Enactment of a new legislation in place of Benami Transactions (Prohibition) Act, 1988 – Introduction of the Benami Transactions (Prohibition ) Bill, 2011

The Union Cabinet today approved the proposal for the enactment of a new legislation in the form of the Benami Transactions (Prohibition) Bill, 2011 to replace the existing Benami Transactions (Prohibition) Act, 1988 and for its introduction in Parliament. During the process of formulating the rules for implementing certain provisions of the present Act which was passed in 1988, it was found that owing to infirmities in the legislation, formulation of the rules would not be possible without a comprehensive legislation by repealing the Act. The Bill contains elaborate provisions dealing with the definition of benami transaction and benami property, prohibited benami transactions, consequences of entering into a prohibited benami transaction and the procedure for implementing the benami law. Properties held by a coparcener in a Hindu undivided family and property held by a person in fiduciary capacity are excluded from the definition of benami transaction. Further, properties acquired by an individual in the name of spouse, brother or sister or any lineal ascendant or descendant are benami transactions which are not prohibited. Consequently, they are not subject to penal provisions.

Where any person enters into a benami transaction in order to defeat the provisions of any law or to avoid payment of statutory dues or to avoid payment to creditors, the beneficial owner, benamidar and any other person who abets or induces any person to enter into such benami transaction, shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to two years and shall also be liable to a fine. A benami property shall also be liable for confiscation by the Adjudicating Authority after the person concerned has been given due opportunity of being heard.


The major infirmities of the existing Act were:

  1. Powers of a civil court have to be conferred on the authorities under the Act.
  2. Specific provisions have to be introduced for vesting of confiscated property with the Central Government.
  3. An appropriate appellate structure has to be defined, while barring jurisdiction of a civil court against an action taken by the authorities under the Act.
  4. Matters of procedure relating to its administration, notice of hearing to parties concerned, service of notice and orders, powers of the competent authority relating to gathering of evidence etc are to be provided.
  5. The word ‘wife’ needs to be replaced with the word ‘spouse’ and property purchased in the name of certain other family members is to be allowed under the Act.

Amendment to Article 243 D of the Constitution of India for enhancing reservation for women in Panchayats

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The Cabinet today approved the proposal for moving an official Amendment to the Constitution (One hundred and Tenth Amendment) Bill, 2009 for enhancing reservation for women in Panchayats at all tiers from 1/3rd to at least 50%. The Constitution (One hundred and Tenth Amendment) Bill, 2009 was introduced in the Lok Sabha on 26.11.2009. The official Amendment proposes to add word ‘rural’ before the word ‘population’ as and where the same occur in 1st Proviso of Clause (2) (iii) of the Constitution (One hundred and Tenth Amendment) Bill, 2009. This Provision will apply to the total number of seats filled by direct election, offices of Chairpersons and seats and offices of Chairpersons reserved for Scheduled Castes and Scheduled Tribes. Enhancement of reservation for women in Panchayats will facilitate more women to enter the public sphere and this will lead to further empowerment of women and also make Panchayats more inclusive institutions, thereby improving governance and public service delivery. The addition of word ‘rural’ before word ‘population1 occurring in the 1st Proviso of Clause (2)(iii) of the Rill will reflect appropriate demographic representation of categories of population for whom reservation is made.

At present, out of the total elected representatives of Panchayats numbering approximately 28.18 lakh, 36.87% are women. With the proposed Constitutional Amendment, the number of elected women representatives is expected to rise to more than 14 lakh. Having more elected women representatives would benefit the entire population of the States and UTs where Panchayati Raj is in existence.

Ministry of Panchayati Raj had moved a Bill for amendment to Article 243D of the Constitution on 26.11.2009 after approval of the Cabinet for enhancing reservation for women in (i) the total number of seats to be filled by direct election, (ii) offices of chairpersons and (iii) in seats and offices of chairpersons reserved for SCs and STs, to 50% in all tiers of Panchayats. The proposed official amendment, as indicated above, in the original Amendment Bill will be moved in the Lok Sabha at the earliest.

All States / UTs are parts thereof to which Part IX of the Constitution applies would be covered (Part IX does not apply to Nagaland, Meghalaya and Mizoram, tribal areas of Assam and Tripura and hill areas of Manipur).


