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TMI Blog2019 (7) TMI 1501X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of Section 269UE of the Income Tax Act, 1961 ("the Act" for short). The purchaser has challenged an order dated 21.10.1994 passed by the Appropriate Authority under Section 269UD of the Act and further communication dated 2.8.2017 issued by the Appropriate Authority threatening to take forcible possession of the land in question with the assistance of the Police authority. This piquant situation has arisen in following background:- 2. The case has a checkered history. This Writ Petition is a sequel to Writ Petition No. 2475 of 1994 which was filed by erstwhile owner of the land (respondent No. 6 herein) and the proposed purchasers (respondent Nos. 3 to 5 herein). At the outset, we may record that learned counsel for the petitioner had placed before us the complete compilation of the said Writ Petition No. 2475 of 1994 with accompanying documents which are taken on record and marked "X" for identification. We would be referring the facts and documents from the present petition as well as those stated in Writ Petition No. 2475 of 1994 to the extent they are relevant for our purpose. 3. Respondent No. 6 herein was erstwhile owner of the said land. It appears that on the said land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the Appropriate Authority was challenged by the purchases and the original owner jointly before this Court in Writ Petition No. 2475 of 1994 on various grounds. The valuation accepted by the Appropriate Authority was questioned. On this petition, an order came to be passed by the Division Bench on 21.10.1994 granting ad-interim order in terms of prayer clause (c) pending admission. This prayer clause (c) of the petition reads as under:- "(c) Pending the hearing and final disposal of the petition, this Hon'ble Court may be pleased to prohibit and restrain by an order or injunction, the Respondents, their officers and agents from proceeding further by way of taking possession of said property or otherwise in pursuant of the said orders of the first Respondent dated 21.10.1994 and 25.10.1994 being Exhibit 'E' & 'F' respectively. 5. In terms of this interim order, pending final disposal of the petition, thus, the Department was restrained from proceeding further by way of taking possession of the said land pursuant to the order dated 21.10.1994. This petition was admitted and interim order continued. On 14.7.2016, this petition came to be dismissed in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owner were called upon to supply the details of the document executed in favour of M/s. N.I. Developers. The members of the petitioner society in the meantime had purchased the flats and started residing there with their families. They claimed that they were not aware about the past proceedings under the Act. Upon receipt of the said letter, they approached the High Court vide Chamber Summons (L) No. 372 of 2017 for being impleaded as parties. They also moved Notice of Motion (L) No. 659 of 2017 for recall of the order of disposal of Writ Petition No. 2475 of 1994 by order dated 14.7.2016. On 18.11.2017, the Division Bench of this Court disposed of such proceedings in following manner: "Mr. Gorwadkar, learned Senior Counsel appearing in support of the Chamber Summons and the Notices of Motion, seeks to withdraw all the three applications, with liberty to take such proceedings in law as are available to the petitioner. Liberty as prayed for granted. 2. All the applications i.e two Notices of Motion and Chamber Summons are withdrawn with the aforesaid liberty." Thereupon, this independent petition has been filed by the society. 9. In support of the petition, learned counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in question. He had in fact, written a letter to the Income Tax Department in June 1997 agreeing to withdraw the petition before the High Court and to handover peaceful vacant possession to the Department upon releasing of the consideration of Rs. 1.40 Crores. In response to the said letter, the Department had written to the original owner on 15.7.1997 showing its willingness to release the consideration upon the petitioner withdrawing the petition and agreeing to hand over vacant possession. The said original owner did not act on this suggestion. The petitioner cannot make a grievance about non-releasing of the sale consideration which was deposited with the Appropriate Authority as required under the law. 11. Respondent No. 9, one of the heirs of deceased respondent No. 3 - Yusuf Mohammed Khan who was one of the original purchasers had appeared through his Advocate and contended that the original owner had played a fraud on the purchasers also. He contended that his father expired in the year 2005 and therefore, the petition could not have been withdrawn in the year 2016 without the instructions from the legal heirs of the deceased. He pointed out that the original purchaser h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions of the members with subsequent developer namely M/s. N.I. Developers. M/s. N.I. Developers derived his right to develop the property under the MOU executed in its favour by the erstwhile owner on 6.9.2004. When this agreement was being executed, the erstwhile owner of the land had lost his title to the land since by virtue of the order dated 21.10.1994 under Section 269UD of the Act, the land had vested in the Government. The original owner, therefore had no authority to execute the said agreement of development dated 6.9.2004. The development agreement therefore, did not pass on the title in land in favour of M/s. N.I. Developers. The petitioner who claims the title to the land through M/s. N.I. Developers, therefore, cannot step into the shoes of any of the original petitioners of Writ Petition No. 2475 of 1994 so as to sustain the challenge to the impugned order. This is precisely why this Court did not permit the petitioner to revive the said petition which stood dismmissed on the statement of the counsel for the original petitioners. Independently also, the petitioner cannot maintain a stand alone petition. The petitioner not having acquired any title or right in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g contained in any other law or any instrument or any agreement for the time being in force, make an order for the purchase by the Central Government of such immovable property at an amount equal to the amount of apparent consideration : Provided that no such order shall be made in respect