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TMI Blog2016 (6) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the value using the cost inflation index the price of the property in 2013 would be ₹ 5.07 crores. Further using the cost inflation index the original sale consideration worked out to ₹ 2.04 crore in 2013. It is mentioned that the present value on balance consideration using the cost inflation index worked out to ₹ 4,48,65,348. It is further pointed out that a re-auction is required to discover the current market price. Lastly a reference is made to the terms and conditions in terms of which the CCIT has a right to reject any bid. Reference is also made to Clause 15 of the terms and conditions of the auction under which a bidder is required to pay 25% of the bid amount, i.e. ₹ 35 lakh, within thirty days, i.e. by 16th March, 1995. The CCIT concludes that the earnest money ought to be refunded to the Petitioners in terms of Clause 11 of the terms and conditions of the auction. The only relief that can be granted to the Petitioners is to direct the ITD to return the earnest money to the Petitioners forthwith and in any event not later than four weeks from today. However, considering that the Petitioners' bid was rejected only in 2013, nearly 18 years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50 lakh and in acceptance thereof he had paid ₹ 3 lakh to Smt. Vidyawati. 4. However with Smt. Vidyawati again defaulting in performing her obligation to sell the rear portion, Mr. Raghbir Singh filed Suit No. 1209/1993 in this Court praying for a perpetual and mandatory injunction. A settlement was entered into between the parties in the pending suit in terms of which Smt. Vidyawati agreed to sell the entire property to Mr. Raghbir Singh for ₹ 56.50 lakh subject to adjustment of ₹ 9.25 lakh already paid by Mr. Raghbir Singh. By an order dated 4th March 1994, the parties were directed by the Court to obtain clearances from the Land and Development Officer (L DO) and the ITD. Application before the Appropriate Authority 5. In terms of the above order Mr. Raghbir Singh filed an application on 20th May, 1994, before Respondent No.4 under Chapter XX-C of the Income Tax Act, 1961 ('the Act') in Form No. 37-I seeking clearance for the purchase of the property in question along with the Agreement to Sell dated 10th May, 1994. Meanwhile an appeal filed by Smt. Vidyawati was dismissed by the Division Bench of this Court on 28th April, 1994. In the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the Division Bench in the said writ petition on 14th February, 1995 directing inter alia that the sale shall not be confirmed and possession shall not be handed over without further orders from this Court. 10. The Petitioners herein participated in the auction held on 15th February 1995 and offered the highest bid of ₹ 1.4 crores which was well above the reserve price of ₹ 65 lakhs. In compliance with the terms of the auction, the Petitioners deposited ₹ 16.50 lakh being 25% of the reserved price as earnest money. By a letter dated 16th February 1995, the CCIT informed the Standing Counsel that the Petitioners were the highest bidders and had deposited the earnest money. He was requested to bring the above facts to the notice of the High Court and make a request for orders that the bid may be confirmed. It was added that it was only after the bid was confirmed that the ITD would seek the balance amount of ₹ 1,23,50,000 from the Petitioners. 11. Meanwhile, the Petitioners filed CM No. 5410/1995 in the pending WP (C) No. 524/1995, seeking intervention. According to the Petitioners despite requesting Respondent No.4 to communicate to them the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority for the time gap of 14 months and for FAR is that they are too high or unrealistic, but it can never be said that such adjustments cannot at all be made; Therefore, even if there is some excessiveness in making such adjustments which may merit some moderation/reduction, still the gap of 30.48% is too large to be bridged. There is no plausible explanation for such a large gap. We do not see on what basis or material it is contended by the petitioner that the whole gap of 30.48% would get wiped out or shortened to less than 15% even if some downward adjustment is required to be made for the time gap and FAR. We are, therefore, unable to hold that the allegations of under-statement of the sale consideration has been successfully rebutted by the petitioner. 13. The order dated 26th August, 1994 passed by Respondent No.4 under Section 269 UD (1) of the Act was upheld and the writ petition was dismissed. The interim orders were vacated. 14. Thereafter on 21st May, 2012, the Petitioners wrote to Respondent No.4 seeking a convenient date on which the execution of sale deed in favour of the Petitioners upon payment of the balance consideration could be completed. However, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id letter was annexed as Annexure P-1. In the said letter, the Petitioners pointed out that despite a lapse of more than 9 years the sale deed in respect of the property in question had not been executed in their favour. They had also been deprived of their money for all this period. The Petitioners stated We are unable to wait any more and are making this representation for refund of the payment of ₹ 16.25 lacs along with interest @ 12% per annum with effect from 15th February, 1995 till realisation. Rejoinder of the Petitioners 18. In the rejoinder filed by the Petitioners, as regards letter dated 11th October 2004, it is stated that the Petitioners had expressed displeasure over the sale not being confirmed and the property in question not being transferred in their favour despite a lapse of more than 9 years and, therefore, the Petitioners had conditionally offered that the earnest money deposited be refunded with interest in view of continuing lapses of the Respondents. It is pointed out that the said letter was discussed in the order dated 4th August, 2011 in W.P.