Tribunal overturns beneficial owner status under Benami Act, attachment order upheld

The Tribunal allowed the appeal, declaring the appellant not a beneficial owner under the Prevention of Benami Property Transactions Act. The attachment order was upheld, but the appellant's name was removed from the list of beneficial owners due to lack of substantial evidence against them. The Tribunal noted that the allegations were based on presumptions without proof and that no prima facie evidence was presented to continue the attachment. Therefore, the appellant was successful in proving their non-involvement as a beneficial owner, although the attachment of the amount in question would persist.

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Issues Involved:
1. Condonation of delay in filing the appeal.
2. Allegations of benami transactions and beneficial ownership.
3. Validity of the provisional attachment order.
4. Determination of whether the appellant is a beneficial owner under the PBPT Act.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The appellant filed an application for condonation of a two-day delay in filing the appeal. The respondent did not object to this application. The delay was condoned in the interest of justice based on the grounds mentioned in the application.

2. Allegations of Benami Transactions and Beneficial Ownership:
The respondent alleged that the appellant was a beneficiary of funds routed through the bank accounts of M/s. Apsara Merchandise Pvt. Ltd. (AMPL), a non-traceable company, via M/s. Daintree Metals Pvt. Ltd. (DMPL). The appellant contested these allegations, asserting no connection or dealing with AMPL and denying any beneficial ownership of the alleged benami property.

3. Validity of the Provisional Attachment Order:
The respondent initiated a reference before the Adjudicating Authority under Section 24(5) of the PBPT Act for the confirmation of the Provisional Attachment Order dated 25.01.2017. The order prohibited the State Bank of India (SBI) from delivering Rs. 28,10,625/- lying in a specified account. The appellant was named as defendant no. 8 in these proceedings.

4. Determination of Whether the Appellant is a Beneficial Owner under the PBPT Act:
The appellant argued that the money received as an advance for ceramic tiles was returned after verifying the credentials of the party. The appellant contended that this transaction did not fall within the definition of a "benami transaction" under Section 2(9) of the PBPT Act, 1988. The respondent, however, maintained that the appellant was a beneficial owner based on the cash/banking transaction trail and statements from Mr. Abhay Sultania, who controlled AMPL and DMPL.

Judgment Analysis:

Upon examining the material and arguments presented, the Tribunal referred to Section 2(9) and Section 2(12) of the PBPT Act, defining "benami transaction" and "beneficial owner," respectively. The Tribunal noted that the appellant returned the money the next day after due inquiry, indicating no benami transaction as per the Act's definitions.

The Tribunal observed that the Adjudicating Authority had not specifically concluded that the appellant was a beneficial owner. The Authority had noted that the Initiating Officer did not provide substantial evidence against the appellant. The appellant also claimed no connection with the money in the bank account in question.

The Tribunal concluded that the allegations against the appellant were based on presumptions without substantial proof. No prima facie evidence was presented to continue the attachment. Thus, the Tribunal held that the appellant was not a beneficial owner under Section 2(12) of the PBPT Act. Consequently, the Tribunal modified the impugned order to remove the appellant's name as a beneficial owner. However, since the appellant did not claim the attached amount, the attachment would continue.

Conclusion:
The appeal was allowed, and the appellant was declared not a beneficial owner. The attachment order remained in force, but the appellant's name was removed from the list of beneficial owners. No costs were awarded.

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