TMI Blog2001 (7) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of 1,148 square yards with constricted area of 998 square feet on the ground floor, 2,309.13 sq. ft. each on the first and second floors. As the said plot of land is part of the area covered under the Film Nagar Co-operative Housing Society, as per the bye-laws of the said society, the same can be sold only to the members of the said society. As the first petitioner was in need of money for the constriction of a commercial complex at Miryalguda, she has proposed to sell the above property and the second petitioner, who was searching for the purchase of a residential house, has agreed to purchase the same. Accordingly, an agreement of sale, dated September 20, 1999, was entered into between the parties for the sale of property in question for a total consideration of Rs. 70 lakhs and the first petitioner received an amount of Rs. 20 lakhs under the agreement of sale and the balance was agreed to be paid at the time of execution of the sale deed and registration and handing over the possession of the property. As the second petitioner did not own any residential premises, with the permission of the first petitioner, the second petitioner carried out certain alterations to the buil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed the present writ petition. Learned counsel for the petitioners contended that the action of the respondents is illegal and unsustainable. The judgments referred to by the respondents in their communication have no application to the facts of the present case. It is stated that the application in Form No. 37-I was filed as early as on October 11, 1999, along with a copy of the agreement entered into between the petitioners. Thereafter, the members of the first respondent authority have inspected the premises on October 30, 1999 and December 3, 1999, and got the property valued by the Departmental Valuer and issued notice calling for objections for the proposed pre-emptive purchase. The petitioners have also filed objections as against the said show-cause notice for the proposed pre-emptive purchase opposing the proposal. The authorities have to exercise the pre-emptive purchase, if the authorities are of the opinion that the apparent consideration is less than the fair market price by more than 15 per cent. Instead of either exercising the pre-emptive purchase or issuing a no-objection certificate in favour of the petitioners, they resorted to a third course of lodging the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of Chapter XX-C either to issue a no-objection certificate in favour of the petitioners or to exercise the option of pre-emptive purchase in favour of the Government. Be that as it may, however, a counter has been filed by the third respondent denying the allegations of the petitioners. In the counter it is stated that based on the comparative sales, the valuation was determined and it was found that the market value was more than 15 per cent. of the apparent consideration. It is also stated that as per the objections filed by the petitioners through their advocate, it was noticed by the appropriate authority that physical possession of the subject property was handed over by the first petitioner to the second petitioner, which is tantamount to transfer in terms of section 269UA(f) of the Act and therefore such transfer is in violation of section 269UL(2) of the Act. Hence, the petitioners have no right to seek a no-objection certificate under the provisions of the Act. Therefore, the application in Form No. 37-1 was lodged. In the counter it was reiterated that the decisions referred to in the impugned proceedings, squarely applies to the case on hand and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt or any arrangement of whatever nature), not being a transaction by way of sale, exchange or lease of such land, building or part of a building (f) 'transfer' (i) in relation to any immovable property referred to in sub-clause (i) of clause (d), means transfer of such property by way of sale or exchange or lease for a term of not less than twelve years, and includes allowing the possession of such property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882). (ii) in relation to any immovable property of the nature referred to in sub-clause (ii) of clause (d), means the doing of anything (whether by way of admitting as a member of or by way of transfer of shares in a cooperative society or company or other association of persons or by way of any agreement or arrangement or in any other manner whatsoever) which has the effect of transferring or enabling the enjoyment of, such property. 269UC. (1) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4 of 1882), or in any other law for the time being in force, no transfer of any immovable property in such are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmovable property after the expiration of a period of two months from the end of the month in which the statement referred to in section 269UC in respect of such property is received by the appropriate authority : Provided further that where the statement referred to in section 269UC in respect of any immovable property is received by the appropriate authority on or after the 1st day of june, 1993, the provisions of the first proviso shall have effect as if for the words 'two months', the words 'three months' had been substituted : Provided also that the period of limitation referred to in the second proviso shall be reckoned, where any defect as referred to in sub-section (4) of section 269UC has been intimated, with reference to the date of receipt of the rectified statement by the appropriate authority ... 