Appellate Tribunal upholds attachment of gold and silver from lockers under Benami Property Transaction Act section 24(1)

The Appellate Tribunal under SAFEMA dismissed the appeal challenging attachment of gold and silver articles from lockers under the Prohibition of Benami Property Transaction Act. The appellant failed to prove ownership of the assets or disclose the source of acquisition. The tribunal found that the appellant and the locker service provider (SVPL) were acting in collusion to mislead authorities. SVPL's failure to obtain mandatory KYC documents from 2016 and delayed name change from the original locker holder despite multiple requests raised suspicions. The tribunal rejected the appellant's claim that proper notice under section 24(1) was not given, finding that adequate opportunity for hearing was provided throughout the proceedings.

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Issues Involved:

1. Legitimacy of the attachment of gold and silver articles under the Prohibition of Benami Property Transaction Act, 1988.
2. Applicability of the amended provisions of the Act of 1988 to transactions prior to the 2016 amendment.
3. Compliance with procedural requirements under Section 24 of the Act of 1988.
4. Ownership and identity issues related to the lockers and their contents.

Detailed Analysis:

1. Legitimacy of the Attachment of Gold and Silver Articles:

The appeal challenged the order confirming the attachment of gold and silver articles valued at Rs. 1,23,27,770/- under the Prohibition of Benami Property Transaction Act, 1988. The appellant contended that the articles were not benami properties as they belonged to him, arguing that the lockers were opened in the name of "Shiv Daga," a name derived from the appellant's and his sister's names. However, the tribunal found contradictions in the appellant's explanations regarding the identity of "Shiv Daga." The tribunal noted the lack of KYC documentation and discrepancies in signatures, suggesting potential forgery. The tribunal concluded that the appellant's narrative was inconsistent and unsupported by evidence, thereby justifying the attachment as a benami transaction.

2. Applicability of the Amended Provisions of the Act of 1988:

The appellant argued that the amended provisions of the Act of 1988, introduced by the Amending Act of 2016, should not apply as the lockers were opened in 1998, and the articles were placed in 2013. The tribunal, however, noted the absence of evidence proving that the articles were placed in the lockers before the amendment. Furthermore, the tribunal highlighted that the name change on the locker occurred in 2019, post-amendment, and thus the amended provisions were applicable. The tribunal also referenced the Supreme Court's judgment in "Union of India & Anr. Versus M/s. Ganpati Dealcom Pvt. Ltd.," which was under review, indicating that the appellant's reliance on it was misplaced.

3. Compliance with Procedural Requirements under Section 24:

The appellant claimed that the proceedings were vitiated due to the absence of notice under Section 24(1) and 24(2) of the Act of 1988. The tribunal examined the records and found that notice under Section 24(1) was issued in the name of "Shiv Daga" at the appellant's address, and Section 24(2) notice was given to SVPL. The tribunal determined that the appellant, claiming to be "Shiv Daga," effectively received the notice and had the opportunity to present his case. The tribunal concluded that the procedural requirements were met and that the appellant was afforded a full opportunity to be heard.

4. Ownership and Identity Issues Related to the Lockers and Their Contents:

The tribunal scrutinized the appellant's claim of ownership over the lockers and their contents. It found inconsistencies in the appellant's narrative about the lockers being opened for his sister's valuables and the subsequent claim that "Shiv Daga" was an alias. The tribunal noted the appellant's failure to respond to public notices and the lack of transparency from SVPL during the investigation. The tribunal emphasized the appellant's inability to substantiate the source of the gold and silver, which further undermined his ownership claim. Consequently, the tribunal upheld the view that the lockers and their contents were involved in a benami transaction.

In conclusion, the tribunal dismissed the appeal, finding no merit in the appellant's arguments and affirming the legality of the attachment under the amended provisions of the Prohibition of Benami Property Transaction Act, 1988.

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