FPA-PBPT-206\/MUM\/2018 Page 1 of 20
\nAPPELLATE TRIBUNAL FOR SAFEMA, FEMA, PMLA, NDPS, PBPT Act
\nAT NEW DELHI
\nDate of Decision: 26.03.2019
\nMP-PBPT-163\/MUM\/2019(Stay)
\nFPA-PBPT-206\/MUM\/2018
\nShri Akashdeep \u2026 Appellant
\nInitiating Officer and Dy. Commissioner of
\nIncome Tax (Benami Prohibition) Unit-2
\nMumbai
\nVersus
\nM\/s. Manpreet Estates LLP \u2026 Respondent No. 1
\nMumbai
\nM\/s. RKW Developers Pvt. Ltd. \u2026 Respondent No. 2
\nMumbai
\nAdvocates\/Authorized Representatives who appeared
\nFor the Appellant : Shri Manpreet Singh Arora,
\nAdvocate
\nShri Rahul Sinha, I.O.
\nFor the Respondents : Shri Ashwani Taneja, Advocate
\nShri Rahul Rai, Advocate
\nCORAM
\nJUSTICE MANMOHAN SINGH : CHAIRMAN
\nJUDGEMENT
\nFPA\/PBPT\/206\/2018\/MUM
\n1. The Appellant has filed an appeal against impugned order dated
\n24.10.2018 passed under Section 26(3) of the PBPT Act arising out of
\nReference No. 198\/17 filed by the Initiating Office upon
\ninformation received from Investigation Directorate, Mumbai as the I.O,
\nMumbai, BPU-2, on the basis of information received from Investigating
\nDirectorate, Mumbai proceeded with reference whereby it was contended
\nFPA-PBPT-206\/MUM\/2018 Page 2 of 20
\nthat the respondent no.1 is benamidar as actual benefits from the
\nimmovable property held by it accrued or would accrue to the respondent
\nno. 2.
\n2. As per the case of appellant, Manpreet Estates LLP is the Benamidar
\nand RKW Developers Private Limited is the beneficial owner.
\n3. The brief facts are that the respondent No 1 purchased ten
\nresidential flats at New Urmila CHS Limited, 19th Road Khar West,
\nMumbai for total consideration of Rs. 95.25 Crores. All of these ten flats
\nare part of one single building i.e. Urmila CHS Ltd. which was constructed
\non land admeasuring 608.64 Sq. Mtrs. and 656.11 Sq. Mtrs. and situated
\nat plot of land bearing C.T.S. No. D\/900\/A\/3 Survey No. 637\/638 of
\nSuburban Scheme VII (Khar), Khar (West), Mumbai. The said properties
\nhave been purchased by the respondent no. 1 from ten persons on
\n17.01.2017 consisting of 5 individuals and 5 companies.
\n4. It is alleged by the appellant that these 5 individuals and the
\nDirectors of these 5 companies are dummy directors of these companies
\nand dummy owner of the properties. The individuals and directors of these
\ncompanies are employees of the respondent no. 2. They were not aware of
\nany details, transactions or day to day functioning of the companies,
\nthough they are the directors of the said companies, which were handled
\nby Mr. SachinPathak and Mr.Hemant Bhatia, who are in turn the
\naccountants of M\/s RKW Developers Private Limited and related concern.
\nBoth Mr. SachinPathak and Mr. Hemant Bhatia are employees of
\nWadhawan Group and are managing and controlling these companies on
\nFPA-PBPT-206\/MUM\/2018 Page 3 of 20
\nthe instruction of Mr. HitenSakhuja, a relative of the promoters and
\ndirectors of the Wadhawan Group companies.
\n5. It is admitted on behalf of the appellant that the entire transaction
\nof purchase of properties by the respondent no.1 from the aforementioned
\nten parties has been funded by M\/s Dewan Housing Finance Limited
\n(DHFL). The respondent no. 2 and DHFL are related to each other by
\nmeans of common promoters and directors and also have common office
\naddresses. The properties were purchased\/registered by the respondent no.
\n1 on 17.01.2017 and whereas the loan was sanctioned to it by DHFL on
\n18.01.2017. The funds received by the ten parties as consideration for sale
\nof the properties were immediately transferred directly or through
\nintermediates to different concerns which were controlled and managed
\neither directly by respondent no. 2 or through its related entities.
