Supreme Court to consider Centre’s plea for review of verdict on Benami law

The Union government Tuesday asked the Supreme Court to conduct an open court hearing on its plea seeking a review of the judgement by which several provisions of the Benami Transactions (Prohibition) Amendment Act, 2016 were struck down.

"Due to this judgment a lot of orders are being passed even though some of the provisions of the Benami Act were not even under challenge. This is an unusual request. We seek an open court hearing of the review,” Solicitor General Tushar Mehta, representing the Centre, submitted before a bench of Chief Justice of India D Y Chandrachud and Justice P S Narasimha.

The bench said “We will consider it”.

Read | Centre moves SC, seeks open court hearing on plea for review of verdict on Benami law

A three-judge bench led by then Chief Justice of India N V Ramana, (since retired) had on August 23, 2022 had struck down section 3(2) and section 5 of the Benami Transactions (Prohibition) Act, 1988.

The top court had said that Section 3(2) of the Benami Transactions (Prohibition) Act 1988 was unconstitutional on the ground of being manifestly arbitrary, and the stringent 2016 amendment to the law cannot be applied retrospectively.

It said: “Section 3(2) of the unamended 1988 Act is declared as unconstitutional for being manifestly arbitrary. Accordingly, Section 3(2) of the 2016 Act is also unconstitutional as it is violative of Article 20(1) of the Constitution. In rem forfeiture provision under Section 5 of the unamended Act of 1988, prior to the 2016 Amendment Act, was unconstitutional for being manifestly arbitrary”.

The top court struck down the provisions of the Benami Transactions (Prohibition) Act of 1988, which provided for imprisonment, which may extend to three years or with a fine or with both for those indulging in ‘benami’ transactions.

The top court made it clear that the amendment Act will be applicable on transactions that took place after the changes were introduced.

“In view of the fact that this court has already held that the criminal provisions under the 1988 Act were arbitrary and incapable of application, the law through the 2016 amendment could not retroactively apply for confiscation of those transactions entered into between September 5, 1988, to October 25, 2016, as the same would tantamount to punitive punishment, in the absence of any other form of punishment,” it had said.

The court had then ruled that the authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, i.e October 25, 2016.