NEW DELHI: Supreme Court on Friday reversed its 2022 decision to strike down two sections of the benami properties Act after the Centre argued that the court had pronounced its verdict even though no one had challenged the provisions.
"It is undisputed that there was no challenge to the constitutionality of the unamended provisions of the Act. It is trite law that a challenge to the constitutional validity of a provision of a law cannot be adjudicated without pleadings," SC bench stated.
Supreme Court also allowed govt to file review petitions against HC orders which have been passed on confiscation proceedings following the 2022 judgment.
Solicitor general Tushar Mehta said the law was to curb the activities of shell companies and facilitate attachment of properties held benami (in another entity's name). He buttressed his argument on the error committed by SC by showing that the judgment itself had recorded that the only question to be adjudicated was whether the 2016 amendments to the 1988 Act were to operate prospectively or retrospectively.
SC in its 2022 judgment had declared Section 3 , which provides for punishment of persons indulging in benami transactions, and Section 5, which provides for confiscation of benami properties, as unconstitutional. Consequently, it also quashed the penal and confiscation proceedings initiated against offenders and benami properties.
The Centre said, "By striking down Sections 3 and 5 of the unamended 1988 Act, without those provisions having been challenged, and without hearing the parties regarding the vires of those provisions, SC has overturned and upset four decades of jurisprudence developed by SC, wherein it has decided rights between parties in property disputes inter-se, as well presuming the entering into benami transactions to be an offence under the 1988 Act."
"It is undisputed that there was no challenge to the constitutionality of the unamended provisions of the Act. It is trite law that a challenge to the constitutional validity of a provision of a law cannot be adjudicated without pleadings," SC bench stated.
Supreme Court also allowed govt to file review petitions against HC orders which have been passed on confiscation proceedings following the 2022 judgment.
Solicitor general Tushar Mehta said the law was to curb the activities of shell companies and facilitate attachment of properties held benami (in another entity's name). He buttressed his argument on the error committed by SC by showing that the judgment itself had recorded that the only question to be adjudicated was whether the 2016 amendments to the 1988 Act were to operate prospectively or retrospectively.
SC in its 2022 judgment had declared Section 3 , which provides for punishment of persons indulging in benami transactions, and Section 5, which provides for confiscation of benami properties, as unconstitutional. Consequently, it also quashed the penal and confiscation proceedings initiated against offenders and benami properties.
The Centre said, "By striking down Sections 3 and 5 of the unamended 1988 Act, without those provisions having been challenged, and without hearing the parties regarding the vires of those provisions, SC has overturned and upset four decades of jurisprudence developed by SC, wherein it has decided rights between parties in property disputes inter-se, as well presuming the entering into benami transactions to be an offence under the 1988 Act."
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