The Constitutional Amendment Bill for enhancing reservation for women in Panchayats at all tiers from one third to one half was introduced in Lok Sabha on 26.11.2009 with the approval of Cabinet in its meeting on 27.08.2009. The Bill was referred to Parliamentary Standing Committee on Rural Development by Hon’ble Speaker on 21.12.2009. The Committee has recommended that word ‘rural’ be added before word ‘population’ occurring in Clause 2 (iii) of the original Amendment Bill in order to maintain better demographic representation to SCs and STs class. In view of this, it has been decided to make official amendment accordingly in the Bill already under consideration of Lok Sabha.

Lessons in equity

Supreme Court of India


The Supreme Court enunciates the virtues of state intervention in ensuring equity in higher education.

THE Supreme Court, in a recent case, examined the question of equity in higher education in India and laid out certain principles that could be relevant in every field of education. The case, Indian Medical Association vs Union of India, related to the Army College of Medical Sciences (ACMS), Delhi Cantonment, devising in 2008 its own admission procedure for the first year MBBS course from a predefined source carved out by itself and its parent society, the Army Welfare Education Society (AWES). The college sought to admit only students who are wards or children of current and former Army personnel and widows of Army personnel.

Students who otherwise would have been eligible for admission challenged the policy in a slew of writ petitions. The Indian Medical Association (IMA) also challenged it. The ACMS is recognised as a private, unaided, non-minority professional institution. According to a judgment of the Supreme Court’s Constitution Bench in TMA Pai Foundation vs State of Karnataka, which was further explained in P.A. Inamdar vs State of Maharashtra, all admissions to private, unaided, non-minority professional institutions should be based only on merit, which is to be taken as inter-se ranking of all students who have taken a common entrance test.

The ACMS’ admission policy was based on the belief that the wards of Army personnel suffer educational disadvantages compared with the civilian population and that this affects the morale of Army personnel. And it reserved 100 per cent of the seats for the wards of Army personnel. The Delhi government erroneously approved this policy. The Delhi High Court, where the petitioners first challenged the policy, too found nothing wrong with it.

The Supreme Court Bench comprising Justices B. Sudershan Reddy and Surinder Singh Nijjar, however, found that the ACMS’ admission policy set at naught the legislative intent in the Delhi Act 80 of 2007 to ensure excellence by mandating that all admissions be made on the basis of inter-se merit within each of the categories of students. The Delhi government’s permission to the ACMS to admit students who may have scored lower marks than others, both within the general category and in the reserved categories, resulted in the defeat of this legislative intent, the court reasoned in its order of May 12.

The Bench held that neither the AWES nor the ACMS was protected by any constitutional provision that allowed it to choose to be an educational institution serving only a small class of students from within the general pool. If indeed Army personnel now constituted a “Socially and Educationally Backward Class”, then under Clause (5) of Article 15, it was for the state to determine the same and provide for reservation to wards of Army personnel, the Bench suggested.

In the case of minority educational institutions, the state can relax its concern for merit on account of Clause (1) of Article 30, provided minority educational institutions maintain their minority status by admitting mostly minority students except for a sprinkling of non-minorities. With respect to non-minority educational institutions, the state can relax such concern for merit only with respect to reservation of seats for the Scheduled Castes, the Scheduled Tribes and the Socially and Educationally Backward Classes (SEBCs) as enabled by Article 15(5). Consequently, the Bench held that the choice of students by non-minority educational institutions could only be from the general pool with respect to non-reserved seats. They could not make further distinctions of their own accord, it said.

In the Mandal II case (2008), the Supreme Court left open the question whether the newly inserted Article 15(5) of the Constitution applied to private unaided non-minority educational institutions. This provision, inserted in 2006 by the United Progressive Alliance-I government, enables the state to make any special provision, by law, for the advancement of the SEBCs or the S.Cs or the S.Ts in the matter of admission to educational institutions, including private educational institutions, whether aided or unaided, other than minority educational institutions. The court left this issue open because none of the private, unaided, non-minority institutions had challenged the validity of this provision.

Justice Dalveer Bhandari, however, dissented from the other four judges of the Bench, holding that the imposition of reservation on non-minority unaided educational institutions was an unreasonable restriction on the freedom granted by Article 19(1)(g) to practise any profession or to carry on any occupation, trade or business.

