PRIMA REALTY Vs. UNION OF INDIA

JUDGEMENT

(1.) This appeal by special leave is against the judgment dated 15/12/1995 by which the appellant's writ petition challenging the compulsory purchase order dated 26/4/1995 made by the appropriate authority under Section 269-UD (1) of the Income Tax Act, 1961 (for short "the Act") has been dismissed. In short, the challenge is on the ground that the compulsory purchase order stood abrogated under Section 269-UH (1) of the Act in view of the failure of the central government to tender under Section 269-UG (1) the amount of consideration required to be tendered within the period specified therein in respect of the immovable property which had vested in the central government under Section 269-UE (I) of the Act.

(2.) The material facts are these. An agreement for sale of the right, title and interest of Respondents 6 to 12 and one Dr V. S. J. Rao (in all eight transferors) was made on 13/1/1995 in favour of the appellant 'prima Realty' in respect of a property at Chembur in Bombay for an aggregate sum of Rs. 3,60,00,000. 00 (Rupees three crores and sixty lakhs). Out of the total sale consideration, a sum of Rs. 3,30,00,000. 00 was to be paid in cash, i. e. , by pay orders/demand drafts payable in instalments over a period of approximately 24 months and the remaining amount of Rs. 30,00,000. 00 was to be paid towards the cost of reconstruction of the bungalow occupied by Dr Rao and his family in that property. A statement in statutory Form No. 37-1 as required by Section 269-UC (1) and (3) read with Rule 48-L duly signed by all the parties to the agreement was filed with the appropriate authority on 30/1/1995 giving details of the persons "interested in consideration". As required by the proviso to Section 269-UD (1) the purchase order had to be made on or before 30/4/1995. A show-cause notice was issued under Section 269-UD (1-A) addressed to Respondents 6 to 12 and Dr V. S. J. Rao (the transferors) and to the appellant (the transferee). The appellant/transferee was described in this notice as "prima Realty, Partnership Firm". On 13/4/1995 Dr V. S. J. Rao expired and was survived by Respondents 13 to 16 as the legal heirs. Show-cause notices were then issued by the appropriate authority to the legal heirs of Dr Rao. On 26/4/19955 the compulsory purchase order was passed by the appropriate authority under Section 269-UD (1) of the Act acquiring the property and determining the apparent consideration payable by the central government at Rs. 3,58,84,384. 00 (Rupees three crores fifty-eight lakhs eighty-four thousand three hundred and eighty-four only). The purchase order correctly records that the sum of Rs. 3,58,84,384. 00 has been arrived at, taking into account the discounted value of the sum of Rs. 3,30,00,000. 00 with reference to the date on which the payment was required to be made by the central government under the Act, i. e. , on or before 31/5/1995 which works out exactly to Rs. 3,28,84,384. 00 (Rupees three crores twenty-eight lakhs eighty-four thousand three hundred and eighty-four only). Thus adding the additional consideration of Rs. 30 lakhs (towards the cost of construction of the new bungalow) the total consideration payable by the central government was Rs. 3,28,84,384. 00 plus Rs. 30 lakhs amounting in all to Rs. 3,58,84,384. 00. The purchase order also correctly described the appellant/transferee as "prima Realty, Partnership Firm. . ". On 29/4/1995 a letter in the standard form was addressed by the appropriate authority to the transferors and the transferee requesting them for various documents and papers relating to the property; and the letter to the appellant/transferee was addressed correctly as "prima Realty, partner".

(3.) Section 269-UG (1) requires that the amount of consideration payable in accordance with the provisions of Section 269-UF shall be tendered to the person or persons entitled thereto within a period of one month from the end of the month in which the immovable property concerned becomes vested in the central government under Ss. (1) , or, as the case may be, Ss. (6) of Section 269-UE. In the present case, the purchase order having been made on 26/4/1995 the property concerned became vested in the central government under Ss. (1) of Section 269-UE on the date of that order. The amount of consideration, namely, Rs. 3,58,84,384. 00 became payable and was required to be tendered to the person or persons entitled thereto under Section 269-UG (1) , within a period of one month from the end of the month of April 1995, i. e. , on or before 31/5/1995. The persons entitled to the payment of the amount of consideration were the transferors/respondents 6 to 12 and the legal heirs of Drv. S. J. Rao and the transferee/appellant to the extent of their shares in the consideration. The appellant/transferee became entitled to the sum of Rs. 66 lakhs which had been paid by them as earnest money to the transferors; and transferors were entitled to the remaining amount to the extent of their shares therein, the details of which were given in the statutory Form No. 37-1 filed with the appropriate authority. The dispute relates to the compliance of this requirement under Section 269-UG (1) of the Act.