Value of benami properties decreased by 54% in the past three years

Show cause notices for provisional attachment of benami properties have fallen 18.9% since 2020

On Tuesday, the Supreme Court struck down Section 3(2) of the Benami Transactions (Prohibition) Amendment Act, 1988 and called it “arbitrary” and violative of Article 20(1) of the Indian Constitution, which prohibits retrospective application of law. Under Section 3(2), a person with a benami transaction could be punished with imprisonment of up to seven years or a fine of up to 25 per cent of the fair market value of the property or both. The apex court also concurred with an earlier Calcutta High Court judgment that the law was only applicable prospectively. 

While data on the number of past convictions under the Act is unavailable, a Business Standard analysis of the finance ministry’s annual reports found that show cause notices issued for provisional attachment of benami properties had decreased to 154 in FY 2021-22 from 430 in FY 2019-20. The number of show cause notices issued in FY 2019-20 was the highest in the past three years.

There was also a 155.9 per cent increase in the value of assets attached between FY 2020 and FY 2021.

In a 2012 reply to a question in the Lok Sabha, the (United Progressive Alliance) government had said that it does not maintain any record of properties attached for benami transactions. According to the National Crime Records Bureau, economic offences in India increased by 10.1 per cent from 2017 to 2019.

The Supreme Court’s judgment comes on an appeal filed by the Centre against an earlier judgment of the Calcutta High Court on the Benami Act.