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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • SECTION 24 PROHIBITION OF BENAMI PROPERTY TRANSACTIONS ACT 1988
  • provisions of the Amendment Act
  • section 24(5) of Prohibition of Benami Property Transaction Act, 1988
  • sections 2(8), 2(9), 2(9)(A), 2(26), 18(2), 19(1)(b), 24(1), 24(3), 24(4), - 3 - 24(4)(a)(1), 24(5), 26(1), 26(3), 28(2)
  • Section 24(4)(a)(i) of the Prohibition of Benami Property Transaction Act, 1988
  • Amending Act of 2016
  • section 24(3) of Prohibition of Benami Property Transaction Act, 1988
  • section 24(4)(a)(i) of Prohibition of Benami Property Transaction Act, 1988
  • Section 24(3) of the Prohibition of Benami Property Transaction Act, 1988
  • section 26(1) of Prohibition of Benami Property Transaction Act, 1988
  • Section 26(1) of the Prohibition of Benami Property Transaction Act, 1988
  • Section 24 (5) of the Prohibition of Benami Property Transaction Act, 1988
  • provisions of the Prohibition of Benami Property Transaction Act, 1988 as amended by Amendment Act, 2016
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • SECTION 24 PROHIBITION OF BENAMI PROPERTY TRANSACTIONS ACT 1988
  • provisions of the Amendment Act
  • section 24(5) of Prohibition of Benami Property Transaction Act, 1988
  • sections 2(8), 2(9), 2(9)(A), 2(26), 18(2), 19(1)(b), 24(1), 24(3), 24(4), - 3 - 24(4)(a)(1), 24(5), 26(1), 26(3), 28(2)
  • Section 24(4)(a)(i) of the Prohibition of Benami Property Transaction Act, 1988
  • Amending Act of 2016
  • section 24(3) of Prohibition of Benami Property Transaction Act, 1988
  • section 24(4)(a)(i) of Prohibition of Benami Property Transaction Act, 1988
  • Section 24(3) of the Prohibition of Benami Property Transaction Act, 1988
  • section 26(1) of Prohibition of Benami Property Transaction Act, 1988
  • Section 26(1) of the Prohibition of Benami Property Transaction Act, 1988
  • Section 24 (5) of the Prohibition of Benami Property Transaction Act, 1988
  • provisions of the Prohibition of Benami Property Transaction Act, 1988 as amended by Amendment Act, 2016
Smart Summary

Factual and Procedural Background

The petitioner, Sri Venkatesh Tantry, challenged the retrospective operation of certain provisions of the Prohibition of Benami Property Transactions Act, 1988, as amended by the Amending Act of 2016. The writ petition was filed under Articles 226 and 227 of the Constitution of India, praying to declare the retrospective operation of the specified provisions unconstitutional and null and void. The petitioner also sought to quash various show cause notices, provisional attachment orders, and references issued by the respondents under different sections of the Act, including sections 24(1), 24(3), 24(4)(a)(i), 24(5), and 26(1). The petition was heard by the Karnataka High Court, which considered prior decisions on the issue, including a judgment of the Supreme Court in Union of India and Another Vs. Ganpati Dealcom Pvt. Ltd.

Legal Issues Presented

  1. Whether the retrospective operation of the provisions of the Prohibition of Benami Property Transactions Act, 1988 as amended by the Amending Act of 2016, is constitutional.
  2. Whether the show cause notices, provisional attachment orders, and references issued under the said provisions are liable to be quashed on the ground of retrospective operation.
  3. Whether the petitioner is entitled to consequential reliefs arising from the quashing of these orders.

Arguments of the Parties

Petitioner's Arguments

  • The retrospective operation of the Amending Act of 2016, particularly the specified sections, is unconstitutional and void.
  • The show cause notices, provisional attachment orders, and references issued under these provisions should be quashed.
  • The petitioner relied heavily on the Supreme Court judgment in Union of India and Another Vs. Ganpati Dealcom Pvt. Ltd. to support the contention that the amendments are prospective in operation.

