In Brief
Suman L. Shah and Laxmichand Shah borrowed money from three companies in 1996-1997, which were later found to be benami entities of a person notified under the Special Court Act, 1992. The Custodian sought recovery from the appellants as supposed garnishees of the notified debtor. The Special Court ordered repayment despite the appellants' claim that they had repaid the loans. The Supreme Court set aside the conviction, holding that properties attach only from the date of notification (October 2001), not earlier. The Custodian failed to prove the debt existed and subsisted using proper evidence—the Income Tax Department communication was unreliable and unexamined. The appellants' assertion of repayment was reasonable and not rebutted by the Custodian's primary case. The appeals were allowed and deposited amounts ordered returned.
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