Rajat Choudhury vs Union Of India (Income
2023 Latest Caselaw 472 Ori

             IN THE HIGH COURT OF ORISSA AT CUTTACK

                          CRLMP No. 2547 of 2022

              1. Rajat Choudhury
              2. Manasinee Choudhury             ....         Petitioners

                                  Mr. S. P. Sarangi, Advocate

                                     -versus-

              Union of India (Income             ....         Opp. Party
              Tax Department)

                                  Mr. Radheyshyam Chimanka
                                  Sr. Standing Counsel
                                  Mr. Avinash Kedia
                                  Jr. Standing Counsel

                                  CORAM:
                             JUSTICE S.K. SAHOO
                                    ORDER

Order No. 13.01.2023

01. This matter is taken up through Hybrid arrangement (video conferencing/physical mode).

Mr. Radheyshyam Chimanka, learned Senior Standing Counsel and Mr. Avinash Kedia, learned Junior Standing Counsel appearing for the Income Tax Department have entered appearance for the opposite party by filing a memo of appearance, which is taken on record.

Heard Mr. S.P. Sarangi, learned counsel for the petitioners and Mr. Radheyshyam Chimanka, Sr. Standing Counsel appearing for the Income Tax Department.

The petitioners have prayed for quashing the // 2 //

complaint petition and the criminal proceeding launched against them under section 3(2) of the Prohibition of Benami Transaction Act, 1988 (hereafter, 'the 1988 Act') in C.M.C. No.81 of 2021 pending before the learned District and Sessions Judge -cum- Special Judge, Prohibition of Benami Transactions Act, 1988, Khurda at Bhubaneswar.

Learned counsel for the petitioners drew the attention of this Court to the complaint petition as well as the summons issued to the petitioners for answering to a charge for commission of offence under section 3(2) of the 1988 Act.

Learned counsel for the petitioners submitted that a three Judge Bench of the Hon'ble Supreme Court in the case of Union of India and another -Vrs.- M/s. Ganpati Dealcom Pvt. Ltd. in Civil Appeal No.5783 of 2022 dated 23.08.2022 was called upon to decide the legal question as to whether the 1988 Act as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 ((hereafter, 'the 2016 Act') has a prospective effect and the Hon'ble Court has been pleased to hold that 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 and such provisions were still-born and never utilized in the first place and the Court found sections 3 and 5 of the 1988 Act were unconstitutional from their inception and ultimately section 3(2) of the unamended 1988 Act is declared to be

// 3 //

unconstitutional for being manifestly arbitrary. Accordingly, section 3(2) of the 2016 Act was also held to be unconstitutional as it is violative of Article 20(1) of the Constitution. It is further held that the 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 i.e. 01.11.2016. As a consequence of such declaration, all the prosecutions and confiscation proceedings was directed to be quashed.

Learned counsel for the petitioners further submitted that the transaction in the case in hand took place on 19.01.2013, which would be clear from paragraph-2 of the complaint petition.

Mr. Chimanka, learned Senior Standing Counsel submitted that review petition has been filed against the judgment and order of the Hon'ble Supreme Court in M/s. Ganpati Dealcom Pvt. Ltd. (supra) dated 23.08.2022, which is still pending. He has filed a copy of the order dated 14.12.2022, which is taken on record.

Review petition has been filed in the Hon'ble Supreme Court, which would be evident from the order passed by the Division Bench of this Court dated 14.12.2022 passed in W.P.(C) No.39995 of 2021, W.P.(C) No.1399 of 2021, W.P.(C) No.1401 of 2021, W.P.(C) No.1402 of 2021 and W.P.(C) No.10223 of 2021.

Issue notice on the question of admission indicating therein that the matter shall be disposed of finally at the stage of admission.

// 4 //

Let an extra copy of the CRLMP application be served on Mr. Radheyshyam Chimanka, learned Senior Standing Counsel by next week.

List this matter on 03.02.2023.

( S.K. Sahoo) Judge

I.A. No.432 of 2022

02. Heard.

As an interim measure, it is ordered that there shall be stay of further proceedings in C.M.C. No.81 of 2021 pending before the learned District and Sessions Judge

-cum- Special Judge, Prohibition of Benami Transactions Act, 1988, Khurda at Bhubaneswar till the next date.

Urgent certified copy of this order be granted on proper application.

( S.K. Sahoo) Judge

RKM