9911796707
TMI Blog1997 (4) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Thus, the 40 per cent. of Alok Kumar Chamaria's undivided interest in the disputed property was leased out to Lipton India Limited. On February 2, 1979, Alok Kumar Chamaria transferred undivided 10 per cent. of his right, title and interest of the said property to his wife, i.e., respondent No. 3. On April 26, 1979, and June 1, 1983, Alok Kr. Chamaria by two separate documents transferred his undivided 40 per cent. right, title and interest in question to M/s. Parijat Investment Limited, i.e., respondent No. 2. On January 6, 1989, a form, i.e., 37-I was filed under section 269UC of the Income-tax Act, 1961, read with rule 48L of the Income-tax Rules before the appropriate authority. That form was signed by Lipton India Limited, Alok Kr. Chamaria, Smt. Prativa Chamaria and Parijat Investment Limited as transferors and Consolidated Consultancy Services Private Limited as the transferee in respect of the disputed premises, i.e., No. 9, Weston Street, Calcutta. There was one agreement for head lease between Alok Kr. Chamaria, Smt. Prativa Chamaria, Parijat Investment Limited and Consolidated Consultancy Services Private Limited intending to transfer the lessors' interest for Rs. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned judge, XIII Bench, City Civil Court, Calcutta, after hearing the submissions of both the parties, granted an injunction as prayed for by his order No. 16, dated February 20, 1990, which is the subject-matter of challenge in the present appeal. It was submitted by Mr. Pal, learned senior counsel appearing on behalf of the defendant-appellants that the absence of prior permission granted by the lessor in favour of the Union of India would not affect the right of the income-tax authorities to transfer the property by the auction sale, as in view of the provisions of section 269UE(1) of the Income-tax Act, as it stood on the date of publication of the notification for such auction sale in the daily newspaper on August 19, 1989, the property in respect of which an order was made under section 269UE(1) of the Act, had vested with the Government "free from all encumbrances". The effect of an order made by the authority under section 269UD(1) of the Income-tax Act is contained in section 269UE(1) of the Act. According to the provisions of the said section 269UE(1) of the Income-tax Act, as it stood on the date of the disputed notification of auction sale of the property in quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghts. It is well known that a property may be heavily encumbered and its value can be considerably depressed if it were sold subject to encumbrances. It is equally well known that a property in respect of which there is a subsisting lease for a substantial period of time would fetch a comparatively low price because the purchase thereof would not carry with it the right to possession or occupation during the subsistence of the leasehold interests. In such cases, the amount of apparent consideration could be even less than the value of the encumbrances or the leasehold interests. An order for compulsory purchase in such cases would necessarily result in gross injustice to the encumbrance holder or the lessees and in their being deprived of their rights without their being in any way involved in the attempt at tax evasion. It, therefore, appears to us difficult to uphold the last part of sub-section (1) of section 269UE in so far as it provides that the property in respect of which an order under sub-section (1) of section 269UE is made shall vest in the Central Government free of all encumbrances. In our opinion, the expression 'free of all encumbrances' is liable to be struck down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember 29, 1973, are binding on the Central Government concisely, the income-tax authority. Therefore, if the said authority intends to transfer the disputed property, i.e., the leasehold interest it must take prior consent of the lessor, i.e., the plaintiff-respondent No. 1. An argument is made in the alternative by the learned advocate for the defendant-appellants that mere publication of a notice of auction sale in the daily newspaper does not amount to actual transfer and as such, if prior permission is necessary to be taken, from the lessor, it should be taken before the finalisation of the transaction of the transfer/sale. After a careful consideration of the submissions made above, we also cannot disagree with the alternative submission to this extent that mere publication of a notice of auction sale does not mean the actual sale. Sale is a form of contract and every contract consists of two parts--one is the offer and the other is the acceptance. The publication of the notice of auction sale in the daily newspaper giving out the description of the properties as well as the expected price is a process calling for offers of price for the property-in-question from the inten ..... X X X X Extracts X X X X X X X X Extracts X X X X
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