Can a Subsequent Supreme Court Judgment Reopen Final Orders? Gauhati High Court Rules on Review Jurisdiction in Benami Cases

Background and Context

The Gauhati High Court recently delivered a significant ruling in Satyajit Saha And 9 Ors Vs Union of India And 3 Ors, arising under Section 49 of the Prohibition of Benami Property Transactions Act, 1988. The central question before the Court was whether a final order passed by the Appellate Tribunal — which had been made in accordance with a then-prevailing Supreme Court judgment — could be recalled through review proceedings, simply because that Supreme Court judgment was itself subsequently reviewed and recalled.

The answer delivered by the Gauhati High Court has far-reaching implications for all proceedings disposed of on the strength of the Supreme Court's earlier ruling in Union of India and Another vs. Ganpati Dealcom Private Limited, reported in (2023) 3 SCC 315.

The Genesis: Search, Seizure, and Benami Allegations

The factual matrix of the case traces back to a search and seizure operation carried out on 25.03.2015 at the premises of one Shri Pradip Kumar Saha, the proprietor of M/s Pioneer Foreign Liquor Shop, Agartala. Incriminating documents and other material seized during the operation allegedly revealed that Shri Pradip Kumar Saha had been operating multiple liquor shops under the names of various other individuals, who were identified as the appellants in the present case.

Chronology of Proceedings

The sequence of events that led to the appeal before the High Court may be traced as follows:

  1. 14.03.2018 — The appellants appeared before the Initiating Officer to record their statements under Section 19(1)(b) of the Prohibition of Benami Property Transactions Act, 1988.
  2. 28.03.2018 — Show-cause notices were served upon the appellants under Section 24 of the Act.
  3. 25.06.2018 — The Initiating Officer passed provisional attachment orders against the assets of the appellants.
  4. 26.07.2019 — After a reference was made to the Adjudicating Authority, a common order was passed holding that the appellants were benamidars of Shri Pradip Kumar Saha and confirming the provisional attachment.
  5. September–October 2019 — The appellants filed appeals before the Appellate Tribunal challenging the order of the Adjudicating Authority.

The Supreme Court's Ruling in Ganpati Dealcom and Its Impact

While the appeals remained pending before the Appellate Tribunal, the Supreme Court delivered a landmark ruling in Union of India and Another vs. Ganpati Dealcom Private Limited, reported in (2023) 3 SCC 315, on 23.08.2022.

The Supreme Court held, inter alia, as under in paragraph 127 of that judgment:

"127. In view of the above discussion, we hold as under:
127.1. Section 3(2) (sic Section 3) of the unamended 1988 Act is declared as unconstitutional for being manifestly arbitrary. Accordingly, Section 3(2) of the 2016 Act is also unconstitutional as it is violative of Article 20(1) of the Constitution.
127.2. In rem forfeiture provision under Section 5 of the unamended 1988 Act, prior to the 2016 Amendment Act, was unconstitutional for being manifestly arbitrary.
127.3. The 2016 Amendment Act was not merely procedural, rather, prescribed substantive provisions.
127.4. In rem forfeiture provision under Section 5 of the 2016 Act, being punitive in nature, can only be applied prospectively and not retroactively.
127.5. The authorities concerned cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act viz. 25-10-2016. As a consequence of the above declaration, all such prosecutions or confiscation proceedings shall stand quashed.
127.6. As this Court is not concerned with the constitutionality of such independent forfeiture proceedings contemplated under the 2016 Amendment Act on the other grounds, the aforesaid questions are left open to be adjudicated in appropriate proceedings."

Appellate Tribunal's Order Dated 07.12.2022

Armed with the above ruling, the appellants sought quashing of the proceedings against them. The Appellate Tribunal, by its order dated 07.12.2022, allowed the appeals and set aside the Adjudicating Authority's confirmation order. The Tribunal recorded the following: