T S RAGHAVAN Vs. APPROPRIATE AUTHORITY

JUDGEMENT

(1.) THIS writ appeal arises out of an order passed by a learned single Judge of this Court whereby w. P. No. 26455 of 1993 filed by the appellant, herein has been dismissed and an order of pre-emptive purchase of property passed by respondent-Appropriate Authority under Section 269ud (1) of the IT Act, 1961 upheld.

(2.) THE controversy arises in the following backdrop : in terms of an agreement dt. 11th Dec. , 1992, respondent No. 3 in this appeal who happened to be the owner of property bearing No. 28-29 situated in 12th 'd' Main Road, 6th Block, rajajinagar, Bangalore, agreed to sell the same to the appellant herein for a total consideration of rs. 14,50,000. A sum of Rs. 3 lakhs representing part payment of the sale price was paid by the appellant to the vendor of the property aforementioned. Since however the consideration fixed was beyond the stipulated amount, the parties appear to have filed Form No. 37-I before the appropriate Authority in accordance with the provisions of Chapter-XXC of the IT Act, 1961 for permission to complete the transaction in terms of the agreement. The Appropriate Authority upon consideration of the said request issued a notice to the parties to the agreement proposing to preemptively purchase the property in question under Section 269ud of the IT Act and calling upon the parties to show-cause why an appropriate order to that effect be not made by it, The appellant-purchaser of the property submitted a reply to the said notice which was considered by the Authority while making an order under Section 269ud (1) of the Act. In the order made by it, the Appropriate Authority recorded a finding to the effect that, while the agreement entered into by the parties intended to transfer the property at the rate of Rs. 213 per sq. ft. , the market value of the said property was around Rs. 400 per sq. ft. The Appropriate Authority while saying so drew a comparison between the sale consideration settled by the parties on the one hand and the sale of similar other properties situate in Rajajinagar and Vijayanagar areas of Bangalore city on the other. In due course, the Chief CIT issued a letter dt. 22nd April, 1993, requesting respondent No. 3-owner of the property to hand over possession of the same and to collect the consideration payable to him in terms of the sale agreement. Before, however, the owner could respond to the said communication, one Mr. K. Sheshadri addressed a letter dt. 24th April, 1993, to the Chief cit received in the latter's office on 26th April, 1993, inter alia, pointing out that he was in occupation of the property as a tenant for the past several years. The communication pointed out that since the property being purchased by the Appropriate Authority was subject to the right of tenancy held by him, any purchase would also be subject to the said encumbrance. The communication also found fault with the proposed pre-emptive purchase of the property by the appropriate Authority and prayed for either setting aside of the entire process set into motion or to allow Sri. Sheshadri to continue in the premises as a tenant under the Central Government. Four days after the receipt of the said communication, the Chief CIT deposited the entire amount of consideration payable to the owner in terms of the agreement to sell before the Appropriate authority in the purported discharge of his obligation to do so under Section 269ug of the IT act. Shortly after the said deposit on 25th May, 1993, the owner of the property filed an application purporting to be one under Section 269ug (4) of the IT Act with a request that the entire amount deposited by the Chief CIT be invested in a fixed deposit. Three months later, on 19th Aug. , 1993, the owner refunded to the appellant herein the advance amount of Rs. 3 lakhs received from him in pursuance of the agreement to sell. Sometime later, on 8th Sept. , 1993, the appropriate Authority directed the release of the apparent consideration determined by it in favour of the owner who received the same without protest and in full and final settlement of his claim. The property in question was three years later sold by the IT Department in a public auction for a sum of Rs. 34,10,000 in favour of M/s Manipal Sowbhagyamdhi Ltd. , Writ Petn. No. 26455 of 1993 had in the meantime been filed by the appellant herein before this Court challenging the validity of the order of pre-emptive purchase made by the Appropriate Authority under Section 269ud of the IT Act. The petition came up for hearing before our esteemed brother V. K. Singhal, J. , who by his order dt. 27th May, 1999, dismissed the same holding that the supervisory jurisdiction exercised by this Court under Articles 226 and 227 of the Constitution did not extend to substituting the opinion of the Court for that of the Appropriate Authority on matters involving appreciation of relevant evidence and material. Relying upon the judgment of the Supreme Court in Appropriate Authority v. Smt. Sudha Patil 1998 viii AD (SC )441 , AIR1999 SC 181 , [1999 ]235 ITR118 (SC ), JT1998 (7 )SC 571 , 1998 (6)SCALE90 , (1998 )8 SCC237 , [1998 ]supp2 SCR619 , the Court held that interference with the order passed by the Appropriate Authority would be justified only in cases where the appropriate Authority had failed to consider some material that was relevant or taken into consideration, material that was extraneous or irrelevant or in cases where the finding recorded by the Authority was without any evidence whatsoever. The case at hand was not, in the opinion of the learned single Judge, one where interference could on any one of those grounds be justified. The Court held that even if two views were possible on a proper appreciation of the relevant material available before the Appropriate Authority, the same could not justify interference with the view taken by the said authority. The present appeal filed by the agreement-holder-appellant herein assails the correctness of the said judgment and order.

