The Delhi Bench High Court has held that Section 53 of Benami Transactions (Prohibition) Amendment Act has prospective effect, and only applies to transactions entered after 1st November 2016.
RajeshKatyal, filed seeking a direction for quashing and to set aside the Show Cause Notice dated 04th April, 2022 (‘SCN’) issued by the Respondent under Section 53 of the Prohibition of Benami Property Transactions Act, 1988, as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 (the ‘Act of 2016’), which came into effect on 01st November 2016, against the Petitioner.
SCN has been issued with respect to purchase of lands by M/s AK Infosystem Pvt. Ltd., (‘the company’) between the period from 2007 to 2010 and transfer of shares heldby the Petitioner in the said company on 31st May, 2014.
It was contended by the petitioner that the newly enacted provisions of the Act of 2016, which came into effect on 01st November, 2016, cannot be applied against the Petitioner retrospectively for the transactions which were admittedly undertaken prior to coming into effect of the said provisions. And the Petitioner cannot be punished under the amended Section 53 (1) of the Act, which was brought into effect on 01st November, 2016 for a transaction which was undertaken prior to its coming into effect.
Supreme Court in the judgment of Ganpati Dealcom (supra) held that the offence under Section 53 of the Act of 2016 is prospective and wouldonly apply to those transactions which were entered into after amendment came into force i.e., 01st November, 2016.
The Court comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that the alleged benami transactions undertaken by the Petitioner were entered prior to 1st November 2016. While allowing the petition the Court quashed the Show Cause Notice dated 04th April, 2022.
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