NEW WHITE ROSE CHS LTD Vs. APPROPRIATE AUTHORITY

JUDGEMENT

(1.) This petition is filed by a Cooperative Housing Society claiming to be the owners of land admeasuring 359.80 sq. yards bearing CTS No. C/1233, Survey No. 282, Hissa No. 3, Sherly Ranjan Road, Bandra (W) (hereinafter referred to as "the said land") on which a residential complex is constructed and the members of the Cooperative Society are the purchasers of the flats from the developer . They claim to be the purchasers for value without notice. The Income Tax Department claims ownership over the said land by virtue of vesting of title in terms of Section 269UE of the Income Tax Act, 1961 ("the Act" for short). The purchaser has challenged an order dated 21.10.1994 passed by the Appropriate Authority under Section 269UD of the Act and further communication dated 2.8.2017 issued by the Appropriate Authority threatening to take forcible possession of the land in question with the assistance of the Police authority. This piquant situation has arisen in following background:-

(2.) The case has a checkered history. This Writ Petition is a sequel to Writ Petition No. 2475 of 1994 which was filed by erstwhile owner of the land (respondent No. 6 herein) and the proposed purchasers (respondent Nos. 3 to 5 herein). At the outset, we may record that learned counsel for the petitioner had placed before us the complete compilation of the said Writ Petition No. 2475 of 1994 with accompanying documents which are taken on record and marked "X" for identification. We would be referring the facts and documents from the present petition as well as those stated in Writ Petition No. 2475 of 1994 to the extent they are relevant for our purpose.

(3.) Respondent No. 6 herein was erstwhile owner of the said land. It appears that on the said land, there was a tin shed which was in occupation of five tenants. Respondent Nos. 3 to 5 herein intended to purchase the said land. They offered a sum of Rs. 1.40 Crores by way of sale consideration to purchase the land. Respondent No. 6 agreed to sell the same on such terms. Memorandum of Understanding ("MOU" for short) was, therefore executed between the parties on 18.7.1994. The said MOU records that there is a structure standing on the said land and the property is occupied by the tenants. All the details of their names, room numbers and rent paid were indicated in Annexure A to the MOU. The vendor had agreed to sell his right, title and interest in the said property to the purchaser for a total consideration of Rs. 1.40 Crores. Rs. 14 Lacs was paid by way of earnest money at the time of execution of MOU. Remaining sum of Rs. 1.26 Crores would be paid within 30 days from the receipt of 'No Objection Certificate' from the Appropriate Authority under the Act and on providing marketable title and handing over possession of the said land. Paragraph 4 of the MOU envisaged that the purchasers would be put in possession of the property on "as is where is basis". But paragraph 5 of the MOU specified that the property was tenanted and it would be the responsibility of the vendor to have the tenants evicted and put the purchasers in possession of the property against the payment of the balance agreed consideration. The original owner, thereafter, applied to the Income Tax Department for necessary 'No Objection' for sale of the land on which the Appropriate Authority passed order dated 21.10.1994 under Section 269UD of the Act. The Authority was of the opinion that the fair market value of the property would be not less than 1,74,36,000/-. As per the MOU, the vendor had agreed to sell the same for consideration of Rs. 1.40 Crores. The difference between the fair market value and the declared apparent consideration was more than 15%. Accordingly, the Government would pay a sum of Rs. 1.40 Crores to vendors and purchasers. Pursuant to such order, the Deputy Commissioner of Income Tax issued a communication dated 25.10.1994 directing the original owner and the proposed purchasers to handover the possession of the property within 15 days failing which further steps would be taken and conveying that the property vests in the Government.