In the IMA case, however, the court had an opportunity to examine this issue because counsel for the ACMS challenged the validity of Article 15(5). The Reddy-Nijjar Bench differed with Justice Bhandari and considered the inclusion of Clause 5 of Article 15 by the 93rd constitutional amendment as of great significance. “It clearly situates itself within the broad egalitarian objectives of the Constitution. In this sense, what it does is that it enlarges as opposed to truncating an essential and indeed a primordial feature of the equality code,” the Bench explained.

The Bench justified reservation as it is social circumstances that prevent some individuals from performing to their full potential and thereby competing on a level playing field with those who might satisfy the “desert based” criteria. The Bench disagreed that the principles enunciated in the Mandal II case – that egalitarianism was an intrinsic part of our equality code with respect to the field of education – could be limited to public and aided institutions.

What followed in the judgment was a brilliant articulation of the dangers of LPG – liberalisation, privatisation and globalisation. Agreeing that the extent of the state’s involvement in the field of higher education had dramatically declined on account of its financial position, the Bench linked this fact to the increasing privatisation and liberalisation of the economy. One of the essential elements of privatisation has been the demand of the private sector that the state reduce its deficits, even as tax rates were cut, by reducing its involvement in various social welfare activities. This, according to the Bench, has had an impact on the ability of the state to invest as much as it should have in education, including higher education.

The Bench explained that the burden of the state comprised not merely financial outlays. The burden of the state, it said, also comprised the positive obligations imposed on it on account of the egalitarian component of the equality code, the directive principles of state policy, and the national goals of achievement of an egalitarian order and social justice for individuals and amongst groups that those individuals are located in. “One cannot, and ought not to, deem that the ideologies of LPG have now stained the entire constitutional fabric itself, thereby altering its very identity,” the Bench observed.

Test of merit

The Bench’s reasoning against qualifying examinations or common entrance tests must wake society up. The test of merit, based on some qualifying examinations or a common entrance test, is prone to rewarding an individual who has a better family life, social exposure, and access to better schools and coaching classes, it suggested. The Bench cautioned that complete dependence on such tests would foreclose the possibility of individuals in the disadvantaged groups from gaining access to a vital element of modern life that grants dignity to individuals, and thereby to the group as a whole, both in this generation and in future generations. Therefore, the Bench held, the proper construction of Article 15(2) would in fact be to prohibit complete dependence on such context (social and educational backwardness) insensitive tests.

Under Article 15(2), no citizen shall, on grounds only of religion, race, caste, sex, place of birth or any of them, be subject to any disability, liability, restriction or condition with regard to (a) access to shops, public restaurants, hotels and places of public entertainment; or (b) the use of wells, tanks, bathing ghats, roads and places of public resort maintained wholly or partly out of state funds or dedicated to the use of the general public.

Reservation based on social and educational backwardness, the Bench said, would promote the selection of those who were truly meritorious in each group on account of their demonstrated ability to be in the higher rungs of achievement within comparable situations of life’s circumstances and disadvantages.

Therefore, it held that clause 5 of Article 15 strengthened the social fabric in which the constitutional vision, goals and values could be better achieved and served. The provision, the Bench suggested, could be likened to a necessary replacement and in fact an enhancement in the equality code so that it made the Constitution more robust and stable.

Pointing out that nearly 85 per cent or more of all engineering seats and about 50 per cent in the field of medicine are in the private sector, the Bench said the number of aided and government colleges in other fields had just not kept pace with the private sector. It asked: “If a vast majority of our youngsters, especially those belonging to disadvantaged groups, are denied access in the higher educational institutions in the private sector, it would mean that a vast majority of youngsters, notwithstanding a naturally equal distribution of talent and ability, belonging to disadvantaged groups would be left without access to higher education at all.” The Bench added that it would constitute a state of social emergency with a potential for conflagration that would be on an unimaginable scale.

The Bench concluded: “The rights of non-minority educational institutions to admit students of their choice, …if exercised in full measure, would be detrimental to the true nature of education as an occupation, damage the environment in which our students are taught the lessons of life, and imparted knowledge, and further also damage their ability to learn to deal with the diversity of India, and gain access to knowledge of its problems….”

The Bench thus held Article 15(5) and the provisions of Delhi Act 80, with respect to the various categories of reservation provided therein, to be constitutionally valid. The judgment, authored by Justice Reddy, reflects his judicial philosophy, which is also evident in his other judgments against globalisation and marketisation. Observers feel that the Supreme Court’s three-judge Bench currently hearing a case by some unaided private schools challenging the validity of the Right to Education Act will find the principles laid down by Justice Reddy relevant in deciding it.