Andhra Pradesh H.C : This writ petition is filed praying for the issue of a writ of mandamus or any other appropriate writ declaring the action of the respondents in not granting a “no objection certificate” pursuant to the joint statement filed in Form No. 37-I of the IT Act, 1961

High Court Of Andhra Pradesh

N. Karuna & Anr. vs. Appropriate Authority & Ors.

Sections 269UA, 269UC, 269UD

S.R. Nayak & S. Ananda Reddy, JJ.

Writ Petn. No. 10690 of 2000

19th July, 2001

Counsel Appeared

B. Vijayasen Reddy, for the Petitioner : J.V. Prasad, for the Respondents

JUDGMENT

S. ANANDA REDDY, J. :

This writ petition is filed praying for the issue of a writ of mandamus or any other appropriate writ declaring the action of the respondents in not granting a “no objection certificate” pursuant to the joint statement filed in Form No. 37-I of the IT Act, 1961, as illegal and arbitrary by setting aside the proceedings dt. 7th Feb., 2000, in Proc. No. AA/BNG/10(44)/1/99-2K, on the file of the second respondent and further direct the respondents to forthwith grant a no objection certificate to the petitioners.

2. The facts leading to the filing of this writ petition may briefly be stated as under : The writ petitioners are two in number. The first petitioner is the owner and possessor of the immovable house property, bearing No. 8-2- 293/82/F/46 of Film Nagar Co-operative Housing Society Ltd. situated in Jubilee Hills, Hyderabad. The said property is in an extent of 1,148 sq. yds. with constructed area of 998 sq. ft. on the ground floor, 2,309.13 sq.ft. each on the first and second floors. As the said plot of land is part of the area covered under the Film Nagar Co- operative Housing Society, as per the bye-laws of the said society, the same can be sold only to the members of the said society. As the first petitioner was in need of money for the construction of a commercial complex at Miryalguda, she has proposed to sell the above property and the second petitioner, who was searching for the purchase of a residential house, has agreed to purchase the same. Accordingly, an agreement of sale, dt. 20th Sept., 1999, was entered into between the parties for the sale of property in question for a total consideration of Rs. 70 lakhs and the first petitioner received an amount of Rs. 20 lakhs under the agreement of sale and the balance was agreed to be paid at the time of execution of the sale deed and registration and handing over the possession of the property. As the second petitioner did not own any residential premises, with the permission of the first petitioner, the second petitioner carried out certain alterations to the building in question.

It is stated that in pursuance of the statement filed in Form No. 37-I under Chapter XX-C of the IT Act, 1961 (hereinafter referred to as “the Act”), for the grant of a no-objection certificate from the first respondent, the members of the first respondent-Appropriate Authority have inspected the property on 30th Oct., 1999, and 3rd Dec., 1999. Thereafter basing on the valuation by the Departmental Valuer, the first respondent felt that the apparent consideration disclosed in the agreement as well as in Form No. 37-I is less than the fair market value by more than 15 per cent, therefore, it issued notices dt. 20th Dec., 1999, to the petitioners calling for objections under s. 269UC of the Act, initiating proceedings for pre-emptive purchase in exercise of the powers conferred on the first respondent. Both the petitioners filed objections, objecting to the valuation as well as to the proposed pre- emptive purchase on 6th Jan., 2000. In the objections it was also stated that certain additions and alterations were made by the second petitioner after entering into the agreement of sale, as he was in a hurry to complete the transaction and further in conformity with the requirements of vaasthu. Therefore, it is stated that the valuation fixed by the Departmental Valuation cell has to be reduced to the extent of the said additions or alterations made by the second petitioner to the property in question. The petitioners have also filed objections as to the valuation, as the same is based on the comparative sales of vacant sites and not buildings, stating that a vacant site would fetch a higher value than that of the site with building. Thereafter, the petitioners did not receive any further proceedings from the first respondent. But, however, a communication was sent by the second respondent dt. 7th Feb., 2000, intimating the petitioners that the application filed by them for issue of a no-objection certificate was lodged, as according to the first-respondent, the ratio of the judgment in the case of Rajasthan Patrika Ltd. vs. Union of India (1994) 121 CTR (Raj) 255 : (1995) 213 ITR 443 (Raj) : TC S3.186 and Digvijay Cement Co. Ltd. vs. Appropriate Authority (2000) 158 CTR (Cal) 448 : (1999) 235 ITR 725 (Cal), squarely applies to the petitioners’ case. Hence, no further action is required and the application is lodged. Assailing the said action of the respondents, the petitioners have filed the present writ petition.