\n6. It is argued that though the reference forwarded by DDIT(Inv.)-8(1),
\nMumbai stated 10 original owners, who sold the properties to respondent
\nno. 1, as benamidar&respondent no. 2 as beneficial owner, the IO is not
\nbound by the reference and has to form his own belief under PBPT Act\u201f
\n1988. It is submitted that on the basis of the information and material
\navailable the I.O. formed a reason to believe that the respondent no.1 is
\nbenamidar as actual benefits from the property accrued or would accrue to
\nthe respondent no. 2 only and accordingly recorded reasons before the
\nissue of notice u\/s 24(1) of the PBPT Act, 1988.
\n7. It is stated on behalf of the appellant that the respondent no. 1 has
\nbeen purchased from the erstwhile partners of partnership firm on
\n13.12.2016 i.e. only about a month before the purchase of the properties
\nand taken over by Shri RajenDhruv and Shri Kishore Parekh as partners. It
\nFPA-PBPT-206\/MUM\/2018 Page 4 of 20
\nis alleged that Benamidar had no major assets or business. It is stated
\nthat though DHFL is listed having 60% of public holding, the key factor
\nremains that day to day management is under the control of the members
\nof the Wadhwan family, who are the main persons in decision making and
\nalso are involved in the management of the respondent no. 2 and the other
\ngroup companies. The respondent no. 2 was involved in the scheme of
\npurchase of flats by the respondent no 1 for redevelopment since beginning
\nas evident from the fact that even the fees for filing forms with RoC with
\nrespect to change in the partnership agreement and the appointment of
\npresent partners in the respondent no. 1 was paid by the respondent no. 2.
\nMere approvals in the name of benamidar do not prove in any way that the
\nbenefits from the property are actually enjoyed by it and not by the
\nbeneficial owner as there is an active financial relationship between the
\nrespondents as evident from the bank statement as even after availing loan
\nfrom DHFL, the respondent no. 1 received huge amounts of money from
\nrespondent no. 2 which it used for the development of property, thereby
\nestablishing that the respondent no. 2 is directly involved in the
\ndevelopment of project in order to derive future benefits arising out of the
\nsame. The person providing the consideration i.e. DHFL and person
\nreaping the benefits of such transaction i.e. respondent no. 2 are same as
\nthey are linked to each by means of common directors and promoters
\n8. It is submitted on behalf of appellant that the benefits to the
\nbeneficial owner arising out of property held in the name of the benamidar
\nneed not be direct and immediate and that indirect and future benefits are
\nalso covered under the definition of a benami transactions under section
\n2(9)(A) of the PBPT Act, 1988, therefore, the Adjudicating Authority thus
\nerred in setting aside on merits the order u\/s 24(4) of the PBPT Act\u201f 1988
\nFPA-PBPT-206\/MUM\/2018 Page 5 of 20
\npassed by the IO holding respondent no 1 as the benamidar and
\nrespondent no 2 as beneficial owner. There being a statutory power vested
\nwith the adjudicating Authority by virtue of Section 11 PBPT Act, the strict
\nrules of evidence may not apply, whilst the Authority needs to weigh and
\nshift the material placed before it with preponderance of probabilities
\ncoupled with circumstances, motives (if any) and object of undertaking a
\nbenami transaction.
\n9. It is alleged that the burden of proving, that a particular property is
\nBenami or a person is Benamidar\/beneficial owner\/interested party, is
\nupon the Initiating Officer alleging the same and such burden has to be
\nstrictly discharged based on legal evidence. Hon\u201fble Supreme Court and
\nHigh Courts have consistently held that the burden of proving that a
\nparticular property is Benami and apparent purchaser is not the real owner
\nalways rests on the person who asserts it to be so. The reliance has been
\nplaced on JaydayalPoddarVs. BibiHazra AIR, 1974 SC 171and Bhim
\nSingh &Anr. Vs. Kan Singh 1980 AIR 727, 1980 SCR(2) 628
\nandBinapani Paul Vs. PratimaGhosh&Ors. on 27th April, 2007 Appeal
\n(Civil)8098 of 2004.
\n10. But, the above mentioned case laws have been laid in relating to
\nBenami Property are prior to the enactment of the Prohibition of Benami
\nProperty Transactions Act, 1988, as amended by Act No. 43 of 2016. The
\nsaidcase laws have been decided in civil matters in respect of the title
\nowner and the real owner of the property prior to amendment.
