TMI Blog2000 (5) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... challenging rejection of Form No. 37-I by the appropriate authority. The High Court by its impugned judgment allowed the petitions, set aside the orders of the appropriate authority and requiring it to take a fresh decision in each of the cases in accordance with law and keeping in view the principles laid by the High Court in its judgment. Aggrieved, the appropriate authority has filed 11 appeals. DLF Universal Ltd. (for short, "DLF"), has also filed one appeal. It is aggrieved by that portion of the judgment of the High Court where the High Court said "no objection by the appropriate authority based on an agreement for transfer of property which is to be constructed cannot be utilised for procuring a deed for transfer of that property which has been constructed". To understand the controversy between the parties and findings arrived at by the High Court, we may examine the facts in two cases, one pertaining to DLF and the other to Ansal Properties and Industries Ltd. (for short, "Ansal"). Both DLF and Ansal are engaged in the business of developing and dealing in real estate, constructing multistoreyed buildings and selling or letting them. Ansal floated a scheme which was wide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls of accommodation, mode of payments as and when construction progressed and in the table for office use in the application for allotment, details of the price, etc., were all mentioned including the initial payment received on making of the application. A more detailed agreement called the "Apartment Buyers' Agreement" was then entered into on January 2, 1998. By this time, some payments towards construction of Richmond apartments had already been made by Mrs. Singh. On January 30, 1998, statement in Form No. 37-I was filed by DLF and Mrs. Singh before the appropriate authority. A notice under section 269UC(4) of the Act was issued by the appropriate authority to both DLF and Mrs. Singh on April 2/3, 1998, requiring them to remove certain defects within 15 days failing which it was intimated that Form No. 37-I shall be deemed not to have been furnished. DLF sent their reply on April 13, 1998. giving the relevant information. However, by order dated April 30, 1998, passed under section 269UC(4) of the Act the appropriate authority held as under : "It is the considered view of the appropriate authority that the transaction would fall into sub-clause (ii) of clause (d) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property revests in the transferor as provided under section 269UH. Section 269UK provides that after Form No. 37-I has been filed the agreement for transfer could not be revoked or altered. Section 269UL places restrictions on the registering authority from registering a deed of transfer of immovable property unless no objection certificate has been issued by the appropriate authority. When an order for purchase of any immovable property by the Central Government is made, the transferor is indemnified from any claim that the transferee may have against him under the agreement for transfer (section 269UM). If we concentrate on the relevant provisions of Chapter XX-C as applicable in the present appeals, it will be seen that immovable property means any right in or with respect to any building or part of a building which is yet to be constructed, which right accrues or arises from any transaction including that by way of any agreement or any arrangement of whatever nature or being a transaction by way of sale, exchange or lease of such building or part of a building. "Transfer" in relation thereto means the doing of anything including by way of an agreement or arrangement which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansfer cannot be altered unless of course no order has been made by the appropriate authority for purchase of the immovable property by the Central Government or the order if any made stands abrogated under sub-section (1) of section 269UH. Any transfer of immovable property made in contravention thereof shall be void. The registering officer under the Registration Act, 1908, is forbidden to register any document for transfer of immovable property unless a certificate from the appropriate authority that it has no objection to the transfer of such immovable property is furnished. There is also a prohibition on any person from doing any act which has the effect of transferring any immovable property unless the appropriate authority certifies that there is no objection thereto, In case no order for purchase by the Central Government is made by the appropriate authority or its order stands abrogated, it shall issue a certificate of no objection for transfer of the property. Where an order for the purchase of immovable property by the Central Government is made no claim by the transferee shall lie against the transferor by reason of such transfer not being in accordance with the agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made available with precision because the form is being filed with a view to secure NOC for a 'transfer in contemplation'. (v) A delay in filing Form No. 37-I is not a defect. The period of 15 days prescribed by rule 48L is directory and not mandatory. (vi) The period of 15 days is to be calculated from the date of entering into the pro forma agreement in Form No. 37-I and not from the date of any other preceding private agreement between the parties. (vii) If there are agreements more than one entered into between the parties, then it is the latest of the agreements which supersedes the earlier ones which has to accompany Form No. 37-I when filing before the appropriate authority. Other agreements if relevant may be looked into by the appropriate authority. (viii) A defect contemplated by section 269UC(4) is one which is capable of being cured. (ix) The stage for entering into the statutory agreement or pro forma agreement in Form No. 37-I arises when the parties are ready to make available all the particulars contemplated by several clauses of Form No. 37-I consistently with the nature of the property. The date of entering into the pro forma agreement must have proximit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished under section 269UC. Reference to this statement is certainly to Form No. 37-I. It would mean that the agreement for transfer can be changed by the parties but they have been forbidden from doing so after statement in Form No. 37-I has been furnished. We have, therefore, to give appropriate meaning to the term "agreement for transfer" appearing in clause (c) of sub-rule (2) of rule 48L and cannot just adopt literal meaning. Foundation for exercise of jurisdiction by the appropriate authority under section 269UD is the statement in Form No. 37-I and not agreement for transfer. In C. B. Gautam v. Union