MANUBHAI SAKARCHAND SHAH Vs. S.K. LAL

JUDGEMENT

(1.) The petitioners entered into an agreement for sale of Flat No. 1 on the 12th floor of a building known as Enterprise Apartment, Forjett Hill Road, Tardeo with one Pramod S. Shah and A.S. Shah on September 17, 1986, for aggregate consideration of Rs. 12,98,000. From the averments it is seen that initially a sum of Rs. 25,000 was paid and before October 1, 1986, a further sum of Rs. 2,25,000 was also paid to the transferor. The petitioners filed an application in Form No. 37EE with the competent authority. The competent authority issued notice under Section 269D(1) asking the parties to show cause as to why the order of acquisition not be passed. The competent authority also issued a notice of initiation of acquisition proceedings. The fair market value was fixed at Rs. 1,600 per sq. ft. The competent authority cited two sale instances, one of a flat situated at Gold Coin Building at Tardeo and the other flat situated in a building known as Wallace Apartment at Sleater Road. The petitioners filed objection and also enclosed a report dated November 17, 1987, of a registered valuer, pointing out as to how the sale instances cited by the competent authority were not comparable. On October 31, 1988, the competent authority passed an order recording satisfaction that it was not a fit case for continuing the proceedings initiated pursuant to the notice under Section 269D(1).

(2.) As the provisions of Chapter XX-C came into force in respect of transfer of property situated at Mumbai on October 1, 1986, the petitioners also filed an application in Form No. 37-I on October 14, 1986, before the appropriate authority. On December 12, 1986, the appropriate authority passed an order under Section 269UD(1) directing purchase of the flat for a consideration of Rs. 12,90,000. It is the case of the petitioners that they were not given an opportunity of being heard nor any reason in support of the order was made available. The petitioners along with the transferor filed a writ petition challenging the validity of the order dated December 12, 1986, as well as the constitutional validity of Chapter XX-C which petition was numbered as Writ Petition No. 3560 of 1993. The petition was admitted and an interim order was granted by this Court. The petition was disposed of on December 16, 1992, pursuant to the decision of the Supreme Court in C.B. Gautam v. UOI, 1993 199 ITR 530. The matter was remanded to the appropriate authority to decide the issue afresh.

(3.) On December 30, 1992, the appropriate authority issued a show-cause notice to the petitioners as to why the order of purchase in terms of Section 269UD(1) ought not to be made. Along with the show-cause notice the copy of the reasons recorded by the appropriate authority on December 12, 1986, in support of the order that was passed was also made available. In the reasons recorded it was stated that the rate at which the petitioners had agreed to purchase the flat at Rs. 1,000 per sq. ft. is low having regard to the sale instances. Three sale instances were cited (1) building known as Windcliffee at Peddar Road, (2) Building known as Ocean Crest at B. D. Road, and (3) building known as Vastu at Maulana Gaffar Road, Worli. The petitioners filed a reply to the show-cause notice on February 8, 1993 and made their submissions as to why no order ought to be passed. Apart from the legal objections as to why Chapter XX-C was not applicable they also submitted a report of the registered valuer wherein the valuer had analysed the various comparative sale instances. A fourth sale instance of a flat in the building Enterprise itself was cited and the rates at which those flats have been sold. The flat in Enterprise was sold in May, 1985, the impugned order under Section 269UD(1) came to be passed on February 18, 1993. The appropriate authority directed to purchase the flat by the Central Government for Rs. 12,98,000. The authority came to the conclusion that it was Chapter XX-C that would be attracted. Consequently the competent authority held that the rate of Rs. 1,200 per sq. ft. at which the petitioners had agreed to purchase the property was very low. In respect of the contention urged on behalf of the petitioners that the valuation report prepared by the Revenue should be made available the same was answered by holding that it was not necessary to furnish detailed valuation report obtained in the petitioners case as well as to give material in so far as the sale instances of comparative cases relied upon by the appropriate authority. For the aforesaid reasons the appropriate authority rejected the contention and passed the impugned order. That is the subject matter of the present petition.