Supreme Court to review 2022 judgment on Prohibition of Benami Property Transactions Act (PBPTA), 1988

Posted 19 Oct 2024

2 min read

SC has allowed review petition filed by the Union Government against the 2022 judgment (Union of India vs M/S. Ganpati Dealcom Pvt. Ltd. Case) in which certain provisions of PBPTA declared unconstitutional.

PBPTA has been enacted to prohibits benami transactions and provides for confiscating benami properties
- Benami transaction refers to transaction where a property is held by or transferred to a person, but has been provided for or paid by another person.

Key highlights of the 2022 Judgement

Section 3(2) of the PBPTA declared unconstitutional, that prescribed a jail term for entering into benami transactions.
- This provision violates Article 20(1) (protection in respect of conviction for offense) of the Constitution due to its arbitrary nature.
Law did not have a retrospective application and the authorities couldn't initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to when the legislation came into force.
- Benami Transactions (Prohibition) Amendment Act, 2016 Act did not have any explicit provision allowing its retrospective application.
- The Union had contended that the 2016 Act would be applicable retrospectively.

Concerns related to Benami Transactions or Property

It considered as a major tool for holding black money.
- It promotes tax evasion which leads to revenue loss for government.
It distorts the real estate market by artificially inflating property prices.
Fraudulent asset diversion makes tracing of ownership difficult and undermines integrity of the financial system.