\nFPA-PBPT-206\/MUM\/2018 Page 6 of 20
\n11. The subject matter of the reference was the transaction for the
\npurchase of piece and parcel of land, admeasuring 608.64 sq. mts. and
\n656.11 sq. mts. bearing CTS No. D\/900\/A\/3 and Survey No. 637\/638 of
\nSuburban Scheme VII, Khar West, Mumbai (hereinafter referred to as the
\n\u201csaid Property\u201d).
\n12. The brief facts as per respondent no. 1 (for short R-1) are as under:-
\na) Mr. Rajen Dhruv is one of the partners of R-1 and is also the
\npromoter of Midcity Group which is known for its quality of
\nconstruction and completing projects within timelines. Mr. Dhruv
\nis the CEO and MD of Midcity Group and controls key
\ndepartments viz. legal, corporate planning, land acquisition,
\nconstruction, marketing and finance, etc. Mr. Dhruv looks after
\nthe finance of the Midcity Group as he is well acquainted with
\nvarious financial institutions, including Altico Capital India
\nPrivate Limited, India Bulls Housing Finance Limited, India
\nInfoline Finance Limited, Punjab National Bank, Union Bank of
\nIndia, Kotak Mahindra Bank, Punjab & Maharashtra Co-operative
\nBank Ltd. and DHFL, as he has in the past raised funds from
\nthem for his other projects, in the ordinary course of business.
\nb) The Midcity Group has over two decades of experience in the Real
\nEstate and Infrastructure space. Midcity Group has completed
\naround 28 projects till date in the City of Mumbai Suburban.
\nPresently there are numerous other ongoing projects with saleable
\narea admeasuring approximately 1.5 million sq. ft.
\nc) In or about October 2016, Mr. Dhruv came to know about a
\nproperty situated at Khar (West) which was available for redevelopment.
\nFinding the property ideal and feasible, Mr. Dhruv
\nFPA-PBPT-206\/MUM\/2018 Page 7 of 20
\ndecided to purchase the flats and initiate re-development on the
\nsaid Property.
\nd) At the relevant time, all the other entities in which Mr. Rajen
\nDhruv was either a partner\/director were the entities\/partnership
\nforming part of the Midcity Group and were engaged in
\nredevelopment of various other projects. Therefore, Mr. Dhruv
\nthought that a separate entity, in which Mr. Dhruv and his
\nrelative Mr. Kishore Parekh would be partners, would be a
\nsuitable entity to undertake development of the said Property after
\npurchasing the same. Mr. Kishore Parekh agreed to the aforesaid
\narrangement.
\ne) Mr. Dhruv had raised funds from DHFL for his other projects also
\nand in November 2016, Mr. Dhruv once again approached DHFL
\nfor the purpose of raising funds in order to redevelop the said
\nProperty. Since Mr. Dhruv was looking after the finance of the
\nMidcity Group, he approached and negotiated with DHFL for the
\npurpose of raising funds for the said Property. Meetings were held
\nwith the representatives of DHFL when the documents\/deeds with
\nrespect to the said Property and the flats were handed over to them
\nand it was agreed that the loan will have to be secured by creating
\na charge.
\nf) In the meanwhile, Mr. Dhruv through his common friend met Ms.
\nTabassum Wajeda Mohammed Abid and Mr. Haroon Rasheed who
\nare the erstwhile partners of R-1 i.e. Manpreet Estates LLP, when
\nhe became aware that the R-1 was in the business of properties,
\nreal estates, developing building, act as contractors, etc. upon
\ndiscussing the matter with the erstwhile partners, Mr. Dhruv
\nrealized that they were desirous of dissolving the R-1 as they could
\nFPA-PBPT-206\/MUM\/2018 Page 8 of 20
\nnot carry on the business for which R-1 had been incorporated.
\nFurther, R-1 also did not have any other assets \/liabilities of its
\nown. Since Mr. Dhruv intended to acquire the said Property in a
\nnew entity, he was of the view that it would be appropriate to
\nacquire the same in R-1 as its objects met with his requirements.
\nMr. Dhruv also discussed the modalities of taking over R-1 with a
\nview to acquire the project of redevelopment in the firm.
\nDiscussions and negotiations were held with the erstwhile partners
\nand pursuant thereto on 16th December 2016, an agreement was
\nentered wherein Mr. Rajen Dhruv and Mr. Kishor Parekh were
\ninducted as partners of R-1 with effect from 12th December 2016
\nand the erstwhile partners retired from R-1.
