Deific Abode LLP Vs Union of India & Ors
Date -16th April, 2021
Forum- Calcutta High Court
Sub-Whether the Prohibition of Benami Property Transactions Act, 1988 as amended in the year 2016 is prospective or retrospective in nature- Doctrine of Precedent explained threadbare in view of the stay of operation of Calcutta High Court in Dealcom case by Supreme Court.

The matter related to the issuance of show cause notice under the Benami Act which were challenged by the appellant as unconscionable in view of non applicability of the proceedings retrospectively to the immovable property acquired much prior to 1/11/2016 when the amended act came into force. Hon’ble Justice Shekhar Saraf while dealing with the writ noted the decision of the Calcutta High Court in the case of *Ganapati Dealcom which had already held the act to be **prospective which though having been stayed by the Apex court vide its order dated 3/2/20, the question was what was the binding force of decision of the Ganapati Dealcom’s judgement in view of this. The Court noted the decision of *Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association, Madras, (1992) 3 SCC 1 **where the Supreme Court had held that “10. ..[W]hile considering the effect of an interim order staying the operation of the order under challenge, a distinction has to be made between quashing of an order and stay of operation of an order. Quashing of an order results in the restoration of the position as it stood on the date of the passing of the order which has been quashed. The stay of operation of an order does not, however, lead to such a result. It only means that the order which has been stayed would not be operative from the date of the passing of the stay order and it does not mean that the said order has been wiped out from existence. In view of this, the court held that the judgement of Ganapati Dealcom was still a binding precedent as far as the Calcutta High Court was concerned. However, in view of the need to protect the revenue also, the Court finally ordered that the revenue will not take any action until the matter is pending and simultaneously barred the appellant from disposing off the properties by sell or otherwise transfer, deal with, encumber or part with possession of the subject properties till the disposal of these writ applications.

This judgement deals elaborately with the law of Precedents when the order of a High court is stayed by the Supreme Court in Part.

Ramesh Patodia
20-04-2021