of India [1993] 199 ITR 530, reference was made to an earlier decision by this court in the case of K. P. Varghese v. ITO [1981] 131 ITR 597, where the following passage was quoted with approval : "The court observed that the task of interpretation of a statutory enactment is not a mechanical task. The famous words of Judge Learned Hand of the United States of America that '... it is true that the words used even in their literal sense are the primary and ordinarily the most reliable source of interpreting the meaning of any writing : be it a statute, a contract or anyth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the prohibition of section 6 of the Tamil Nadu Urban Land Ceiling Act the agreement dated September 7, 1995, to transfer the entire land, including the excess vacant land shall be deemed to be null and void and in that view of the matter, the appropriate authority could not effectively exercise its powers with regard to pre-emptive right to purchase the subject property. This court referred to its earlier decision in Appropriate Authority v. Tanvi Trading and Credits P. Ltd. [1991] 191 ITR 307 (SC), which approved the decision of the Delhi High Court (see [1991] 188 ITR 625) as follows : "Sub-section (4) was inserted in section 269UC by the Finance Act, 1995, with effect from July 1, 1995. Section 269UC, as it stood before the said amendment of 1995, came up for consideration before the various High Courts. In Tanvi Trading and Credits P. Ltd. v. Appropriate Authority [1991] 188 ITR 623, a Division Bench of the Delhi High Court has considered the provisions contained in sections 269UC, 269UD and 269UL of the Income-tax Act. It has been held that the only right which section 269UD of the Act confers on the appropriate authority is to enable it to make an order for purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the further period which is given by the appropriate authority. A defect regarding the legality and validity of the agreement which renders the agreement void and unenforceable cannot be rectified. Since a defect which cannot be rectified was not within the contemplation of the Legislature in enacting sub-section (4) of section 269UC a defect regarding the legality or validity of the agreement would not fall within the ambit of the said provision. The objects and reasons of the Bill which was enacted as Finance Act, 1995, also do not give an indication that by inserting sub-section (4) in section 269UC Parliament intended to confer a power on the appropriate authority to go into the legality or validity of the agreement." Now the appropriate authority is obliged to give an opportunity to the parties to rectify the defects, if any, in Form No. 37-I within a period of 15 days or such extended period as the appropriate authority may allow. If we consider section 269UC(4) vis-a-vis rule 48L, the scenario or setting is rather incongruous. If statement in Form No. 37-I has no defect, rule 48L mandates that it should be filed within 15 days, but if it is defective, then an opportuni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... XX-C do not require the parties to enter into more than one agreement for transfer. It is on the basis of the terms of that agreement for transfer, which is reduced into writing in the shape of Form No. 37-I that the appropriate authority has to make up its mind to pass an order under section 269UD. These provisions do not contemplate filing of more than one form No. 37-I and grant of more than one no objection certificate by the appropriate authority. We, may in this connection refer to sub-sections (6) and (7) of section 269UE. Immovable property, subject-matter of transfer, is of the nature referred to in sub-clause (ii) of clause (d) of section 269UA and when an order is made under section 269UD with respect to that property, it shall place the Central Government in the same position in relation to such right as the person in whom such a right would have continued to vest if such order had not been made. The whole agreement for transfer and Form No. 37-I are before the appropriate authority. It has to make up its mind once and for all whether to pass an order under section 269UD or not. If not, it is bound to grant no objection certificate as required by section 269UL. We do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 per cent. or more, it may draw a presumption that this undervaluation has been done with a view to evading tax. While examining the statement in Form No. 37-I this object has to be kept in view by the appropriate authority. It cannot act in a mechanical fashion and pass its order on irrelevant considerations. Sub-section (4) of section 269UC is not a device for the appropriate authority to raise irrelevant considerations ignoring the very object of Chapter XX-C. Paras. 12 and 13 of Form No. 37-I cannot be said to be relevant in the present cases. We, therefore, fail to understand as to what prevented the appropriate authority from exercising jurisdiction under section 269UD. In the view which we have taken of rule 48L, there is no delay in the submission of statement in Form No. 37-I in any of the cases. Thus, taking note of all the relevant considerations, we are of the opinion that the appropriate authority was not correct in passing orders that the statement in Form No. 37-I was deemed never to have furnished, thus, creating a stalemate for sale of the flats which have by now been built but could not be transferred. The High Court by its impugned judgment allowed the writ p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o grant no objection certificate, were quashed and directions were issued to the appropriate authority that the no objection certificate under section 269UL(3) of the Act in respect of the transfer of the premises in terms of the agreement between the parties be issued. In Murlidhar Ratanlal Exports Ltd. v. Appropriate Authority [2000] 243 ITR 752 (Cal) (Appex.) the High Court was considering an appeal against the order of the learned single judge in Digvijay Cements Co. Ltd. v. Appropriate Authority [1999] 235 ITR 725 (Cal). Here the agreement of sale was dated March 7, 1994, By insertion (sic) of section 269UL,, the appropriate authority treated the Form No. 37-I as non est. The only question before the High Court was as to whether upon the submission of Form No. 37-I, the appropriate authority had any option to pass an order, the like of which it has done in the present case. In other words, under the scheme of Chapter XX-C, particularly with reference to sections 269UC, 269UD and 269UL read with section 276AB, whether the appropriate authority is legally bound and obliged upon submission of Form No. 37-1 only to pass an order either granting "no-objection" certificate to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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