UPSC Prelims 2017 · Question 95 of 99
UPSC Prelims 2017 question on Benami Transactions Act
- ExamUPSC CSE
- Year2017
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicPublic Finance
- DifficultyHard
- TypeStatement
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?
Show answer
Answer: B. 2 only
Verdict
The answer is 2 only. Benami properties are liable for confiscation, but the other two statements misstate the law.
Analysis
Statement 2 is CORRECT. Properties held benami are liable to confiscation by the Government under the amended Act. Statement 1 is INCORRECT and inverts the definition, since the definition of a benami transaction was widened to include transactions made in a fictitious name and those where the owner is not aware of or denies knowledge of the ownership, so lack of awareness brings a transaction within the Act rather than outside it. Statement 3 is INCORRECT, since the amended framework provides an appellate mechanism alongside its investigating authorities.
Source
Press reporting on the amendment of the benami property law.
How to crack it
Statement 1 is a straight inversion of a statutory definition, which is one of the commonest constructions in law based questions, so read definitional statements twice and ask whether the stated condition would let obvious wrongdoing escape. A law that exempted transactions where the nominal owner claimed ignorance would be trivially defeated, which flags the inversion. On statement 3, remember that Indian regulatory statutes almost always provide an appellate tier, so a claim that none exists is structurally unlikely.