Niharika Jain vs. UOI (Rajasthan High Court)

HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Civil Writ Petition No. 2915/2019
1. Niharika Jain W/o Shri Andesh Jain, Aged About 39 Years,
R/o Sawan, Shiv Marg, Banswara-327001
2. Ashok Jain S/o Shri Madan Lal Jain, Aged About 59 Years,
R/o Sawan, Shiv Marg, Banswara-327001
3. Smt. Someshwari Jain W/o Shri Ashok Jain, Aged About
58 Years, R/o Sawan, Shiv Marg, Banswara-327001
4. Smt. Sheela Devi Jain W/o Shri Vinod Kumar Jain, Aged
About 48 Years, R/o Sawan, Shiv Marg, Banswara-327001
5. Motiya Dodiyar, S/o Shri Wesiya Bheel, Aged About 56
Years, R/o Village Borda Tehsil Ghantol, Distt. Banswara-
327021
—-Petitioners
Versus
1. Union Of India, Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
2. Deputy Commissioner (Benami Prohibition) Jaipur And
Initiating Officer, Office At Room No. 250, New Central
Revenue Building, Income Tax Office, Statue Circle, Jaipur
3. Adjudicating Authority, The Prohibition Of Benami
Property Transaction Act 1988, Office At, Room No. 26,
4Th Floor, Jeevan Deep Building, Parliament Street, New
Delhi-110001
—-Respondents
Connected With
S.B. Civil Writ Petition No. 15978/2017
1. M/s Manglam Build Developers Limited (a registered
Companies registered under the Companies Act, 1956)
through its Director, Shri Rambabu Agarwal son of Shri
Madan Lal Agarwal, resident of H-55, Jhakhreshwar Marg,
Banipark, Jaipur
2. Shri Rambabu Agarwal Son Of Shri Madan Lal Agarwal,
Resident Of H-55, Jhakhreshwar Marg, Banipark, Jaipur
—-Petitioners
Versus
1. Dy. Commissioner of Income Tax (Benami Transaction)
(D.B. SAW/839/2018 has been filed in this matter. Please refer the same for further orders)
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and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
2. Union Of India Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
—-Respondents
S.B. Civil Writ Petition No. 19132/2017
Smt. Pallavi Mishra Wife Of Sh. Abhishek Mishra, Resident Of A-
801, Auram Apartment, Tilak Marg, C-Scheme, Jaipur.
—-Petitioner
Versus
1. Dy. Commissioner Benami Prohibition, Rajasthan And
Initiating Officer, Prohibition Of Benami Transa, Ncrb
Building, Income Tax Office, Statute Circle, Jaipur.
2. Union Of India Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
—-Respondents
S.B. Civil Writ Petition No. 21751/2017
1. M/s Amar Pratap Developers Private Limited, A-21, Sadul
Ganj, Bikaner through its Director Shri Ashok Kumar Modi
son of Hanuman Prasad Modi, R/o A-21, Sadul Ganj,
Bikaner, at present resident of Room No. 3, 3rd Floor,
Madhav Plaza, District Shopping Centre, Sahakar Marg,
Jaipur.
2. Ashok Kumar Modi son of Hanuman Prasad Modi, resident
of A- 21, Sadul Ganj, Bikaner, at present resident of
Room No. 3, 3rd Floor, Madhav Plaza, District Shopping
Center, Sahakar Marg, Jaipur.
—-Petitioners
Versus
1. Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
2. Union Of India Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
—-Respondents
(D.B. SAW/839/2018 has been filed in this matter. Please refer the same for further orders)
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S.B. Civil Writ Petition No. 9162/2018
1. Dev Kishan Acharya S/o Sh. V.c. Acharya, R/o 3-H-13,
14, R.C. Vyas Colony, Bhilwara.
2. Smt. Kiran Acharya, W/o Shri Dev Kishan Acharya, R/o 3-
H-13, 14, R.C. Vyas Colony, Bhilwara.
3. Shri Mohan Lal S/o Sh. Ganesh Raigar, R/o 3-H-13, 14,
R.C. Vyas Colony, Bhilwara.
4. Jai Ram S/o Sh. Ram Singh, R/o 3-H-13, 14, R.C. Vyas
Colony, Bhilwara.
5. Smt. Antar Bai W/o Shri Jain Ram, R/o 3-H-13, 14, R.C.
Vyas Colony, Bhilwara.
—-Petitioners
Versus
1. Union Of India Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
2. Dy. Commissioner Of Income Tax Benami Transaction And
Initiating Officer Under The Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur.
3. Additional Commissioner Of Income Tax (BP) Jaipur, Room
No. 239, New Central Revenue Building, Income Tax
Office, Statue Circle, Jaipur.
—-Respondents
S.B. Civil Writ Petition No. 10852/2018
1. M/s Epic Vyapaar Pvt Limited, 3rd Floor Madhav Plaza,
District Shopping Center Sahakar Marg, Jaipur,
(Registered Office at Darpam Appartment, 19/1/A,
Mohanlal Bahalwala Road, 3rd Floor, Bally, Howrah)
through its Director Shri Avinash Modi son of Arun Kumar
Modi, resident of A-21, Sadul Ganj, Bikaner, at Present
resident of Room No. 3, 3rd Floor, Madhav Plaza, District
Shopping Center, Sahakar Marg, Jaipur.
2. Shri Avinash Modi son of Arun Kumar Modi, resident of A-
21, Sadul Ganj, Bikaner, at present resident Of Room No.
3, 3rd Floor, Madhav Plaza, District Shopping Center,
Sahakar Marg, Jaipur.
—-Petitioners
Versus
(D.B. SAW/839/2018 has been filed in this matter. Please refer the same for further orders)
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1. Dy. Commissioner Of Income Tax Benami Transaction
And Initiating Officer Under The Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur.
2. Union Of India Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act 1988, Room No. 26, 4th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 10853/2018
1. M/s Avijit Agro Private Limited, Room No. 2, 3rd Floor
Madhav Plaza District Shoping Center, Sahakar Jaipur,
through its Director Shri Ashok Kumar Modi son of
Hanuman Prasad Modi, resident of A-21, Sadul Ganj,
Bikaner, at present resident of Room No. 3, 3rd Floor,
Madhav Plaza, District Shopping Center, Sahakar Marg,
Jaipur.
2. Ashok Kumar Modi Son Of Hanuman Prasad Modi,
Resident Of A-21, Sadul Ganj, Bikaner, At Present
resident of Room No. 3, 3rd Floor, Madhav Plaza, District
Shopping Center, Sahakar Marg, Jaipur.
—-Petitioners
Versus
1. Dy. Commissioner Of Income Tax Benami Transaction
And Initiating Officer Under The Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur.
2. Union Of India Through Its Secretary, Income Tax
Department, Government of India, New Delhi.
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act 1988, Room No. 26, 4th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 10868/2018
(D.B. SAW/839/2018 has been filed in this matter. Please refer the same for further orders)
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Suman Devi Wife of Shri Pradeep Kumar, resident of Karni Pura
Road, Uttar Mohalla, Danta Ramgarh Sikar (Raj.)
—-Petitioner
Versus
1. Dy. Commissioner Of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act, 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur.
2. Union Of India Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act 1988, Room No. 26, 4Th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 11295/2018
1. M/s Vibhuti Integrated Finance Private Limited, 3rd Floor
Madhav Plaza District Shopping Centre, Sahakar Marg,
Opp. Near J.P. Phatak, Jaipur, through its Director Shri
Avinash Modi son of Shri Arun Kumar Modi, resident of A-
21, Sadul Ganj, Bikaner, at present resident of room no.
3, 3rd Floor, Madhav Plaza, District Shopping Center,
Sahakar Marg, Jaipur.
2. Shri Avinash Modi Son Of Shri Arun Kumar Modi, resident
of A-21, Sadul Ganj, Bikaner, at present resident of Room
No. 3, 3rd Floor, Madhav Plaza, District Shopping Center,
Sahakar Marg, Jaipur.
—-Petitioners
Versus
1. Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
2. Union Of India Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
3. Adjudicating Authority, Under the Prohibition Of Benami
Property Transaction Act 1988, Room No. 26, 4th Floor,
(D.B. SAW/839/2018 has been filed in this matter. Please refer the same for further orders)
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Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 11371/2018
1. M/s Amar Pratap Developers Private Limited, A-21, Sadul
Ganj, Bikaner through its Director Shri Ashok Kumar Modi
son of Hanuman Prasad Modi, resident of A-21, Sadul
Ganj, Bikaner, at present resident of Room No. 3, 3rd
Floor, Madhav Plaza, District Shopping Center, Sahakar
Marg, Jaipur.
2. Ashok Kumar Modi Son Of Hanuman Prasad Modi,
resident of A-21, Sadul Ganj, Bikaner, at present resident
of Room No. 3, 3rd Floor, Madhav Plaza, District Shopping
Center, Sahakar Marg, Jaipur.
—-Petitioners
Versus
1. Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
2. Union Of India through its secretary, Income Tax
Department, Government Of India, New Delhi.
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act 1988, Room No. 26, 4th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 11511/2018
1. M/s Natraj Finlease Private Limited, 3rd Floor, Madhav
Plaza, District Shopping Center, Sahakar Marg, Opp. Near
J.P. Phatak, Jaipur through its Director Shri Ashok Kumar
Modi son of Hanuman Prasad Modi, resident of A-21,
Sadul Ganj, Bikaner, At Present Resident of Room No. 3,
3rd Floor, Madhav Plaza, District Shopping Center, Sahakar
Marg, Jaipur.
2. Ashok Kumar Modi Son Of Hanuman Prasad Modi,
Resident Of A-21, Sadul Ganj, Bikaner, At Present
Resident Of Room No. 3, 3rd Floor, Madhav Plaza, District
Shopping Center, Sahakar Marg, Jaipur.
(D.B. SAW/839/2018 has been filed in this matter. Please refer the same for further orders)
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—-Petitioners
Versus
1. Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
2. Union Of India Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act 1988, Room No. 26, 4Th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 11948/2018
1. St. Wilfred Education Society, Sector 10, Meera Marg,
Mansarover, Jaipur Through Its Secretary Shri Keshav
Gupta S/o Shri Mahesh Kumar Gupta.
2. Adarsh Gyan Vidhalya Samiti, Badaya Chamber, Film
Colony, Jaipur Through Its Secretary Shri Suresh Kumar
S/o Shri Gopal Das Badaya
—-Petitioners
Versus
1. Union Of India, Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
2. Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
3. Additional Commissioner Of Income Tax Bp Jaipur, Room
No. 239, New Central Revenue Building, Income Tax
Office, Statute Circle, Jaipur.
—-Respondents
S.B. Civil Writ Petition No. 12580/2018
Jaspal Singh Son of Jangir Singh Bawari, Resident Of Chak 28
KYD, Bariyanwali, Tehasil Khajuwala, District Bikaner
—-Petitioner
Versus
1. Dy. Commissioner of Income Tax (Benami Transaction)
(D.B. SAW/839/2018 has been filed in this matter. Please refer the same for further orders)
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and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
2. Union Of India Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act, 1988, Room No.26, 4th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 12613/2018
1. Shri Raghav Trading Corporation, A-12, Karni Nagar,
Pawanpuri, Bikaner through its Partner Shri Anil Asopa
Son of Shri Shyam Sundar Asopa, resident of Plot No.
3,4,5, Flat No. 301, Platinum, Chandra Kala Colony,
Dungarpura, Paniki Tankiwali Gali,tonk Road, Jaipur
2. Shri Anil Asopa Son Of Shri Shyam Sundar Asopa,
Resident Of Plot No. 3,4,5, Flat No. 301, Platinum,
Chandra Kala Colony, Dungarpura, Paniki Tankiwali Gali,
Tonk Road, Jaipur
—-Petitioners
Versus
1. Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
2. Union Of India Through Its Secretary, Income Tax
Department, Government Of India, New Delhi
3. Adjudicating Authority, under The Prohibition Of Benami
Property Transaction Act, 1988, Room No. 26, 4th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 12617/2018
1. M/s Naman Buildcon, A-12, Karni Nagar, Pawanpuri,
Bikaner Through Its Partner Shri Vinit Asopa S/o Shri
Girija Shankar Asopa R/o Plot No. 3,4,5 Flat No. 301,
Platinum, Chandra Kala Colony, Durgapura, Pani Ki
Tankiwali Gali, Tonk Road, Jaipur.
(D.B. SAW/839/2018 has been filed in this matter. Please refer the same for further orders)
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2. Shri Vinit Asopa S/o Shri Girija Shankar Asopa, R/o Plot
No. 3,4,5 Flat No. 301, Platinum, Chandra Kala Colony,
Durgapura, Pani Ki Tanki Wali Gali, Tonk Road, Jaipur.
—-Petitioners
Versus
1. Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
2. Union Of India Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
3. Adjudicating Authority Under The Prohibition Of Benami
Property Transaction Act, 1988, Room No. 26, 4th Floor,
Jeevan Deep Building, Parliament Street, New Delhi
-110001
—-Respondents
S.B. Civil Writ Petition No. 14222/2018
Bhanwara Ram Nayak S/o Shera Ram Nayak, aged about 57
yrs, R/o Ridmalsar, Purohitan, Sagar, Bikaner.
—-Petitioners
Versus
1.
2.
Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
Union Of India Through Its Secretary, Income Tax
Department, Government Of India, New Delhi
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act, 1988, Room No. 26, 4th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001
—-Respondents
S.B. Civil Writ Petition No. 14260/2018
Balram Meghwal S/o Ishwar Ram Meghwal, aged about
36….years, R/o Near Manoj Dal Mill, Sarvoday Basti, Bikaner.
(D.B. SAW/839/2018 has been filed in this matter. Please refer the same for further orders)
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—-Petitioners
Versus
1.
2.
Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
Union Of India Through Its Secretary, Income Tax
Department, Government Of India , New Delhi
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act 1988, Room No. 26, 4Th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 14274/2018
Kishan Lal S/o Pira Ram Nayak, aged about 45 years, R/o
Nayako ka Mohalla, Village Palana, District Bikaner.
—-Petitioners
Versus
1.
2.
Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
Union Of India Through Its Secretary, Income Tax
Department, Government Of India , New Delhi
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act, 1988, Room No. 26, 4Th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 14275/2018
Shyam Lal Mehtar S/o Kalu Ram Mehtar, aged about 36 years,
R/o Behind Shiv Mandir, Shivbari, Bikaner.
—-Petitioners
Versus
1. Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
(D.B. SAW/839/2018 has been filed in this matter. Please refer the same for further orders)
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2.
NCRB, Income Tax Office, Jaipur
Union Of India Through Its Secretary, Income Tax
Department, Government Of India , New Delhi
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act 1988, Room No. 26, 4Th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 14276/2018
Tejpal Mehtar S/o Kalu Ram Mehtar, aged about 31 years, R/o
Behind Shiv Mandir, Shivbari, Bikaner
—-Petitioners
Versus
1.
2.
Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur.
Union Of India Through Its Secretary, Income Tax
Department, Government Of India, New Delhi
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act 1988, Room No. 26, 4Th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 14277/2018
Kishan Lal Mehatar S/o Kalu Ram Mehater, aged about 32 yr.,
R/o Behind shiv Mandir, Shivbari, Bikaner.
—-Petitioners
Versus
1.
2.
Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur.
Union Of India Through Its Secretary, Income Tax
(D.B. SAW/839/2018 has been filed in this matter. Please refer the same for further orders)
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Department, Government Of India , New Delhi
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act 1988, Room No. 26, 4Th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 14279/2018
Sharwan Singh, S/o Nayak Singh Bawari, aged about 56 years,
R/o 28 KYD, Khajuwala, Bikaner, through power of attorney
holder Sh. Anil Lohiya S/o Nemi Chand Lohiya, aged 40 years,
R/o F-101, Vallabh Garden, Bikaner.
—-Petitioners
Versus
1.
2.
Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
Union Of India Through Its Secretary, Income Tax
Department, Government Of India , New Delhi
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act 1988, Room No. 26, 4Th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 14282/2018
Girja Shankar Asopa S/o Mahadev Asopa, aged 60 years, R/o
A-12, Karni Nagar, Pawam Puri, Bikaner.
—-Petitioners
Versus
1.
2.
Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
Union Of India Through Its Secretary, Income Tax
Department, Government Of India , New Delhi
(D.B. SAW/839/2018 has been filed in this matter. Please refer the same for further orders)
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3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act 1988, Room No. 26, 4Th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 14285/2018
Jangir Singh, S/o Nanak Singh Bawari, aged about 59 years,
R/o 28 KYD, Khajuwala, Bikaner through power of attorney
holder Sh. Anil Lohiya S/o Nemi Chand Lohiya, aged 40 years,
R/o F-101, Vallabh Garden, Binaker.
—-Petitioners
Versus
1.
2.
Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
Union Of India Through Its Secretary, Income Tax
Department, Government Of India , New Delhi
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act, 1988, Room No. 26, 4Th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 14286/2018
Ratan Sirohi S/o Shri Gopal Kishan Sirohi, aged about 40 years,
R/o Opposite Karni Market, Phar Bazar, Bikaner.
—-Petitioners
Versus
1.
2.
Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
Union Of India Through Its Secretary, Income Tax
Department, Government Of India , New Delhi
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act 1988, Room No. 26, 4Th Floor,
(D.B. SAW/839/2018 has been filed in this matter. Please refer the same for further orders)
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Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 14289/2018
Pratap Singh, S/o Nanak Singh Bawari, aged about 40 years,
R/o 28 KYD, Khajuwala, Bikaner, throuth power of attorney
holder sh. Anil Lohiya S/o Nemi chand Lohiya, aged 40 years,
R/o F-101, Vallabh Garden, Bikaner.
—-Petitioners
Versus
1.
2.
Dy. Commissioner of Income Tax (Benami Transaction)
and Initiating Officer under the Prevention of Benami
Transaction Act 2016, Room No. 250, Statue Circle,
NCRB, Income Tax Office, Jaipur
Union Of India Through Its Secretary, Income Tax
Department, Government Of India , New Delhi
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act 1988, Room No. 26, 4Th Floor,
Jeevan Deep Building, Parliament Street, New Delhi-
110001.
—-Respondents
S.B. Civil Writ Petition No. 15308/2018
Smt Beena Singh Wife Of Dr. Jitendra Singh, Aged About 53
Years, Resident Of Village Pidwali, Panchayat Samiti And Tehsil
Bayana, District Bharatpur In The State Of Rajasthan
—-Petitioner
Versus
1. Union Of India, Through The Secretary, Ministry Of
Finance (Department Of Revenue) North Block, New Delhi
2. Deputy Commissioner Of Income-Tax (Benami
Prohibition) & Initiating Officer, Under The Prohibition Of
Benami Property Transactions Act, 1988, New Central
Revenue Building, Statue Circle, Bhagwan Das Road, CScheme,
Jaipur
—-Respondents
S.B. Civil Writ Petition No. 16304/2018
(D.B. SAW/839/2018 has been filed in this matter. Please refer the same for further orders)
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Gulab Singh Yadav alias Ramu Ram Alias Ramu Son Of Brij Lal
Alias Virdhi Chand, Aged About 45 Years, R/o Plot No. 804E,
Kisan Marg, Opp. Ahinsa Park, Barkat Nagar, Tonk Road, Jaipur
—-Petitioner
Versus
1. Union Of India Through Its Secretary, Income Tax
Department, Government Of India New Delhi
2. Dy. Commissioner Of Income Tax (Benami Prohibition)
And Initiating Officer, Under The Prevention Of Benami
Property Transaction Act, 1988, Room No. 250, Statue
Circle, Ncrb, Statue Circle, Jaipur
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act1988, Room No. 26, 4th Floor,
Jeevan Deep Building, Parliament Street, New Delhi
-110001
—-Respondents
S.B. Civil Writ Petition No. 21219/2018
M/s Finetech Macro Developers Pvt. Ltd., (a registered
companies registered Under The Companies Act, 1956)
Registered Office E-666, Prim Pavilion, Nakul Path, Lal Kothi
Scheme, Jaipur through its Director, Shri Charan Singh
Khangarot, S/o Shri Mukut Singh, By Caste Rajput Aged About
41 Years Resident of Plot No. M-28, Income Tax Colony, Tonk
Road, Jaipur, Rajasthan.
—-Petitioner
Versus
1. Dy. Commissioner (Benami Prohibition), Rajasthan And
Initiating Officer, Prohibition Of Benami Transactions Act,
1988, Room No. 250, Statue Circle, NSRB, Income Tax
Office, Jaipur
2. Adjudicating Authority, (Under The Prohibition Of Benami
Property Transactions Act, 1988), Office At Room No. 26,
Fourth Floor, Jeevan Deep Building, New Delhi-110001
3. Union Of India, Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
—-Respondents
S.B. Civil Writ Petition No. 21220/2018
M/s Finetech Macro Developers Pvt. Ltd., (a registered
companies registered Under The Companies Act, 1956)
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Registered Office E-666, Prim Pavilion, Nakul Path, Lal Kothi
Scheme, Jaipur Through Its Director, Shri Charan Singh
Khangarot, S/o Shri Mukut Singh, By Caste Rajput Aged About
41 years resident of Plot No. M-28, Income Tax Colony, Tonk
Road, Jaipur, Rajasthan.
—-Petitioner
Versus
1. Dy. Commissioner (Benami Prohibition), Rajasthan And
Initiating Officer, Prohibition Of Benami Transactions Act,
1988, Room No. 250, Statue Circle, Ncrb, Income Tax
Office, Jaipur
2. Adjudicating Authority, (Under The Prohibition Of Benami
Property Transactions Act, 1988), Office At Room No. 26,
Fourth Floor, Jeevan Deep Building, New Delhi-110001
3. Union Of India, Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
—-Respondents
S.B. Civil Writ Petition No. 21229/2018
M/s Finetech Macro Developers Pvt. Ltd., (a Registered
Companies registered under the Companies Act, 1956)
registered office E-666, Prim Pavilion, Nakul Path, Lal Kothi
Scheme, Jaipur through its Director, Shri Charan Singh
Khangarot, S/o Shri Mukut Singh, By Caste Rajput Aged About
41 Years Resident Of Plot No. M-28, Income Tax Colony, Tonk
Road, Jaipur, Rajasthan.
—-Petitioner
Versus
1. Dy. Commissioner (Benami Prohibition), Rajasthan And
Initiating Officer, Prohibition Of Benami Transactions Act,
1988, Room No. 250, Statue Circle, NCRB, Income Tax
Office, Jaipur
2. Adjudicating Authority, (Under The Prohibition Of Benami
Property Transactions Act, 1988), Office At Room No. 26,
Fourth Floor, Jeevan Deep Building, New Delhi-110001
3. Union Of India, Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
—-Respondents
S.B. Civil Writ Petition No. 25438/2018
Dr. Ram Singh Yadav @ Ramu Ram @ Ramu Yadav S/o Late Sh.
(D.B. SAW/839/2018 has been filed in this matter. Please refer the same for further orders)
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Braj Lal alias Virdhi Chand Yadav, Aged About 52 Years, R/o Plot
No. 10, Achrol House, Civil Lines, Jaipur, Rajasthan.
—-Petitioner
Versus
1. Union Of India, Through Its Secretary, Ministry Of
Finance, Department Of Revenue, Government Of India,
New Delhi.
2. Dy. Commissioner Of Income Tax, (Benami Prohibition)
and Initiating Officer Under The Prevention Of Benami
Property Transaction Act 1988, Room No. 250, NCR
Building, Statue Circle, Jaipur.
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act, 1988, Through Its Registrar,
Room No. 17, 4th Floor, Jeevan Deep Building, Parliament
Street, New Delhi – 110001
4. Sh. Gulab Singh Yadav S/o Sh. Braj Lal @ Virdhi Chand
Yadav, Aged About 45 Years, R/o Plot No. 804 E, Kisan
Marg, In Front of Ahinsa Park, Barkat Nagar, Tonk Road,
Jaipur.
—-Respondents
S.B. Civil Writ Petition No. 25439/2018
Dr. Ram Singh Yadav @ Ramu Ram @ Ramu Yadav S/o Late Sh.
Braj Lal Alias Virdhi Chand Yadav, Aged About 52 Years, R/o Plot
No. 10, Achrol House, Civil Lines, Jaipur, Rajasthan.
—-Petitioner
Versus
1. Union Of India, Through Its Secretary, Ministry Of
Finance, Department Of Revenue, Government Of India,
New Delhi.
2. Dy. Commissioner Of Income Tax, (Benami Prohibition)
And Initiating Officer Under The Prevention Of Benami
Property Transaction Act 1988, Room No. 250, NCR
Building, Statue Circle, Jaipur.
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act, 1988, Through Its Registrar,
Room No. 17, 4th Floor, Jeevan Deep Building, Parliament
Street, New Delhi – 110001
–—Respondents
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4. Sh. Gulab Singh Yadav S/o Sh. Braj Lal @ Virdhi Chand
Yadav, R/o Plot No. 804 E, Kisan Marg, in front Of Ahinsa
Park, Barkat Nagar, Tonk Road, Jaipur.
5. Smt. Vinita Yadav W/o Sh. Gulab Singh Yadav, R/o Plot
No. 804 E, Kisan Marg, In Front Of Ahinsa Park, Barkat
Nagar, Tonk Road, Jaipur.
6. Ms. Riya Yadav D/o Sh. Gulab Singh Yadav R/o Plot no.
804 E, Kisan Marg, in Front Of Ahinsa Park, Barkat Nagar,
Tonk Road, Jaipur.
—-Proforma Respondents
S.B. Civil Writ Petition No. 25440/2018
Dr. Ram Singh Yadav @ Ramu Ram @ Ramu Yadav S/o Late Sh.
Braj Lal Alias Virdhi Chand Yadav, Aged About 52 Years, R/o Plot
No. 10, Achrol House, Civil Lines, Jaipur, Rajasthan.
—-Petitioner
Versus
1. Union Of India, Through Its Secretary, Ministry Of
Finance, Department Of Revenue, Government Of India,
New Delhi.
2. Dy. Commissioner Of Income Tax, (Benami Prohibition)
and Initiating Officer Under The Prevention Of Benami
Property Transaction Act 1988, Room No. 250, NCR
Building, Statue Circle, Jaipur.
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act, 1988, Through Its Registrar,
Room No. 17, 4th Floor, Jeevan Deep Building, Parliament
Street, New Delhi – 110001
——Respondents
4. Sh. Gulab Singh Yadav S/o Sh. Braj Lal @ Virdhi Chand
Yadav, R/o Plot No. 804 E, Kisan Marg, In Front Of Ahinsa
Park, Barkat Nagar, Tonk Road, Jaipur.
—-Proforma Respondents
S.B. Civil Writ Petition No. 25441/2018
Dr. Ram Singh Yadav @ Ramu Ram @ Ramu Yadav S/o Late Sh.
Braj Lal Alias Virdhi Chand Yadav, Aged About 52 Years, R/o Plot
No. 10, Achrol House, Civil Lines, Jaipur, Rajasthan.
—-Petitioner
Versus
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1. Union Of India, Through Its Secretary, Ministry Of
Finance, Department Of Revenue, Government Of India,
New Delhi.
2. Dy. Commissioner Of Income Tax, (Benami Prohibition)
And Initiating Officer Under The Prevention Of Benami
Property Transaction Act 1988, Room No. 250, Ncr
Building, Statue Circle, Jaipur.
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act, 1988, Through Its Registrar,
Room No. 17, 4Th Floor, Jeevan Deep Building, Parliament
Street, New Delhi – 110001
4. Sh. Gulab Singh Yadav S/o Sh. Braj Lal @ Virdhi Chand
Yadav, R/o Plot No. 804 E, Kisan Marg, In Front Of Ahinsa
Park, Barkat Nagar, Tonk Road, Jaipur.
—-Respondents
S.B. Civil Writ Petition No. 25602/2018
Dr. Ram Singh Yadav @ Ramu Ram @ Ramu Yadav S/o. Late Sh.
Braj Lal Alias Virdhi Chand Yadav, Aged About 52 Years, R/o. Plot
No. 10, Achrol House, Civil Lines, Jaipur, Rajasthan.
—-Petitioner
Versus
1. Union Of India, Through Its Secretary, Ministry Of
Finance, Department Of Revenue, Government Of India,
New Delhi.
2. Dy. Commissioner Of Income Tax (Benami Prohibition),
And Initiating Officer Under The Prevention Of Benami
Property Transaction Act 1988, Room No. 250, NCR
Building, Statue Circle, Jaipur.
3. Adjudicating Authority, Under The Prohibition Of Benami
Property Transaction Act, 1988, Through Its Registrar,
Room No. 17, 4Th Floor, Jeevan Deep Building, Parliament
Street, New Delhi-110 001.
—-Respondents
4. Sh. Gulab Singh Yadav S/o. Sh. Braj Lal @ Virdhi Chand
Yadav, Aged About 45 Years, R/o Plot No. 804 E, Kisan
Marg, In Front Of Ahinsa Park, Barkat Nagar, Tonk Road,
Jaipur.
—-Proforma Respondents
S.B. Civil Writ Petition No. 27102/2018
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1. Sitaram Meena S/o Shri Phool Chand Meena, aged about
33 Years, By Caste Meena, R/o 199, Patel Colony, Badi Ka
Baas, via-Sitapura Tehsil Sanganer, Jaipur (Rajasthan)
2. Charan Singh Khangarot S/o Shri Mukut Singh Khangarot,
aged about 40 Years, By Caste Rajput, R/o M-28, Income
Tax Colony, Durgapura Tonk Road, Jaipur, Rajasthan
3. Udai Buildhome Pvt. Ltd., having its registered office at
302, Golden Sunrise Apartment, Lajpat Nagar, C-Scheme,
Jaipur through its principal officer/ director duly Shri
Sandeep Sharma S/o Shri Totaram Sharma aged 36 Years
R/o 74-B, Phool Kunj, Gaurav Nagar, Civil Lines, Jaipur
duly authorized by the company
—-Petitioners
Versus
1. Dy Commissioner (Benami Prohibition), Rajasthan And
Initiating Officer, Prohibition of Benami Transactions Act,
1988, Room No. 250, Statue Circle, Ncrb, Income Tax
Office, Jaipur
2. Union Of India, Through Its Secretary, Income Tax
Department, Government Of India, New Delhi
3. Adjudicating Authority (Under The Prohibition Of Benami
Property Transactions Act, 1988), Office at Room No. 26,
Fourth Floor, Jeevan Deep Building, New Delhi-110001
—-Respondents
S.B. Civil Writ Petition No. 27114/2018
1. Sitaram Meena S/o Shri Phool Chand Meena, aged about
33 Years, By caste Meena , R/o 199, Patel Colony, Badi Ka
Baas, via-Sitapura Tehsil Sanganer, Jaipur (Rajasthan)
2. Charan Singh Khangarot S/o Shri Mukut Singh Khangarot,
aged about 40 Years, By Caste Rajput, R/o M-28, Income
Tax Colony, Durgapura Tonk Road, Jaipur, Rajasthan
3. Udai Buildhome Pvt. Ltd., having its registered office at
302, Golden Sunrise Apartment, Lajpat Nagar, C-Scheme,
Jaipur through its principal officer/ director duly Shri
Sandeep Sharma S/o Shri Totaram Sharma aged 36 Years
R/o 74-B, Phool Kunj, Gaurav Nagar, Civil Lines, Jaipur
duly authorized by the company
—-Petitioners
Versus
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1. Dy. Commissioner (Benami Prohibition), Rajasthan and
Initiating Officer, Prohibition of Benami Transactions Act,
1988, Room No. 250, Statue Circle, NCRB, Income Tax
Office, Jaipur
2. Union of India, Through its Secretary, Income Tax
Department, Government Of India, New Delhi
3. Adjudicating Authority (Under The Prohibition Of Benami
Property Transactions Act, 1988), Office At Room No. 26,
Fourth Floor, Jeevan Deep Building, New Delhi-110001
—-Respondents
S.B. Civil Writ Petition No. 27550/2018
Kishan Singh, S/o Shri Gopal Singh, aged about 50 Years, R/o
13, Jai Kishan Colony, Tonk Phatak, Jaipur In The State Of
Rajasthan.
—-Petitioner
Versus
1. Union Of India, Through The Secretary, Ministry Of
Finance (Department Of Revenue) North Block, New Delhi
2. Deputy Commissioner Of Income-Tax (Benami
Prohibition) & Initiating Officer, Under The Prohibition Of
Benami Property Transactions Act, 1988, New Central
Revenue Building, Statue Circle, Bhagwan Das Road, CScheme,
Jaipur
—-Respondents
S.B. Civil Writ Petition No. 27551/2018
Chandra Mohan Bhati, S/o Shri Gendilal Ji Bhati, Aged About 53
Years, R/o 17, Kalyan Colony, Barkat Nagar, Tonk Phatak, Jaipur
In The State of Rajasthan.
