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The Benami Transactions (Prohibition) Bill 2011, introduced by Finance Minister Pranab Mukherjee, will replace the existing Benami Transactions (Prohibition) Act, 1988.
According to the Statement of Objects and Reasons, the Bill has been brought to prohibit holding property in benami and restrict the right to recover or transfer such property.
It also seeks to provide a mechanism and procedure for confiscation of property held benami without any compensation.
The proposed law will prohibit benami transactions by any person, except deals entered into in the name of spouse, brother, sister or any lineal ascendant or descendant.
The Bill contains 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 rule can be jailed for not less than six months, which may be extended to two years and also be liable to a hefty fine.
The bill enables the Central Government, in consultation with the Chief Justice of High Court, to designate one or more Courts of Session as Special Court or Special Courts for the purpose of the legislation.
Benami transactions are one of the notorious sources of circulation and investment of black money. The government has been facing heat on black money from the Supreme Court, civil society and Opposition for not doing enough to check the menace.
