The Federal Appellate Tribunal (FAT), Special Bench Karachi, has ruled that the Benami Transactions (Prohibition) Act, 2017 (BTPA) will not be applicable to benami properties created through past transactions or those declared under the Asset Declaration Ordinance, 2019, commonly known as the amnesty scheme. The tribunal’s decision comes after a detailed review of a case involving alleged benami property dealings by a Karachi-based developer and builder.
The two-member bench of the FAT issued a comprehensive order against the Benami Adjudication Authority Karachi, clarifying the scope and limitations of the BTPA, 2017. The tribunal highlighted that a benami property can only be confiscated if it involves a transaction conducted after the enactment of the law. Transactions executed before 2017, when such dealings were not prohibited, are therefore exempt from the act.
“There is no mechanism or procedure for confiscating properties held benami under transactions executed prior to the promulgation of the Benami Act, 2017, when such transactions were legal,” the tribunal noted. The ruling emphasizes that past transactions are considered closed and vested rights of beneficial owners have accrued under civil law, making retrospective application of the act impermissible.
The FAT further clarified that properties declared under the 2019 Asset Declaration Ordinance are similarly exempt. As a result, there is no requirement to re-evaluate these properties in light of the BTPA 2017, including determining the benamidar, beneficial owners, or related proceedings. The tribunal underscored that the earlier orders by the adjudication authorities and attachment of properties suffered from jurisdictional overreach and procedural lapses.
The case before the tribunal specifically challenged an Adjudication Order confirming the confiscation of alleged benami properties. FAT Karachi found that both the Initiating Officer and the Benami Adjudicating Authority had exceeded their legal mandate by attempting to apply the BTPA retrospectively. Consequently, the tribunal set aside all orders of attachment and confiscation issued against the involved properties.
This decision provides legal clarity for property owners and investors, affirming that assets acquired legally before 2017 or declared under the amnesty scheme are protected from confiscation under the Benami Act. Legal experts noted that the ruling reinforces civil rights associated with property ownership and curtails potential misuse of retrospective enforcement by authorities.
The tribunal’s ruling also emphasizes procedural compliance and accountability of adjudication authorities in applying financial and property laws. Observers suggest that the judgment may influence similar cases nationwide, ensuring that the enforcement of benami property laws aligns with the legislative intent and respects vested rights of citizens.
The FAT’s verdict underscores the importance of distinguishing between transactions conducted before and after the enactment of the Benami Act, providing greater certainty in property-related legal frameworks and safeguarding investor confidence.
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