Sri Rachakonda Srinivas Rao Vs Initiating Officer (Appellate Tribunal Under Safema At Delhi)
The Appellate Tribunal under the SAFEMA at Delhi overturned an order attaching a commercial property under the Prohibition of Benami Property Transactions Act (PBPTA). The case involved Shri Rachakonda Srinivas Rao, M/s. ICON Constructions, and Smt. Sarda Devi. The original order by the Adjudicating Authority had confirmed a Provisional Attachment Order (PAO) on a commercial unit in Secunderabad, alleging it was benami property. The property’s sale consideration was Rs. 70,77,000, of which Rs. 9,00,000 was allegedly paid through Smt. Sarda Devi, identified as the benamidar, with Shri Rao as the beneficial owner.
Shri Rao and M/s. ICON Constructions appealed the order, arguing that the property was never owned or held by Shri Rao. They contended that Smt. Sharda Devi, along with two others, had entered into an agreement of sale with M/s. ICON Constructions, but she had denied ownership and making any payments. The appellants further argued that the PBPTA provisions were inapplicable as the agreement of sale predated the amendment to the Act, which came into force on November 1, 2016. They also pointed out that the agreement was never finalized into a sale. M/s. ICON Constructions also maintained that Smt. Sarda Devi never acquired title to the property.
The respondent, the Initiating Officer, argued that information from the Anti Corruption Bureau suggested that though payments were made via cheques, cash was deposited into Smt. Sharda Devi’s account before being transferred to M/s. ICON Constructions. They claimed Smt. Devi, a relative of Shri Rao, had given signed blank cheques to him, which were used for the transaction. The respondent asserted that the Adjudicating Authority correctly identified Smt. Devi as the benamidar and Shri Rao as the beneficial owner, alleging he used unaccounted money for the purchase.
The Tribunal, after reviewing the arguments and evidence, emphasized that only a partial payment of Rs. 9,00,000 had been made towards the property. It cited Section 54 of the Transfer of Property Act, 1882, which clarifies that an agreement to sell does not create any interest or charge on the property. The Tribunal also referred to Supreme Court judgments, including Rambhau Namdeo Gajre versus Narayan Bapuji Dhotra and Namdeo versus Collector, which reiterate that an agreement of sale does not confer ownership or interest in the property to the proposed buyer. The Tribunal noted that M/s. ICON Constructions confirmed that Smt. Devi did not acquire any rights or title to the property and that they remained the owners.
The Tribunal concluded that the property was neither benami nor was the transaction a benami transaction. It highlighted the lack of evidence connecting Shri Rao to the alleged cash infusions into Smt. Devi’s account. Given the arguments and the cited legal precedents, the Tribunal set aside the Impugned Order and allowed the appeals, effectively overturning the attachment of the property.
FULL TEXT OF THE JUDGMENT/ORDER OF APPELLATE TRIBUNAL UNDER SAFEMA AT DELHI
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