Manki Bai v. Assistant Commissioner Of Income Tax (Benami Prohibition), Roomno. 201, First Floor, Central Revenue Building, Civil Lines, Raipurchhattisgarhno. 201, First Flo

NAFR HIGH COURT OF CHHATTISGARH, BILASPUR Writ Petition (C) No. 3819 of 2019 Reserved on : 11/11/2019 Delivered on : 15/11/2019 1. Tulsiram S/o Shri Ganeshram Aged About 68 Years, R/o VillageBarekel, Police Station And Tehsil - Pithora, District - MahasamundChhattisgarhBarekel, Police Station And Tehsil - Pithora, District - MahasamundChhattisgarh 2. Manki Bai W/o Shri Tulsiram Aged About 59 Years R/o VillageBarekel, Police Station And Tehsil - Pithora, District - MahasamundChhattisgarhBarekel, Police Station And Tehsil - Pithora, District - MahasamundChhattisgarh ---- Petitioners Versus 1. Assistant Commissioner Of Income Tax (Benami Prohibition), RoomNo. 201, First Floor, Central Revenue Building, Civil Lines, RaipurChhattisgarhNo. 201, First Floor, Central Revenue Building, Civil Lines, RaipurChhattisgarh 2. Initiating Officer, PBPT Act, Assistant Commissioner Of Income Tax(Benami Prohibition), Room No. 201, First Floor, Central RevenueBuilding Civil Lines, Raipur, Chhattisgarh(Benami Prohibition), Room No. 201, First Floor, Central RevenueBuilding Civil Lines, Raipur, Chhattisgarh 3. Union Of India, Through Its Secretary, Income Tax Department,Government Of India, New DelhiGovernment Of India, New Delhi 4. Adjudication Officer Under The Prohibition Of Benami PropertyTransactions Act, 1988, Room No. 26, 4th Floor, Jeevan DeepBuilding, Parliament Street, New DelhiTransactions Act, 1988, Room No. 26, 4th Floor, Jeevan DeepBuilding, Parliament Street, New Delhi ---- Respondents For Petitioner: Mr. Surfaraj Khan, AdvocateFor Respondents 1 & 2 :Kumrani, Advocates Ms. Naushina Afrin Ali with Mr. Ajay Hon'ble Shri Justice P. Sam Koshy CAV Order 1. The challenge in the present writ petition is to the order of provisionalattachment of immovable properties Annexure P-1 dated 31.07.2019 underSection 24(4)(b)(i) of the Prohibition of Benami Property Transactions Act,1988 (in short “the Act of 1988”) and also to the notice Annexure P-2 dated27.08.2019 under Section 24 (5) of the said Act in respect of confirmation ofthe order of provisional attachment dated 31.07.2019 Annexure P-1.attachment of immovable properties Annexure P-1 dated 31.07.2019 underSection 24(4)(b)(i) of the Prohibition of Benami Property Transactions Act,1988 (in short “the Act of 1988”) and also to the notice Annexure P-2 dated27.08.2019 under Section 24 (5) of the said Act in respect of confirmation ofthe order of provisional attachment dated 31.07.2019 Annexure P-1. 2. The core issue raised by the petitioners in the present writ petition is“whether the provisions of the Act of 1988 providing for confiscation ofproperties found to be 'Benami' could be applied in respect of thetransactions carried out prior to 01.11.2016”.“whether the provisions of the Act of 1988 providing for confiscation ofproperties found to be 'Benami' could be applied in respect of thetransactions carried out prior to 01.11.2016”. 2. The core issue raised by the petitioners in the present writ petition is“whether the provisions of the Act of 1988 providing for confiscation ofproperties found to be 'Benami' could be applied in respect of thetransactions carried out prior to 01.11.2016”.“whether the provisions of the Act of 1988 providing for confiscation ofproperties found to be 'Benami' could be applied in respect of thetransactions carried out prior to 01.11.2016”. 3. The brief facts which led to the filing of the present writ petition are that therespondents have initiated a proceeding under the Act of 1988 against thepetitioners who are husband and wife. It is alleged that the petitioners arein possession of more than 200 acres of land in Tahsil Pithora in villagesPatewa, Jhalap, Lahrod, Barekel and in village Baya (Kasdol) and also invillage Sankara, Basana and Bagbahara. According to the respondents, allthese properties in fact are of one Shri Laxminarayan Agrawal @ PunnuSeth Son of Jagannath Agrawal R/o Pithora, District Mahasamund (CG).According to the respondents, the petitioners herein are basically villagerswho do not have sufficient source of income to have such large chunk ofland. As per the notice and the order of the respondents, on verification, itwas found that the petitioners could not provide sufficient details in respectof their income on the basis of which they had acquired or purchased theseproperties. According to the respondents, the petitioners have not beenrespondents have initiated a proceeding under the Act of 1988 against thepetitioners who are husband and wife. It is alleged that the petitioners arein possession of more than 200 acres of land in Tahsil Pithora in villagesPatewa, Jhalap, Lahrod, Barekel and in village Baya (Kasdol) and also invillage Sankara, Basana and Bagbahara. According to the respondents, allthese properties in fact are of one Shri Laxminarayan Agrawal @ PunnuSeth Son of Jagannath Agrawal R/o Pithora, District