Respondents' Arguments

  • The respondents did not dispute that the Supreme Court decision covers the present writ petition.
  • The learned Additional Solicitor General acknowledged the Supreme Court ruling but sought a short accommodation on the ground that a decision was being taken at the highest level (possibly referring to a pending review).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Union of India and Another Vs. Ganpati Dealcom Pvt. Ltd., 2022 SCC Online SC 1064 Held that the provisions of the Amending Act of 2016 are prospective in operation and not retrospective. The Court relied on this decision to hold that the impugned proceedings based on retrospective operation are void and quashed the related notices and orders.

Court's Reasoning and Analysis

The Court noted that the issue raised in the writ petition was squarely covered by the Supreme Court judgment in Union of India Vs. Ganpati Dealcom Pvt. Ltd., which held that the Amending Act, 2016 provisions are prospective in operation. The Court also referred to its own earlier orders following the same principle. The Court observed that the impugned proceedings were initiated under the wrong assumption that the provisions had retrospective effect, which constituted an apparent error on the face of the records. Consequently, the show cause notices, provisional attachment orders, and other related proceedings were liable to be quashed. The Court rejected the respondents' request to keep the matter pending on the ground of a pending decision at the highest level, stating that the Supreme Court's clarification on the legal position was final and binding. The Court also allowed the petitioner to claim consequential benefits flowing from the quashment of the attachment orders. However, the Court granted liberty to the respondents to seek revival of the order if the pending review petition before the Supreme Court is decided in their favor.

Holding and Implications

Holding: The writ petition was allowed and the impugned show cause notices, provisional attachment orders, references, and related proceedings issued under the Prohibition of Benami Property Transactions Act, 1988 as amended by the 2016 Act were quashed.

Implications: The petitioner is entitled to all consequential benefits arising from the quashment of the attachment orders. No order as to costs was made. The Court reserved liberty to the respondents to seek revival of the order in case the pending review petition before the Supreme Court is decided in their favor. The decision does not set a new precedent but applies the binding Supreme Court ruling to the facts of the case, ensuring that retrospective application of the amended provisions is not upheld.

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    SRI VENKATESH TANTRY v. THE INITIATING OFFICER

    - 1 -

    WP No. 43861 of 2019

    IN THE HIGH COURT OF KARNATAKA AT BENGALURU

    DATED THIS THE 22ND DAY OF FEBRUARY, 2023

    BEFORE

    THE HON'BLE MRS JUSTICE K.S. HEMALEKHA WRIT PETITION NO. 43861 OF 2019 (GM-RES)

    BETWEEN:

    SRI. VENKATESH TANTRY,

    SON OF SRI. ANANTA PADMANABHA TANTRY,

    AGED ABOUT 41 YEARS,

    NO.14/34, 2ND FLOOR,

    7TH MAIN, 3RD CROSS,

    CHIKKADUGODI,

    DRC POST,

    BANGALORE - 560 029.

    KARNATAKA

    …PETITIONER

    (BY SRI. LAVA M, ADVOCATE)

    AND:

    1. THE INITIATING OFFICER

    UNDER THE PBPT ACT, 1988,

    DEPUTY COMMISSIONER OF

    INCOME TAX (BPU),

    NO.208, 2ND FLOOR,

    C.R BUILDING, QUEENS ROAD,

    BENGALURU - 560 001.

    2. THE ADJUDICATING AUTHORITY

    UNDER THE PROHIBITION OF BENAMI

    PROPERTY TRANSACTIONS ACT, 1988,

    ROOM NO.26, 4TH FLOOR,

    JEEVANDEEP BUILDING,

    PARLIAMENT STREET,

    NEW DELHI - 110 001.

