Summary
The Supreme Court allowed a review petition by the Union of India and recalled the three-Judge Bench judgment in Union of India v Ganpati Dealcom (2022), because that judgment had declared unamended provisions of the Benami Act, 1988 unconstitutional although no party had challenged their validity. The civil appeal was restored for fresh hearing.
Issues
- Whether the judgment of 23 August 2022, which declared Sections 3 and 5 of the unamended Prohibition of Benami Property Transactions Act, 1988 unconstitutional, called for review when the only question framed was whether the 2016 amendment operated prospectively.
- Whether the constitutional validity of a statutory provision can be decided in the absence of a challenge and contest between the parties.
Provisions considered
- Sections 3 and 5, Prohibition of Benami Property Transactions Act, 1988 (unamended and as amended by the Benami Transactions (Prohibition) Amendment Act, 2016)The recalled judgment had declared Section 3 and the in rem forfeiture provision in Section 5 of the unamended Act manifestly arbitrary, and Section 3(2) of the amended Act violative of Article 20(1). The review Bench noted that the validity of the unamended provisions was never challenged or argued, and recalled the judgment in its entirety. (¶¶ 3, 4, 5, 6)
Held
- The only question framed in the recalled judgment was whether the 1988 Act as amended in 2016 operated prospectively; it is undisputed that no party challenged the constitutional validity of the unamended provisions, and the parties' recorded submissions did not squarely address that issue. (¶¶ 2, 5)
- A challenge to the constitutional validity of a statutory provision cannot be adjudicated without a lis and contest between the parties on that question; the declarations of unconstitutionality were therefore made without such a contest, and the review was allowed and the judgment of 23 August 2022 recalled. (¶ 6)
- Parties whose proceedings were disposed of on the strength of the recalled judgment were given liberty to seek review in light of this order. (¶ 7)
Result
Review petition allowed; judgment dated 23 August 2022 recalled; Civil Appeal No. 5783 of 2022 restored to file for fresh adjudication before a Bench to be nominated by the Chief Justice of India; liberty to parties in other proceedings decided on the basis of that judgment to seek review.