Benami routing through RTGS credits sustained attachment where alleged gold sales lacked independent evidence and cross-examination caused no prejudice.

RTGS credits claimed as gold-sale proceeds were treated as a benami transaction because cash deposits in entities controlled by the alleged benamidar, subsequent credits after commission deductions, and banking records established routing of demonetised cash. The gold-sale explanation lacked independent support, with no established relationship with remitters and anomalous invoice rates and weights; the attachment was therefore sustained. Denial of cross-examination did not breach natural justice because no intermediary statement existed, the benamidar's statement was disclosed, and the appellant showed no actual prejudice despite corroborative material. In benami proceedings, cross-examination is not invariably required where disclosed evidence independently supports the transaction.

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Issues: (i) Whether the RTGS credits received by the Appellant, claimed as proceeds of gold sales, constituted a benami transaction warranting confirmation of the attachment; (ii) Whether non-grant of cross-examination of the alleged intermediary and benamidar violated principles of natural justice.

Issue (i): Whether the RTGS credits received by the Appellant, claimed as proceeds of gold sales, constituted a benami transaction warranting confirmation of the attachment.

Analysis: The cash deposit of Rs. 1.55 crore in entities controlled by the alleged benamidar, the subsequent RTGS credits to the Appellant after deduction of commission, and the proximity of the transactions to demonetisation were undisputed. The explanation of genuine gold sales was unsupported by independent evidence: there was no established prior business relationship with the remitting entities, while the invoices reflected anomalous gold rates and weights. The sworn statement identifying cash received for providing RTGS entries was admissible, and the banking records corroborated the routing of funds.

Conclusion: The impugned transaction was a benami transaction, and confirmation of the provisional attachment was justified, against the Appellant.

Issue (ii): Whether non-grant of cross-examination of the alleged intermediary and benamidar violated principles of natural justice.

Analysis: No statement of the alleged intermediary was on record, making cross-examination of that person unavailable. The Appellant had been supplied the benamidar's statement, and the benamidar was summoned for cross-examination but did not appear. Natural justice does not invariably require cross-examination; procedural denial warrants relief only upon demonstrated prejudice. On the facts, the Appellant neither established prejudice nor displaced the corroborative material.

Conclusion: The denial of cross-examination caused no prejudice and did not violate principles of natural justice, against the Appellant.

Final Conclusion: The attachment of the funds was sustained as the alleged gold-sale documentation did not rebut the established benami routing of demonetised cash.

Ratio Decidendi: In benami proceedings, denial of cross-examination does not invalidate the adjudication unless actual prejudice is established, particularly where the material is disclosed and independently corroborates the transaction.

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