Jaipal Jain and Others vs Appropriate Authority and Others

J.P. Devadhar, J.—This petition is filed to challenge the order dated 24-2-1993 passed by the Appropriate Authority u/s 269UD(1) of the Income Tax Act, 1961 (Act for short) for compulsory purchase of the property which is the subject matter of the present petition.

By agreement dated 15-9-1986, the petitioners had agreed to purchase from the vendors a bungalow type residential house in Unit H situated at Dev Park, J.V.P.D. Scheme, Vile Parle (West), Mumbai-40.0049 (the property in question) for a consideration of Rs. 19,11,250.

On 13-10-1986, the petitioner filed a declaration in Form 37EE seeking NOC from the competent authority for purchase of the property in question as per Chapter XX-A of the Act. Notices were issued by the competent authority under Chapter XX-A and ultimately by an order dated 30-12-1992 passed u/s 269F(7) of the Act, it was held that the property in question is not a fit case for acquiring under Chapter XX-A of the Act.

The petitioners, however, as .a matter of abundant caution, had also filed declaration in Form 37-1 on 16-10-1986 seeking approval u/s 269UD(1) of the Act. By an order dated 26-12-1986, the Appropriate Authority directed purchase of the property in question. On a writ petition bearing No. 34 of 1987, filed by the petitioner, the purchase order dated 26-12-1986 was set aside by this Court on 16-12-1992. Thereafter, fresh show-cause notice was issued and by the impugned judgment and order dated 24-2-1993, the Appropriate Authority once again sought to purchase the property in question on the ground that there is undervaluation. Challenging the aforesaid order, present petition is filed.

In the case of Hiten Rashmikant Mehta and Swati Hiten Mehta Vs. Union of India (UOI) and Others, , this Court in a similar case held that the provisions of Chapter XX-A would apply to the transactions entered into prior to 1-10-1986 relating to transfer of immovable property as also transactions where a person acquires any right in or with respect to any building or part of a building by becoming a member or acquiring shares in a co-operative society. In the present case, the agreement in question was entered into on 15-9-1986 i.e. prior to the introduction of Chapter XX-C of the Act, under which the petitioners had acquired right in respect of the property in question. Admittedly, the competent authority under Chapter XX-A has held that the property in question is not a fit case for acquisition u/s 269F(7) of the Act. Thus, the issue raised in this petition is squarely covered by the judgment of this Court in the case of Hiten R. Mehta (supra) against the revenue and, therefore, the impugned order passed under Chapter XX-C of the Act cannot be sustained.

Even otherwise, as held by this Court in the case of Vimal Agarwal Vs. Appropriate Authority and others, an order passed under Chapter XX-C of the Act cannot be sustained, if -the fair market value of the property in question is not determined before deciding to purchase the property compulsorily. Admittedly, in the present case the fair market value of the property in question has not been determined in the order impugned in this petition so as to hold that the transaction is undervalued by 15 per cent of the fair market value of the property in question.

In the result, the impugned order dated 24-2-1993 passed by the Appropriate Authority u/s 269UD(1) of the Act is quashed and set aside. The Appropriate Authority is directed to grant requisite certificate to the petitioner in accordance with law. Rule is made absolute accordingly with no order as to costs.