TMI Blog2011 (3) TMI 1234X X X X Extracts X X X X X X X X Extracts X X X X ..... close of working hours, rendering deposit with the Appropriate Authority impossible. In my view it is permissible for the Central Government to make a deposit with the Appropriate Authority in advance to avoid lapse of compulsory acquisition, writ applications fail and the same are dismissed. - 128 of 2011 and 2106 of 2003 - - - Dated:- 29-3-2011 - INDIRA BANERJEE MS., J. JUDGMENT Ms. Indira Banerjee J.- 1. The writ applications, being W. P. No. 128 of 2011 and W. P. No. 2106 of 2003, are directed against an order of compulsory acquisition dated August 14, 2001, of the first floor of premises No. 4A, Pollock Street, Kolkata-700 001, hereinafter referred to as the said premises, passed by the Income-tax Department under Chapter XX-C of the Income-tax Act, 1961. 2. Petitioner No. 1 entered into an agreement dated September 22, 1984, for transfer of the entire first floor of premises No. 4A, Pollock Street, Kolkata 700 001, to Karnani Finance Enterprises Ltd. 3. Before the said property was actually transferred in terms of the aforesaid agreement, the Finance Act, 1986, was enacted, amending the Income-tax Act, 1961, by insertion of Chapter XX-C consisting of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to any immovable property in respect of which an agreement for transfer is made, being immovable property of the nature referred to in sub-clause (ii) of clause (d), means,- (i) in a case where the consideration for the transfer consists of a sum of money only, such sum ; (ii) in a case where the consideration for the transfer consists of a thing or things only, the price that such thing or things would ordinarily fetch on sale in the open market on the date on which the agreement for transfer is made ; (iv) in a case where the consideration for the transfer consists of a thing or things and a sum of money, the aggregate of the price that such thing or things would ordinarily fetch on sale in the open market on the date on which the agreement for transfer is made, and such sum, and where the whole or any part of the consideration for such transfer is payable on any date or dates falling after the date of such agreement for transfer, the value of the consideration payable after such date shall be deemed to be the discounted value of such consideration, as on the date of such agreement for transfer, determined by adopting such rate of interest as may be prescribed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of section 269UB to make the order referred to in this sub-section in relation to the immovable property concerned, the period of limitation referred to in the preceding proviso shall be reckoned with reference to the date of receipt of the statement by the Appropriate Authority having jurisdiction to make the order under this sub-section : . . . 269UE.(1) Where an order under sub-section (1) of section 269UD is made by the Appropriate Authority in respect of an immovable property referred to in sub-clause (i) of clause (d) of section 269UA, such property shall, on the date of such order, vest in the Central Government free from all encumbrances : . . . (2) The transferor or any other person who may be in possession of the immovable property in respect of which an order under sub-section (1) of section 269UD is made, shall surrender or deliver possession thereof to the Appropriate Authority or any other person duly authorised by the Appropriate Authority in this behalf within fifteen days of the service of such order on him : . . . (3) If any person refuses or fails to comply with the provisions of sub-section (2), the Appropriate Authority or other person duly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed thereunder within the period specified therein in respect of any immovable property which has vested in the Central Government under sub-section (1) or, as the case may be, sub-section (6) of section 269UE, the order to purchase the immovable property by the Central Government made under sub-section (1) of section 269UD shall stand abrogated and the immovable property shall stand re-vested in the transferor after the expiry of the aforesaid period : Provided that where any dispute referred to in sub-section (2) or sub-section (3) of section 269UG is pending in any court for decision, the time taken by the court to pass a final order under the said sub-sections shall be excluded in computing the said period. . . 269UJ. With a view to rectifying any mistake apparent from the record, the Appropriate Authority may amend any order made by it under this Chapter, either on its own motion or on the mistake being brought to its notice by any person affected by the order : Provided that if any such amendment is likely to affect any person prejudicially, it shall not be made without giving to such person a reasonable opportunity of being heard : Provided further that no ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f petitioner No. 1 and a director of Karnani Finance Enterprises Ltd. was submitted to the Appropriate Authority, in terms of section 269UC of the Income-tax Act, 1961, read with rule 48L of the Income-tax Rules, 1962. A photocopy of the said statement in Form 37-I was produced in this court, by the income-tax authorities, and directed to be taken on record. 7. As per the statement duly signed on behalf of petitioner No. 1 and Karnani Finance Enterprises Ltd. by their respective directors, the first floor of premises No. 4A, Pollock Street, Kolkata-700 001, comprising superbuilt area of approximately 6000 square feet was being sold at a consideration of Rs. 18 lakhs. 