\ng) The understanding arrived at between the parties was that R-1
\nshall raise money from banks\/financial institution for payment of
\nconsideration. In order to safeguard the interest of the flat owners,
\nit was also agreed that the physical possession of the flats would be
\ntaken only once the cheques are encashed.
\nh) During the said period, R-1 was also in process of complying with
\nthe requirements of DHFL with respect to raising a loan and
\ncreation of mortgage. It was only after the requisite compliances
\nwere followed by R-1 that on 4th January 2017, DHFL issued its inprinciple
\napproval to the loan. It was only on the basis of the inprinciple
\napproval that R-1 proceeded to execute and register the
\nagreements with various flat owners in the building on 13th
\nJanuary 2017 and registered the same on 17th January 2017. All
\nthe vendors were paid valuable consideration and requisite stamp
\nduty was also paid on all the agreements. The total consideration
\npaid by R-1 to all the flat owners and the owner of the land is
\nFPA-PBPT-206\/MUM\/2018 Page 9 of 20
\napproximately about Rs. 111,32,00,000\/- (Rupees One Hundred
\nand Eleven Crores Thirty Two Lakhs Only) and the total amount
\npaid towards stamp duty by R-1 was approximately about Rs.
\n5,56,60,500\/- (Rupees Five Crores Fifty Six Lakhs Sixty
\nThousand and Five Hundred Only).
\ni) That accordingly, on 19th January 2017, a mortgage deed
\n(appended in the along with reply filed before the authority) was
\nexecuted and registered by and between this R-1 (therein referred
\nto as the Mortgagor) and DHFL (therein referred to as the
\nMortgagee) on the terms and conditions stated therein.
\nj) Subsequent to the registration of the documents, R-1 took
\nfollowing steps towards redevelopment of the said Property:
\ni) On 6th February 2017, R-1 through its Architect filed an
\napplication with the Chief Executive Officer, Slum
\nRehabilitation Authority and submitted a proposal under
\nregulation 33(14) for acceptance (Appended in the reply
\nfiled before the Adjudicating Authority).
\nii) On 7th April 2017, the Chief Executive Officer, Slum
\nRehabilitation Authority accepted the proposal for S. R.
\nScheme submitted by R-1 under Regulation 33(14) (D) read
\nwith (E) and (F) subject to certain conditions. (Appended in
\nthe reply filed before the Adjudicating Authority).
\niii) On 12th December 2017, Slum Rehabilitation Authority
\naccepted the proposal of clubbing and issued an in principle
\napproval to the scheme in the form of a Letter of Intent.
\niv. Further, since the project had already received IOD and CC,
\nR-1 demolished the building and started shore piling work.
\nk) Since R-1 hadcompleted the transactions in a bona-fide manner, it
\nwas shocked to receive a show cause notice dated 14th July 2017
\nunder section 24(1) of the Prohibition of Benami Property
\nFPA-PBPT-206\/MUM\/2018 Page 10 of 20
\nTransactions Act, 1988 (the said Act). On the same date, an order
\nwas passed by the Dy. Commissioner of Income Tax thereby levying
\nprovisional attachment on the said Property. R-1 states that vide
\nits letter dated 8th August 2017, R-1 submitted a detailed reply to
\nthe show cause notice and the provisional attachment order.
\nRelevant contents of the reply were reproduced in the order of the
\nAdjudicating Authority and is at Pg. 22-32 of the impugned order
\n( Appeal Set\u2019s Pg. No. 33-43).
\nl) R-1 states that despite of the aforesaid clear and equivocal facts of
\nthe case, the IO in total disregard to the reply given by R-1 and
\nwithout furnishing any valid justification whatsoever, passed an
\norder dated 9th October 2017 continuing the provisional
\nattachment.
\nm) The IO subsequently also filed in the Adjudicating Authority
\nReference No. 198\/2017 seeking therein the confirmation of its
\nattachment order. R-1 was arrayed as benamidar in the said
\nreference.
\nn) Consequent to the filing of the above reference, Ld. Adjudicating
\nAuthority in a detailed and comprehensive order dated
\n24.10.2018, did not confirm the Provisional Attachment Order as
\npassed by the IO, finding the pleadings and grounds taken by R-1
\nto be true, valid and genuine.
