Supreme Court recalls judgment striking down provisions of Benami Transactions (Prohibition) Act

The Supreme Court on Friday recalled its 2022 judgment that struck down certain provisions of the Benami Transactions (Prohibition) Amendment Act, 1988 and 2016 amendments to it [Union of India v. Ganpati Dealcom].

The Bench of Chief Justice of India (CJI) DY Chandrachud, Justice PS Narasimha and Justice Manoj Misra allowed the review petition filed by the Central government against the top court's August 22 judgment.

The Court today today said there was no challenge to the provisions of the unamended Act and the issue of constitutional validity was not addressed in the decision.

It accordingly recalled the judgment and restored the original case for hearing before a new bench.

"It is trite law that constitutional validity of a provision can only be decided when the same provision is under challenge," the Court said.

The bench of then CJI NV Ramana and Justices Krishna Murari and Hima Kohli had in August 2022 held that Section 3(2) of the unamended 1988 Act was unconstitutional for being manifestly arbitrary.

Consequently, Section 3(2) of the 2016 Act had also been held to be unconstitutional for being violative of Article 20(1) of the Constitution.

Section 3(2) criminalised benami transactions, making it punishable with imprisonment up to 3 years.

During the hearing of the review today, Solicitor General Tushar Mehta submitted the provisions had not been challenged before the Court.

"Yes, before a provision is held as unconstitutional then there has to be a challenge at least," Justice Narasimha remarked.

Though the Court initially said it would list the review for hearing, it later proceeded to recall the decision after looking at the judgment and hearing the counsel.