8. In the aforesaid statement, there is a categorical declaration of the intention of petitioner No. 1 to transfer the said premises to Karnani Finance Enterprises Ltd. of No. 3, Synagogue Street, Calcutta-700 001 for total apparent consideration of Rs. 18 lakhs. 9. By an order dated December 12, 1986, passed under section 269UD(1) of the Income-tax Act, the Appropriate Authority directed pre-emptive purchase of the said property, for the reasons recorded in the said order. 10. Petitioner No. 1 filed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of 2011 and has also prayed for vacating of the orders dated February 4, 2011, and February 7, 2011. 17. In spite of directions in the main writ petitions no affidavit-in-opposition has been filed by the income-tax authorities. The records pertaining to the order of compulsory acquisition were, however, produced pursuant to the orders of this court, and this court perused the same. 18. In the first writ petition, it is alleged that the petitioner had availed of credit facility of Rs. 15 lakhs from Karnani Finance Enterprises Ltd. in 1986 and the said premises had been offered to Karnani Finance Enterprises Ltd. as collateral security for the said credit facility. The Income-tax Department misconstrued the collateral security arrangement as a sale and took possession of the said premises by purporting to exercise right of pre-emption. 19. The aforesaid allegation contradicts the petitioner's own statement in Form 37-I filed in terms of section 269UC(1) of the Income-tax Act, and cannot, therefore, be accepted. 20. Mr. Abhrajit Mitra, learned counsel appearing on behalf of the petitioner, emphatically argued that the impugned order of compulsory acquisition dated Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f there was any dispute as to the title to receive the consideration, the Central Government was required to deposit the amount of consideration with the Appropriate Authority within the aforesaid period of one month. 28 . Mr. Mitra referred to section 269UH of the Income-tax Act which provides that if the Central Government fails to tender under sub-section (1) of section 269UG or deposit under sub-section (2) or sub-section (3) of the said section, the whole or any part of the amount of consideration required to be tendered or deposited, thereunder within the period specified therein, in respect of any immovable property which had vested in the Central Government, the order to purchase the immovable property, made by the Central Government would stand abrogated and the immovable property would stand revested in the transferor. Mr. Mitra argued that upon expiry of one month from August 14, 2001, the order of compulsory acquisition lapsed and the said premises revested in the petitioner. 29. In support of his submission that the order of compulsory acquisition had lapsed and or stood abrogated, Mr. Mitra cited the judgments of the Supreme Court in Chand V. Raheja v. Union o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement, is the apparent consideration. 34. In the instant case, the said premises was agreed to be sold at a consideration of Rs. 18 lakhs as per the declaration made by petitioner No. 1 and Karnani Finance Enterprises Ltd. in the statement in Form 37-I. 35. As observed above, pursuant to the orders of this court, the records pertaining to the order of compulsory acquisition were produced. In the statutory statement filed in Form 37-I under section 269UC of the Income-tax Act read with rule 48L of the Income-tax Rules, petitioner No. 1 and Karnani Finance Enterprises Ltd. declared that the consideration was Rs.18 lakhs. The area of the said premises was shown as approximately 6000 sq. ft. 36. Under section 269UF, the Central Government was obliged to pay by way of consideration an amount equal to the amount of the apparent consideration. There is no infirmity in law in taking Rs. 18 lakhs as the apparent consideration on the basis of the statutory statement filed by petitioner No. 1 and/or its authorised representative. On the other hand, the concerned authorities were obliged to accept the consideration shown in the statement in Form 37-I as the apparent conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contemporaneous correspondence does not show that the point that the consideration was not tendered to the petitioner had ever been taken at any earlier stage. 42. Mr. Mitra later argued that the cheque was not accepted as the full amount had not been tendered. In any case, even assuming that the petitioner had refused to accept the consideration, the Central Government was obliged to deposit the full amount of consideration with the Appropriate Authority. Unless the full consideration was deposited with the Appropriate Authority, the compulsory acquisition would stand abrogated. 43. The cheque dated September 28, 2001, which was produced in court was issued to petitioner No. 1 by the Appropriate Authority. As rightly pointed out by the learned Additional Solicitor General appearing on behalf of the income-tax authorities and Mr. S. N. Mookherjee, appearing on behalf of the purchasers, the cheque could be issued by the Appropriate Authority, obviously because the entire amount had been deposited with the Appropriate Authority. 44. Under section 269UG(1), the full consideration has to be tendered within a period of one month from the end of the month in which the immova ..... X X X X Extracts X X X X X X X X Extracts X X X X
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