UNION OF INDIA & ANR. versus M/S. GANPATI DEALCOM PVT. LTD.

Citation: [2022] 12 S.C.R. 320 · Decided: 23-08-2022 · Supreme Court of India · Bench: N.V. RAMANA · Disposal: Disposed off

Cited by 2 judgment(s) · cites 13 · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
320
SUPREME COURT REPORTS
[2022] 12 S.C.R.
320
UNION OF INDIA & ANR.
v.
M/s. GANPATI DEALCOM PVT. LTD.
(Civil Appeal No. 5783 of 2022)
AUGUST 23, 2022
[N. V. RAMANA, CJI, KRISHNA MURARI AND
HIMA KOHLI, JJ.]
Prohibition of Benami Property Transactions Act, 1988 –
ss.3(2),5 – Benami Transactions (Prohibition) Amendment Act, 2016
– Held: s.3(2) of the unamended 1988 Act is unconstitutional for
being manifestly arbitrary – Accordingly, s.3(2) of the 2016 Act is
also unconstitutional as it is violative of Article 20(1) of the
Constitution – Further, in rem forfeiture provision u/s.5 of the
unamended Act of 1988, prior to the 2016 Amendment Act, was
unconstitutional for being manifestly arbitrary – 2016 Amendment
Act was not merely procedural, rather, prescribed substantive
provisions – In rem forfeiture provision u/s.5 of the 2016 Act, being
punitive in nature, can only be applied prospectively and not
retroactively – Thus, concerned authorities cannot initiate or
continue criminal prosecution or confiscation proceedings for
transactions entered into prior to the coming into force of the 2016
Act, viz., 1.11.2016 –Consequently, all such prosecutions or
confiscation proceedings stand quashed– Constitution of India –
Article 20(1).
Benami Property Transactions Act, 1988 – ss.2(a), 3 – Mens
rea, absence of – Effect of – Held: The criminal provision envisaged
u/ss. 2(a) and 3 does not expressly contemplate mens rea – Mens rea
is an essential ingredient of a criminal offence – Absence of mens
rea creates a harsh provision having strict liability –Mere fact that
the object of the statute is to promote welfare activities or to eradicate
a grave social evil which by itself is not decisive of the question as
to whether the element of a guilty mind is excluded from the
ingredients of an offence – Mens rea by necessary implication may
be excluded from a statute only where it is absolutely clear that
implementation of the object of the statute would otherwise be
defeated – The language of s.2(a) coupled with s.3, completely
[2022] 12 S.C.R. 320
A
B
C
D
E
F
G
H
321
ignores the aspect of mens rea, as it intends to criminalize the very
act of one person paying consideration for acquisition of property
for another person – The 1988 law was envisaged on the touchstone
of strict liability.
Judicial Review– Law with respect to testing the
unconstitutionality of a statutory instrument – Held: Constitutional
Courts can test constitutionality of legislative instruments (statute
and delegated legislations)both on procedure as well as substantive
nature of these instruments – The test should be based on a combined
reading of Articles 14, 19 and 21 of the Constitution – Constitution
of India – Articles 14, 19, 21.
Doctrines/Principles – Doctrine of manifest arbitrariness–
Discussed.
Interpretation of Statutes – Law declared unconstitutional –
Effect of – Held: Such a declaration would render the law not to
exist in the law books since its inception – It is only a limited
exception under Constitutional law, or when substantial actions have
been undertaken under such unconstitutional laws that going back
to the original position would be next to impossible – In those cases
alone, would this Court take recourse to the concept of ‘prospective
overruling’.
Constitution of India –Retroactive/retrospective legislations
– Legislature’s power to enact – Held: Legislature has power to
enact retroactive/retrospective civil legislations under the
Constitution – However, Article 20(1) mandates that no law
mandating a punitive provision can be enacted retrospectively – A
punitive provision cannot be couched as a civil provision to by-pass
the mandate under Article 20(1) of the Constitution which follows
the settled legal principle that “what cannot be done directly, cannot
be done indirectly”.
Words and Phrases– “Forfeiture”, “Benami”, “Benami
transaction”, “Benamidar/ostensible owner”– Discussed.
Disposing of the appeal, the Court
HELD: 1. Reading Section 2(a) along with Section 3 makes
one thing clear – the criminal provision envisaged under the
aforesaid provisions does not expressly contemplate mens rea.
UNION OF INDIA & ANR. v. M/s. GANPATI DEALCOM PVT.
LTD.
A
B
C
D
E
F
G
H
322
SUPREME COURT REPORTS
[2022] 12 S.C.R.
Under the Indian jurisprudence, the law on the subject is fairly
well-settled. It has been subjected to the judicial scrutiny of this
Court on several occasions. It does not call for a detailed
discussion and is enough to resta

Excerpt shown. Read the full judgment & AI analysis in Lexace.