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 in terms of the agreement for transfer referred to in sub-section (1) of section 269UC. 269 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into operation, there is a prohibition for the transfer of immovable property of the value more than Rs. 20 lakhs (originally Rs. 10lakhs) in respect of the properties situated in the city of Hyderabad without obtaining a no-objection certificate from the appropriate authority constituted under the provisions of the Act. In accordance with the procedure prescribed, as soon as the parties enter into an agreement for the sale and purchase, the substance of the said agreement shall be reduced in writing in Form No. 37-I setting forth all the particulars and shall be furnished to the appropriate authority and the agreement shall not be given effect at least for a period of four months from the date of the agreement. Thereafter, the appropriate authority has to consider whether the apparent consideration referred to in the agreement represents the fair market value or whether the apparent consideration is less by more than 15 per cent. of the apparent consideration and in such case the authority may make an order for purchase by the Central Government of such property. The said exercise is to be completed within a period of three months from the end of month in which the statement in F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding. Learned counsel also contended that the property in question is part of a property belonging to the cooperative housing society and as per the bye-laws of the said society there is a restriction to transfer the property to any third parties and a member of the society can alienate the house plot only to the members of the said society. Therefore, there is a limited market to the property in question. Apart from the above, it is contended that the second petitioner, who is the purchaser under the agreement has effected certain additions and alterations in respect of the property in question in order to be in conformity with the vaasthu and the said alterations had cost about Rs.2,55,910 and if the said amount is deducted from the market value arrived at by the Valuation Cell, there is no excess as provided under the Act. Apart from all this, the contention of the petitioners is that after the inspection of the property in question by the members of the first respondent authority, the first respondent authority issued notice calling for objections for the proposed exercise of pre-emptive right to purchase the property in question. To the said show-cause notice, the petitioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld expire by January 31, 2000. But, no such action was taken before the expiry of the abovesaid period and it is only on February 7, 2000, that the second respondent issued a communication to the petitioners, intimating that their application was lodged. The said action of the first respondent authority is clearly in violation of the provisions of the Act. Even if we look into the contents from which the first respondent authority inferred that a transfer has already been effected between the parties, we do not find that possession was delivered, as contemplated under the provisions of the Act in pursuance of an agreement, as contained in section 53A of the Transfer of Property Act. What was stated in the objections filed by the second petitioner was that-"He has requested the vendor to hand over the possession of the house to him to undertake some alterations to suit his requirement. Accordingly, he undertook the following works in the building for shifting his residence to his house for which he entered into an agreement of sale : Rs. (i) Colouring the entire building (inside arid outside) 1,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of possession delivered by the seller to the purchaser. As is evident from the above facts, we do not find that there is any merit in the inference drawn by the first respondent authority that a transfer was effected before making an application in Form No. 37-I and, therefore, the action of the first respondent in lodging the application of the petitioners is proper and just. The first respondent authority also referred to two judgments in its communication dated February 7, 2000. One is the judgment of the Calcutta High Court in the case of Digvijay Cement Co. Ltd. v. Appropriate Authority [1999] 235 ITR 725. A single judge of the Calcutta High Court held that in that case it was an admitted fact that the transferee has already taken possession of a mill, which was an act to be performed under the agreement in question, for which the application had been made in Form No. 37-1. Therefore, the application has been made after the transfer took place. Hence, the appropriate authority was justified in holding the transaction to be null and void. In fact, the said judgment was the subject-matter of a writ appeal and a Division Bench of the same High Court considered and accepted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercising the pre-emptive right after the expiry of the period of three months. Admittedly, in the present case, the first respondent authority did not pass any order of pre-emptive purchase, though it was proposed within the statutory period of three months. Having failed to pass such an order, the option to the first respondent authority is only to issue a no-objection certificate, thereby allowing the first petitioner to sell the property in question to the second petitioner. Instead of doing so, the first respondent authority has resorted to issue a communication stating that the application of the petitioners in Form No. 37-I is lodged. The said action is clearly illegal and unsustainable. Under the above circumstances, the same is quashed. As the statutory period of three months is already over, no purpose would be served by sending the matter to the first respondent. Hence, the first respondent is -directed to issue the no-objection certificate forthwith to the petitioners. Under the above circumstances, the impugned proceeding dated February 7, 2000, is quashed and, consequently, the first respondent is directed to issue the no-objection certificate, as contemplated under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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