Mahasamund (CG).According to the respondents, the petitioners herein are basically villagerswho do not have sufficient source of income to have such large chunk ofland. As per the notice and the order of the respondents, on verification, itwas found that the petitioners could not provide sufficient details in respectof their income on the basis of which they had acquired or purchased theseproperties. According to the respondents, the petitioners have not been able to show or recollect the details of the properties that they own indifferent villages. The petitioners have also not been able to provide thedetails of the loan that they had taken from different relatives or friends forthe purpose of purchase of these properties and therefore the saidproperties are nothing but Benami properties. able to show or recollect the details of the properties that they own indifferent villages. The petitioners have also not been able to provide thedetails of the loan that they had taken from different relatives or friends forthe purpose of purchase of these properties and therefore the saidproperties are nothing but Benami properties. 4. The solitary ground of challenge to these orders i.e. Annexure P-1 & P-2 bythe petitioners is that the proceeding drawn is without any authority andforce of law. The simple contention that the petitioners raise is that all theproperties which are said to be recorded in the name of the petitioners infact are all purchased prior to 01.11.2016. According to the petitioners, onthe date when the petitioners had purchased these properties, theprovisions of Section 24 of the Act of 1988 were not in existence. Since onthe date of purchase of the properties the law under Section 24 of the Act of1988 was not in force, the proceeding drawn under Section 24 subsequentto its enactment w.e.f. 01.11.2016 could not be attracted upon thepetitioners. the petitioners is that the proceeding drawn is without any authority andforce of law. The simple contention that the petitioners raise is that all theproperties which are said to be recorded in the name of the petitioners infact are all purchased prior to 01.11.2016. According to the petitioners, onthe date when the petitioners had purchased these properties, theprovisions of Section 24 of the Act of 1988 were not in existence. Since onthe date of purchase of the properties the law under Section 24 of the Act of1988 was not in force, the proceeding drawn under Section 24 subsequentto its enactment w.e.f. 01.11.2016 could not be attracted upon thepetitioners. 5. The contention of the petitioners is that the applicability of Section 24 of theAct of 1988 would not have a retrospective effect and it would only beprospective w.e.f. 01.11.2016 onwards, therefore, the issuance of the orderAnnexure P-1 and the proceeding drawn vide Annexure P-2, both are perse illegal and bad in law. Act of 1988 would not have a retrospective effect and it would only beprospective w.e.f. 01.11.2016 onwards, therefore, the issuance of the orderAnnexure P-1 and the proceeding drawn vide Annexure P-2, both are perse illegal and bad in law. 6. The petitioners also contended that most of the properties cited in thenotice in fact are not owned by the petitioners but are owned by someoneelse and therefore also, the petitioners could not have been prosecuted inrespect of the properties which they do not own. The petitioners reliedupon a judgment rendered by the Rajasthan High Court in respect of theirnotice in fact are not owned by the petitioners but are owned by someoneelse and therefore also, the petitioners could not have been prosecuted inrespect of the properties which they do not own. The petitioners reliedupon a judgment rendered by the Rajasthan High Court in respect of their contention in a batch of writ petitions leading among which being S.B.C.W.No. 2915/2019 Niharika Jain Vs. Union of India and other connected writpetitions which stood decided vide judgment dated 12.07.2019. In addition,counsel for the petitioners relied upon the judgment of the Supreme Courtrecently passed in the case of Mangathai Ammal in Civil Appeal No.4805/2019 decided on 09.05.2019. contention in a batch of writ petitions leading among which being S.B.C.W.No. 2915/2019 Niharika Jain Vs. Union of India and other connected writpetitions which stood decided vide judgment dated 12.07.2019. In addition,counsel for the petitioners relied upon the judgment of the Supreme Courtrecently passed in the case of Mangathai Ammal in Civil Appeal No.4805/2019 decided on 09.05.2019. 