Sunday 4 September 2022

Supreme Court Declares Section 3(2) Of Benami Transactions Prohibition Act As Unconstitutional; 2016 Amendment Act To Have Only Prospective Effect

 18. Conclusion

18.1. In view of the above discussion, we hold as under:

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) In rem forfeiture 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.

f) As this Court is not concerned with the constitutionality of such independent forfeiture proceedings contemplated under the 2016 Amendment Act on the other grounds, the aforesaid questions are left open to be adjudicated in appropriate proceedings.


Civil Appeal No. 5783 of 2022 

Union of India (UOI) and Ors. Vs. Ganpati Dealcom Pvt. Ltd.

Hon'ble Judges/Coram:

N.V. Ramana, C.J.I., Krishna Murari and Hima Kohli, JJ.

Decided On: 23.08.2022

Citation: MANU/SC/1028/2022.

Read full Judgment here: Click here


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