B SUNDARARAJAN Vs. APPROPRIATE AUTHORITY

JUDGEMENT

(1.) PETITIONER, Mr. Sundararajan in W. P. No. 20284 of 1994,. entered into an agreement on 25-8-1988 for the purchase of property with an extent of 3 grounds and 1844 sq. ft. at No. 37, IV Main Road, Gandhi Nagar, madras-20 for a sum of Rs. 19 lakhs. The rate per ground was Rs. 5, 04, 000. The petitioner and the vendor filed a statement under section 269uc of the income-tax Act, 1961 ('the Act') in Form 37-I on 7-9-1988. The appropriate authority on 15-11-1988 made an order for compulsory purchase of the property and that order was challenged by the petitioner in W. P. 150399 of 1988 on 5-12-1988. This Court stayed further proceedings on 9-12-1988 , though by that date the vendor had surrendered the possession. The property was not put up for auction in view of the interim order passed by this Court on 2-1-1989. This Court made an order directing the authority to pay the sale consideration under the agreement between the vendor and the vendee, namely, Rs. 19, 00, 000 to the vendor and on such payment, the vendor was to return the advance of Rs. 1, 00, 000 to the vendee. The counsel for the vendor who is one of the respondents here confirms that the advance that had been received earlier; (interim) Rs. 1, 00, 000 had been returned to the vendee. The vendor has, thus, received the value in full.

(2.) THE writ petition filed by the petitioner in W. P. No. 15039 of 1988 was subsequently dismissed. However, an appeal filed against that order in Writ Appeal No. 880 of 1994 was allowed by a Division Bench of this court on 28-7-1994 and the matter was remanded to the authority for fresh disposal after giving due opportunity to the petitioner. THE petitioner was asked to furnish a bank guarantee for a sum of Rs. 19, 00, 000 in favour of the authority to ensure a payment of the consideration in the event of the authority ultimately deciding to grant no objection certificate. THE bank guarantee was duly furnished to the authority by the petitioner.

(3.) THE reasons, if at all they can be characterised as such, given by the authority, are clearly arbitrary and wholly untenable. THE fact that every transaction had been entered into, the transactions were not doubted by the authority on the date subsequent to the date of the agreement, but transactions ranging from a few days subsequent to the agreement to the date within one year of the agreement did not on that account alone render them non-comparable. THE authority did not find that there was fall in price after the date of the agreement. On the other hand, the method of valuation adopted by the authority to make addition to the values ascertained from the date of the transaction till the date of the consideration, further amounts to the fact that, for the period subsequent to the period of transaction there was inflation. If properties were transacted at a lesser rate immediately after the date of the agreement, that evidence is a clear evidence which is relevant and is helpful in ascertaining the market value when the values shown in those transactions are less than the value at which the parties before the authority, had agreed to transact. THE authority's refusal to regard another property at the same rate and which was transacted at a figure which is almost half of on rate and which the petitioner had agreed to buy this property and which transaction was about one, year prior to the date of the agreement between the petitioner and his transferor, is again wholly arbitrary. Even after providing for inflation for the period subsequent to the date of that transaction, the market value of this property was very much less than the value at which the petitioner had agreed to buy the property.