KETKI LAND HOLDINGS PRIVATE LIMITED Vs. APPROPRIATE AUTHORITY

JUDGEMENT

(1.) MR . J. P. Shah, learned advocate for the petitioner requests to delete respondent No. 2 from the petition as no relief is claimed against him. Request is granted. On deletion of respondent No. 2, respondent No. 1 now becomes the sole respondent. Rule. Mr. B. J. Shelat, advocate instructed by M/s. R. P. Bhatt & Co. waives service of Rule on behalf of the respondent (original respondent No. 1). On the facts and in the circumstances of the case, the matter is taken up for final hearing today.

(2.) THIS petition is filed by the petitioner for quashing and setting aside orders at Annexures 'G' and 'H' passed by Appropriate Authority on 28th April, 1995. By order, Annexure 'G', in exercise of powers conferred under s. 269UD(1) of the IT Act, 1961 (hereinafter referred to as 'the Act'), the respondent exercised power to purchase immovable property consisting of land with superstructure situated in Bootee Street in Cantonment area, Pune bearing House No. 900 (GLR Survey No. 390/5A), admeasuring o. 34 acres (14810.4 sq. ft. or 1375.92 sq. mtrs) (PUC for short). By order, Annexure 'H', passed under s. 269UE(2) of the Act, the property was ordered to be taken over from the transferor. It is the case of the petitioner that in the light of memorandum of undertaking ('MOU' for short) entered on 29th Dec., 1994, the petitioner agreed to purchase land from one Mr. Shahrokh Rustom Mazda on old grant tenure with three tenants therein. In MOU, it was mentioned that the land was owned by the Central Government and held by the vendor on old grant tenure. It was also stated that the land was occupied by three sitting tenants and it was for the purchaser to get them evicted at his own costs if he wished to do so. The consideration which was agreed between the parties was Rs. fifty one lacs. An amount of Rs. five lacs was paid by way of earnest money at the time of execution of MOU. The remaining amount was to be paid as mentioned in MOU. In accordance with the provisions of s. 269UC, Form No. 37 -I was filled in by the parties on 6th Jan., 1995. In MOU as well as in Form No. 37 -I, it was stated that three persons other than the owner were in occupation of the property as tenants and they were having leasehold rights. On 10th April, 1995, the Appropriate Authority issued notice to transferor and transferee under the provisions of s. 269UD(1A), alleging therein that the rate of property under consideration ('PUC') was too low in view of two sale instances referred to in the notice. It was averred that PUC was situated in Bootee Street in Cantonment area. Sale Instance Property 1 (SIP -1 for short) was also situated on General Thimmaya Road in Cantonment area whereas Sale Instance Property 2 (SIP -2 for short) was situated at about 150 metres from General Thimmaya Road. In case of PUC, the agreement was of 29th Dec., 1994 while in case of SIP -1 it was of 31st Aug., 1994 and in case of SIP -2, it was of 6th Jan., 1995. SIP -1 was sold at the rate of Rs. 10,886 per sq. mtr. whereas SIP -2 was sold at the rate of Rs. 13,660 per sq. mtr. Apparent consideration of PUC was Rs. 3,519 per sq. mtr. Discounted consideration of SIP -1 was Rs. 9,984 per sq. mtr. SIP -2 was Rs. 13,588 per sq. mtr. while that of PUC was of Rs. 3,317 per sq. mtr. In view of those facts, it was clear that apparent as well as discounted consideration of PUC appeared to be understated by more than 15%. The Appropriate Authority, therefore, called upon the parties to show cause as to why an order under s. 269UD(1) should not be passed and the property should not be acquired under Chapter XX -C of the Act. The petitioner submitted reply to the aforesaid show cause notice on 18th April, 1995, inter alia, contending that SIPs were located on General Thimmaya Road in Pune Camp, while PUC was situated in Bootee Street. General Thimmaya Road was prime location in Pune Cantonment and an exclusive commercial centre area but Bootee Street though in nearby area, it was predominately a lower middle class locality. Another major factor, according to the petitioner, was that PUC was under 'old grant rights' and for getting it converted into freehold, additional expenditure of conversion charges at the rate of around Rs. 260 per sq. ft. would have to be incurred. It was also mentioned that PUC was occupied by three sitting tenants, namely : (1) Mr. Behram Surty, (2) Mr. F. G. Hirani and (3) Mr. Behram Shahbadi. PUC was surrounded by motor garages which would reduce value of any property. The plot was also faced by a burial ground which had further reduced its value. It was having a very small frontage. In the light of all those facts, the petitioner contended that the consideration for which the property was agreed to be sold was reasonable and the notice was required to be withdrawn. The vendor also submitted a similar reply on 21st April, 1995. After considering the replies of the parties, the Appropriate Authority passed on order under s. 269UD(1) of the Act, holding that it was satisfied that the market rate of PUC would not be less than Rs. 7,500 per sq. mtr. and thus, there was understatement of more than 15% and it was proper to pass an order for pre -emptive purchase, and accordingly the impugned order was passed. In para 4, the Appropriate Authority stated :

(3.) HAVING given anxious and thoughtful consideration to the facts and circumstances of the case, we are of the view that the petition requires to be allowed. So far as the preliminary contention of Mr. Shelet is concerned, we do not find any substance therein. It is, no doubt, true that the litigation pertains to immovable property situated in Pune. It is also true that both the parties i.e. transferor and transferee are residents of Pune. From the record, however, it clearly transpires that notice under s. 269UD(1A) of the Act was issued by the respondent from Ahmedabad. The petitioner submitted his reply to the said show cause notice at Ahmedabad, and after considering notice as well as reply, the Appropriate Authority passed an order at Ahmedabad which is impugned in the present petition. It is, therefore, very clear that atleast a part of cause of action can certainly be said to have arisen within the territorial jurisdiction of this Court. In our opinion, therefore, this Court has jurisdiction. Article 226(2) of the Constitution reads as under :