9911796707
TMI Blog2000 (5) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... t is aggrieved by that portion of the judgment of the High Court where the High Court said "no objection by the appropriate authority based on an agreement for transfer of property which is to be constructed cannot be utilised for procuring a deed for transfer of that property which has been constructed". To understand the controversy between the parties and findings arrived at by the High Court, we may examine the facts in two cases, one pertaining to DLF and the other to Ansal Properties and Industries Ltd. (for short, "Ansal"). Both DLF and Ansal are engaged in the business of developing and dealing in real estate, constructing multistoreyed buildings and selling or letting them. Ansal floated a scheme which was widely advertised inviting applications from the public for allotment of apartments. In one of the cases the scheme pertained to apartments in "Celebrity Homes". Palam Vihar, Gurgaon. One Mr. Sudarshan Kumar Kohli and his wife, Mrs. Nibha Kohli, applied on July 13, 1995, for booking of an apartment. The application was in the form prescribed by Ansal. The application contains details regarding the apartment number, rates, accommodation available and payment plan. Initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h. On January 30, 1998, statement in Form No. 37-I was filed by DLF and Mrs. Singh before the appropriate authority. A notice under section 269UC(4) of the Act was issued by the appropriate authority to both DLF and Mrs. Singh on April 2/3, 1998, requiring them to remove certain defects within 15 days failing which it was intimated that Form No. 37-I shall be deemed not to have been furnished. DLF sent their reply on April 13, 1998. giving the relevant information. However, by order dated April 30, 1998, passed under section 269UC(4) of the Act the appropriate authority held as under : "It is the considered view of the appropriate authority that the transaction would fall into sub-clause (ii) of clause (d) of section 269UA and once the property is not in existence, only the rights therein can be transferred. Since the major terms and conditions were finalised on the date of hooking/allotment, Form No. 37-I should have been filed within 15 (lays thereof. Since this was not so, the form is treated as belated form. Further in the absence of any power of condonation of delay, the form has to be treated as non-maintainable." This was challenged by DLF by filing a writ petition in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de, the transferor is indemnified from any claim that the transferee may have against him under the agreement for transfer (section 269UM). If we concentrate on the relevant provisions of Chapter XX-C as applicable in the present appeals, it will be seen that immovable property means any right in or with respect to any building or part of a building which is yet to be constructed, which right accrues or arises from any transaction including that by way of any agreement or any arrangement of whatever nature or being a transaction by way of sale, exchange or lease of such building or part of a building. "Transfer" in relation thereto means the doing of anything including by way of an agreement or arrangement which has the effect of transferring or enabling the enjoyment of such immovable property. No transfer of immovable property shall be effected except after an agreement for transfer as defined in clause (a) of section 269UA is entered into between the parties, i.e., the transferor and the transferee at least four months before the intended date of transfer. This is so notwithstanding anything contained in the Transfer of Property Act, 1882, or in any other law. This agreement for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the appropriate authority that it has no objection to the transfer of such immovable property is furnished. There is also a prohibition on any person from doing any act which has the effect of transferring any immovable property unless the appropriate authority certifies that there is no objection thereto, In case no order for purchase by the Central Government is made by the appropriate authority or its order stands abrogated, it shall issue a certificate of no objection for transfer of the property. Where an order for the purchase of immovable property by the Central Government is made no claim by the transferee shall lie against the transferor by reason of such transfer not being in accordance with the agreement for the transfer of immovable property entered into between the parties. There is no dispute that the agreement for transfer, which has been reduced into writing in Form No. 37-I, pertains to immovable property and amounts to transfer of immovable property within the meaning of clauses (d) and (f) of section 269UA. The High Court, after examining the terms of the agreement and the provisions of Chapter XX-C, reached various findings in paragraph 28 of the judgment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements more than one entered into between the parties, then it is the latest of the agreements which supersedes the earlier ones which has to accompany Form No. 37-I when filing before the appropriate authority. Other agreements if relevant may be looked into by the appropriate authority. (viii) A defect contemplated by section 269UC(4) is one which is capable of being cured. (ix) The stage for entering into the statutory agreement or pro forma agreement in Form No. 37-I arises when the parties are ready to make available all the particulars contemplated by several clauses of Form No. 37-I consistently with the nature of the property. The date of entering into the pro forma agreement must have proximity of relationship by time with the proposed transfer of property as defined in clause (f) of section 269UA. The test for determining proximity of relationship is the availability of the property agreed to be transferred in such status in which it is proposed to be transferred. (x) A no objection certificate issued by the appropriate authority based on an agreement for transfer of property to be constructed cannot be utilised for securing registration of property which has been cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opriate authority under section 269UD is the statement in Form No. 37-I and not agreement for transfer. In C. B. Gautam v. Union of India [1993] 199 ITR 530, reference was made to an earlier decision by this court in the case of K. P. Varghese v. ITO [1981] 131 ITR 597, where the following passage was quoted with approval : "The court observed that the task of interpretation of a statutory enactment is not a mechanical task. The famous words of Judge Learned Hand of the United States of America that '... it is true that the words used even in their literal sense are the primary and ordinarily the most reliable source of interpreting the meaning of any writing : be it a statute, a contract or anything else. But it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary ; but to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning' were quoted with approval." It has, therefore, to be held that this term "agreement for transfer" in clause (c) of sub-rule (2) of rule 48L has reference to the statement in Form No. 37-I. The ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 191 ITR 307 (SC), which approved the decision of the Delhi High Court (see [1991] 188 ITR 625) as follows : "Sub-section (4) was inserted in section 269UC by the Finance Act, 1995, with effect from July 1, 1995. Section 269UC, as it stood before the said amendment of 1995, came up for consideration before the various High Courts. In Tanvi Trading and Credits P. Ltd. v. Appropriate Authority [1991] 188 ITR 623, a Division Bench of the Delhi High Court has considered the provisions contained in sections 269UC, 269UD and 269UL of the Income-tax Act. It has been held that the only right which section 269UD of the Act confers on the appropriate authority is to enable it to make an order for purchase of the immovable property at an amount equal to the amount of the apparent consideration and that it does not give jurisdiction to the appropriate authority to adjudicate upon the legality of the transaction which is proposed to be entered into by the applicant and that section 269UD is not concerned with the validity of the sale. According to the said decision of the High Court the only order which can be passed under section 269UD is an order to purchase and no other order and if an order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enacted as Finance Act, 1995, also do not give an indication that by inserting sub-section (4) in section 269UC Parliament intended to confer a power on the appropriate authority to go into the legality or validity of the agreement." Now the appropriate authority is obliged to give an opportunity to the parties to rectify the defects, if any, in Form No. 37-I within a period of 15 days or such extended period as the appropriate authority may allow. If we consider section 269UC(4) vis-a-vis rule 48L, the scenario or setting is rather incongruous. If statement in Form No. 37-I has no defect, rule 48L mandates that it should be filed within 15 days, but if it is defective, then an opportunity can be granted by the appropriate authority under sub-section (4) of section 269UC to correct the mistakes even beyond the period of 15 days after filing of the statement in Form No. 37-I. It would appear that no thought was given to amend clause (c) of sub-rule (2) of rule 48L while inserting sub-section (4) of section 269UC of the Act. It would further appear as rightly held by the High Court that rule 48L is only directory and not mandatory. We may also note the argument of the appropriate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) and (7) of section 269UE. Immovable property, subject-matter of transfer, is of the nature referred to in sub-clause (ii) of clause (d) of section 269UA and when an order is made under section 269UD with respect to that property, it shall place the Central Government in the same position in relation to such right as the person in whom such a right would have continued to vest if such order had not been made. The whole agreement for transfer and Form No. 37-I are before the appropriate authority. It has to make up its mind once and for all whether to pass an order under section 269UD or not. If not, it is bound to grant no objection certificate as required by section 269UL. We do not, therefore, think that the High Court was right in its findings as given in sub-paras (ix) and (x) of para. 28 of its judgment. One of the grounds of rejection of Form No. 37-I was that it did not contain particulars required by paras 12 and 13 given in the form. It must be seen that Form No. 37-I is a composite form used whether the transaction is sale, lease or exchange. It may not, therefore, be necessary that all the paras. are required to be filled in when the transaction is either for sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be said to be relevant in the present cases. We, therefore, fail to understand as to what prevented the appropriate authority from exercising jurisdiction under section 269UD. In the view which we have taken of rule 48L, there is no delay in the submission of statement in Form No. 37-I in any of the cases. Thus, taking note of all the relevant considerations, we are of the opinion that the appropriate authority was not correct in passing orders that the statement in Form No. 37-I was deemed never to have furnished, thus, creating a stalemate for sale of the flats which have by now been built but could not be transferred. The High Court by its impugned judgment allowed the writ petitions and set aside the orders of the appropriate authority, It directed that the appropriate authority shall take decisions afresh in each of the cases in accordance with law and consistently with the principles stated in the judgment which may be done within a period of three months. Since we have not agreed with all the findings of the High Court and, in our opinion, the appropriate authority was not justified in holding that the statement in Form No. 37-I was deemed never to have furnished, the q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 99] 235 ITR 725 (Cal). Here the agreement of sale was dated March 7, 1994, By insertion (sic) of section 269UL,, the appropriate authority treated the Form No. 37-I as non est. The only question before the High Court was as to whether upon the submission of Form No. 37-I, the appropriate authority had any option to pass an order, the like of which it has done in the present case. In other words, under the scheme of Chapter XX-C, particularly with reference to sections 269UC, 269UD and 269UL read with section 276AB, whether the appropriate authority is legally bound and obliged upon submission of Form No. 37-1 only to pass an order either granting "no-objection" certificate to the parties or to direct the pre-emptive purchase of the property in terms of section 269UD, and not to pass any other order whatsoever, In effect and substance, therefore, the appropriate authority has only two options, either to grant a no objection certificate or to invoke section 269UD. The Division Bench noticed that under the agreement for sale, which was on the basis of Form No. 37-I, it was clear that the possession of the property in question was handed over by the vendor to the vendee not in pursuanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
