Plots attached as ‘benami’, Shapoorji Pallonji goes to court
A group company of construction giant Shapoorji Pallonji has approached the Bombay high court to challenge orders of provisional attachment of properties in Raigad and the city that it said were owned by it but which the authorities were treating as the benami assets of a former deputy collector, Nitish Thakur.
The company said the properties were purchased with its money by its land aggregator, Nilesh Thakur, appointed in 2007. Nilesh is the brother of Nitish Thakur.
It has questioned the constitutional validity of the Prohibition of Benami Property Transaction Act, amended in 2016, over its retrospective application to transactions going back to the inception of the actin 1988.
The company said the properties – lands in Pen, Panvel and Alibaug, and flats in the city – were purchased by Nilesh and his firm PRS Enterprises and with money it had advanced him through cheque payments between 2008 and 2010, transactions which the Income Tax Appellate Authority had twice held to be genuine – once in 2015 and again in 2017.
The company contended that the issue, thus, could not be reopened and so the Benami Act proceedings were contrary to the ITAT orders.
Nitish, a former Mhada deputy collector, is facing cases of disproportionate assets filed by the Enforcement Directorate and the Anti-Corruption Bureau (ACB) against him.
The company said the provisional attachment order issued last December and its continuation order issued in March by authorities under the Benami Act were “illegal, without jurisdiction, misconceived and absolutely arbitrary” and “in gross violation of principles of natural justice” as it was not heard.
On Wednesday, a bench of Chief Justice Naresh Patil and Justice M S Karnik heard company counsel Milind Sathe and additional solicitor general Anil Singh for the Centre. Sathe said the properties could not be treated as ‘benami’ since these were purchased under an agreement as business assets from original landowners, with company monies. He also said the Benami Act could not be applied retrospectively to transactions prior to 2016.
Singh, appearing for the Benami Act authorities, who are income tax officials, said Nitish Thakur was a deputy collector who had negotiated property transactions and purchased properties worth more than Rs 150 crore in the name of his brother and mother or their firms, thus becoming their benami beneficiary.
He said that in March after the provisional attachment was continued the issue was referred to an adjudicating authority for final decision.
Singh said the high court need not intervene at this stage and that the company could argue its case of ownership before the adjudicating authority where it had already intervened.
The high court adjourned the matter to January 15 for further hearing.
The company said that in 2007 it had appointed Nilesh Thakur to acquire 900 acres of land within five years. It said that between 2008 and 2010, Thakur “utilized Rs 141 crore to purchase various immovable properties in Pen, Panvel and Alibaug and ownership flats at Mumbai.” In 2011, when he failed to transfer the properties to the company, it had moved the high court, which passed a decree by consent to transfer the properties to the Shapoorji Pallonji group company.