The Supreme Court on Tuesday held unconstitutional a provision within the Benami Transactions (Prohibition) Act, 1988, which had prescribed jail time period for getting into into benami transactions.
A bench of Chief Justice of India NV Ramana and Justices Krishna Murari and Hema Kohli additionally noticed that the Act amended in 2016 can solely be enforceable prospectively and quash all prosecution or confiscation proceedings earlier than the amended Act comes into power. executed.
Section 3(3) of the 2016 modification elevated the imprisonment from three years to seven years and a effective of as much as 25% of the honest market worth of the property, a provision that is still untouched.
“The authorities concerned cannot initiate or continue criminal prosecution or confiscation proceedings for transactions done before the commencement of the 2016 Act, 25.10.2016. Consequent to the above declaration, all such prosecution or confiscation proceedings shall stand cancelled. will be given,” it stated.
The bench additionally expressed concern over a few of the findings of the Supreme Court’s latest judgment upholding the Prevention of Money Laundering Act, 2002, permitting authorities to take possession of property earlier than trial in distinctive circumstances, saying it was a case of arbitrary software. leaves room. It stated, “After reading the said judgment, we are of the opinion that the above ratio needs further elaboration in a suitable case, without which, much scope is left for arbitrary application”.
The choice got here on the Centre’s enchantment difficult the Calcutta High Court’s December 2019 choice, which held that the 2016 Act doesn’t include any specific provision permitting its retrospective software.
The Center had argued that beneath the 1988 Act, there was no mechanism or process to provide impact to proceedings towards benami transactions and the Amendment Act was introduced solely to deal with this procedural lacuna.
Rejecting the argument, the SC stated, “The Amendment Act of 2016 was not merely procedural, but had a stipulated substantive provision”.
Though it held the penal provision within the 1988 Act unconstitutional, the court docket held that it might not have an effect on the civil penalties anticipated beneath the Act.
It was additionally held as unconstitutional, the availability within the 1988 Act with respect to confiscation of benami properties, and stated that the availability within the amended 2016 Act on the identical may solely prospectively be invoked. The court docket rejected the Centre’s rivalry that such confiscation beneath the 1988 Act was civil in nature and subsequently there can be no violation of elementary rights beneath Article 20(1).
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The court docket stated that since it isn’t associated to the constitutionality of unbiased confiscation proceedings contemplated beneath the 2016 Amendment Act on different grounds, it’s leaving the query open for adjudication in applicable circumstances.
The bench stated, “At this stage, we will solely suggest that the usefulness of the unbiased provisions of confiscation, as distinct from legal prosecution, must be utilized in a proportionate method conserving in view the gravity of the offence. There are few situations that are akin to Stringent civil confiscations could also be handed on a proportional foundation for crimes associated to terroristic actions, drug cartels or organized legal actions.
With inputs from TheIndianEXPRESS
