For decades, the law instructed the State that benami property could be taken, but it gave no effective means of doing so. Similarly, Section 3 of the Prohibition of Benami Property Transactions Act, 1988 prohibited benami transactions from happening, while Section 5 made benami property liable to acquisition by the government. Yet the 1988 Act supplied little to no machinery which were necessary to translate those declarations into definitive action as envisaged within the act i.e. there was no adjudicating authority, no effective power of attachment, and no confiscation procedure.

The Benami Transactions (Prohibition) Amendment Act, 2016 completely changed that skeleton architecture. It redefined what was meant by the term of “benami transaction” under Section 2(9), rearticulated Section 3 offence with revised punishment, and introduced the whole machinery needed for provisional attachment, adjudication and confiscation. Some of these amendments supplied the much required machinery for enforcing a prohibition that had already existed while others created or enlarged the criminal consequences. The question, therefore, was not simply whether the 2016 Amendment was retrospective in nature, but rather it was about which parts of the said act could be said to operate on transactions that pre-dated its commencement.

The constitutional point of divergence on this is Article 20(1), which prohibits conviction for an act that was not an offence at the time of its commission and the imposition of a penalty greater than that prescribed by the law then in force. This provision is primarily concerned with substantive criminal liability and does not ordinarily govern procedural or machinery provisions. Confiscation, however, does not fit neatly within this distinction. It does not by itself create the underlying prohibition present against benami holdings; rather, it can be seen to operate as a consequence of the said prohibition by permanently depriving a person of the property without any compensation. The question, therefore, is not what the statute terms the measure, but what the measure legally does: whether confiscation is punitive in substance, such that Article 20(1) is attracted, or whether it is instead a civil consequence directed at a property that the law treats as having been benami from the get go.

In August 2022, a three-judge Bench answered that question in Union of India v. Ganpati Dealcom Pvt. Ltd. It held that the 2016 Amendment could not operate retrospectively as the unamended Sections 3(2) and 5 of the 1988 Act were unconstitutional by virtue of being manifestly arbitrary. The immediate consequence of this declaration was substantial in nature as prosecutions and confiscation proceedings concerning pre-November 2016 transactions were brought to an immediate halt, with several High Courts relying solely on Ganpati Dealcom to quash the pending proceedings. The judgment, in effect, treated the amended regime as substantive and punitive in nature rather than being merely procedural.

This apparent clarity unfortunately could not last as on the Union's review petition, the apex court recalled the 2022 judgment on 18 October 2024, holding that the constitutional validity of the unamended provisions was never actually contested between the parties and therefore could not have properly been adjudicated in that posture. The direct consequence of this recall was restoration of the said appeal for a fresh hearing and, with it, again reopening the question of retrospectivity.

The Court was once again confronted with this issue in a brief manner in the case of Manjula v. D.A. Srinivas in May 2026, the case revolved around a civil suit seeking declaration of title on the basis of a Will, where the defendants argued that the plaintiff's own pleadings disclosed a benami arrangement. The Bench of Justices J.B. Pardiwala and R. Mahadevan therefore revisited the architecture of both the 1988 and 2016 regime of the said act. Rather than labelling the entirety of the Amendment as wholly prospective or retrospective, the Court instead distinguished between machinery-oriented provisions, such as that of attachment, adjudication and confiscation, and provisions which created new offences or enhanced punishment. The former part of this categorization may operate retrospectively because they give effect to a prohibition that already existed; the latter part remains prospective in nature. Confiscation in lieu of this falls on the machinery side of that divide: it is a civil consequence which is attached to the property, rather than a mere penal consequence imposed upon the person, and therefore it does not attract Article 20(1)'s prohibition placed on retrospective penal law. The Court also made it very clear that a Will cannot, merely by its form, transform a benami holding into that of lawful inheritance.

Manjula can, in the meantime, provide the governing position on the substantive issue, pending the final determination in Ganpati. But between the 2024 recall and the 2026 judgment, another question had emerged in the backdrop, one which is not concerning the issue of retrospectivity, but concerns its finality. When a Supreme Court judgment has already attained finality, can it be reopened merely because the legal proposition on which it rested is subsequently overruled?