—-Petitioner
Versus
1. Union Of India, Through The Secretary, Ministry Of
Finance (Department Of Revenue) North Block, New Delhi
2. Deputy Commissioner Of Income-Tax (Benami
Prohibition) & Initiating Officer, Under The Prohibition Of
Benami Property Transactions Act, 1988, New Central
Revenue Building, Statue Circle, Bhagwan Das Road, CScheme,
Jaipur
—-Respondents
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S.B. Civil Writ Petition No. 27552/2018
Vinika Bhati, D/o Shri Chandra Mohan Bhati, Aged About 26
Years, R/o 17, Kalyan Colony, Barkat Nagar, Tonk Phatak, Jaipur
In The State Of Rajasthan
—-Petitioner
Versus
1. Union Of India, Through The Secretary, Ministry Of
Finance (Department Of Revenue) North Block, New Delhi
2. Deputy Commissioner Of Income-Tax (Benami
Prohibition) And Initiating Officer, Under The Prohibition
Of Benami Property Transactions Act, 1988, New Central
Revenue Building, Statue Circle, Bhagwan Das Road, CScheme,
Jaipur
—-Respondents
S.B. Civil Writ Petition No. 27553/2018
Laxmi Bhati, W/o Shri Chandra Mohan Bhati, Aged About 51
Years, R/o 17, Kalyan Colony, Barkat Nagar, Tonk Phatak, Jaipur
In The State Of Rajasthan
—-Petitioner
Versus
1. Union Of India, Through The Secretary, Ministry Of
Finance (Department Of Revenue) North Block, New Delhi
2. Deputy Commissioner Of Income-Tax (Benami
Prohibition) And Initiating Officer, Under The Prohibition
Of Benami Property Transactions Act, 1988, New Central
Revenue Building, Statue Circle, Bhagwan Das Road, CScheme,
Jaipur
—-Respondents
S.B. Civil Writ Petition No. 27554/2018
Anjali Rathore, W/o Shri Kishan Singh, Aged About 49 Years, R/o
13, Jai Kishan Colony, Tonk Phatak, Jaipur In The State Of
Rajasthan
—-Petitioner
Versus
1. Union Of India, Through The Secretary, Ministry Of
Finance (Department Of Revenue) North Block, New Delhi
2. Deputy Commissioner Of Income-Tax (Benami
Prohibition) & Initiating Officer, Under The Prohibition Of
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Benami Property Transactions Act, 1988, New Central
Revenue Building, Statue Circle, Bhagwan Das Road, CScheme,
Jaipur
—-Respondents
S.B. Civil Writ Petition No. 4212/2019
Ramdhan Meena S/o Rewad Mal Meena, Village – Langdiyawad,
Tehsil- Jamwaramgarh, District- Jaipur.
—-Petitioner
Versus
1. Deputy Commissioner Of Income Tax, (Benami
Prohibition) & Initiating Officer Under The Prohibition Of
Benami Property Transactions Act For The State Of
Rajasthan, Room No. 250, New Central Revenue Building,
Statue Circle, C-Scheme, Jaipur (Rajasthan).
2. Union Of India, Through Secretary, Ministry Of Finance,
Department Of Revenue, Income Tax Department,
Government Of India, New Delhi.
—-Respondents
S.B. Civil Writ Petition No. 4396/2019
Ramdhan Meena S/o Rewad Mal Meena, Village- Langdiyawad,
Tehsil- Jamwaramgarh, District- Jaipur (Rajasthan).
—-Petitioner
Versus
1. Deputy Commissioner Of Income Tax, (Benami
Prohibition) & Initiating Officer Under The Prohibition Of
Benami Property Transactions Act For The State Of
Rajasthan, Room No. 250, New Central Revenue Building,
Statue Circle, C-Scheme, Jaipur (Rajasthan)
2. Union Of Inida, Through Secretary, Ministry Of Finance,
Department Of Revenue, Income Tax Department,
Government Of India, New Delhi.
—-Respondents
S.B. Civil Writ Petition No. 4704/2019
Sita Devi W/o Shri Ramdhan Meena, Aged About 28 Years, R/o
Village – Langdiyawad, Tehsil – Jamwaramgarh, District – Jaipur.
(Rajasthan).
—-Petitioner
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Versus
1. Deputy Commissioner Of Income Tax, (Benami
Prohibition) & Initiating Officer Under The Prohibition Of
Benami Property Transactions Act For The State Of
Rajasthan, Room No. 250, New Central Revenue Building,
Statue Circle, C-Scheme, Jaipur (Rajasthan).
2. Union Of India, Through Secretary, Ministry Of Finance,
Department Of Revenue, Income Tax Department,
Government Of India, New Delhi.
—-Respondents
S.B. Civil Writ Petition No. 4897/2019
Ramdhan Meena S/o Rewad Mal Meena, Village- Langdiyawad,
Tehsil- Jamwaramgarh, District- Jaipur. (Rajasthan).
—-Petitioner
Versus
1. Deputy Commissioner Of Income Tax, (Benami
Prohibition) & Initiating Officer Under The Prohibition Of
Benami Property Transactions Act For The State Of
Rajasthan, Room No. 250, New Central Revenue Building,
Statue Circle, C-Scheme, Jaipur (Rajasthan).
2. Union Of India, Through Secretary, Ministry Of Finance,
Department Of Revenue, Income Tax Department,
Government Of India, New Delhi.
—-Respondents
S.B. Civil Writ Petition No. 5284/2019
1. M/s Manglam Build Developers Limited, (a registered
companies registered under The Companies Act, 1956)
through its Authorized Signatory, Shri Sanjay Gupta Son
Of Shri Nand Kishore Gupta, resident of C-9, Barwada
House, Civil Lines, Jaipur.
2. Shri Sanjay Gupta Son Of Shri Nand Kishore Gupta,
Resident Of C-9, Barwada House, Civil Lines, Jaipur.
—-Petitioners
Versus
1. Dy. Commissioner Of Income Tax, (Benami Transaction)
and Initiating Officer Under The Prohibition Of Benami
Property Transaction Act 1988, Room No. 250, Statue
Circle, NCRB, Income Tax Office, Jaipur.
2. Union Of India Through Its Secretary, Income Tax
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Department, Government Of India, New Delhi.
—-Respondents
S.B. Civil Writ Petition No. 5352/2019
Ram Singh Meena S/o Sh. Ramkaran, Aged About 50 Years, R/o
Mohalla Mainpura, Sawaimadhopur (Rajasthan).
—-Petitioner
Versus
1. Dy. Commissioner Of Income Tax, (Benami Transaction)
And Initiating Officer Under The Prohibition Of Benami
Property Transaction Act 1988, Room No. 250, Statue
Circle, Ncrb, Income Tax Office, Jaipur.
2. Union Of India, Through Its Secretary, Income Tax
Department, Government Of India, New Delhi.
—-Respondents
For Petitioner(s) : Mr. K.K. Sharma, Sr. Adv. with
Mr. Sandeep Taneja
Mr. M.M. Ranjan, Sr. Adv. with
Mr. Rohan Agarwal
Mr. Anant Kasliwal with
Mr. Vaibhav Kasliwal, Ms. Charu
Pareek, Mr. Pradeep Kumar
Mr. Gunjan Pathak
Mr. N.L. Agarwal
For Respondent(s) : Mr. Prabhuling K Navadgi, Sr. Adv.
with Mr. Prabhansh Sharma,
Mr. R.B. Mathur
HON’BLE MR. JUSTICE VEERENDR SINGH SIRADHANA
Order
12 th July, 2019
The above noted batch of writ applications, projects a
challenge to the jurisdiction of the income tax authorities in
initiation of proceedings under section 24 of the Prohibition of
Benami Property Transactions Act, 1988 (for short, Benami Act of
1988), as amended vide Benami Transactions (Prohibition)
Amendment Act, 2016 (for short, Benami Amendment Act of
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2016), which came into effect on 01st November, 2016. Hence, the
matters have been entertained collectively for final adjudication at
this stage by this common order consented by the counsel for the
parties.
2. Shorn off unnecessary details, the essential skeletal material
facts needs to be taken note of for adjudication of the controversy
are: that the Income Tax Department conducted search and
seizure under Section 132 of the Income Tax Act, 1961, on various
premises belonging to the petitioners and in course of search and
seizure, several incriminating documents were found, indicating
several benami transactions in purchase of lands involved herein.
Accordingly, show cause notices were issued under section 24 (1)
of the amended Benami Act of 1988, to show cause why action
should not be taken against them under Section 24 (4) of the
amended Benami Act of 1988, as the consideration was actually
paid by the petitioners but the land was purchased in the name
and by another person, thus, making it a clear case of benami
transaction. The respondent department made order of provisional
attachment under Section 24 (3) of the amended Benami Act, in
respect of the properties mentioned in the show cause notices. It
is pleaded case of the petitioners that the initiating officer has
acted without jurisdiction, as the Benami Transaction (Prohibition)
Amendment Act, 2016, came into effect on 01st November, 2016
and the alleged benami transactions took place prior to that date.
The said notices were responded in the same terms. However, the
Initiating Officer of the respondent department made order under
Section 24 (4) of the amended Benami Amendment Act of 2016,
continuing the provisional attachment of the properties involved
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herein. Thereafter, further show cause notices were issued by the
Adjudicating Authority under the provisions of the Benami
Amendment Act of 2016, as to why the order of provisional
attachment of the benami properties should not be confirmed and
the matters are still pending before the said authority. The
petitioners, aggrieved of initiation of the proceedings and orders
aforesaid, for being without jurisdiction, have instituted the instant
writ petitions before this court.
3. Mr. Kamlakar Sharma, learned senior counsel for the
petitioner(s), stated that the initiation of the very proceedings for
provisional attachment of the alleged benami properties, from the
very beginning is per se illegal and arbitrary, as the alleged
benami transactions took place before the search proceedings and
the Benami Amendment Act of 2016, that came into existence
with effect from 01st November, 2016, vide notification dated 25th
October, 2016, and therefore, the Benami Amendment Act of
2016, shall have prospective effect. Since the alleged benami
transactions and date of discovery of the alleged benami
transactions, are, of a date prior to coming into force of the
Benami Amendment Act of 2016; hence, the provisions as such
are inapplicable to the present cases.
4. Learned counsel for the petitioners vehemently asserted that
the intent in introduction of the Benami Amendment Act of 2016,
was to eradicate the discrepancies and loop holes that have crept
in with passage of time after the introduction of the Benami Act of
1988. Further, referring to the text of section 1 and 6 of the
Benami Amendment Act of 2016, it is vociferously contended that
it was never the intention of either the legislation or the executive
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that the provisions of the Benami Amendment Act of 2016; be
applicable with retrospective effect. According to the learned
counsel for the petitioners, the language employed with the
statement that whoever enters into any benami transaction on
and after the date of commencement of the Benami Amendment
Act of 2016, that is on 1st November, 2016 or afterwards; leaves
no room for any doubt that the alleged benami transactions so
transacted by the petitioners, before the commencement of the
Benami Amendment Act of 2016, doesn’t fall under its purview.
5. In the backdrop of section 3 (3) of Benami Act of 1988 and
new section 53 of Benami Amendment Act of 2016, it is pointed
out that the punishment for benami transaction under Benami Act
of 1988, was imprisonment for 3 years, which has been now
extended to 7 years, through the Benami Amendment Act of
2016. Therefore, the said amendment and provisions introduced,
cannot be applied retrospectively with penal consequences.
6. It was further added by the learned senior counsel for the
petitioners that as per the earlier provisions of the Benami Act of
1988, the benami property was to be acquired by the Government
by acquisition and no compensation was to be paid for the such
acquisition. Rules and Regulations for the acquisition aforesaid,
were supposed to follow the Act of 1988, but the same were never
framed and notified thus making the acquisition of land through
benami transaction, under the old/un-amended provisions
redundant. Now, as per the provisions of the Benami Amendment
Act of 2016, the said benami property shall be confiscated instead
of acquisition. For confiscation of property, is a penal provision
which can only be prospective and if the penal provision is to be
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applied retrospectively, that would be arbitrary, illegal and in
violation of the Article 20 of the Constitution of India in absence of
any contemplation to that effect under the amended Act. Thus,
Benami Amendment Act of 2016; cannot have retrospective
application.
7. Counsel for the petitioners repelling the preliminary
contention as to the very maintainability of the instant writ
petitions for the matters were stated to be pending before the
Adjudicating Authority, and therefore, being pre-mature and not
maintainable before this court; contended that a glance of section
24 of the Benami Amendment Act of 2016; would reflect that writ
petitions are very much maintainable. For as per Section 24 (1) of
the Benami Amendment Act of 2016, the Initiating Officer shall
issue notice to show cause as to why the property in question
shall not be considered a benami property and further issue notice
of provisional attachment of the said benami property. Moreover,
there is no provision provided in section 24 of the Benami
Amendment Act of 2016, to file an appeal against the provisional
attachment of the alleged benami property. Thus, the petitioners
are left with no option other than to invoke the jurisdiction of this
court under Article 226 and/or 227 of the Constitution of India.
Further, the petitioners have challenged the very jurisdiction and
authority of the respondent department to make such a
provisional attachment of the alleged benami property, and
therefore, the instant writ petitions are maintainable as the
petitioners have no other remedy for redressal of their grievance.
8. It is further alleged that the respondent department has
initiated the proceeding involved herein in order to harass and
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torment the petitioners for it is evident from the fact that the
respondent department referred the matters to the Adjudicating
Authority so soon they learned of the institution of the instant writ
applications by the petitioners before this court. Furthermore, the
respondent department issued notices under Section 24 (3) of the
Benami Amendment Act of 2016, to the petitioners on the very
same day when it issued notice to the local authorities to provide
information with respect to the transactions made in regard to the
alleged subject benami property. The notices under Section 24 (3)
of the Benami Amendment Act of 2016; are to be issued after
making thorough inquires and examination of reports or evidences
and not after issuing notices. Therefore, oblique intent of the
respondent department is apparent on the face of record.
9. It is also pointed that no Rules could have been framed in
exercise of powers under section 68 of the Benami Amendment
Act of 2016, before 1st November, 2016 i.e. the date of its
commencement. Hence, the Rules framed under the Benami
Amendment Act of 2016, are of no consequence. In order to
fortify their stand learned counsel for the petitioners have relied
upon the following dictionary meaning of term confiscation, phrase
‘Jaipur Region’, Notifications, and opinions:
1. Notification of Ministry of Finance (Central Board of Direct
Taxes), dated 25th October, 2016.
2. Notification of Ministry of Finance (Department of Revenue),
dated 25th October, 2016.
3. Notification of Ministry of Finance (Department of Revenue),
dated 25th October, 2016, S.O. 3288 (E), S.O. 3289(E) and 6A. 6.
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Notification of Ministry of Finance (Department of Revenue), dated
19th May, 2016, S.O. 1830 (E), (iii)
4. The Benami Transactions (Prohibition) Act, 1988 (for short, ‘the
Act of 1988’)
5. In the case of R. Rajagopal Reddy (dead) by LRs. And Ors. Vs.
Padmini Chandrashekharan (Dead) by LRs.: (1995)2 SCC 630.
6. In the case of Mangathai Ammal (died) through Lrs and Ors.
Vs. Rajeshwari & Ors.:Civil Appeal No. 4805 of 2019, decided by
the Apex Court of the land, on 9th May, 2019.
7. In the case of K.T. Plantation Pvt. Ltd. and Anr. Vs. State of
Karnataka: AIR 2011 SC 3430.
8. In the case of Garikapati Veeraya vs. N. Subbiah Choudhary
and Ors. : AIR 1957 SC 540.
9. In the case of Keshavan Madhava Menon Vs State of Bombay:
AIR 1951 SC 128.
10. In the case of Monnet Ispat & Energy Ltd. Vs. UOI & Ors.
(2012) 11 SCC 1.
11. Commissioner of Income Tax vs. Vatika Township Private
Limited (2015) 1 SCC 1
12. Prakash and Ors. vs. Phulavati and Ors. (2016) 2 SCC 36
13. Sukhdev Singh vs. State of Haryana (2013) 2 SCC 212
14. J.S Yadav Vs. State of U.P. & Ors. 2011 6 Scc 570
15. Shakti Tubes Ltd. vs. State of Bihar and Ors. (2009) 7 SCC
673
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16. O. Konavalov vs. Commander, Coast Guard Region and Ors.
(2006)4SCC620
17. M/S Pepsi Foods Ltd. and Ors. vs. Special Judicial Magistrate
and Ors. AIR 1998 SC 128
18. Collector of Central Excise, Ahmedabad vs. Orient Fabrics Pvt.
Ltd. (2004 ) 1 SCC 597
19. Suhas H. Pophale vs. Oriental Insurance Co. Ltd. and its
Estate Officer (2014) 4 SCC 657
20. State of Punjab and Ors. vs. Bhajan Kaur and Ors. (2008 )
12SCC 112
21. Jeans Knit (P) Ltd. vs. Deputy Commissioner of Income Tax
and Ors (2018) 12 SCC 36
22. Calcutta Discount Company Limited vs. Income Tax Officer,
Companies District, I and Ors. AIR 1961 SC 372
23. Raza Textiles Ltd. vs. Income Tax Officer, Rampur (1973) 1
SCC 633
24. Malayala Manorama Co. Ltd vs Assistant Commissioner,
Commercial Taxes , Civil Appeal No. 2267/2007, decided on July
8, 2010
25. In the case of Bhibhuti Bhusan Bankura Vs. Sate of West
Bengal: 1994 (1) CLJ 353
26. In the case of Thakur Bhim Singh (dead) By Lrs and Ors. Vs.
Thakur Kan Singh: AIR 1980 SC 727.
27. Joseph Isharat vs. Rozy Nishikant Gaikwad 2017(5)ABR706
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10. Per contra: Mr. Prabhuling K. Navadgi, learned Sr. counsel
with Mr. Prabhansh Sharma and Mr. R.B. Mathur, advocates,
resisted the claim of the petitioners raising preliminary objections
as to the very maintainability of the writ applications at this stage
while the entire proceedings are pending consideration before the
Adjudicating Authority. Learned counsel vehemently contended
that it is well settled proposition of law that jurisdiction under
Article 226 and/or 227 of the Constitution of India can only be
exercised when there is no remedy available to the parties.
According to the learned counsel for the respondents, law in this
reference is no more res-integra, as has been declared by the
Apex Court of the land on several occasions. In the backdrop of
the provisions of Benami Act of 1988, as amended vide Benami
Amendment Act of 2016, it is contended that any order made by
the authority therein, would be open to inquiry before the
Adjudicating Authority under Section 25 and 26 of the amended
Act. Further, the order made by Adjudicating Authority under
Section 26 (3), is open to an appeal before the Appellate Tribunal
as would be evident from Section 46 of the amended Benami Act
of 1988. And finally, Section 49 contemplates an appeal to the
High Court, to any party aggrieved by any decision or order of the
Appellate Tribunal within a period of 60 days, from the date of
communication of the order made by the Appellate Tribunal, on
any question of law arising out of such an order.
11. Furthermore, according to learned senior counsel, the
petitioners have admitted the fact that the matters are still
pending before the Adjudicating Authority. Thus, the petitioners
have instituted the present writ applications, contrary to the
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Scheme of the Benami Act of 1988, as amended in the year 2016,
which provides a complete self contained procedure for resolution
of the matters arising therein; hence, the instant batch of writ
applications is premature and is not maintainable, and therefore,
deserve to be dismissed on that ground alone.
12. Learned Senior Counsel for the respondents also emphasized
that the provisions introduced by way of Benami Amendment Act
of 2016, would have retrospective application and cannot be
considered to be prospective keeping in view of the underlying
object and intendment in introduction of amended Benami Act of
1988. It is urged that the main object behind introduction of the
Benami Act of 1988, on 19 May 1988, was to make benami
transactions offence and to acquire such benami properties
through acquisition without compensation as per the procedure
prescribed therein, so that the unjust gains and benefits of
evasion of taxes could be avoided. Hence, keeping in view the
intendment and object in introduction of amended Benami Act of
1988; incorporating necessary amendments introduced through
Benami Amendment Act of 2016, only clarified and amplified the
intention of legislature in order to effectively cure and curb the
mischief of ever increasing corruption, which was the also
intended under the Principal Act i.e. Benami Act of 1988; enacted
on 19 May 1988.
13. According to learned counsel for the respondents,
confiscation of the benami property, a replacement, by way of
amendment, is not a new introduction in totality to the Benami Act
of 1988. Acquisition without compensation is nothing but
confiscation only; therefore, substitution of the term
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acquisition by another term i.e. confiscation, cannot be termed
as penal, in the backdrop of the object sought to be achieved
through the Benami Amendment Act of 2016.
14. It is further pointed out that similarly, change in the
definition of all ‘Benami Transaction’ would not alter the object and
purpose which remains the same as contemplated under the
principal Benami Act of 1988. The change in definition only
clarifies and amplifies the existing definition, without imposing any
new liability or right accruing to the parties. Thus, the amendment
in the definition of ‘Benami Transaction’ is only descriptive and
explanatory substitution. Referring to Rule of Hayden’s case, it is
contended that Lord Edverd Coke evolved the well accepted test to
understand the effectiveness of a new amendment on the
following criteria:
(i) what was the law before making of the law;
(ii) what was the mischief and defect before the Act was
passed;
(iii) what remedy the Parliament as appointed; and
(iv) what was the reason of the remedy.
15. Hence, applying the test aforesaid, to the question of
retrospective application of the amended provisions,
involved in the instant batch of writ applications, would make it
evident that the object in introduction of the amendments,
through Benami Amendment Act of 2016, is to effectively cure the
mischief which could not be checked effectively, as intended by
the Principal Act of 1988. Therefore, if the amendments are not
applied retrospectively, that would defeat the very purpose and
object of its introduction. Hence, provisions of Benami Amendment
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Act of 2016, keeping in view the underlying object, shall have
retrospective application in order to effectively cure the mischief
that persisted all along even after enactment of the unamended
Benami Act of 1988, which consisted only of 9 Sections.
16. Learned counsel would further contend that a glance of text
of section 3 (3) of the Benami Amendment Act of 2016, in no
uncertain terms contemplates that penalty for benami
transactions, on or after commencement of the Benami
Amendment Act of 2016, would only be punishable in accordance
with the provisions contained under Chapter VII of the
Amendment Act of 2016. Since, the provision itself contemplates
penalty for benami transactions on or after the commencement of
the Benami Amendment Act of 2016, that would not mean that
the benami transactions prior to its commencement, shall be free
from liability. According to learned counsel, the intended object of
the statute by amendment, involved herein is two fold; firstly,
benami transactions entered into on or after commencement of
Benami Amendment Act of 2016, shall be punishable under the
amended provisions contained in Chapter VII by imprisonment for
seven years, and; secondly, the benami transactions prior to the
commencement of Benami Amendment Act of 2016, shall be
penalized by the existing provisions contained in the unamended
Benami Act of 1988, i.e by three years imprisonment. Thus, the
provision only provides for an enhanced punishment for benami
transactions entered into on or after commencement of Benami
Amendment Act of 2016. Hence, no right to any party has accrued
nor a new liability created as to the pending benami transactions.
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17. Reference has also been made to text of Section 65 of the
amended Benami Act of 1988, which contemplates transfer of
pending cases. According to learned senior counsel, a glance of
the text of Section 65 would reflect that the procedure provided
therein for prevention of ‘Benami Transactions’ under the
provisions of Benami Amendment Act of 2016, shall also apply to
all the ‘Benami Transactions’ pending on enactment of the Benami
Amendment Act of 2016. Hence, retrospective applicability of the
amended Act of the Benami Act of 1988, is explicit. In order to
buttress his contentions reliance is placed on the following
opinions:
1. Sree Bank Ltd. vs. Sarkar Dutt Roy and Co. AIR 1966 SC 1953
2. The Buckingham and Carnatic Co.Ltd. vs. Venkatiah and Ors.
[1964 ]4SCR 265
3. Rai Bahadur Seth Shreeram Durgaprasad vs. Director of
Enforcement (1987 )3SCC 27
4. Nar Bahadur Bhandari and Ors. vs. State of Sikkim and Ors.
(1998) 5 SCC 39
5. State of Punjab vs. Mohar Singh [1955 ]1SCR 893
6. Zile Singh vs. State of Haryana and Ors. (2004) 8 SCC 1
7. Yogendra Kumar Jaiswal and Ors. vs. State of Bihar and Ors.
(2016 )3SCC 183
8. Titaghur Paper Mills Co. Ltd. and Ors. vs. State of Orissa and
Ors. (1983 )2SCC 433
9. Thansingh Nathmal and Ors. vs. A. Mazid [1964 ]6SCR 654
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10. State of H.P. and Ors. vs. Gujarat Ambuja Cement Ltd. and
Ors. AIR2005SC3936
11. Commissioner of Income Tax and Ors. vs. Chhabil Dass
Agarwal (2014 )1SCC 603
12. Harbanslal Sahnia and Ors. vs. Indian Oil Corpn. Ltd. and Ors.
(2003) 2 SCC 107
13. Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai
and Ors. (1998 )8 SCC 1
14. Vodafone International Holdings B.V. vs. Union of India (UOI)
and Ors. (2009) 321 CTR 617 (SC)
15. The Management of Express Newspapers Ltd. vs. Workers and
Staff Employed under it and Ors. (1963) 3 SCR 540
16. Raghuvinder Singh Vs Dy. Commissioner Of Income Tax,
(Benami Transaction) And Initiating Officer Under The Prevention
Of Benami Transaction Act 2016, S.B. Civil Writs No. 18701/2018
decided on 27/08/2018 Rajasthan High Court, Jaipur
17. S.B. Civil Writ Petition No. 2426 / 2018 Great Pacific General
Trading Company (Limited Liability Partnership), Vs. Union of
India, Through the Secretary, Ministry of Finance, Department of
Revenue, Decided on 27/02/2018 Rajasthan High Court, Jodhpur.
The same judgement was challenged in D.B. Spl. Appl. Writ No.
1315/2018 , decided on 22/10/2018.
18. MP-531-2017,decided on 09-01-2018, Dheeru Gond Vs. Union
of India, High Court of Madeya Pradesh
19. CIT, New Delhi Vs. Ram Kishan Dass 2019 (5) SCALE 312
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20. Authorized Officer, State Bank of Travancore and another Vs.
Mathew K.C. (2018) 3 SCC 85
21. R. Rajgopal Reddy (Dead) by L.Rs. And Ors. Vs. Padmini
Chandrasekhara (Dead) by L.Rs. (1995) 2 SCC 630
22. WA-704-2017, Kailash Assudani vs Commissioner Of Income
Tax decided on 16 August, 2017
23. His Highness Maharaja Pratap Singh Vs. Maharani Sajojani
Devi and ors. :1994 supp (1) SCC 734
24. Kapur Chand Pokhraj Vs. State of Bombay: AIR 1958 SC 993
25. Canbank Financial Services Ltd. vs. The Custodian and Ors.
(2004) 8 SCC 355
18. Heard the learned counsel for the parties and with their
assistance perused the materials available on record as well as
gave my thoughtful consideration to the rival submissions at bar
and the opinions referred to and relied upon.
19. Considering the entire factual matrix, materials available on
record and pleadings of the parties, in the above noted writ
applications in totality, this court concluded to deal with the larger
question of retrospective applicability of the Benami Amendment
Act, 2016, consented by the counsel for the parties. Thus, the
question framed for determination, in substance, is:
Whether the provisions of Benami Amendment Act,
2016, shall be applicable retrospectively or not?
20. At the very outset, it will be in the fitness of things to deal
with the preliminary objection raised by the learned senior
counsel, appearing on behalf of the respondents as to the
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maintainability of the writ applications in view of the scheme of
the Benami Amendment Act, 2016, and in view of the opinion of
the Supreme Court in the case of Vodafone International
Holdings B.V. (supra). A glance of the opinion referred to and
relied upon would reflect that the Supreme Court while relying
upon earlier opinion in the case of the Management of Express
Newspapers Ltd. vs. Workers and Staff Employed under it
and Ors.: AIR 1963 SC 569; observed that normally, the
questions of facts, though they may be jurisdictional facts, the
decision of which depends upon the appreciation of evidence,
should be left to be tried by the Special Tribunals constituted for
that purpose. The Supreme Court in no uncertain terms, in the
same opinion, observed that it did not lay down any fixed or
inflexible rule; whether or not even the preliminary facts should
be tried by a High Court in a writ petition, for the same would
depend upon the facts and circumstances of each case and upon
the nature of the preliminary issue raised between the parties.
21. The factual matrix of the matters at hand, is entirely
different and distinguishable, wherein the fact that the alleged
benami transactions, involved herein, are of a date prior to seizure
and search conducted by the respondent-department, and also, of
the date the provisions of Benami Amendment Act of 2016,
brought into force i.e. 1st November, 2016. Hence, the
question in the instant batch of writ applications for determination
and adjudication, as to the retrospective application of the
amended provisions introduced vide Benami Amendment Act of
2016, amending the Prohibition of Benami Transactions Act, 1988;
is a pure question of law. Thus, there is no factual matrix which
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requires evidence and consequent appreciation and determination
thereon, in view of the undisputed statement as to the alleged
benami transactions, which happens to be of dates precedent to
the enactment of Benami Amendment Act of 2016.
22. It is also not in dispute that the rules in exercise of powers
conferred by virtue of Section 68 of the Benami Amendment Act of
2016, have been notified on 25th October, 2016, even before the
substantive section 68 of the Benami Amendment Act of 2016,
was made effective for which date appointed is 1st November,
2016.
23. In the case of Whirlpool Corporation (supra), the Apex
Court of the land held thus:
“13. Learned counsel for the appellant has contended
that since suo motu action Under Section 56(4) could
be taken only by the High Court and not by the
Registrar, the notice issued to the appellant was wholly
without jurisdiction and, therefore, a writ petition even
at that stage was maintainable. The appellant, in these
circumstances, was not obliged to wait for the Registrar
to complete the proceedings as any further order
passed by the Registrar would also have been without
jurisdiction.
14. The power to issue prerogative writs under Article
226 of the Constitution is plenary in nature and is not
limited by any other provision of the Constitution This
power can be exercised by the High Court not only for
issuing writs in the nature of Habeas Corpus,
Mandamus, prohibition, Qua Warranto and Certiorari for
the enforcement of any of the Fundamental Rights
contained in Part III of the Constitution but also for
“any other purpose”.
15. Under Article 226 of the Constitution, the High
Court, having regard to the facts of the case, has
discretion to entertain or not to entertain a writ
petition. But the High Court has imposed upon itself
certain restrictions one of which is that if an effective
and efficacious remedy is available, the High Court
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would not normally exercise its jurisdiction. But the
alternative remedy has been consistently held by this
court not to operate as a bar in at least three
contingencies, namely, where the Writ Petition has
been filed for the enforcement of any of the
Fundamental rights or where there has been a violation
of the principle of natural justice or where the order or
proceedings are wholly without jurisdiction or the vires
of an Act is challenged.There is a plethora of case law
on this point but to cut down this circle of forensic
whirlpool we would rely on some old decisions of the
evolutionary era of the constitutional law as they still
hold the field.
20. Much water has since flown beneath the bridge, but
there has been no corrosive effect on these decisions
which though old, continue to hold the field with the
result that law as to the jurisdiction of the High Court in
entertaining a Writ Petition under Article 226 of the
Constitution, in spite of the alternative statutory
remedies, is not affected, specially in a case where the
authority against whom the Writ is filed is shown to
have had no jurisdiction or had purported to usurp
jurisdiction without any legal foundation.
21. That being so, the High Court was not justified in
dismissing the Writ Petition at the initial stage without
examining the contention that the show cause notice
issued to the appellant was wholly without jurisdiction
and that the Registrar, in the circumstances of the
case, was not justified in acting as the “TRIBUNAL”.”
24. A glance of the observations of the Apex Court of the land,
as extracted herein-above, would reflect that factual matrix of the
matters at hand, is entirely different and distinguishable from the
factual matrix of the Vodafone International Holdings B.V.
(supra), that fell for consideration of the Supreme Court. Hence,
the opinion referred to and relied upon is of no help to the
respondents in support of preliminary objection as to
maintainability of the writ applications under Article 226 of the
Constitution.
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25. In the case of Calcutta Discount Company Limited
(supra), a Constitution Bench of the Apex Court of the land while
examining the rejection order on a writ application under Article
226 of the Constitution of India, in the backdrop of notices issued
under Section 34 of the Indian Income Tax Act, 1922, wherein the
Income Tax Officer called upon the Company to submit fresh
returns of its total income; in no uncertain terms observed that
the pretended notice was issued without existence of the
necessary conditions precedent, which confers jurisdiction under
section 34; and therefore, the aggrieved party approaching the
court at the earliest opportunity, could not be denied relief for
existence of such alternative remedy is not however always a
sufficient reason for refusing a party quick relief by a writ or order
prohibiting an authority acting without jurisdiction from continuing
such action. At this juncture, it will relevant to take note of the
text of the opinion aforesaid, which reads thus:
“1. This appeal is against an appellate decision of a
Bench of the Calcutta High Court by which in reversal of
the order made by the Trial Judge the Bench rejected
the present appellant’s application under Article 226 of
the Constitution. The appellant is a private limited
company incorporated under the Indian Company’s Act
and has its registered office in Calcutta. It was assessed
to income-tax for the assessment years, 1942-43,
1943-44 and 1944-45 by three separate orders dated
January 26, 1944, February 12, 1944, and February 15,
1945, respectively. These assessments were made
under section 23(3) of the Indian Income-tax Act upon
returns filed by it accompanied by statements of
account. The first two assessments were made by Mr. L.
D. Rozario the then Income-tax Officer had the last one
by Mr. K. D. Banerjee. The taxes assessed were duly
paid up. On March 28, 1951, three notices purporting to
be under section 34 of the Indian Income-tax Act, 1922,
were issued by the Income-tax Officer calling upon the
company to submit fresh returns of its total income and
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the total world income assessable for the three
accounting years relating to the three assessment
years, 1942-43 1943-44 and 1944-45. The appellant
company furnished returns in compliance with the
notices but on September 18, 1951, applied to the High
Court of Calcutta for issue under article 226 of the
Constitution of appropriate writs or orders directing the
Income-tax Officer not to proceed to assess it on the
basis of these notices. The first ground on which this
prayer was based was mentioned in the petition in these
terms: – “The said pretended notice was issued without
the existence of the necessary conditions precedent
which confers jurisdiction under section 34
aforementioned, whether before or after the
amendment in 1948.” The other ground urged was that
the amendment to section 34 of the Income-tax Act in
1948 was not retrospective and that the assessment for
the years 1942-43, 1943-44 and 1944-45 became
barred long before March 1951.
