The Central government has filed a review appeal in the case of Union of India v. Ganpati Dealcom, challenging the Supreme Court’s recent decision that invalidated some provisions of the 1988 Benami Transactions (Prohibition) Amendment Act and its 2016 amendments.
Solicitor General Tushar Mehta brought up the subject on Tuesday before a bench presided over by Chief Justice of India (CJI) DY Chandrachud, and he also requested that the case be heard in public.
A three-judge Supreme Court panel led by the court’s former Chief Justice NV Ramana issued the decision that is being challenged in August of last year.
In that ruling, the Court determined that because the in rem forfeiture provision under Section 5 of the 2016 Amendment Act was punitive in character, it could only be applied going forward and not backward.
The Court also ruled that the in rem forfeiture clause in Section 5 of the original Act of 1988 is unconstitutional because it is obviously arbitrary.
Since the 2016 Act didn’t take effect until October 25, 2016, the Court ruled that the relevant authorities cannot begin or continue criminal prosecution or confiscation procedures for transactions made before that date.
The Court therefore annulled all prosecutions or confiscation procedures brought in connection with transactions that occurred before October 2016.
The bench additionally ruled that the 1988 Act’s Section 3(2) is invalid since it is obviously arbitrary. As a result of violating Article 20(1) of the Constitution, Section 3(2) of the 2016 Act was also declared unconstitutional.
Benami transactions are now illegal and are subject to a three-year maximum sentence of imprisonment under Section 3(2) of the act.