2012 (9) TMI 576 - HC - Income Tax

Writ petition Re-vesting of property in hand of transferor u/s 269UH - The order u/s 269UD came on April 28 1993 pursuant to which the subject land stood vested in the Central Government - Writ petition filed by person who was already have an agreement with owner of land No stay had been granted by the Bombay High Court till August 1993 - Consideration was not tendered upto the date of dismissal of Writ petition by HC on Sep 20 2005 Present Writ Petition was filed on Nov. 1 2006 challenging on the basis of that CG had not tendered the amount of apparent consideration by the date fixed by section 269UG HC did not provide any interim relief to respondent Held that - Sec. 269UG the amount of consideration was required to be tendered within a period of one month from the end of the month in which order of such vesting took place i.e. by end of May 1993. The writ petition file was dismissed on Sep 20 2005 after which there was no reason for the CG not to tender the amount. The present petition came to be filed on or about November 1 2006 and no interim relief has been granted therein. However till date even in the year 2012 the consideration payable in accordance with the provisions of Sec 269UF has not been tendered to the petitioners. On account of failure on the part of the respondents to tender the amount of consideration payable u/s 269UF the order dated April 28 1993 stands abrogated in view of the mandatory provision of Sec 269UG(1) and the Central Government stands divested of the title which was vested in it as in accordance with Sec. 269UH. Decision in favour of assessee

Issues Involved:
1. Delay and laches in filing the petition.
2. Abrogation of the order under section 269UD(1) due to non-payment of consideration under section 269UG.

Detailed Analysis:

1. Delay and Laches in Filing the Petition:
The respondents contended that the petitioners were not initially aggrieved by the order dated April 28, 1993, under section 269UD(1) and did not challenge it in a timely manner. The petitioners only challenged the order after the dismissal of the writ petition filed by M/s. Ellora Constructions and the passing of the order dated October 14, 2005. The respondents argued that the petition should be dismissed due to delay and laches.

However, the court noted that the petitioners had filed a civil application for condoning the delay in challenging the orders. This application was allowed on April 16, 2007, after hearing the parties, and notice was issued on the petition on May 10, 2007. Consequently, the court held that the issue of delay had already been decided and could not be re-agitated by the respondents.

2. Abrogation of the Order under Section 269UD(1) Due to Non-Payment of Consideration under Section 269UG:
The petitioners argued that the Central Government was required to tender the amount of consideration within one month from the end of the month in which the property vested in the Central Government, as per section 269UG of the Act. The order under section 269UD(1) was made on April 28, 1993, and the consideration was required to be paid by the end of May 1993. However, no payment was made to date. The petitioners contended that the purchase order stood abrogated under section 269UH due to the non-payment of consideration within the stipulated time.

The respondents argued that the period for tendering the consideration ceased to operate once M/s. Ellora Constructions filed a writ petition, and the proceedings were stayed by the Bombay High Court. They contended that there was no limitation for tendering the consideration thereafter.

The court examined the facts and noted that the consideration was not paid within the prescribed period under section 269UG. Even though the Bombay High Court granted interim relief on August 11, 1993, staying the execution and operation of the order dated April 28, 1993, there was no stay order from April 28, 1993, to August 11, 1993. Therefore, the respondents were not restrained from complying with section 269UG during that period. Additionally, even after the dismissal of the writ petition on September 20, 2005, the respondents did not tender the consideration.

The court referred to the Supreme Court's decision in Dr. A. K. Garg [2002] 256 ITR 660 (SC), which held that the failure to tender the amount of consideration within the stipulated period results in the abrogation of the purchase order under section 269UH. The court also cited the decision in Hotel Mardias P. Ltd. v. Union of India [1996] 220 ITR 94 (Guj), which emphasized the mandatory nature of the provisions of section 269UG.

Based on these principles, the court concluded that the order dated April 28, 1993, under section 269UD(1) stood abrogated due to the failure to tender the consideration within the stipulated period. Consequently, the Central Government was divested of the title, and the subject land was retransferred to the petitioners.

Conclusion:
The petition was allowed, and the impugned orders dated April 28, 1993, and October 14, 2005, were quashed and set aside. The court held that the order under section 269UD(1) stood abrogated due to the non-payment of consideration within the stipulated period, and the subject land was retransferred to the petitioners. The rule was made absolute with no order as to costs.

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