amendment could not be held as merely procedural.
It said the in rem forfeiture provision under Section 5 of the 2016 Amendment Act could only be applied prospectively and not retroactively, since it was punitive in nature.
The Court ruled that concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, on October 25, 2016.
It quashed all prosecutions or confiscation proceedings initiated with respect to transactions prior to October, 2016.
The Apex Court ruled that Section 3(2) of the unamended 1988 Act was unconstitutional for being manifestly arbitrary, while Section 3(2) of the 2016 Act was also held to be unconstitutional for being violative of Article 20(1) of the Constitution.
Section 3(2) criminalised benami transactions, making it punishable with imprisonment up to three years.
(Case title: Union of India vs Ganpati Dealcom)