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TMI Blog1995 (11) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... lieve that the apparent consideration was less than the fair market value of the property and a reference was, therefore, made to the Valuation Officer, Chandigarh, to determine the said value of the property so transferred. As per his report, the fair market value was Rs. 1,28,750. On receipt of this report, the competent authority initiated proceedings for acquiring the aforesaid property and accordingly notice under section 269D(1) of the Act was sent on July 26, 1973, for publication in the Official Gazette. It was published on August 11, 1973. A copy of that notice was served on the transferor and the transferee on July 30, 1973, and a copy thereof was also pasted on a conspicuous part of the property on August 20, 1973. The transferor and the transferee filed their objections on September 10, 1973, and October 5, 1973, respectively, and after hearing the parties, the competent authority made an order dated March 30, 1978, for acquisition of the property. It is common ground between the parties that the aforesaid shop-cum-flat had been rented out to Kesar Singh Lamba and Sons on a monthly rent of Rs. 400 and that a rent note dated March 1, 1973, was executed between the landlo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson aggrieved by the non-service of the individual notice under section 269D(2) of the Act upon him who can make a grievance thereof. Consequently, the transferor and the transferee who had been validly served in the present case could not assail the acquisition proceedings on the ground of non-service of notice on the tenant of the property and the finding recorded by the Tribunal to that effect will have to be set aside. However, we propose to uphold the order of the Tribunal on another ground that was raised before it but left undecided in view of the fact that the Tribunal had agreed with the contention of the appellants before it that the mandatory provisions of section 269D(2) of the Act had not been complied with. It was contended before the Tribunal on behalf of the transferor and the transferee that the notice under section 269D(2) of the Act was served on them before its publication in the Official Gazette, that is, before the proceedings for acquisition were initiated and, therefore, all subsequent proceedings leading to the passing of the order of acquisition must be set aside. On a consideration of the provisions of section 269D of the Act, the Tribunal took the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) cause a notice under sub-section (1) in respect of any immovable property to be served on the transferor, the transferee, the person in occupation of the property, if the transferee is not in occupation thereof, and on every person whom the competent authority knows to be interested in the property ; (b) cause such notice to be published-- (i) in his office by affixing a copy thereof in a conspicuous place ; (ii) in the locality in which the immovable property to which it relates is situate, by affixing a copy thereof in a conspicuous part of the property and also by making known in such manner as may be prescribed the substance of such notice at convenient places in the said locality." A perusal of the aforesaid provisions would show that before the competent authority can proceed to acquire the property under Chapter XX-A of the Act, it is necessary to first initiate the proceedings for acquisition under section 269D(1) and this can be done by a notice to that effect published in the Official Gazette. It is only on the publication of this notice that the proceedings get validly initiated and it is thereafter that the competent authority is required to serve a copy of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The question that now arises is as to whether a notice served on the transferor or the transferee before the initiation of proceedings would invalidate the acquisition proceedings including the order of acquisition. The argument of Mr. Sawhney, appearing for the Revenue, is that service of a notice on the transferor or the transferee before its publication in the Official Gazette under sub-section (1) was a mere irregularity and it would not vitiate the proceedings commenced by the competent authority. He submitted that the purpose of such a notice was only to put the transferor and the transferee on guard and to inform them that the competent authority had decided to initiate the proceedings for acquisition of the property in question. Reliance in this regard was placed on the observations of the Full Bench of this court in Amrit Sports Industries case [1983] 144 ITR 113 and also on the judgments of the Karnataka High Court in A. Premchand v. IAC of I. T. [1985] 153 ITR 774 and B. M. Marappa v. IAC of I. T. [1986] 160 ITR 642. As already observed earlier, the proceedings for acquisition have first to be validly Initiated before any of the persons mentioned in sub-section (2) of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings once validly done. Therefore, a default in service of the persons interested or even of publication under sub-section 2(b) does not affect the jurisdiction of the competent authority but at the very highest pertains to the exercise of the power thereunder. It is well-settled that an erroneous exercise of the power does not vitiate the proceedings, but merely calls for correction, be it in the appellate, revisional or any other jurisdiction." In our opinion, the Full Bench in Amrit Sports Industries' case [1983] 144 ITR 113 (P & H) did not hold that even where the notice is served under sub-section (2) prior to its publication under sub-section (1), the error committed by the competent authority is only procedural and not jurisdictional. Such a defect is one of jurisdiction and the competent authority cannot proceed to make an order acquiring the property. We do not, therefore, in all respect agree with the view taken by the Karnataka High Court in A. Premchand's case [1983] 153 ITR 774. and B. M. Marappa's case [1986] 160 ITR 642 (Kar). In B. M. Marappa's case [1986] 160 ITR 642, the Karnataka High Court reiterated its earlier view while placing reliance on A. Premchand's ..... X X X X Extracts X X X X X X X X Extracts X X X X
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