The Rajasthan High Court while quashing the Provisional attachment held that the Commercial complex leased out to the company by the Joint Development Agreement (JDA) cannot be treated as a Benami transaction.
The petitioner, Kalyan Buildmart Pvt. Ltd assailed the provisional attachment orders passed by the Initiating Officer under Section 24(4) of the Prohibition of Benami Property Transactions Act, 1988 and the confirmation orders passed by the Adjudicating Authority under Section 26(3) of the Prohibition of Benami Property Transactions Act, 1988.
Mr. Swadeep Singh Hora, counsel for the petitioners submitted that the company purchased the land in its name while the Directors of the company at that time were Madan Mohan Gupta and Shashikala Gupta, who obtained a loan from one Rajendra Kumar Jain for the purpose of purchase of the agricultural land in 2006. The shares of the company were transferred to the petitioner, who purchased their shares in 2008.
The petitioners submit that the impugned orders holding the petitioner-company is ‘benamidar’ and the other petitioners as ‘beneficial owners, on the ground that they are shareholders of petitioner company, are wholly erroneous. It is submitted that the company has its own separate identification in law as a juristic person and the relation between the shareholders and the company cannot be said to be benamidar and beneficial owners as shareholders. It is stated that the company has throughout owned the property and mere change of shareholding would not make the property of the company as ‘Benami’s.
The single-judge bench of Justice Sanjeev Prakash Sharma held that once the land has been surrendered and the order has been passed by the JDA under Section 90B of the Rajasthan Land Revenue Act, 1956 and the land has been converted from agriculture to commercial and registered lease deed has been executed by the JDA in favour of the company, the transaction is not a Benami transaction.
“The provisional attachment orders passed by the Initiating Officer under Section 24(4) of the Benami Act, 1988 and the orders passed by the Adjudicating Authority confirming the orders under Section 26(3) of the Benami Act, 1988 are set aside with all consequential benefits. The property shall be handed over to the company,” the court said.Subscribe Taxscan AdFree to view the Judgment