Important Sections under The Prohibition of Benami Property Transactions Act, 1988 (Amended, No. 43 of 2016) i.e. Power of authorities, Notices, attachment Order etc.
Powers of authorities i.e. Summon (Section 19)
(1) The authorities shall, for the purposes of this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit in respect of the following matters, namely:—
(a) discovery and inspection;
(b) enforcing the attendance of any person, including any official of a banking company or a public financial institution or any other intermediary or reporting entity, and examining him on oath;
(c) compelling the production of books of account and other documents;
(d) issuing commissions;
(e) receiving evidence on affidavits; and
(f) any other matter which may be prescribed.
(2) All the persons summoned under sub-section (1) shall be bound to attend in person or through authorised agents, as any authority under this Act may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required.
(3) Every proceeding under sub-section (1) or sub-section (2) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860).
(4) For the purposes of this Act, any authority under this Act may requisition the service of any police officer or of any officer of the Central Government or State Government or of both to assist him for all or any of the purposes specified in sub-section (1), and it shall be the duty of every such officer to comply with the requisition or direction.
(5) For the purposes of this section, “reporting entity” means any intermediary or any authority or of the Central or the State Government or any other person as may be notified in this behalf.
Explanation.—For the purposes of sub-section (5), “intermediary” shall have the same meaning as assigned to it in clause (n) of sub-section (1) of section 2 of the Prevention of Money-Laundering Act, 2002 (15 of 2003).]
Notice and attachment of property involved in benami transaction i. e. Show cause notice, Provisional Attachment Order etc. (Section 24)
(1) Where the Initiating Officer, on the basis of material in his possession, has reason to believe that any person is a benamidar in respect of a property, he may, after recording reasons in writing, issue a notice to the person to show cause within such time as may be specified in the notice why the property should not be treated as benami property.
(2) Where a notice under sub-section (1) specifies any property as being held by a benamidar referred to in that sub-section, a copy of the notice shall also be issued to the beneficial owner if his identity is known.
(3) Where the Initiating Officer is of the opinion that the person in possession of the property held benami may alienate the property during the period specified in the notice, he may, with the previous approval of the Approving Authority, by order in writing, attach provisionally the property in the manner as may be prescribed, for a period not exceeding ninety days from the date of issue of notice under sub-section (1).
(4) The Initiating Officer, after making such inquires and calling for such reports or evidence as he deems fit and taking into account all relevant materials, shall, within a period of ninety days from the date of issue of notice under sub-section (1),—
(a) where the provisional attachment has been made under sub-section (3),—
(i) pass an order continuing the provisional attachment of the property with the prior approval of the Approving Authority, till the passing of the order by the Adjudicating Authority under sub-section (3) of section 26; or
(ii) revoke the provisional attachment of the property with the prior approval of the Approving Authority.
(b) where provisional attachment has not been made under sub-section (3),—
(i) pass an order provisionally attaching the property with the prior approval of the Approving Authority, till the passing of the order by the Adjudicating Authority under sub-section (3) of section 26; or
(ii) decide not to attach the property as specified in the notice, with the prior approval of the Approving Authority.
(5) Where the Initiating Officer passes an order continuing the provisional attachment of the property under sub-clause (i) of clause (a) of sub-section (4) or passes an order provisionally attaching the property under sub-clause (i) of clause (b) of that sub-section, he shall, within fifteen days from the date of the attachment, draw up a statement of the case and refer it to the Adjudicating Authority.]
Adjudication of benami property i.e. Order confirming Provisional Attachment Order (Section 26)
(1) On receipt of a reference under sub-section (5) of section 24, the Adjudicating Authority shall issue notice, to furnish such documents, particulars or evidence as is considered necessary on a date to be specified therein, on the following persons, namely:—
(a) the person specified as a benamidar therein;
(b) any person referred to as the beneficial owner therein or identified as such;
(c) any interested party, including a banking company;
(d) any person who has made a claim in respect of the property:
Provided that the Adjudicating Authority shall issue notice within a period of thirty days from the date on which a reference has been received:
Provided further that the notice shall provide a period of not less than thirty days to the person to whom the notice is issued to furnish the information sought.