\n13. Admittedly, the Adjudicating Authority inter-alia on various reasons
\ndisallowed the reference filed by the IO by passing the speak detailed order
\non the following:-
\nFPA-PBPT-206\/MUM\/2018 Page 11 of 20
\ni) SCN is not sustainable since no explanation given by IO for
\nchanging the character of original reference and hence order
\nu\/s 24(3) & 24(4) are also invalid and illegal.
\nii) No explanation was given as to why the Provisional Attachment
\nOrder u\/s 24(4)(a)(i) was not served to the R-2.
\niii) The IO has miserably failed to discharge the burden of proof cast
\nupon him to prove the transaction as benami.
\niv) Genuine and Bona-fide transaction carried out by R-1 and
\nFailure of the IO to establish connection between DHFL and
\nRKW Developer Pvt. Ltd. (R-2).
\nv) Transaction not carried out in stages as alleged as the R-1 has
\nable proved that the land was purchased by it through genuine
\nsources and for re-development.
\nvi) The possession, control and enjoyment of the property is totally in
\nthe hands of the R-1 and therefore no proof that the property is
\nheld for the benefit of R-2 and thus crucial mandatory test to treat
\nthe property as benami failed.
\nvii) Admission of IO that the funds were not given by the R-2 to R-1
\nfor the purchase of property.
\n14. The counsel appearing on behalf of R-1submits that R-1 is the true
\nand sole owner of the said Property and all the benefits arising out of the
\nsaid land accrues to R-1 only and as such no other person is beneficial
\nowner of the said property as is being erroneously projected by the
\nappellant (the IO). The transaction of the purchase of the 10 flats is a
\nFPA-PBPT-206\/MUM\/2018 Page 12 of 20
\ngenuine and bona-fide transaction for which consideration was paid by R-
\n1.
\n15. There is no denial that the consideration for all the eleven (11) flats
\nwas partly funded out of the loan proceeds as secured from DHFL. TheIO
\nhas accepted the genuineness of transaction involving the Flat No. 5
\npurchased by R-1 for valid consideration, from its joint owners Sh.
\nManojDhirajlal Shah, Mrs. Rajul D. Shah and Sh. Manoj D Shah. The said
\nflat was also brought on the same date as the other ten (10) flats i.e.
\n13.01.2017. In fact, the IO had questioned the validity of alleged as
\nbenami ten (10) flats, meaning thereby IO admitted and accepted that the
\npurchase of the above-said flat is not a benami transaction, but remaining
\n10 flats are of benami transaction.
\n16. R-1 is a registered LLP whose designated partner Mr. Rajen Dhruv is
\na promoter of Midcity group. R-1 is also a part of Midcity group. It has
\ncome on record that the Mid-city group has completed many real-estate
\nprojects in the past and is in course of developing other projects also. A
\nstatement of projects under-taken by mid-city group including the R-1 is
\nfiled and a brief profile of Mid-city group is annexed.
\n17. It is not denied by the appellant that the Mid-city group has taken
\nloan facilities for its other real-estate projects from DHFL in the past and as
\nrecently as November 2016 had availed mortgage loan of Rs.
\n200,00,00,000\/- (Two Hundred Crores) for one of its group entity namely
\nOrbit Ventures Developers, which is developing project \u201eShikar I-II\u201f.
\nTherefore for business convenience and prudence, Mr. Rajen Dhruv again
\napproached DHFL and got sanctioned a project loan of Rs. 180,00,00,000\/-
\nFPA-PBPT-206\/MUM\/2018 Page 13 of 20
\n(One Hundred and Eight Crores) for R-1. In the letter dated 06.04.2018,
\nthe lender i.e. DHFL had addressed to the IO that \u201cthe loan to Manpreet
\nEstates LLP (a Midcity group concern) was sanctioned in the normal
\ncourse of our business for acquisition of project and redevelopment
\nthereof. The subject loan is not the only project loan sanctioned to
\nthat group. Earlier also some projects of that group were financed by
\nus\u201dThe said Letter was reproduced in the order of the Adjudicating
\nAuthority. Therefore, it is wrongful for the appellant to state that R-1 did
\nnot had the financial capacity to avail loan from DHFL or it has a control
\nover to the financial institution.
