SATISH BALAN Vs. UNION OF INDIA

JUDGEMENT

(1.) BY this petition, the petitioners challenge the order dated 22nd May 1995 passed by the respondent no.2 ' appropriate authority constituted under Chapter XXC of the Income Tax Act, 1961 acquiring the property bearing plot no.70P, Suburban Scheme III, Chembur Garden, Chembur (for short 'the said property').

(2.) THE respondent no.3, who is represented by his legal representatives, was the owner of the said property. By an agreement of sale dated 10th February 1995, the respondent no.3 agreed to sell the said property to the petitioners for a total consideration of Rs. 1,15,00,000/- to be paid in two installments, that is to say Rs. 11,50,000/- paid at the time of the agreement and the balance of Rs. 1,03,50,000/- to be paid at the time of the sale which was to be completed within 4 months. In accordance with the provisions of Chapter XXC of the Income Tax Act (for short 'the I.T. Act'), the petitioners and the respondent no.3 filed a statement in Form No.37I as required under section 269UC of the I.T. Act. After notice to the petitioners and the respondent no.3 and after giving them an opportunity of being heard, the appropriate authority (the respondent no.2) passed an order acquiring the said property. That order is impugned in this petition.

(3.) MR. Soli Dastoor, learned Senior Advocate appearing for the respondent no.3 ' original owner, submitted that the agreement for sale was entered into on 10th February 1995, under which the respondent no.3 was to get the entire consideration within a period of 4 months. However, after the order for compulsory acquisition of the said property was passed, the petitioners had filed the present petition and obtained a stay of the order. Neither the petitioners nor the respondent nos.1 and 2 have paid the balance consideration to the respondent no.3. The petitioner no.3 died waiting in vain to receive the consideration and, therefore, his heirs were entitled to interest at the rate of 20% per annum payable by the petitioners if the impugned order was set aside and at the rate of 15% per annum if the impugned order was upheld and the consideration was to be paid by the respondent nos.1 and 2. In support, he referred to and relied upon two decisions of the Supreme Court in Rajlaxmi Narayanan v. Margaret K. Gandhi, 1993 (Vol. 201) ITR 681 and Appropriate Authority v. R. Shanmuganathan, 287 ITR 558.