2. The Trial Judge held that the first ground was not
made out but being of opinion that the amending Act of
1948 was not retrospective, he held that the notices
issued were without jurisdiction. Accordingly he made
an order prohibiting the Income-tax Officer from
continuing the assessment proceedings on the basis of
the impugned notices.
3. The learned Judges who heard the appeal agreed
with the Trial Judge that the first ground had not been
made out. They held however that in consequence of
the amendment of section 34 in 1948 the objection on
the ground of limitation must also fail. A point of
constitutional law which appears to have been raised
before the appeal court was also rejected. The appeal
was allowed and the company’s application under article
226 was dismissed with costs.
6. To confer jurisdiction under this section to issue
notice in respect of assessments beyond the period of
four years, but within a period of eight years, from the
end of the relevant year two conditions have therefore
to be satisfied. The first is that the Income-tax Officer
must have reason to believe that income, profits or
gains chargeable to income-tax have been underassessed.
The second is that he must have also reason
to believe that such “under assessment” has occurred
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by reason of either (i) omission or failure on the part of
an assessee to make a return of his income under
section 22, or (ii) omission or failure on the part of an
assessee to disclose fully and truly and all material facts
necessary for his assessment for that year. Both these
conditions are conditions precedent to be satisfied
before the Income-tax Officer could have jurisdiction to
issue a notice for the assessment or reassessment
beyond the period of four years but within the period of
eight years, from the end of the year in question.
24. We are therefore bound to hold that the conditions
precedent to the exercise of jurisdiction under section
34 of the Income-tax Act did not exist and the Incometax
Officer had therefore no jurisdiction to issue the
impugned notices under section 34 in respect of the
years 1942-43, 1943-44 and 1944-45 after the expiry
of four years.
25. Mr. Sastri argued that the question whether the
Income-tax Officer had reason to believe that underassessment
had occurred “by reason of non-disclosure
of material facts” should not be investigated by the
courts in an application under article 226. Learned
Counsel seems to suggest that as soon as the Incometax
Officer has reason to believe that there has been
under-assessment in any year he has jurisdiction to
start proceedings under section 34 by issuing a notice
provided 8 years have not elapsed from the end of the
year in question, but whether the notices should have
been issued within a period of 4 years or not is only a
question of limitation which could and should properly
be raised in the assessment proceedings. It is wholly
incorrect however to suppose that this is a question of
limitation only not touching the question of jurisdiction.
The scheme of the law clearly is that where the Incometax
Officer has reason to believe that an under
assessment has resulted from non-disclosure he shall
have jurisdiction to start proceedings for re-assessment
within a period of 8 years; and where he has reason to
believe that an under assessment has resulted from
other causes he shall have jurisdiction to start
proceedings for reassessment within 4 years. Both the
conditions, (i) the Income-tax Officer having reason to
believe that there has been under assessment and (ii)
his having reason to believe that such under
assessment has resulted from non-disclosure of material
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facts, must co-exist before the Income-tax Officer has
jurisdiction to start proceedings after the expiry of 4
years. The argument that the Court ought not to
investigate the existence of one of these conditions,
viz., that the Income-tax Officer has reason to believe
that under assessment has resulted from non-disclosure
of material facts cannot therefore be accepted.
26. Mr. Sastri next pointed out that at the stage when
the Income-tax Officer issued the notices he was not
acting judicially or quasi-judicially and so a writ of
certiorari or prohibition cannot issue. It is well settled
however that though the writ of prohibition or certiorari
will not issue against an executive authority, the High
Courts have power to issue in a fit case an order
prohibiting an executive authority from acting without
jurisdiction. Where such action of an executive authority
from acting without jurisdiction subjects or is likely to
subject a person to lengthy proceedings and
unnecessary harassment, the High Courts, it is well
settled, will issue appropriate orders or directions to
prevent such consequences.
27. Mr. Sastri mentioned more than once the fact that
the company would have sufficient opportunity to raise
this question, viz., whether the Income-tax Officer had
reason to believe that under assessment had resulted
from non-disclosure of material facts, before the
Income-tax Officer himself in the assessment
proceedings and, if unsuccessful there, before the
appellate Officer or the appellate tribunal or in the High
Court under section 66(2) of the Indian Income-tax Act.
The existence of such alternative remedy is not however
always a sufficient reason for refusing a party quick
relief by a writ or order prohibiting an authority acting
without jurisdiction from continuing such action.
28. In the present case the company contends that the
conditions precedent for the assumption of jurisdiction
under section 34 were not satisfied and came to the
court at the earliest opportunity. There is nothing in its
conduct which would justify the refusal of proper relief
under article 226. When the Constitution confers on the
High Courts the power to give relief it becomes the duty
of the courts to give such relief in fit cases and the
courts would be failing to perform their duty if relief is
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refused without adequate reasons. In the present case
we can find no reason for which relief should be refused.
38. That the Income Tax Officer has reason to believe
that there was under assessment in the material years
was not challenged by the appellant and in our opinion
rightly. There are on the record the reports of Income
Tax Officer in which the belief is expressly set out. It
also appears from the assessment orders for the years
1945-46 and 1946-47 that tax has been assessed on
the profits made by sale of shares by the company in
those years.”
26. In the Raza Textiles Ltd. (supra), while examining the
question as to whether the order of Income Tax Officer, a
quasi judicial authority, is, subject to review by the High
Court under Article 226 of the Constitution of India, was ruled
in affirmative. At this stage, it will be profitable to take note
of contents of paragraph 3 of the opinion aforesaid, which
reads thus:
“3. Aggrieved by that order the appellant went up in
appeal to the Appellate Assistant Commissioner. The
Appellate Assistant Commissioner rejected the appeal
on the ground that the same was not maintainable. He
took the view that an appeal lay only under Section
30(1A). But before such an appeal can be entertained
the appellant must satisfy two conditions, namely, (1)
he had deducted the tax due from the non-resident in
accordance with the provisions of Sub-section 3(B) and
(2) that he had paid the sum deducted to the
Government. The appellant having not complied with
those two conditions, the Appellate Assistant
Commissioner held that the appeal was incompetent.
The order of the Appellate Assistant Commissioner was
confirmed by- the Tribunal. Thereafter the appellant
moved the High Court under Article 226 of the
Constitution. That application came up before a single
Judge. The single Judge after going into the matter in
detail came to the conclusion that M/s. Nathirmal and
Sons is not a non-resident firm and that being so the
appellant was not required to act under Section 18(3B).
He accordingly, set aside the order impugned. The
revenue went up in appeal against the order of the
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learned single Judge to the Appellate Bench. That Bench
allowed the appeal with the observations, “In the
present case the question before the Income-tax Officer,
Rampur, was whether the firm Nathirmal and Sons was
non-resident or not. There was material before him on
this question. He had jurisdiction to decide the question
either way. It cannot be said that the officer assumed
jurisdiction by wrong decision on this question of
residence”. The Appellate Bench appears to have been
under the impression that the Income-tax Officer was
the sole judge of the fact whether the firm in question
was resident or non-resident. This conclusion, in our
opinion, is wholly wrong. No authority, much less a
quasi-judicial authority, can confer jurisdiction on
itself by deciding a jurisdictional fact wrongly. The
question whether the jurisdictional fact has been
rightly decided or not is a question that is open for
examination by the High Court in an application
for a writ of certiorari. If the High Court comes to
the conclusion, as the learned single Judge has
done in this case, that the Income-tax Officer had
clutched at the jurisdiction by deciding a
jurisdictional fact erroneously, then the assesses
was entitled for the writ of certiorari prayed for by
him. It is incomprehensible to think that a quasijudicial
authority like the Income-tax Officer can
erroneously decide a jurisdictional fact and
thereafter proceed to impose a levy on a citizen.
In our opinion the Appellate Bench is wholly wrong in
opining that the Income-tax Officer can “decide either
way”.
27. In the case of Malayala Manorama Co. Ltd. (supra), the
Apex Court of the land on a survey of earlier opinions including
Whirlpool Corporation (supra), repelling the plea of availability
of statutory alternative remedy while remanding the matter back
to the High Court, observed thus:
“5. The assessee firm did not take recourse to the
statutory remedies available under the Act but
questioned the very correctness and legality of the
issuance of the notice as well as the order passed by
the Assistant Commissioner before the High Court of
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Kerala at Ernakulam, by filing a writ petition
under Article 226 of the Constitution of India.
6. This writ petition was contested by the Department
which filed detailed counter affidavit. It was specifically
pleaded by the Department that for availability of
statutory alternative remedy as well as for other
reasons and facts stated in the reply, the writ petition
itself was not maintainable. The Division Bench of the
High Court while considering this primary objection
raised by the Department before the High Court, came
to the conclusion that as the facts were not in dispute
and questions raised were purely legal and are to be
tested in view of the judgment of this Court in the case
of Printers (Mysore) Ltd. v. Assistant Commercial Tax
Officer [(1994) 93 Sales Tax Cases 95 : (1994) 2 SCC
434], Whirlpool Corporation v. Registrar of Trade
Marks [(1998) 8 SCC 1] as well as the judgment in the
case of State of H.P. & Ors. v. Gujarat Ambuja Cements
Ltd. [(2005) 6 SCC 499 : (2005) 142 Sales Tax Cases
1], the writ petition was maintainable. However, while
laying emphasis that the newspaper would not fall
within the expression `goods’ under sub-section 3 of
Section 5 of the Act, the High Court held that the notice
issued was proper as Form No. 18 which gives benefit
of concessional rate of tax was factually not correct.
While dismissing the writ petition, however, the Bench
issued a direction to the assessing authority to examine
whether the imposition of penalty at double the rate is
justified in the facts and circumstances of the case,
within a period of two months from the date of receipt
of the copy of the judgment. It is this judgment of the
High Court which has been assailed in the present
appeal under Article 136 of the Constitution of India.
9. Having heard the learned senior counsel appearing
for the parties, we are of the considered view that the
order under challenge requires interference by this
Court. There is no dispute to the fact that the material
amendments were carried out in the provisions
of Section 5(3) of the Act with effect from 01.04.2002.
The existing 1st proviso to Section 5(3)(i) was deleted
as well as the expression `or uses the same in the
manufacture of any goods which are not liable to tax in
this Act’ in Section 5(3)(i) was also deleted. Despite
these amendments, as it appears from the record
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before the Court, format of Form No. 18 has not been
amended consequently. However, the fact of
thematter remains that the High Court has not
dwelt upon these legal issues which are the core
issues involved in the present case. In our view,
the discussion on the first issue would certainly
have some bearing on the alternative argument
raised on behalf of the appellant before us. Thus,
it may not be possible for this Court to sustain
the finding recorded by the High Court in that
regard. Of course, we are not ruling out all the
possibilities of the High Court arriving at the
same conclusion if it is of that view after
examining the amendments as well as the
submissions made on behalf of the appellant with
regard to its alternative submissions. In light of
this discussion, we pass the following order :
(a) The impugned order dated 2nd August,
2006 passed by the High Court is hereby
set aside.
(b) The matter is remanded to the High
Court for consideration afresh in
accordance with law on both the aforesaid
submissions while leaving all the
contentions of the assessee and the
Department open for the year 2000- 2001,
in relation to imposition of penalty
under Section 45 (A) of the Act.
(c) The legality and validity or otherwise of the
notice dated 16.01.2006 and 17.01.2006 shall be
subject to the final decision of the High Court.
28. Applying the principle deducible from the opinions supra, to
the preliminary objections raised by the learned senior counsel for
the respondents, as to maintainability of the writ applications;
merits rejection, and is, hereby rejected.
29. Indisputably, in all the writ applications constituting the
batch; the alleged benami transactions are of a date preceding 1st
November, 2016. In some of the matters, even prior to the
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commencement of unamended Benami Act of 1988, which came
into effect on 5th September, 1988 whereas Sections 3, 5 and 8 of
the unamended Benami Act, 1988, were deemed to have come
into force on 19th day of May, 1988 i.e with retrospective effect.
The Benami Amendment Act, 2016 (43 of 2016), has been made
applicable from the date appointed by the Central Government
vide notification dated 25th October, 2016. And the appointed date
determined, is, 1st November, 2016, as the date on which the
provisions of the Benami Amendment Act, 2016, shall come into
force.
30. A comparative consideration of Section 2 of the Benami Act,
1988 and the Benami Amendment Act, 2016, would reflect that
the definitions under the unamended Act contains sub-section (1)
to (4) only, whereas the amending Benami Amendment Act, 2016,
contains sub-section (1) to (31), defining various terms and
phrases elaborately. Learned counsel for the parties referring to
the aims, objects and scope of amendment in the Principal Act of
1988 vide Benami Transactions (Prohibition) Amendment Act,
2016, contended that while the earlier unamended Benami Act,
1988, consisted of only 9 Sections, the Benami Amendment Act,
2016, consisted of as many as 72 Sections.
31. However, the unamended Benami Act of 1988, for the first
time contemplated prohibition of benami transactions vide Section
3. Section 4 prohibited right to recover property held benami.
Section 5 contemplated properties held benami subject to
acquisition by such authority in such manner and following such
procedure as may be prescribed; without payment of any amount
for acquisition of any property that was held benami. The
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unamended Benami Act, 1988, vested the Central Government
with the power to frame rules for carrying out the purpose of the
Benami Act, 1988, by notification in the official gazette. Since no
rules were framed by the Central Government in exercise of
powers under Section 8 of the unamended Benami Act, 1988, for
acquisition of properties held benami; no property was acquired
despite the unamended Benami Act of 1988, remained in force all
along until amnedments interoduced in the year 2016.
Admittedly, the unamended Benami Act, of 1988, did not contain
any specific provision for vesting of benami property with
Central Government. Furthermore, there was no provision for an
appellate mechanism against action taken by the authorities under
the unamended the Benami Act, 1988 while barring the
jurisdiction of Civil Court. No powers with the authorities
concerned for its implementation. However, in order to deal with
the benami transactions involving large amounts of unaccounted
black money, a mechanism has been introduced to make operative
the intention and object of the unamended Benami Act of 1988 by
the Benami Amendment Act, 2016; is the plea in support of its
retrospective applicability of amended the Benami Act, 1988
through the Benami Amendment Act, 2016.
32. In order to appreciate the rival contentions of the parties on
the question for determination, it will be profitable to take note of
the relevant provisions of the unamended Benami Act of 1988 so
also the relevant provisions of the Benami Amendment Act, 2016
along with text of Article 20 of the Constitution of India, which
reads thus:
Article 20 of the Constitution:-
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“20. Protection in respect of conviction for offences:
(1) No person shall be convicted of any offence except
for violation of the law in force at the time of the
commission of the act charged as an offence, nor be
subjected to a penalty greater than that which might
have been inflicted under the law in force at the time of
the commission of the offence
(2) No person shall be prosecuted and punished for the
same offence more than once
(3)No person accused of any offence shall be compelled
to be a witness against himself.”
Unamended Benami Transactions (Prohibition) Act,
1988
1. Short title, extent and commencement- (1) This
Act may be called the Benami Transactions (Prohibition)
Act, 1988.
(2) It extends to the whole of India except the State of
Jammu and Kashmir.
(3) The provisions of sections 3, 5 and 8 shall come
into force at once, and the remaining provisions of this
Act shall be deemed to have come into force on the
19th day of May, 1988.
2. Definitions- In this Act, unless the context
otherwise requires,–
(a) benami transaction means any transaction in which
property is transferred to one person for a
consideration paid or provided by another person;
(b) prescribed means prescribed by rules made under
this Act;
(c) property means property of any kind, whether
movable or immovable, tangible or intangible, and
includes any right or interest in such property.
3. Prohibition of benami transactions- (1) No
person shall enter into any benami transaction.
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(2) Nothing in sub-section (1) shall apply to the
purchase of property by any person in the name of his
wife or unmarried daughter and it shall be presumed,
unless the contrary is proved, that the said property had
been purchased for the benefit of the wife of the
unmarried daughter.
(3) 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.
(4) Notwithstanding anything contained in the Code of
Criminal Procedure, 1973, an offence under this section
shall be non-cognizable and bailable.
4. Prohibition of the right to recover property
held benami- (1) No suit, claim or action to enforce
any right in respect of any property held benami
against the person in whose name the property is held
or against any other person shall lie by or on behalf of
a person claiming to be the real owner of such
property.
(2) No defence based on any right in respect of any
property held benami, whether against the person in
whose name the property is held or against any other
person, shall be allowed in any suit, claim or action by
or on behalf of a person claiming to be the real owner
of such property.
(3) Nothing in this section shall apply,–
(a) where the person in whose name the property is
held is a coparcener in a Hindu undivided family and
the property is held for the benefit of the coparceners
in the family; or
(b) where the person in whose name the property is
held is a trustee or other person standing in a fiduciary
capacity, and the property is held for the benefit of
another person for whom he is a trustee or towards
whom he stands in such capacity.
5. Property of benami liable to acquisition- (1) All
properties held benami shall be subject to acquisition
by such authority, in such manner and after following
such procedure as may be prescribed.
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(2) For the removal of doubts, it is hereby declared
that no amount shall be payable for the acquisition of
any property under sub-section (1).
8. Power to make rules- (1) The Central
Government may, by notification in the Official
Gazette, make rules for carrying out the purposes of
this Act.
(2) In particular, and without prejudice to the
generality of the foregoing power, such rules may
provide for all or any of the following matters,
namely:–
(a) the authority competent to acquire properties
under section 5;
(b) the manner in which, and the procedure to be
followed for, the acquisition of properties under section
5;
(c) any other matter which is required to be, or may
be, prescribed.
(3) Every rule made under this Act shall be laid, so
soon as may be after it is made, before each House of
Parliament, while it is in session for a total period of
thirty days which may be comprised in one session or
in two or more successive sessions, and if, before the
expiry of the session immediately following the session
or the successive sessions aforesaid, both Houses
agree in making any modification in the rule or both
Houses agree that the rule should not be made, the
rule shall thereafter have effect only in such modified
form or be of no effect, as the case may be; so,
however, that any such modification or annulment
shall be without prejudice to the validity of anything
previously done under that rule.
Benami Transactions (Prohibition) Amendment Act,
2016.
(1) This Act may be called the Benami Transactions
(Prohibition) Amendment Act, 2016.
(2) It shall come into force on such date as the Central
Government may, by notification in the Official
Gazette, appoint, and different dates may be
appointed for different provisions of this Act and any
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reference in any such provision to the commencement
of this Act shall be construed as a reference to the
coming into force of that provision.
(8) “benami property” means any property which is
the subject matter of a benami transaction and also
includes the proceeds from such property;
(9) “benami transaction” means,-
(A) a transaction or an arrangement-
(a) 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; and
(b) the property is held for the immediate or future
benefit, direct or indirect, of the person who has
provided the consideration, except when the property is
held by-
(i) a Karta, or a member of a Hindu undivided family,
as the case may be, and the property is held for his
benefit or benefit of other members in the family and
the consideration for such property has been provided
or paid out of the known sources of the Hindu
undivided family;
(ii) a person standing in a fiduciary capacity for the
benefit of another person towards whom he stands in
such capacity and includes a trustee, executor, partner,
director of a company, a depository or a participant as
an agent of a depository under the Depositories Act,
1996 (22 of 1996) and any other person as may be
notified by the Central Government for this purpose;
(iii) any person being an individual in the name of his
spouse or in the name of any child of such individual
and the consideration for such
property has been provided or paid out of the known
sources of the individual;
(iv) any person in the name of his brother or sister or
lineal ascendant or descendant, where the names of
brother or sister or lineal ascendant or descendant and
the individual appear as joint-owners in any document,
and the consideration for such property has been
provided or paid out of the known sources of the
individual; or
(B) a transaction or an arrangement in respect of a
property carried out or made in a fictitious name; or
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(C) a transaction or an arrangement in respect of a
property where the owner of the property is not aware
of, or, denies knowledge of, such ownership;
(D) a transaction or an arrangement in respect of a
property where the person providing the consideration
is not traceable or is fictitious;
(19) “Initiating Officer” means an Assistant
Commissioner or a Deputy Commissioner as defined in
clauses (9A) and (19A) respectively of section 2 of the
Income-tax Act, 1961 (43 of 1961);
In section 3 of the principal Act,-
(a) sub-section (2) shall be omitted;
(b) sub-section (3) shall be renumbered as sub-section
(2) thereof;
(c) after sub-section (2) as so renumbered, the
following sub-section shall be inserted, namely:-
“(3) Whoever enters into any benami transaction on
and after the date of commencement of the Benami
Transactions (Prohibition) Amendment Act, 2016, shall,
notwithstanding anything contained in sub-section (2),
be punishable in accordance with the provisions
contained in Chapter VII.”;
24. Notice and attachment of property involved in
benami transaction
(1) Where the Initiating Officer, on the basis of material
in his possession, has reason to believe that any person
is a benamidar in respect of a property, he may, after
recording reasons in writing, issue a notice to the
person to show cause within such time as may be
specified in the notice why the property should not be
treated as benami property.
(2) Where a notice under sub-section (1) specifies any
property as being held by a benamidar referred to in
that sub-section, a copy of the notice shall also be
issued to the beneficial owner if his identity is known.
(3) Where the Initiating Officer is of the opinion that
the person in possession of the property held benami
may alienate the property during the period specified in
the notice, he may, with the previous approval of the
Approving Authority, by order in writing, attach
provisionally the property in the manner as may be
prescribed, for a period not exceeding ninety days from
the date of issue of notice under sub-section (1).
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(4) The Initiating Officer, after making such inquires
and calling for such reports or evidence as he deems fit
and taking into account all relevant materials, shall,
within a period of ninety days from the date of issue of
notice under sub-section (1),-
(a) where the provisional attachment has been made
under sub-section (3), –
(i) pass an order continuing the provisional attachment
of the property with the prior approval of the Approving
Authority, till the passing of the order by the
Adjudicating Authority under sub-section (3) of section
26; or
(ii) revoke the provisional attachment of the property
with the prior approval of the Approving Authority;
(b) where provisional attachment has not been made
under sub-section (3),-
(i) pass an order provisionally attaching the property
with the prior approval of the Approving Authority, till
the passing of the order by the Adjudicating Authority
under sub-section (3) of section 26; or
(ii) decide not to attach the property as specified in the
notice, with the prior approval of the Approving
Authority.
(5) Where the Initiating Officer passes an order
continuing the provisional attachment of the property
under sub-clause (i) of clause (a) of sub-section (4) or
passes an order provisionally attaching the property
under sub-clause (i) of clause (b) of that sub-section,
he shall, within fifteen days from the date of the
attachment, draw up a statement of the case and refer
it to the Adjudicating Authority.
26. Adjudication of benami property
(1) On receipt of a reference under sub-section (5) of
section 24, the Adjudicating Authority shall issue
notice, to furnish such documents, particulars or
evidence as is considered necessary on a date to be
specified therein, on the following persons, namely:-
(a) the person specified as a benamidar therein;
(b) any person referred to as the beneficial owner
therein or identified as such;
(c) any interested party, including a banking company;
(d) any person who has made a claim in respect of the
property:
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Provided that the Adjudicating Authority shall issue
notice within a period of thirty days from the date on
which a reference has been received:
Provided further that the notice shall provide a period
of not less than thirty days to the person to whom the
notice is issued to furnish the information sought.
(2) Where the property is held jointly by more than one
person, the Adjudicating Authority shall make all
endeavours to serve notice to all persons holding the
property:
Provided that where the notice is served on anyone of
the persons, the service of notice shall not be invalid on
the ground that the said notice was not served to all
the persons holding the property.
(3) The Adjudicating Authority shall, after-
(a) considering the reply, if any, to the notice issued
under sub-section (1);
(b) making or causing to be made such inquiries and
calling for such reports or evidence as it deems fit; and
(c) taking into account all relevant materials,
provide an opportunity of being heard to the person
specified as a benamidar therein, the Initiating Officer,
and any other person who claims to be the owner of
the property, and, thereafter, pass an order-
(i) holding the property not to be a benami property
and revoking the attachment order; or
(ii) holding the property to be a benami property and
confirming the attachment order, in all other cases.
(4) Where the Adjudicating Authority is satisfied that
some part of the properties in respect of which
reference has been made to him is benami property,
but is not able to specifically identify such part, he shall
record a finding to the best of his judgment as to which
part of the properties is held benami.
(5) Where in the course of proceedings before it, the
Adjudicating Authority has reason to believe that a
property, other than a property referred to it by the
Initiating Officer is benami property, it shall
provisionally attach the property and the property shall
be deemed to be a property referred to it on the date
of receipt of the reference under sub-section (5) of
section 24.
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(6) The Adjudicating Authority may, at any stage of the
proceedings, either on the application of any party, or
suo motu, strike out the name of any party improperly
joined or add the name of any person whose presence
before the Adjudicating Authority may be necessary to
enable him to adjudicate upon and settle all the
questions involved in the reference.
(7) No order under sub-section (3) shall be passed
after the expiry of one year from the end of the month
in which the reference under sub-section (5) of section
24 was received.
(8) The benamidar or any other person who claims to
be the owner of the property may either appear in
person or take the assistance of an authorised
representative of his choice to present his case.
Explanation.-For the purposes of sub-section (8),
authorised representative means a person authorised in
writing, being-
(i) a person related to the benamidar or such other
person in any manner, or a person regularly employed
by the benamidar or such other person as the case may
be; or
(ii) any officer of a scheduled bank with which the
benamidar or such other person maintains an account
or has other regular dealings; or
(iii) any legal practitioner who is entitled to practice in
any civil court in India; or
(iv) any person who has passed any accountancy
examination recognised in this behalf by the Board; or
(v) any person who has acquired such educational
qualifications as the Board may prescribe for this
purpose.
53. Penalty for benami transaction
(1) Where any person enters into a benami transaction
in order to defeat the provisions of any law or to avoid
payment of statutory dues or to avoid payment to
creditors, the beneficial owner, benamidar and any
other person who abets or induces any person to enter
into the benami transaction, shall be guilty of the
offence of benami transaction.
(2) Whoever is found guilty of the offence of benami
transaction referred to in sub-section (1) shall be
punishable with rigorous imprisonment for a term
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which shall not be less than one year, but which may
extend to seven years and shall also be liable to fine
which may extend to twenty-five per cent. of the fair
market value of the property.
65. Transfer of pending cases
(1) Every suit or proceeding in respect of a benami
transaction pending in any Court (other than a High
Court) or Tribunal or before any forum on the date of
the commencement of this Act shall stand transferred
to the Adjudicating Authority or the Appellate Tribunal,
as the case may be, having jurisdiction in the matter.
(2) Where any suit, or other proceeding stands
transferred to the Adjudicating Authority or the
Appellate Tribunal under sub-section (1),-
(a) the court, Tribunal or other forum shall, as soon as
may be, after the transfer, forward the records of the
suit, or other proceeding to the Adjudicating Authority
or the Appellate Tribunal, as the case may be;
(b) the Adjudicating Authority may, on receipt of the
records, proceed to deal with the suit, or other
proceeding, so far as may be, in the same manner as in
the case of a reference made under sub-section (5) of
section 24, from the stage which was reached before
the transfer or from any earlier stage or de novo as the
Adjudicating Authority may deem fit.
68. Power to make rules
(1) The Central Government may, by notification, make
rules for carrying out the provisions of this Act.
(2) In particular, and without prejudice to the
generality of the foregoing power, such rules may
provide for all or any of the following matters, namely:-
(a) manner of ascertaining the fair market value under
clause 16 of section 2;
(b) the manner of appointing the Chairperson and the
Member of the Adjudicating Authorities under subsection
(2) of section 9;
(c) the salaries and allowances payable to the
Chairperson and the Members of the Adjudicating
Authority under sub-section (1) of section 13;
(d) the powers and functions of the authorities under
sub-section (2) of section 18;
(e) other powers of the authorities under clause (f) of
sub-section (1) of section 19;
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(f) the form and manner of furnishing any information
to the authority under sub-section (2) of section 21;
(g) the manner of provisional attachment of property
under sub-section (3) of section 24;
(h) the procedure for confiscation of benami property
under the second proviso to sub-section (1) of section
27;
(i) the manner and conditions to receive and manage
the property under sub-section (1) of section 28;
(j) the manner and conditions of disposal of property
vested in the Central Government under sub-section
(3) of section 28;
(k) the salaries and allowances payable to and the
other terms and conditions of service of the
Chairperson and other Members of the Appellate
Tribunal under sub-section (1) of section 33;
(l) the manner of prescribing procedure for removal of
Chairperson or Member under sub-section (4) of
section 35;
(m) the salaries and allowances payable to and the
other terms and conditions of service of the officers and
employees of the Appellate Tribunal under sub-section
(3) of section 39;
(n) any power of the Appellate Tribunal under clause (i)
of sub-section (2) of section 40;
(o) the form in which appeal shall be filed and the fee
for filing the appeal under sub-section (1) of section
46;
(p) any other matter which is to be, or may be,
prescribed, or in respect of which provision is to be
made, by rules.
71. Transitional provision
The Central Government may, by notification, provide
that until the Adjudicating Authorities are appointed
and the Appellate Tribunal is established under this Act,
the Adjudicating Authority appointed under sub-section
(1) of section 6 of the Money-Laundering Act, 2002 (15
of 2003) and the Appellate Tribunal established under
section 25 of that Act may discharge the functions of
the Adjudicating Authority and Appellate Tribunal,
respectively, under this Act.’’
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33. From a glance of notification dated 25th October, 2016, it is
evident that Central Government, in exercise of powers conferred
by Section 68 of the Benami Amendment Act, 2016; has framed
the rules and made them effective w.e.f. 1st November, 2016, i.e.
the date from which the Benami Amendment Act, 2016, has been
enacted. Thus, it is evident that the Central Government exercised
the powers, to frame the rules, conferred by virtue of Section 68,
introduced vide Benami Amendment Act, 2016, which itself came
into effect from the appointed date i.e. 1st November, 2016.
Hence, the rules framed, in exercise of power under Section 68,
have been framed and notified by notification dated 25th October,
2016, even before the amendement incorporating Section 68, was
made operative that is w.e.f. 1st November, 2016. Therefore, the
plea of the petitioners as to the rules having been framed contrary
to and in absence of power available to the Central Government
under Section 68 of the Benami Amendment Act, 2016, which was
made operative and effective w.e.f. 1st November, 2016; has
substance.
34. Further, to understand the true character and meaning of
Benami Transactions, under the English law and Indian Law; it will
be relevant to take note of the text of para 14 of the Apex Court
of the land in the case of Thakur Bhim Singh (dead) By Lrs
and Ors. (supra), which reads thus:
“14. Under the English law, when real or personal
property is purchased in the name of a stranger, a
resulting trust will be presumed in favour of the person
who is proved to have paid the purchase money in the
character of the purchaser. It is, however, open to the
transferee to rebut that presumption by showing that
the intention of the person who contributed the
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purchase money was that the transferee should himself
acquire the beneficial interest in the property. There is,
however, an exception to the above rule of presumption
made by the English law when the person who gets the
legal title under the conveyance is either a child or the
wife of the person who contributes the purchase money
or his grand child, whose father is dead. The rule
applicable in such cases is known as the doctrine of
advancement which requires the court to presume that
the purchase is for the benefit of the person in whose
favour the legal title is transferred even though the
purchase money may have been contributed by the
father or the husband or the grandfather, as the case
may be, unless such presumption is rebutted by
evidence showing that it was the intention of the
person who paid the purchase money that the
transferee should not become the real owner of the
property in question. The doctrine of advancement is
not in vogue in India. The counterpart of the English
law of resulting trust referred to above is the Indian law
of benami transactions. Two kinds of benami
transactions are generally recognized in India. Where a
person buys a property with his own money but in the
name of another person without any intention to
benefit such other person, the transaction is called
benami. In that case, the transferee holds the property
for the benefit of the person who has contributed the
purchase money, and he is the real owner. The second
case which is loosely termed as a benami transaction is
a case where a person who is the owner of the property
executes a conveyance in favour of another without the
intention of transferring the title to the property
thereunder. In this case, the transferor continues to be
the real owner. The difference between the two kinds of
benami transactions referred to above lies in the fact
that whereas in the former case, there is an operative
transfer from the transferor to the transferee though
the transferee holds the property for the benefit of the
person who has contributed the purchase money, in the
latter case, there is no operative transfer at all and the
title rests with the transferor notwithstanding the
execution of the conveyance. One common feature,
however, in both these cases is that the real title is
divorced from the ostensible title and they are vested
in different persons. The question whether a
transaction is a benami transaction or not mainly
depends upon the intention of the person who has
contributed the purchase money in the former case and
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upon the intention of the person who has executed the
conveyance in the latter case. The principle underlying
the former case is also statutorily recognized in Section
82 of the Indian Trusts Act, 1882 which provides that
where property is transferred to one person for a
consideration paid or provided by another person and it
appears that such other person did not intend to pay or
provide such consideration for the benefit of the
transferee, the transferee must hold the property for
the benefit of the person paying or providing the
consideration. This view is in accord with the following
observations made by this Court in Meenakshi Mills.
Madurai v. The Commissioner of Income-Tax, Madras
MANU/SC/0044/1956 : [1956]1SCR691 .:
In this connection, it is necessary to note that the word
‘benami’ is used to denote two classes of transactions
which differ from each other in their legal character and
incidents. In one sense, it signifies a transaction which
is real, as for example when A sells properties to B but
the sale deed mentions X as the purchaser. Here the
sale itself is genuine, but the real purchaser is B, X
being his benamidar. This is the class of transactions
which is usually termed as benami. But the word
‘benami’ is also occasionally used, perhaps not quite
accurately, to refer to a sham transaction, as for
example, when A purports to sell his property to B
without intending that his title should cease or pass to
B. The fundamental difference between these two
classes of transactions is that whereas in the former
there is an operative transfer resulting in the vesting of
title in the transferee, in the latter there is none such,
the transferor continuing to retain the title
notwithstanding the execution of the transfer deed. It is
only in the former class of cases that it would be
necessary, when a dispute arises as to whether the
person named in the deed is the real transferee or B, to
enquire into the question as to who paid the
consideration for the transfer, X or B. But in the latter
class of cases, when the question is whether the
transfer is genuine or sham, the point for decision
would be, not who paid the consideration but whether
any consideration was paid.”
