SC strikes down one provision of 1988 benami law

NEW DELHI: The Supreme Court on Tuesday struck down one of the provisions of the Benami Transactions (Prohibition) Act of 1988, which provides for the punishment of a maximum jail term of three years or a fine or both for those indulging in ‘benami’ transactions. The Supreme Court termed the provision ‘unconstitutional’ on the ground of being ‘manifestly arbitrary’. “We hold section 3(2) of the Benami Transactions (Prohibition) Act, 1988 as unconstitutional,” a  bench comprising Chief Justice N V Ramana and Justices C T Ravikumar and Hima Kohli said. Section 3 of the statute deals with the issue of ‘Prohibition of benami transactions’ and its impugned sub-section (2) says:  ‘Whoever enters into any benami transaction shall be punishable with imprisonment for a term which may extend to three years or with fine or with both.’