OM SHRI JIGAR ASSOCIATION Vs. UNION OF INDIA

JUDGEMENT

(1.) . It is the contention of the petitioner that it is a registered non-trading corporation and that its President Shri Mahesh Kalubhai Bhatt entered into an agreement on June 10 1992 to purchase a land bearing Final Plot No. 287 admeasuring 1230 sq.mtr. (1028.40 sq.mtr) owned by the third respondent (Budhabhai Trust) for a sum of Rs. 20 lakhs. The third respondent is a public charitable trust registered under the Bombay Public Trusts Act 1960 (the Act for short). The Trust filed an application on February 25 1993 before the Charity Commissioner for seeking permission to sell the said land. Pursuant to the said application a public advertisement was given in the newspaper on June 4 1993 inviting objections if any to the said sale and inviting offers from the public at large for purchase of the said land. It is also contended that on June 30 1993 the Charity Commissioner found that the offer of one person to buy the said land was conditional one and therefore that offer was not accepted. Further considering the fact that the highest offer was for a sum of Rs. 22 lakhs the petitioner gave an offer to buy the said land for a consideration of Rs. 22 lakhs to the Charily Commissioner. The petitioners offer was accepted and thereafter an agreement to sell was executed between the petitioner and the said trust on October 19 1993 The said agreement to sell was executed subject to certain conditions inter alia that the sale would be subject to sanction by the Charity Commissioner under Section 36 of the Act as well as by the appropriate authority under the Income-tax Act. Thereafter Form No. 37 was submitted in the office of the appropriate authority on November 3 1993 On January 13 1994 the Charity Commissioner approved the said agreement to sell. It is the contention of the petitioner that in spite of the aforesaid facts without giving an opportunity of hearing to the petitioner the appropriate authority has passed an order on February 23 1994 holding that the said land is fit for pre-emptive purchase under Section 269UD(1) of the Income-tax Act because the apparent consideration has been understated by more than 15% and in exercise of powers vested under Section 269UD(1) of the Income-tax Act ordered to purchase the said land. It is submitted that the petitioner has purchased the said land in the public auction held by the Charity Commissioner. The Charity Commissioner has found that the bid of the petitioner was the highest and therefore accorded sanction under Section 36 of the Act. Therefore in the present case there is no question of undervaluing the land for its purchase. It is further contended by the petitioner that the notice given by the department is absolutely vague and illegal and it does not disclose any reason or ground as to why the property was sought to be compulsorily purchased.

(2.) . Mr. Shelat learned Advocate appearing on behalf of the respondents submitted that it cannot be held that merely because the land was sold in a public auction there cannot be any undervaluation. He further submitted that the notice was sent to the petitioner at the address mentioned in Form 37-I but it was returned unserved by the postal authorities with a remark not known. As the correct address was not known to the department the officer of the second respondent contacted the President of the Association on phone who was asked to collect the show-cause notice on 1st February 1994 but nobody has turned up to collect the show-cause notice on behalf of the petitioner.

(3.) . In our view the contentions raised by the petitioner are required to be accepted. It is apparent that the petitioner has agreed to purchase the land as per Banakhat dated 10th June 1992 (Annexure B to the petition). Subsequently an application was submitted by the Trust before the Charity Commissioner to grant sanction for sale. Of the said land. Thereafter the Charity Commissioner issued a public notice and invited offers for purchase of the said land. Two offers were received by the Charity Commissioner one of them for Rs. 22 lakhs was not acceptable because it was conditional. The petitioner thereafter offered Rs. 22 lakhs and its offer was accepted by the Charity Commissioner. Thereafter an argeement to sell was executed between the Trust and the petitioner and it was subject to the sanction by the Charity Commissioner under Section 36 of the Act as well as by the appropriate authority under the Income-tax Act. So it is apparent that the petitioner entered into an agreement to purchase the property on the basis of advertisement issued by the Charity Commissioner for sale of the said land. Offers were invited from the public at large. Except where it is alleged that there was fraud for such other reasons in normal circumstances the amount offered by the petitioner is required to be considered as market value of the land that is to say the highest price realized at the time of public auction is required to be accepted as market value of the land.