35. In the case of Calcutta Discount Company Limited (supra),
Supreme Court, held thus:
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6. To confer jurisdiction under this section to issue
notice in respect of assessments beyond the period of
four years, but within a period of eight years, from the
end of the relevant year two conditions have therefore
to be satisfied. The first is that the Income-tax Officer
must have reason to believe that income, profits or
gains chargeable to income-tax have been underassessed.
The second is that he must have also reason
to believe that such “under assessment” has occurred
by reason of either (i) omission or failure on the part of
an assessee to make a return of his income under
section 22, or (ii) omission or failure on the part of an
assessee to disclose fully and truly and all material
facts necessary for his assessment for that year. Both
these conditions are conditions precedent to be
satisfied before the Income-tax Officer could have
jurisdiction to issue a notice for the assessment or
reassessment beyond the period of four years but
within the period of eight years, from the end of the
year in question.
24. We are therefore bound to hold that the conditions
precedent to the exercise of jurisdiction under section
34 of the Income-tax Act did not exist and the Incometax
Officer had therefore no jurisdiction to issue the
impugned notices under section 34 in respect of the
years 1942-43, 1943-44 and 1944-45 after the expiry
of four years.
25. Mr. Sastri argued that the question whether the
Income-tax Officer had reason to believe that underassessment
had occurred “by reason of non-disclosure
of material facts” should not be investigated by the
courts in an application under article 226. Learned
Counsel seems to suggest that as soon as the Incometax
Officer has reason to believe that there has been
under-assessment in any year he has jurisdiction to
start proceedings under section 34 by issuing a notice
provided 8 years have not elapsed from the end of the
year in question, but whether the notices should have
been issued within a period of 4 years or not is only a
question of limitation which could and should properly
be raised in the assessment proceedings. It is wholly
incorrect however to suppose that this is a question of
limitation only not touching the question of jurisdiction.
The scheme of the law clearly is that where the
Income-tax Officer has reason to believe that an under
assessment has resulted from non-disclosure he shall
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have jurisdiction to start proceedings for re-assessment
within a period of 8 years; and where he has reason to
believe that an under assessment has resulted from
other causes he shall have jurisdiction to start
proceedings for reassessment within 4 years. Both the
conditions, (i) the Income-tax Officer having reason to
believe that there has been under assessment and (ii)
his having reason to believe that such under
assessment has resulted from non-disclosure of
material facts, must co-exist before the Income-tax
Officer has jurisdiction to start proceedings after the
expiry of 4 years. The argument that the Court ought
not to investigate the existence of one of these
conditions, viz., that the Income-tax Officer has reason
to believe that under assessment has resulted from
non-disclosure of material facts cannot therefore be
accepted.
26. Mr. Sastri next pointed out that at the stage when
the Income-tax Officer issued the notices he was not
acting judicially or quasi-judicially and so a writ of
certiorari or prohibition cannot issue.
It is well settled however that though the writ of
prohibition or certiorari will not issue against an
executive authority, the High Courts have power to
issue in a fit case an order prohibiting an executive
authority from acting without jurisdiction. Where such
action of an executive authority from acting without
jurisdiction subjects or is likely to subject a person to
lengthy proceedings and unnecessary harassment, the
High Courts, it is well settled, will issue appropriate
orders or directions to prevent such consequences.
27. Mr. Sastri mentioned more than once the fact that
the company would have sufficient opportunity to raise
this question, viz., whether the Income-tax Officer had
reason to believe that under assessment had resulted
from non-disclosure of material facts, before the
Income-tax Officer himself in the assessment
proceedings and, if unsuccessful there, before the
appellate Officer or the appellate tribunal or in the High
Court under section 66(2) of the Indian Income-tax Act.
The existence of such alternative remedy is not however
always a sufficient reason for refusing a party quick
relief by a writ or order prohibiting an authority acting
without jurisdiction from continuing such action.
28. In the present case the company contends that the
conditions precedent for the assumption of jurisdiction
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under section 34 were not satisfied and came to the
court at the earliest opportunity. There is nothing in its
conduct which would justify the refusal of proper relief
under article 226. When the Constitution confers on the
High Courts the power to give relief it becomes the duty
of the courts to give such relief in fit cases and the
courts would be failing to perform their duty if relief is
refused without adequate reasons. In the present case
we can find no reason for which relief should be refused.
29. We have therefore come to the conclusion that the
company was entitled to an order directing the Incometax
Officer not to take any action on the basis of the
three impugned notices.
30. We are informed that assessment orders were in
fact made on March 25, 1952, by the Income-tax Officer
in the proceedings started on the basis of these
impugned notices. This was done with the permission of
the learned Judge before whom the petition under
article 226 was pending, on the distinct understanding
that these orders would be without prejudice to the
contentions of the parties on the several questions
raised in the petition and without prejudice to the orders
that may ultimately be passed by the Court. The fact
that the assessment orders have already been made
does not therefore affect the company’s right to obtain
relief under article 226. In view however of the fact that
the assessment orders have already been made we
think it proper that in addition to an order directing the
Income-tax Officer not to take any action on the basis
of the impugned notices a further order quashing the
assessment made be also issued.
36. In the case of Commissioner of Income Tax vs. Vatika
Township Private Limited (supra), the Supreme Court,
observed thus:
27. A legislation, be it a statutory Act or a statutory
Rule or a statutory Notification, may physically consists
of words printed on papers. However, conceptually it is
a great deal more than an ordinary prose. There is a
special peculiarity in the mode of verbal communication
by a legislation. A legislation is not just a series of
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statements, such as one finds in a work of fiction/non
fiction or even in a judgment of a court of law. There is
a technique required to draft a legislation as well as to
understand a legislation. Former technique is known as
legislative drafting and latter one is to be found in the
various principles of ‘Interpretation of Statutes’. Vis-àvis
ordinary prose, a legislation differs in its
provenance, lay-out and features as also in the
implication as to its meaning that arise by presumptions
as to the intent of the maker thereof.
28. Of the various rules guiding how a legislation has to
be interpreted, one established rule is that unless a
contrary intention appears, a legislation is presumed not
to be intended to have a retrospective operation. The
idea behind the rule is that a current law should govern
current activities. Law passed today cannot apply to the
events of the past. If we do something today, we do it
keeping in view the law of today and in force and not
tomorrow’s backward adjustment of it. Our belief in the
nature of the law is founded on the bed rock that every
human being is entitled to arrange his affairs by relying
on the existing law and should not find that his plans
have been retrospectively upset. This principle of law is
known as lex prospicit non respicit: law looks forward
not backward. As was observed in Phillips v. Eyre
(1870) LR 6 QB 1, a retrospective legislation is contrary
to the general principle that legislation by which the
conduct of mankind is to be regulated when introduced
for the first time to deal with future acts ought not to
change the character of past transactions carried on
upon the faith of the then existing law.
29. The 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 the
decision reported in L’Office Cherifien des Phosphates v.
Yamashita-Shinnihon Steamship Co. Ltd. (1994) 1 AC
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486. 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.
In any case, we shall refer to few judgments containing
this dicta, a little later.
32. Let us sharpen the discussion a little more. We may
note that under certain circumstances, a particular
amendment can be treated as clarificatory or
declaratory in nature. Such statutory provisions are
labeled as “declaratory statutes”. The circumstances
under which a provision can be termed as “declaratory
statutes” is explained by Justice G.P. Singh in the
following manner:
“Declaratory statutes
The presumption against retrospective operation is not
applicable to declaratory statutes. As stated in CRAIES
and approved by the Supreme Court: “For modern
purposes a declaratory Act may be defined as an Act to
remove doubts existing as to the common law, or the
meaning or effect of any statute. Such Acts are usually
held to be retrospective. The usual reason for passing a
declaratory Act is to set aside what Parliament deems to
have been a judicial error, whether in the statement of
the common law or in the interpretation of statutes.
Usually, if not invariably, such an Act contains a
preamble, and also the word ‘declared’ as well as the
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word ‘enacted’. But the use of the words ‘it is declared’
is not conclusive that the Act is declaratory for these
words may, at times, be used to introduced new rules of
law and the Act in the latter case will only be amending
the law and will not necessarily be retrospective. In
determining, therefore, the nature of the Act, regard
must be had to the substance rather than to the form. If
a new Act is ‘to explain’ an earlier Act, it would be
without object unless construed retrospective. An
explanatory Act is generally passed to supply an obvious
omission or to clear up doubts as to the meaning of the
previous Act. It is well settled that if a statute is
curative or merely declaratory of the previous law
retrospective operation is generally intended. The
language ‘shall be deemed always to have meant’ is
declaratory, and is in plain terms retrospective. In the
absence of clear words indicating that the amending Act
is declaratory, it would not be so construed when the
pre-amended provision was clear and unambiguous. An
amending Act may be purely clarificatory to clear a
meaning of a provision of the principal Act which was
already implicit. A clarificatory amendment of this
nature will have retrospective effect and, therefore, if
the principal Act was existing law which the Constitution
came into force, the amending Act also will be part of
the existing law.
The above summing up is factually based on the
judgments of this Court as well as English decisions.
37. When we examine the insertion of proviso in Section
113 of the Act, keeping in view the aforesaid principles,
our irresistible conclusion is that the intention of the
legislature was to make it prospective in nature. This
proviso cannot be treated as declaratory/statutory or
curative in nature.
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42.2 Thus, it was a conscious decision of the
legislature, even when the legislature knew the
implication thereof and took note of the reasons which
led to the insertion of the proviso, that the amendment
is to operate prospectively. Learned Counsel appearing
for the Assessees sagaciously contrasted the aforesaid
stipulation while effecting amendment in Section 113 of
the Act, with various other provisions not only in the
same Finance Act but Finance Acts pertaining to other
years where the legislature specifically provided such
amendment to be either retrospective or clarificatory.
In so far as amendment to Section 113 is concerned,
there is no such language used and on the contrary,
specific stipulation is added making the provision
effective from 1st June, 2002.
44. Finance Act, 2003, again makes the position clear
that surcharge in respect of block assessment of
undisclosed income was made prospective. Such a
stipulation is contained in second proviso to Subsection
(3) of Section 2 of Finance Act, 2003. This
proviso reads as under:
“Provided further that the amount of incometax
computed in accordance with the
provisions of Section 113 shall be increased
by a surcharge for purposes of the Union as
provided in Paragraph A, B, C, D or E, as the
case may be, of Part III of the First Schedule
of the Finance Act of the year in which the
search is initiated Under Section 132 or
requisition is made Under Section 132A of
the income-tax Act.”
Addition of this proviso in the Finance Act, 2003 further
makes it clear that such a provision was necessary to
provide for surcharge in the cases of block assessments
and thereby making it prospective in nature. The charge
in respect of the surcharge, having been created for the
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first time by the insertion of the proviso to Section 113,
is clearly a substantive provision and hence is to be
construed prospective in operation. The amendment
neither purports to be merely clarificatory nor is there
any material to suggest that it was intended by
Parliament. Furthermore, an amendment made to a
taxing statute can be said to be intended to remove
‘hardships’ only of the Assessee, not of the Department.
On the contrary, imposing a retrospective levy on the
Assessee would have caused undue hardship and for
that reason Parliament specifically chose to make the
proviso effective from 1.6.2002.
37. In the case of Commissioner of Prakash and Ors. vs.
Phulavati and Ors. (supra), the Apex Court of the land, held thus:
17. The text of the amendment itself clearly provides
that the right conferred on a ‘daughter of a coparcener’
is ‘on and from the commencement of Hindu
Succession (Amendment) Act, 2005’. Section 6(3) talks
of death after the amendment for its applicability. In
view of plain language of the statute, there is no scope
for a different interpretation than the one suggested by
the text of the amendment. An amendment of a
substantive provision is always prospective unless
either expressly or by necessary intendment it is
retrospective Shyam Sunder v. Ram Kumar (2001) 8
SCC 24, Paras 22 to 27. In the present case, there is
neither any express provision for giving retrospective
effect to the amended provision nor necessary
intendment to that effect. Requirement of partition
being registered can have no application to statutory
notional partition on opening of succession as per
unamended provision, having regard to nature of such
partition which is by operation of law. The intent and
effect of the Amendment will be considered a little
later. On this finding, the view of the High Court cannot
be sustained.
18. Contention of the Respondents that the
Amendment should be read as retrospective being a
piece of social legislation cannot be accepted. Even a
social legislation cannot be given retrospective effect
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unless so provided for or so intended by the legislature.
In the present case, the legislature has expressly made
the Amendment applicable on and from its
commencement and only if death of the coparcener in
question is after the Amendment. Thus, no other
interpretation is possible in view of express language of
the statute. The proviso keeping dispositions or
alienations or partitions prior to 20th December, 2004
unaffected can also not lead to the inference that the
daughter could be a coparcener prior to the
commencement of the Act. The proviso only means
that the transactions not covered thereby will not affect
the extent of coparcenary property which may be
available when the main provision is applicable.
Similarly, Explanation has to be read harmoniously with
the substantive provision of Section 6(5) by being
limited to a transaction of partition effected after 20th
December, 2004. Notional partition, by its very nature,
is not covered either under proviso or under Subsection
5 or under the Explanation.
38. In the case of Sukhdev Singh vs. State of Haryana:
(supra), the Supreme Court, observed thus:
“Another Bench of this Court in the case of Jawahar
Singh @ Bhagat Ji. v. State of GNCT of Delhi (2009) 6
SCC 490], while dealing with the amendments of
Section 21 of the NDPS Act, the Court took the view
that amendments made by Act 9 of 2001 could not be
given retrospective effect as if it was so given, it would
warrant a retrial which is not the object of the Act. The
Court held as under:
“9. It is now beyond any doubt or dispute
that the quantum of punishment to be
inflicted on an accused upon recording a
judgment of conviction would be as per the
law which was prevailing at the relevant
time. As on the date of commission of the
offence and/or the date of conviction, there
was no distinction between a small
quantity and a commercial quantity,
question of infliction of a lesser sentence
by reason of the provisions of the
amending Act, in our considered opinion,
would not arise.
10. It is also a well-settled principle of law
that a substantive provision unless
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specifically provided for or otherwise
intended by Parliament should be held to
have a prospective operation. One of the
facets of the rule of law is also that all
statutes should be presumed to have a
prospective operation only.”
18. No law can be interpreted so as to frustrate the
very basic rule of law. It is a settled principle of
interpretation of criminal jurisprudence that the
provisions have to be strictly construed and cannot be
given a retrospective effect unless legislative intent and
expression is clear beyond ambiguity. The amendments
to criminal law would not intend that there should be
undue delay in disposal of criminal trials or there
should be retrial just because the law has changed.
Such an approach would be contrary to the doctrine of
finality as well as avoidance of delay in conclusion of
criminal trial.”
39. In the case of J.S. Yadav vs. State of U.P. and Ors.
(supra), the Supreme Court held thus:
24. The Legislature is competent to unilaterally alter
the service conditions of the employee and that can be
done with retrospective effect also, but the intention of
the Legislature to apply the amended provisions with
retrospective effect must be evident from the
Amendment Act itself expressly or by necessary
implication. The aforesaid power of the Legislature is
qualified further that such a unilateral alteration of
service conditions should be in conformity with legal
and constitutional provisions. Roshan Lal Tandon v.
Union of India and Ors. AIR 1967 SC 1889; State of
Mysore v. Krishna Murthy and Ors. AIR 1973 SC 1146;
Raj Kumar v. Union of India and Ors. AIR 1975 SC
1116; Ex-Capt. K.C. Arora and Anr. v. State of Haryana
and Ors. (1984) 3 SCC 281; and State of Gujarat and
Anr. v. Raman Lal Keshav Lal Soni and Ors. AIR 1984
SC 161.
25. In Union of India and Ors. v. Tushar Ranjan
Mohanty and Ors. (1994) 5 SCC 450, this Court
declared the amendment with retrospective operation
as ultra vires as it takes away the vested rights of the
Petitioners therein and thus, was unreasonable,
arbitrary and violative of Articles 14 and 16 of the
Constitution. While deciding the said case, this Court
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placed very heavy reliance on the judgment in P.D.
Aggarwal and Ors. v. State of U.P. and Ors.AIR 1987 SC
1676, wherein this Court has held as under:
“18. …the Government has power to make
retrospective amendments to the Rules but
if the Rules purport to take away the
vested rights and are arbitrary and not
reasonable then such retrospective
amendments are subject to judicial
scrutiny if they have infringed Articles 14
and 16 of the Constitution.”
40. In the case of Shakti Tubes Ltd. vs. State of Bihar and
Ors.:(supra), the Apex Court of the land observed thus:
“24. Generally, an Act should always be regarded as
prospective in nature unless the legislature has clearly
intended the provisions of the said Act to be made
applicable with retrospective effect.
“13. It is a cardinal principle of construction
that every statute is prima facie prospective
unless it is expressly or by necessary
implication made to have a retrospective
operation. The aforesaid rule in general is
applicable where the object of the statute is
to affect vested rights or to impose new
burdens or to impair existing obligations.
Unless there are words in the statute
sufficient to show the intention of the
legislature to affect existing rights, it is
deemed to be prospective only — “nova
Constitution futuris formam imponere debet
non praeteritis” — a new law ought to
regulate what is to follow, not the past.
(See Principles of Statutory Interpretation
by Justice G.P. Singh, 9th Edn., 2004 at p.
438.). It is not necessary that an express
provision be made to make a statute
retrospective and the presumption against
retrospectivity may be rebutted by
necessary implication especially in a case
where the new law is made to cure an
acknowledged evil for the benefit of the
community as a whole (ibid., p. 440).
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25. There is no dispute with regard to the fact that the
Act in question is a welfare legislation which was
enacted to protect the interest of the suppliers
especially suppliers of the nature of a small scale
industry. But, at the same time, the intention and the
purpose of the Act cannot be lost sight of and the Act in
question cannot be given a retrospective effect so long
as such an intention is not clearly made out and
derived from the Act itself.”
41. In the case of O. Konavalov vs. Commander, Coast
Guard Region and Ors.: (supra), the Supreme Court observed
thus:
“POWER TO CONFISCATE
30. The power to confiscate and the consequent
forfeiture of rights or interests are drastic, being penal
in nature. Statutes conferring such powers must be
read very strictly. There can be no exercise of power
under such statutes by way of extension or implication.
No expansive meaning can be given therefore to
Section 115 of the Customs Act merely from the
dictionary meaning the word absolute as has been done
by the Division Bench of the High Court.
42. In the case of M/S Pepsi Foods Ltd. and Ors. vs. Special
Judicial Magistrate and Ors.(supra), the Supreme Court held
thus:
“29. No doubt the magistrate can discharge the
accused at any stage of the trial if he considers the
charge to be groundless, but that does not mean that
the accused cannot approach the High Court under
Section 482 of the Code or Article 227 of the
Constitution to have the proceeding quashed against
him when the complaint does not make out any case
against him and still he must undergo the agony of a
criminal trial. It was submitted before us on behalf of
the State that in case we find that the High Court failed
to exercise its jurisdiction the matter should be
remanded back to it to consider if the complaint and
the evidence on record did not make out any case
against the appellants. If, however, we refer to the
impugned judgment of the High Court it has come to
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the conclusion, though without referring to any
material on record, that “in the present case it cannot
be said at this stage that the allegations in the
complaint are so absurd and inherently improbable on
the basis of which no prudent man can ever reach a
just conclusion that there exists no sufficient ground for
proceedings against the accused.” We do not think that
the High Court was correct in coming to such a
conclusion and in coming to that it has also foreclosed
the matter for the magistrate as well, as the magistrate
will not give any different conclusion on an application
filed under Section 245 of the Code. The High Court
says that the appellants could very well appear before
the court and move an application under Section
245(2) of the Code and that the magistrate could
discharge them if he found the charge to be groundless
and at the same time it has itself returned the finding
that there are sufficient grounds for proceeding against
the appellants. If we now refer to the facts of the case
before us it is clear to us that not only that allegations
against the appellants do not make out any case for an
offence under Section 7 of the Act and also that there
is no basis for the complainant to make such
allegations. The allegations in the complaint merely
show that the appellants have given their brand name
to “Residency Foods and Beverages Ltd.” for bottling
the beverage “Lehar Pepsi ‘. The complaint does not
show what is the role of the appellants in the
manufacture of the beverage which is said to be
adulterated. The only allegation is that the appellants
are the manufacturer of bottle. There is no averment as
to how the complainant could say so and also if the
appellants manufactured the alleged bottle or its
contents. His sole information is from A.K. Jain who is
impleaded as accused No. 3. The preliminary evidence
on which the 1st respondent relied in issuing summon
to the appellants also does not show as to how it could
be said that the appellants are manufacturers of either
the bottle or the beverage or both. There is another
aspect of the matter. The Central Government in the
exercise of their powers under Section 3 of the
Essential Commodities Act, 1955 made Fruit Products
Order, 1955 (for short, the “Fruit Order”). It is not
disputed that the beverage in the question is a “fruit
product” within the meaning of Clause (2)(b) of the
Fruit Order and that for the manufacture thereof
certain licence is required. The Fruit Order defines the
manufacturer and also sets out as to what the
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manufacturer is required to do in regard to the
packaging, marking and labelling of containers of fruit
products. One of such requirement is that when a
bottle is used in packing any fruit products, it shall be
so sealed that it cannot be opened without destroying
the licence number and the special identification mark
of the manufacturer to be displayed on the top or neck
of the bottle. The licence number of manufacturer shall
also be exhibited prominently on the side label on such
bottle [Clause (8) (1) (b) ]. Admittedly, the name of
the first appellant is not mentioned as a manufacturer
on the top cap of the bottle. It is not necessary to refer
in detail to other requirements of the Fruit Order and
the consequences of infringement of the Order and to
the penalty to which the manufacturer would be
exposed under the provisions of the Essential
Commodities Act, 1955. We may, however, note that in
The Hamdard Dawakhana .(WAKF) Delhi and Anr. v.
The Union of India and Ors.,[1965]2SCR192 , an
argument was raised that the Fruit Order was invalid
because its provision indicated that it was an Order
which could have been appropriately issued under the
Prevention of Food Adulteration Act, 1954. This Court
negatived this plea and said that the Fruit order was
validly issued under the Essential Commodities Act.
What we find in the present case is that there was
nothing on record to show if the appellants held the
licence for the manufacture of the offending beverage
and if, as noted above, the first appellant was the
manufacturer thereof.
29. It is no comfortable thought for the appellants to
be told that they could appear before the court which is
at a far off place in the Ghazipur in the State of Uttar
Pradesh, seek their release on bail and then to either
move an application under Section 245(2) of the Code
or to face trial when the complaint and the preliminary
evidence recorded makes out no case against them. It
is certainly one of those cases where there is an abuse
of the process of the law and the courts and the High
Court should not have shied away in exercising its
jurisdiction. Provisions of Articles 226 and 227 of the
Constitution and Section 482 of the Code are devised
to advance justice and not to frustrate it. In our view
High Court should not have adopted such a rigid
approach which certainly has led to miscarriage of
justice in the case. Power of judicial review is
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discretionary but this was a case where the High Court
should have exercised it.”
43. In the case of Collector of Central Excise, Ahmedabad vs.
Orient Fabrics Pvt. Ltd.: (supra) , the Apex Court of the land,
held thus:
“3. The Tribunal relying upon the decision in the case
of Pioneer Silk Mills Pvt. Ltd. v. Union of India,
reported in 1995(80)ELT507(Del) , allowed the
appeals, holding that the provisions of Central Excise
Act and the Rules made thereunder, so far as they
relate to confiscation cannot be made applicable for
the breach of provisions of the Act. It is against the
said judgment and order of the Tribunal, the appellant
is in appeal before us.
4. Mr. S.R. Bhat, learned counsel appearing for the
appellant, urged that the view taken by the Tribunal in
allowing the appeals was erroneous inasmuch as it is
contrary to the decisions in the case of Khema & Co.
(Agencies) Pvt. Ltd. v. State of Maharashtra, reported
in [1975]3SCR753 and Commissioner of Central Excise
v. Ashok Fashion Ltd., reported in
2002(141)ELT606(Guj).
5. In order to appreciate the issue, it is relevant to set
out the Sub-section (3) of Section 3 of the Act, as
applicable in this matter and which runs as under:
“SECTION 3: Levy and collection of
additional duties:
(1)..……………………………………………………
(2)………………………………………………………
(3) The provisions of the Central Excise and
Salt Act, 1944 and the rules made
thereunder including those relating to
refunds and exemptions from duty shall, so
far as may be apply in relation to the levy
and collection of the additional duties as
they apply in relation to the levy and
collection of duties as they apply in relation
to the levy and collection of the duties of
excise on the goods specified in Sub-section
(1).”
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6. A perusal of the said provision shows that the breach
of the provision of the Act has not been made penal or
an offence and no power has been given to confiscate
the goods. It only provides for application of the
procedural provisions of the Central Excise and Salt
Act, 1944 and the Rules made thereunder. It is no
longer res integra that when the breach of the
provisions of the Act is penal in nature or a penalty is
imposed by way of additional tax, the constitutional
mandate requires a clear authority of law for imposition
for the same. Article 265 of the Constitution provides
that no tax shall be levied or collected except by
authority of law. The authority has to be specific and
explicit and expressly provided. The Act created liability
for additional duty for excise, but created no liability for
any penalty. That being so, the confiscation
proceedings against the respondents were unwarranted
and without authority of law.
7. The Parliament by reason of Section 63(a) of the
Finance Act, 1994 (Act No. 32 of 1994) substituted
Sub-section (3) of Section 3 of the said Act, which now
reads as under:
“3. Levy and collection of Additional
Duties:-
(1)………………………………………………………..
(2)……………………………………………………….
(3) The provisions of the [Central Excise
Act, 1944] (1 of 1944), and the rules made
thereunder, including those relating to
refunds, exemptions from duty, offences
and penalties, shall, so far as may be,
apply in relation to the levy and collection
of the additional duties as they apply in
relation to the levy and collection of the
duties of excise on the goods specified in
Sub-section (1).”
19. It is now a well settled principles of law that
expropriatory legislation must be strictly construed (see
D.L.F. Qutab Enclave Complex Educational Charitable
Trust v. State of Haryana and Ors., reported in :
[2003]2SCR1 ). It is further trite that a penal statute
must receive strict construction.
20. The matter may be considered from another angle.
The Parliament by reason of the Amending Act 32 of
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1994 consciously brought in the expression offences
and penalties’ in Sub-section (3) of Section 3 of the
Act. The mischief rule, if applied, would clearly show
that such amendment was brought with a view to
remedy the defect contained in the unamended
provisions of Sub-section (3) of Section 3 of the Act.
Offences having regard to the provisions contained in
Article 20 of the Constitution of India cannot be given a
retrospective effect. In that view of the matter too Subsection
(3) of Section 3 of the Act as amended cannot
be said to have any application at all.
21. In view of the aforesaid decisions, it must be held
that the confiscation proceedings taken against the
respondents and the penalty imposed upon them were
totally without the authority of law and were rightly set
aside by the Tribunal.”
44. In the case of Suhas H. Pophale vs. Oriental Insurance
Co. Ltd. and its Estate Officer: (supra) , the Supreme Court,
held thus:
“45. It has been laid down by this Court time and again
that if there are rights created in favour of any person,
whether they are property rights or rights arising from
a transaction in the nature of a contract, and
particularly if they are protected under a statute, and if
they are to be taken away by any legislation, that
legislation will have to say so specifically by giving it a
retrospective effect. This is because prima facie every
legislation is prospective (see para 7 of the Constitution
Bench judgment in Janardan Reddy v. The State
reported in AIR 1951 SC 124). In the instant case, the
Appellant was undoubtedly protected as a ‘deemed
tenant’ under Section 15A of the Bombay Rent Act,
prior to the merger of the erstwhile insurance company
with a Government Company, and he could be removed
only by following the procedure available under the
Bombay Rent Act. A ‘deemed tenant’ under the Bombay
Rent Act, continued to be protected under the
succeeding Act, in view of the definition of a ‘tenant’
under Section 7(15)(a)(ii) of the Maharashtra Rent
Control Act, 1999. Thus, as far as the tenants of the
premises which are not covered under the Public
Premises Act are concerned, those tenants who were
deemed tenants under the Bombay Rent Act continued
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to have their protection under the Maharashtra Rent
Control Act, 1999. Should the coverage of their
premises under the Public Premises Act make a
difference to the tenants or occupants of such
premises, and if so, from which date?
46. It has been laid down by this Court through a
number of judgments rendered over the years, that a
legislation is not be given a retrospective effect unless
specifically provided for, and not beyond the period that
is provided therein. Thus, a Constitution Bench held in
Garkiapati Veeraya v. N. Subbiah Choudhry reported in
AIR 1957 SC 540 that in the absence of anything in the
enactment to show that it is to be retrospective, it
cannot be so constructed, as to have the effect of
altering the law applicable to a claim in litigation at the
time when the act was passed. In that matter, the
Court was concerned with the issue as to whether the
Appellant’s right to file an appeal continued to be
available to him for filing an appeal to the Andhra
Pradesh High Court after it was created from the
erstwhile Madras High Court. The Constitution Bench
held that the right very much survived, and the vested
right of appeal can be taken away only by a subsequent
enactment, if it so provides expressly or by necessary
intendment and not otherwise.
49. The same has been the view taken by a bench of
three Judges of this Court in J.P. Jani, Income Tax
Officer, Circle IV, Ward G, Ahmedabad v. Induprasad
Devshanker Bhatt reported in AIR 1969 SC 778 in the
context of a provision of the Income Tax Act, 1961, in
the matter of reopening of assessment orders. In that
matter the Court was concerned with the issue as to
whether the Income Tax Officer could re-open the
assessment under Section 297(2) (d)(ii) and 148 of the
Income Tax Act, 1961, although the right to re-open
was barred by that time under the earlier Income Tax
Act, 1922. This Court held that the same was
impermissible and observed in paragraph 5 as follows:
5……The reason is that such a construction
of Section 297(2)(d)(ii) would be
tantamount to giving of retrospective
operation to that section which is not
warranted either by the express language
of the section or by necessary implication.
The principle is based on the well-known
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rule of interpretation that unless the terms
of the statute expressly so provide or
unless there is a necessary implication,
retrospective operation should not be given
to the statute so as to affect, alter or
destroy any right already acquired or to
revive any remedy already lost by efflux of
time.
50. In Arjan Singh v. State of Punjab reported in AIR
1970 SC 703, this Court was concerned with the issue
of date of application of Section 32KK added into the
Pepsu Tenancy and Agricultural Lands Act, 1955. This
Court held in paragraph 4 thereof as follows:
4. It is a well-settled rule of construction
that no provision in a statute should be
given retrospective effect unless the
legislature by express terms or by
necessary implication has made it
retrospective and that where a provision is
made retrospective, care should be taken
not to extend its retrospective effect
beyond what was intended.
52. In the case of K.S. Paripoornan v. State of Kerala
reported in AIR 1995 SC 1012, a Constitution Bench of
this Court was concerned with the retrospective effect
of Section 23(1A) introduced in the Land Acquisition
Act. While dealing with this provision, this Court has
observed as follows:
64. A statute dealing with substantive
rights differs from a statute which relates
to procedure or evidence or is declaratory
in nature inasmuch as while a statute
dealing with substantive rights is prima
facie prospective unless it is expressly or
by necessary implication made to have
retrospective effect, a statute concerned
mainly with matters of procedure or
evidence or which is declaratory in nature
has to be construed as retrospective unless
there is a clear indication that such was not
the intention of the legislature. A statute is
regarded retrospective if it operates on
cases or facts coming into existence before
its commencement in the sense that it
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affects, even if for the future only, the
character or consequences of transactions
previously entered into or of other past
conduct. By virtue of the presumption
against retrospective applicability of laws
dealing with substantive rights transactions
are neither invalidated by reason of their
failure to comply with formal requirements
subsequently imposed, nor open to attack
under powers of avoidance subsequently
conferred. They are also not rendered valid
by subsequent relaxations of the law,
whether relating to form or to substance.
Similarly, provisions in which a contrary
intention does not appear neither impose
new liabilities in respect of events taking
place before their commencement, nor
relieve persons from liabilities then
existing, and the view that existing
obligations were not intended to be
affected has been taken in varying degrees
even of provisions expressly prohibiting
proceedings. (See: Halsbury’s Laws of
England, 4th Edn. Vol. 44, paras 921, 922,
925 and 926).
54. Having noted the aforesaid observations, it is very
clear that in the facts of the present case, the
Appellant’s status as a deemed tenant was accepted
under the state enactment, and therefore he could not
be said to be in “unauthorised occupation”. His right
granted by the state enactment cannot be destroyed by
giving any retrospective application to the provisions of
Public Premises Act, since there is no such express
provision in the statute, nor is it warranted by any
implication. In fact his premises would not come within
the ambit of the Public Premises Act, until they
belonged to the Respondent No. 1, i.e. until 1.1.1974.
The corollary is that if the Respondent No. 1 wanted to
evict the Appellant, the remedy was to resort to the
procedure available under the Bombay Rent Act or its
successor Maharashtra Rent Control Act, by
approaching the forum thereunder, and not by resorting
to the provisions of the Public Premises Act.”
