Prohibition of Benami Property Transactions Act

20) With reference to the ‘Prohibition of Benami Property Transactions Act, 1988 (PBPT Act)’, consider the following statements:

1. A property transaction is not treated as a benami transaction if the owner of the property is not aware of the transaction.
2. Properties held benami are liable for confiscation by the Government.
3. The Act provides for three authorities for investigations but does not provide for any appellate mechanism.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) 1 and 3 only

(d) 2 and 3 only

Solution: (b) 2 only

Explanation :

“Ignorance of law can never be an excuse for the violation of law” is a basic principle in Indian legal framework. If  someone is unaware of the legality he cannot claim immunity on that ground, therefore statement 1 is wrong.

Properties held benami are liable for confiscation by the Government without payment of compensation. Wealth acquired by illegal means and corrupt methods can be confiscated by government.

An appellate mechanism has been provided under the PBPT Act in the form of Adjudicating Authority and Appellate Tribunal. Not providing for an appellate mechanism would be arbitrary and irrational. It would be detrimental to justice and be violative of providing the accused an opportunity to prove his innocence