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TMI Blog2019 (7) TMI 1501X X X X Extracts X X X X X X X X Extracts X X X X ..... pted such proposal under letter dated 15.7.1997 stating that there would be no objection to making such payment if the owner is ready to handover peaceful vacant possession of the land in question. However, nothing materialized out of this correspondence. The concept of revesting of the property in the original owner upon the Department failing to tender or deposit the apparent sale consideration cannot be applied in the present case. We cannot lose sight of the fact that the Department has also contributed substantially to this complication. It is an agreed position that after passing the order u/s 269UG, the Department took no further steps to safeguard its interest in the land. In the property records, there was no indication of the land having vested in the Government. No claim, no charge, no interest of the Government was recorded in the property records. The least that the Department could have done was to have its name entered in the property records. No doubt that the petitioner society or its members do not have any legal title to the land in question. The erstwhile owner upon being divested of his title, could not have passed on any valid title in the developer a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad paid to the owner way back in July 1994. Therefore, if the CBDT accepts the request of the society mentioned in the previous paragraph, from the amount that the society may deposit with the Income Tax Department, the original purchasers and their heirs may be paid over a sum of ₹ 14 Lacs with interest. If the petitioner society does not show willingness to deposit such amount, this attempt to find solution will in any way fail and in such circumstances, out of the amount of ₹ 1.40 Crores deposited by the Government of India with the Appropriate Authority, a sum of ₹ 14 Lacs would be paid over to them with accrued interest. This would be done after due verification of their identity. It would not be necessary to pay any amount to erstwhile owner since he has clearly defrauded the Department as well as indirectly the members of the petitioner society. - WRIT PETITION NO. 1994 OF 2018 - - - Dated:- 23-7-2019 - AKIL KURESHI S.J. KATHAWALLA, JJ. Mr. Sanjeev M. Gorwadkar, Sr. Advocate a/w Mr. Yusuf Baugwala and Gaurav Gangal i/by Ms. Sana Y. Baugwala for the Petitioner Mr. Akhileshkumar Sharma for Respondent No. 1 Mr. Sachin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent paid were indicated in Annexure A to the MOU. The vendor had agreed to sell his right, title and interest in the said property to the purchaser for a total consideration of ₹ 1.40 Crores. ₹ 14 Lacs was paid by way of earnest money at the time of execution of MOU. Remaining sum of ₹ 1.26 Crores would be paid within 30 days from the receipt of 'No Objection Certificate' from the Appropriate Authority under the Act and on providing marketable title and handing over possession of the said land. Paragraph 4 of the MOU envisaged that the purchasers would be put in possession of the property on as is where is basis . But paragraph 5 of the MOU specified that the property was tenanted and it would be the responsibility of the vendor to have the tenants evicted and put the purchasers in possession of the property against the payment of the balance agreed consideration. The original owner, thereafter, applied to the Income Tax Department for necessary 'No Objection' for sale of the land on which the Appropriate Authority passed order dated 21.10.1994 under Section 269UD of the Act. The Authority was of the opinion that the fair market value of the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above petition, on 6.9.2004, the original owner executed an agreement for development (hereinafter referred to as the development agreement ) with M/s. N.I. Developers, a partnership firm. This development agreement was registered on 8.9.2004. Under the agreement, the original owner assigned all his rights in favour of the new purchasers for a sale consideration of Rs. One Crore. The developer would be entitled to take all steps for developing the property. This development agreement, however, does not refer to the previous transaction of agreement to sale in favour of the original purchasers or the proceedings under Chapter XXC of the Act. Keeping total silence about the order passed by the Authority under Section 269UD of the Act and the pending petition filed by the original owner and the erstwhile purchasers before this Court, the said development agreement came to be executed. 7. Acting on the basis of the such development agreement, M/s. N.I. Developers submitted plans for construction of residential building known as New White Rose CHS Ltd before the Municipal authorities. The Authorities approved the plan on or around 8.12.2005. M/s. N.I. Developers enrolled the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for getting its name registered in the property records. The erstwhile owner had executed a registered development agreement in favour of M/s. N.I. Developers who had constructed the building in question. The Department cannot now take a stand that the land having vested in the department, the society acquired no legal title; (ii) That the Department had not paid the apparent sale consideration to the original owner / proposed purchasers and therefore vesting of the land in the Department had not taken place; (iii) That the order passed by the Appropriate Authority under Section 269UD of the Act suffers from various lacuna. The valuation report presented by the original owner was not considered. The fact that the property was tenanted was totally ignored. The valuation of non-comparable properties was cited for coming to the conclusion that fair market value of the property was higher than the apparent sale consideration. 