SHAHID JAMIL KHAN, J. This judgment declares the summons dated 17.08.2020, purportedly issued under Section 21 of Benami Transactions (Prohibition) Act, 2017 ("Act of 2017"), as illegal and without lawful authority.
Through impugned summons, petitioner is asked for a statement and affidavits, regarding properties mentioned therein, which are suspected to be "benami properties" [Section 2(7)] and petitioner as a benamidar" [Section 2(9)].
2. Before discussing the provisions of Section 21, other provisions along with preamble of the Act of 2017 are examined; The preamble tells that the Act of 2017 is meant to provide law for "prohibition of holding property in benami" and "mechanism and procedure for confiscation of property held benami". Section 2 defines "benami property", "benami transaction", benamidar" and "beneficial owner". The provisions, respectively, are reproduced for quick reference; "2. Definitions.---(1) In this Act, unless there is anything repugnant in the subject or context,-
(7) "benami property" means any property which is the subject matter of benami transaction and also includes the proceeds from such property;
(8) "benami transaction" means,-(A) a transaction or arrangement-
(a) where a property is transferred to, or is held by a person and the consideration for such property has been provided, or paid by, another person; and
(b) the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration, except when the property is held by-
(i) a person standing in a fiduciary capacity for the benefit of another person towards whom he stands in such capacity and includes a trustee, executor, partner, director of a company, agent or legal advisor, and any other person as may be notified by the Federal Government for this purpose; or
(ii) any person being an individual in the name of his spouse or in the name of any child or in the name of his brother and sister or lineal ascendant or descendant and the individual appearing as joint owner in any document of such individual and the consideration for such property has been provided or paid out of known resources of income of the individual; or
(B) a transaction or arrangement in respect of a property carried out or made in the fictitious name; or
(C) a transaction or arrangement in respect of a property where the owner of the property is not aware of, or denies knowledge of, such ownership; or
(D) a transaction or arrangement in respect of a property where the person providing the consideration is not traceable or is fictitious;
(9) "benamidar" means a person or a fictitious person, as the case may be, in whose name the benami property is transferred or held and includes a person who lends his name;
(11) "beneficial owner" means a person, whether his identity is known or not, for whose benefit the benami property is held by a benamidar;"
[emphasis supplied] For prohibition of holding a benami property and its confiscation, it must fall within the definitions, ibid. In nutshell, the consideration should he provided by a person other than the one in who's name the property is and it should be held for benefit of person providing the consideration or another person.
Section 3 prohibits entrance into a benami transaction and declares it as punishable being an offence "on and after the commencement of this Act". By using the emphasised phrase, fundamental right (ex post facto) under Article 12 of the Constitution of Islamic Republic of Pakistan, 1973 ("Constitution") is satisfied.
Section 4 renders the benami property, liable to be confiscated. And Section 5(1) restrains the benamidar from transferring the "benami property", whereas its subsection (2) holds such transfer as null and void.
3. Section 18 empowers any Authority or Chairperson and Member of Appellate Tribunal, under the Act of 2017, to call for an information, from any officer of the Federal, Provincial, local body or Authority. It also authorizes to call for information from "any person or officer who is responsible for registering any property or maintain hooks of accounts or other documents", which contains record of transaction relating to any property. Provisions of Section 18 are reproduced:- "18. Power to call for information.---Any authority or Chairperson or member of the Appellate Tribunal under this Act shall have power to require any officer of the Federal Government or Provincial Government or a local body or an authority or any person or officer who is responsible for registering any property or maintaining books of account or other documents containing a record of any transaction relating to any property or any other person to furnish any information in relation to any person, point or matter as in his opinion shall be useful for or relevant for the purposes of this Act."
[emphasis supplied] These provisions do not authorize for calling any information from the suspected henamidar or beneficial owner. Any other person, envisaged in this Section, is a third person, if information in his possession, regarding any other person, point or matter, is useful or relevant for the purpose of this Act.
4. Learned counsel for the petitioners submits that summons are issued in absence of any incriminating material against the petitioners regarding property purchased in the years 2003 to 2014. Perusal of the summons supports the contention of learned counsel for the petitioners.
Learned counsel for the respondents has read Section 21 of the Act of 2017 and submits that respondent No.4 has power to conduct inquiry.
5. Heard. Record perused.
6. Section 21 is examined in backdrop of other provisions, discussed supra, and is reproduced for a quick reference:- "21. Power of Authority to conduct inquiries and investigation.---The initiating Officer, after obtaining prior approval of the Approving Authority, shall have power to conduct or cause to be conducted any inquiry or investigation in respect of any person, place, property, assets, documents, books of account or other documents, in respect of any other relevant matters under this Act."
[emphasis supplied] The provisions, ibid, are giving power to conduct or cause to be conducted any inquiry or investigation in respect of any person, place, property assets, documents etc. This power is contingent with prior approval of the Approving Authority. Nothing is mentioned regarding issuance of notice to benamidar, asking to give statement or affidavit to the effect that the property is not benami.
