Benami property act

Dear Client,
The Benami Transactions (Prohibition) Act, 1988 came into force w.e.f. May 19, 1988. Section 4(1) of the Act specifically prohibited new suits, claims, or actions to recover benami-held properties initiated after the commencement of the Act. Therefore, a property bought in 1986/1987 is outside the purview of the prohibitions under Section 4(1) of the 1988 Act. The Act was further amended in 2016 stating that the provisions of the Act are substantive in nature and cannot be applied retrospectively. The courts have consistently held that the provisions of the Benami Transactions (Prohibition) Amendment Act, 2016, cannot be applied to transactions that occurred before the amendment which came into effect from November 1, 2016. In the landmark decisions passed in the case of R. Rajagopal Reddy v. Padmini Chandrasekharan(1995) and Union of India & anr v. M/s. Ganpait Dealcom Pvt. Ltd(2022), the Hon'ble Supreme Court has consistently held that the provisions of the Benami Act, including Section 4(1), operate prospectively and do not have retrospective application to transactions that occurred before the Act came into force in 1988.