In a significant legal development, the Supreme Court of India on Friday recalled its 2022 judgment in the case Union of India vs Ganpati Dealcom Pvt. Ltd, which had previously declared Sections 3(2) and 5 of the Benami Transactions (Prohibition) Act, 1988, as unconstitutional.
A bench comprising Chief Justice of India DY Chandrachud, Justice JB Pardiwala, and Justice Manoj Misra, issued the ruling in response to a review petition filed by the Union Government. The recall of the judgment revives the legal provisions that were struck down and restores the case for fresh adjudication.
Key Reasons for Recall
The bench observed that the constitutionality of the unamended provisions of the 1988 Act was not contested in the original proceedings. The central question in the earlier case was whether the amendments made to the Act by the Benami Transactions (Prohibition) Amendment Act, 2016 should have a prospective or retrospective effect. However, the bench that delivered the 2022 judgment went beyond this issue, declaring Sections 3 and 5 of the unamended 1988 Act unconstitutional.
“It is undisputed that there was no challenge to the constitutional validity of the provisions of the then unamended Act. This is clear from the formulation of the question,” the bench said in its ruling. The Court emphasized that the issue of constitutionality had not been sufficiently addressed in the absence of a direct challenge. “It is trite law that the challenge to the validity of a statutory provision cannot be adjudicated upon in the absence of a live lis or a contest,” the judgment noted.
Implications of the Recall
By recalling the earlier judgment, the Court effectively restores Sections 3(2) and 5 of the Benami Transactions (Prohibition) Act, 1988, pending further legal examination. Section 3(2) pertains to the punishment for entering into benami transactions, while Section 5 deals with the confiscation of property involved in such transactions.
Background and Next Steps
In 2022, a bench led by then Chief Justice NV Ramana, along with Justices Krishan Murari and Hima Kohli, had struck down these sections, ruling that they were unconstitutional. The same judgment had also declared that the 2016 amendments to the Act would not apply retrospectively, limiting the scope of actions under the amended provisions.
The recall of this judgment means the civil appeal will now undergo fresh adjudication by a new bench. The decision to allow the Union Government’s review petition reopens the case for reconsideration of the constitutionality of these provisions.
Solicitor General of India Tushar Mehta represented the Union Government during the hearing of the review petition.
