The recent buzz in the country have undoubtedly been about Sasikala, the lady who had been a shadow cum right hand for the Late Selvi J. Jayalalitha, who was the main convict in the DA case. Charges were framed against them under Section 13(1) (e) and 13(2) of the Prevention of Corruption Act, 1988 and under section 120B and 109 of Indian Penal Code, 1860. Initially the trial court found them guilty including V.N Sudhakaran and J. Elavarsai. This order was challenged in The Hon’ble High Court of Karnataka and the aforementioned people were acquitted from the charge. Now, a decade later the Hon’ble Supreme Court reversed the order and they were even tried under the amended, “The Benami Transactions (Prohibition) Amendment Act, 2016(hereon called the BTPA)

In the current matter, the convicts had a sudden increase in the acquisition of assets during the period of 1991-96, when Late Selvi J. jayalalitha was the Chief Minister of the State. The activities were more in nature of acquiring assets like lands, machinery, building etc., which were not product oriented. Moreover, no income tax returns were filed, no assessment for commercial tax had been done with respect to the firms in question. Using her position and resources, Late Selvi J. jayalalitha did not even file for her income tax returns for the assessment years 1987-88 to 1992-93, till the issue was raised in the Parliament in November, 1992.  Following the allegations, bank accounts were scanned and proper assessment led to the revelation of the corruption going on from a long time. Finally, on 14.06.199, Dr. Subramanian Swami, lodged a complaint against the Late Selvi J. Jayalalitha before the Principal Sessions/Special Judge, Madras.

The BTPA act came into force with effect 1.11.2016. The earlier Act of 1988, was not enough to curb the increasing level of Benami transactions and corruption and hence the Act was amended and brought into force just days before when demonetization took the entire country by storm. It was only after this huge step, that the transactions in this case that were termed as corruption got the terminology of Benaim.

A Benami transaction is one where the owner of property is only on papers, i.e. to say a third person or a fictitious owner, funded by the real owner or the owner is not aware of and denies any knowledge of the ownership or possession of the property. It might also be the case when person providing the consideration for the property is not traceable.

In a misappropriate assets case, the prosecution has to discharge the initial burden to prove that the assets of the accused were disproportionate to the known sources of income. It was on the prosecution to prove that the property held by Sasikala, V.N Sudhakaran and J. Elavarasi were held benami for the public servant.

It was only when Dinakaran, the estranged nephew of Sasikala was suspected of deposits over 300 crore rupees between 1991-95, when Jayalalithaa was the Chief Minister. He was searched by the Enforcement Directorate under Foreign Exchange Regulation Act (FERA) where the property so purchased and the transactions were held to be Benami. It was further pleaded to try all the aforementioned four accused under The Benami Transactions (Prohibition) Act, 1988 since it came into force before Prevention of Corruption Act, 1988.

 It was under section 24 of  BTPA , for which the all the aforementioned accused were tried on , at a later stage when the matter was before the Hon’ble Supreme Court .The section deals with notice  and attachment of property involved in Benami Transaction .

24. (1) Where the Initiating Officer, on the basis of material in his possession, has reason to believe that any person is a benamidar in respect of a property, he may, after recording reasons in writing, issue a notice to the person to show cause within such time as may be specified in the notice why the property should not be treated as benami property.

 

(2) Where a notice under sub-section (1) specifies any property as being held by a benamidar

Referred to in that sub-section, a copy of the notice shall also be issued to the beneficial owner if his identity is known.

 

(3 ) Where the Initiating Officer is of the opinion that the person in possession of the property held benami may alienate the property during the period specified in the notice, he may, with the previous approval of the Approving Authority, by order in writing, attach provisionally the property in the manner as may be prescribed, for a period not exceeding ninety days from the date of issue of notice under sub-section (1).

 

(4) The Initiating Officer, after making such inquires and calling for such reports or evidence as he deems fit and taking into account all relevant materials, shall, within a period of ninety days from the date of issue of notice under sub-section (1),—

(a) Where the provisional attachment has been made under sub-section (3), —

(I) pass an order continuing the provisional attachment of the property with the prior approval of the Approving Authority, till the passing of the order by the Adjudicating Authority under sub-section (3) of section 26; or Power of authority to conduct inquiry, etc. Notice and attachment of property involved in benami transaction.

 

 (ii) Revoke the provisional attachment of the property with the prior approval of the Approving Authority;

(b) Where provisional attachment has not been made under sub-section (3),—

(i) Pass an order provisionally attaching the property with the prior approval of the Approving Authority, till the passing of the order by the Adjudicating Authority under sub-section (3) of section 26; or (ii) decide not to attach the property as specified in the notice, with the prior approval of the Approving Authority.

 

(5) Where the Initiating Officer passes an order continuing the provisional attachment of the property under sub-clause (i) of clause (a) of sub-section (4) or passes an order provisionally attaching the property under sub-clause (i) of clause (b) of that sub-section, he shall, within fifteen days from the date of the attachment, draw up a statement of the case and refer it to the Adjudicating Authority.

 As the section clearly indicates that if the Initiating Officer has knowledge of the benamidar property and according to sub section (2) where it is specified that a notice should specify the benamidar property. In the current case 87 notices were issued, highlighting the property being Benami. Any such notification or intimation is enough for the concerned appropriate authority to take steps and act on it. Especially in a matter like this, where the Chief Minister of a State was involved.

Furthermore as it was cited in Jaydayal Poddar through L.Rs. & Anr vs. Mst. Bibi Hazara [(1974) 1 SCC 3] that, “It is well settled that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so”. Similarly, in the current matter the burden was on the Selvi J Jayalalithaa and Smt Sasikala along with the other accused. The authority had the complete call to take an action against them and it was on the accused now convict to prove their innocence.

It is critical to note that even though the property might be specified as Benami, the contention of it varies on the facts of a particular case. Along with, it also varies on the circumstantial evidence and the most importantly the source of funds to purchase a particular property.

The plea that the Company is incorporated under the Companies Act, will not be taken as an excuse. Although, a company is an artificial person with members running the firm, any allegation of corruption or Benami will be charged against the company and the members so involved will be answerable in the court of law.  For almost over 100 properties held by the accused and even though there was Companies Act governing the firms so incorporated, the accused were tried for being members of a company incorporated through benami means.

With governments approach to curb corruption and the instigated charge to fight back the powerful and corrupt, this new amended Act is proving to be a blessing in disguise.

Author: Ashna Jha

You can reach author at: ashnajd@gmail.com 

The author is pursuing law from Rizvi Law College, Mumbai. She is a freelance content writer.