\n18. The appellant has disputed the veracity of the loan agreement as
\nexecuted between R-1 and DHFL, and has claimed that R-2 is exercising
\ncontrol over DHFL. DHFL i.e. Dewan Housing Financial Corporation Ltd. is
\na listed public company having substantial public holding. Therefore,
\nsubmission of the appellant cannot be accepted to the effect that it is in
\ncontrol of a public listed company as the loan extended to the R-1 by DHFL
\nwas done on \u201earm\u2019s length basis\u201f. The relevant disclosures for the payment
\nof interest have been made in the Income Tax Return filed for the
\nAssessment Year 2018-19.
\n19. It is not denied on behalf of the appellant that the designated
\npartners of R-1 i.e. Mr. Rajen Dhruv and Mr. Kishore Parekh had given
\n\u201eIrrevocable Personal Guarantee\u201f and therefore stood as guarantors for the
\nloan taken by R-1. The sanction letter dated 18.01.2017, from DHFL
\ncontaining therein names of Mr. Rajen Dhruv and Mr. Kishore Parekh as
\npersonal guarantors for the loan sanctioned to R-1. In the letter dated
\nFPA-PBPT-206\/MUM\/2018 Page 14 of 20
\n06.04.2018 of DHFL, a copy was also served to the R-1, requesting R-1 to
\narrange alternative property as collateral security.
\n20. It is admitted by the IO himself that consideration was paid by R-1 to
\nthe 10 (ten) erstwhile owners, and it has been contended that the sale
\nconsideration is finally parked with R-2 and related concerns. The IO has
\npassed order of attachment u\/s 24(4)(a)(i), claiming therein that the
\ntransaction entered into by R-1 is covered within the meaning of section
\n2(9)(A) of the PBPT Act. For a transaction to be covered under section
\n2(9)(A) of PBPT Act, there must be following two conditions are met:
\ni) Consideration for property has been provided or paid by another
\nperson; and
\nii) Property is held for immediate or future benefit, direct or indirect,
\nof the person who has provided the consideration.
\nIn view of facts involved in the present case, it cannot be accepted
\nthat the R-2 is the beneficial owner,therefore, in the absence of beneficial
\nowner allegation of transaction being benami u\/s 2(9)(A) cannot be
\nsustained and were rightly rejected by the Adjudicating Authority.
\n21. Even the attachment order u\/s 24(3) of PBPT Act, has been passed
\nwithout following the procedure as laid down in the Rule 5 of the PBPT
\nRules, 2016 which deals with provisions relating to provisional attachment,
\nwhich read as under:-
\n\u201c5. Provisional attachment \u2013 For the purpose of sub-section (3)
\nof section 24, the Initiating Officer shall provisionally attach any
\nproperty in the manner provided in the Second Schedule of
\nIncome-tax Act, 1961 (43 of 61)\u201d
\nFPA-PBPT-206\/MUM\/2018 Page 15 of 20
\nIn this case the referred property being immovable, Part-III of Second
\nSchedule of Income-Tax Act, 1961, containing rules dealing with
\nattachment and sale of immovable property are applicable and for
\nready reference the rules are reproduced below:-
\n\u201cAttachment
\n48. Attachment of the immovable property of the defaulter shall be
\nmade by an order prohibiting the defaulter from transferring or
\ncharging the property in any way and prohibiting all persons from
\ntaking any benefit under such transfer or charge.
\nService of notice of attachment:
\n49. A copy of the order of attachment shall be served on the defaulter.
\nProclamation of attachment
\n50. The order of attachment shall be proclaimed at some place on or
\nadjacent to the property attached by beat of drum or other customary
\nmode, and a copy of the order shall be affixed on a conspicuous part of
\nthe property and on the notice board of the office of the Tax Recovery
\nOfficer.
\n22. Under these mandatory provisions, the IO was duly bound to follow
\nthe statutory procedure mandated in above rules. Though order of
\nattachment was passed and served on the R-1, the requirement of
\nproclamation of attachment order at some place on or adjacent to the
\nproperty attached by beat of drum or other customary mode and affixture
\nof copy thereof on a conspicuous part of the property and on the notice
\nboard of the office of the Initiating Officer was not done.Certificate of
\nconfirmation of affixture of the order on the notice board of the Initiating
\nOfficer is also not found enclosed with the reference confirming that said
\nmandatory step was taken at the relevant point of time. Thus, the rules
\nwere not followed.