45. In the case of State of Punjab and Ors. vs. Bhajan Kaur
and Ors.: (supra) , the Apex Court of the land, held thus:
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“9. A statute is presumed to be prospective unless held
to be retrospective, either expressly or by necessary
implication. A substantive law is presumed to be
prospective. It is one of the facets of rule of law.
10. Section 92-A of the 1939 Act created a right and a
liability on the owner of the vehicle. It is a statutory
liability. Per se it is not a tortuous liability.
Where a right is created by an enactment, in absence
of a clear provision in the statute, it is not to be applied
retrospectively.
13. No reason has been assigned as to why the 1988
Act should be held to be retrospective in character. The
rights and liabilities of the parties are determined when
cause of action for filing the claim petition arises. As
indicated hereinbefore, the liability under the Act is a
statutory liability. The liability could, thus, be made
retrospective only by reason of a statute or statutory
rules. It was required to be so stated expressly by the
Parliament. Applying the principles of interpretation of
statute, the 1988 Act cannot be given retrospective
effect, more particularly, when it came into force on or
about 1.07.1989.
17. In Garikapati v. Subbaiah Chowdhary
[1957]1SCR488 , the law is stated, thus:
25…The golden rule of construction is that,
in the absence of anything in the
enactment to show that it is to have
retrospective operation, it cannot be so
construed as to have the effect of altering
the law applicable to a claim in litigation at
the time when the Act was passed.…
23. In Madishetti Bala Ramul (D) by LRs. v. The Land
Acquisition Officer: (2007)9SCC650 , this Court
observed:
“19. In Land Acquisition Officer-cum-
DSWO, A.P. v. B.V. Reddy and Sons this
Court opined that Section 25 being not a
procedural provision will have no
retrospective effect, holding:
6. Coming to the second question, it is a
well- settled principle of construction that a
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substantive provision cannot be
retrospective in nature unless the provision
itself indicates the same. The amended
provision of Section 25 nowhere indicates
that the same would have any retrospective
effect. Consequently, therefore, it would
apply to all acquisitions made subsequent to
24-9-1984, the date on which Act 68 of
1984 came into force. The Land Acquisition
(Amendment) Bill of 1982 was introduced in
Parliament on 30- 4-1982 and came into
operation with effect from 24-9-1984….
27. For the reasons aforementioned, the decisions of
Kerala and Punjab & Haryana High Court do not lay
down a good law. They are overruled accordingly.
However, as the State has not asked for any relief
against the respondents, this appeal is dismissed. No
costs.
46. In the case of Joseph Isharat vs. Rozy Nishikant
Gaikwad:(supra), the Bombay High Court, held thus:
“4. Under the Benami Act, as it stood on the date of the
suit as well as on the date of filing of written statement
and passing of the decree by the courts below,
provided for the definition of a “benami transaction”
under clause (a) of Section 2. Under that provision, any
transaction in which property is transferred to one
person for consideration paid or provided by another
came within the definition of “benami transaction”.
Section 3 of the Benami Act, in sub-section (1),
provided that no person shall enter into any benami
transaction. Sub-section (2) contained two exceptions
to the prohibition contained in sub-section (1). The first
exception, contained in clause (a) of sub-section (2),
was in respect of purchase of property by any person in
the name of his wife or unmarried daughter. In the
case of such purchase, it was to be presumed, unless
the contrary was proved, that the property was
purchased for the benefit of the wife or unmarried
daughter, as the case may be. Simultaneously, Section
4 of the Benami Act contained a prohibition in respect
of right to recover property held benami. Sub-section
(1) provided that no suit, claim or action to enforce any
right in respect of any property held benami against
the person in whose name the property is held, or
against any other person, shall lie by or on behalf of a
person claiming to be the real owner of such property.
Sub-section (2) made provisions likewise in respect of a
defence based on a plea of benami transaction. Sub-
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section (2) provided that no defence based on any right
in respect of any property held benami, whether
against the person in whose name the property is held
or against any other person, shall be allowed in any
suit, claim or action by or on behalf of a person
claiming to be the real owner of such property. There
was a twofold exception to this restriction. First was in
respect of the person in whose name the property is
held being a coparcener in a Hindu undivided family
and the property being held for the benefit of the
coparceners of the family. The second exception was in
respect of the person, in whose name the property was
held, being a trustee or other person standing in a
fiduciary capacity and the property being held for the
benefit of another person for whom he was such
trustee or towards whom he stood in such capacity. The
present suit was filed when these provisions were in
operation. These provisions continued to apply even
when the written statement was filed by the Defendant
and the suit was heard and decreed by both the courts
below. The legal provisions continued to apply even
when the second appeal was filed before this court. It
is only now during the pendency of the second appeal,
when it has come up for final hearing, that there is a
change in law. The Benami Act has been amended by
the Parliament in 2016 with the passing of the Benami
Transactions (Prohibition) Amendment Act, 2016. This
amendment has come into effect from 01 November
2016. In the Amended Act the definition of “benami
transaction” has undergone a change. Under the
Amended Act “benami transaction” means (under
Section 2(9) of the Act) 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; and the property is held for the immediate or
future benefit, direct or indirect, of the person who has
provided the consideration. There are four exceptions
to this rule. The first is in respect of a karta or a
member of a Hindu undivided family holding the
property for the benefit of the family. The second
exception is in respect of a person standing in a
fiduciary capacity holding the property for the benefit of
another person towards whom he stands in such
capacity. The third exception is in the case of an
individual who purchases the property in the name of
his spouse or child, the consideration being provided or
paid out of the known sources of the individual. The
fourth exception is in the case of purchase of property
in the name of brother or sister or lineal ascendant or
descendant where the names of such brother or sister
or lineal ascendant or descendant, as the case may be,
and the individual appear as joint owners in any
document. Sub-section (1) of Section 3 contains the
very same prohibition as under the unamended Act, in
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that it prohibits all benami transactions. Section 4
likewise prohibits suits, claims or actions or defences
based on the plea of benami as in the case of the
unamended Act. The submission is that under this
scheme of law, step-daughter not having been defined
under the Benami Act, but having been defined under
the Income Tax Act, 1961, by virtue of sub-section (31)
of Section 2 of the amended Benami Act, the meaning
of the expression will be the one assigned to it under
the Income Tax Act. The definition of daughter under
the Income Tax Act admits of a step-child within it. It is
submitted that under the amended definition of
“benami transaction”, thus, there is a clear exception in
respect of a purchase made in the name of a stepdaughter
by an individual provided, of course, the
consideration has been provided or paid out of known
sources of the individual.
7. What is crucial here is, in the first place, whether the
change effected by the legislature in the Benami Act is
a matter of procedure or is it a matter of substantial
rights between the parties. If it is merely a procedural
law, then, of course, procedure applicable as on the
date of hearing may be relevant. If, on the other hand,
it is a matter of substantive rights, then prima facie it
will only have a prospective application unless the
amended law speaks in a language “which expressly or
by clear intention, takes in even pending matters.”.
Short of such intendment, the law shall be applied
prospectively and not retrospectively.
8. As held by the Supreme Court in the case of R.
Rajagopal Reddy v. Padmini Chandrasekharan (1995) 2
SCC 630, Section 4 of the Benami Act, or for that
matter, the Benami Act as a whole, creates substantive
rights in favour of benamidars and destroys substantive
rights of real owners who are parties to such
transaction and for whom new liabilities are created
under the Act. Merely because it uses the word “it is
declared”, the Act is not a piece of declaratory or
curative legislation. If one has regard to the substance
of the law rather than to its form, it is quite clear, as
noted by the Supreme Court in R. Rajagopal Reddy,
that the Benami Act affects substantive rights and
cannot be regarded as having a retrospective
operation. The Supreme Court in R. Rajagopal Reddy
also held that since the law nullifies the defences
available to the real owners in recovering the properties
held benami, the law must apply irrespective of the
time of the benami transaction and that the expression
“shall lie” in Section 4(1) or “shall be allowed” in
Section 4(2) are prospective and apply to the present
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(future stages) as well as future suits, claims and
actions only. These observations clearly hold the field
even as regards the present amendment to the Benami
Act. The amendments introduced by the Legislature
affect substantive rights of the parties and must be
applied prospectively.”
47. In the case of Jeans Knit (P) Ltd. vs. Deputy Commissioner
of Income Tax and Ors (supra), the Supreme Court, held thus:
“2. We may make it clear that this Court has not made
any observations on the merits of the cases, i.e. the
contentions which are raised by the Appellant
challenging the move of the IT authorities to reopen
the assessment. Each case shall be examined on its
own merits keeping in view the scope of judicial review
while entertaining such matters, as laid down by this
Court in various judgments.
3. We are conscious of the fact that the High Court has
referred to the judgment of this Court in CIT v. Chhabil
Dass Agarwal (2013) 261 CTR (SC) 113 : (2013) 91
DTR (SC) 193 : (2013) 357 ITR 357 (SC). We find that
the principle laid down in the said case does not apply
to these cases.
4. During the pendency of these appeals, stay of
reassessment was granted, which shall continue till the
disposal of the writ petitions before the High Courts.
The appeals are allowed in the aforesaid terms.
48. In the case of Raza Textiles Ltd. vs. Income Tax Officer,
Rampur:(supra), the Apex Court of the land, observed thus:
3. There was material before him on this question. He
had jurisdiction to decide the question either way. It
cannot be said that the officer assumed jurisdiction by
wrong decision on this question of residence”. The
Appellate Bench appears to have been under the
impression that the Income-tax Officer was the sole
judge of the fact whether the firm in question was
resident or non-resident. This conclusion, in our
opinion, is wholly wrong. No authority, much less a
quasi-judicial authority, can confer jurisdiction on itself
by deciding a jurisdictional fact wrongly The question
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whether the jurisdictional fact has been rightly decided
or not is a question that is open for examination by the
High Court in an application for a writ of certiorari. If
the High Court comes to the conclusion, as the learned
single Judge has done in this case, that the Income-tax
Officer had clutched at the jurisdiction by deciding a
jurisdictional fact erroneously, then the assesses was
entitled for the writ of certiorari prayed for by him. It is
incomprehensible to think that a quasi-judicial
authority like the Income-tax Officer can erroneously
decide a jurisdictional fact and thereafter proceed to
impose a levy on a citizen. In our opinion the Appellate
Bench is wholly wrong in opining that the Income-tax
Officer can “decide either way”.
49. In the case of Malayala Manorama Co. Ltd vs Assistant
Commissioner, Commercial Taxes, (supra), it has been held
thus:
“4. The Assistant Commissioner, Commercial Tax, who
had issued the notice, came to the conclusion that the
concession has been extended to non-taxable goods
also and formed an opinion that the concession is
applicable only to `goods’ and newspaper was not a
`goods’ within the meaning of Section 2 of the Act.
While referring to another judgment of this Court
in Collector of Central Excise v. Ballarpur Industries Ltd.
[(1989) 4 SCC 566 : (1990) 77 Sales Tax Cases 282],
the said Assistant Commissioner concluded that
newspaper was not a `goods’ and, therefore, the
declaration was not appropriate and imposed a penalty
of Rs. 14,66,256 for the year 2000-2001.
5. The assessee firm did not take recourse to the
statutory remedies available under the Act but
questioned the very correctness and legality of the
issuance of the notice as well as the order passed by
the Assistant Commissioner before the High Court of
Kerala at Ernakulam, by filing a writ petition
under Article 226 of the Constitution of India.
6. This writ petition was contested by the Department
which filed detailed counter affidavit. It was specifically
pleaded by the Department that for availability of
statutory alternative remedy as well as for other
reasons and facts stated in the reply, the writ petition
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itself was not maintainable. The Division Bench of the
High Court while considering this primary objection
raised by the Department before the High Court, came
to the conclusion that as the facts were not in dispute
and questions raised were purely legal and are to be
tested in view of the judgment of this Court in the case
of Printers (Mysore) Ltd. v. Assistant Commercial Tax Officer [(1994)
93 Sales Tax Cases 95 : (1994) 2 SCC 434], Whirlpool
Corporation v. Registrar of Trade Marks [(1998) 8
SCC 1] as well as the judgment in the case of State of
H.P. & Ors. v. Gujarat Ambuja Cements Ltd. [(2005) 6
SCC 499 : (2005) 142 Sales Tax Cases 1], the writ
petition was maintainable. However, while laying
emphasis that the newspaper would not fall within the
expression `goods’ under sub-section 3 of Section 5 of
the Act, the High Court held that the notice issued was
proper as Form No. 18 which gives benefit of
concessional rate of tax was factually not correct. While
dismissing the writ petition, however, the Bench issued
a direction to the assessing authority to examine
whether the imposition of penalty at double the rate is
justified in the facts and circumstances of the case,
within a period of two months from the date of receipt
of the copy of the judgment. It is this judgment of the
High Court which has been assailed in the present
appeal under Article 136 of the Constitution of India.
9. Having heard the learned senior counsel appearing
for the parties, we are of the considered view that the
order under challenge requires interference by this
Court. There is no dispute to the fact that the material
amendments were carried out in the provisions
of Section 5(3) of the Act with effect from 01.04.2002.
The existing 1st proviso to Section 5(3)(i) was deleted
as well as the expression `or uses the same in the
manufacture of any goods which are not liable to tax in
this Act’ in Section 5(3)(i) was also deleted. Despite
these amendments, as it appears from the record
before the Court, format of Form No. 18 has not been
amended consequently. However, the fact of the matter
remains that the High Court has not dwelt upon these
legal issues which are the core issues involved in the
present case. In our view, the discussion on the first
issue would certainly have some bearing on the
alternative argument raised on behalf of the appellant
before us. Thus, it may not be possible for this Court to
sustain the finding recorded by the High Court in that
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regard. Of course, we are not ruling out all the
possibilities of the High Court arriving at the same
conclusion if it is of that view after examining the
amendments as well as the submissions made on
behalf of the appellant with regard to its alternative
submissions. In light of this discussion, we pass the
following order :
(a) The impugned order dated 2nd August, 2006
passed by the High Court is hereby set aside.
(b) The matter is remanded to the High Court for
consideration afresh in accordance with law on both the
aforesaid submissions while leaving all the contentions
of the assessee and the Department open for the year
2000- 2001, in relation to imposition of penalty
under Section 45 (A) of the Act.
(c) The legality and validity or otherwise of the notice
dated 16.01.2006 and 17.01.2006 shall be subject to
the final decision of the High Court.”
50. In the case of K.T. Plantation Pvt. Ltd. and Ors. vs. State
of Karnataka, (supra), the Supreme Court observed thus:
“110. Article 300A proclaims that no person can be
deprived of his property save by authority of law,
meaning thereby that a person cannot be deprived of
his property merely by an executive fiat, without any
specific legal authority or without the support of law
made by a competent legislature. The expression
‘Property’ in Article 300A confined not to land alone, it
includes intangibles like copyrights and other
intellectual property and embraces every possible
interest recognised by law. This Court in State of W.B.
and Ors. v. Vishnunarayan and Associates (P) Ltd and
Anr. MANU/SC/0199/2002 : (2002) 4 SCC 134, while
examining the provisions of the West Bengal Great
Eastern Hotel (Acquisition of Undertaking) Act, 1980,
held in the context of Article 300A that the State or
executive offices cannot interfere with the right of
others unless they can point out the specific provisions
of law which authorises their rights. Article 300A,
therefore, protects private property against executive
action. But the question that looms large is as to what
extent their rights will be protected when they are
sought to be illegally deprived of their properties on
the strength of a legislation. Further, it was also
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argued that the twin requirements of ‘public purpose’
and ‘compensation’ in case of deprivation of property
are inherent and essential elements or ingredients, or
“inseparable concomitants” of the power of eminent
domain and, therefore, of entry 42, List III, as well
and, hence, would apply when the validity of a statute
is in question. On the other hand, it was the
contention of the State that since the Constitution
consciously omitted Article 19(1)(f), Articles 31(1) and
31(2), the intention of the Parliament was to do away
the doctrine of eminent domain which highlights the
principles of public purpose and compensation.
111. Seervai in his celebrated book ‘Constitutional Law
of India’ (Edn. IV), spent a whole Chapter XIV on the
44th Amendment, while dealing with Article 300A. In
paragraph 15.2 (pages 1157-1158) the author opined
that confiscation of property of innocent people for the
benefit of private persons is a kind of confiscation
unknown to our law and whatever meaning the word
“acquisition” may have does not cover “confiscation”
for, to confiscate means “to appropriate to the public
treasury (by way of penalty)”. Consequently, the law
taking private property for a public purpose without
compensation would fall outside Entry 42 List III and
cannot be supported by another Entry in List III.
Requirements of a public purpose and the payment of
compensation according to the learned author be read
into Entry 42 List III. Further the learned author has
also opined that the repeal of Article 19(1)(f) and 31(2)
could have repercussions on other fundamental rights
or other provisions which are to be regarded as part of
the basic structure and also stated that notwithstanding
the repeal of Article 31(2), the word “compensation” or
the concept thereof is still retained in Article 30(1A)
and in the second proviso to Article 31A(1) meaning
thereby that payment of compensation is a condition of
legislative power in Entry 42 List III.
51. In the case of Mangathai Ammal (Died) through L.Rs.
and Ors. vs. Rajeswari and Ors. (supra), it has been held
thus:
“12. It is required to be noted that the benami
transaction came to be amended in the year 2016. As
per Section 3 of the Benami Transaction (Prohibition)
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Act 1988, there was a presumption that the transaction
made in the name of the wife and children is for their
benefit. By Benami Amendment Act, 2016, Section 3(2)
of the Benami Transaction Act, 1988 the statutory
presumption, which was rebuttable, has been omitted.
It is the case on behalf of the Respondents that
therefore in view of omission of Section 3(2) of the
Benami Transaction Act, the plea of statutory
transaction that the purchase made in the name of wife
or children is for their benefit would not be available in
the present case. Aforesaid cannot be accepted. As
held by this Court in the case of Binapani Paul (Supra)
the Benami Transaction (Prohibition) Act would not be
applicable retrospectively. Even otherwise and as
observed hereinabove, the Plaintiff has miserably failed
to discharge his onus to prove that the Sale Deeds
executed in favour of Defendant No. 1 were benami
transactions and the same properties were purchased
in the name of Defendant No. 1 by Narayanasamy
Mudaliar from the amount received by him from the
sale of other ancestral properties.
52. In the case of R. Rajagopal Reddy (Dead) by L.Rs. and
Ors. vs. Padmini Chandrasekharan (Dead) by L.Rs. (supra),
the Supreme Court held thus:
“A mere look at the above provisions shows that the
prohibition under Section 3(1) is against persons who
are to enter into benami transactions and it has laid
down that no person shall enter into any benami
transaction which obviously means from the date on
which this prohibition comes into operation i.e. with
effect from September 5, 1988. That takes care of
future benami transactions. We are not concerned with
Sub-section (2) but subsection (3) of Section 3 also
throws light on this aspect. As seen above, it states
that 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.
Therefore, the provision creates a new offence of
entering into such benami transactions.
It is made non-cognizable and bailable as laid down
under Sub-section (4). It is obvious that
when a statutory provision creates new liability and
new offence, it would naturally have prospective
operation and would cover only those offences which
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take place after Section 3(1) comes into operation.
In fact Saikia J. speaking for the Court in Mithilesh
Kumari’s case (supra) has in terms observed at page
635 of the report that Section 3 obviously cannot have
retrospective operation. We respectfully concur with
this part of the learned Judge’s view. The real problem
centers round the effect of Section 4(1) on pending
proceedings wherein claim to any property on account
of it being held benami by other side is on the anvil and
such proceeding had not been finally disposed of by the
time Section 4(1) came into operation, namely, on 19th
May, 1988. Saikia J. speaking for the Division Bench in
the case of Mithilesh Kumari (supra) gave the following
reasons for taking the view that though Section 3 is
prospective and though Section 4(1) is also not
expressly made retrospective, by the legislature, by
necessary implication, it appears to be retrospective
and would apply to all pending proceedings wherein
right to property allegedly held benami is in dispute
between parties and that Section 4(1) will apply at
whatever stage the litigation might be pending in the
hierarchy of the proceedings :-
(1)………………….
(2)………………….
(3) When an Act is declaratory in nature, the
presumption against retrospectivity is not applicable. A
statute declaring the benami transactions to be
unenforceable belongs to this type. The presumption
against taking away vested right will not apply in this
case in as much as under law it is the benamidar in
whose name the property stands, and law only enabled
the real owner to recover the property from him which
right has now been ceased by the Act. In one sense
there was a right to recover or resist in the real owner
against the benamidar. Ubi Jus ibi remedium. Where
the remedy is barred, the right is rendered
unenforceable.
(4) When the law nullifies the defences available to the
real owners in recovering the benami property from the
benamidar, the law must apply irrespective of the time
of the benami transactions. The expression “shall lie”
under Section 4(1) and “shall be allowed” in Section
4(2) are prospective and shall apply to present (future
stages) and future suits, claims or action only.
(5)……………………………..
(6) …………………………….
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11. Before we deal with these six considerations which
weighed with the Division Bench for taking the view
that Section 4 will apply retrospectively in the sense
that it will get telescoped into all pending proceedings,
howsoever earlier they might have been filed, if they
were pending at different stages in the hierarchy of the
proceedings even upto this Court, when Section 4 came
into operation, it would be apposite to recapitulate the
salient feature of the Act. As seen earlier, the preamble
of the Act itself states that it is an act to prohibit
benami transactions and the right to recover property
held benami, for matters connected therewith or
incidental thereto. Thus it was enacted to efface the
then existing rights of the real owners of properties
held by others benami. Such an act was not given any
retrospective effect by the legislature. Even when we
come to Section 4, it is easy to visualise that Subsection
(1). of Section 4 states that no suit, claim or
action to enforce any right in respect of any property
held benami against the person in whose name the
property is held or against any other shall lie by or on
behalf of a person claiming to be the real owner of such
property. As per Section 4(1) no such suit shall
thenceforth lie to recover the possession of the
property held benami by the defendant. Plaintiffs right
to that effect is sought to be taken away and any suit
to enforce such a right after coming into operation of
Section 4(1) that is 19th May, 1988, shall not lie. The
legislature in its wisdom has nowhere provided in
Section 4(1) that no such suit, claim or action pending
on the date when Section 4 came into force shall not be
proceeded with and shall stand abated. On the
contrary, clear legislative intention is seen from the
words “no such claim, suit or action shall lie”, meaning
thereby no such suit, claim or action shall be permitted
to be filed or entertained or admitted to the portals of
any Court for seeking such a relief after coming into
force of Section 4(1). In Collins English Dictionary,
1979 Edition as reprinted subsequently, the word ‘lie’
has been defined in connection with suits and
proceedings. At page 848 of the Dictionary while
dealing with topic No. 9 under the definition of term ‘lie’
it is stated as under :-
“For an action, claim appeal ect. to subsist; be
maintainable or admissible.”
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The word ‘lie’ in connection with the suit, claim or
action is not defined by the Act. If we go by the
aforesaid dictionary meaning it would mean that such
suit, claim or action to get any property declared
benami will not be admitted on behalf of such plaintiff
or applicant against the concerned defendant in whose
name the property is held on and from the date on
which this prohibition against entertaining of such suits
comes into force. With respect, the view taken by that
Section 4(1) would apply even to such pending suits
which were already filed and entertained prior to the
date when the Section came into force and which has
the effect of destroying the then existing right of
plaintiff in connection with the suit property cannot be
sustained in the face of the clear language of Section
4(1). It has to be visualised that the legislature in its
wisdom has not expressly made Section 4
retrospective. Then to imply by necessary implication
that Section 4 would have retrospective effect and
would cover pending litigations filed prior to coming
into force of the Section would amount to taking a view
which would run counter to the legislative scheme and
intent projected by various provisions of the Act to
which we have referred earlier. It is, however, true as
held by the Division Bench that on the express
language of Section 4(1) any right inhering in the real
owner in respect of any property held benami would
get effaced once Section 4(1) operated, even if such
transaction had been entered into prior to the coming
into operation of Section 4(1), and hence-after Section
4(1) applied no suit can lie in respect to such a past
benami transaction. To that extent the Section may be
retroactive. To highlight this aspect we may take an
illustration. If a benami transaction has taken place in
1980 and suit is filed in June 1988 by the plaintiff
claiming that he is the real owner of the property and
defendant is merely a benamidar and the consideration
has flown from him then such a suit would not lie on
account of the provisions of Section 4(1). Bar against
filing, entertaining and admission of such suits would
have become operative by June, 1988 and to that
extent Section 4(1) would take in its sweep even past
benami transactions which are sought to be litigated
upon after coming into force of the prohibitory
provision of Section 4(1); but that is the only effect of
the retroactivity of Section 4(1) and nothing more than
that. From the conclusion that Section 4(1) shall apply
even to past benami transactions to the aforesaid
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extent, the next step taken by the Division Bench that
therefore, the then existing rights got destroyed and
even though suits by real owners were filed prior to
coming into operation of Section 4(1) they would not
survive, does not logically follow.
“17. As regards, reason No. 3, we are of the
considered view that the Act cannot be treated to
be declaratory in nature.
Declaratory enactment declares and clarifies the
real intention of the legislature in connection
with an earlier existing transaction or enactment,
it does not create new rights or obligations.
On the express language of Section 3, the Act
cannot be said to be declaratory but in substance
it is prohibitory in nature and seeks to destroy
the rights of the real owner qua properties held
benami and in this connection it has taken away
the right of the real owner both for filing a suit or
for taking such a defence in a suit by benamidar.
Such an Act which prohibits benami transactions
and destroys rights flowing from such
transactions as existing earlier is really not a
declaratory enactment. With respect, we disagree
with the line of reasoning which commanded to
the Division Bench. In this connection, we may
refer to the following observations in ‘Principles
of Statutory Interpretation’, 5th Edition 1992, by
Shri G.P. Singh, at page 315 under the caption
‘Declaratory statutes’ :-
The presumption against retrospective operation
is not applicable to declaratory statutes. As states
in CRAIES and approved by the Supreme Court :
“For modern purposes a declaratory Act may be
defined as an Act to remove doubts existing as to
the common law, or the meaning or effect of any
statute. Such Acts are usually held to be
retrospective. The usual reason for passing a
declaratory Act is to set aside what Parliament
deems to have been a judicial error whether in
the statement of the common law or in the
interpretation of statutes. Usually, if not
invariably, such an Act contains a preamble, and
also the word ‘declared’ as well as the word
enacted”. But the use of the words ‘it is declared’
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is not conclusive that the Act is declaratory for
these words may, at times be used to introduce
new rules of law and the Act in the latter case will
only be amending the law and will not necessarily
be retrospective. In determining, therefore, the
nature of the Act, regard must be had to the
substance rather than to the form. If a new Act is
to explain an earlier Act, it would be without
object unless construed retrospective. An
explanatory Act is generally passed to supply an
obvious omission or to clear up doubts as to the
meaning of the previous Act. It is well settled
that if a statute is curative or merely declaratory
of the previous law retrospective operation is
generally intended. The language ‘shall be
deemed always to have meant’ is declaratory,
and is in plain terms retrospective. In the
absence of clear words indicating that the
amending Act is declaratory, it would not be so
construed when the pre-amended provision was
clear and unambiguous. An amending Act may be
purely clarificatory to clear a meaning of a
provision of the principal Act which was already
implicit. A clarificatory amendment of this nature
will have retrospective effect and, therefore, if
the principal Act was existing law when the
constitution came into force the amending Act
also will be part of the existing law.
In Mithilesh Kumari v. Prem Bihari Khare, Section
4 of the Benami Transactions (Prohibition) Act,
1988 was, it is submitted, wrongly held to be an
Act declaratory in nature for it was not passed to
clear any doubt existing as to the common law or
the meaning or effect of any statute. The
conclusion however, that Section 4 applied also
to past benami transactions may be supportable
on the language used in the section.
18. No exception can be taken to the aforesaid
observations of learned author which in our view
can certainly be pressed in service for judging
whether the impugned section is declaratory in
nature or not. Accordingly it must be held that
Section 4 or for that matter the Act as a whole is
not a piece of declaratory or curative legislation.
It creates substantive rights in favour of
benamidars and destroys substantive rights of
real owners
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who are parties to such transactions and for
whom new liabilities are created by the Act.”
53. In the case of Garikapatti Veeraya Vs. N. Subbiah
Choudhury, AIR 1957 SC 540, the Supreme Court observed thus:
25. In construing the articles of the Constitution we
must bear in mind certain cardinal rules of
construction. It has been said in Hough v. Windus
[1884] 12 Q.B.D. 224, that “statutes should be
interpreted, if possible, so as to respect vested right.”
The golden rule of construction is that, in the absence
of anything in the enactment to show that it is to have
retrospective operation, it cannot be so construed as to
have the effect of altering the law applicable to a claim
in litigation at the time when the Act was passed
[Leeds and County Bank Ltd. v. Walker (1883) 11
Q.B.D. 84; Moon v. Durden (1848) 2 Ex. 22; 76 R.R.
479. The following observation of Rankin C.J. in Sadar
Ali v. Dalimuddin (supra) at page 520 is also apposite
and helpful : “Unless the contrary can be shown the
provision which takes away the jurisdiction is itself
subject to the implied saving of the litigant’s right.” In
Janardan Reddy v. The State [1950]1SCR940 Kania C.J.
in delivering the judgment of the Court observed that
our Constitution is generally speaking prospective in its
operation and is not to have retroactive operation in
the absence of any express provision to that effect. The
same principle was reiterated in Keshavan Madhava
Menon v. The State of Bombay 1951CriLJ680 and
finally in Dajisaheb Mane and Others v. Shankar Rao
Vithal Rao [1955]2SCR872 to which reference will be
made in greater detail hereafter.
54. In the case of Keshavan Madhava Menon vs. The State
of Bombay, (supra), the Supreme Court held thus:
7. It will be noticed that all that this clause declares is
that all existing laws, in so far as they are inconsistent
with the provisions of Part III shall, to the extent of
such inconsistency, be void. Every statute is prima facie
prospective unless it is expressly or by necessary
implications made to have retrospective operation.
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There is no reason why this rule of interpretation
should not be applied for the purpose of interpreting
our Constitution. We find nothing in the language of
article 13(1) which may be read as indicating an
intention to give it retrospective operation. On the
contrary, the language clearly points the other way. The
provisions of Part III guarantee what are called
fundamental rights. Indeed, the heading of Part III is
“Fundamental Rights”. These rights are given, for the
first time, by and under our Constitution. Before the
Constitution came into force there was no such thing as
fundamental right.
What article 13(1) provides is that all existing laws
which clash with the exercise of the fundamental rights
(which are for the first time created by the
Constitution) shall to that extent be void.
As the fundamental rights became operative only on
and from the date of the Constitution the question of
the inconsistency of the existing laws with those rights
must necessarily arise on and from the date those
rights came into being. It must follow, therefore, that
article 13(1) can have no retrospective effect but is
wholly prospective in its operation. After this first point
is noted, it should further be seen that article 13(1)
does not in terms make the existing laws which are
inconsistent with the fundamental rights void ab initio
or for all purposes. On the contrary, it provides that all
existing laws, in so far as they are inconsistent with the
fundamental rights, shall be void to the extent of their
inconsistency.
They are not void for all purposes but they are void
only to the extent they come into conflict with the
fundamental rights. In other words, on and after the
commencement of the Constitution no existing law will
be permitted to stand in the way of the exercise of any
of the fundamental rights. Therefore, the voidness of
the existing law is limited to the future exercise of the
fundamental rights.
Article 13(1) cannot be read as obliterating the entire
operation of the inconsistent laws, or to wipe them out
altogether from the statute book, for to do so will be to
give them retrospective effect which, we have said,
they do not possess.
Such laws exist for all past transactions and for
enforcing all rights and liabilities accrued before the
date of the Constitution.
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Learned counsel for the appellant has drawn our
attention to articles 249(3), 250, 357, 358 and 369
where express provision has been made for saving
things done under the laws which expired. It will be
noticed that each of those articles was concerned with
expiry of temporary statutes. It is well known that on
the expiry of a temporary statute no further
proceedings can be taken under it, unless the statute
itself saved pending proceedings. If, therefore, an
offence had been committed under a temporary statute
and the proceedings were initiated but the offender had
not been prosecuted and punished before the expiry of
the statute, then, in the absence of any saving clause,
the pending prosecution could not be proceeded with
after the expiry of the statute by efflux of time. It was
on this principle that express provision was made in the
several articles noted above for saving things done or
omitted to be done under the expiring laws referred to
therein. As explained above, article 13(1) is entirely
prospective in its operation and as it was not intended
to have any retrospective effect there was no necessity
at all for inserting in that article any such saving
clause. The effect of article 13(1) is quite different from
the effect of the expiry of a temporary statute or the
repeal of a statute by a subsequent statute.
As already explained, article 13(1) only has the effect
of nullifying or rendering all inconsistent existing laws
ineffectual or nugatory and devoid of any legal force or
binding effect only with respect to the exercise of
fundamental rights on and after the date of the
commencement of the Constitution. It has no
retrospective effect and if, therefore, an act was done
before the commencement of the Constitution in
contravention of the provisions of any law which, after
the Constitution, becomes void with respect to the
exercise of any of the fundamental rights, the
inconsistent law is not wiped out so far as the past act
is concerned for, to say that it is, will be to give the law
retrospective effect.
There is no fundamental right that a person shall not
be prosecuted and punished for an offence committed
before the Constitution came into force.
So far as the past acts are concerned the law exists,
notwithstanding that it does not exist with respect to
the future exercise of fundamental rights.
