TMI Blog2002 (12) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... rea of about 7,100 sq. mts. and was Jointly owned by one Leila D. Lean and her two sisters. On March 13, 1988, the three owners agreed to sell the entire premises to the appellants. Before the conveyance could be executed, Leila Lean died. The executor named in her will, through a general power of attorney holder, one Sri Arumugham, entered into a fresh agreement with the appellants on April 27, 1989, agreeing to sell Leila Lean's 1/3 undivided share in the property. The two other sisters appointed the appellants as their power of attorney holders. In their capacity as the power of attorney holders the appellants sold demarcated portions of the property to nominees of the appellants by eight separate agreements executed and registered between April 28, 1989 and May 31, 1989. On June 1, 1989, Chapter XX-C of the Act which statutorily provides for the compulsory purchase by the Central Government of immovable properties in certain cases of transfer came into force in the State of Andhra Pradesh. The Chapter was introduced in an effort to curb tax evasion by undervaluation of the property sold. The substance of the provisions of Chapter XX-C which are relevant for the determination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (1) of section 269UD or if the order stands abrogated under section 269UH, "the Appropriate Authority shall issue a certificate of no objection referred to in sub-section (1) or, as the case may be, sub-section (2) and deliver copies thereof to the transferor and the transferee" (section 269UL(3)). On June 15, 1989, the appellants and Sri Armugham, representing the estate of Leila Lean, filed a joint statement under section 269UC in Form No. 37-I which is the prescribed form under the Act in respect of Leila Lean's share in the premises. The consideration for the sale was stated to be Rs. 15,33,333.33. The date of the agreement of transfer was given as March 13, 1988. The Appropriate Authority did not accept the statement. By its order dated August 23, 1989, it refused to act on its basis stating that the statement was premature and invalid because the property belonged to a non-resident and the approval of the Reserve Bank of India was required for alienating the same. According to the appropriate authority, no such approval having been taken the transferor was not empowered to dispose of the property. It was said in the order: "Therefore we are unable to issue e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause against an order for compulsory purchase was to be given under section 269UD(1) to the interested parties. Reasons were also to be recorded by the Appropriate Authority to support its order. Otherwise the order issued under section 269UD(1) was bad in law. However, taking into consideration the laudable object with which Chapter XX-C had been introduced in the Act, this court, inter alia, directed that in all cases where the orders under section 269UD were invalid consequent upon this court's decision, and were the subject matter of challenge in writ proceedings, the statement in Form No. 37-I submitted would be treated as if it were submitted on the date of the disposal of those proceedings and the Appropriate Authority could if it so thought fit issue a show cause notice within a period of two months calculating the commencement of the period under the proviso to section 269UD(1) from that date. It was also made clear that as far as completed transactions were concerned, i.e., where after the order of compulsory purchase under section 269UD(1), possession had been taken and compensation paid and accepted by the owner without protest, nothing said in the judgment would inval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declared the highest bidder of Leila Lean's property at a sum of rupees four crores and five lakhs. Vansh Builders made an application for intervention before this court which was allowed on September 28, 2000. The appellants have challenged the first order of purchase on the ground that although the issue of limitation had been left open by the earlier order of this court disposing of the first writ petition, the Appropriate Authority had failed to consider the issue. According to the appellants, it was settled by this court in Appropriate Authority v. Tanvi Trading and Credits (P.) Ltd. [1991] 191 ITR 307, that the Appropriate Authority was bound to either pass an order for purchase under section 269UD or issue a no-objection certificate under section 269UL. It could not question the title of the vendor. Since it was not in dispute that the Appropriate Authority had done neither within the prescribed period, it is contended by the appellants that the Appropriate Authority could not extend the period of limitation for issuing a compulsory purchase order on such basis. It is contended that merely because a second statement in Form No. 37-I has been filed by the parties beyond tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration money nor paid it to the transferor as required under the provisions of section 269UG and, therefore, in terms of section 269UH, the premises stood re-vested in the transferor. In the light of all these circumstances, it is submitted by the appellants, that the Appropriate Authority should now be directed to issue a "no-objection" under section 269UL(3). The respondents have submitted that it was not open to the appellants to impugn the second purchase order on the ground that the first purchase order had been issued beyond the period of limitation. The respondents say