1994 (3) TMI 42 - HC - Income Tax

Appropriate Authority, Auction Sale, Delay In Filing Petition, Earnest Money, Movable Property, Petition Against Order, Purchase Of Immovable Property By Central Government, Supreme Court, Writ Petition

Issues Involved:
1. Opportunity of hearing and principles of natural justice.
2. Requirement of recording and communicating reasons under Section 269UD(1).
3. Allegation of malice in law.
4. Implications of the Supreme Court's decision in C. B. Gautam v. Union of India.
5. Acceptance of money and its impact on the petitioner's claim.
6. Delay, laches, and acquiescence in filing the petition.

Detailed Analysis:

1. Opportunity of Hearing and Principles of Natural Justice:
The petitioners contended that the impugned order was passed without giving them an opportunity of hearing, thereby violating principles of natural justice. This order interfered with their rights under the agreement dated February 22, 1991, adversely affecting their civil rights. The respondents were bound to follow the principles of natural justice.

2. Requirement of Recording and Communicating Reasons Under Section 269UD(1):
The petitioners argued that Section 269UD(1) imposes a statutory obligation to record reasons, which should be part of the order or decision. In this case, the reasons were recorded separately and not communicated to the petitioners, making the operative order violative of natural justice and mandatory provisions.

3. Allegation of Malice in Law:
The petitioners claimed the impugned order suffered from malice in law as the authorities failed to apply their mind to relevant considerations and took into account irrelevant factors.

4. Implications of the Supreme Court's Decision in C. B. Gautam v. Union of India:
The petitioners argued that the Supreme Court's observation in C. B. Gautam v. Union of India should not mean that orders passed in breach of natural justice and statutory provisions should not be set aside. They emphasized that an opportunity of hearing must be given to persons affected by the authority's decision.

5. Acceptance of Money and Its Impact on the Petitioner's Claim:
The petitioners accepted the refund of earnest money from the Department but argued this should not preclude them from challenging the order. They contended that acceptance was not voluntary but due to helplessness, and whether they waived their rights was a factual question requiring pleadings, which were absent.

6. Delay, Laches, and Acquiescence in Filing the Petition:
The respondents argued that the petition should be dismissed due to delay, laches, and acquiescence. The petitioners accepted the earnest money without protest and did not challenge the order until after the Supreme Court's decision in C. B. Gautam. The petitioners also withdrew a previous petition to not interfere with the auction, indicating acceptance of the order.

Judgment Analysis:

Opportunity of Hearing and Principles of Natural Justice:
The court found that the petitioners had accepted the order without any grievance and did not challenge it until much later. The petitioners' conduct of accepting the refund and not challenging the auction indicated they had no initial grievance against the order.

Requirement of Recording and Communicating Reasons:
The court referenced the Supreme Court's decision in C. B. Gautam, which held that reasons must be communicated to the affected party. However, the court noted that the Supreme Court limited the retrospective operation of its judgment to avoid invalidating completed transactions where compensation was accepted without protest.

Allegation of Malice in Law:
The court did not find merit in the petitioners' claim of malice in law, as the petitioners' conduct indicated acceptance of the order.

Implications of the Supreme Court's Decision:
The court held that, per the Supreme Court's directions, completed transactions where compensation was accepted without protest should not be invalidated. The petitioners' acceptance of the refund and non-challenge of the auction aligned with this directive.

Acceptance of Money:
The court found that the petitioners' acceptance of the earnest money without protest and their conduct of withdrawing the petition to allow the auction disentitled them to relief under Article 226 of the Constitution.

Delay, Laches, and Acquiescence:
The court emphasized the significant delay in filing the petition and the petitioners' conduct of accepting the order and refund without protest. The court concluded that the petition was barred by time and the petitioners had acquiesced to the order.

Conclusion:
The petition was rejected on grounds of delay, laches, and acquiescence. The court emphasized that the petitioners' conduct and the Supreme Court's directive in C. B. Gautam precluded setting aside the impugned order. The petitioners' acceptance of the order and refund without protest, along with their delay in filing the petition, disentitled them to any relief. The rule was discharged with costs.

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