TMI Blog1990 (5) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... nk of India for securing loans and advances for the purposes of its business. The petitioner No. 1 company is stated to be a sick industrial unit within the meaning of the Sick Industrial Companies (Special Provisions) Act of 1985. It is claimed that the Industrial Reconstruction Bank of India prepared a rehabilitation scheme for the revival of the company which was modified by the Board of Industrial and Financial Reconstruction. The draft scheme envisaged huge cost of modernisation and the means of finance proposed in the said scheme included, inter alia, a sum of Rs. 17 lakhs to be realised on the sale of the aforesaid premises and a portion of the property at Titagarh. The petitioners have stated in detail in the writ petition that the aforesaid scheme further stipulated that the State Bank of India would give necessary permission for sale of the said premises and the portion of the property at Titagarh and for utilisation of the sale proceeds towards meeting a part of the cost of the said scheme. It is asserted that the scheme further provided that the State of West Bengal will also give the necessary permission for sale of the said properties and utilisation of the sale proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly stated that the company had already obtained a no objection certificate from the Competent Authority under the 1976 Act to any construction upon the said land. It is also disclosed in the writ petition that, on March 7, 1989, the company and the transferee filed Form No. 37-I before respondent No. 1, the Appropriate Authority, in respect of the said agreement dated February 27, 1989. On May 9, 1989, the petitioner-company is alleged to have received an order dated May 2, 1989, passed by respondent No. 1 and, in the said purported order, it was alleged that the statement in Form No. 37-I was premature and invalid and there was no question of acting upon it in any manner and the same was filed as such. It was pointed out in the said order that although a "no objection" certificate was obtained by the company for construction of the said premises, there was still a possibility that ultimate permission will be withdrawn by the Competent Authority and, in that case, the provisions of sections 6 to 14 of the 1976 Act would immediately come into play. The petitioners challenged the said order claiming it to be wholly illegal, invalid and without or in excess of jurisdiction. Consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proposed transfer was null and void in view of the provisions of section 5(3) of the Urban Land Ceiling Act. It was recorded that although the application was made under the Urban Land Ceiling Act, no exemption was, however, allowed and even if any such exemption was granted, the excess vacant land could be used only for industrial purposes and not for the purposes of sale. It is placed on record also that on March 7, 1989, the same parties who filed Form No. 37-1 on September 5, 1988, again filed another Form No. 37-1 purporting to transfer the very same property, viz., No. 2, Burdwan Road, Calcutta, and for the very same consideration, viz., Rs. 65 lakhs. The appropriate authority considered the matter and again came to the conclusion that the statement in Form No. 37-1 was premature and invalid and the question of acting on such Form No. 37-1 did not arise. Respondent No. 1, however, held that the transferor-company was permitted to contract subject to the provisions of section 22 of the Urban Land Ceiling Act and, if the Competent Authority under the Urban Land Ceiling Act was not satisfied, they might withhold the permission to retain the land in excess of the said limit an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the absence of the Competent Authority under the Urban Land (Ceiling and Regulation) Act, 1976, and the State Bank of India, the present writ petition ought not to be decided and the same may be dismissed in limine. It is also contended that the first Form No. 37-I was filed by Kelvin Jute Co. Ltd. as transferor and Granito Ceramics P. Ltd. as transferee whereby the transferor intended to transfer No. 3, Burdwan Road, Calcutta, for a consideration of Rs. 65 lakhs under an agreement dated September 1, 1988. The prayer was rejected by order dated November 25, 1988, as it was found premature. The second application has been filed and the same is wholly misconceived. He has drawn the attention of the court to the fact that, under section 269UC(3), Income-tax Act, inter alia, requires Form No. 37-I to be filed within such time as may be prescribed. Rule 48L(2)(b) of the Income-tax Rules provides that Form No. 37-I should be filed before the expiry of 15 days from the date on which the agreement for transfer is entered into. According to Dr. Pal, the second agreement dated February 22, 1989, is verbatim the same as the first agreement and an attempt is being made to circumvent the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l