Open court hearing sought for Benami Transaction (Prohibition) Amendment Act

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On Tuesday, the Supreme Court bench agreed to consider hearing the Centre’s plea against its own 2022 judgment that struck down several provisions of the Benami Transactions (Prohibition) Amendment Act, 2016 in the open Court. The plea was presented before the bench comprising of Chief Justice of India DY Chandrachud and Justice PS Narasimha. This plea was filed by Solicitor General Tushar Mehta who stated that “This is an unusual request. We seek an open court hearing of the review. 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. Like retrospectivity could not have been looked into”. Hearing this, CJI said, “We will consider it”.

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The judgment to be reviewed was passed in August 2022 by the Supreme Court’s three-judge bench headed by former CJI NV Ramana. They said that “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”. The Apex Court termed the provisions of the Benami Transactions Act as “unconstitutional” on the basis of being “manifestly arbitrary”, also highlighted that Sections 3(2) and 5 were vague and arbitrary.

The verdict challenging the Calcutta High Court’s judgment stated that the amendment in the 1988 Act in 2016 would be applicable with prospective effect whereas the Centre argued that the 2016 Act would be retrospectively applied. The bench further observed that “It is in this unique circumstance that confiscation contemplated under the period between September 5, 1988, and October 25, 2016, would characterize itself as punitive if such confiscation is allowed retroactively.”  

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