With reference to the 'Prohibition of Benami Property Transactions 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 ?
- (a) 1 only
- (b) 2 only ✓ UPSC's answer
- (c) 1 and 3 only
- (d) 2 and 3 only
Why the answer is (b)
• The PBPT Act (as amended in 2016) defines a benami transaction as one where property is held by one person but paid for by another for the latter's benefit; a case where the owner is unaware or denies knowledge is expressly included as benami, so statement 1 is wrong.
• Statement 2 is correct: Section 5 makes benami property liable to confiscation by the Central Government without compensation.
• Statement 3 is wrong: the Act provides four authorities (Initiating Officer, Approving Authority, Administrator, Adjudicating Authority) and an Appellate Tribunal, with further appeal to the High Court.
• Hence 2 only, option (b).
Why the other options are wrong
- (a) 1 only
- Statement 1 is wrong: owner's ignorance makes it benami, not otherwise.
- (c) 1 and 3 only
- Statements 1 and 3 are wrong.
- (d) 2 and 3 only
- Statement 3 is wrong: an Appellate Tribunal exists.
Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2017, held on 18 June 2017. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.