Question 51 from UPSC CSE 2017 - Current
Affairs

Question

With reference to the 'Prohibition of Benami Property Transaction Act, 1988 (PBPT Act)', consider the following statements:
1. A property transaction is not treated as a benami transaction if the owner of the property is not aware of the transaction.
2. Properties held benami are liable for confiscation by the Government.
3. The Act provides for three authorities for investigations but does not provide for any appellate mechanism.
Which of the statements given above is/are correct?

Accepted Answer

Correct Option: B. 2 only

Strategy: - Analyze each statement individually based on the PBPT Act provisions.
- For Statement 1, focus on the legal definition of a benami transaction, which centers on the source of consideration and the beneficial owner, not just the registered owner's awareness.
- For Statement 2, recall the punitive measures under the Act, specifically that confiscation is a primary consequence.
- For Statement 3, identify the authorities established by the Act, noting the explicit provision for an Appellate Tribunal, which contradicts the claim of no appellate mechanism.

Key Info: The Prohibition of Benami Property Transaction Act, 1988 (PBPT Act), significantly amended in 2016, aims to curb benami transactions.

**Benami Transaction Definition**
A benami transaction is one where a property is held by one person (benamidar) for the benefit of another person (beneficial owner). The consideration for the property is provided by the beneficial owner. The benamidar's awareness is not the primary determinant; the source of funds and the beneficial ownership are key. The 2016 amendment broadened the definition and strengthened enforcement.

**Confiscation**
Properties held benami are liable for confiscation by the Central Government. The Act provides for the attachment and subsequent confiscation of such properties.

**Authorities and Appellate Mechanism**
The Act provides for several authorities for investigation and adjudication:
- Initiating Officer: Initiates proceedings.
- Approving Authority: Approves the attachment of property.
- Adjudicating Authority: Decides whether a transaction is benami.
- Appellate Tribunal: The Act does provide for an Appellate Tribunal to hear appeals against the orders of the Adjudicating Authority. This provision ensures an appellate mechanism is in place, contradicting claims to the contrary.

Answer

Option A: 1 only

Answer

Option C: 1 and 3 only

Answer

Option D: 2 and 3 only