SC recalls 2022 verdict declaring benami law provisions unconstitutional           

The Supreme Court on Friday recalled its 2022 verdict that declared unconstitutional two provisions of the Prohibition of Benami Property Transactions Act, 1988 that restrains such deals and acquisition of properties by authorities.

Allowing the Centre’s petition seeking review of the August 23, 2022 verdict, a three-judge Bench led by Chief Justice of India  DY Chandrachud recalled the judgment delivered by a three-judge bench led by the then CJI N V Ramana that had held that Sections 3(2) and 5 of the Act were “manifestly arbitrary”, and hence, unconstitutional.

Section 3 deals with prohibition of benami (a property held by a person through proxies) transactions while Section 5 is about benami property liable to acquisition.

The recall order came after Solicitor General Tushar Mehta submitted on behalf of the Centre that the validity of the two provisions was not under challenge before the Bench that struck them down.

“In this view of the matter, the review would have to be allowed. It is trite law that challenge to the constitutional validity of a statutory provision can’t be adjudicated upon in the absence of a live lis (lawsuit) and contest between the parties,” the Bench ordered.

It said the civil appeal, on which the August 2022 verdict was delivered, will stand restored to the file for a fresh adjudication before a bench nominated by the chief justice on the administrative side.

The 2022 verdict was delivered on an appeal of the Centre challenging a Calcutta High Court judgment, which held that the amendment made in the 1988 Act in 2016 would be applicable prospectively.

The top court had held that the benami law did not have a retrospective application and the authorities couldn’t initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to when the legislation came into force.