We, therefore, agree with the conclusion arrived at by
the High Court on the second question, although on
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different grounds. In view of that conclusion, we do not
consider it necessary to examine the reasons of the
High Court for its conclusion. In our opinion, therefore,
this appeal fails, and is dismissed.
19. A reference to the Constitution will show that the
framers thereof have used the word “repeal” wherever
necessary (see articles 252, 254, 357, 372 and 395).
They have also used such words as “invalid” (see
articles 245, 255 and 276), “cease to have effect” (see
articles 358 and 372), “shall be inoperative”, etc. They
have used the word “void” only in two articles, these
being article 13(1) and article 154, and both these
articles deal with cases where a certain law is
repugnant to another law to which greater sanctity is
attached. It further appears that where they wanted to
save things done or omitted to be done under the
existing law, they have used apt language for the
purpose; see for example articles 249, 250, 357, 358
and 369. The thoroughness and precision which the
framers of the Constitution have observed in the
matters to which reference has been made, disinclines
me to read into article 13(1) a saving provision of the
kind which we are asked to read into it.
Nor can I be persuaded to hold that treating an Act as
void under article 13(1) should have a milder effect
upon transactions not past and closed than the repeal
of an Act or its expiry in due course of time. In my
opinion, the strong sense in which the word “void” is
normally used and the context in which it has been
used are not to be completely ignored. Evidently, the
framers of the Constitution did not approve of the laws
which are in conflict with the fundamental rights, and,
in my judgment, it would not be giving full effect to
their intention to hold that even after the Constitution
has come into force, the laws which are inconsistent
with the fundamental rights will continue to be treated
as good and effectual laws in regard to certain matters,
as if the Constitution had never been passed. How such
a meaning can be read into the words used in article
13(1), it is difficult for me to understand. There can be
no doubt that article 13(1) will have no retrospective
operation, and transactions which are past and closed,
and rights which have already vested, will remain
untouched. But with regard to inchoate matters which
were still not determined when the Constitution came
into force, and as regards proceedings whether not yet
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begun, or pending at the time of enforcement of the
Constitution and not yet prosecuted to a final
judgment, the very serious question arises as to
whether a law which has been declared by the
Constitution to be completely ineffectual can yet be
applied. On principle and on good authority, the answer
to this question would appear to me to be that the law
having ceased to be effectual can no longer be applied.
In R. v. Mawgan (Inhabitants) (1888) 8 A. & E. 496 a
presentment as to the non-repair of a highway had
been made under 13 Geo. 3, c. 78, s. 24, but before
the case came on to be tried, the Act was repealed. In
that case, Lord Denman C.J. said :
“If the question had related merely to the presentment,
that no doubt is complete. But dum loquimur, we have
lost the power of giving effect to anything that takes
place under that proceeding.”And Littledale J. added :
“I do not say that what is already done has become
bad, but that no more can be done.” In my opinion,
this is precisely the way in which we should deal with
the present case.
55. In the case of Thakur Bhim Singh (Dead) by Lrs and
Ors. vs. Thakur Kan Singh (1980) 3 SCC 72, the Supreme Court
held thus:
14. Under the English law, when real or personal
property is purchased in the name of a stranger, a
resulting trust will be presumed in favour of the person
who is proved to have paid the purchase money in the
character of the purchaser. It is, however, open to the
transferee to rebut that presumption by showing that
the intention of the person who contributed the
purchase money was that the transferee should himself
acquire the beneficial interest in the property. There is,
however, an exception to the above rule of presumption
made by the English law when the person who gets the
legal title under the conveyance is either a child or the
wife of the person who contributes the purchase money
or his grand child, whose father is dead. The rule
applicable in such cases is known as the doctrine of
advancement which requires the court to presume that
the purchase is for the benefit of the person in whose
favour the legal title is transferred even though the
purchase money may have been contributed by the
father or the husband or the grandfather, as the case
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may be, unless such presumption is rebutted by
evidence showing that it was the intention of the
person who paid the purchase money that the
transferee should not become the real owner of the
property in question. The doctrine of advancement is
not in vogue in India. The counterpart of the English
law of resulting trust referred to above is the Indian law
of benami transactions. Two kinds of benami
transactions are generally recognized in India. Where a
person buys a property with his own money but in the
name of another person without any intention to
benefit such other person, the transaction is called
benami. In that case, the transferee holds the property
for the benefit of the person who has contributed the
purchase money, and he is the real owner. The second
case which is loosely termed as a benami transaction is
a case where a person who is the owner of the property
executes a conveyance in favour of another without the
intention of transferring the title to the property
thereunder. In this case, the transferor continues to be
the real owner. The difference between the two kinds of
benami transactions referred to above lies in the fact
that whereas in the former case, there is an operative
transfer from the transferor to the transferee though
the transferee holds the property for the benefit of the
person who has contributed the purchase money, in the
latter case, there is no operative transfer at all and the
title rests with the transferor notwithstanding the
execution of the conveyance. One common feature,
however, in both these cases is that the real title is
divorced from the ostensible title and they are vested
in different persons. The question whether a
transaction is a benami transaction or not mainly
depends upon the intention of the person who has
contributed the purchase money in the former case and
upon the intention of the person who has executed the
conveyance in the latter case. The principle underlying
the former case is also statutorily recognized in Section
82 of the Indian Trusts Act, 1882 which provides that
where property is transferred to one person for a
consideration paid or provided by another person and it
appears that such other person did not intend to pay or
provide such consideration for the benefit of the
transferee, the transferee must hold the property for
the benefit of the person paying or providing the
consideration. This view is in accord with the following
observations made by this Court in Meenakshi Mills.
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Madurai v. The Commissioner of Income-Tax, Madras
[1956]1SCR691 .:
In this connection, it is necessary to note
that the word ‘benami’ is used to denote
two classes of transactions which differ
from each other in their legal character and
incidents. In one sense, it signifies a
transaction which is real, as for example
when A sells properties to B but the sale
deed mentions X as the purchaser. Here
the sale itself is genuine, but the real
purchaser is B, X being his benamidar. This
is the class of transactions which is usually
termed as benami. But the word ‘benami’
is also occasionally used, perhaps not quite
accurately, to refer to a sham transaction,
as for example, when A purports to sell his
property to B without intending that his
title should cease or pass to B. The
fundamental difference between these two
classes of transactions is that whereas in
the former there is an operative transfer
resulting in the vesting of title in the
transferee, in the latter there is none such,
the transferor continuing to retain the title
notwithstanding the execution of the
transfer deed. It is only in the former class
of cases that it would be necessary, when a
dispute arises as to whether the person
named in the deed is the real transferee or
B, to enquire into the question as to who
paid the consideration for the transfer, X or
B. But in the latter class of cases, when the
question is whether the transfer is genuine
or sham, the point for decision would be,
not who paid the consideration but whether
any consideration was paid.
The Buckingham and Carnatic Co.Ltd. vs. Venkatiah and Ors.
(supra)
10. Section 73 of the Act reads as under :
‘Employer not to dismiss or punish employee during
period of sickness, etc. –
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(1) No employer shall dismiss, discharge, or reduce or
otherwise punish an employee during the period the
employee is in receipt of sickness benefit or maternity
benefit, nor shall he, except as provided under the
regulations, dismiss, discharge or reduce or otherwise
punish an employee during the period he is in receipt of
disablement benefit for temporary disablement or is
under medical treatment for sickness or is absent from
work as a result of illness duly certified in accordance
with the regulations to arise out of the pregnancy or
confinement rendering the employee unfit for work.
(2) No notice of dismissal or discharge or reduction
given to an employee during the period specified in
sub-section (1) shall be valid or operative.”
Mr. Dolia contends that since this Act has been passed
for conferring certain benefits on employees in case of
sickness, maternity and employment injury, it is
necessary that the operative provisions of the Act
should receive a liberal and beneficent construction
from the court.
It is a piece of social legislation intended to confer
specified benefits on workmen to whom it applies, and
so, it would be inappropriate to attempt to construe the
relevant provisions in a technical or a narrow sense.
This position cannot be disputed. But in dealing with
the plea raised by Mr. Dolia that the section should be
liberally construed, we cannot overlook the fact that
the liberal construction must ultimately flow from the
words used in the section. If the words used in the
section are capable of two constructions one of which is
shown patently to assist the achievement of the object
of the Act, courts would be justified in preferring that
construction to the other which may not be able to
further the object of the Act.
But, on the other hand, if the words used in the section
are reasonably capable of only one construction and
are clearly intractable in regard to the construction for
which Mr. Dolia contends, the doctrine of liberal
construction can be of no assistance.
56. In the case of Sree Bank Ltd. vs. Sarkar Dutt Roy and Co.
(Supra), the Supreme Court observed thus:
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5. Two reasons have operated on my mind to lead me
to the conclusion that the general rule should not be
applied in the present case. First, it is recognised that
the general rule is not invariable and that it is a sound
principle in considering whether the intention was that
the general rule should not be applied, to “look to the
general scope and purview of the statute, and at the
remedy sought to be applied, and consider what was
the former state of the law and what it was that the
Legislature contemplated.” : see Pardo v. Bingham
(1869) L.R. 4 Ch. A. 735. Again in Craies on Statute
Law, 6th ed., it is stated at p. 395, “If a statute is
passed for the purpose of protecting the public against
some evil or abuse, it may be allowed to operate
retrospectively, although by such operation it will
deprive some person or persons of a vested right.” To
the same effect is the observation in Halsbury’s Laws of
England, 3rd ed., vol. 36 p. 425. This seems to me to
be plain commonsense. In ascertaining the intention of
the legislature it is certainly relevant to enquire what
the Act aimed to achieve. In Pardo v. Bingham
L.R(1869)Ch. A. 735 a statute which took away the
benefit of a longer period of limitation for a suit
provided by an earlier Act was held to have
retrospective operation as otherwise it would not have
any operation for fifty years or more in the case of
persons who were at the time of its passing residing
beyond the seas. It was thought that such an
extraordinary result could not have been intended. In
R. v. Vine (1875) 10 Q.B. 195 the words “Every person
convicted of felony shall for ever be disqualified from
selling spirits by retail…. and if any person shall, after
having been so convicted, take out or have any licence
to sell spirits by retail, the same shall be void to all
intents and purposes” were applied to a person who
had been convicted of felony before the Act was passed
though by doing so vested rights were affected. Mellor
J. observed, (pp. 200-201). “It appears to me to be the
general object of this statute that there should be
restrains as to the persons who should be qualified to
hold licences, not as a punishment, but for the public
good, upon the ground of character… A man convicted
before the Act passed is quite as much tainted as a
man convicted after; and it appears to me not only the
possible but the natural interpretation of the section
that any one convicted of felony shall be ipso facto
disqualified, and the licenses, if granted, void.”
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8. If that is not the intention, then it is clear to me that
sub-s. (3) need not have been enacted at all for clearly
the first sub-section would by its own terms have
applied to cases of winding up on a petition presented
before the amending Act. It applies to all banking
companies being wound up and, therefore, also to such
companies as are being wound up on a petition
presented before that Act. It could be said that even
then the first sub-section would not have a
retrospective operation but would only apply
prospectively to a banking company being wound up on
a petition presented before the Act. This may be
illustrated by two cases. In R. v. St. Mary, Whitechapel
(Inhabitants) (1848) 12 Q.B. 120 Lord Denman C.J.
said that a statute “is not properly called a
retrospective statute because a part of the requisites
for its action is drawn from time antecedent to its
passing.” Again in Master Ladies Tailors Organisation v.
Minister of Labour and National Service (1950) 2 All.
F.R. 525 it was observed, “The fact that a prospective
benefit is in certain cases to be measured by or
depends on antecedent facts does not necessarily…
make the provision retrospective.”
57. In the case of Rai Bahadur Seth Shreeram Durgaprasad
vs. Director of Enforcement (supra), the Supreme Court
observed thus:
“8. The contention of the learned Counsel that recourse
could not be had to the amended Section 23(1) read
with Section 23C of the Act in respect of the
contravention of Section 12(2) for failure on the part of
the appellants to repatriate foreign exchange on
shipments of manganese ore made prior to September
20, 1957, and there could be no initiation of
adjudication proceedings under the amended Section
23(1) read with Section 23C or levy of penalty on the
appellants must also fail for another reason. In
Sukumar Pyne’s case the Court reversed the decision of
the Calcutta High Court in Sukumar Pyne v. Union of
India and Ors., AIR 1962 Cal 590 striking down
Section 23(1)(a) as being violative of Article 14 of the
Constitution. Regarding the point, namely, whether
Section 23(1)(a) having been substituted by
Amendment Act XXXIX of 1957 would have
retrospective operation in respect of the alleged offence
which took place in 1954, the High Court came to the
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conclusion that the petitioner had a vested right to be
tried by an ordinary court of the land with such rights
of appeal as were open to all and although Section
23(1)(a) was procedural, where a vested right was
affected, prima facie, it was not a question of
procedure. Therefore, the High Court came to the
conclusion that the provision as to adjudication by the
Director of Enforcement could not have any
retrospective operation. It was held that ‘the
impairment of a right by putting a new restriction
thereupon is not a matter of procedure only’. It impairs
a substantive right and an enactment that does so is
not retrospective unless it says so expressly or by
necessary intendment. The Court reversed the High
Court decision and held that effect of these provisions
was that after the amendment of 1957, adjudication or
criminal proceedings could be taken up in respect of a
contravention mentioned in section 23(1) while before
the amendment only criminal proceedings before a
Court could be instituted to punish the offender. In
repelling the contention advanced by Shri N.C.
Chatterjee that the new amendments did not apply to
contravention which took place before the Act came
into force, the Court observed:
In our opinion, there is force in the
contention of the learned Solicitor-General.
As observed by this Court in Rao Shiv
Bahadur Singh vs. The State of Vindhya
Pradesh (1953) SCR 1188, a person
accused of the commission of an offence
has no vested right to be tried by a
particular court or a particular procedure
except in so far as there is any
constitutional objection by way of
discrimination or the violation of any other
fundamental right is involved. It is well
recognised that “no person has a vested
right in any course of procedure” (vide
Maxwell 11th Edition, p. 216), and we see
no reason why this ordinary rule should not
prevail in the present case. There is no
principle underlying Art. 20 of the
Constitution which makes a right to any
course of procedure a vested right.
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58. In the case of Nar Bahadur Bhandari and Ors. vs. State
of Sikkim and Ors. (supra) , the Supreme Court held thus:
“10.……………..The said Sub-section while on the one
hand ensures that the application of Section 6 of the
General Clauses Act is not prejudiced, on the other it
expresses a different intention as contemplated by the
said Section 6. The last part of the above Sub-section
introduces a legal fiction whereby anything done or
action taken under or in pursuance of the Act of 1947
shall be deemed to have been done or taken under or
in pursuance of corresponding provisions of the Act of
1988. That is, the fiction is to the effect that the Act of
1988 had come into force when such thing was done or
action was taken.
11. This aspect of the matter was clearly elucidated by
the Constitution Bench in B. N. Kohli’s case (supra). In
that case Ordinance 27/49 repealed Ordinance 12/49.
The relevant provision in the repealing Ordinance was
sub-sec.(3) of Section 58. That read as follows:
“The repeal by this Act of the
Administration of Evacuee Property
Ordinance, 1949 or the Hyderabad
Administration of Evacuee Property
Regulation or of any corresponding law
shall not affect the previous operation of
that Ordinance, Regulation or
corresponding law, and subject thereto,
anything done or any action taken in the
exercise of any power conferred by or
under that Ordinance, Regulation or
corresponding law, shall be deemed to
have been done or taken in the exercise of
the powers conferred by or under this Act
as if this Act were in force on the day on
which such thing was done or action was
taken.”
12. While construing the said Sub-section, the Court
observed as follows:
“…By the first part of Section 58(3) repeal of the
statutes mentioned therein did not operate to vacate
things done or action taken under those statutes. This
provision appears to have been enacted with a view to
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avoid the possible application of the rule of
interpretation that where statute expires or is repealed,
in the absence of a provision to the contrary, it is
regarded as having never existed except as to matters
and transactions past and closed: (see Surtees v.
Ellison, 1829) 9 B & C 752. This rule was altered by an
omnibus provision in General Clauses Act, 1897,
relating to the effect of repeal of statutes by any
Central Act or Regulation. By Section 6 of the General
Clauses Act, it is provided, in so far as it is material,
that any Central Act or Regulation made after the
commencement of the General Clauses Act or repeals
any enactment, the repeal shall not affect the previous
operation of any enactment so repealed or anything
duly done or suffered thereunder, or affect any right,
privilege, obligation or liability acquired, occurred or
incurred under any enactment so repealed or affect any
investigation legal proceeding or remedy in respect of
any such right, privilege, obligation, liability, penalty,
forfeiture or punishment as aforesaid; and any such
investigation, legal proceeding or remedy may be
instituted, continued or enforced, any such penalty,
forfeiture or punishment may be imposed, as if the
Repealing Act or Regulation had not been passed. But
the rule contained in Section 6 applies only if a
different intention does not appear, and by enacting
Section 58(3) the Parliament has expressed a different
intention, for whereas the General Clauses Act keeps
alive the previous operation of the enactment 13.
repealed, and things done and duly suffered, the rights,
privileges, obligations or liabilities acquired or incurred,
and authorities the investigation, legal proceeding and
remedies in respect of rights, privileges, obligations,
liabilities, penalties, forfeitures and punishment and if
the repealing Act or Regulation had not been passed,
Section 58(3) of Act 31 of 1950 directs that things
done or actions taken in exercise of power conferred by
the repealed statutes shall be deemed to be done or
taken under the repealing Act as if that latter Act were
in force on the day on which such thing was done or
action was taken. The rule so enunciated makes a clear
departure from the rules enunciated in Section 6 of the
General Clauses Act, 1897. By the first part of Section
58(3) which is in terms negative, the previous
operation of the repealed statutes survives the repeal.
Thereby matters and transactions past and closed
remain operative; so does the previous operation of the
repealed statute. But as pointed out by this Court in
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Indira Sohanlal’s case, [1955]2SCR1117 , the saving of
the previous operation of the repealed law is not to be
read, as saving the future operation of the previous
law. The previous law stands repealed, and it has not
for the future the partial operation as it is prescribed by
Section 6 of General Clauses Act. All things done and
actions taken under the repealed statute are deemed to
be done or taken in exercise of powers conferred by or
under the repealing Act, as if that Act were in force on
the day on which that thing was done or action was
taken. It was clearly the intention of the parliament
that matters and transactions past and closed were not
to be deemed vacated by the repeal of the statute
under which they were done. The previous operation of
the statute repealed was also affirmed expressly but
things done or actions taken Under the repealed statute
are to be deemed by fiction to have been done or taken
under the repealing Act.”
59. In the case of State of Punjab vs. Mohar Singh: (supra) ,
the Supreme Court observed thus:
“8………………………. These observations could not
undoubtedly rank higher than mere obiter dictum for
they were not at all necessary for purposes of the case,
though undoubtedly they are entitled to great respect.
In agreement with this dictum of Sulaiman C.J. the
High Court of Punjab, in its judgment in the present
case, has observed that where there is a simple repeal
and the Legislature has either not given its thought to
the matter of prosecuting old offenders, or a provision
dealing with that question has been inadvertently
omitted, section 6 of the General Clauses Act will
undoubtedly be attracted. But no such inadvertence
can be presumed where there has been a fresh
legislation on the subject and if the new Act does not
deal with the matter, it may be presumed that the
Legislature did not deem it fit to keep alive the liability
incurred under the old Act. In our opinion the approach
of the High Court to the question is not quite correct.
Whenever there is a repeal of an enactment, the
consequences laid down in section 6 of the General
Clauses Act will follow unless, as the section itself says,
a different intention appears. In the case of a simple
repeal there is scarcely any room for expression of a
contrary opinion. But when the repeal is followed by
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fresh legislation on the same subject we would
undoubtedly have to look to the provisions of the new
Act, but only for the purpose of determining whether
they indicate a different intention.
The line of enquiry would be, not whether the new Act
expressly keeps alive old rights and liabilities but
whether it manifests an intention to destroy them.
We cannot therefore subscribe to the broad proposition
that section 6 of the General Clauses Act is ruled out
when there is repeal of an enactment followed by a
fresh legislation. Section 6 would be applicable in such
cases also unless the new legislation manifests an
intention incompatible with or contrary to the
provisions of the section.
Such incompatibility would have to be ascertained from
a consideration of all the relevant provisions of the new
law and the mere absence of a saving clause is by itself
not material. It is in the light of these principles that we
now proceed to examine the facts of the present case.
60. In the case of Zile Singh vs. State of Haryana and Ors.:
(supra), the Supreme Court held thus:
“13. It is a cardinal principle of construction that every
statute is prima facie prospective unless it is expressly
or by necessary implication made to have a
retrospective operation. But the rule in general is
applicable where the object of the statute is to affect
vested rights or to impose new burdens or to impair
existing obligations. Unless there are words in the
statute sufficient to show the intention of the
Legislature to affect existing rights, it is deemed to be
prospective only. ‘nova Constitution futuris formam
imponere debet non praeteritis’ – a new law ought to
regulate what is to follow, not the past. (See :
Principles of Statutory Interpretation by Justice G.P.
Singh, Ninth Edition, 2004 at p.438). It is not
necessary that an express provision be made to make a
statute retrospective and the presumption against
retrospectivity may be rebutted by necessary
implication especially in a case where the new law is
made to cure an acknowledged evil for the benefit of
the community as a whole.
(ibid, p.440)
14. The presumption against retrospective operation is
not applicable to declaratory statutes…….
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In determining, therefore, the nature of the Act, regard
must be had to the substance rather than to the form.
If a new Act is “to explain’ an earlier Act, it would be
without object unless construed retrospective. An
explanatory Act is generally passed to supply an
obvious omission or to clear up doubts as to the
meaning of the previous Act. It is well settled that if a
statute is curative or merely declaratory of the previous
law retrospective operation is generally intended.
……..
An amending Act may be purely declaratory to clear a
meaning of a provision of the principal Act which was
already implicit. A clarificatory amendment of this
nature will have retrospective effect.
(ibid, pp.468-469).
15. Though retrospectivity is not to be presumed and
rather there is presumption against retrospectivity,
according to Craies (Statute Law, Seventh Edition), it is
open for the legislature to enact laws having
retrospective operation. This can be achieved by
express enactment or by necessary implication from
the language employed. If it is a necessary implication
from the language employed that the legislature
intended a particular section to have a retrospective
operation, the Courts will give it such an operation. In
the absence of a retrospective operation having been
expressly given, the Courts may be called upon to
construe the provisions and answer the question
whether the legislature had sufficiently expressed that
intention giving the Statute retrospectivity.
Four factors are suggested as relevant: (i) general
scope and purview of , the statute; (ii) the remedy
sought to be applied; (iii) the former state of the law;
and (iv) what it was the legislature contemplated
(p.388). The rule against retrospectivity does not
extend to protect from the effect of a repeal, a privilege
which did not amount to accrued right (p.392).
16. Where a Statute is passed for the purpose of
supplying an obvious omission in a former statute or to
‘explain’ a former statute, the subsequent statute has
relation back to the time when the prior Act was
passed. The rule against retrospectivity is inapplicable
to such legislations as are explanatory and declaratory
in nature. The classic illustration is the case of Att. Gen.
v. Pougett [1816] 2 Pri 381. By a Customs Act of 1873
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53 Geo. 3 a duty was imposed upon hides of 9s. 4d.,
but the Act omitted to state that it was to be 9s. 4d.
per cwt., and to remedy this omission another Customs
Act (53 Geo. 3, c. 105) was passed later in the same
year. Between the passing of these two Acts some
hides were exported, and it was contended that they
were not liable to pay the duty of 9s. 4d. per cwt., but
Thomson C.B., in giving judgment for the Attorney-
General, said:
“The duty in this instance was in fact
imposed by the first Act, but the gross
mistake of the omission of the weight for
which the sum expressed was to have been
payable occasioned the amendment made
by the subsequent Act, but that had
reference to the former statute as soon as
it passed, and they must be taken together
as if they were one and the same Act.”
(p.395).
17. Maxwell states in his work on Interpretation of
Statutes, (Twelfth Edition) that the rule against
retrospective operation is a presumption only, and as
such it “may be overcome, not only by express words
in the Act but also by circumstances sufficiently strong
to displace it.” (p.225). If the dominant intention of the
legislature can be clearly and doubtlessly spelt out, the
inhibition contained in the rule against perpetuity
becomes of doubtful applicability as the “inhibition of
the rule” is a matter of degree which would “vary
secundum materiam” (p.226). Sometimes, where the
sense of the statute demands it or where there has
been an obvious mistake in drafting, a court will be
prepared to substitute another word or phrase for that
which actually appears in the text of the Act (p.231).
18. In a recent decision of this Court in National
Agricultural Cooperative Marketing Federation of India
Ltd. And Anr. v. Union of India and Ors.,
(2003)181CTR(SC)1 , it has been held
that there is no fixed formula for the
expression of legislative intent to give
retrospectivity to an enactment. Every
legislation whether prospective or
retrospective has to be subjected to the
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question of legislative competence. The
retrospectivity is liable to be decided on a
few touchstones such as : (i) the words
used must expressly provide or clearly
imply retrospective operation; (ii) the
retrospectivity must be reasonable and not
excessive or harsh, otherwise it runs the
risk of being struck down as
unconstitutional; (iii) where the legislation
is introduced to overcome a judicial
decision, the power cannot be used to
subvert the decision without removing the
statutory basis of the decision. There is no
fixed formula for the expression of
legislative intent to give retrospectivity to
an enactment. A validating clause coupled
with a substantive statutory change is only
one of the methods to leave actions
unsustainable under the unamended
statute, undisturbed. Consequently, the
absence of a validating clause would not by
itself affect the retrospective operation of
the statutory provision, if such
retrospectivity is otherwise apparent.
19. The Constitution Bench in Shyam Sunder and Ors.
v. Ram Kumar and Anr., AIR2001SC2472 , has held — ”
Ordinarily when an enactment declares the
previous law, it requires to be given
retroactive effect. The function of a
declaratory statute is to supply an omission
or explain previous statute and when such
an Act is passed, it comes into effect when
the previous enactment was passed. The
legislative power to enact law includes the
power to declare what was the previous
law and when such a declaratory Act is
passed invariably it has been held to be
retrospective. Mere absence of use of word
‘declaration’ in an Act explaining what was
the law before may not appear to be a
declaratory Act but if the Court finds an Act
as declaratory or explanatory it has to be
construed as retrospective.
” (p. 2487).
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20. In The Bengal Immunity Company Ltd. v. The State
of Bihar and Ors.,[1955]2SCR603 , Heydon’s case 3 C.
R.7a; 76 E.R.637 was cited with approval. Their
Lordships have said —
“It is a sound rule of construction of a
statute firmly established in England as far
back as 1584 when Heydon’s case was
decided that –“……for the sure and true
interpretation of all Statutes in general (be
they penal or beneficial, restrictive or
enlarging of the common law) four things
are to be discerned and considered:-
1st. What was the common law before the
making of the Act.
2nd. What was the mischief and defect for
which the common law did not provide.,
3rd. What remedy the Parliament hath
resolved and appointed to cure the disease
of the Commonwealth., and
4th. The true reason of the remedy; and
then the office of all the judges is always to
make such construction as shall suppress
the mischief, and advance the remedy, and
to suppress subtle inventions and evasions
for continuance of the mischief, and pro
private commodo, and to add force and life
to the cure and remedy, according to the
true intent of the makers of the Act, pro
bono publico”.”
22. The State Legislature of Haryana intended to
impose a disqualification with effect from 5.4.1994 and
that was done. Any person having more than two living
children was disqualified on and from that day for being
a member of municipality. However, while enacting a
proviso by way of an exception carving out a factsituation
from the operation of the newly introduced
disqualification the draftsman’s folly caused the
creation of trouble. A simplistic reading of the text of
the proviso spelled out a consequence which the
Legislature had never intended and could not have
intended. It is true that the Second Amendment does
not expressly give the amendment a retrospective
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operation. The absence of a provision expressly giving
a retrospective operation to the legislation is not
determinative of its prospectivity or retrospectivity.
Intrinsic evidence may be available to show that the
amendment was necessarily intended to have the
retrospective effect and if the Court can unhesitatingly
conclude in favour of retrospectivity, the Court would
not hesitate in giving the Act that operation unless
prevented from doing so by any mandate contained in
law or an established principle of interpretation of
statutes.
23. The text of Section 2 of the Second Amendment Act
provides for the word “upto” being substituted for the
word “after”. What is the meaning and effect of the
expression employed therein – “shall be substituted”.
24. The substitution of one text for the other preexisting
text is one of the known and well-recognised
practices employed in legislative drafting. ‘Substitution’
has to be distinguished from ‘supersession’ or a mere
repeal of an existing provision.
25. Substitution of a provision results in repeal of the
earlier provision and its replacement by the new
provision (See Principles of Statutory Interpretation,
ibid, p.565). If any authority is needed in support of
the proposition, it is to be found in West U.P. Sugar
Mills Assn. and Ors. v. State of U.P. and Ors. – :
[2002]1SCR897 , State of Rajasthan v. Mangilal
Pindwal – : (1997)IILLJ756SC , Koteswar Vittal Kamath
v. K. Rangappa Baliga and Co. – [1969]3SCR40 and
A.L.V.R.S.T. Veerappa Chettiar v. S. Michael and Ors. –
AIR1963SC933 . In West U.P. Sugar Mills Association
and Ors.’s case (supra) a three-Judges Bench of this
Court held that the State Government by substituting
the new rule in place of the old one never intended to
keep alive the old rule. Having regard to the totality of
the circumstances centering around the issue the Court
held that the substitution had the effect of just deleting
the old rule and making the new rule operative. In
Mangilal Pindwal’s case (supra) this Court upheld the
legislative practice of an amendment by substitution
being incorporated in the text of a statute which had
ceased to exist and held that the substitution would
have the effect of amending the operation of law during
the period in which it was in force. In Koteswar’s case
(supra) a three-Judges Bench of this Court emphasized
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the distinction between ‘supersession’ of a rule arid
‘substitution’ of a rule and held that the process of
substitution consists of two steps : first, the old rule is
made to cease to exist and, next, the new rule is
brought into existence in its place.
61. In the case of Yogendra Kumar Jaiswal and Ors. vs.
State of Bihar and Ors. : (supra), the Supreme Court observed
thus:
“8. Section 14 provides for issuance of show cause
notice by the Authorised Officer to the person
concerned to explain his source of income and other
assets and why such money or property or both should
not be declared to have been acquired by means of the
offence and be confiscated to the State Government.
Sub-section (2) provides that where a notice Under
Sub-section (1) to any person specifies any money or
property or both has been held on behalf of such
person by any other person, a copy of the notice shall
also be served upon such other person. Sub-section (3)
lays down that the evidence, information or particulars
brought on record before the authorised officer shall
not be used against the accused in the trial before the
special court. Section 15 deals with the confiscation of
property in certain cases. It provides a detailed
procedure and obliges the authorised officer to follow
the principles of natural justice. It prescribes a time
limit for disposal of the proceeding and gives immense
stress on identification of property or money or both
which have been acquired by means of the offence and
further it makes the confiscation subject to the order
passed in appeal Under Section 17 of the Orissa Act. It
may be noted here that the proviso to Section 15(3)
stipulates that the market price of the property
confiscated, if deposited with the Authorised Officer, the
property shall not be confiscated. Section 16 lays down
that after the issue of notice Under Section 14, any
money or property or both referred to in the said notice
are transferred by any mode whatsoever, such transfer
shall for the purposes of the proceedings under the
Orissa Act, be void and if such money or property or
both are subsequently confiscated to the State
Government Under Section 15, then the transfer of
such money or property or both shall be deemed to be
null and void. Section 17(1) enables the aggrieved
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person by the order passed by an authorised officer to
prefer an appeal within thirty days from the date on
which the order appealed against was passed. Subsection
(2) provides that upon appeal being preferred
under the said provision, the High Court may, after
giving such parties, as it thinks proper, an opportunity
of being heard, pass such order as it thinks fit; Subsection
(3) requires the High Court to dispose of the
appeal within three months from the date it is preferred
and stay order, if any, passed in appeal shall not remain
in force beyond the period prescribed for disposal of
appeal. Sub-section (1) of Section 18 of the Orissa Act
empowers the State Government to take possession. It
stipulates that where any money or property has been
confiscated to the State Government under the Act, the
concerned authorised officer shall order the person
affected as well as any other person who may be in
possession of the money or property or both, to
surrender or deliver possession thereof to the
concerned authorised officer or to any person duly
authorised by in this behalf, within thirty days of the
service of the order. The proviso to the said Sub-section
stipulates that the authorised officer, on an application
being made in that behalf and being satisfied that the
person affected is residing in the property in question,
may instead of dispossessing him immediately from the
same, permit such person to occupy it for a limited
period to be specified on payment of market rent to the
State Government and thereafter, such person shall
deliver the vacant possession of the property. Subsection
(2) provides that if any person refuses or fails
to comply with an order made Under Sub-section (1),
the authorised officer may take possession of the
property and may, for that purpose, use such force as
may be necessary. Sub-section (3) confers powers on
the authorised officer to requisition service of any
police officer to assist and mandates the concerned
police officer to comply with such requisition.
Section 15. Confiscation of property in certain cases –
(1)…………………………………………
(2)………………………………………….
(3) Where the authorised officer records a finding
under this section to the effect that any money or
property or both have been acquired by means of the
offence, he shall declare that such money or property
or both shall, subject to the provisions of this Act,
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stand confiscated to the State Government free from
all encumbrances.
Provided that if the market price of the property
confiscated is deposited with the authorised officer, the
property shall not be confiscated.
