Full Text
HIGH COURT OF DELHI
W.P.(C) 8422/2022
RAJESH KATYAL ..... Petitioner
Through: Mr. Sidhartha Das, Advocate.
Through: Mr. Zoheb Hossain, Senior Standing Counsel for Revenue with Mr. Vipul Agrawal & Mr. Parth Semwal, Advocates.
Date of Decision: 03rd November, 2022
HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA
JUDGMENT
1. Present writ petition has been filed seeking a direction for quashing and to set aside the Show Cause Notice dated 04th April, 2022 (‘SCN’) issued by the Respondent under Section 53 of the Prohibition of Benami Property Transactions Act, 1988, as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 (the ‘Act of 2016’), which came into effect on 01st November 2016, against the Petitioner.
2. Learned counsel for the Petitioner states that SCN has been issued with respect to purchase of lands by M/s AK Infosystem Pvt. Ltd., (‘the company’) between the period from 2007 to 2010 and transfer of shares held by the Petitioner in the said company on 31st May, 2014. He states that the newly enacted provisions of the Act of 2016, which came into effect on 01st November, 2016, cannot be applied against the Petitioner retrospectively for the transactions which were admittedly undertaken prior to coming into effect of the said provisions. He states that the Petitioner cannot be punished under the amended Section 53 (1) of the Act, which was brought into effect on 01st November, 2016 for a transaction which was undertaken prior to its coming into effect.
3. He states that the said issue is no longer res integra in view of the authoritative judgment dated 23rd August, 2022 of the Supreme Court in Union of India and Another. v. Ganpati Dealcom Pvt. Ltd., [2022] SCC OnLine SC 1064, holding that concerned authorities cannot initiate or continue criminal prosecution for transactions entered into prior to the coming into force of the Act of 2016 and declaring that all such prosecutions shall stand quashed.
4. Issue notice. Mr. Zoheb Hossain, accepts notice. He states that the Department is in a process of filing a Review Petition before the Hon’ble Supreme Court against the judgment in Ganpati Dealcom (supra).
5. We have heard the learned counsel for the parties. M/s AK Infosystems Pvt. Ltd. is the owner of the land alleged to be held benami. The Petitioner resigned as a director of M/s AK Infosystems Pvt. Ltd. on 01st August, 2008 and he sold his entire shareholding in the said company on 31st May, 2014.
6. The Supreme Court in the judgment of Ganpati Dealcom (supra) has at paragraph no.92 recorded the concession made by the Union of India that the offence under Section 53 of the Act of 2016 is prospective and would only apply to those transactions which were entered into after amendment came into force i.e., 01st November, 2016. The Supreme Court at paragraph nos. 94 and 130(e) of the said judgment has categorically held that the Act of 2016 which contains the criminal provisions is applicable only prospectively and quashed the prosecution proceedings. The relevant paragraphs of the judgement read as under:
7. It is admitted in the present case that the alleged benami transactions undertaken by the Petitioner were entered prior to 01st November 2016. In light of the law as declared by the Supreme Court in Ganapati Dealcom (supra), the present writ petition is allowed. The Show Cause Notice dated 04th April, 2022 shall stand quashed.
MANMEET PRITAM SINGH ARORA, J MANMOHAN, J NOVEMBER 03, 2022