C B GAUTAM Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner herein filed Civil Writ Petition No. 2821 of 1986 in the Delhi High court challenging the validity of the ' provisions of Ch. XX-C inserted in the Income Tax Act, 1961 (referred to herein as 'the Income Tax Act') by the Finance Act of 1986. That writ petition has been transferred to this court as a test case. The order transferring the said writ petition was made on 20/09/1989.

(2.) The relevant facts lie within a narrow compass. The petitioner is the intending purchaser of a plot of land bearing No. B-7/108 A, situated at Safdarjung Enclave, New Delhi, admeasuring 253 sq. mtrs. The owner of the property is one Jai Lal s/o Ghazi Ram. The said owner held the b said plot under a lease executed by the Delhi Development Authority on 25/02/1981. On Fe 4/02/1985 the owner entered into an agreement to transfer the leasehold rights in the said property to the petitioner and a sum of Rs. 4.5 lakhs was paid as the advance price. On the same day an agreement for the construction of a structure on the plot was entered between the said parties. On 9/07/1986 a fresh agreement to sell the residential house put up on the aforesaid plot of land along with the leasehold rights in the said land was executed between the parties wherein the owner agreed to transfer to the petitioner his leasehold rights in the said land along with the ownership of the construction, namely, the building put up thereon, for Rs. 16 lakhs. In addition, the petitioner was liable under the agreement to pay Rs. 3.4 lakhs to the Delhi Development Authority on account of the unearned increase. On the coming into force of Ch. XX-C of the Income Tax Act, which was brought into effect from 1/10/1986 by a notification dated 7/08/1986 in the area with which we are concerned, the said agreement to sell the said property along with Form No. 37-1 in duplicate were furnished to the appropriate authority as per the requirements of Section 269-UC of the Income Tax Act. After getting the report of the registered valuer, the appropriate authority passed an order for the purchase by the central government of the said property, namely, the leasehold rights in the land and the ownership of the said building under Section 269-UD (1 of the Income Tax Act and served the same on the petitioner in the night of 15/12/1986. No specific reason was given in the said order for the compulsory purchase of the said property. All that was stated was ". . considering all the relevant facts and for the reasons recorded as required, it is decided that the said property is fit for purchase by the central government at an equal amount of the apparent consideration. . " The said order has been challenged in this petition on various grounds.

(3.) As we will presently show, the controversy which remains after analysing the respective stands of Mr Salve, learned counsel for the petitioner, and learned Attorney General, who appears for the respondents, is fairly narrow. It is, therefore, not necessary to set out the submissions of respective counsel in much detail or to cite al! the authorities referred to by counsel.