KRISHNASWAMY S PD Vs. UNION OF INDIA

JUDGEMENT

(1.) Challenge in these appeals is to the judgment rendered by a Division bench of the Karnataka High Court dismissing the Writ Petitions filed by the appellants.

(2.) The factual background in a nutshell is as follows :the fourth Respondent and appellants entered into an agreement of sale dated 16.7.1987 in respect of premises bearing No. 377 R. M. V. Extension, Bangalore measuring 50' x 90'. The total consideration was fixed at rs. 18,00,000/ -. Appellants paid a sum of Rs. 6,00,000/- by two cheques dated 16.7.1987 to the fourth respondent and the balance consideration was agreed to be paid at the time of registration of sale deed. The parties to the agreement were required under Chapter XX-C of the Income Tax Act, 1961 (in short the 'act'} read with Rule 48 (L) of the Income Tax Rules, 1962 (in short the 'rules') to file a Statement in Form No. 37-I before the appropriate authority specified under Chapter XX-C. Accordingly, appellants and fourth respondent filed form No. 37-I along with certain documents on 29.10. 1987. Thereafter, the appropriate authority passed an order dated 18.12.1987 purported to be under Section 269ud (1) of the Act, for pre-emptive purchase of the said property by the Central Government at an amount equal to the apparent consideration. It was stated that the reasons were recorded separately. The said order dated 18.12.1987 was challenged before the Karnataka High court in W. P. Nos. 247-248 of 1988. Challenge in the writ petitions was to the constitutional validity of Chapter XX-C of the Act with consequential prayer to quash the order dated 18.12.1987.

(3.) The High Court stayed the order of purchase dated 18.12.1987 on 7.1.1988. The interim order of stay was subsequently modified on 13.1.1988 by staying only the delivery of possession under Section 269-UE and further proceedings pursuant to vesting subject to the condition that the transferees and the transferor shall not effect any change in the nature and character of the property or alienate or encumber the property during the pendency of the writ petition. On 1.8.1991, the High Court vacated the interim stay by the following order :"after hearing both the learned Counsel, we are of the view that stay of delivery of possession ordered by the learned single Judge cannot be continued. Accordingly, the stay is vacated. Therefore, the transferor-respondent-4 W. G. S. Saldhana shall deliver possession in favour of respondent-3, the Income Tax officer, without any demur. Within two weeks from the date of delivery of session, the said W. G. S. Saldhana shall be paid by the Revenue whatever amount is due to him. It is open to the department to bring the property to public auction. We make it clear that the order relating to delivery of possession and payment of amount shall be subject to the ultimate result of the writ peti- tions. Sri Sarangan, learned Counsel for the petitioners states that a sum of Rupees six Lakhs paid by way of advance under the agreement dated 16/7/1987 may be refunded. It is open to the writ petitioners to seek refund of the same from the transferor namely, respondent-4. "