Rationalizing the provisions of the Prohibition of Benami Property Transactions Act

The existing provisions of section 23 of the Prohibition of Benami Property Transactions Act (‘the PBPT Act’) provide that the Initiating Officer, with the prior approval of the Approving Authority, shall conduct any inquiry or investigation. This power is exercised by the Initiating Officer where no case is pending before him. However, it is not expressly provided in the PBPT Act that the prior approval of Approving Authority shall not be required where the Initiating Officer has already initiated proceedings by issuing notice under section 24(1).

In order to clarify that no prior approval of the Approving Authority would be required in cases where notice under section 24(1) has been issued, it is proposed to suitably amend the provisions of section 23 of the PBPT Act.

This amendment will take effect retrospectively from 1st November, 2016.

[Clause 172]

Further, section 24(3) of the PBPT Act provides for attachment of property for a period of ninety days from the date of issue of notice under section 24(1) of the PBPT Act. Section 24(4) provides for passing of order within ninety days from the date of issuing notice under section 24(1).

In order to rationalize the aforesaid provisions, it is proposed to amend the section 24 so as to provide that the period of ninety days in respect of provisional attachment of the property under section 24(3) and passing of order under section 24(4) shall be reckoned from the end of the month in which the notice under section 24(1) is issued.

This amendment will take effect from 1st day of September, 2019.

[Clause 173]

The existing provisions of section 24(4) of the PBPT Act provide for passing of order by the Initiating Officer, of section 24(5) provide for making of reference by the Initiating Officer and of section 26(7) provide for passing of order by the Adjudicating Authority. However, no exclusion is provided for the period during which the proceedings are stayed by the Court. In order to provide for the exclusion and adequate time to pass the order or make the reference, it is proposed to suitably amend the provisions of sections 24 and 26.

This amendment will take effect from 1st September, 2019.

[Clauses 173 & 174]

With a view to ensure compliance with the summons  issued and information required to be furnished under the PBPT Act, it is proposed to insert a new section 54A in the PBPT Act so as to provide for levy of penalty of rupees twenty five thousand for failure to comply with the summons issued or to furnish information under section 19 or section 21 respectively of the PBPT Act.

This amendment will take effect from 1st September, 2019.

[Clause 175]

With a view to enable admissibility of certified copies of records or other documents in the custody of the authority as evidence in any proceeding under the PBPT Act, it is proposed to insert a new section 54B in the said Act so as to provide that entries in the records or other documents in the custody of an authority shall be admitted in evidence in any proceedings for the prosecution of any person for an offence under the PBPT Act.

This amendment will take effect from 1st September, 2019.

[Clause 175]

The existing provisions of the section 55 of the PBPT Act provide that no prosecution shall be instituted against any person in respect of any offence under the said Act without the previous sanction of the Board. With a view to rationalise the provisions, it is proposed to amend the said section so as to provide that no prosecution shall be instituted against any person in respect of any offence under the said Act without the previous sanction of the competent authority.

This amendment will take effect from 1st September, 2019.

[Clause 176]

 

 

 

 

Benami transaction enforcement: amendments streamline initiation, attachment timing, evidence admissibility and penalties. Amendments clarify that Initiating Officer need not obtain prior Approving Authority approval once notice under section 24(1) is issued; fix that the 90 day periods for provisional attachment and passing of orders run from the end of the month of notice and exclude court stays; introduce a penalty for failure to comply with summonses or furnish information; permit admissibility of certified authority records as evidence; and replace prior sanction by the Board with sanction by the competent authority.