That question was answered in this regard by the Government of NCT of Delhi v. K.L. Rathi Steels Ltd.. Following a two-judge Bench split in March 2023, a three-judge Bench resolved the issue on 17 May 2024 by applying the Explanation to Order XLVII Rule 1 of the Code of Civil Procedure, the Court held that a subsequent change in the law, even if one which is brought about by a superior or larger Bench, does not, by itself, provide a ground to review a judgment that has otherwise attained finality. Consequently holding that a proposition of law may be overruled but the judgment that applied the said proposition does not thereby become reviewable.

This principle quickly entered into Benami litigation, producing a consequence that can be found to be in an obvious tension with the 2024 recall. Matters that had already attained finality on the strength of Ganpati Dealcom could not simply be reopened because Ganpati Dealcom itself had been recalled. In Union of India v. Virendra Amrutbhai Patel, decided on 4 November 2025, a Bench of Justices B.V. Nagarathna and Augustine George Masih applied the proposition laid down in Rathi Steels and dismissed the Union's review petitions. The Court after careful deliberation held that the 2024 recall order could not, by itself, disturb separate orders that already attained finality, the same fate was met by a parallel batch concerning Kokilaben Chhaganbhai Patel.

The controversy did not end there; it simply moved to the next procedural layer. If Virendra Amrutbhai Patel means that the Ganpati Dealcom recall cannot disturb matters beyond that particular appeal then in that scenario what would be the position in a scenario where proceedings were still pending when the recall was made? That issue has since then reached various Tribunals and High Courts. In Satyajit Saha v. Union of India, the Gauhati High Court, on 30 January 2026, considered the interplay between the review jurisdiction prevalent under Order XLVII of the Code and Section 40(2)(f) of the Benami Act in the aftermath of the 2024 recall of Ganpati Dealcom. The Court noted that the tension existed between the liberty which had been granted in paragraph 7 of the 2024 Ganpati review order and the earlier three-Judge Bench decision in K.L. Rathi Steels, as has been subsequently reaffirmed in Kokilaben Chhaganbhai Patel. It ultimately treated Rathi Steels as binding and regarded the contrary observation in Ganpati as per incuriam.

All of these when read together can be said to reveal a striking paradox. Manjula on one hand confirms that the confiscatory machinery which were introduced by way 2016 amendment can operate upon pre-2016 benami transactions. In that sense, it can be said to be indicative towards the proposition that a benami holding is not exempted from confiscation merely because the machinery for enforcing the prohibition arrived later on. Yet Rathi Steels on the other hand, applied through Virendra Amrutbhai Patel, can be found to simultaneously close the door on the very cases in which that conclusion might otherwise have made the greatest practical difference.

The result of this discourse is a distinction between being legally right and being entitled to reopen an already concluded case. The Union cannot revive a matter merely because the judgment on which it had earlier rested on was subsequently recalled and Manjula has since then affirmed a wholly different understanding of the Act itself. Thus, a litigant whose matter was finally quashed while Ganpati Dealcom was in force, may retain the benefit of that quashing, notwithstanding that Manjula has since then rejected the legal premise on which it rested. Since a subsequent correction of the law does not, by itself, reopen every final judgment which has been rendered under the law as it was then understood.

The substantive position thus becomes clearer. A transaction which has been entered into before November 2016 can be said to fall within the statutory definition of a benami transaction. What was added in the act by way of Amendment, and what may be operated retrospectively, is the enforcement machinery of notice, provisional attachment, and adjudication. Article 20(1) is not offended because these provisions do not retrospectively penalise conduct that was lawful when committed. What remains prospective are provisions that create new criminal liability or enhance the existing punishment within a framework. Furthermore, finality imposes its own limit as well, matters which were finally quashed or dismissed on the strength of Ganpati Dealcom cannot simply be reopened because that judgment was later recalled.

For those holding property in another person's name from before 2016, the practical message to take away from the whole discourse is one of exposure and not of immunity, unless the case falls within the narrow window in which proceedings attained finality between Ganpati Dealcom and its recall. Outside the said narrow window, the principal risk encountered is no longer merely prosecution; it is the loss of the property itself.

Author is a 4th year BA LLB (Hons) student at Guru Gobind Singh Indraprastha University, School of Law and Legal Studies. Views are personal.