    - 2 -

    3. UNION OF INDIA,

    THROUGH THE SECRETARY,

    MINISTRY OF FINANCE,

    DEPARTMENT OF REVENUE,

    GOVERNMENT OF INDIA,

    NORTH BLOCK,

    NEW DELHI - 110 001. …RESPONDENTS

    (BY SRI. E.I SANMATHI, ADVOCATE FOR

    SRI. K.V ARAVIND, ADVOCATE FOR R1 TO R3)

    THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF

    THE CONSTITUTION OF INDIA PRAYING TO DECLARE AS

    UNCONSTITUTIONAL THE INTERPRETATION OF RESPONDENTS

    THE RETROSPECTIVE OPERATION PROVIDED OF THE

    AMENDING ACT OF 2016 IN RESPECT OF THE PROVISIONS

    VIDE SECTIONS 1, 2(8), 2(9), 2(9)(A), 2(26), 18(2), 19(1)(b), 24(1), 24(2), 24(3), 24(4), 24(4)(a)(i), 24(5), 26(1), 26(3),

    28(2) AND 59 AND THEREFORE, TO BE NULL AND VOID

    (ANNEXURE-A) AND ETC.,

    THIS PETITION, COMING ON FOR PRELIMINARY HEARING

    IN 'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:

    ORDER

    The petitioner in this writ petition sought for the following reliefs:

    "(a) Declare as unconstitutional the interpretation of respondents to the retrospective operation provided of the Amending Act of 2016 in respect of the provisions vide sections 2(8), 2(9), 2(9)(A), 2(26), 18(2), 19(1)(b), 24(1), 24(3), 24(4),

    - 3 -

    24(4)(a)(1), 24(5), 26(1), 26(3), 28(2) and 59 and therefore, to be null and void (Annexure-A).

    (b) Issue a writ of Certiorari or direction i in the nature of a writ of certiorari quashing the show notice issued under section 24(1) of the Prohibition of Benami Property Transactions Act, 1988 vide F.No.DCIT/BPU/PS/2017-18 dated 28.09.2018 issued by the Respondent No.1 as enclosed and marked as Annexure-B.

    (c) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the final show notice issued under section 24(1) of the Prohibition of Benami Property Transactions Act, 1988 vide F.No.46/10/PBPT Act 1988/2018-19 dated 07.12.2018 issued by the Respondent No.1 as enclosed and marked as Annexure-C.

    (d) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the provisional attachment order of in respect of the properties attached by the respondent No. 1, Under section 24(3) of Prohibition of Benami Property Transaction Act, 1988 vide

    F.No.DCIT/BPU/VT/2017-18 dated 08.10.2018 issued by the Respondent No. 1 as enclosed and marked as Annexure-D.

    - 4 -

    (e) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the provisional attachment order of in respect of the properties attached by the respondent No.1, Under section 24(4)(a)(i) of Prohibition of Benami Property Transaction Act, 1988 dated 24.12.2018 Issued by the Respondent No.1 as enclosed and marked as Annexure-E.

    (f) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the reference under section 24(5) of Prohibition of Benami Property Transaction Act, 1988 dated 02.11.2018 as enclosed and marked as Annexure-F.

    (g) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the show cause notice under section 26(1) of Prohibition of Benami Property Transaction Act, 1988 vide Reference No. R-1130/2019 dated 23.01.2019 issued by the Respondent No.2 Annexure-G.

    (h) And pass such other orders as this Hon'ble Court deems fit and proper in the interest of justice and equity."

    2. Learned counsel for the petitioner would submit that the issue in the lis stands covered by the judgment

    - 5 -

    rendered by the Hon'ble Apex Court in the case of Union of India and Another Vs. Ganpati Dealcom Pvt. Ltd.

    reported in 2022 SCC Online SC 1064.

    3. Learned counsel for the respondents, does not dispute that the present writ petition is squarely covered by the decision of the Apex Court as stated supra.

