Sections 12-17 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Once the Adjudicating Authority is constituted under sections 7 to 11, sections 12 to 17 say how long its Chairperson and Members serve, on what terms, when they can be removed, who acts in a vacancy, whether defects in its constitution spoil its orders, and who staffs it.
As per the consolidated text consulted, the Chairperson and Members hold office for not more than five years or until sixty-two years of age, whichever is earlier, and are not eligible for reappointment (section 12). A vacancy is to be filled within three months (section 13). The Central Government may remove them on five listed grounds (section 14), the senior-most Member acts in a vacancy or absence (section 15), vacancies and defects do not invalidate the Authority's acts (section 16), and the Government provides officers and employees (section 17).
How these sections came in
Sections 12 to 17 form part of Chapter III (Authorities), inserted by the Benami Transactions (Prohibition) Amendment Act, 2016 as part of sections 7 to 55 of the principal Act. The text is checked against the Gazette of India copy of that Act (assent 10 August 2016). The 2016 changes were brought into force by notification; the date is not in the sources consulted. The first part of Chapter III is in our article on sections 7 to 11.
If a decision of the Authority is questioned, it is worth knowing whether the person sitting was validly in office and whether any defect matters. A legal consultation can help you read the position before you decide how to respond to an order.
Section 12: term of office
The Chairperson and Members "shall hold office for a term not exceeding five years from the date on which they enter upon their office, or until they attain the age of sixty-two years, whichever is earlier and shall not be eligible for reappointment".
Three limits apply together: a term not exceeding five years, a cut-off at sixty-two years of age, and the earlier of the two prevails. Reappointment is not available. Because the text says "not exceeding", the Government may appoint for a shorter term.
Section 13: terms of service and filling vacancies
- Section 13(1): the salary and allowances, and other terms and conditions of service of the Chairperson and other Members, "shall be such as may be prescribed". The detail is left to rules, which are not in the sources consulted.
- Section 13(2): any vacancy in the office of the Chairperson or any other Member "shall be filled up within a period of three months from the date on which such vacancy occurs".
Section 14: removal
Section 14(1) lets the Central Government, by order, remove the Chairperson or another Member if he:
| Clause | Ground |
|---|---|
| (a) | has been adjudged an insolvent |
| (b) | has been convicted of an offence involving moral turpitude |
| (c) | has become physically or mentally incapable of acting as a Member |
| (d) | has acquired such financial or other interest as is likely to affect prejudicially his functions |
| (e) | has so abused his position as to render his continuance in office prejudicial to the public interest |
Printing slip. Clause (e) is printed in the consolidated copy as "has so abused his position as to render his continuance in office is prejudicial to the public interest", with an extra "is". This article reads it in the sense just given and does not correct the printed text.
Section 14(2) adds a safeguard: no Chairperson or Member shall be removed under clause (d) or clause (e) "unless he has been given a reasonable opportunity of being heard in the matter". The hearing requirement therefore applies to the two grounds that involve judgment, interest and abuse, and not to insolvency, conviction or incapacity.
Section 15: who acts as Chairperson
- Vacancy (section 15(1)): where the office of Chairperson falls vacant "by reason of his death, resignation or otherwise", the senior-most Member acts as Chairperson until the date on which a new Chairperson, appointed under the Act to fill the vacancy, enters upon his office.
- Absence or illness (section 15(2)): when the Chairperson is unable to discharge his functions "owing to absence, illness or any other cause", the senior-most Member discharges the functions until the Chairperson resumes his duties.
Compare section 9(3), under which the senior-most Member is appointed Chairperson in the first place. The acting arrangement in section 15 is a stopgap for gaps in service.
Section 16: defects do not invalidate proceedings
"No act or proceeding of the Adjudicating Authority shall be invalid merely by reason of" any of three things:
- any vacancy in, or any defect in the constitution of, the Authority;
- any defect in the appointment of a person acting as a Member; or
- any irregularity in the procedure of the Authority not affecting the merits of the case.
The word "merely" matters: the section protects an act from being treated as invalid only because of such a defect. The third item is limited to an irregularity "not affecting the merits of the case". This section does not say that every defect is harmless; it removes the defect as a reason for invalidity by itself.
Section 17: officers and employees
Section 17(1): the Central Government "shall provide each Adjudicating Authority with such officers and employees as that Government may think fit". Section 17(2): those officers and employees "shall discharge their functions under the general superintendence of the Chairperson". The staff are provided by the Government but work under the Chairperson's superintendence.
Quick reference
| Section | Subject | Key point |
|---|---|---|
| 12 | Term | Not exceeding five years, or until sixty-two years of age, whichever is earlier; no reappointment |
| 13 | Terms of service; vacancies | Terms as prescribed; vacancy filled within three months |
| 14 | Removal | Five grounds; hearing needed for clauses (d) and (e) |
| 15 | Acting Chairperson | Senior-most Member acts on vacancy or absence |
| 16 | Validity | Vacancy, defect in constitution or appointment, or irregularity not affecting merits does not by itself invalidate |
| 17 | Staff | Government provides; Chairperson superintends |
Who is affected
- Persons facing proceedings before the Authority, who may ask whether a Member's term has run, whether a Bench is validly formed and whether section 16 saves a defect.
- Persons considering appeal, who should compare any complaint about constitution with section 16.
- Students and practitioners, who will see the same pattern of terms, removal and protected proceedings repeated for the Appellate Tribunal; see our article on sections 35 to 39.
Practical example
Farhan Siddiqui is told that one of the three Members who passed an order against his client has crossed sixty-two years of age. Section 12 says the term ends at sixty-two years or five years from entry, whichever is earlier, so the point is worth checking against the dates of appointment and of the order. If the order was passed while a vacancy existed in the Authority, section 16 says the order is not invalid merely by reason of the vacancy. Farhan would therefore look at whether the defect affected the merits and what the Act's remedies provide, not rely on the defect alone.
Other laws and later amendments
Section 14 uses the expressions "insolvent" and "offence involving moral turpitude" without naming another law. Where other sections of the Act refer to the Income-tax Act, 1961, the Code of Civil Procedure, 1908 or the Code of Criminal Procedure, 1973, check the current law for the corresponding provision. Later amendments to the Act are not in the sources consulted; check them. For the parallel position under the money-laundering law, see our article on the Adjudicating Authority under the Prevention of Money-laundering Act, 2002.
Need help understanding who decides your case?
The composition of the body that hears a notice, and the validity of its orders, can affect the way a reply or an appeal is framed. If you want the position explained for your matter, our legal consultation service can review the order and the Act together with you.
Key takeaways
- Term: not exceeding five years, or until sixty-two years of age, whichever is earlier; no reappointment (section 12).
- A vacancy is to be filled within three months (section 13(2)).
- Removal is by Central Government order on five grounds; a hearing is required for clauses (d) and (e) (section 14).
- The senior-most Member acts as Chairperson on a vacancy or absence (section 15).
- Vacancies, defects in constitution or appointment and irregularities not affecting merits do not by themselves invalidate acts (section 16).
Read next
- Sections 7 to 11: the Adjudicating Authority
- Sections 18 to 20: Initiating Officer and Approving Authority
- Sections 35 to 39: removal, vacancies, resignation and staff of the Appellate Tribunal
- Overview of the Benami Transactions Prohibition Act
Disclaimer: Based on a third-party consolidated text of the Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016, checked against the Gazette of India copy of that amending Act (11 August 2016), as consulted on 2 October 2026. The commencement notification, the rules and later amendments should be checked. This article is general information, not legal advice; check the official text before acting.