Quashing of Benami Law’s Retrospective Effect: A short Overview

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Quashing of Benami Law’s Retrospective Effect: A short Overview

 

Supreme Court in the case of Ganpati Dealcom Private Limited quashed the retrospective effect of Benami Act. It has held as under:

  1. a) Section 3(2) of the unamended 1988 Act is declared as unconstitutional for being manifestly arbitrary. Accordingly, Section 3(2) of the 2016 Act is also unconstitutional as it is violative of Article 20(1) of the Constitution.b) In rem forfeiture provision under Section 5 of the unamended Act of 1988, prior to the 2016 Amendment Act, was unconstitutional for being manifestly arbitrary.

    c) The 2016 Amendment Act was not merely procedural, rather, prescribed substantive provisions.

    d) Provision under Section 5 of the 2016 Act, being punitive in nature, can only be applied prospectively and not retroactively.

    e) Concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, viz., 25.10.2016. As a consequence of the above declaration, all such prosecutions or confiscation proceedings shall stand quashed.

 

The copy of the order is as under:

 

Quashing of Benami Law's Retrospective Effect: A short Overview

 

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