Section 24: Notice and Attachment of Property Involved in a Benami Transaction
Section 24 of the Prohibition of Benami Property Transactions Act, 1988 lays down the procedure by which the Initiating Officer may issue notice in respect of suspected benami property, obtain the response of the benamidar and beneficial owner, provisionally attach the property in specified circumstances, and refer an attached case to the Adjudicating Authority.
What does Section 24 cover?
Section 24 is the principal procedural provision for starting action against property suspected to be benami. It requires recorded reasons, notice to the alleged benamidar, a copy of the notice to the known beneficial owner, an opportunity to furnish an explanation, and approval safeguards where provisional attachment is ordered or continued.
- Benamidar: broadly, the person in whose name benami property is held or transferred, including a person who lends his name.
- Beneficial owner: the person for whose benefit the benami property is held by the benamidar.
- Benami property: property that is the subject matter of a benami transaction and includes proceeds from such property.
- Attachment: a prohibition on transfer, conversion, disposition or movement of property by an order under the Act.
Section 24 procedure explained
1. Notice by the Initiating Officer - Section 24(1)
If the Initiating Officer has material in his possession giving him reason to believe that a person is a benamidar in respect of a property, the officer may issue a show-cause notice after recording the reasons in writing. The notice must require the person to explain, within the time stated in it, why the property should not be treated as benami property.
2. Copy to known beneficial owner - Section 24(2)
When the property identified in the notice is stated to be held by a benamidar, a copy of the notice must also be issued to the beneficial owner if the identity of that person is known.
3. Time for explanation or submissions - Section 24(2A)
The benamidar and, where applicable, the beneficial owner must furnish their explanation or submissions within the period stated in the notice. The Initiating Officer may extend that period, but the extension cannot go beyond three months from the end of the month in which the notice was issued.
4. Provisional attachment during notice period - Section 24(3)
If the Initiating Officer forms the opinion that the person in possession of the suspected benami property may alienate it, the officer may provisionally attach the property by a written order. Previous approval of the Approving Authority is mandatory.
The present statutory limit is a period not exceeding four months from the last day of the month in which the Section 24(1) notice is issued.
5. Decision after inquiry - Section 24(4)
After making inquiries, calling for reports or evidence, and considering the relevant material, the Initiating Officer must act within four months from the last day of the month in which the notice under Section 24(1) is issued.
If provisional attachment has already been made under Section 24(3), the officer may, with prior approval of the Approving Authority:
- continue the provisional attachment until the order of the Adjudicating Authority under Section 26(3); or
- revoke the provisional attachment.
If provisional attachment was not made earlier, the officer may, with prior approval of the Approving Authority:
- provisionally attach the property until the Adjudicating Authority passes its order under Section 26(3); or
- decide not to attach the property specified in the notice.
6. Reference to the Adjudicating Authority - Section 24(5)
If the Initiating Officer continues an existing provisional attachment or provisionally attaches the property under Section 24(4), the officer must draw up a statement of the case and refer it to the Adjudicating Authority within 15 days from the date of attachment.
Section 24 at a glance
| Stage | Requirement | Key time limit |
|---|---|---|
| Notice | Reason to believe based on material; reasons recorded in writing | Time specified in notice |
| Copy to beneficial owner | Required where identity is known | Along with Section 24 process |
| Explanation under Section 24(2A) | Benamidar / beneficial owner may furnish submissions | Extension cannot exceed three months from end of notice month |
| Initial provisional attachment | Previous approval of Approving Authority required | Up to four months from last day of notice month |
| Decision under Section 24(4) | Continue, revoke, attach or decide not to attach | Within four months from last day of notice month |
| Reference under Section 24(5) | Statement of case to Adjudicating Authority | Within 15 days from attachment |
Related provisions
Section 24 should be read with Section 25 on service of notice, Section 26 on adjudication, and Section 27 on confiscation and vesting.
Official legal source
The current consolidated text is available from India Code - Prohibition of Benami Property Transactions Act, 1988.
This page is an explanatory legal article. For an exact statutory reading, amendments, commencement dates and legal proceedings, refer to the official Act and applicable rules.