Amendments in Benami law | Supreme Court to consider hearing in open court a review petition filed by Centre against 2022 judgment

The amendments had applied retrospectively and mandated sending a person to prison for three years even as it empowered the Centre to confiscate “any property” subject to a benami transaction.

Chief Justice of India D. Y. Chandrachud on January 31 agreed to consider hearing in open court a review filed by the government against a 2022 judgment which declared as “unconstitutional and manifestly arbitrary” amendments introduced in the benami law in 2016.

The amendments had applied retrospectively and mandated sending a person to prison for three years even as it empowered the Centre to confiscate “any property” subject to a benami transaction.

In an oral mentioning, Solicitor General Tushar Mehta said the judgment tended to apply to provisions in the benami law which were not even under challenge. Mr. Mehta said the judgment had widespread ramifications as lower courts are striking down cases on the basis of the apex court judgment.

The 2022 judgment had declared Sections 3(2) and 5 introduced through the Benami Transactions (Prohibition) Amendment Act of 2016. The 2016 law had amended the original Benami Act of 1988. It had expanded the 1988 Act to 72 Sections from a mere nine Sections.

Section 3(2) had provided for punishment of three years’ imprisonment for those who had entered into benami transactions between September 5, 1988 to October 25, 2016. That is, a person could have been sent behind bars for a benami transaction entered into 28 years before the section even came into existence. The court had held that the provision violated Article 20(1) of the Constitution.

Article 20(1) mandates that no person should be convicted of an offence which was not in force “at the time of the commission of the act charged as an offence”. Section 5 of the 2016 Amendment Act had said that “any property, which is subject matter of benami transaction, shall be liable to be confiscated by the Central Government”. The court had held that this provision cannot be applied retrospectively.

The judgment had dismissed the government’s version that forfeiture, acquisition and confiscation of property under the 2016 Act was not in the nature of prosecution and cannot be restricted under Article 20.