The Supreme Court has stayed an interim order passed by the Madhya Pradesh High Court, allowing the release and sale of equity shares of Som Distilleries Breweries & Wineries Limited (SDBWL) worth around Rs 350 crore, allegedly the benami assets of the company.
Expressing serious concern over the High Court verdict, which also allowed the substitution of the alleged benami shares by attaching shares held by the alleged beneficial owners of the benami assets instead, the Bench of Justice Abhay S Oka and Justice Ujjal Bhuyan observed that the verdict bordered on perversity.
The matter pertained to allegations that eight Benamidars, including employees and associates of the Som Group, had been holding 1.2 crore of public-listed shares of Som Distilleries. The real ownership of these shares was reportedly attributed to Jagdish Kumar Arora, promoter-director of Som Distilleries.
The Bhopal branch of the Income Tax Department’s Benami Prohibition Unit (BPU) had provisionally attached the shares under the Prohibition of Benami Property Transactions (PBPT) Act, 1988.
A petition was filed in the High Court challenging the validity of the 1988 Act.
On March 27, 2025, the High Court directed the release of the attached shares that BPU claimed as benami assets. The Bench instead ordered that an equivalent number of shares held by Jagdish Arora and Som Distilleries be attached.
It further ordered that the provisionally attached shares be released and disposed of.
BPU moved the Apex Court against this direction.
The Union government contended that the High Court’s direction effectively allowed the disposal of benami property, which was prohibited under the Act, risking irreversible financial loss to the exchequer.
Appearing for Som Distilleries, Senior Advocate Mukul Rohatgi argued that the shares in question were purchased as early as 2008, well before a 2016 amendment to the PBPT Act, under which the shares were attached. He alleged that Som Distilleries was being unfairly targeted.
The Apex Court expressed its reservations over the High Court permitting a ‘full swap’ of benami assets without proper legal sanction.
While staying the interim order, the Bench clarified that the High Court may continue to hear the writ petition before it.
The Union of India apprised the Bench that the validity of the PBPT Act was already pending consideration before the top court of the country, after it recalled the 2022 verdict in Union of India vs Ganpati Dealcom.
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