Finance Minister Pranab Mukherjee on Thursday introduced the Benami Transactions (Prohibition) Bill, 2011, in the Lok Sabha.
The Bill, to replace the existing Benami Transactions (Prohibition) Act, 1988, seeks stricter control over transactions and has provisions for confiscation of such property and imprisonment.
It prohibits benami transactions done in someone else’s name by any person, except in the case of transactions in the name of a spouse, brother or sister or any lineal ascendant or descendant.
The Statement of Objects and Reasons of the Bill outlines that it has been brought to prohibit holding property in benami and to restrict the right to recover or transfer such property, and to provide a mechanism and procedure for confiscation.
It mentions that during the process of formulating the rules for implementing certain provisions of the Benami Transactions (Prohibition) Act of 1988, it was found that the provisions were inadequate to deal with benami deals.
The Bill provides that benami properties arising out of prohibited transactions would be liable to confiscation by the central government without paying any compensation.
More From This Section
It prohibits the right to recover properties held benami. It provides penalty for entering into prohibited benami transactions and for furnishing false document in any proceeding under the Bill.
The Adjudicating Authority and the Appellate Tribunal established under the Prevention of Money Laundering Act, 2002, would be the Adjudicating Authority and Appellate Tribunal under the proposed Benami Act.
The Bill has outlined elaborate provisions to deal with the definition of benami transaction and benami property, prohibited benami transactions, consequences of entering into a prohibited benami transaction and the procedure for implementing the benami law.
Under the proposed law, anyone violating the rules can be jailed for not less than six months, which may be extended to two years and also be liable to a fine up to 25 per cent of the fair market value of the property.
The Bill also enables the central government, in consultation with the chief justice of high court, to designate one or more courts of session as a special court or courts for the purpose of the legislation.
Benami transactions are considered to be one of the major sources of circulation of black money.
By introducing the Bill in Parliament in the current session, the government wants to counter the pressure mounted by the Supreme Court, civil society and Opposition parties for tackling black money.