With reference to the Prohibition of Benami Property Transactions 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. Pr

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Q: 20 (IAS/2017)
With reference to the ‘Prohibition of Benami Property Transactions 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?

question_subject: 

Polity

question_exam: 

IAS

stats: 

0,111,35,10,111,8,17

keywords: 

{'benami property transactions act': [0, 0, 0, 1], 'benami transaction': [0, 0, 0, 1], 'pbpt act': [0, 0, 0, 1], 'benami': [0, 0, 0, 1], 'property transaction': [0, 0, 0, 1], 'appellate mechanism': [0, 0, 0, 1], 'property': [15, 0, 8, 22], 'transaction': [0, 0, 1, 4], 'properties': [0, 0, 0, 1], 'prohibition': [0, 0, 0, 2], 'confiscation': [0, 0, 0, 1], 'investigations': [0, 0, 0, 4]}

The correct answer is option 2: 2 only.

Explanation:

The Prohibition of Benami Property Transactions Act, 1988 (PBPT Act) is an Indian law that aims to prohibit benami transactions and confiscate benami properties. A benami transaction is a transaction where a property is transferred to one person for a consideration paid or provided by another person, and the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration.

Let`s analyze each statement given in the question one by one:

Statement 1: A property transaction is not treated as a benami transaction if the owner of the property is not aware of the transaction.

This statement is incorrect. According to the PBPT Act, a property transaction will be considered as benami, even if the owner of the property is not aware of the transaction. In fact, one of the main objectives of the Act is to tackle the problem of benami transactions, where the real owner of the property is not disclosed.

Statement 2: Properties held benami are liable for confiscation by the Government.

This statement is correct. Under the PBPT Act, properties held benami are liable for confiscation by the Government. The Act provides for the confiscation of benami properties, which means that the Government can take over the property without paying any compensation to the benamidar (the person in whose name the property is held). The confiscated property is then vested in the Central Government, free from all encumbrances.

Statement 3: The Act provides for three authorities for investigations but does not provide for any appellate mechanism.

This statement is partially correct. The PBPT Act provides for three authorities for investigations, namely the Initiating Officer, the Approving Authority, and the Adjudicating Authority. However, the Act also provides for an appellate mechanism. Any person aggrieved by an order of the Adjudicating Authority can file an appeal to the Appellate Tribunal within 45 days of the date of the order. Further, any person aggrieved by an order of the Appellate Tribunal can file an appeal to the High Court within 60 days of the date of the order.

In conclusion, the correct answer is option 2: 2 only, as statement 2 is correct, and statements 1 and 3 are incorrect.