Learned counsel for the petitioners contended that the action of the respondents is illegal and unsustainable. The judgments referred to by the respondents in their communication have no application to the facts of the present case. It is stated that the application in Form No. 37-I was filed as early as on 11th Oct., 1999, along with a copy of the agreement entered into between the petitioners. Thereafter, the members of the first respondent authority have inspected the premises on 30th Oct., 1999 and 3rd Dec., 1999, and got the property valued by the Departmental Valuer and issued notice calling for objections for the proposed pre-emptive purchase. The petitioners have also filed objections as against the said show-cause notice for the proposed pre-emptive purchase opposing the proposal. The authorities have to exercise the pre-emptive purchase, if the authorities are of the opinion that the apparent consideration is less than the fair market price by more than 15 per cent. Instead of either exercising the pre-emptive purchase or issuing a no-objection certificate in favour of the petitioners, they resorted to a third course of lodging the application, which is not contemplated under the provisions of the Act. It is stated that the authorities under the provisions of the Act have to pass an order exercising the pre-emptive purchase within a period of three months. The respondents having allowed the period of three months to expire without exercising the pre-emptive right to purchase, have to issue a no-objection certificate. If the respondents want to exercise their powers under the provisions of the Act, they are under a statutory obligation to exercise such powers within the period stipulated under the provisions of the Act. Having lost such power by not exercising the same within the period prescribed under the Act, the impugned proceedings communicated to the petitioners dt. 7th Feb., 2000 are illegal and without jurisdiction. Learned counsel also contended that the first petitioner permitted the second petitioner to carry out certain alterations, in view of the urgency for the second petitioner to occupy the premises. But such permissive action of the second petitioner would not amount to giving possession of the property under the agreement of sale, as contemplated under the provisions of the Act. The terms of the agreement as well as draft sale deed filed by the petitioners are clear that the possession of the property is to be delivered only after the receipt of the full consideration and execution of necessary sale deed and registration of the same. It is also contended that even when the members of the first respondent authority visited the premises, it is not their case that under the agreement possession was delivered to the second petitioner.

The permissive possession given by the first petitioner to the second petitioner, subsequent to the agreement, would not in anyway amount to transfer in terms of the provisions of the Act. In any case as the authorities failed to exercise the jurisdiction within the prescribed period, it is not open to them to pass any other order except issuing of a no-objection certificate. Therefore, the petitioners sought for an appropriate writ in their favour. On behalf of the respondents, a counter has been filed by the third respondent. The third respondent is not directly connected with the proceedings that were taken under Chapter XX-C of the Act and it is only the first respondent, which is concerned with the actions that were taken under the provisions of Chapter XX-C either to issue a no- objection certificate in favour of the petitioners or to exercise the option of pre-emptive purchase in favour of the Government. Be that as it may, however, a counter has been filed by the third respondent denying the allegations of the petitioners. In the counter it is stated that based on the comparative sales, the valuation was determined and it was found that the market value was more than 15 per cent of the apparent consideration. It is also stated that a per the objections filed by the petitioners through their advocate, it was noticed by the Appropriate Authority that physical possession of the subject property was handed over by the first petitioner to the second petitioner, which is tantamount to transfer in terms of s. 269UA(f) of the Act and, therefore, such transfer is in violation of s. 269UL (2) of the Act. Hence, the petitioners have no right to seek a no-objection certificate under the provisions of the Act. Therefore, the application in Form No. 37-I was lodged. In the counter it was reiterated that the decisions referred to in the impugned proceedings, squarely applies to the case on hand and, therefore, the petitioners are not entitled to any relief. Relying upon the above averments in the counter, learned standing counsel for the Department contended that as the objections filed by the petitioners show that possession was delivered by the first petitioner to the second petitioner, transfer was effected within the terms of the provisions of the Act and, therefore, the petitioners are not entitled for a no-objection certificate and as such the action of the respondents is proper and just. The issue, therefore, that arises for consideration of this Court is “whether the proceeding of the second respondent dt. 7th Feb., 2000, is legal and valid?” or “whether the petitioners are entitled for the relief sought for in this writ petition ?” Before considering the merits of the rival contentions, it would be proper to refer to the relevant provisions of the Act. “269UA.