10. On the other hand, the learned counsel for the Income Tax Department opposed the petition contending as under: (i) That the petitioner society has no locus standi to challenge the order passed under Section 269UD of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e opinion that the petitioner has no right to challenge the said order. We may recall the genesis of the said order was an agreement for sale of the said land by the original owner Bhimsen Bhikaji More to three prospective purchasers Mr. Yusuf Mohammed Khan and two others. When this agreement was executed on 18.7.1994, Chapter XXC in the Act was in force. The 'No Objection' from the Income Tax Department was necessary before the sale deed could be executed. The parties to the agreement, therefore, filed necessary documents and declarations before the Income Tax Authorities. On the basis of valuation reports and other relevant material, the Appropriate Authority was of the opinion that the apparent sale consideration of ₹ 1.40 Crore declared in the agreement was substantially lower than the fair market value and the difference between the fair market value and the declared apparent consideration was more than 15%, permitting the Department to exercise powers under Section 269UD of the Act. This order was challenged jointly by the original owner and the prospective purchasers in Writ Petition No. 2475 of 1994. In such petition, the Court had granted injunction restraini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r conotation in legal parlance. Not any or every person who faces adverse consequences of an order or action, can be allowed to question the legality thereof. In order to be able to sustain a legal challenge to an action or an order, the petitioner must have a locus standi which in the present case, we find completely lacking. 13. With this, we may go to the other aspects of the matter namely the petitioner's challenge to the order dated 2.8.2017 passed by the Income Tax Officer calling upon the heirs of the original owner Bhimsen Bhikaji More to provide necessary details of the transactions executed by the said deceased Bhimsen Bhikaji More and further calling upon them to handover peaceful possession of the property in question failing which the Department would initiate further action for eviction. In this context, we may first peruse the legal provisions contained in Chapter XXC of the Act. The said Chapter was inserted by the Finance Act, 1986 w.e.f. 1.10.1986. Section 269UA is a definitions provision containing various definitions for purposes of the said Chapter including 'apparent consideration'. Section 269UB pertains to constitution of an Appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty concerned, the period of limitation referred to in the first and second provisos shall be reckoned with reference to the date of receipt of the statement by the appropriate authority having jurisdiction to make the order under this sub-section : Provided also that the period of limitation referred to in the second proviso shall be reckoned, where any stay has been granted by any court against the passing of an order for the purchase of the immovable property under this Chapter, with reference to the date of vacation of the said stay. (1A) Before making an order under sub-section (1), the appropriate authority shall give a reasonable opportunity of being heard to the transferor, the person in occupation of the immovable property if the transferor is not in occupation of the property, the transferee and to every other person whom the appropriate authority knows to be interested in the property. (1B) Every order made by the appropriate authority under subsection (1) shall specify the grounds on which it is made. (2) The appropriate authority shall cause a copy of its order under sub-section (1) in respect of any immovable property to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any person refuses or fails to comply with the provisions of subsection (2), the appropriate authority or other person duly authorised by it under that sub-section may take possession of the immovable property and may, for that purpose, use such force as may be necessary. (4) Notwithstanding anything contained in sub-section (2), the appropriate authority may, for the purpose of taking possession of any property referred to in sub-section (1), requisition the services of any police officer to assist him and it shall be the duty of such officer to comply with such requisition. (5) For the removal of doubts, it is hereby declared that nothing in this section shall operate to discharge the transferor or any other person (not being the Central Government) from liability in respect of any