7. Per contra, counsel appearing for the respondents opposing the petitionsubmits that the contention of the petitioners of the provisions of law beingnot applicable to the petitioners is totally baseless. According to the counselfor the respondents, the amendment brought into the Act of 1988 by way ofamendment Act, 2016 is only amending and incorporating the proceduralprovisions and by way of the amendment Act, 2016, the original Act of 1988has not been either superseded or replaced a new provision of law.According to the respondents, the original Act of 1988 is still in operationand also in force and by way of Amendment Act of 2016, certain additionalprovisions have been incorporated in respect of the procedures to beadopted and also in respect of making the provisions more stringent anddeterrent. Therefore, the proceedings initiated by the respondents cannotbe said to be without force of law or beyond purview of the Act of 1988. submits that the contention of the petitioners of the provisions of law beingnot applicable to the petitioners is totally baseless. According to the counselfor the respondents, the amendment brought into the Act of 1988 by way ofamendment Act, 2016 is only amending and incorporating the proceduralprovisions and by way of the amendment Act, 2016, the original Act of 1988has not been either superseded or replaced a new provision of law.According to the respondents, the original Act of 1988 is still in operationand also in force and by way of Amendment Act of 2016, certain additionalprovisions have been incorporated in respect of the procedures to beadopted and also in respect of making the provisions more stringent anddeterrent. Therefore, the proceedings initiated by the respondents cannotbe said to be without force of law or beyond purview of the Act of 1988. 8. It was also the contention of the respondents that the present writ petitionin its present form is premature insofar as it is only at notice stage andwhatever contentions that the petitioners indent to raise so far as theapplicability of the Act of 1988 is concerned, it can still be raised by thepetitioners before the authorities concerned and thereafter the provision oflaw itself has a remedy of appeal before whom also the petitioners canraise all these grounds and therefore the writ petition deserves to bein its present form is premature insofar as it is only at notice stage andwhatever contentions that the petitioners indent to raise so far as theapplicability of the Act of 1988 is concerned, it can still be raised by thepetitioners before the authorities concerned and thereafter the provision oflaw itself has a remedy of appeal before whom also the petitioners canraise all these grounds and therefore the writ petition deserves to be rejected. 9. Having heard the contentions put forth on either side and on perusal ofrecord, the undisputed fact of the present writ petition is that whateverproperties that are in the name of the petitioners are all which have beenpurchased or acquired prior to 01.11.2016 i.e. the date on which theamended provision of law by virtue of Amendment Act, 2016 came intoforce. record, the undisputed fact of the present writ petition is that whateverproperties that are in the name of the petitioners are all which have beenpurchased or acquired prior to 01.11.2016 i.e. the date on which theamended provision of law by virtue of Amendment Act, 2016 came intoforce. rejected. 9. Having heard the contentions put forth on either side and on perusal ofrecord, the undisputed fact of the present writ petition is that whateverproperties that are in the name of the petitioners are all which have beenpurchased or acquired prior to 01.11.2016 i.e. the date on which theamended provision of law by virtue of Amendment Act, 2016 came intoforce. record, the undisputed fact of the present writ petition is that whateverproperties that are in the name of the petitioners are all which have beenpurchased or acquired prior to 01.11.2016 i.e. the date on which theamended provision of law by virtue of Amendment Act, 2016 came intoforce. 10.Now, the issue involved in the present case or the question raised bythe petitioners is whether the provisions of the Act of 1988 being madeapplicable upon the petitioners was justified or not, particularly when it isundisputed that the petitioners have acquired or purchased the propertiesbefore the Amendment Act of 2016 came into force. the petitioners is whether the provisions of the Act of 1988 being madeapplicable upon the petitioners was justified or not, particularly when it isundisputed that the petitioners have acquired or purchased the propertiesbefore the Amendment Act of 2016 came into force. 11.The Act originally was known as “The Benami Transactions(Prohibition) Act, 1988”. In the year 2016, the Parliament enacted theBenami Transactions (Prohibition) Amendment Act, 2016. By virtue ofamendment Act, certain provisions of the original Act of 1988 stoodamended and substituted. In addition to the amendments made in Chapter-I so far as Section 1 to 3 are concerned, Chapter III to VII were newlyinserted to the Act of 1988. Chapter III deals with the authorities under thesaid Act, Chapter IV deals with the procedure regarding attachment,adjudication and confiscation, Chapter V provides for establishment ofAppellate Tribunal, Chapter VI deals with the constitution of Special Courts,Chapter VII deals with penalties for the offences and prosecution under theAct and Chapter VIII deals with repealing of certain acts. (Prohibition) Act, 