\nFPA-PBPT-206\/MUM\/2018 Page 16 of 20
\na) The Hon\u201fble Supreme Court in the case of Ronald Wood
\nMathams v. State of West Bengal (AIR 1954 SC 455)
\nobserved “But it is essential that rules of procedure designed to
\nensure justice should be scrupulously followed, and Courts
\nshould be jealous in seeing that there is no breach of them”.
\nb) On the decision of Hon\u201fble Punjab & Haryana High Court in
\nthe case of Pal Singh Santa Singh v. The State(AIR 1955
\nPunjab 18), in the matters of proclamation u\/s 87 of Criminal
\nProcedure Code, where the Hon\u201fble High Court has held that
\nattachment without publication is invalid if publication of
\nattachment was required under rules but not made.
\n23. Thus, the provisional attachment order passed u\/s 24(3) as well as
\norder directing its continuation passed u\/s 24(4)(a) of the Act wascontrary
\nto the rules.
\n24. In the present case, the beneficial interest in the property is with R-
\n1. The Adjudicating Authority has correctly observed that there is nothing
\nto show that the property in question is held by R-1 for the benefit of R-2.
\n25. The sale deeds for all the 10 flats has not been challenged by the IO.
\nThe erstwhile sellers had entered\/executed the sale deed with R-1,
\nrepresenting themselves to be the true owners. As per the mandate of
\nSection 91 and Section 92 of the Indian Evidence Act, 1872, If a transfer
\nhas been done of an immovable property vide a written documentary
\nevidences in the form of a registered sale deed. The contradictory stand by
\nFPA-PBPT-206\/MUM\/2018 Page 17 of 20
\nway of oral evidence is not available unless the party concerned
\nchallenging the written documents are able to prove that those are sham
\ndocuments and executed between the parties contrary to law.
\n26. It is correct that after amendment, the onus of proving a benami
\ntransaction rests entirely on the shoulders of the respondents. Before
\namendment, the burden of proof was on the prosecution to prove the guilt
\nof the Benamidar and beneficial owner. Once both are able to discharge
\ntheir burden of proof as per amended law, then the burden of proof would
\nbe shifted to the prosecution. In the present case, the respondents were
\nable to discharge their initial burden of proof by producing the sale deeds
\nand document pertaining to the loan amount and respondent no. 1 was
\nalso the promoter of respondent no. 2, no even prima contrary evidence is
\nproved by the appellant. Thus, in the facts of present case and
\ndocumentary evidence proved, the onus of proving a benami transaction
\nrests entirely on the shoulders of the IO who is making the charge. The
\nburden of proof shall shift to the person who is taking contrary of within
\nthe meaning of section 91 and 92 of the Evidences Act, 1972.
\n27. The authority has also concurred with the submission of R-1 that the
\nIO has miserably failed to discharge such burden of proof. Section 92 of
\nIndian Evidence Act,1872 talks about the exclusion of evidence of oral
\nagreement. Once the primary evidence is proved by way of written
\ndocument which is not challenged, no evidence of an oral agreement or
\nstatement shall be admitted, the burden shall be shifted to the party who
\npleaded oral agreement. After the amendment in the Benami Act, if apply
\nas it is, the burden of proof was shifted upon the appellant. In the present
\ncase, the IO has failed to discharge such burden and he has merely based
\nFPA-PBPT-206\/MUM\/2018 Page 18 of 20
\non his personal perception with uncorroborated statements had passed
\nthe order without even a single iota of evidence to discharge such a burden
\nof proof once the R-1 was able to prove that his transaction was bona fide
\nfor beyond reasonable doubt.
\n28. Once the burden is shifted upon the IO,the principles of general law
\navailable prior to amendment would apply. The following judgements are
\nreferred on behalf of respondent no. 1 and 2:-
\na) Valiammal V. Subramaniam,
\nAIR 2004 SC 4187
\n\u201cCircumstances which can be taken as a guide to determine the
\nnature of transaction:-
\nAfter saying so, this Court spelt out following six circumstances
\nwhich can be taken as a guide to determine the nature of the
\ntransaction:
\n1. the source from which the purchase money came;
\n2. the nature and possession of the property, after the purchase;
\n3. motive, if any, for giving the transaction a benami colour;
\n4. the position of the parties and the relationship, if any, between the
\nclaimant and the alleged benamidar;
\n5. the custody of the title deeds after the sale; and
\n6. the conduct of the parties concerned in dealing with the property after
\nthe sale.”
