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Section 71 of the Prohibition of Benami Property Transactions Act, 1988 - Transitional Provision

Section 71 contains the transitional mechanism for adjudication and appeals under the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act). It enables the Central Government, by notification, to use the adjudicatory and appellate machinery referred to in the Prevention of Money-laundering Act, 2002 until the corresponding institutional arrangements under the PBPT Act are in place, subject to the period and classes of cases specified in the relevant notification.

Current statutory name: The 1988 law is now titled the Prohibition of Benami Property Transactions Act, 1988. The Benami Transactions (Prohibition) Amendment Act, 2016 substantially amended the 1988 Act and the amended framework came into force on 1 November 2016.

Text and scope of Section 71

Section 71 authorises the Central Government to provide, by notification, that until the Adjudicating Authorities are appointed and the Appellate Tribunal is established under the PBPT Act, the Adjudicating Authority referred to in section 6(1) of the Prevention of Money-laundering Act, 2002 and the Appellate Tribunal referred to in section 25 of that Act may discharge the corresponding functions under the PBPT Act, for the period and in relation to the cases or classes of cases specified in the notification.

The words concerning the specified period and specified cases or classes of cases were added through the Prohibition of Benami Property Transactions (Removal of Difficulties) Second Order, 2018 with effect from 31 October 2018.

What is a transitional provision?

A transitional provision is a statutory bridge used when a new or substantially amended legal framework begins operating before every institution contemplated by that framework has become fully functional. It avoids an administrative or adjudicatory vacuum by permitting an existing authority or tribunal to perform specified functions temporarily.

How Section 71 operates

  • Notification is required: the Central Government activates the transitional arrangement by notification.
  • Temporary institutional substitution: the notified authority or tribunal performs the corresponding PBPT Act functions during the transitional period.
  • Defined scope: the arrangement may be confined to a stated period and to specified cases or classes of cases.
  • Purpose: the provision ensures continuity in adjudication and appellate remedies while the statutory machinery changes.

Related legal provisions

Adjudicating Authority

The PBPT Act defines the Adjudicating Authority by reference to section 7. Its role is part of the statutory process for deciding matters arising after action by the authorities under the Act.

Appellate Tribunal

The PBPT Act provides an appellate mechanism against appealable orders. Section 71 was designed to maintain access to an appellate forum during the transition to the institutional structure contemplated by the amended law.

Connection with the Prevention of Money-laundering Act, 2002

Section 71 expressly refers to the adjudicatory and appellate framework under the Prevention of Money-laundering Act, 2002. This cross-reference allowed the Central Government to use an existing institutional mechanism for PBPT Act matters during the notified transitional period.

Legislative background

The Benami Transactions (Prohibition) Amendment Act, 2016 overhauled the 1988 law, renamed it as the Prohibition of Benami Property Transactions Act, 1988 and introduced a substantially expanded enforcement, adjudication and appeal framework. The amended provisions were brought into force from 1 November 2016.

Section 71 is therefore best read as an institutional continuity provision. It does not itself create the substantive prohibition on benami transactions or the confiscation mechanism; instead, it addresses who may perform specified adjudicatory and appellate functions during the transition.

Practical reading: when examining an order passed under the transitional arrangement, the relevant Central Government notification and its stated period, case coverage and institutional designation should be checked along with Section 71 itself.

Frequently asked questions

Does Section 71 itself permanently appoint the PMLA authorities for PBPT Act cases?

No. Section 71 is framed as a transitional enabling provision. Its operation depends on a Central Government notification and is limited by the terms of that notification.

Why was Section 71 necessary?

It was intended to prevent a gap in adjudication and appeals while the institutional structure under the amended PBPT Act was being established or reorganised.

Was Section 71 changed after the 2016 amendment?

Yes. In 2018, words were inserted permitting the notification to specify the period and the cases or classes of cases covered by the transitional arrangement.

Related sections

For the surrounding statutory scheme, see Section 70 - Power to remove difficulties and Section 72 - Repeal and saving.

This page is a general legal information resource. For a dispute involving jurisdiction, limitation, attachment, confiscation, adjudication or appeal, the current statutory text, applicable notifications and relevant judicial decisions should be examined together.