APPU HOTELS LTD Vs. APPROPRIATE AUTHORITY

JUDGEMENT

(1.) The petitioner has sought for a direction to the Appropriate Authority to grant to the petitioner a no objection certificate under section 269UL of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), in respect of the property comprising 2374/75000 undivided share of the land situated in No. 8, Estcort Road, Royapettah, Madras, bearing survey No. 904, R.S. 1279 and the office No. 3 in the first floor of the building known as 'Gokhale Bhavan' with a sale plinth area of 2374 square feet and pursuant to the agreement of sale entered into by the petitioner and Royapettah Benefit Fund Ltd., the second respondent dated 6-6-1990.

(2.) The petitioner filed Form No. 37-I seeking a no objection certificate from the authority on 20-6-1990. The petitioner also produced several documents along with that form. The Appropriate Authority just before expiry of two months from that date, on 16-8-1990 addressed a long letter to the petitioner stating therein that according to the authority, there were several ornissions in the form and also pointed out that there is breach of Chapter XX-C of the Act by the proposed vendor of the petitioner. It was asserted in that letter that the vendor of the petitioner had breached Chapter XX-C by having failed to obtain a no objection certificate for transfer of 50 per cent of undivided share to one Sunile Estates on 29-2-1988. The authority, however, did not choose to exercise its power of compulsory purchase; nor did it grante a no objection certificate. It concluded its communication thus:

(3.) The learned counsel for the petitioner stated at the Bar that the statement in fact was not returned to the petitioner. It is undisputed that the period of two months within which the authority should have compulsorily purchased, if it had wanted to, expired long ago. The authority, by sending communication in the manner it did, clearly mis-conceived this rule and also its power. It acted in the manner which is wholly inconsistent with the statutory provisions which are required to be adhered to, while exercising its jurisdiction. The authority was, under the provision of section 269UL, required to consider the statement in Form No. 37-I. If it felt that the power of compulsory purchase was not to be exercised in relation to the property, it was required to give a no objection certificate. If it thought otherwise, it was required to give notice of its intention to effect compulsory purchase; heard the petitioner and thereafter make an order as the Appropriate Authority, neither of these things had been done. It appears to have woken up very late and just before the expiry of the period of limitation of two months, sent a long letter neither granting the certificate of no objection nor proposing compulsory purchase. The principal points made therein being the alleged violation of law by the proposed vendor of the petitioner some two years prior to the date of agreement pursuant to which the petitioner sought to purchase the property.