\nThe above indicia are not exhaustive and their efficacy varies according to
\nthe facts of each case. Nevertheless, the source from where the purchase
\nmoney came and the motive why the property was purchased benami are
\nby far the most important tests for determining whether the sale standing
\nin the name of one person, is in reality for the benefit of another.\u201d
\nb) Smt. Usha Bhar vs Sanat Kumar Bhar
\nFPA-PBPT-206\/MUM\/2018 Page 19 of 20
\n2004 135 Taxman 526 Cal
\n\u201cIn order to ascertain whether a particular sale is benami and
\napparent purchaser is not the real owner, the burden lies on the person
\nasserting to prove so, such burden has to be strictly discharged based
\non legal evidence of definite nature.\u201d
\n\u201cit is the intention of the parties which is to be ascertained, very often
\nsuch intention is shrouded in a thick veil. It is not possible to pierce
\nthe veil easily. However, such difficulties would not relieve the person
\nwho asserts that the transaction is benami, of any part of onus that
\nrests on him. The difficulty would not justify the acceptance of mere
\nconjecture or surmise as a substitute of proof.\u201d
\nc) Bhim Singh V. Kan Singh AIR 1980 SC 727
\n\u201cThe principle governing the determination of the question whether
\ntransfer is a benami transaction or not may be summed up thus:
\n(1) The burden of showing that a transfer is a benami transaction
\nlies on the person who asserts that it is such a transaction;
\n(2) If it provided that the purchase money came from a person other than
\nthe person in whose favour the property is transferred. The purchase
\nis prima-facie assumed to be for the benefit of the person who supplied
\nthe purchase money, unless there is evidence to the contrary;
\n(3) The true character of the transaction is governed by the intention of the
\nperson who has contributed the purchase money and
\n(4) The question as to what his intention was has to be decided on the
\nbasis of the surrounding circumstances, the relationship of the parties,
\nthe motives governing their action in bringing about the transaction
\nand their subsequent conduct etc.\u201d
\nd) Andalammal V. Rajeswari Vedachallam
\nAIR 1985 Mad 321
\n\u201cThe next question to which we propose to advert is the issue relating
\nto benami theory. It is by now well-settled that the burden is on the
\nperson who sets up the case of benami in the instant case the
\nrespondents and that if the burden is not discharged, the ostensible
\ntitle will prevail. To substantiate a case of benami, the judicial
\npronouncements have laid down several factors have to be taken into
\nFPA-PBPT-206\/MUM\/2018 Page 20 of 20
\nconsideration and on an over all assessment of such factors is the
\ncourt to render a finding. The relevant factors are:-
\na) The consideration;
\nb) Possession and enjoyment of property;
\nc) Possession of the title deeds;
\nd) Motive; and
\ne) Mutation in the public records.\u201d
\ne) Jayadayal Poddar V. Bibi Hazra AIR 1974 SC 171
\n\u201cThe essence of a benami is the intention of the party or parties
\nconcerned; and not unoften such intention is shrouded in a thick veil
\nwhich cannot be easily pierced through. But such difficulties do not
\nrelieve the person asserting the transaction to be benami of any part of
\nthe serious onus that rests on him; nor justify the acceptance of mere
\nconjectures or surmises, as a substitute for proof.\u201d
\n29. Counsel for appellant in his written submission has stated that if
\nthere are infirmities in the proceedings, then this Appellate Authority is not
\nconvinced with the above arguments,it may remand the proceedings back
\nto the Adjudicating Authority for impleading DHFL as an interested party
\nand deciding the matter afresh, rather than dismissing the appeal. I do not
\nagree with the submission of the appellant due to the nature of the present
\ncase.
\n30. In the light of above, this Tribunal is of the view that no ground has
\nbeenmade outby the appellant for any interference. The appeal is
\ndismissed.
\n31. No costs.
\n(Justice Manmohan Singh)
\nChairman
\nNew Delhi,
\n26th March, 2019
\n\u201eskb\u201f<\/p>\n","protected":false},"excerpt":{"rendered":"
The essence of a benami is the intention of the party or parties concerned; and not unoften such intention is shrouded in a thick veil which cannot be easily pierced through. But such difficulties do not relieve the person asserting the transaction to be benami of any part of the serious onus that rests on him; nor justify the acceptance of mere conjectures or surmises, as a substitute for proof<\/p>\n