Section 26: Adjudication of Benami Property
Section 26 of the Prohibition of Benami Property Transactions Act, 1988 sets out the procedure followed by the Adjudicating Authority after it receives a reference from the Initiating Officer under Section 24(5). The provision deals with notice, documents and evidence, inquiry, opportunity of hearing, confirmation or revocation of attachment, additional property discovered during adjudication, joinder of parties, the time limit for the order, and representation.
Updated: September 14, 2026
Meaning and scope of Section 26
Adjudication under Section 26 begins after a reference under Section 24(5) reaches the Adjudicating Authority. The Authority does not merely review the provisional attachment. It considers replies, may make or cause inquiries to be made, may call for reports or evidence, must consider relevant material, and must provide the statutory opportunity of hearing before deciding whether the property is benami.
The final order under Section 26(3) has two principal outcomes: the Authority may hold that the property is not benami and revoke the attachment, or it may hold that the property is benami and confirm the attachment. If the property is held benami, the subsequent confiscation process is governed by Section 27.
Section 26 procedure at a glance
- A reference is received from the Initiating Officer under Section 24(5).
- The Adjudicating Authority issues notice to the persons specified in Section 26(1).
- The notice must be issued within thirty days of receipt of the reference.
- The recipient must be given at least thirty days to furnish the information sought.
- The Authority considers replies, inquiries, reports, evidence and other relevant material.
- The benamidar, Initiating Officer and any other person claiming ownership are given an opportunity of hearing.
- The Authority decides whether the property is benami and whether the attachment should be confirmed or revoked.
- The Section 26(3) order is subject to the time limit in Section 26(7).
Section 26 - Adjudication of benami property
(1) On receipt of a reference under sub-section (5) of section 24, the Adjudicating Authority shall issue notice, to furnish such documents, particulars or evidence as is considered necessary on a date to be specified therein, on the following persons, namely:
(a) the person specified as a benamidar therein;
(b) any person referred to as the beneficial owner therein or identified as such;
(c) any interested party, including a banking company;
(d) any person who has made a claim in respect of the property:
Provided that the Adjudicating Authority shall issue notice within a period of thirty days from the date on which a reference has been received:
Provided further that the notice shall provide a period of not less than thirty days to the person to whom the notice is issued to furnish the information sought.
(2) Where the property is held jointly by more than one person, the Adjudicating Authority shall make all endeavors to serve notice to all persons holding the property:
Provided that where the notice is served on anyone of the persons, the service of notice shall not be invalid on the ground that the said notice was not served to all the persons holding the property.
(3) The Adjudicating Authority shall, after:
(a) considering the reply, if any, to the notice issued under sub-section (1);
(b) making or causing to be made such inquiries and calling for such reports or evidence as it deems fit; and
(c) taking into account all relevant materials, provide an opportunity of being heard to the person specified as a benamidar therein, the Initiating Officer, and any other person who claims to be the owner of the property, and, thereafter, pass an order:
(i) holding the property not to be a benami property and revoking the attachment order; or
(ii) holding the property to be a benami property and confirming the attachment order, in all other cases.
(4) Where the Adjudicating Authority is satisfied that some part of the properties in respect of which reference has been made to him is benami property, but is not able to specifically identify such part, he shall record a finding to the best of his judgment as to which part of the properties is held benami.
(5) Where in the course of proceedings before it, the Adjudicating Authority has reason to believe that a property, other than a property referred to it by the Initiating Officer is benami property, it shall provisionally attach the property and the property shall be deemed to be a property referred to it on the date of receipt of the reference under sub-section (5) of section 24.
(6) The Adjudicating Authority may, at any stage of the proceedings, either on the application of any party, or suo motu, strike out the name of any party improperly joined or add the name of any person whose presence before the Adjudicating Authority may be necessary to enable him to adjudicate upon and settle all the questions involved in the reference.
(7) No order under sub-section (3) shall be passed after the expiry of one year from the end of the month in which the reference under sub-section (5) of section 24 was received.
(8) The benamidar or any other person who claims to be the owner of the property may either appear in person or take the assistance of an authorised representative of his choice to present his case.
Explanation. For the purposes of sub-section (8), authorised representative means a person authorised in writing, being:
(i) a person related to the benamidar or such other person in any manner, or a person regularly employed by the benamidar or such other person as the case may be; or
(ii) any officer of a scheduled bank with which the benamidar or such other person maintains an account or has other regular dealings; or
(iii) any legal practitioner who is entitled to practice in any civil court in India; or
(iv) any person who has passed any accountancy examination recognised in this behalf by the Board; or
(v) any person who has acquired such educational qualifications as the Board may prescribe for this purpose.
Official text: For citation in proceedings or professional work, verify the provision against the latest official text published on India Code. View the Prohibition of Benami Property Transactions Act, 1988 on India Code.
Important time limits under Section 26
Section 26 contains specific procedural deadlines. Under the first proviso to Section 26(1), the Adjudicating Authority must issue notice within thirty days from receipt of the Section 24(5) reference. The second proviso requires the notice to allow at least thirty days for furnishing the information sought.
Under Section 26(7), no order under Section 26(3) may be passed after one year from the end of the month in which the Section 24(5) reference was received.
Appearance through an authorised representative
Section 26(8) permits the benamidar or another person claiming ownership to appear in person or to take the assistance of an authorised representative of choice. The statutory explanation requires written authority and specifies the categories of persons who may act as such representative, including a legal practitioner and certain other eligible persons stated in the provision.