1988”. In the year 2016, the Parliament enacted theBenami Transactions (Prohibition) Amendment Act, 2016. By virtue ofamendment Act, certain provisions of the original Act of 1988 stoodamended and substituted. In addition to the amendments made in Chapter-I so far as Section 1 to 3 are concerned, Chapter III to VII were newlyinserted to the Act of 1988. Chapter III deals with the authorities under thesaid Act, Chapter IV deals with the procedure regarding attachment,adjudication and confiscation, Chapter V provides for establishment ofAppellate Tribunal, Chapter VI deals with the constitution of Special Courts,Chapter VII deals with penalties for the offences and prosecution under theAct and Chapter VIII deals with repealing of certain acts. 12.What has to be understood at this juncture is that the original Act of1988 does not stand repealed or superseded in any manner. The Act of1988 does not stand repealed or superseded in any manner. The Act of 1988 is in operation with full force. The Parliament in its wisdom did not findthe original Act of 1988 to be effective enough to control the menace ofBenami properties being acquired in the country. The Parliament foundcertain discrepancies and loopholes and also did not find the original Act tobe stringent and deterrent enough to achieve the object behind theenactment of the Act of 1988. With an intention to make the Act or the lawmore effective, forceful and stringent, certain new amendments were mademaking the law stringent and also prescribing the procedure and themanner in which the proceedings were to be drawn while initiatingproceeding to attach and confiscate the Benami properties. 1988 is in operation with full force. The Parliament in its wisdom did not findthe original Act of 1988 to be effective enough to control the menace ofBenami properties being acquired in the country. The Parliament foundcertain discrepancies and loopholes and also did not find the original Act tobe stringent and deterrent enough to achieve the object behind theenactment of the Act of 1988. With an intention to make the Act or the lawmore effective, forceful and stringent, certain new amendments were mademaking the law stringent and also prescribing the procedure and themanner in which the proceedings were to be drawn while initiatingproceeding to attach and confiscate the Benami properties. 13.To decide the core issue whether the amended Act of 2016 can bemade applicable for initiating proceedings against the petitioner in respectof the properties which were purchased or acquired prior to 01.11.2016, itwould be necessary to read the Act of 1988 as a whole including theProvisions inserted by way of Act of 2016.made applicable for initiating proceedings against the petitioner in respectof the properties which were purchased or acquired prior to 01.11.2016, itwould be necessary to read the Act of 1988 as a whole including theProvisions inserted by way of Act of 2016. 14. Sub Section 3 of Section 1 reads as under: “(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 19[th] day of May, 1988.once, and the remaining provisions of this Act shall be deemed to have come into force on the 19[th] day of May, 1988. The aforesaid section clearly indicates that the law as it stands shall be deemed to have come into force on the 19[th] day of May, 1988. 15.Sub sections (2) and (3) of Section 3 reads as under: (2) 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.with imprisonment for a term which may extend to three years or with fine or with both. (3) whoever enters into any benami transaction on and after the date ofcommencement of the Benami Transactions (Prohibition) Amendment Act,2016, shall, notwithstanding anything contained in sub-section (2), becommencement 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. 16.Both these provisions of law have been inserted by way of theamendment Act of 2016 w.e.f. 01.11.2016. A plain reading of both theseprovisions makes it evident that Sub Section 2 would be applicable uponany Benami Transactions made prior to 01.11.2016 and Sub Section 3would be applicable upon only those properties or Benami Transactionsmade on or after the commencement of the Amendment Act, 2016 i.e.01.11.2016. This again leads us to draw a safe inference that theproceedings under the Act of 1988 could very well be initiated against aperson who has entered into a Benami transaction irrespective of the datewhen the amendment act came into force. amendment Act of 2016 w.e.f. 01.11.2016. A plain reading of both theseprovisions makes it evident that Sub Section 2 would be applicable uponany Benami Transactions made prior to 01.11.2016 and Sub Section 3would be applicable upon only those properties or Benami Transactionsmade on or after the commencement of the Amendment Act, 2016 i.e.01.11.2016. This again leads us to draw a safe inference that theproceedings under the Act of 1988 could very well be initiated against aperson who has entered into a Benami transaction irrespective of the datewhen the amendment act came into force. 