The prior approval of the Approving Authority should be based on some initial incriminating material or information, which, after approval, should be confronted to the person in a show cause or other notice, permissible under the law. The officer can himself probe the matter, at first instance by looking into the available documents, books of account or other documents, initiate inquiry without calling the person. The condition of prior approval seems to be a check on misuse of authority or powers by the officer. The owner of the property can only be associated/confronted in the proceedings under the Act of 2017 on the basis of material in possession of the initiating officer, who has reasons to believe that the person, being issued notice, is a benamidar in respect of the property. The Benami Transactions (Prohibition) Rules, 2019 are also silent about it. Section 22 is very clear in this regard, which is reproduced hereunder:- "22. Notice and attachment of property involved in benami transaction.-
(1) Where the Initiating Officer, on the basis of material in his possession, has reason to believe that any person is a benamidar in respect of a property, he may, after recording reasons in writing, issue a notice to such person to show cause, within such time as may be specified in the notice, as to why such property should not be treated as benami property.
[emphasis supplied] A show cause notice is envisaged, which appears to be a first official interaction with the benamidar. The property is not outrightly attached but the benamidar is to be asked to show why the property be not treated as benami property. The show-cause notice must disclose reasons, based on the material, available after calling information under the Section 18 and during inquiry/ investigation under the Section 21 that too after getting approval.
7. The contents of impugned notice are tested on touchstone of the provisions, discussed hereinabove, and are reproduced for this purpose:- "Dated 17.08.2020 No.IO/BZ-II/151 Ehsan Ullah son of Allah Ditta (34301-1681555-1) Caste Jutt Chatha, Resident of District Hafizabad.
SUMMONS Whereas an inquiry/investigation under section 21 of the Benami Transactions (Prohibition) Act 2017 is under way in case of following property/asset:
(ii) Total 300 Kanals situated in following Khewat and Khatooni No.'s mouza Kot Panah (Rural): a. Khewat No.11 and Khatooni No.19 b. Khewat No.13 and Khatooni Nos.21 to 32 c. Khewat No.23 and Khatooni Nos.56 to 58 d. Khewat No.43 and Khatooni Nos.121 to 131 e. Khewat No.45 and Khatooni Nos.133 to 149 f. Khewat No.46 g. Khewat No.59 and Khatooni Nos.178 to 180 h. Khewat No.61 and Khatooni Nos.182 to 190 i. Khewat No.62 and Khatooni Nos.191 to 199 j. Khewat No.73 and Khatooni No.225 k. Khewat No.86 and Khatooni Nos.240 to 245
1. Khewat No.16/3 and Khatooni No.38/3
2. As per the revenue record you have purchased the above mentioned alleged benami property purchased from following persons in different period of time:
1. Muhammad Moeen son of Muhammad Akram 15-Kanals
2. Safdar Ali son of Muhammad Akram 12-Kanals-8-Marlas
3. Shah Nawaz son of Ghulam Hussain 4-Kanals-9-Marlas
4. Muhammad Ashraf son of Ghulam Rasool 4-Kanals-9- Marlas
5. Fayyaz Ahmed son of Nazir Ahmed 20-Kanals-17-Marlas
6. Shaista Nasreen daughter of Akbar Ali 2-Kanals-10-Marlas
7. Altaf Hussain son of Ghulam Rasool 18-Kanals-0-0 Therefore, you are hereby summoned in person for statement on affidavit before the undersigned in above stated case registered in the office of the initiating officer, Benami Transactions (Prohibition) Zone-II, Lahore: 2nd Floor, Corporate Regional Tax Office, Nabha Road, Purani Anarkali, Lahore on 24.08.2020 along with the following documentary evidence:
(1) Registration deed of the property (Registry)/Allotment/ Transfer Letter if available.
(2) Proof of paym ent for the purchase of this property. 2nd floor, CRTO Building, Tax House, Nabha Road, Lahore (042-99214164)
(3) Mode of acquisition of property.
(4) Agreement to sell/purchase; and
(5) Banking instruments issued for the purchase of property with reconciliation of banking statement.
3. This summons has been issued in exercise of the powers vested in the undersigned under section 16 of the Benami Transactions (Prohibition) Act, 2017 read with Section 30(b) of the Civil Procedure Code, 1908 (Act V of 1908). Non-compliance to these summonses, incomplete, false or misleading information shall entail action as prescribed by the law under section 32 of the Code of Civil Procedure, 1908 (Act V of 1908) which includes: a) Issuance of a warrant of arrest; b) Attachment and sale of property; c) Imposition of a fine upon not exceeding two thousand] rupees; d) Order to furnish security for appearance and in default commit to prison for enforcement of the summons.
(SALMAN NAVEED)
Deputy Commissioner Inland Revenue (Initiating Officer)"
There is no incriminating material, confronted in the Summons. No notice under Section 22, or proceedings under Sections 18 and 21 are disclosed. Powers under Section 18 can be exercised only after taking cognizance of the matter, under the law discussed above. At initial stage, `SUMMONSES' are not envisaged in the Act of 2017 and in particular under Section 21. It can neither be termed as notice under Section 22. After insertion of Article 19A read with 10A in the Constitution, it is fundamental right of a person proceeded against, under the law (Article 4), that information regarding mandatory proceedings and necessary information/material, requiring action under the law, is dully provided and confronted in the show cause notice. Any notice proposing legal action under the law, is not enforceable, if it lacks the mandatory details, ibid.
8. Under the circumstances, the impugned summons for calling petitioners to give statement and affidavit is declared without jurisdiction and in absence of any lawful authority.
The respondents, however, can proceed, if permissible under the law, as interpreted in this judgment.
The petition is allowed.