With reference to the ‘Prohibition of Benami Property Transaction 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?

The correct option is 2 only.

Let us analyze each statement regarding the Prohibition of Benami Property Transaction Act, 1988 (PBPT Act):

Statement 1 is incorrect: Under the PBPT Act (as amended in 2016), a benami transaction includes situations where a property is transferred to, or held by, one person, and the consideration for such property has been provided or paid by another person. Lack of awareness by the nominal owner does not exempt a transaction from being classified as a benami transaction if the essential criteria of benami property are met.

Statement 2 is correct: Properties held benami are liable to confiscation by the Central Government. Once a property is declared as benami, the Adjudicating Authority can order the confiscation of such property, and no compensation is payable for it.

Statement 3 is incorrect: The PBPT Act provides four initiating authorities for investigation (Initiating Officer, Approving Authority, Administrator, and Adjudicating Authority). Furthermore, the Act explicitly provides for an appellate mechanism, including the Appellate Tribunal to hear appeals against the orders of the Adjudicating Authority, and appeals against the decision of the Appellate Tribunal can be made to the High Court.

Therefore, only statement 2 is correct.