 DY Chandrachud, Justice PS Narasimha and Justice Manoj Misra allowed the review petition lodged by the Central government against the apex court's August 22 judgment.){kind=link}
The Supreme Court today recalled its 2022 judgment that struck down certain provisions of the Benami Transactions (Prohibition) Amendment Act, 1988 and invalidated all prosecution carried out under the Act before its amendment in 2016.
The Bench comprising Chief Justice of India (CJI) DY Chandrachud, Justice PS Narasimha and Justice Manoj Misra allowed the review petition lodged by the Central government against the apex court’s August 22 judgment.
The Supreme Court on Friday stated that there was no challenge to the provisions of the unamended Act and the issue of constitutional validity was not addressed in the decision. Subsequently, it recalled the judgment and restored the original case for hearing before a new bench. The court observed that it is trite law that constitutional validity of a provision can only be decided when the same provision is under challenge.
The then bench of CJI NV Ramana and Justice Krishna Murari and Justice Hima Kohli had in August 2022 ruled that Section 3(2) of the unamended 1988 Act was unconstitutional for being manifestly arbitrary. Thereafter, Section 3(2) of the 2016 Act had also been held to be unconstitutional for being violative of Article 20(1) of the Constitution. Notably, Section 3(2) criminalised benami transactions, making it punishable with imprisonment up to 3 years.
During the hearing of the review petition, Solicitor General Tushar Mehta contended that the provisions had not been challenged before the Court. Agreeing, Justice PS Narasimha said that before a provision is held as unconstitutional then there has to be a challenge at least.
The bench clarified that the judgment was not made in response to a live dispute where the constitutionality of the provisions was raised or debated by the parties. It further observed that the issue of constitutional validity was not squarely raised, mentioning that such a decision must only be reached when constitutional challenges are properly argued in court.
The bench added that they cannot hold a provision to be unconstitutional when there is no challenge. It has to be raised, has to be argued, and assessed on suitable grounds, the court continued. Subsequently, the court stated that the batch of matters will be adjudicated afresh before a new bench that would be set up by the CJI on the administrative side.
Initially, the Court said it would list the review for hearing, it later proceeded to recall the decision after looking at the judgment and hearing the counsel.