TMI Blog1996 (8) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Authority (hereinafter referred to as "NOIDA") on a lease of 99 years for a premium of Rs. 73,937.50, by lease deed dated October 29, 1981. She entered into an agreement with the petitioner on May 7, 1994, to sell her rights in the said plot for a consideration of Rs. 14,90,000. A sum of Rs. 1,60,000 was paid by way of earnest money and the balance was to be paid at the time of the execution of the sale deed that was to be executed on or before August 30, 1994. According to the terms of the agreement to sell, all transfer charges to be charged by NOIDA were to be paid by the purchaser, that is, the petitioner. The transfer charges payable to NOIDA were 25 per cent. of the difference between the premium paid by the original lessee and the sale consideration. The petitioner and respondent No. 3 jointly filed a return in Form No. 37-I before the appropriate authority and the appropriate authority by the impugned order, decided to purchase the said property for the Union of India. That order is challenged in the present writ petition. In a lengthy petition, several grounds, including the one about the constitutional validity of the provisions contained in Chapter XX-C of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roverted by the respondents, who, in their counter-affidavit, have stated that the valuation has been done according to the standard practice. We may begin from the last contention. The agreement to sell is dated May 7, 1994, and the sale deed was to be executed on or before August 30, 1994. The apparent consideration has been defined in section 269UA(b) of the Act which provides that 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 this behalf. Fifteen per, cent. is the rate of interest prescribed for the purpose of discounting under this section and it is in accordance with this provision of law that the discounting for determining the apparent consideration has been done. The discounting is thus in accordance with the statutory provisions, the validity of which is now not open to question. This point, therefore, has no force and fails. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the permission for the transfer of the property from NOIDA in favour of the transferee. The appropriate authority in its impugned order has not mentioned how the Valuation Officer determined the sale consideration of the land of plot No. A-8. No details in this regard have been mentioned and no copy of the valuer's report has been annexed to the counter-affidavit. On the other hand, the petitioner with his rejoinder affidavit has filed what he describes as the copy of the valuation report supplied to him. This so-called valuation report merely contains a chart mentioning three properties, namely, C-51, A-8 and C-54 of sector 14, NOIDA. In respect of plot No. A-8, this chart mentions the value of the building at Rs. 24,78,500 and that of the land at Rs. 19,21,500. There are no details about the nature of the building and the type of materials used and one wonders how the total consideration of Rs. 44,00,000 could be bifurcated in two sums aforesaid. Learned counsel for the petitioner also contended that the appropriate authority did not collect any exemplar in respect of smaller plots in which the total sale consideration was less than Rs. 10,00,000 and that such examplars could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... increase in the value of the demised building, that is, the difference between the premium paid and the market value of the demised premises at the time of the transfer shall be paid by the lessee to the lessor at the time of the transfer. Thus, the lessee, respondent No. 3, was, before the transfer of the property in favour of the petitioner, to pay the difference that came to about Rs. 3,55,000. Clause 9 of the agreement to sell between the petitioner and respondent No. 3 provided that the transfer charges that shall be charged by the NOIDA in respect of the transfer of the said property shall be paid by the vendee, namely, the petitioner. This was over and above the consideration of Rs. 14,90,000 payable to the vendor. Thus, the agreement to purchase was with an additional liability of about Rs. 3,50,000 to be paid to the owner of the land, namely, NOIDA, as a consideration for permission to transfer the leasehold rights. The appropriate authority has not taken this into account at all although the agreement to sell was before it. In the examplar, that is, the sale instance of plot No. A-8, the vendor had, as mentioned in the sale deed, already obtained the permission of NOID ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the sum of about Rs. 70,000 paid by respondent No. 3 as the price from Rs. 17,82,000 and deducting from the remainder 25 per cent. thereof as unearned increase. Therefore, determining the fair market value of the property, according to the terms at which the vendor wanted to sell it, it cannot be said that the fair market value of the property, that is, plot No. B-70, was, in any way, more than the apparent consideration. The finding to the contrary arrived at by the appropriate authority is, in our view, perfunctory and perverse and cannot be sustained. We hold that it was not established that the fair market value of the land was in excess of the apparent sale consideration and, therefore, the appropriate authority had no jurisdiction to order the purchase of the property in question under section 269UD of the Act. Learned counsel for the respondents contended that the petitioner who agreed to purchase the property in question has no right to maintain this petition and challenge the order of purchase passed by the appropriate authority under section 269UD. He placed reliance on a judgment of the Karnataka High Court in Rajata Trust v. Chief CIT [1992] 193 ITR 220 in which it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ives at an agreement with the vendor and usually pays a substantial amount as earnest money is left entirely to lose. The provisions of the Act do not even contain a provision that the earnest money paid by him to the vendor would be returned to him by the State and adjusted towards the sale consideration payable to the owner. Therefore, a buyer is a person who is interested in the property and sub-section (1A) as inserted by the Finance Act, 1993, with effect from November 17, 1992, makes this all the more clear. Sub-section (1A) stands as under: "Before making an order under sub-section (1), the appropriate authority shall give a reasonable opportunity of being heard to the transferee, the person in occupation of the immovable property if the transferee is not in occupation of the property, the transferee and to every other person whom the appropriate authority knows to be interested in the property." By this provision a purchaser has been given a right to contest the proceedings before the appropriate authority and it would be anomalous that a person who has a right to contest the proceedings before the appropriate authority has no right to challenge that order before a High ..... X X X X Extracts X X X X X X X X Extracts X X X X
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