(2) Where the property is held jointly by more than one person, the Adjudicating Authority shall make all endeavours to serve notice to all persons holding the property:
Provided that where the notice is served on any one of the persons, the service of notice shall not be invalid on the ground that the said notice was not served to all the persons holding the property.
(3) The Adjudicating Authority shall, after—
(a) considering the reply, if any, to the notice issued under sub-section (1);
(b) making or causing to be made such inquiries and calling for such reports or evidence as it deems fit; and
(c) taking into account all relevant materials,
provide an opportunity of being heard to the person specified as a benamidar therein, the Initiating Officer, and any other person who claims to be the owner of the property, and, thereafter, pass an order—
1. holding the property not to be a benami property and revoking the attachment order; or
(ii) holding the property to be a benami property and confirming the attachment order, in all other cases.
(4) Where the Adjudicating Authority is satisfied that some part of the properties in respect of which reference has been made to him is benami property, but is not able to specifically identify such part, he shall record a finding to the best of his judgment as to which part of the properties is held benami.
(5) Where in the course of proceedings before it, the Adjudicating Authority has reason to believe that a property, other than a property referred to it by the Initiating Officer is benami property, it shall provisionally attach the property and the property shall be deemed to be a property referred to it on the date of receipt of the reference under sub-section (5) of section 24.
(6) The Adjudicating Authority may, at any stage of the proceedings, either on the application of any party, or suo motu, strike out the name of any party improperly joined or add the name of any person whose presence before the Adjudicating Authority may be necessary to enable him to adjudicate upon and settle all the questions involved in the reference.
(7) No order under sub-section (3) shall be passed after the expiry of one year from the end of the month in which the reference under sub-section (5) of section 24 was received.
(8) The benamidar or any other person who claims to be the owner of the property may either appear in person or take the assistance of an authorised representative of his choice to present his case.
Explanation.—For the purposes of sub-section (8), authorised representative means a person authorised in writing, being—
1. a person related to the benamidar or such other person in any manner, or a person regularly employed by the benamidar or such other person as the case may be; or
2. any officer of a scheduled bank with which the benamidar or such other person maintains an account or has other regular dealings; or
3. any legal practitioner who is entitled to practice in any civil court in India; or
4. any person who has passed any accountancy examination recognised in this behalf by the Board; or
5. any person who has acquired such educational qualifications as the Board may prescribe for this purpose.
Rectification of mistakes (Section 47)
(1) The Appellate Tribunal or the Adjudicating Authority may, in order to rectify any mistake apparent on the face of the record, amend any order made by it under section 26 and section 46 respectively, within a period of one year from the end of the month in which the order was passed.
(2) No amendment shall be made under sub-section (1), if the amendment is likely to affect any person prejudicially, unless he has been given notice of intention to do so and has been given an opportunity of being heard.
Offences by companies i.e. companies means Body Corporate, Firm, AOP, BOI (Section 62)
(1) Where a person committing contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company, for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.
(2) Nothing contained in sub-section (1), shall render any person liable to punishment if he proves that the contravention took place without his knowledge.
(3) Notwithstanding anything contained in sub-section (1), where a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of any director, manager, secretary or other officer of the company, the director, manager, secretary or other officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.
Explanation.—For the purposes of this section,—
(a) “company” means a body corporate, and includes—
(i) a firm; and
(ii) an association of persons or a body of individuals whether incorporated or not; and
(b) “director”, in relation to—
(i) a firm, means a partner in the firm;
(ii) any association of persons or a body of individuals, means any member controlling the affairs thereof.
Notice, etc., not to be invalid on certain grounds (Section 63)
No notice, summons, order, document or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid, or shall be deemed to be invalid merely by reason of any mistake, defect or omission in the notice, summons, order, document or other proceeding if the notice, summons, order, document or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.
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