If you hold any benami property and the Central Government declares it as such, not only will the Government confiscate it without paying any compensation, it will also impose a fine of up to 25 per cent of the market value of the property on you.

It could even imprison you for between six and 24 months.

But, you can appeal as the new Bill provides an appellate mechanism. It specifies that the adjudicating authority and the appellate tribunal established under the Prevention of Money Laundering Act 2002 respectively will be the adjudicating authority and the appellate tribunal for the new legislation.

Also, any party aggrieved by any decision or order of the Tribunal can file an appeal in the High Court on any question of law.

This is provided for in the new Bill on prohibition of benami transactions introduced in the Lok Sabha by the Finance Minister, Mr Pranab Mukherjee, here on Thursday. The Benami Transactions (Prohibition) Bill 2011 seeks to repeal the existing Benami Transactions (Prohibition) Act 1988, which was never fully implemented because its provisions were inadequate to deal with benami transactions.

For those entering into a benami transaction, the current law provides for imprisonment for a term of up to three years or with fine or both. The proposed law seeks to provide for both imprisonment as well as penalty.

The Bill has also sought to widen the scope of transactions that would not be considered as ‘benami transactions'. Under the proposed law, transactions entered into the name of spouse, brother or sister or any lineal ascendant or descendant will not be considered as ‘benami transactions'. At present, transactions entered in the name of wife and unmarried daughter are excluded from the ambit of the benami transactions prohibition law.

The Benami Transactions (Prohibition) Act 1988 does not contain any specific provision for vesting of confiscated property with the Central Government. Also, it does not have any provision for an appellate mechanism against an action taken by the authorities, while barring the jurisdictions of a civil court. The existing law does not confer the powers of a civil court upon the authorities for its implementation.

Under the proposed law, an offence will be non-cognisable and bailable. Even under the existing law, any offence is non-cognisable and bailable. Also, a benamidar cannot re-transfer the benami property held by him to the beneficial owner or any other person acting on his behalf.

> krsrivats@thehindu.co.in

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