    4. Learned counsel for the petitioner would take this Court through the order passed by this Court in W.P. No.27322/2019 and connected matters disposed of on 05.09.2022, following the judgment of the Hon'ble Apex Court in the case of Union of India stated supra, wherein, this Court has held as under:

    "Petitioners are knocking at the doors of Writ Court in effect, seeking a declaration that certain provisions of the Prohibition of Benami Property Transaction Act, 1988 as amended by Amendment Act, 2016 are prospective in operation and therefore, the impugned proceedings taken up with an assumption of the said provisions being retrospective in effect are liable to be voided. Some of the petitioners have the grievance against the

    - 6 -

    interdiction of registration of conveyances issued by the official respondents.

    2. Learned ASG Mr. Nargund appearing for the answering respondents fairly agrees that the subject provisions of the Amendment Act have been held to be prospective in effect by the Apex Court in UNION OF INDIA Vs. GANAPATHI DEALCOM PVT. LTD Civil Appeal No.5703/2022 disposed off on 23.08.2022, which decision learned advocates appearing for the petitioners heavily banked upon in support of their cases. However, he seeks a short accommodation contending "a decision is being taken at the highest level".

    3. Having heard the learned counsel appearing for the parties and having perused the petition papers, this Court is of a considered opinion that there is no reason to keep the matter pending any longer in view Apex Court decision supra. The impugned proceedings having been taken up with a wrong assumption of the subject provisions of the Amendment Act being retrospective in operation, have a demonstrable error apparent on their face and therefore, are liable to be voided. Further, the interdiction of execution & registration of the conveyances is also liable to be set at naught. When highest Court of the Country has clarified the legal position, the contention that "a decision is being

    - 7 -

    taken at the highest level and therefore, matter be kept pending for a short while" does not merit acceptance.

    Ordered accordingly and all the petitions stand disposed off, costs having been made easy."

    5. In the light of the issue being squarely covered by the judgment of the Hon'ble Apex Court and that of the Co-Ordinate Bench of this Court, this Court is of the considered view that the writ petition needs to be disposed of on similar directions.

    6. Learned counsel for the petitioner, would submit that Review Petition has been filed before the Hon'ble Apex Court by the Union of India and the same is pending consideration and seeks liberty of this Court to seek revival of the order, in the event, the review petition is in favour of the respondents herein.

    7. Said submission is placed on record.

    - 8 -

    8. Accordingly, this Court pass the following:

    ORDER

    i. The writ petition is hereby allowed.

    ii. The show cause notice F.No.DCIT/BPU/VT/2017-18 dated 28.09.2018 at Annexure-B and final show cause notice dated 07.12.2018 at Annexure-C

    issued under Section 24 (1) of the Prohibition of Benami Property Transactions Act, 1988 by the 1st respondent to the petitioner are hereby quashed.

    iii. Consequently, the provisional attachment order under Section 24(3) of the Prohibition of Benami Property Transaction Act, 1988 dated 08.10.2018 at Annexure-D and provisional attachment order under Section 24(4)(a)(i) of the Prohibition of Benami Property Transaction Act, 1988 dated 24.12.2018 at Annexure-E issued by the 1st respondent are hereby quashed.

    iv. The reference under Section 24 (5) of the Prohibition of Benami Property Transaction Act, 1988 dated 04.01.2019 at Annexure-F and show

    - 9 -

    cause notice issued under Section 26(1) of the Prohibition of Benami Property Transaction Act, 1988 vide Reference No.R-1130/2019 dated 23.01.2019 at Annexure-G are also hereby

    quashed.

    v. Petitioner would be entitled to all consequential benefits that would flow from the quashment of the attachment orders.

    vi. Liberty is reserved to the respondents to seek revival of the order, in the event, they succeed in the review petition, which is pending consideration before the Hon'ble Apex Court, if need arises, in accordance with law.

    Accordingly, the writ petition stands disposed of.

    No order as to costs.

    Sd/-

    JUDGE

    SNN

    List No.: 1 Sl No.: 45

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    SRI VENKATESH TANTRY v. THE INITIATING OFFICER
    (Feb 22, 2023)