encumbrances on the property and, notwithstanding anything contained in any other law for the time being in force, such liability may be enforced against the transferor or such other person. (6) Where an order under sub-section (1) of section 269UD is made in respect of an immovable property, being rights of the nature referred to in sub-clause (ii) of clause (d) of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the amount of consideration required to be tendered or deposited thereunder within the period specified therein in respect of any immovable property which has vested in the Central Government under sub-section (1) or, as the case may be, sub-section (6) of section 269UE, the order to purchase the immovable property by the Central Government made under sub-section (1) of section 269UD shall stand abrogated and the immovable property shall stand re-vested in the transferor after the expiry of the aforesaid period : Provided that where any dispute referred to in sub-section (2) or sub-section (3) of section 269UG is pending in any court for decision, the time taken by the court to pass a final order under the said subsections shall be excluded in computing the said period. (2) Where an order made under sub-section (1) of section 269UD is abrogated and the immovable property re-vested in the transferor under sub-section (1), the appropriate authority shall make, as soon as may be, a declaration in writing to this effect and shall- (a) deliver a copy of the declaration to the persons mentioned in sub-section (2) of section 269UD; and (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration to the persons entitled to receive the same and if the same is not accepted, depositing it with the Appropriate Authority which in the present case was done. It is not the case of the petitioner that the original owner and the purchasers had shown willingness to receive the payment. Their action of challenging the order itself was sufficient indication of their unwillingness to receive the same. It is not even the case of the petitioner that the amount was not tendered to them. Relevant provisions of Chapter XXC are sufficiently clear. Under Section 269UE(1) of the Act, upon the Appropriate Authority passing an order under Section 269UD(1), the land would vest in the Government. The question of payment or tendering the sale consideration would arise later. Since the vesting had taken place before payment of sale consideration, the legislature advisedly provided in Section 269UH for revesting of the land in the owner if sale consideration or part thereof was not paid or tendered within the time prescribed. 16. We may also refer to an undated letter received by the Department on 23.6.1997 written by the original owner in which it was stated as under:- We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon the Department failing to tender or deposit the apparent sale consideration cannot be applied in the present case. Learned counsel for Respondent No. 9 who is one of the legal heirs of the original purchasers, however, had objected that the said Writ Petition No. 2475 of 1994 could not have been withdrawn on behalf of the purchasers since his father i.e one of the purchasers had already expired by then. This contention is completely off the mark since for several years after the death of this purchaser who was one of the petitioners of the said petition, his legal heirs were not brought on record. Qua the said petitioner, therefore, the petition had abated. There was no question of unauthorized withdrawal of the petition by the counsel on behalf of the dead person. It was a case where the proceedings qua the deceased had abated. In any case, no such grievance can be examined at his instance in this petition. He is a respondent in this petition and has not asked for any relief. Further, he has not taken any steps to have the order of the dismissal of the petition recalled and the petition revived. 17. The situation, therefore, that has arisen is that the member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the appropriate entries made in the property records, we are of the opinion that some conciliation has to be found. We would, therefore, request the CBDT to sympathetically examine these facts and take appropriate decision in terms of its powers under Section 119(2) of the Act. In the context, we may recall that against the apparent consideration of ₹ 1.40 Crores, according to the Appropriate Authority, the market value as on the date of transaction i.e 18.7.1994 was ₹ 1,74,36,000/- Thus, according to the Department, the property was undervalued by a sum of ₹ 24,36,000/-. In other words, if the Department had auctioned the property soon after it was acquired under Section 269UD of the Act, the Department could have reasonably expected to take an additional sum of ₹ 24,36,000/- over and above the base figure of ₹ 1.40 Crores which would in any case be paid over to the original owner and the prospective purchasers in their respective shares. Thus, the Department would have earned a profit of ₹ 24.36 Lakhs. We have noticed that as per the sale agreement dated 18.7.1994, the purchasers had paid sum of ₹ 14 Lacs to the owner. This amount sha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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