of any immovable 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 subsection (4) of section 269UC has been intimated, with reference to the date of receipt of the rectified statement by the appropriate authority : Provided also that in a case where the statement referred to in section 269 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 269UD, is of the opinion that any encumbrance on the property or leasehold interest specified in the aforesaid agreement for transfer is so specified with a view to defeat the provisions of this Chapter, it may, by order, declare such encumbrance or leasehold interest to be void and thereupon the aforesaid property shall vest in the Central Government free from such encumbrance or leasehold interest. (2) The transferor or any other person who may be in possession of the immovable property in respect of which an order under subsection (1) of section 269UD is made, shall surrender or deliver possession thereof to the appropriate authority or any other person duly authorised by the appropriate authority in this behalf within fifteen days of the service of such order on him : Provided that the provisions of this sub-section and sub-sections (3) and (4) shall not apply where the person in possession of the immovable property, in respect of which an order under sub-section (1) of section 269UD is made, is a bona fide holder of any encumbrance on such property or a bona fide lessee of such property, if the said encumbrance or lease has not been declared void under the proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment shall pay, by way of consideration for such purpose, an amount equal to the amount of the apparent consideration. Section 269UG of the Act pertains to payment or deposit of consideration. Under sub-section (1) of Section 269UG of the Act, the amount of consideration payable in accordance with the provisions of section 269UF shall be tendered to the person entitled thereto within a period of one month from the end of the month in which the immovable property vests in the Central Government. Subsection (3) of Section 269UG provides that notwithstanding anything contained in sub-section (1), if the person entitled to the amount of consideration does not consent to receive it, or if there is any dispute as to the title to receive the amount of consideration, the Central Government shall deposit with the Appropriate Authority the amount of consideration required to be tendered under sub-section (1) within the period specified therein. Section 269UH of the Act pertains to revesting of property to the transferor on failure of payment or deposit of consideration and reads as under:- "269UH.(1) If the Central Government fails to tender under subsection (1) of section 269UG or de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed the Writ Petition and challenged the order under Section 269UD(1) itself. The Central Government, therefore, acted in terms of sub-section (2) of Section 269UG and deposited the amount with Appropriate Authority. The petition filed by the erstwhile owner and the proposed purchasers has now come to be dismissed. Thereupon, the interim relief granted against taking possession of the property by the Central Government stood automatically vacated. During pendency of the petition, the erstwhile owner was divested of his title in the land since the land stood vested in the Government. He, therefore, could not have dealt with such property. His action of executing MOU in favour of M/s. N.I. Developers in the year 2004, did not amount to transferring any right, title or interest in the property. Any development carried out by M/s. N.I. Developers pursuant to such MOU on such property was wholly unauthorized. 15. Learned counsel for the petitioner had, however, submitted that since the Government did not pay the apparent sale consideration to the original owner, the land would revest in him. However, this argument cannot be accepted. Firstly because Section 269UG envisages tendering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such proposal under letter dated 15.7.1997 stating that there would be no objection to making such payment if the owner is ready to handover peaceful vacant possession of the land in question. However, nothing materialized out of this correspondence. We do not find that the stand of the Department flowing from the said letter dated 15.7.1997 is in any manner conflicting with the orders passed by the Appropriate Authority. The original owner in the MOU dated 18.7.1994 had agreed to sell the land in question for a consideration of Rs. 1.40 Crores. The agreement showed that the property had several tenants. The owner had undertaken responsibility to vacate such tenants at his own cost, obtain vacant possession of the property and handover the vacant possession to the purchasers. His letter to the Department written in June 1997 was in tune with this agreement. He showed willingness to withdraw the petition and hand over vacant possession if Department released the consideration. Department accepted the proposal as was made by the owner. The concept of revesting of the property in the original owner upon the Department failing to tender or deposit the apparent sale consideration cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered and we are sure, development permission and subsequent permissions would not have been granted by the Municipal Authorities. Thus, it was because the Department did not have its name entered in the property records that the original owner fraudulently and perhaps in connivance with the developer could execute development agreement and the developer could obtain series of permissions from the Municipal Authorities such as development permission, construction commencement, completion and occupation certificates. While passing the final order, therefore, these aspects shall have to be borne in mind. 19. We have, however, no doubt that the petitioner society or its members do not have any legal title to the land in question. The erstwhile owner upon being divested of his title, could not have passed on any valid title in the developer and in turn, the developer could not have passed valid title to the petitioner society. Despite this, particularly looking to the inaction on the part of the Income Tax Department in safeguarding its rights in the property by having the appropriate entries made in the property records, we are of the opinion that some conciliation has to be fou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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