(C) 524/1995 whereby the Court granted liberty to the Respondents to refund the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. Accordingly the bid of the Petitioners was rejected and it was directed that the earnest money of ₹ 16.25 lakh deposited should be refunded to them in terms of Clause 11 of the terms and conditions of sale by auction. 22. With a view to challenging the aforementioned order dated 4th October, 2013, the Petitioners filed CM No. 17081/2013 seeking permission to amend the present writ petition. This application was allowed by the Court by the order dated 19th December, 2013. Thereafter the amended writ petition was filed. By order dated 18th March, 2014 in CM No. 3657/2014, the Court directed that the Respondents should not take any action or steps towards parting with the possession of or selling the property in question. 23. During the hearing of this petition on 7th April 2016, an offer was made by the Petitioners to pay ₹ 5 crore in addition to the sum already deposited with the ITD. The Court then recorded the submission of Mr. Dileep Shivpuri, learned Senior Standing Counsel for the Revenue, that he would place the above offer the CCIT and revert on the next date. 24. At the hearing on 16th May 2016, the Court was informed that the above offer was not ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B). Mr. Shivpuri submitted that the current market value of the property in question was such that it would be unconscionable to allow the sale to be confirmed in favour of the Petitioners on the basis of the bid offered by them more than 21 years ago. Analysis and reasons 28. Some of the undisputed facts are that the Petitioners were the successful bidders at the public auction held on 15th February 1995 for sale of the property in question. The bid offered by them in the sum of ₹ 1.40 crore was far higher than the reserve price of ₹ 65 lakh. Secondly, in compliance with the terms and conditions of the auction, the Petitioners deposited, way back on 15th February 1995, a sum of ₹ 16.25 lakh constituting 25% of the reserve price. The third factor is that the Petitioners went before the authorities and then came to this Court expressing willingness to tender the balance sum of ₹ 1,23,75,000/-. It is only on account of the pendency of the writ petition by Mr. Raghbir Singh, being CWP No. 524/1995, that the sale was unable to be confirmed in their favour. As pointed out by Mr. Sethi, the ITD filed CM No. 1466/1995 in CWP No. 524/1995, seeking order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCC 477 , in which the Supreme Court disapproved an order of the High Court which had issued a direction which virtually amounted to confirmation of the auction, which according to the Supreme Court was not the function of the High Court. 29.4 The Supreme Court in U.P. Avas Evam Vikas Parishad (supra) held that in the absence of acceptance of the bid, there was no concluded contract in respect of the plot in question. It proceeded to explain the legal position as under: 28. .so long as an order regarding final acceptance of the bid had not been passed by the Chairman of the Housing Board, the highest bidder acquire no vested right to have the auction concluded in his favour and the auction proceedings could always be cancelled. Other relevant decisions 30. In Gulmarg Restaurant v. Delhi Development Authority (supra), a Division Bench this Court referred to the decision in DDA v. Ravindra Mohan Aggarwal AIR 1999 SC 1256 , where the Supreme Court held that the initial acceptance of the bid and the deposit of 25% of the bid amount did not constitute transfer of property and that DDA could not be compelled to finalise and deliver possession to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serves the right to reject any bid, including the highest bid without assigning any reason. In such an event, the money already paid will be refunded to the intending purchaser without any Interest, unless the same is forfeited because of the reasons mentioned in para 9 above. 12. The successful bidder shall submit a duly filled In application in the attached form Immediately after the close of the auction of the property in question. 13. The successful bidder whose bid has been accepted shall immediately pay as earnest money a sum equivalent to 25% of the Reserve Price by A/C Payee Bank Draft in favour of the Zonal Accounts Officer, New Delhi drawn on any Scheduled Bank in Delhi/New Delhi on the property being knocked down in his favour in the auction. He should confirm in writing and under his signature that he has purchased the property in the auction on the terms and conditions of sale mentioned herein. 14. Subject to the terms hereof, Twenty five per cent of the bid amount will have to be paid within 7 days of the auction and when the bid is accepted by the Chief Commissioner of Income-tax II, New Delhi, the intending purchaser shall be informed of such accep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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