Pre-amendment benami transactions cannot support confiscation or prosecution after the Ganpati Dealcom ruling.

Alleged benami transactions said to have occurred before the 2016 amendment could not sustain adjudication or continuation of proceedings under the Benami law, in view of Union of India v. M/s. Ganpati Dealcom Pvt. Ltd. That ruling held Section 3(2) of the unamended Act, and the corresponding amended provision, unconstitutional, and treated forfeiture under Section 5 as punitive and prospective only. It also excluded criminal prosecution and confiscation proceedings for pre-amendment transactions. As the transactions were undisputedly prior to the amendment, the initiating action and confirming order were set aside.

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Issues: Whether the impugned adjudication and initiation of proceedings under the Prohibition of Benami Property Transactions Act, 1988 could be sustained in respect of alleged benami transactions said to have occurred prior to the 2016 amendment, in light of the declaration of law in Union of India v. M/s. Ganpati Dealcom Pvt. Ltd.

Analysis: The alleged transactions were found to be of a period prior to the coming into force of the 2016 amendment. The judgment in Ganpati Dealcom held that Section 3(2) of the unamended Act and the corresponding amended provision were unconstitutional, that the forfeiture provision under Section 5 was punitive and could operate only prospectively, and that criminal prosecution or confiscation proceedings for pre-amendment transactions could not be continued. As the present matters were covered by that ruling and the respondents could not dispute the pre-amendment nature of the transactions, the adjudication confirming the initiating action could not stand.

Conclusion: The impugned order and the proceedings initiated in relation to alleged benami transactions of the pre-amendment period were set aside, and the appeals were allowed.

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