1991 (10) TMI 30 - HC - Income Tax

Summary

Issues Involved:

1. Non-deposit of sale consideration by Muthulakshmi Achi.
2. Best price for the estate.
3. Bar under the Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978.
4. Non-impleading of the official assignee.
5. Validity of court's power to order sale and issue sale certificate.
6. Concealment of identity by Muthulakshmi Achi.

Issue-wise Detailed Analysis:

1. Non-deposit of Sale Consideration by Muthulakshmi Achi:
The appellant argued that Muthulakshmi Achi did not deposit the sale consideration as directed in the order dated June 28, 1978. Consequently, she is not entitled to enforce the sale. However, Muthulakshmi Achi contended that she is prepared to deposit the entire amount of Rs. 4,50,000 and take the sale certificate without insisting on the clearance certificate from the Urban Land Ceiling authorities.

2. Best Price for the Estate:
The first defendant/applicant argued that the court must ensure the best price for the estate. He offered Rs. 10 lakhs for the house, which is significantly higher than the Rs. 3,85,000 offered by Muthulakshmi Achi. The appellant contended that the original offer was grossly inadequate and detrimental to the estate.

3. Bar under the Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978:
The appellant argued that since Muthulakshmi Achi was willing to purchase only the house and not the vacant site due to potential legal issues under the Act, the sale should not be confirmed in her favor. The court noted that the strenuous efforts by the Advocate-Commissioner to get clearance from the Urban Land Ceiling authorities ended in failure.

4. Non-impleading of the Official Assignee:
The appellant contended that the order dated June 28, 1978, was passed without impleading the official assignee, who represented the estate of the first defendant, then declared insolvent. This omission violated the principles of natural justice, as the official assignee was not given an opportunity to be heard.

5. Validity of Court's Power to Order Sale and Issue Sale Certificate:
The court examined whether it had the inherent power to order the sale of immovable property and issue a sale certificate. The court referred to the provisions of Orders 21 and 39 of the Code of Civil Procedure and concluded that these provisions do not apply to the sale of property in partition actions. The court also referenced Section 2 of the Partition Act, which allows for the sale of property if it cannot be conveniently divided. The court determined that it did not have the power to order the sale through the Advocate-Commissioner and that all proceedings and orders related to the sale were void ab initio.

6. Concealment of Identity by Muthulakshmi Achi:
The appellant contended that Muthulakshmi Achi was not a bona fide third-party purchaser but the wife of the third defendant. This fact was concealed by her describing herself as the daughter of "so and so" in all material records. The court found that this concealment was a deliberate attempt to retain the properties within the family and circumvent the provisions of the Act.

Conclusion:
The court concluded that it did not have the jurisdiction to order the sale of immovable property through the Advocate-Commissioner and issue a sale certificate. All proceedings and orders related to the sale were declared void. The court also noted that the concealment of identity by Muthulakshmi Achi was a significant factor. The court directed that Muthulakshmi Achi be compensated for the amount deposited with a reasonable rate of interest, to be adjusted in the final decree proceedings. The appeal was disposed of accordingly, with no order as to costs.