(3.) APPEARING for the appellant Ms. S. Nithya, strenuously argued that the view taken by the learned single Judge was erroneous hence unsustainable. She contended that the learned single judge had failed to appreciate that apart from other grounds, the petitioner had assailed the validity of the impugned order of pre-emptive purchase on the ground that the requirement of section 269ug (1) had not been satisfied in the instant case. She contended that in terms of section 269ug (1) of the Act, the amount of consideration payable in accordance with the provisions of Section 269uf had to 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 became vested in the Central Government under Sub-section (1) or as the case may be under sub-section (6) of Section 269ue. Relying upon the judgment of the Supreme Court in Asgar S. Patel and Ors. v. Union of India and Ors. , she argued that the amount paid by a buyer for purchase of the property constituted a charge on the property forming the subject-matter of sale to the extent of the amount paid by him. The prospective purchaser of the property under the sale agreement was, therefore, one of the persons entitled to receive the amount of consideration referred to in Section 269ug of the Act. No amount, leave alone Rs. 3 lakhs, which the appellant had paid to the seller of the property was at any stage offered to the appellant. She further argued that in terms of Section 269ug (2) of the Act, the amount of consideration could be deposited with the Appropriate Authority only in case there was any dispute as to the apportionment of the amount of consideration among persons claiming to be entitled thereto. So also, in terms of sub-section (3) to Section 269ug, such a deposit could be made before the Appropriate authority only if a person entitled to the amount of consideration did not consent to receive it or if there was any dispute as to his or their title to do so. None of these contingencies having arisen in the instant case, deposit of the sale consideration by the Central Government before the appropriate Authority was not proper nor even a substantial compliance with the provisions of section 269ug of the Act. In cases where the amount of consideration was not paid or deposited in accordance with the provisions of Section 269ug, the provisions of Section 269uh would become operative to re-vest the property in question in the transferor upon the expiry of the statutory period prescribed for making the payment or deposit as the case may be. The consequence flowing from non-compliance with the requirements of Section 269ug had, therefore, according to the learned counsel resulted in abrogation of the order of pre-emptive purchase and re-vesting of the property in the transferor. The fact that the property had in the meantime been sold in a public auction did not according to the learned counsel make any material difference as any such sale or transfer was subject to the result of the writ petition that was pending before the learned single Judge of which the present appeal is only a logical extension. It was submitted that the writ jurisdiction of this Court was wide enough to ensure that an undeserved benefit did not flow to any party no matter the beneficiary is a statutory authority or the Central Government as in the instant case. This Court according to the learned counsel could intervene even at this stage to ensure that the ownership of the property is transferred in favour of the appellant upon his paying the settled consideration of Rs. 14,50,000 to the vendor of the property.