Calcutta High Court (Appellete Side)
Deific Abode Llp vs Union Of India & Ors on 30 November, 2022
30.11.2022
ks WPA 11123 of 2020
sl. 3-7 CAN/1/2021
Deific Abode LLP
Vs
Union of India & Ors.
With
WPA/11127/2020
CAN/1/2021
With
WPA/11132/2020
CAN/1/2021
With
WPA/11135/2020
CAN/1/2021
With
WPA/11136/2020
CAN/1/2021
Mrs. Manju Agarwal,
Mr. Bajrang Manot,
Ms. Surabhi Baid
... For the Petitioners.
Mr. Smarajit Roy Chowdhury
... For the Respondents.
Heard learned Advocates appearing for the parties.
Learned Advocate appearing for the petitioners
submits that the issue involved in these writ petitions
are covered in favour of the petitioners by a recent
judgment of the Hon'ble Supreme Court dated 23rd
August, 2022 in the case of Union of India & Anr. Vs.
M/s. Ganpati Dealcom Pvt. Ltd., reported in Civil
Appeal No.5783 of 2022 (@ Special Leave Petition ©
No.2784 of 2020) and petitioners rely on the same in
support of their contention particularly on paragraphs
15.16, 15.17, 15.18 and 15.22 of the aforesaid
judgment which are quoted as hereunder :
"15.16 Fourth, reading Section 2(a) with Section 3(1)
would have created overly broad laws susceptible to be
challenged on the grounds of manifest arbitrariness. If
this Court reads criminal provisions of the Benami Act
to have had force since 1988, then the following
deleterious consequences would ensue:
(i) Section 187C of the Companies Act,
1956 assured protection to nominal and
beneficial holding of shares if the
prescribed declaration duly made are at
serious risk.
(ii) Benami cooking gas connections which
have been regularized from time to time
are at risk.
(iii) Hosing colonies and benami allotments
of DDA flats which have been
regularised from time to time are at risk.
15.16 The criminal provision under Section 3(1)
of the 1988 Act has serious lacunae which could
not have been cured by judicial forums, even
through some form of harmonious interpretation.
A conclusion contrary to the above would make the
aforesaid law suspect to being overly oppressive,
fanciful and manifestly arbitrary, thereby violating
the 'substantive due process' requirement of the
Constitution.
15.17 SComing to Section 5 of the 1988 Act, it must
be noted that the acquisition proceedings
contemplated under the earlier ACt were in
rem proceedings against benami property. We
may note that, jurisprudentially, such in rem
proceedings transfer the guilt from the person
who utilized a property which is a general
harm to the society, to the property itself.
15.22 From the above, Section 3(criminal provision)
read with Section 2(a) and Section 5(confiscation
proceedings) of the 1988 Act are overly broad,
disproportionately harsh, and operate without
adequate safeguards in place. Such provisions were
still-born law and never utilized in the first place. In
this light, this Court finds that Sections 3 and 5 of the
1988 Act were unconstitutional from their inception."
Learned Advocate appearing for the
respondent/Income Tax Authority does not dispute the
aforesaid contention of the petitioners.
In view of the facts and circumstances of the case
as appears from record, submission of the parties and
by taking into consideration the aforesaid judgment of
the Hon'ble Supreme Court, all these writ petitions
along with CAN being WPA 11123 of 2020,
CAN/1/2021, WPA/11127/2020, CAN/1/2021,
WPA/11132/2020, CAN/1/2021,WPA/11135/2020,
CAN/1/2021 and WPA/11136/2020, CAN/1/2021 are
disposed of by setting aside the impugned notices
under Section 24(1) of the Prohibition of Benami
Property Transactions Act, 1988 and all subsequent
proceedings on the basis of the aforesaid notices are
quashed and all legal consequences will automatically
follow.
( Md. Nizamuddin, J. )
