{"id":267190,"date":"2022-04-20T19:19:24","date_gmt":"2022-04-20T13:49:24","guid":{"rendered":"https:\/\/www.indialegallive.com\/?p=267190"},"modified":"2022-04-21T10:18:07","modified_gmt":"2022-04-20T14:09:58","slug":"union-of-india-benami-act-restrospective","status":"publish","type":"post","link":"https:\/\/www.indialegallive.com\/constitutional-law-news\/supreme-court-news\/union-of-india-benami-act-restrospective\/","title":{"rendered":"Supreme Court says law amended in 2016 cannot have retrospective effect on 2011 transaction"},"content":{"rendered":"\n
The Supreme Court<\/a> has asked the Centre how can it prosecute someone under the amended Benami Act retrospectively while hearing a plea by the Union of India against the order of the Calcutta High Court which had held that the 2016 amendment had prospective effect.<\/p>\n\n\n\n On Wednesday, Chief Justice of India N.V. Ramana opined that the Benami Transactions (Prohibition) Amendment Act, (2016) cannot be applied retrospectively. The bench, which also comprised of Justices Krishna Murari and Hima Kohli, was hearing a petition filed by Union of India against M\/S Ganpati Dealcom Pvt. Ltd which had approached the Calcutta High Court against the show cause notice for alleged benami property purchased by the company.<\/p>\n\n\n\n The CJI observed,<\/p>\n\n\n\n \u201cIn 2016, there was no mechanism to know what is benami or not benami. It has to be by way of rule, you cannot prosecute someone retrospectively. When vacuum is there, you have to accept it. See, 2016 onwards okay. When you are admitting that there is no procedure.\u201d<\/mark><\/p><\/blockquote>\n\n\n\n Additional Solicitor General Vikramjeet Banerjee, appearing for the Union Ministry of Finance, replied, \u201cI am in milordship hand.\u201d<\/p>\n\n\n\n Also Read: <\/strong>Supreme Court appoints former SC judge AM Sapre to assist Unitech board<\/a><\/p>\n\n\n\n CJI said, \u201cNo lordships hand, what lordships hand will do, we are all abideinigby the law.\u201d<\/p>\n\n\n\n \u201cYou have to blame yourself. There was no law in place at that period of time,\u201d added the CJI.<\/p>\n\n\n\n ASG Banerjee: “I must only say this, Section 4, attachment means the prohibition of transfer, conversion, disposition or movement of property, by an order issued under this act;<\/p>\n\n\n\n Section 5 of the New Act, by which Chapter II \u201cProhibition of Benami Transactions\u201d is added before Section 3, of the Principal Act.<\/p>\n\n\n\n In Section 8 of the New Act, substituted the Section 5 and 6 of the principal act;<\/p>\n\n\n\n “5. Any property, which is subject matter of benami transaction, shall be liable to be confiscated by the Central Government.<\/p>\n\n\n\n Also Read: <\/strong>Supreme Court reserves order in plea against bail granted to law student in rape case<\/a><\/p>\n\n\n\n The Court has adjourned its hearing till tomorrow.<\/p>\n\n\n\n The Apex Court on February 3, 2020, had issued notice and stayed the order of the Calcutta High Court insofar as it holds that 2016 amendment of the Benami Transactions Act, 1988 was prospective in nature.<\/p>\n\n\n\n The High Court had opined, \u201cThe obvious basis of the principle against retrospectivity is the principle of ‘fairness’, which must be the basis of every legal rule as was observed in L’Office Cherifien des Phosphates v. Yamashita-Shinnihon Steamship Co. Ltd. Thus, legislations which modified accrued rights or which impose obligations or impose new duties or attach a new disability have to be treated as prospective unless the legislative intent is clearly to give the enactment a retrospective effect; unless the legislation is for purpose of supplying an obvious omission in a former legislation or to explain a former legislation. We need not note the cornucopia of case law available on the subject because aforesaid legal position clearly emerges from the various decisions and this legal position was conceded by the counsel for the parties.<\/p>\n\n\n\n In Niharika Jain & Ors. Vs. Union of India & Ors. reported in an unreported decision of the Rajasthan High Court made on 12th July, 2019, the Court inter alia held that the 2016 amendment had prospective effect.<\/p>\n\n\n\n Also Read: <\/strong>Supreme Court appoints former SC judge AM Sapre to assist Unitech board<\/a><\/p>\n\n\n\n By an amendment, an existing Act is supplemented by new provisions adding to or subtracting from it. It is usual that parts of the existing Act are retained. Say for example, there is a provision in the existing Act for penalty in the case of acquisition of property described as benami. If the definition of benami property, its acquisition and the penal provisions remain unaltered after the amendment, and the alleged contravention took place before the amendment, it would not affect any proceeding taken in respect of that contravention, after the amendment, because these provisions are continued by the amending Act, untouched and unaffected by it. But take the case here. The definitions of benami transaction and property are radically changed by the amending Act. So are the provisions regarding investigation of contraventions, offences etc., the consequence of it namely, confiscation, prosecution etc. The show-cause notice dated 29th August, 2017 was issued under Section 24(1) of the 1988 Act as amended. It referred to the alleged benami transaction by the appellant under Section 2(8) and 2(9)(D) thereunder. Therefore to allege contravention of the 1988 Act as amended in 2016 the contravention should have been made after the date of coming into force of the amendment. In the absence of retrospective operation of the amending Act, one cannot allege that the transaction resulting in the said contravention of the 1988 Act as amended in 2016 took place in 2011. That is exactly what the impugned show-cause notice proposed to do.<\/p>\n\n\n\n Now, it is an accepted principle of law that the statute cannot have any retrospectivity unless expressly provided therein. In Rao Shiv Bahadur Singh and Anr. Vs. State of Vindhya Pradesh reported in AIR 1953 SC 394, the Supreme Court was concerned with the interpretation and application of Article 20 of our Constitution. The court remarked that “this article in its broad import has been enacted to prohibit convictions and sentences under ex-facto laws.” It defined ex-post facto laws as those which “voided and punished what had been lawful when done.”<\/p>\n\n\n\n This case was cited to support the argument that the 2016 amendment could not be utilized to charge the appellant with contravention or convict him for an alleged offence under it but which was not so under the 1988 Act, said the High Court.<\/p>\n\n\n\n Further it stated that, <\/p>\n\n\n\n \u201cAll the above authorities were cited by Mr. Khaitan. I reject the contention of the Additional Solicitor General that the provision in Section 1(2) of the said Act automatically made the amending Act of 2016 retrospective. The 2016 amendment is a new legislation and in order to have retrospectivity it should have been specifically provided therein that it was intended to cover contraventions at an earlier point of time. That express provision is not there. Therefore this contention of the Additional Solicitor General fails.\u201d<\/mark><\/p><\/blockquote>\n\n\n\n