Rajiv D. Bhatia and Another vs Appropriate Authority and Others

J.P. Devadhar, J.—This petition is filed to challenge the order dated 23-2-1993, passed by the Appropriate Authority u/s 269UD(1) of the Income Tax Act, 1961 ("the Act" for short) whereby Flat No. 47 on the sixth floor of the building C.C.I. Chambers situated at Dinshaw Vachha Road, Mumbai ("the flat in question" for short) is sought to be compulsorily purchased under the provisions of Chapter XX-C of the Act.

The flat in question was initially tenanted by Dilip Bhatia and Laxmikant Bhatia. Later on the said flat was converted into ownership flat for which both contributed for the consideration payable to the society. Thus, according to the petition, both the persons had 50 per cent share in the flat in question.

However, on the death of Laxmikant Bhatia, his wife Damayanti (respondent No. 5), without the consent of the petitioners, purported to sell the flat in question to one Vijay Tulsidas Gandhi for a sum of Rs. 60,00,000 as per the memorandum of understanding (MoU) dated 28-11-1989. In Form No. 37-I filed under the provisions of Chapter XX-C of the Act, it was specifically stated that the petitioners are in possession of the premises in question. On a notice issued by the Appropriate Authority, the petitioners came to know the transaction which Damayanti Bhatia had entered into on 28-11-1989 for sale of the flat in question. The petitioners thereupon filed a suit in the Bombay High Court being Suit No. 442 of 1990, inter alia, seeking a declaration that the petitioners have 50 per cent share in the flat in question and also for a declaration that the MoU dated 28-11-1989 is null and void.

By an order dated 1-2-1990, the Appropriate Authority purported to purchase the flat in question under Chapter XX-C of the said Act., Challenging the said order, the petitioners filed Writ Petn. No. 441 of 1990 in this Court. By an order dated 16-1-1992, the said writ petition was allowed by setting aside the purchase order dated 1-2-1990 and the matter was remitted for de novo consideration in the light of the decision of the Apex Court in the case of C.B. Gautam Vs. Union of India and Others,

Thereafter, the Appropriate Authority issued fresh show cause notice and passed the impugned order on 23-2-1993, for compulsory purchase of the flat. Challenging the aforesaid order, the present petition is filed.

Although, Mr, Irani, learned Counsel appearing on behalf of the petitioners had sought to advance various submissions, in our opinion, this petition is liable to be allowed on the first ground itself. The first ground is that the purchase order dated 23-2-1993, itself specifically states that the said order would be subject to the outcome of the pending Suit No. 442 of 1990.

Suit No. 442 of 1990 was filed by Dilip Bhatia, seeking a declaration that he is the co-owner of the flat in question to the extent of 50 per cent. In the said suit, notice of motion was taken out seeking certain reliefs which were not granted by the learned Single Judge. Thereupon, an appeal was filed by Shri Dilip Bhatia, wherein consent terms were filed. On the basis of the consent terms, the suit was decreed on 27-6-1994, thereby confirming that Dilip Bhaia was the co-owner of the flat in question to the extent of 50 per cent.

It is not in dispute that the Appropriate Authority was a party to the proceedings in Suit No. 442 of 1990 and that the Appropriate Authority has not objected to the decree being passed in terms of the consent terms.

Once it is accepted that Damayanti Bhatia, wife of Laxmikant Bhatia, had only 50 per cent share in the flat in question, she had no right to sell off the entire flat in question.

We have perused various documents annexed to the petition in order to satisfy ourselves that the decree in terms of the consent terms was not obtained fraudulently. From the documents annexed to the petition, it is clear that Dilip Bhatia had 50 per cent share in the flat in question and the consent terms were arrived at after hotly contesting the matter and after paying 50 per cent of the amount which Mrs. Damayanti Bhatia was entitled to under the MoU.

Therefore, in the facts of the present case, Dilip Bhatia, who claims to be the co-owner of the flat in question, was admittedly in possession of the flat in question on the date on which Damayanti Bhatia, having 50 per cent share in the flat in question had purported to sell the flat in question. Since Damayanti Bhatia had no right to sell the flat in question without the consent of Dilip Bhatia, and as per the consent decree it is established that she had only 50 per cent share in the flat in question, the purported sale by Damayanti was invalid and consequently the purchase order passed by the Appropriate Authority on. 23-2-1993 cannot be sustained.

Accordingly, the petition succeeds. Impugned order dated 23-2-1993, passed by the Appropriate Authority is quashed and set aside. Rule is made absolute in the above terms with no order as to costs.