that in their writ petition in challenge to the first order, the appellants had never raised this issue. The issue was raised for the first time in answer to the show cause notice issued prior to the second purchase order. It was also submitted that the Appropriate Authority had considered the issue and had negatived it. According to the respondents, the appellants had accepted the order of the Appropriate Authority which had "filed" the first statement in Form No. 37-I holding that it was premature and invalid. They had acted on that order and submitted the second statement without protest. The resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven up the argument that the property had been "transferred" to them within the meaning of section 2(47) of the Income-tax Act prior to the coming into force of Chapter XX-C. This had been recorded by the High Court. Documents on record as well as the finding of the Appropriate Authority were referred to to show that the appellants' had not in fact taken possession of Leila Lean's share pursuant to the agreement of sale dated March 13, 1988. They had entered into possession of the demarcated portions of Leila Lean's sisters' property after the eight sale deeds had been executed by the appellants on behalf the sisters and had never taken possession of Leila Lean's share. Finally, on the question of valuation, it is stated that the Appropriate Authority had considered the material on record which clearly showed that the consideration which the appellants had agreed to pay to Leila Lean or her representative did not represent the true market value of the property either in 1988 or in 1989 when the fresh agreement for sale was entered into between the executor of Leila Lean's estate and the appellants. We are of the opinion that the respondents' submissions are entirely acceptable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated August 23, 1989, on the file of the first respondent herein be and hereby quashed". There is no appeal from this order. If the first purchase order has been set aside without protest, the appellants' present grievance that the first purchase order is otherwise invalid is ill founded. C.B. Gautam's case [1993] 199 ITR 530 directive that the statements in Form No. 37-I were to be deemed to have been filed on the date of the disposal of pending writ petitions did not make a distinction between the orders under section 269UD(1) which were invalid because of non-compliance with natural justice alone and those which were also otherwise assailable. Having quashed the purchase order, the High Court had also directed, as has been quoted above, that the Form No. 37-I filed by the appellants would be deemed to have been filed as on that date. No doubt, the High Court records that the deeming fiction as to the date of the filing of the statement was without prejudice to the appellant's contention that the first purchase order was passed beyond the period of limitation. However, in preserving the appellants' right, the High Court directed the Appropriate Authority to determine the conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was in fact demarcated as recorded in the order under section 269UD(1). The reason why the share of Leila Lean has been mentioned as undivided in the agreement of sale dated March 13, 1988, has been explained by the appellants themselves in the eight sale deeds executed by them between April and May, 1989 as: "Though the property had already been divided equally among the three sisters through an oral partition and share of each sister was delineated in the plan, as the agreement holders wanted to buy the entire said property for re development, all the three sisters executed a single agreement of sale." In other words, the oral partition had taken place before the agreement of sale. For the Appropriate Authority to have issued the purchase order in respect of the undivided share, in these circumstances, would mean not only the disruption of the established state of fact but also a reopening of the appellants' title to the divided portions of the premises which had been purchased by them or by their nominees. In any event, it does not lie in the appellants' mouths to contend in the face of these facts that Leila Lean's share was at any material time in fact undivided. The fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vendee". In other words, the appellants or their nominees who were the purchasers of the property conveyed took possession of demarcated portions of the premises pursuant to the eight deeds of sale and not prior thereto. There is no such document which would show that the appellants had ever taken possession of Leila Lean's share. Besides the question is essentially one of fact and the High Court expressly records that: "Although a contention has been raised in the writ petition that the agreement was given effect to and the transferees were put in possession even before the date Chapter XX-C was made applicable to the State of Andhra Pradesh, the same has not been pursued before us." Having given up the case before the High Court, the appellants cannot be permitted to reopen the issue at this stage. On the question of valuation, the Appropriate Authority has in great detail considered the several instances of the sale which had taken place on or about the time that the agreement of sale was executed on March 31, 1988. Apart from the sale instances, the location of the property, its frontage and accessibility were considered by the Appropriate Authority which after physical i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
