The Delhi High Court stayed further proceedings initiated under the Prohibition of Benami Property Transactions Act, 1988, in a matter involving a challenge to the very assumption of jurisdiction by the Initiating Officer under Section 24(1) of the Act.

The petitioner had challenged the initiation of proceedings on the ground that although reasons had been recorded in the show cause notice, the Initiating Officer did not possess the material necessary to form an opinion as contemplated under Section 24(1) of the Act. During the hearing, counsel argued that the statutory requirement of possession of material before assuming jurisdiction was absent and therefore the proceedings themselves were legally unsustainable. 

On March 24, 2026, the High Court took note of these arguments and directed the respondents to file a short counter affidavit specifically addressing the issue concerning availability of material with the Initiating Officer at the stage of formation of opinion. 

Subsequently, when the matter came up on May 5, 2026, the petitioner contended that the counter affidavit failed to address the central jurisdictional challenge. It was argued that from the inception of proceedings before both the Initiating Officer and the Adjudicating Authority, the consistent stand had been that the mandatory precondition under Section 24(1) had not been fulfilled. Counsel further highlighted documents and communications suggesting that the Initiating Officer possessed only portions or illegible copies of an appraisal report and did not possess the underlying material referred to in the proceedings. 

After a prima facie examination, the High Court observed that the respondents had not demonstrated through the counter affidavit that the material referred to in the show cause notices and communications was actually in the possession of the Initiating Officer at the time proceedings were initiated. Taking note of this issue, the Court directed production of the original records maintained by the Initiating Officer for its consideration. 

Thereafter, by order dated May 22, 2026, the Bench of  Justice Dinesh Mehta and Justice Vinod Kumar directed that all proceedings arising out of the notice dated March 28, 2025 and all other proceedings under the Prohibition of Benami Property Transactions Act against the petitioner shall remain stayed until the next date of hearing. 

The matter has been listed for further hearing on July 23, 2026. 

Case Details

Case Title: Ram Prakash Kharbanda Versus Initiating Officer

Case No.: W.P.(C) 3744/2026, CM APPL. 18324/2026 & CM APPL. 18325/2026

Date: 22.05.2026

Counsel For Petitioner: Debesh Panda

Counsel For Respondent: Abhishek Maratha

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