C S LOGANATHAN Vs. P L KAPUR

JUDGEMENT

(1.) This petition (I.A. 1092 of 1970) has been moved by the plaintiff in Suit No. 506 of 1968 under the following circumstances. On 5th December, 1968, the plaintiff instituted a suit for recovery of Rs 10,61,134.00 on the allegations that the property in dispute, namely, 3, Friends Colony, New Delhi, which was owned by defendants Nos. 1 and 2, had been mortgaged by them with defendant No. 3 on 7th December, 1964 for a sum of Rs. 2 lacs and that the mortgagee had assigned its rights to the plaintiff on 31st August, 1967 and so the plaintiff had become the mortgagee of the said property. It was further alleged in the plaint that the plaintiff had directly advanced to defendants Nos. I and 2 a considerable amount of money on security of some shares as well, and that even after the expiry of the period of mortgage, the defendants had not cleared the debts and so the same be realised by sale of the mortgaged movable as well as immovable properties. The suit was contested for sometime and eventually a compromise (dated 12th May, 1969) was arrived at between the parties which was recorded by the Court on 26th May, 1969 and a compromise decree followed the same. One of the terms of the compromise decree was that defendants Nos. 1 and 2 will absolutely sell and convey to the plaintiff the aforesaid immovable property namely, 3, Friends Colony, New Delhi in consideration of adjustment of a sum of Rs. 8 lacs and if the defendants failed to execute the saleeed within the period of one month, the plaintiff decree-holder would bs entitled to obtain a conveyance of the property through the Court by an officer of the Court appointed in this behalf, executing and registering the sale-deed at the expense of the plaintiff decree-holder. Eventually, by order dated 25th September, 1969, the Court appointed the Registrar of the Court as the officer concerned and directed him to execute and register the sale-deed. After approval of the draft, the sale-deed was engrossed on a stamp paper and executed by the Registrar and it was presented on 3rd January, 1970 to the Sub-Registrar for registration under the Indian Registration Act, but the Sub-Registrar declined to register the same on the ground that the tax clearance certificate had not been obtained and the sale-deed was. however, probably to save the prescribed limitation, presented to the Sub-Registrar again on 2nd May, 1970 and the same is still in his office.

(2.) Feeling aggrieved by failure of the Registrar of this Court to obtain registration of the sale-deed from the Sub-Registrar, the plaintiff moved an application (1.A. No. 507 of 1970) for an order compelling the Sub-Registrar to register the document. Reply to the said application was filed on behalf of the Sub-Registrar but the application was withdrawn on 18th August, 1970 with the permission of the Court. However, another application (LA. No. 1092 of 1970) has been moved for the same purpose which has been amended with the leave of the Court granted in 1.A. 1210 of 1970 and the petiion as amended has come up before me for disposal. Notice of the application was, by order dated 7th October, 1970, issued to the Attorney-General of India, Commissioner of Income-Tax and the Inspector General of Registration, besides of course the parties. No body has appeared on behalf of the Attorney-General, but the petition has been contested on behalf of the Commissioner of Income-Tax as well as by the Inspector General of Registration and I have heard the arguments of the learned counsel for the parties.

(3.) The obstacle in the way of registration of the sale-deed is created by section 230(A) of the Income-Tax Act, 1961 as amended in 1964, which I will reproduce in detail later on and the said provision has prescribed the income-tax clearance certificate as a condition precedent to registration of sale-deeds worth more than Rs. 50,000.00. The decreeholder petitioner contends that the said provision of law is ultra vires of the Constitution and is an unreasonable restriction on the rights of the vendor as well as the vendee in respect of the property under sale and the same contravenes the fundamental rights guaranteed by Article 19(l)(f) and Article 14 of the Constitution. In the alternative, it has been submitted that the language of the provision does not justify its extension to involuntary transfers made under orders of the Court.