PROCESS OF ATTACHMENT OF BENAMI PROPERTY

INTRODUCTION

Whenever we hear the word Benami, the first thought which strikes our mind is something not having its real owner. Be it property or any other movable or valuable property.

For a better understanding of this process, we will refer to the provisions given under the Act. The act duly states the process of attachment and confiscation of the properties. It reads as:

Section 24– If the Initiating Officer has reason to believe any person is benamidar,  he will issue a notice to:

1. Benamidar, and

• 1. Beneficial owner (if they know identity).

• The Initiating Officer with the approval of the Approving Authority can attach the property for a period which shall not exceed 90 days.  If there are chances that the person to whom notice is issued may alienate the property during the notice period. Further, the Initiating Officer after making inquiries and considering the evidence and relevant material, with the approval of the Approving Authority and within 90 days from the issuance of notice:
  1. Pass an order continuing the provisional attachment of the property till the adjudication order by the Adjudicating Authority; or
  2. Revoke the provisional attachment order.

But, in cases, if  there is no provisional attachment:

1. Then, he can Pass an order for attaching the property till the adjudication order by the Adjudicating Authority; or
2. Decide not to attach the property.

If there is an order for attachment of the property or continuation of the provisional attachment, the Initiating Officer shall draw up a statement of the case and refer it to Adjudicating Authority within 15 days from such attachment.

ADJUDICATION OF BENAMI PROPERTY

Apart from the process and authorities involved, the matters arise of the Jurisdiction. It reads as:

• The Adjudicating Authority under Section 26 of the 2016 Act, within 30 days of the reference, shall issue a notice to:

• • Benamidar;
  • Beneficial owner (if they know identity);
  • Any interested party (including a banking company);
  • Any person who has made the claim in the respect of the benami property; and
  • All the joint owners of the property if it is a joint property (if they know identity).

• They do this to furnish all documents and evidence in their support.
• • It shall give 30 days to the person, to whom it has issued the notice.
• After considering the reply, evidence, and all other relevant material, and granting an opportunity of being heard to the affected parties and the Initiating Officer, the Adjudicating Authority should pass an order holding property:
  • As not to be benami and revoking the attachment order; or
  • As to be benami and confirming the attachment order.
• Adjudicating Authority has to pass an order before the expiry of one year from the end of the month in which the Initiating Officer has made the reference.

 PROCESS TO CONFISCATE  BENAMI PROPERTY

After the adjudication of the authorities, there comes the power of confiscating the benami property. The act states if:

• The Adjudicating Authority has held any property as benami property, the Adjudicating Authority under Section 27 of the 2016 Act, shall after giving an opportunity of hearing to the concerned person, pass an order to confiscate the attached property.
  • If they have preferred an appeal against the order of attachment passed by Adjudicating Authority, the property shall only be confiscated after the order of the Appellate Tribunal.

• If any property is held or acquired by any person from the benamidar for adequate consideration before issuing the Notice by Initiating Officer that property won’t get confiscated.
• Any right of any third person created in such property with a view to defeat the purposes of this Act shall be void.
• Under the order of confiscation, all the rights and title in such property shall vest absolutely with the central government free of all encumbrance and no compensation shall be payable.
• The Administrator will administer the confiscated property.

APPEALS

• Any person aggrieved by the order of the Adjudicating Authority of holding the property as benami or not can file an appeal to the Appellate Tribunal within 45 days from the order.
•  The parties may prefer An appeal against the order of the Appellate Tribunal in the High Court within 60 days.

PROHIBITION OF & PENALTY FOR BENAMI TRANSACTIONS

• Any person who had entered any benami transaction prior to the commencement of the 2016 Act shall be liable to punishment. The punishment may include imprisonment for a term which may extend to three years or with fine or with both.
• Again as per Section 53 of the 2016 Act, any person who enters a benami transaction or abets or induces any person to enter the benami transaction shall be guilty of committing the offence of benami transaction.
• However, the person shall be punishable with rigorous imprisonment for a term not less than one year. It may extend to seven years and shall also be liable to the fine. It may extend the fine to 25% of the fair market value of the property.