GURBUX GIANCHAND MOTWANI Vs. S C PRASAD

JUDGEMENT

(1.) THE petitioner who is the purchaser of Flat No. 2 situate on the first floor of the building called "garden Homes", Khar, Bombay, has challenged the order of compulsory purchase dated 25th March, 1994 passed by the Appropriate Authority, Bombay. By the impugned order, the Appropriate Authority arrived at the conclusion that the fair market value of the subject property is Rs. 46 lacs on the date of the agreement (22nd June, 1992) as against the disclosed consideration of Rs. 38 lacs and, therefore, the difference is much more than 15%.

(2.) THE aforesaid order is passed with regard to a residential flat, being Flat No. 2, admeasuring 1347 square feet on the first floor of "garden Homes", Khar, Bombay. It is the contention of the petitioner that he was the owner of another flat situate at Worli and that in June 1992, he entered into an agreement for the sale of the said flat for a consideration of Rs. 45 lacs and in view of the provisions of section 54 of the Income-Tax Act, 1961, (hereinafter referred to as "the Act") the petitioner was required to invest the sale proceeds in another residential flat to obtain tax benefits. Hence, on 22nd June, 1992, the petitioner entered into an agreement for the purchase of the flat in question from respondents Nos. 5 and 6 for a consideration of Rs. 38 lacs. The petitioner paid Rs. 3. 80 lacs as earnest money. As per the agreement, the balance was required to be paid with a period of 15 days from the date of the receipt of NOC from the Income-Tax authorities under Chapter XX-C of the Act. On 23rd June, 1992, the petitioner and respondents Nos. 5 and 6 filled in Form 37-I. It is the contention of the petitioner that on 23rd June, 1992, the property was inspected by the Valuation Officer and in the Valuation Report he deducted an amount of Rs. 65,151. 00 as discount for 120 days which would be the time to be taken by the Appropriate Authority for passing an order under Chapter XX-C and for paying the consideration. He also deducted Rs. 1. 5 lacs as the price of the garage; Rs. 60,000. 00 as the price of fixtures and Rs. 5,000. 00 as transfer fees; thus according to the Valuation Officer the discounted amount of consideration was Rs. 35,19,849. 00 for the flat admeasuring 1347 square feet which works out at the rate of Rs. 2,613. 00 per square feet. The Valuation Report is produced on record at Exhibit "d" to the petition. The Valuation Officer has made the following endorsement on the Valuation Report :

(3.) BY an interim order dated 29th September, 1992, the Division Bench of this Court restrained respondents Nos. 1 and 2 from tendering the amount payable under section 269-UF (2) till the petition was heard for admission. Thereafter, on 30th September, 1992, the order was modified to the extent that the amount payable under section 269-UF (2) was directed to be deposited with the Prothonotary and Senior Master on or before 6th October, 1992 and the Prothonotary and Senior Master was directed to invest the said amount in a Nationalised Bank.