On 13.05.2015, the Benami Transactions (Prohibition) Amendment Bill, 2015 was introduced in Lok Sabha. The Bill seeks to amend the Benami Transactions (Prohibition) Act, 1988 (referred hereto as the principal Act) by introducing following amendments in the said Act:
- Inserts a new Chapter I before Section 1 of the principal Act, which states that now the principal Act shall be called as “Prohibition of Benami Property Transactions Act, 1988”, and provides a new definition clause in Section 2 of the said Act.
- Inserts a new Chapter II before Section 3 of the principal Act, namely “Prohibition of Benami Transaction”, which omits Section 3 (2) & (4) and Section 4 (3) of the principal Act, and inserts new Section 3(3) which provides for stringent punishment for entering into any Benami Transaction on or after the date of commencement of the Benami Transactions (Prohibition) Amendment Act, 2015.
- Substitutes Section 5 & 6 of the principal Act, with following clause:
Ø “5. Any property, which is subject matter of Benami transaction, shall be liable to be confiscated by the Central Government.
Ø 6. (1); No person, being a Benamidar shall re-transfer the Benami property held by him to the beneficial owner or any other person acting on his behalf.
(2) Where any property is re-transferred in contravention of the provisions of sub-section (1), the transaction of such property shall be deemed to be null and void.”
- Inserts a new Chapter III after Section 6 of the principal Act, which provides provisions relating to appointment of adjudicating authority to exercise jurisdiction, powers and authority under the said Act.
- Inserts a new Chapter IV, which provides for procedure to issue notice to any person who is believed to be a Benamidar in respect of a property, and also procedure for attachment of the property involved in Benami transaction. The Chapter also includes provisions for adjudication of Benami property; confiscation & vesting of the said property; possession and management of the property confiscated thereto.
- Inserts a new Chapter V, which provides for establishment of Appellate Tribunal to hear appeals against the orders of the Adjudicating Authority, its composition and powers thereto. The Chapter bars the jurisdiction of civil courts to entertain any suit or proceeding in respect of any matter in which the Adjudicating authority or Appellate Tribunal have power to determine under the Act. The Chapter also provides that any party aggrieved by the decision or order of the Appellate Tribunal may file appeal to the High Court.
- Inserts a new Chapter VI, which provides for designation of one or more Court of Session as Special Court/s for trial of offence punishable under the said Act.
- Inserts a new Chapter VII, which provides for rigorous imprisonment for a term not less than a year and which may extend to seven years, along with a fine of 25% of the fair market value of the property on any person who is found guilty of the offence of Benami Transaction. The Chapter also provides penalty for false information.
- Substitutes a new Chapter VIII for Sections 7 & 8 of the principal Act, which repeals Section 81, 82 and 94 of the Indian Trust Act, 1882; Section 66 of the CPC, 1908; and Section 281A of the Income-tax Act, 1961. The Chapter also provides power to the Central Government to exempt any property relating to charitable or religious trusts from the operation of this Act.
- Renumber Section 9 of the principal Act as Section 72 thereof.