(4)……………………………………
(5)……………………………………
(6)……………………………………
147. The next facet of the said submission pertains to
retrospective applicability. The submission has been put
forth on the ground that by transfer of cases to the
Special Courts under the Orissa Act in respect of the
accused persons who are arrayed as accused under the
1988 Act, have been compelled to face harsher
punishment which is constitutionally not permissible. It
is contended that there was no interim confiscation
under the 1988 Act but under the Orissa Act they have
to face confiscation. We have already opined that
confiscation is not a punishment and, therefore, Article
20(1) is not attracted. Thus, the real grievance pertains
to going through the process of confiscation and
suffering the same after the ultimate adjudication of
the said proceeding which is subject to appeal.…..…….
151. We are absolutely conscious that the said
judgment was delivered in a different context. What is
prohibited Under Article 20(1) is imposition of greater
punishment that might have been imposed and
prohibition of a conviction of any person for violation of
law at the time of commission of the act. We repeat at
the cost of repetition that confiscation being not a
punishment does not come in either of the categories.
Thus viewed, the property of an accused facing trial
under the 1988 Act could be attached and there can be
administration by third party of the said property and
eventual forfeiture after conviction. The term
“attachment” has been understood by this Court in
Kerala State Financial Enterprises Ltd. v. Official
Liquidator, High Court of Kerala (2006) 10 SCC 709 in
the following manner:
11. The word “attachment” would only
mean “taking into the custody of the law
the person or property of one already
before the court, or of one whom it is
sought to bring before it”. It is used for
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two purposes: (i) to compel the
appearance of a Defendant; and (ii) to
seize and hold his property for the
payment of the debt. It may also mean
prohibition of transfer, conversion,
disposition or movement of property by an
order issued by the court.
152. The legislature has thought it proper to change
the nature and character of the interim measure. The
property obtained by ill-gotten gains, ii prima facie
found to be such by the authorised officer, is to be
confiscated. An accused has no vested right as regards
the interim measure. He is not protected by any
constitutional right to advance the plea that he cannot
be made liable to face confiscation proceedings of the
property which has been accumulated, by illegal
means. That being the litmus test, the filament of
reasoning has to rest in favour of confiscation and not
against it. Therefore, we are of the considered view
that the provision does not violate any constitutional
assurance.
62. In the case of Titaghur Paper Mills Co. Ltd. and Ors. vs.
State of Orissa and Ors.: (supra), Supreme Court, observed
thus:
“6. We are constrained to dismiss these petitions on the
short ground that the petitioners have an equally
efficacious alternative remedy by way of an appeal to
the prescribed authority under Sub-section (1) of
Section 23 of the Act, then a second appeal to the
Tribunal under Sub-section (3)(a) thereof, and
thereafter in the event the petitioners get no relief, to
have the case stated to the High Court under Section
23 of the Act. In Raleigh Investment Co. Limited v.
Governor General in Council, 74 I.A. 50 Lord Uthwart,
J. in delivering the judgment of the Board observed
that in the provenance of tax where the Act provided
for a complete machinery which enabled an assessee to
effectively to raise in the courts the question of the
validity of an assessment denied an alternative
jurisdiction to the High Court to interfere. It is true that
the decision of the Privy Council in Raleigh Investment
Company’s case, supra, was in relation to a suit
brought for a declaration that an assessment made by
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the Income Tax Officer was a nullity, and it was held by
the Privy Council that an assessment made under the
machinery provided by the Act, even if based on a
provision subsequently held to be ultra vires, was not a
nullity like an order of a court lacking jurisdiction and
that Section 67 of the Income Tax Act, 1922 operated
as a bar to the maintainability of such a suit. In dealing
with the question whether Section 67 operated as a bar
to a suit to set aside or modify an assessment made
under a provision of the Act which is ultra vires, the
Privy Council observed:
In construing the section it is pertinent, in their
Lordships opinion to ascertain whether the Act contains
machinery which enables an assessee effectively to
raise in the courts the question whether a particular
provision of the Income Tax Act bearing on the
assessment made is or is not ultra vires. The presence
of such machinery, though by no means conclusive,
marches with a construction of the section which denies
an alternative jurisdiction to inquire into the same
subject-matter.
7. We are not oblivious of the fact that this Court in
K.S. Venkataraman and Co. v. State of Madras,
[1966]60ITR112(SC) , in a five-Judge Bench by a
majority of 3 : 2 has dissented with the view expressed
by the Privy Council in Raleigh Investment Company’s
case, supra, and held that an assessment made on the
basis of a provision which is ultra vires is not an
assessment made under the Act. It was observed that
the entire reasoning of the Judicial Committee was
based upon the assumption that the question of ultra
vires can be canvassed and finally decided through the
machinery provided under the Income Tax Act. The
majority observed that the hierarchy of authorities set
up under the Act being creatures of statute were not
concerned as to whether the provisions of the Act were
intra vires or not. If an assessee raises such a question,
according to the decision of the majority in
Venkataraman’s case, supra, the Appellate Tribunal can
only reject it on the ground that it has no jurisdiction to
entertain such objection or render any decision on it.
As no such question can be raised or can even arise out
of the order of the Appellate Tribunal, the High Court
cannot possibly give any decision on the question of
ultra vires because its jurisdiction under Section 66 is a
special advisory jurisdiction and its scope is strictly
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limited. It can only decide questions of law that arise
out of the order of the Appellate Tribunal and that are
referred to it. Further, an appeal to this Court under
Section 66A(2) does not enlarge the scope of the
jurisdiction of this Court as this Court can only do what
the High Court can under Section 66. It would therefore
appear that the majority decision in Venkataraman’s
case, supra, rests on the principle that (i) An ultra vires
provision cannot be regarded as a part of the Act at all,
and an assessment under such a provision is not “made
under the Act” but is wholly without the jurisdiction and
is not directed by Section 67 of the Act. And (ii) The
question whether a provision is ultra vires or not
cannot be decided by any of the authorities created by
the Act and therefore cannot be the subject matter of a
reference to the High Court or a subsequent appeal to
this Court.
8. No such question arises in a case like the present
where the impugned orders of assessment are not
challenged on the ground that they are based on a
provision which is ultra vires. We are dealing with a
case in which the entrustment of power to assess is not
in dispute, and the authority within the limits of his
power is a Tribunal of exclusive jurisdiction. The
challenge is only to the regularity of the proceeding
before the learned Sales Tax Officer as also his
authority to treat the gross turnover returned by the
petitioners to be the taxable turnover. Investment of
authority to tax involves authority to tax transactions
which in exercise of his authority the Taxing Officer
regards as taxable, and not merely authority to tax
only those transactions which are, on a true view of the
facts and the law, taxable.
63. In the case of Thansingh Nathmal and Ors. vs. A.
Mazid : (supra), the Supreme Court held thus:
7. Against the order of the Commissioner an order for
reference could have been claimed if the appellants
satisfied the Commissioner or the High Court that a
question of law arose out of the order. But the
procedure provided by the Act to invoke the jurisdiction
of the High Court was bypassed. The appellants moved
the High Court challenging the competence of the
Provincial Legislature to extend the concept of sale, and
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invoked the extraordinary jurisdiction of the High Court
under Art. 226 and sought to reopen the decision of the
taxing authorities on questions of fact.
The jurisdiction of the High Court under Art. 226 of the
Constitution is couched in wide terms and the exercise
thereof is not subject to any restrictions except the
territorial restrictions which are expressly provided in
the Article. But the exercise of the jurisdiction is
discretionary; it is not exercised merely because it is
lawful to do so. The very amplitude of the jurisdiction
demands that it will ordinarily be exercised subject to
certain self-imposed limitations. Resort so that
jurisdiction is not intended as an alternative remedy for
relief which may be obtained in a suit or other mode
prescribed by statute. Ordinarily the Court will not
entertain a petition for a writ under Art. 226, where the
petitioner has an alternative remedy which, without
being unduly onerous, provides an equally efficacious
remedy. Again the High Court does not generally enter
upon a determination of questions which demand an
elaborate examination of evidence to establish the right
to enforce which the writ is claimed.
The High Court does not therefore act as a court of
appeal against the decision of a court or tribunal, to
correct errors of fact, and does not by assuming
jurisdiction under Art. 226 trench upon an alternative
remedy provided by statute for obtaining relief. Where
it is open to the aggrieved petitioner to move another
tribunal, or even itself in another jurisdiction for
obtaining redress in the manner provided by a statute,
the High Court normally will not permit, by entertaining
a petition under Art. 226 of the Constitution, the
machinery created under the stature to be by-passed,
and will leave the party applying to it to seek resort to
the machinery so set up.
64. In the case of State of H.P. and Ors. vs. Gujarat Ambuja
Cement Ltd. and Ors.: (supra), the Supreme Court observed
thus:
“17. We shall first deal with the plea regarding
alternative remedy as raised by the appellant-State.
Except for a period when Article 226 was amended by
the Constitution (42 Amendment) Act, 1976, the power
relating to alternative remedy has been considered to
be a rule of self imposed limitation. It is essentially a
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rule of policy, convenience and discretion and never a
rule of law. Despite the existence of an alternative
remedy it is within the jurisdiction of discretion of the
High Court to grant relief under Article 226 of the
Constitution. At the same time, it cannot be lost sight
of that though the matter relating to an alternative
remedy has nothing to do with the jurisdiction of the
case, normally the High Court should not interfere if
there is an adequate efficacio4us alternative remedy. If
somebody approaches the High Court without availing
the alternative remedy provided the High Court should
ensure that he has made out a strong case or that
there exist good grounds to invoke the extra-ordinary
jurisdiction.
18. Constitution Benches of this Court in K.S. Rashid
and Sons v. Income Tax Investigation Commission and
Ors. [1954]25ITR167(SC) ; Sangram Singh v. Election
Tribunal, Kotah and Ors. [1955]2SCR1 ; Union of India
v. T.R. Varma (1958)IILLJ259SC ; State of U.P. and
Ors. v. Mohammad Nooh AIR 1958 SC 86; and K.S.
Venkataraman and Co. (P) Ltd. v. State of Madras
[1966]60ITR112(SC) , held that Article 226 of the
Constitution confers on all the High Courts a very wide
power in the matter of issuing writs. However, the
remedy of writ is an absolutely discretionary remedy
and the High Court has always the discretion to refuse
to grant any writ if it is satisfied that the aggrieved
party can have an adequate or suitable relief
elsewhere. The Court, in extraordinary circumstances,
may exercise the power if it comes to the conclusion
that there has been a breach of principles of natural
justice or procedure required for decision has not been
adopted.
19. Another Constitution Bench of this Court in State of
Madhya Pradesh and Anr. v. Bhailal Bhai etc. ,
[1964]6SCR261 , held, that the remedy provided in a
writ jurisdiction is not intended to supersede
completely the modes of obtaining relief by an action in
a civil court or to deny defence legitimately open in
such actions. The power to give relief under Article 226
of the Constitution is a discretionary power. Similar
view has been re-iterated in N.T. Veluswami Thevar v.
G. Raja Nainar and Ors. AIR1959SC422 ; Municipal
Council, Khurai and Anr. v. Kamal Kumar and Anr.
[1965]2SCR653 ; Siliguri Municipality and Ors. v.
Amalendu Das and Ors. [1984]146ITR624(SC) ; S.T.
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Muthusami v. K. Natarajan and Ors. [1988]2SCR759 ;
R.S.R.T.C. and Anr. v. Krishna Kant and Ors. :
(1995)IILLJ728SC ; Kerala State Electricity Board and
Anr. v. Kurjen E. Kalathil and Ors. AIR2000SC2573 ; A.
Venkatasubbiah Naidu v. S. Chekkappan and Ors. :
AIR2000SC3032 ; and L.L. Sudhakar Reddy and Ors. v.
State of Andhra Pradesh and Ors. AIR2001SC3205 ;
Shri Sant Sadguru Janardan Swami (Moingiri Maharaj)
Sahakari Dugdha Utpadak Sanstha and Anr. v. State of
Maharashtra and Ors. : AIR2001SC3982 ; Pratap Singh
and Anr. v. State of Haryana AIR2002SC3385 and
G.K.N. Driveshafts (India) Ltd. v. Income Tax Officer
and Ors. (2003)179CTR(SC)11 .
20. In Harbans Lal Sahnia v. Indian Oil Corporation
Ltd : AIR2003SC2120 , this Court held that the rule of
exclusion of writ jurisdiction by availability of
alternative remedy is a rule of discretion and not one of
compulsion and the Court must consider the pros and
cons of the case and then may interfere if it comes to
the conclusion that the petitioner seeks enforcement of
any of the fundamental rights; where there is failure of
principles of natural justice or where the orders or
proceedings are wholly without jurisdiction or the vires
of an Act is challenged.
22. In G. Veerappa Pillai v. Raman & Raman Ltd.
[1952]1SCR583 ; Assistant Collector of Central Excise
v. Dunlop India Ltd. 1985ECR4(SC); Ramendra Kishore
Biswas v. State of Tripura (1999)IILLJ192SC ;
Shivgonda Anna Patil and Ors. v. State of Maharashtra
and Ors. AIR1999SC2281; C.A. Abraham v. I.T.O.
Kottayam and Ors. [1961]41ITR425(SC); Titaghur
Paper Mills Co. Ltd. v. State of Orissa and Anr.
[1983]142ITR663(SC); H.B. Gandhi v. Gopinath and
Sons; Whirlpool Corporation v. Registrar of Trade Marks
and Ors. AIR1999SC22; Tin Plate Co. of India Ltd. v.
State of Bihar and Ors. AIR1999SC74; Sheela Devi v.
Jaspal Singh AIR1999SC2859 and Punjab National Bank
v. O.C. Krishnan and Ors. AIR2001SC3208 , this Court
held that where hierarchy of appeals is provided by the
statute, party must exhaust the statutory remedies
before resorting to writ jurisdiction.
23. Where under a statute there is an allegation of
infringement of fundamental rights or when on the
undisputed facts the taxing authorities are shown to
have assumed jurisdiction which they do not possess
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can be the grounds on which the writ petitions can be
entertained. But normally, the High Court should not
entertain writ petitions unless it is shown that there is
something more in a case, something going to the root
of the jurisdiction of the officer, something which would
show that it would be a case of palpable injustice to the
writ petitioner to force him to adopt the remedies
provided by the statute. It was noted by this Court in L.
Hirday Narain v. Income Tax Officer, Bareilly
[1970]78ITR26(SC) that if the High Court had
entertained a petition despite availability of alternative
remedy and heard the parties on merits it would be
ordinarily unjustifiable for the High Court to dismiss the
same on the ground of non exhaustion of statutory
remedies; unless the High Court finds that factual
disputes are involved and it would not be desirable to
deal with them in a writ petition.
65. In the case of Commissioner of Income Tax and Ors. vs.
Chhabil Dass Agarwal: (supra), the Supreme Court observed
thus:
13. In Nivedita Sharma v. Cellular Operators Assn. of
India (2011) 14 SCC 337, this Court has held that
where hierarchy of appeals is provided by the statute,
party must exhaust the statutory remedies before
resorting to writ jurisdiction for relief and observed as
follows:
“12. In Thansingh Nathmal v. Supdt. of Taxes AIR
1964 SC 1419 this Court adverted to the rule of selfimposed
restraint that the writ petition will not be
entertained if an effective remedy is available to
the aggrieved person and observed: (AIR p. 1423,
para 7).
7. … The High Court does not therefore act as a
court of appeal against the decision of a court or
tribunal, to correct errors of fact, and does not by
assuming jurisdiction under Article 226 trench upon an
alternative remedy provided by statute for obtaining
relief. Where it is open to the aggrieved Petitioner to
move another tribunal, or even itself in another
jurisdiction for obtaining redress in the manner
provided by a statute, the High Court normally will not
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permit by entertaining a petition under Article 226 of
the Constitution the machinery created under the
statute to be bypassed, and will leave the party
applying to it to seek resort to the machinery so set
up.
13. In Titaghur Paper Mills Co. Ltd. v. State
of Orissa (1983) 2 SCC 433 this Court
observed: (SCC pp. 440-41, para 11)
11. … It is now well recognised that where
a right or liability is created by a statute
which gives a special remedy for enforcing
it, the remedy provided by that statute
only must be availed of. This rule was
stated with great clarity by Willes, J. in
Wolverhampton New Waterworks Co. v.
Hawkesford 141 ER 486 in the following
passage: (ER p. 495)
… There are three classes of cases in
which a liability may be established
founded upon a statute. … But there is a
third class viz. where a liability not existing
at common law is created by a statute
which at the same time gives a special and
particular remedy for enforcing it.
…The remedy provided by the statute
must be followed, and it is not competent
to the party to pursue the course
applicable to cases of the second class. The
form given by the statute must be adopted
and adhered to.
The rule laid down in this passage was approved by the
House of Lords in Neville v. London Express
Newspapers Ltd. 1919 AC 368 and has been reaffirmed
by the Privy Council in Attorney General of Trinidad and
Tobago v. Gordon Grant and Co. Ltd. 1935 AC 532 (PC)
and Secy. of State v. Mask and Co. AIR 1940 PC 105 It
has also been held to be equally applicable to
enforcement of rights, and has been followed by this
Court throughout. The High Court was therefore
justified in dismissing the writ petitions in limine.
14. In Mafatlal Industries Ltd. v. Union of
India(1997) 5 SCC 536 B.P. Jeevan Reddy, J.
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(speaking for the majority of the larger Bench)
observed: (SCC p. 607, para 77)
77. … So far as the jurisdiction of the High Court
under Article 226–or for that matter, the
jurisdiction of this Court under Article 32–is
concerned, it is obvious that the provisions of the
Act cannot bar and curtail these remedies. It is,
however, equally obvious that while exercising the
power under Article 226/Article 32, the Court would
certainly take note of the legislative intent manifested
in the provisions of the Act and would exercise
their jurisdiction consistent with the provisions of
the enactment.
16. In the instant case, the Act provides complete
machinery for the assessment/re-assessment of
tax, imposition of penalty and for obtaining relief in
respect of any improper orders passed by the
Revenue Authorities, and the Assessee could not be
permitted to abandon that machinery and to invoke
the jurisdiction of the High Court under Article 226 of
the Constitution when he had adequate remedy open to
him by an appeal to the Commissioner of Income Tax
(Appeals). The remedy under the statute, however,
must be effective and not a mere formality with no
substantial relief. In Ram and Shyam Co. v. State of
Haryana (1985) 3 SCC 267 this Court has noticed
that if an appeal is from “Caesar to Caesar’s wife” the
existence of alternative remedy would be a mirage
and an exercise in futility.
66. In the case of Harbanslal Sahnia and Ors. vs. Indian Oil
Corpn. Ltd. and Ors. (supra), the Supreme Court held thus:
“7. So far as the view taken by the High Court that the
remedy by way of recourse to arbitration clause was
available to the appellants and therefore the writ
petition filed by the appellants was liable to be
dismissed, suffice it to observe that the rule of
exclusion of writ jurisdiction by availability of an
alternative remedy is a rule of discretion and not one of
compulsion. In an appropriate case in spite of
availability of the alternative remedy, the High Court
may still exercise its writ jurisdiction in at least three
contingencies: (i) where the writ petition seeks
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enforcement of any of the Fundamental Rights; (ii)
where there is failure of principles of natural justice or,
(iii) where the orders or proceedings are wholly without
jurisdiction or the vires of an Act and is challenged
[See Whirlpool Corporation v. Registrar of Trade Marks,
Mumbai and Ors., AIR1999SC22 . The present case
attracts applicability of first two contingencies.
Moreover, as noted, the petitioners’ dealership, which is
their bread and butter came to be terminated for an
irrelevant and non-existent cause. In such
circumstances, we feel that the appellants should have
been allowed relief by the High Court itself instead of
driving them to the need of initiating arbitration
proceedings.
67. In the case of Whirlpool Corporation vs. Registrar of
Trade Marks, Mumbai and Ors.: (supra) , the Supreme Court
held thus:
“51. It is in the background of the above provisions
that the question relating to the jurisdiction of the
“Registrar” and the “High Court”, which individually and
separately constitute “TRIBUNAL” within the meaning
of Section 2(1)(x), has to be considered.
52. The functions and extent of jurisdiction of the
registrar and that of the High Court which, incidentally,
has also been constituted as the appellate authority of
the Registrar, have been distinctly set out in different
provisions of the Act. There are, however, certain
matters for which jurisdiction has been given to the
“TRIBUNAL” which, by its definition, includes the “High
Court” and the “Registrar” and therefore, the question
is “can both be said to have “concurrent” jurisdiction
over matters as are set out for example, in Sections 9,
10, 26, 45, 46, 47 and 56″.
53. If the proceeding is cognisable both by the
Registrar and the High Court, which of the two will have
jurisdiction to entertain such proceeding to the
exclusion of the other or the jurisdiction being
concurrent, can the proceeding go on simultaneously
before the High Court and the Registrar, resulting, may
be, in conflicting decisions at the end, is a question
which seems to be answered by the words “before
which the proceeding concerned is pending” occurring
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in the definition of “TRIBUNAL” in Section 2(1)(x) of the
Act. Let us test whether the answer is correct.
54. Section 56 contemplates proceedings of varying
nature. The proceedings contemplated by Sub-section
(1) relate to the cancellation of Trade Mark or varying
the registration of Trade Mark, on the ground that the
condition on which the registration was granted, was
either violated or there was failure in observing the
condition of registration. These proceedings may be
entertained either by the High Court or the Registrar on
the application, and, at the instance, of the “person
aggrieved”.
55. The proceedings contemplated by Sub-section (2)
of Section 56 relate to the absence or omission of an
entry in the Register or an entry having been made
without sufficient cause or an entry wrongly remaining
on the Register or there being any error or defect in an
entry in the Register. Such proceedings may also be
entertained either by the Registrar or the High Court on
an application made in the prescribed manner by a
“person aggrieved”. The High Court or the registrar
may, in these proceedings, pass an order either for
making an entry, or expunging or varying the entry. In
these proceedings which may be pending either before
the High court or the Registrar, it would be open to
either of them to decide any further question which
may be necessary or expedient to decide in connection
with the rectification of the Register. Obviously, this
gives very wide jurisdiction to the High Court or the
Registrar working as a Tribunal as the jurisdiction is not
limited to the proceedings pending under Sub-section
(1) or Sub-section (2) but extends also to decide, in
the same proceedings, any other question which may
legitimately arise in connection with the rectification
proceedings.
56. The jurisdiction conferred on the High Court or the
Registrar under Sub-section (1) or Sub-section (2) can
also be exercised suo motu subject to the condition
that a notice is issued to the parties concerned and an
opportunity of hearing is given to them before passing
any order contemplated by Subsection (1) or Subsection
(2).
57. The Registrar and the High Court have also been
given the jurisdiction under this Section to order that a
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Trade Mark registered in Part A shall be shifted to Part
B of the Register.
58. An order of rectification, if passed by the High
Court, is implemented by the Registrar by rectifying the
Register in conformity with the order passed by the
High Court.
59. The extent of jurisdiction conferred by Section 56
on the Registrar to rectify the Register, is, however
curtailed by Section 107 which provides that an
application for rectification shall, in certain situations,
be made only to the High Court. These situations are
mentioned in Sub-section (1) of Section 107, namely,
where in a suit for infringement of the registered Trade
Mark, the validity of the registration is questioned by
the defendant or the defendant, in that suit, raises the
defence contemplated by Section 30(1)(d) in which the
acts which do not constitute an infringement, have
been specified, and the plaintiff in reply to this defence
questions the validity of the defendant’s Trade Mark. In
these situations, the validity of the registration of the
Trade Mark can be determined only by the High Court
and not by the Registrar.
60. Section 107 thus impels the proceedings to be
instituted only in the High Court. The jurisdiction of the
Registrar in those cases which are covered by Section
107 is totally excluded. Significantly, Section 107(2)
provides that if an application for rectification is made
to the registrar Under Section 46 or Section 47(4) or
Section 56, the Registrar may, if he thinks fit, refer that
application, at any stage of the proceeding, to the High
Court.
61. Similarly, Under Section 111 of the Act, in a
pending suit relating to infringement of a Trade Mark, if
it is brought to the notice of the Court that any
rectification proceedings relating to plaintiffs or
defendant’s trade Mark are pending either before the
Registrar or the High Court, the proceedings in the suit
shall be stayed pending final decision of the High Court
or the Registrar. Even if such proceedings are not
pending either before the Registrar or the High Court,
the trial court, if pritna facie satisfied that the plea
regarding invalidity of plaintiff s or defendant’s Trade
Mark is tenable, may frame an issue and adjourn the
case for three months to enable the party concerned to
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apply to the High Court for rectification of the Register.
If within three months, the party concerned does not
approach the High Court, the plea regarding invalidity
of Trade Mark would be treated as abandoned but if
such an application has been given hearing,, the suit
would be stayed awaiting final decision of the High
Court. The finding of the High Court would bind the
parties and the issue relating to the invalidity of Trade
Mark would be decided in terms of those findings.
62. In this background, the phrase “before which the
proceeding concerned is pending” stands out
prominently to convey the idea that if the proceeding is
pending before the “Registrar”, it becomes the
“TRIBUNAL” Similarly, if the proceeding is pending
before the “High Court”, then the High Court has to be
treated as “TRIBUNAL”. Thus, the jurisdiction of the
Registrar and the High Court, though apparently
concurrent in certain matters, is mutually exclusive.
That is to say, if a particular proceeding is pending
before the registrar, any other proceeding, which may,
in any way, relate to the pending proceeding, will have
to be initiated before and taken up by the Registrar and
the High Court will act as the Appellate Authority of the
Registrar Under Section 109: It is obvious that if the
proceedings are pending before the High Court, the
registrar will keep his hands off and not touch those or
any other proceedings which may, in any way, relate to
those proceedings, as the High Court, which has to be
the High Court having jurisdiction as set out in Section
3, besides being the Appellate Authority of the
Registrar has primacy over the Registrar in all matters
under the Act. Any other interpretation of the definition
of “TRIBUNAL” would not be in consonance with the
scheme of the Act or the contextual background set out
therein and may lead to conflicting decision on the
same question by the Registrar and the High Court
besides generating multiplicity of proceedings.
63. Learned counsel for the respondent – Chinar Trust,
at this stage, invoked the Rule of Punctuation in English
Grammar and contended that the definition of
“TRIBUNAL” is amply clear and requires no
interpretative exercise as there is a distinction between
the “Registrar” and the “High Court” inasmuch as the
Registrar will have jurisdiction irrespective of the
pendency of any proceeding, the High Court will have
jurisdiction only when “proceeding concerned is
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pending before it. This he tried to show by pointing out
that the words “as the case may be” are placed
between two commas, one at the beginning
immediately after the word “Registrar” and the other at
the end, with the result that the words “Tribunal means
the Registrar” stand out distinctly, while the words
“High Court before which the proceeding concerned is
pending” stand out separately as an independent
phrase. It is contended that the words “before which
the proceeding concerned is pending” will not be
applicable to the Registrar and, therefore, the Registrar
can exercise the jurisdiction Under Section 56
irrespective of pendency of any “proceeding”.
68. In the case of Vodafone International Holdings B.V. vs.
Union of India (UOI) and Ors.: (supra) , the Supreme Court
held thus:
3. In the facts and circumstances of this case, thus, we
are of the opinion that the question in regard to the
jurisdictional issue, may be determined, by the
authority concerned as a preliminary issue, in terms of
the decision of this Court in Management of Express
Newspapers (Private) Ltd., Madras v. The Workers and
Ors. (1962)IILLJ227SC , Wherein this Court has held as
under:
(15) The High Court undoubtedly has jurisdiction to ask
the Industrial Tribunal to stay its hands and to embark
upon the preliminary enquiry itself. The jurisdiction of
the High Court to adopt this course cannot be, and is
indeed not disputed. But would it be proper for the
High Court to adopt such a course unless the ends of
justice seen to makes is necessary to do so? Normally,
the questions of fact, though they may be jurisdictional
facts the decision of which depends upon the
appreciation of evidence, should, be left to be tried by
the Special Tribunals constituted for that purpose. If
and after the Special Tribunals try the preliminary issue
in respect of such jurisdictional facts, it would be open
to the aggrieved party to take that matter before the
High Court by a writ petition and ask for an appropriate
writ. Speaking generally, it would not be proper or
appropriate that the initial jurisdiction of the Special
Tribunal to deal with these jurisdictional facts should be
circumvented and the decision of such a preliminary
issue brought before a High Court in its writ
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jurisdiction. We wish to point out that in making these
observations, we do not propose to lay down any fixed
or inflexible rule; whether or not even the preliminary
facts should be tried by a High Court in a writ petition,
must naturally depend upon the circumstances of each
case and upon the nature of the preliminary issue
raised between the parties. Having regard to the
circumstances of the present dispute, we think the
Court of Appeal was right in taking the view that the
preliminary issue should more appropriately be dealt
with by the Tribunal. The Appeal Court has made it
clear that any party who feels aggrieved by the finding
of the Tribunal on this preliminary issue may move the
High Court in accordance with law. Therefore, we are
not prepared to accept Mr. Shastri’s argument that the
appeal Court was wrong in reversing the conclusion of
the Trial Judge in so far as the Trial Judge proceeded to
deal with the question as to whether the action of the
appellant was a closure or a lockout.
69. In the case of The Management of Express Newspapers
Ltd. vs. Workers and Staff Employed under it and Ors.: , the
(supra) Supreme Court held thus:
“6…………..In regard to the main point of controversy
between the parties as to the validity of the reference
itself, the Appeal Court took the view that the questions
which had to be decided in dealing with the appellant’s
contention that the reference was invalid, were
complex questions of fact and that it would be
appropriate that the said questions should be fully
investigated and tried in the first instance by the
Industrial Tribunal itself. In other words, the Appeal
Court held that though the High Court had jurisdiction
to entertain an application for a writ of Prohibition even
at the initial stage of the proceedings commenced
before a Special Tribunal, it would not be proper that a
writ of prohibition should be issued unless the disputed
questions of fact were tried by the said Special Tribunal
in the first instance. On this view, the order passed by
the trial Judge has been modified and the disputes
referred to the Industrial Tribunal for its adjudication
have been remitted to the said Tribunal for its disposed
in accordance with law. In making this Order, the
Appeal Court has indicated the nature of the dispute
and the questions of fact which the Industrial Tribunal
may have to try and the limits of its jurisdiction. In the
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result, the writ apple No. 73/1959 succeeded whereas
writ appeal No. 85/1959 failed. It is this decision of the
Court of Appeal that is challenged before us by Mr.
Viswanatha Sastri on behalf of the appellant.
15. The High Court undoubtedly has jurisdiction to ask
the Industrial Tribunal to stay its hands and to embark
upon the preliminary enquiry itself. The jurisdiction of
the High Court to adopt this course cannot be, and is
indeed not, disputed. But would it be proper for the
High Court to adopt such a course unless the ends of
justice seem to make it necessary to do so ? Normally,
the questions of fact, though they may be jurisdictional
facts the decision of which depends upon the
appreciation of evidence, should be left to be tried by
the Special Tribunals constituted for that purpose. If
and after the Special Tribunals try the preliminary issue
in respect of such jurisdictional facts, it would be open
to the aggrieved party to take that matter before the
High Court by a writ petition and ask for an appropriate
writ. Speaking generally, it would not be proper or
appropriate that the initial jurisdiction of the Special
Tribunal to deal with these jurisdictional facts should be
circumvented and the decision of such a preliminary
issue be brought before a High Court in its writ
jurisdiction. We wish to point out that in making these
observations, we do not propose to lay down any fixed
or inflexible rule; whether or not even the preliminary
fact should be tried by a High Court in a write petition,
must naturally depend upon the circumstances of each
case and upon the nature of the preliminary issue
raised between the parties. Having regard to the
circumstances of the present dispute, we think the
Court of Appeal was right in taking the view that the
preliminary issue should more appropriately dealt with
by the Tribunal. The Appeal Court has made it clear
that any party who feels aggrieved by the finding of the
Tribunal on this preliminary issue may move the High
Court in accordance with law. Therefore, we are not
prepared to accept Mr. Sastri’s argument that the
Appeal Court was wrong in reversing the conclusion of
the trial Judge in so for as the Trial Judge proceeded to
deal with the question as to whether the action of the
appellant was a closure or a lockout.
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70. In Raghuvinder Singh Vs Dy. Commissioner Of Income
Tax, (Benami Transaction) And Initiating Officer (supra )
Under The Prevention Of Benami Transaction Act 2016, this Court
observed thus:
Grounds have been raised regarding non-compliance of
principles of natural justice as well as non-compliance
of the provisions contained under the Benami
Transaction (Prohibition) Act, 1988, specially Section 24
with regard to service of notice and also with regard to
application of mind relating to the order of approval.
Having noted the aforesaid, this Court finds that it
would not be appropriate for this Court at this stage to
examine the veracity and legality of the notice of
attachment issued way back as on 22/12/2017 as of
now as the matter is already pending before the
adjudicating authority. However, all the objections,
which the petitioner has raised before this Court, can
be taken up by him before the adjudicating authority
and it would be for the adjudicating authority to decide
and examine all the objections and pass a reasoned
order. It is expected from the adjudicating authority to
give reasonable time to the petitioner to put up his
objections in writing and examine the entire issue
thread-bear after giving fair opportunity to all the
parties.
71. In Great Pacific General Trading Company (Limited
Liability Partnership), Vs. Union of India, Through the
Secretary, Ministry of Finance, Department of Revenue,
(supra), it has been observed thus:
“It is contended that the transaction questioned by the
respondent No.3 in the order dated 18.11.2017 does
not fall in the category of benami transaction.
After hearing learned counsel for the petitioner and
after perusing the material available on record and the
order dated 18.11.2017 passed by the Initiating Officer
under Section 24(4) of the PBPT Act, it cannot be said
that the respondent No.3 has passed the order dated
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18.11.2017 without there being any material on record.
