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Amendment Aftermath: SAFEMA Appellate Tribunal Clarifies Applicability of 2016 Amendment in Benami Law


In a recent ruling by the Appellate Tribunal (‘Tribunal’) for the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (‘SAFEMA’) in Sukhlal Baiga v. Initiating Officer, Bhopal,[i] addressed a batch of appeals under s. 46(1) of the Prohibition of Benami Transactions Act, 1988 (‘PBT Act’). These appeals challenged an order that confirmed the provisional attachment of certain properties. This judgment delves into the complex realm of benami transactions, examining both pre- and post-amendment scenarios under the PBT Act. It showcases the meticulous scrutiny the Tribunal applied in determining the applicability of legal provisions and analyzing the factual matrix surrounding the transactions.

Brief Facts

  • The appeals stemmed from an order dated 29.04.2022 by the adjudicating authority (‘AA’), which confirmed the provisional attachment orders of several properties purchased over time by the Appellant, and subsequently declared as benami.

  • These properties were acquired prior to the 2016 amendment to the PBT Act, raising questions about the amendment’s retrospective applicability. Further, the Appellant’s ownership was acknowledged in two connected appeals.

  • The Appellant’s primary defence hinged on the argument that as per the Hon’ble Supreme Court’s judgment in Union of India v. M/s Ganpati Dealcom Private Limited[ii], the amendment had prospective application and hence, pre-amendment transactions should be exempt from the amended PBT Act. Thus, the primary question before the Tribunal was whether the 2016 amendment to the PBT Act applies to the properties acquired before its enactment but held thereafter.


  • The Tribunal affirmed the retrospective applicability of the amendment in this case, citing the precedent set in Prism Scan Express (P) Ltd. v. Initiating Officer, DCIT[iii]. It emphasized the relevance of continued property holding post-amendment. It is important to note at the very outset that while referring to the judgment in Ganpati Dealcom (supra), the Tribunal held that the 2016 amendment applied prospectively, excluding pre-amendment transactions under its purview. However, if properties were held by the benamidar after the 2016 amendment, the amended PBT Act would apply, as exemplified by the present case.

  • The Tribunal examined the Appellant’s income as against the properties purchased, thereby finding inconsistencies in the acquisition of properties worth over Rs. 11 lakhs. Despite the Appellant’s claim of purchasing the said properties from his earnings, the Tribunal noted that evidence suggested otherwise, with payments being traced back to one Padam Kumar Singhania.

  • The Tribunal further dismissed the contentions of the Appellant regarding the denial of cross-examination, emphasizing the Appellant’s failure to have filed an application before the AA seeking the same.

  • Additionally, the Tribunal intervened to correct the designation of beneficial ownership, recognizing Padam Kumar Singhania as the sole beneficial owner and the Appellant as the benamidar. However, this finding did not affect the attachment order.


This decision holds significant ramifications for benami transactions, particularly concerning the temporal applicability of statutory amendments. It clarifies the distinction between pre- and post-amendment scenarios, emphasizing the need for factual and legal precision in determining beneficial ownership. The Tribunal’s meticulous analysis underscores the importance of evidence in establishing the true nature of transactions. It highlights the burden on parties to substantiate claims and avail opportunities for due process, such as cross-examination.

Furthermore, the decision exemplifies the judiciary’s role in upholding legal principles while ensuring equitable outcomes. By rectifying errors in designation, the Tribunal reaffirmed its commitment to fair adjudication, thereby balancing legal interpretations with factual realities. Thus, this ruling not only clarifies the application of statutory provisions but also underscores the judiciary’s vigilance in addressing complexities within the realm of benami transactions, thereby promoting transparency and accountability in property dealings.

End Note

[i] [2024] 161 119 (SAFEMA – New Delhi) [dated: 12.03.2024].

[ii] [2022] 141 389 (SC) [dated: 23.08.2022].

[iii] [2023] 157 623 (SAFEMA – New Delhi) [dated: 15.12.2023].

Authored by Srishty Jaura, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinion.


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