Appellate Tribunal order on benami property transactions upheld, Section 5 retrospective application denied

The Madras HC dismissed appeals challenging an Appellate Tribunal order regarding benami property transactions. The appellants argued that Section 5 of the Prohibition of Benami Property Transactions Act, 1988 as amended in 2016 should apply retrospectively to transactions involving shell companies. However, the court held that the SC decision in Union of India v. Ganapati Dealcom Pvt Ltd governs, which prevents retrospective application of the amended provisions. The court noted that a pending review petition of the SC judgment, even with condoned delay and allowed oral hearing, cannot justify interfering with the Tribunal's order since no stay was granted.

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Issues involved:
The issues involved in the judgment include the retrospective application of Section 5 of the Prohibition of Benami Property Transactions Act, 1988 as amended in 2016, and the impact of the decision of the Honourable Supreme Court in Union of India vs. Ganapati Dealcom P Ltd. on the appeals filed challenging the order of the Appellate Tribunal.

Issue 1 - Retrospective Application of Section 5:
The main issue in this batch of appeals was whether Section 5 of the Benami Property Transactions Act, 1988 as amended in 2016 should have retrospective effect. The appellants contended that the Tribunal's order was contrary to this position. The Tribunal had relied on the Supreme Court's decision in Union of India vs. Ganapati Dealcom P Ltd., which held that the provisions of the 2016 Amendment Act, particularly Section 5, should be applied prospectively, not retrospectively. The Tribunal's order set aside actions related to benami transactions before the 2016 Amendment Act. The Telangana High Court and the Supreme Court upheld this view, emphasizing that the 2016 Amendment Act introduced substantive provisions that could not be applied retroactively.

Issue 2 - Review Petition and Pending Decision:
The appellants sought to challenge the Tribunal's order based on a Review Petition filed by the Department before the Supreme Court. However, the Court noted that the pendency of a Review Petition alone was not sufficient grounds to interfere with the Tribunal's order. Citing a Supreme Court decision, the Court emphasized that High Courts should decide cases based on existing law and not wait for outcomes of references or review petitions. The Court found no valid reason to overturn the Tribunal's order based solely on the pending Review Petition.

Separate Judgment by the Supreme Court:
In a separate judgment, the Supreme Court dismissed an appeal related to similar issues, stating that the matter was already covered by the Union of India vs. Ganapati Dealcom P Ltd. decision. The Court allowed for a fresh petition to be filed in case the review petition was successful, but for the present, the existing judgment stood.

Therefore, the High Court of Madras upheld the Tribunal's order, emphasizing the prospective application of the 2016 Amendment Act, and dismissed the appeals, leaving room for further action based on the outcome of the pending Review Petition before the Supreme Court.

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