17.So far as Chapter IV particularly Section 24 is concerned, the same isonly a procedural law or procedural provision inserted in the original Act of1988 by way of amendment w.e.f. 01.11.2016. Plain reading of theimpugned order Annexure P-1 shows that the petitioners have in fact beengiven a fair and reasonable opportunity of hearing before the same waspassed.only a procedural law or procedural provision inserted in the original Act of1988 by way of amendment w.e.f. 01.11.2016. Plain reading of theimpugned order Annexure P-1 shows that the petitioners have in fact beengiven a fair and reasonable opportunity of hearing before the same waspassed. 18.Reading the impugned order Annexure P-1 that is the order ofprovisional attachment, it reveals that petitioners have given an extensiveexplanation to the show cause notice which was duly considered by theInitiating Officer and taking into consideration the explanation andstatements made by the petitioners the Provisional order of attachment hasbeen issued. So far as Annexure P-1 is concerned, the same is purely inaccordance with the provisions of Section 24 of the Act of 1988. So alsoAnnexure P-2 again is a proceeding drawn strictly in accordance with thesaid provisions and as such the two orders cannot be said to have beenprovisional attachment, it reveals that petitioners have given an extensiveexplanation to the show cause notice which was duly considered by theInitiating Officer and taking into consideration the explanation andstatements made by the petitioners the Provisional order of attachment hasbeen issued. So far as Annexure P-1 is concerned, the same is purely inaccordance with the provisions of Section 24 of the Act of 1988. So alsoAnnexure P-2 again is a proceeding drawn strictly in accordance with thesaid provisions and as such the two orders cannot be said to have been passed without jurisdiction or authority of law. The proceedings drawn isonly to determine whether the property standing in the name of thepetitioners are a Benami property or not?. The final adjudication is yet to bedone. Petitioners have been called upon in the said proceedings and it isonly pending the final adjudication of whether the properties in the name ofthe petitioners are Benami Properties or not, the authorities concerned as amatter of precaution passed an order of provisional attachment until thedispute is finally resolved. 19.So far as the judgment of the Supreme Court in the case ofMangathai Ammal(Supra) relied upon by the petitioners is concerned, thesaid judgment by the Hon'ble Supreme Court has been delivered in anentirely different contextual background and facts of the said case also isentirely different as compared to the facts of the present case.Mangathai Ammal(Supra) relied upon by the petitioners is concerned, thesaid judgment by the Hon'ble Supreme Court has been delivered in anentirely different contextual background and facts of the said case also isentirely different as compared to the facts of the present case. 20.Moreover, the said judgment has been passed in a Civil Appealassailing the judgment and decree passed from the Appeal decided by theHigh Court affirming the judgment of decree passed by the Civil Court in asuit for partition. In addition, the said judgment so far as referring to theprovisions of amended Act of 2016 is concerned, was keeping in view theProvisions of unamended Sub sections (2) of Section 3 which stood omittedby the Act of 2016, dealing with the property purchased by a person in thename of his wife or unmarried daughter. Thus, the principles or ratio laiddown in the said judgment would not be applicable in the given facts andcircumstances of the present case. If we take into consideration, theprovisions Sub Section 3 of Section 1 and read it along with otheramendments which have been brought in the Act of 1988 vide AmendmentAct of 2016, this Court is compelled to reach to the conclusion that proceedings drawn against the petitioners in the given factual matrix of thecase cannot be found fault with. It can also not to be said that provisions ofthe Amended Act of 2016 could not have been made applicable in respectof properties which were acquired prior to 01.11.2016. The whole Act of1988 as it stands today inclusive of the amended provisions brought intoforce from 01.11.2016 onwards applies irrespective of the period ofpurchase of the alleged Benami property. Amended Act of 2016 does nothave an existence by itself. Without the provisions of the Act of 1988, theamended provisions of 2016 has no relevance and the amended Provisionsare only laying down the proceedings to be adopted in a proceeding drawnunder the Act of 1988 and the penalties to be imposed in each of the casestaking into consideration the period of purchase of Benami property. 21.Given the facts, this Court does not find any strong case made out bythe petitioners calling for an interference with the impugned orders and writpetition thus being devoid of merits deserves to be and accordingly standsrejected. Sd/-P. Sam KoshyJudge