PRIMA REALTY Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS Petition is filed by the purchaser challenging the compulsory purchase order passed by the Appropriate Authority on the ground that the Respondent No.1 had not paid full amount of earnest money on the due date and even the short payment of Rs.60,00,000.00 made by cheque was in the name of a wrong person. therefore, the compulsory purchase order stands abrogated under Section 269-UE of the Income Tax Act, 1961. It is also contended that the determination of the market value by the Appropriate Authority at Rs.6600.00 per sq.ft. FSI is unreasonable and perverse.

(2.) IN this Petition, the points involved for determination are as follows :-

(3.) WITH this prelude, facts of the present case may be seen. Prior to 31st October 1970, one V.R. Swamy was the owner of plot bearing Nos. 558 and 559 in sub Scheme No.III Chembur. The above two plots also had bungalow and other structures standing thereon. On 31st October 1970, V.R.Swamy died. Respondent Nos. 6 to 12 along with one Dr. Rao (since deceased) are the heirs and legal representatives of V.R. Swami. On 18th November 1992 the family arrangement was arrived at, under which, Dr. Rao as a co-sharer got 23.45 per cent share in the total holding. Dr. Rao was also in use and occupation of the bungalow. Dr. Rao was also an Administrator of the estate of the deceased V.R.Swamy. On 13th January 1995 Respondent Nos.6 to 12 along with Dr. Rao (since deceased) entered into a development agreement with the Petitioner/Transferees. The said development agreement was in respect of the above two plots. On 13th April 1995, Dr. Rao died leaving behind Respondent Nos. 13 to 15 as his legal heirs. In other words, Respondent Nos. 6 to 16 are hereinafter referred to for the sake of brevity and convenience as "Transferors" whereas the Petitioners are described as "Transferees". The total area of the above two plots is 1706 sq. yards equal to 15354 sq. ft. at Chembur. The plots fall in residential zone. Permitted F.S.I. at the relevant time was .75. In other words, in respect of the two plots the permissible F.S.I. stood at 11515 sq.ft. (15354 x .75). As stated above, two plots belonged to eight co-owners including Dr. Rao. As stated hereinabove, the property was occupied by Dr. Rao who stayed in the bungalow on the plots. Dy development agreement dated 13th January 1995, the Transferors transferred the entire F.S.I. of 11515 sq.ft. except 2000 sq.ft. of F.S.I. 2000 sq.ft. was retained by Dr. Rao for construction of a new bungalow by the Petitioners/Transferee/Developers at the cost of Rs.30,00,000.00. In other words, the Petitioners purchased rights in the F.S.I. to the extent of 9515 sq.ft. for a sum of Rs.3.60 crores. Under the said agreement vide Clause 5, it was further provided that the Petitioners as Developers shall provide temporary accommodation to Dr. Rao in nearby locality in property admeasuring 2500 sq.ft. till the Developers constructed a new bungalow at the cost of Rs. 30,00,000.00 as stated hereinabove. The total consideration under the development agreement agreed to be paid by the Transferees to the Transferors was Rs. 3.60 crores out of which Rs.3 crores 30 lakhs was to be paid in the form of money whereas Rs.30 Lakhs was to be paid as consideration in the form of bungalow to be constructed for Dr. Rao. Under the said agreement, Transferees paid Rs.60 lakhs as an earnest money to the seven co-owners and further sum of Rs.6 lakhs was paid as an earnest money to Dr. Rao. This was at the time of execution of the agreement. Under the agreement it was further stipulated that within one year of the agreement, the Petitioners as Developers would construct a new bungalow; that only after Dr. Rao being put in possession of the new bungalow, Petitioners would have the right to construct and develop the above two plots, by constructing bungalows to be sold to the public. In other words, till Dr. Rao is put in possession of the new bungalow, the Petitioners did not have right to develop the property for one year because the Petitioners agreed to construct a bungalow for Dr. Rao within one year from the date of development agreement.