This Court at this stage cannot record a finding to the
effect that Shri Aditya Lodha cannot be termed as
benamidar or the property in question is not a benami
property. It is for the adjudicating authority to
adjudicate upon the matter, referred to it by the
Initiating Officer, after providing opportunity of hearing
to Shri Aditya Lodha as per the provisions of Section 26
of the PBPT Act.
72. The above judgement was challenged in D.B. Spl. Appl. Writ
No. 1315/2018, decided on 22/10/2018: Great Pacific General
Trading Company (Limited Liability Partnership) Vs. Union
of India, through the Secretary, Ministry of Finance,
Department of Revenue holding thus:
“We are constraint to note that the averments made in
para 5 of the Special Appeal are factual. As per the said
reply to para 5, Shri Aditya Lodha and his son Shri
Manan Lodha retired on 01.06.2015 and only Shri
Tarachand Parakh and his son Shri Aditya Parakh
remained the partners in the LLP till 10.07.2017.
During this period, the transactions were carried out by
Shri Aditya Lodha alone and Shri Tara Chand Parakh
and his son Shri Aditya Parakh were not even aware of
the said transactions, which has given rise to bonafide
suspicion that the property is benami property. Hence,
we agree with the learned Single Judge that in case, we
go into the same at this stage, it would effect the
finding with respect to the property as to whether the
same was benami or not. Accordingly, no ground is
made out to interfere in the order impugned.”
73. In the case , Dheeru Gond Vs. Union of India(supra),
High Court of Madhya Pradesh held thus:
“It is apparent that the learned Single Judge of this
Court in WP No.10280/2017 filed by one Kailash
Assudani challenging the show cause notice of similar
nature has dismissed the petition holding that the
provision of Section 26 of the Act, 1988 is a complete
code in itself providing ample opportunities to the
assessee concerned, and apart from that there is
remedy of appeal available to the petitioner. The order
passed by the learned Single a Judge of this Court in
WP No.10280/2017 has been confirmed by the Division
Bench of this Court in WA No.704/2017 with the ad
following observations:-
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We do not find any merit in the present M
appeal. It is the Adjudicating Authority who
is to decide the question of Benami nature
of the property. The proceedings under
Section 24 of the Act contemplates the
issuance of show cause notice as to why
the property specified in the notice should
not be treated as Benami property.
However, the substantive order of treating
the property as Benami is required to be
passed by Adjudicating Authority under
Section 26 C of the Act only. Therefore, the
appellant is at liberty to take all such plea
of law and facts as may be available to the
appellant before the Adjudicating Authority.
The Adjudicating Authority shall decide the
Benami nature of the property in
accordance with law.
74. In the case of WA-704-2017, Kailash Assudani vs
Commissioner Of Income Tax: decided on 16 August, 2017, it
has been observed thus:
“We do not find any merit in the present appeal. It is
the Adjudicating Authority who is to decide the
question of Benami nature of the property. The
proceedings under Section 24 of the Act contemplates
the issuance of show cause notice as to why the
property specified in the notice should not be treated
as Benami property. However, the substantive order of
treating the property as Benami is required to be
passed by Adjudicating Authority under Section 26 of
the Act only. Therefore, the appellant is at liberty to
take all such plea of law and facts as may be available
to the appellant before the Adjudicating Authority. The
Adjudicating Authority shall decide the Benami nature
of the property in accordance with law.”
75. In the case of R. Rajagopal Reddy (Dead) by L.Rs. and
Ors. (supra), it has been held thus:
“11. Before we deal with these six considerations which
weighed with the Division Bench for taking the view
that Section 4 will apply retrospectively in the sense
that it will get telescoped into all pending proceedings,
howsoever earlier they might have been filed, if they
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were pending at different stages in the hierarchy of the
proceedings even upto this Court, when Section 4 came
into operation, it would be apposite to recapitulate the
salient feature of the Act. As seen earlier, the preamble
of the Act itself states that it is an act to prohibit
benami transactions and the right to recover property
held benami, for matters connected therewith or
incidental thereto. Thus it was enacted to efface the
then existing rights of the real owners of properties
held by others benami. Such an act was not given any
retrospective effect by the legislature. Even when we
come to Section 4, it is easy to visualise that Subsection
(1). of Section 4 states that no suit, claim or
action to enforce any right in respect of any property
held benami against the person in whose name the
property is held or against any other shall lie by or on
behalf of a person claiming to be the real owner of such
property. As per Section 4(1) no such suit shall
thenceforth lie to recover the possession of the
property held benami by the defendant. Plaintiffs right
to that effect is sought to be taken away and any suit
to enforce such a right after coming into operation of
Section 4(1) that is 19th May, 1988, shall not lie. The
legislature in its wisdom has nowhere provided in
Section 4(1) that no such suit, claim or action pending
on the date when Section 4 came into force shall not be
proceeded with and shall stand abated. On the
contrary, clear legislative intention is seen from the
words “no such claim, suit or action shall lie”, meaning
thereby no such suit, claim or action shall be permitted
to be filed or entertained or admitted to the portals of
any Court for seeking such a relief after coming into
force of Section 4(1). In Collins English Dictionary,
1979 Edition as reprinted subsequently, the word ‘lie’
has been defined in connection with suits and
proceedings. At page 848 of the Dictionary while
dealing with topic No. 9 under the definition of term ‘lie’
it is stated as under :-
For an action, claim appeal ect. to subsist; be
maintainable or admissible.
The word ‘lie’ in connection with the suit, claim or
action is not defined by the Act. If we go by the
aforesaid dictionary meaning it would mean that such
suit, claim or action to get any property declared
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benami will not be admitted on behalf of such plaintiff
or applicant against the concerned defendant in whose
name the property is held on and from the date on
which this prohibition against entertaining of such suits
comes into force. With respect, the view taken by that
Section 4(1) would apply even to such pending suits
which were already filed and entertained prior to the
date when the Section came into force and which has
the effect of destroying the then existing right of
plaintiff in connection with the suit property cannot be
sustained in the face of the clear language of Section
4(1). It has to be visualised that the legislature in its
wisdom has not expressly made Section 4
retrospective. Then to imply by necessary implication
that Section 4 would have retrospective effect and
would cover pending litigations filed prior to coming
into force of the Section would amount to taking a view
which would run counter to the legislative scheme and
intent projected by various provisions of the Act to
which we have referred earlier. It is, however, true as
held by the Division Bench that on the express
language of Section 4(1) any right inhering in the real
owner in respect of any property held benami would
get effaced once Section 4(1) operated, even if such
transaction had been entered into prior to the coming
into operation of Section 4(1), and hence-after Section
4(1) applied no suit can lie in respect to such a past
benami transaction. To that extent the Section may be
retroactive. To highlight this aspect we may take an
illustration. If a benami transaction has taken place in
1980 and suit is filed in June 1988 by the plaintiff
claiming that he is the real owner of the property and
defendant is merely a benamidar and the consideration
has flown from him then such a suit would not lie on
account of the provisions of Section 4(1). Bar against
filing, entertaining and admission of such suits would
have become operative by June, 1988 and to that
extent Section 4(1) would take in its sweep even past
benami transactions which are sought to be litigated
upon after coming into force of the prohibitory
provision of Section 4(1); but that is the only effect of
the retroactivity of Section 4(1) and nothing more than
that. From the conclusion that Section 4(1) shall apply
even to past benami transactions to the aforesaid
extent, the next step taken by the Division Bench that
therefore, the then existing rights got destroyed and
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even though suits by real owners were filed prior to
coming into operation of Section 4(1) they would not
survive, does not logically follow.
12. So far as Section 4(2) is concerned, all that is
provided is that if a suit is filed by a plaintiff who claims
in his favour and holds the property in his name, once
Section 4(2) applies, no defence will be permitted or
allowed in any such suit, claim or action by or on behalf
of a person claiming to be the real owner of such
property held benami. The disallowing of such a
defence which earlier was available, itself, suggests
that a new liability or restriction is imposed by Section
4(2) on a pre- existing right of the defendant. Such a
provision also cannot be said to be retrospective or
retroactive by necessary implication. It is also pertinent
to note that Section 4(2) does not expressly seek to
apply retrospectively. So far as such a suit which is
covered by the sweep of Section 4(2) is concerned, the
prohibition of Section 4(1) cannot apply to it as it is not
a claim or action filed by the plaintiff to enforce right in
respect of any property held benami. On the contrary,
it is a suit, claim or action flowing from the sale deed or
title deed in the name of the plaintiff. Even though such
a suit have been filed prior to 19.5.1988, if before the
stage of filing of defence by the real owner is reached,
Section 4(2) becomes operative from 19th May, 1988,
then such a defence, as laid down by Section 4(2) will
not be allowed to such a defendant. However, that
would not mean that Section 4(1) and 4(2) only on that
score can be treated to be impliedly retrospective so as
to cover all the pending litigations in connection with
enforcement of such rights of real owners who are
parties to benami transactions entered into prior to the
coming into operation of the Act and specially Section 4
thereof. It is also pertinent to note that Section 4(2)
enjoins that no such defence ‘shall be allowed’ in any
claim, suit or action by or on behalf of a person
claiming to be the real owner of such property. That is
to say no such defence shall be allowed for the first
time after coming into operation of Section 4(2). If
such a defence is already allowed in a pending suit
prior to the coming into operation of Section 4(2),
enabling an issue to be raised on such a defence, then
the Court is bound to decide the issue arising from such
an already allowed defence as at the relevant time
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when such defence was allowed Section 4(2) was out of
picture. Section 4(2) nowhere uses the words “No
defence based on any right in respect of any property
held benami whether against the person in whose
name the property is held or against any other person,
shall be allowed to be raised or continued to be raised
in any suit.” With respect, it was wrongly assumed by
the Division Bench that such an already allowed
defence in a pending suit would also get destroyed
after coming into operation of Section 4(2). We may at
this stage refer to one difficulty projected by learned
advocate for the respondents in his written
submissions, on the applicability of Section 4(2). These
submissions read as under:-
Section 4(1) places a bar on a plaintiff
pleading ‘benami’, while Section 4(2)
places a bar on a defendant pleading
‘benami’, after the coming into force of the
Act. In this context, it would be anomalous
if the bar in Section 4 is not applicable if a
suit pleading ‘benami’ is already filed prior
to the prescribed date, and it is treated as
applicable only to suit which he filed
thereafter. It would have the effect of
classifying the so-called ‘real’ owners into
two classes – those who stand in the
position of plaintiffs and those who stand in
the position of defendants. This may be
clarified by means of an illustration. A and
B are ‘real’ owners who have both
purchased properties in say 1970, in the
names of C and D respectively who are
ostensible owners viz. benamidars. A files
a suit in February 1988 i.e. before the
coming into force of the Act against C, for
a declaration of his title saying that C is
actually holding it as his benamidar.
According to the petitioner’s argument,
such a plea would be open to A even after
coming into force of the Act, since the suit
has already been laid. On the other hand,
if D files a suit against B at the same for
declaration and injunction, claiming himself
to be the owner but B’s opportunity to file
a written statement comes in say
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November 1988 when the Act has already
come into force, he in his written
statement cannot plead that D is a
benamidar and that he, B is the real owner.
Thus A and B, both ‘real’ owners, would
stand on a different footing, depending
upon whether they would stand in the
position of plaintiff or defendant. It is
respectfully submitted that such a
differential treatment would not be rational
or logical.
13. According to us this difficulty is inbuilt in Section
4(2) and does not provide the rationale to hold that
this Section applies retrospectively. The legislature
itself thought it fit to do so and there is no challenge to
the vires on the ground of violation of Article 14 of the
Constitution. It is not open to us to re-write the section
also. Even otherwise, in the operation of Section 4(1)
and (2), no discrimination can be said to have been
made amongst different real owners of property, as
tried to be pointed out in the written objections. In
fact, those cases in which suits are filed by real owners
or defences are allowed prior to corning into operation
of Section 4(2), would form a separate class as
compared to those cases where a stage for filing such
suits or defences has still not reached by the time
Section 4(1) and (2) starts operating. Consequently,
latter type of cases would form a distinct category of
cases. There is no question of discrimination being
meted out while dealing with these two classes of cases
differently. A real owner who has already been allowed
defence on that ground prior to coming into operation
of Section 4(2) cannot be said to have been given a
better treatment as compared to the real owner who
has still to take up such a defence and in the meantime
he is hit by the prohibition of Section 4(2). Equally
there cannot be any comparison between a real owner
who has filed such suit earlier and one who does not
file such suit till Section 4(1) comes into operation. All
real owners who stake their claims regarding benami
transactions after Section 4(1) and (2) came into
operation are given uniform treatment by these
provisions, whether they come as plaintiffs or as
defendants. Consequently, the grievances raised in this
connection cannot be sustained.”
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76. In the case of State Bank of Travancore and another Vs.
Mathew K.C. (supra) it has been held thus:
“13. In Ikbal (supra), it was observed that the action of
the Bank Under Section 13(4) of the ‘SARFAESI Act’
available to challenge by the aggrieved Under Section
17 was an efficacious remedy and the institution
directly Under Article 226 was not sustainable, relying
upon Satyawati Tandon (Supra), observing:
27. No doubt an alternative remedy is not
an absolute bar to the exercise of
extraordinary jurisdiction Under Article 226
but by now it is well settled that where a
statute provides efficacious and adequate
remedy, the High Court will do well in not
entertaining a petition Under Article 226.
On misplaced considerations, statutory
procedures cannot be allowed to be
circumvented.
***
28…….In our view, there was no
justification whatsoever for the learned
Single Judge to allow the borrower to
bypass the efficacious remedy provided to
him Under Section 17 and invoke the
extraordinary jurisdiction in his favour
when he had disentitled himself for such
relief by his conduct. The Single Judge was
clearly in error in invoking his
extraordinary jurisdiction Under Article 226
in light of the peculiar facts indicated
above. The Division Bench also erred in
affirming the erroneous order of the Single
Judge.
77. In the case of CIT, New Delhi Vs. Ram Kishan Dass
(supra), the Apex Court of the land held thus:
“24. We find no substance in the submission urged on
behalf of the Assessees that to adopt an interpretation
which we have placed on the provisions of Section
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142(2C) would enable the assessing officer to extend
the period of limitation for making an assessment
Under Section 153B. Explanation (iii) to Section
153B(1), as it stood at the material time, provided for
the exclusion of the period commencing from the date
on which the assessing officer had directed the
Assessee to get his accounts audited Under Sub-section
(2A) of Section 142 and ending on the day on which
the assesee is required to furnish a report under that
Sub-section. The day on which the Assessee is required
to furnish a report of the audit Under Sub-section (2A)
marks the culmination of the period of exclusion for the
purpose of limitation. Where the assessing officer had
extended the time, the period, commencing from the
date on which the audit was ordered and ending with
the date on which the Assessee is required to furnish a
report, would be excluded in computing the period of
limitation for framing the assessment Under Section
153B. The principle governing the exclusion of time
remains the same. The act on which the exclusion
culminates is the date which the assessing officer fixes
originally, or on extension for submission of the report.
25. The issue as to whether the amendment which has
been brought about by the legislature is intended to be
clarificatory or to remove an ambiguity in the law must
depend upon the context. The Court would have due
regard to (i) the general scope and purview of the
statute; (ii) the remedy sought to be applied; (iii) the
former state of the law; and (iv) what power that the
legislature contemplated (See Zile Singh v. State of
Haryana (2004) 8 SCC 1). The decision in Sedco Forex
International Drill Inc. v. Commissioner of Income Tax
[2005] 279 ITR 310 (SC); (2005) 12 SCC 717 on which
learned Counsel for the assesses relied involved a
substitution of the Explanation to Section 9(1)(ii) of the
IT Act, 1961 with effect from 1 April 2000. A two Judge
Bench of this Court held that given the legislative
history of Section 9(1)(ii), it can only be assumed that
it was deliberately introduced with effect from 1 April
2000 and was therefore intended to be prospective.
This was also so construed by the CBDT, and in the
explanatory notes to the provisions of the Finance Act,
1999. As we have indicated, interpretation is a matter
of determining the path on the basis of statutory
context and legislative history. In taking the view that
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we have, we have also taken note of the fact that the
same view was adopted by several High Courts. Among
them are (i) the Punjab and Haryana High Court in
Jagatjit Sugar Mills Co. Ltd. v. Commissioner of Income
Tax (1994) 74 Taxman 8 (Pun. & Har.); [1994] 210 ITR
468; (ii) the Kerala High Court in Commissioner of
Income Tax, Cochin v. Popular Automobiles (2011) 333
ITR 308; and (iii) the Allahabad High Court in
Ghaziabad Development Authority v. Commissioner of
Income Tax, Ghaziabad (UP) (2011) 12 Taxman.com
334 (Allahabad). The decision of the Kerala High Court
in Popular Automobiles (supra) is the subject matter of
Civil Appeal No. 2951 of 2012 in these proceedings.
78. In the case of Canbank Financial Services Ltd. vs. The
Custodian and Ors. (supra), the Supreme Court observed thus:
“67. The evil of benami transaction was sought to be
curbed by reason of the provisions of the Urban Land
(Ceiling and Regulation) Act 1976, the State Ceiling
Laws, Income Tax Act 1961 as amended by the
Taxation Laws (Amendment) Act 1975 (See Sections
281 and 281A of the Income Tax Act), Section 5 of the
Gift Tax Act 1958, Section 34B of the Wealth Tax Act
and Section 5(1) of the Estate Duty Act (since
repealed). It is only with that view the Benami
Transactions (Prohibition) Act, 1988 prohibiting the
right to recover benami transaction was enacted.
Section 5(1) provided that all properties held benami
shall be subject to acquisition as different from
forfeiture provided for in the Smugglers and Foreign
Exchange Manipulators (Forfeiture of Property) Act,
1976. But even Section 5 had not been made workable
as no rules under Section 8 of the Act for acquisition of
property held benami were framed.”
79. Applying the principles deducible from the opinions of the
Apex Court of the land as referred to and relied upon by the
learned counsel for the parties; it is evident that High Court could
interfere in exercise of writ jurisdiction, if, the conditions
precedent to the exercise of jurisdiction under the statutory
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provisions did not exist even at the stage of notice issued. Thus,
the High Courts have power in appropriate cases to prohibit
executive authority from acting without jurisdiction. Moreover, if
executive authority exercised the power without jurisdiction that
would subject an individual to lengthy proceedings and
unnecessary harassment. Hence, to prevent such lengthy
proceedings and unnecessary harassment, recourse to jurisdiction
under Article 226 and/or227 of the Constitution is not prohibited.
Further, the legislative drafting is more than an ordinary prose
which differs in provenance, features and its import as to the
meaning attached thereto and presumptions as to intendment of
the legislation.
80. By now, it is well settled law that unless a contrary intention
is reflected, a legislation is presumed and intended to be
prospective. For in the normal course of human behavior, one is
entitled to arrange his affairs keeping in view the laws for the time
being in force and such arrangement of affairs should not be
dislodged by retrospective application of law. The principle of law
known as lex prospicit non prospicit (law looks forward not
backward), is a well known and accepted principle. The
retrospective legislation is contrary to general principle for
legislation by which the conduct of mankind is to be regulated
when introduced for the first time to deal with future acts ought
not to change the character of past transactions carried out in the
faith of the then existing law (vide Phillips Vs. Eyre (1870)LR 6 QB
1). Thus, the principle against retrospectivity is the principle of
‘fairplay’ and unless there is a clear and unambiguous intendment
for retrospective effect to the legislation which affects accrued
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rights or imposes obligations or castes new duties or attaches a
new disability is to be treated as prospective.
81. It is trite law that an explanatory or declaratory Act is
intended to supply an obvious omission or is enacted to clear
doubts as to the meaning of the previous Act. While retrospective
operation is generally intended as to declaratory or curative
provisions, which is supplied with the ‘language’ “shall be deemed
always to have meant”. Therefore, in absence of clarity
amendment being declaratory or curative in the face of
unambiguous or confusion in the pre-amended provisions; the
same is not required to be treated as curative or declaratory
amendment. Viewed in the light of the settled legal proposition,
as aforesaid, Benami Amendment Act, 2016, neither appears to be
clarificatory nor curative. Moreover, by way of amendment penal
consequences have been introduced providing for confiscation of
the benami property and enhanced punishment.
82. In the case of Prakash and Ors. (supra), the Apex Court of
the land while dealing with the very Benami Amendment Act,
2016, held thus:
“17. The text of the amendment itself clearly provides
that the right conferred on a ‘daughter of a coparcener’
is ‘on and from the commencement of Hindu
Succession (Amendment) Act, 2005’. Section 6(3) talks
of death after the amendment for its applicability. In
view of plain language of the statute, there is no scope
for a different interpretation than the one suggested by
the text of the amendment. An amendment of a
substantive provision is always prospective unless
either expressly or by necessary intendment it is
retrospective Shyam Sunder v. Ram Kumar (2001) 8
SCC 24, Paras 22 to 27. In the present case, there is
neither any express provision for giving retrospective
effect to the amended provision nor necessary
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intendment to that effect. Requirement of partition
being registered can have no application to statutory
notional partition on opening of succession as per
unamended provision, having regard to nature of such
partition which is by operation of law. The intent and
effect of the Amendment will be considered a little
later. On this finding, the view of the High Court cannot
be sustained.
18. Contention of the Respondents that the
Amendment should be read as retrospective being a
piece of social legislation cannot be accepted. Even a
social legislation cannot be given retrospective effect
unless so provided for or so intended by the legislature.
In the present case, the legislature has expressly made
the Amendment applicable on and from its
commencement and only if death of the coparcener in
question is after the Amendment. Thus, no other
interpretation is possible in view of express language of
the statute. The proviso keeping dispositions or
alienations or partitions prior to 20th December, 2004
unaffected can also not lead to the inference that the
daughter could be a coparcener prior to the
commencement of the Act. The proviso only means
that the transactions not covered thereby will not affect
the extent of coparcenary property which may be
available when the main provision is applicable.
Similarly, Explanation has to be read harmoniously with
the substantive provision of Section 6(5) by being
limited to a transaction of partition effected after 20th
December, 2004. Notional partition, by its very nature,
is not covered either under proviso or under Subsection
5 or under the Explanation.”
83. By now, it is well settled law that a substantive provision
unless specifically made retrospective or otherwise intended by
the Parliament should always be held to be prospective. The power
to confiscate and consequent forfeiture of rights or interests are
drastic being penal in nature, and therefore, such statutes are to
be read very strictly. However, there can be no exercise of powers
under such statutes by way of extension or implication (vide
O.Konavalov (supra).
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84. In the case of D.L.F. Qutab Enclave Complex Educational
Charitable Trust (supra), the Apex Court of the land in no
uncertain terms observed that extraordinary legislation must be
strictly construed and a penal statute must receive strict
construction. The Supreme Court further observed that the
mischief of rule, if applied, in view of amendment made would be
in infraction to the provisions of Article 20 of the Constitution of
India, cannot be given retrospective effect. Similar is the position
operating in the instant batch of cases at hand. The rights
accrued in favour of any person owing to a transaction in the
nature of contract protected under a statute, in that event
transgration/violation of those rights could only be by a legislation
with retrospective effect.
85. In view of the settled legal proposition that no authority,
much less, a quasi judicial authority, can confer jurisdiction on
itself by deciding a jurisdictional fact wrongly; is a question that is
always open for scrutiny by the High Court in an application under
Article 226/227 of the Constitution of India. The very question of
correctness and legality of the issuance of notice can be examined
in exercise of writ jurisdiction.
86. In the case of Mangathai Ammal (died) through L.Rs. & ors.
(supra), the Apex Court of the land while dealing with issue of
retrospective effect of the Benami Amendment Act, 2016, in
unambiguous terms held that Benami Transaction Act would not
be applicable retrospectively. At this juncture, it would be
relevant to take note of the text of para 12 of the said judgment
which reads thus:
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“12. It is required to be noted that the benami
transaction came to be amended in the year 2016. As
per Section 3 of the Benami Transaction (Prohibition)
Act 1988, there was a presumption that the
transaction made in the name of the wife and children
is for their benefit. By Benami Amendment Act, 2016,
Section 3(2) of the Benami Transaction Act, 1988 the
statutory presumption, which was rebuttable, has
been omitted. It is the case on behalf of the
Respondents that therefore in view of omission of
Section 3(2) of the Benami Transaction Act, the plea
of statutory transaction that the purchase made in the
name of wife or children is for their benefit would not
be available in the present case. Aforesaid cannot be
accepted. As held by this Court in the case of Binapani
Paul (Supra) the Benami Transaction (Prohibition) Act
would not be applicable retrospectively. Even
otherwise and as observed hereinabove, the Plaintiff
has miserably failed to discharge his onus to prove
that the Sale Deeds executed in favour of Defendant
No. 1 were benami transactions and the same
properties were purchased in the name of Defendant
No. 1 by Narayanasamy Mudaliar from the amount
received by him from the sale of other ancestral
properties.”
87. Article 20 of the Constitution of India is fundamental right
guaranteed under Part-III of the Constitution and the penal
consequences emanating from the Benami Amendment Act, 2016,
in infraction to the mandate of fundamental rights guaranteed
under Article 20 of the Constitution; cannot be given retrospective
effect in absence of a clear stipulation by the Parliament on
retrospectivity.
88. In the case of Joseph Isharat (supra), relying upon the
opinion of the Apex Court of the land in the case of R. Rajagopal
Reddy (Dead) by L.Rs. and Ors. (supra) while examining the
provisions of amendment introduced by the Legislature through
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Benami Amendment Act, 2016, made effective from 1st
November, 2016, the Bombay High Court observed thus:
4. Under the Benami Act, as it stood on the date of
the suit as well as on the date of filing of written
statement and passing of the decree by the courts
below, provided for the definition of a “benami
transaction” under clause (a) of Section 2. Under that
provision, any transaction in which property is
transferred to one person for consideration paid or
provided by another came within the definition of
“benami transaction”. Section 3 of the Benami Act, in
sub-section (1), provided that no person shall enter
into any benami transaction. Sub-section (2)
contained two exceptions to the prohibition contained
in sub-section (1). The first exception, contained in
clause (a) of sub-section (2), was in respect of
purchase of property by any person in the name of his
wife or unmarried daughter. In the case of such
purchase, it was to be presumed, unless the contrary
was proved, that the property was purchased for the
benefit of the wife or unmarried daughter, as the case
may be. Simultaneously, Section 4 of the Benami Act
contained a prohibition in respect of right to recover
property held benami. Sub-section (1) provided that
no suit, claim or action to enforce any right in respect
of any property held benami against the person in
whose name the property is held, or against any other
person, shall lie by or on behalf of a person claiming
to be the real owner of such property. Sub-section (2)
made provisions likewise in respect of a defence
based on a plea of benami transaction. Sub-section
(2) provided that no defence based on any right in
respect of any property held benami, whether against
the person in whose name the property is held or
against any other person, shall be allowed in any suit,
claim or action by or on behalf of a person claiming to
be the real owner of such property. There was a
twofold exception to this restriction. First was in
respect of the person in whose name the property is
held being a coparcener in a Hindu undivided family
and the property being held for the benefit of the
coparceners of the family. The second exception was
in respect of the person, in whose name the property
was held, being a trustee or other person standing in
a fiduciary capacity and the property being held for
the benefit of another person for whom he was such
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trustee or towards whom he stood in such capacity.
The present suit was filed when these provisions were
in operation. These provisions continued to apply even
when the written statement was filed by the
Defendant and the suit was heard and decreed by
both the courts below. The legal provisions continued
to apply even when the second appeal was filed
before this court. It is only now during the pendency
of the second appeal, when it has come up for final
hearing, that there is a change in law. The Benami Act
has been amended by the Parliament in 2016 with the
passing of the Benami Transactions (Prohibition)
Amendment Act, 2016. This amendment has come
into effect from 01 November 2016. In the Amended
Act the definition of “benami transaction” has
undergone a change. Under the Amended Act “benami
transaction” means (under Section 2(9) of the Act) 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; and the property is held for
the immediate or future benefit, direct or indirect, of
the person who has provided the consideration. There
are four exceptions to this rule. The first is in respect
of a karta or a member of a Hindu undivided family
holding the property for the benefit of the family. The
second exception is in respect of a person standing in
a fiduciary capacity holding the property for the
benefit of another person towards whom he stands in
such capacity. The third exception is in the case of an
individual who purchases the property in the name of
his spouse or child, the consideration being provided
or paid out of the known sources of the individual.
The fourth exception is in the case of purchase of
property in the name of brother or sister or lineal
ascendant or descendant where the names of such
brother or sister or lineal ascendant or descendant, as
the case may be, and the individual appear as joint
owners in any document. Sub-section (1) of Section 3
contains the very same prohibition as under the
unamended Act, in that it prohibits all benami
transactions. Section 4 likewise prohibits suits, claims
or actions or defences based on the plea of benami as
in the case of the unamended Act. The submission is
that under this scheme of law, step-daughter not
having been defined under the Benami Act, but having
been defined under the Income Tax Act, 1961, by
virtue of sub-section (31) of Section 2 of the amended
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Benami Act, the meaning of the expression will be the
one assigned to it under the Income Tax Act. The
definition of daughter under the Income Tax Act
admits of a step-child within it. It is submitted that
under the amended definition of “benami transaction”,
thus, there is a clear exception in respect of a
purchase made in the name of a step-daughter by an
individual provided, of course, the consideration has
been provided or paid out of known sources of the
individual.
7. What is crucial here is, in the first place, whether
the change effected by the legislature in the Benami
Act is a matter of procedure or is it a matter of
substantial rights between the parties. If it is merely a
procedural law, then, of course, procedure applicable
as on the date of hearing may be relevant. If, on the
other hand, it is a matter of substantive rights, then
prima facie it will only have a prospective application
unless the amended law speaks in a language “which
expressly or by clear intention, takes in even pending
matters.”. Short of such intendment, the law shall be
applied prospectively and not retrospectively.
8. As held by the Supreme Court in the case of R.
Rajagopal Reddy v. Padmini Chandrasekharan (1995)
2 SCC 630, Section 4 of the Benami Act, or for that
matter, the Benami Act as a whole, creates
substantive rights in favour of benamidars and
destroys substantive rights of real owners who are
parties to such transaction and for whom new
liabilities are created under the Act. Merely because it
uses the word “it is declared”, the Act is not a piece of
declaratory or curative legislation. If one has regard
to the substance of the law rather than to its form, it
is quite clear, as noted by the Supreme Court in R.
Rajagopal Reddy, that the Benami Act affects
substantive rights and cannot be regarded as having a
retrospective operation. The Supreme Court in R.
Rajagopal Reddy also held that since the law nullifies
the defences available to the real owners in
recovering the properties held benami, the law must
apply irrespective of the time of the benami
transaction and that the expression “shall lie” in
Section 4(1) or “shall be allowed” in Section 4(2) are
prospective and apply to the present (future stages)
as well as future suits, claims and actions only. These
observations clearly hold the field even as regards the
present amendment to the Benami Act. The
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amendments introduced by the Legislature affect
substantive rights of the parties and must be applied
prospectively.”
89. It is also a fact that an SLP instituted against the opinion
(supra), has also been declined by the Supreme Court on 28th
April, 2017 in Special Leave to Appeal (C) No. 12328/2017.
90. In the case of Mohar Singh (supra), the Apex Court of the
land dealt with the consequences of repeal of the Act. The
question in the case of Zile Singh (supra), was related to
disqualification from being a member of Municipal Council (if
children were more than two). Thus, there was no violation of any
fundamental right or penal consequence contemplated. Hence, the
principles cannot be applied to the controversy raised in the
instant batch of writ applications. Similarly, in the case of
Yogendra Kumar Jaiswal (supra), the observations made by the
Apex Court of the land while dealing with the issue of confiscation
or attachment of money/property that was acquired illegally and
that too at an interim stage of prosecution.
91. In the case of Titaghur Paper Mills Co. Ltd. and Ors.
(supra), the matter that fell for consideration of the Supreme
Court, was with regard to ultra vires/jurisdiction of Sales Tax
Officer and no question of law was involved therein.
92. In the case of Gujarat Ambuja Cement Ltd. and Ors.
(supra), while dealing with scope and ambit of writ application
under Article 226 of the Constitution of India, the Supreme Court
observed that what is to be ensured before entertaining such an
application is that a strong case is made out and there exists no
ground to interfere in extra-ordinary jurisdiction. It was further
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observed that where under a statute there is an allegation of
infringement of fundamental right or when on the undisputed facts
the Taxing Authorities are shown to have assumed jurisdiction
which they do not possess, can be the grounds for entertaining
writ application. To the same effect is opinion of the Supreme
Court in the case of Harbanslal Sahnia and ors.(supra).
93. For the reason aforesaid and in the backdrop of the settled
legal proposition so also in view of singular factual matrix of the
matters herein; this Court has no hesitation to hold that the
Benami Amendment Act, 2016, amending the Principal Benami
Act, 1988, enacted w.e.f. 1st November, 2016, i.e. the date
determined by the Central Government in its wisdom for its
enforcement; cannot have retrospective effect.
94. It is made clear that this Court has neither examined nor
commented upon merits of the writ applications but has
considered only the larger question of retrospective applicability of
the Benami Amendment Act, 2016 amending the original Benami
Act of 1988. Thus, the authority concerned would examine each
case on its own merits keeping in view the fact that amended
provisions introduced and the amendments enacted and made
enforceable w.e.f. 1st November, 2016; would be prospective and
not retrospective.
95. The batch of writ applications stands disposed off, as
indicated above.
96. A copy of this order be placed in each of the file.
(VEERENDR SINGH SIRADHANA) J.
Bmg/
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