Tuesday, 23.8.2022 :
The Supreme Court Tuesday
struck down one of the provisions of the Benami Transactions (Prohibition) Act
of 1988, which provides for the punishment of a maximum jail term of three
years or a fine or both for those indulging in ‘benami’ transactions.
The apex court termed the
provision “unconstitutional” on the ground of being “manifestly arbitrary”.
"We hold section 3(2) of
the Benami Transactions (Prohibition) Act, 1988 as unconstitutional," a
bench comprising Chief Justice N.V. Ramana and Justices C.T. Ravikumar and Hima
Kohli said.
Section 3 of the statute deals
with the issue of “Prohibition of benami transactions” and its impugned
sub-section (2) says: ”Whoever enters into any benami transaction shall be
punishable with imprisonment for a term which may extend to three years or with
fine or with both.”
The verdict came on the appeal
of the Centre challenging the Calcutta High Court judgement in which it was
held that the amendment made in the 1988 Act in 2016 would be applicable with
prospective effect.
The 1988 Act was made to
prohibit ‘benami’ transactions and the right to recover property that is held
to be 'benami'.