for the proper and effectual performance of the work which the statute has in contemplation may be implied. The rule of prohibition by necessary implication to such implied power could be applied only where a specified procedure is laid down for the performance of duty and there is an express prohibition. Dr. Pal had drawn the attention of the court to the decision in J. K. Cotton Spinning and Weaving Mills Co. Ltd. v. State of Uttar Pradesh [1960-611 19 FJR 436 (SC) ; AIR 1961 SC 1170, Assistant Collector of Central Excise v. National Tobacco Co. of India Ltd., AIR 1972 SC 2563; [1973] Tax LR 1607 (SC), CIT v. Shahzada Nand and Sons [1966] 60 ITR 392 (SC), ITO v. M. K. Mohammed Kunhi [1969] 71 ITR 815 (SC). It is emphasized that the Urban Land (Ceiling and Regulation) Act, 1976, is a special Act and non-compliance with the said special Act will vest the property in the State Government and as a result thereof, the transferor has no right to transfer the property and, consequently, the Central Government cannot purchase the property. The determination of this question is implicit in the provision of Chapter XXC. Mr. B. N. Sen and Mr. R. N. Bajoria, learned lawyers appearing f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alf of the other parties. Sub-section (3) provides that every statement referred to in subsection (2) shall, (i) be in the prescribed form ; (ii) set forth such particulars as may be prescribed and (iii) be verified in the prescribed manner, and shall be furnished to the appropriate authority in such manner and within such time as may be prescribed by each of the parties to such transaction or by any of the parties to such transaction acting on behalf of himself and on behalf of the other parties. Looking further, it appears that, under section 269UD, the appropriate authority, after the receipt of the statement under sub-section (3) of section 269UC in respect of any immovable property, may, notwithstanding anything contained in any other law or any instrument or any agreement for the time being in force, and for reasons to be recorded in writing, make an order for the purchase by the Central Government of such immovable property for an amount equal to the amount of the apparent consideration. Provided that no such order shall be made in respect of any immovable property after the expiration of the period of 2 (two) months from the end of the month in which the statement ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the existing industry, the impact of sub-section (2) of section 20 upon non-compliance of the essential conditions as incorporated therein. The appropriate authority has mainly considered that since the Urban Land (Ceiling and Regulation) Act has not run its full course, one cannot say with certainty that the property will not be acquired by the State Government. Besides, the transferor, having extensive lands at its factory premises at Titagarh, may choose to surrender the subject property rather than the lands at Titagarh and, consequently, the circumstances do not warrant the consideration of the application under Form No. 37-I and it has been filed on the ground that it is premature. This court had occasion to scrutinize the impugned orders in the background of the facts of the case and the provisions of law as they stand. The law is very clear that no statutory authority can exercise its power by way of surmises and conjectures. It is not permissible in law to conjure up any instance which is likely to happen upon non-fulfilment of certain events. This negative approach is never appreciated by jurisprudence. Under the present concept of law, the prospective transferor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the question of vesting. The appropriate authority also finds difficulty in that, although the petitioner No. 1 is entitled to exemption, the operation of section 20 of the Urban Land (Ceiling and Regulation) Act has not been exhausted. It has also tried to visualise that the properties in question are not ripe and ready for transfer and the consideration. Form No. 37-1 is not an idle formality. The details of the provisions of the Urban Land (Ceiling and Regulation) Act have been considered and, on both the occasions, the appropriate authority found that it is premature to consider the Form No. 37-I in its proper perspective. With great anxiety, this court has gone through the entire background of the case, the scheme to revitalise the sick industry and the agreement for sale to raise the funds for the survival of the industry. Admittedly, scheme has been prepared to which the State Bank of India and the State of West Bengal have given consent. The transferor-company has obtained "no objection" certificate to raise a building upon the land in question at No. 3, Burdwan Road, Calcutta. Admittedly, the petitioner-company has other lands at Titagarh but it has not appreciated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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