In this Chapter, unless the context otherwise requires,— (a) ‘agreement for transfer’ means an agreement, whether registered under the Registration Act, 1908 (16 of 1908), or not, for the transfer of any immovable property; (b) ‘apparent consideration’ : (1) in relation to any immovable property in respect of which an agreement for transfer is made, being immovable property of the nature referred to in sub-cl. (i) of cl. (d), means,— (i) if the immovable property is to be transferred by way of sale, theconsideration for such transfer as specified in the agreement for transfer;…… (c) ‘Appropriate Authority’ means an authority constituted under s. 269UB to perform the functions of an Appropriate Authority under this Chapter; (d) ‘immovable property’ means— (i) any land or any building or part of a building, and includes, where any land or any building or part of a building is to be transferred together with any machinery, plant, furniture, fittings or other things, such machinery, plant, furniture, fittings or other things also…. (ii) any rights in or with respect to any land or any building or a part of a building (whether or not including any machinery, plant, furniture, fittings or other things therein) which has been constructed or which is to be constructed, accruing or arising from any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other AOPs or by way of any agreement or any arrangement of whatever nature), not being a transaction by way of sale, exchange or lease of such land, building or part of a building;…. (f) ‘transfer’,— (i) in relation to any immovable property referred to in sub-cl. (i) of cl. (d), means transfer of such property by way of sale or exchange or lease for a term of not less than twelve years, and includes allowing the possession of such property to be taken or retained in part-performance of a contract of the nature referred to in s. 53A of the Transfer of Property Act, 1882 (4 of 1882). (ii) in relation to any immovable property of the nature referred to in sub-cl. (ii) of cl. (d), means the doing of anything (whether by way of admitting as a member of or by way of transfer of shares in a co-operative society or company or other AOP or by way of any agreement or arrangement or in any other manner whatsoever) which has the effect of transferring or enabling the enjoyment of, such property. 269UC.—(1) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4 of 1882), or in any other law for the time being in force, no transfer of any immovable property in such area and of such value exceeding five lakhs rupees, as may be prescribed, shall be effected except after an agreement for transfer is entered into between the person who intends transferring the immovable property (hereinafter referred to as the transferor) and the person to whom it is proposed to be transferred (hereinafter referred to as the transferee) in accordance with the provisions of sub-s. (2) at least four months before the intended date of transfer. (2) The agreement referred to in sub-s. (1) shall be reduced to writing in the form of a statement by each of the parties to such transfer or by any of the parties to such transfer acting on behalf of himself and on behalf of the other parties. (3) Every statement referred to in sub-s. (2) shall,— (i) be in the prescribed form; (ii) set forth such particulars as may be prescribed; and (iii) be verified in the prescribed manner, and shall be furnished to the Appropriate Authority in such manner and within such time as may be prescribed, by each of the parties to such transaction or by any of the parties to such transaction acting on behalf of himself and on behalf of the other parties. (4) Where it is found that the statement referred to in sub-s. (2) is defective, the Appropriate Authority may intimate the defect to the parties concerned and give them an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the Appropriate Authority may, in its discretion, allow and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Chapter, the statement shall be deemed never to have been furnished. 269UD.—(1) Subject to the provisions of sub-ss. (1A) and (1B), the Appropriate Authority, after the receipt of the statement under sub-s. (3) of s. 269UC in respect of any immovable property, may, notwithstanding anything contained in any other law or any instrument or any agreement for the time being in force, make an order for the purchase by the Central Government of such immovable property at an amount equal to the amount of apparent consideration : Provided that no such order shall be made in respect of any immovable property after the expiration of a period of two months from the end of the month in which the statement referred to in s. 269UC in respect of such property is received by the Appropriate Authority : Provided further that where the statement referred to in s. 269UC in respect of any immovable property is received by the Appropriate

Authority on or after the 1st day of June, 1993, the provisions of the first proviso shall have effect as if for the words ‘two months’, the words ‘three months’ had been substituted : Provided also that the period of limitation referred to in the second proviso shall be reckoned, where any defect as referred to in sub-s. (4) of s. 269UC has been intimated, with reference to the date of receipt of the rectified statement by the Appropriate Authority…..

269UE.—(1) Where an order under sub-s. (1) of s. 269UD is made by the Appropriate Authority in respect of an immovable property referred to in sub-cl. (i) of cl. (d) of s. 269UA, such property shall, on the date of such order, vest in the Central Government in terms of the agreement for transfer referred to in sub-s. (1) of s. 269UC.

269UF.—(1) Where an order for the purchase of any immovable property by the Central Government is made under sub-s. (1) of s. 269UD, the Central Government shall pay, by way of consideration for such purchase, an amount equal to the amount of the apparent consideration. 269UL.—(1) Notwithstanding anything contained in any other law for the time being in force, no registering officer appointed under the Registration Act, 1908 (16 of 1908), shall register any document which purports to transfer immovable property exceeding the value prescribed under s. 269UC unless a certificate from the Appropriate Authority that it has no objection to the transfer of such property for an amount equal to the apparent consideration therefore as stated in the agreement for transfer of the immovable property in respect of which it has received a statement under sub-s. (3) of s. 269UC, is furnished, along with such document. 269UN.—Save as otherwise provided in this Chapter, any order made under sub-s. (1) of s. 269UD or any order made under sub-s. (2) of s. 269UF shall be final and conclusive and shall not be called in question in any proceeding under this Act or under any other law for the time being in force.”

8. Chapter XX-C was inserted in the Act by the Finance Act, 1986, w.e.f. 1st Oct., 1986. The object and purpose of inserting Chapter XX-C in the Act was to discourage the proliferation of black money in transactions relating to the purchase and sale of immovable properties, and with this in view the legislature had enacted the aforesaid legislative provision insisting on the parties intending to effect sale and purchase of properties to submit the requisite information to the Appropriate Authority so that the Appropriate Authority may be in a position to examine and find out whether the consideration for which the property was being sold was adequate or not. If it found out that the consideration was adequate and proper, it was supposed to issue “no objection certificate”. If, however, in the opinion of the Appropriate Authority the stated consideration was inadequate, it could resort to the power of pre-emptive purchase. The provisions of this Chapter were extended to the city of Hyderabad w.e.f. 1st June, 1989, vide Notification No. S.O. 339(E), dt. 8th May, 1989. After the provisions of this Chapter came into operation, there is a prohibition for the transfer of immovable property of the value more than Rs. 20 lakhs (originally Rs. 10 lakhs) in respect of the properties situated in the city of Hyderabad without obtaining a no- objection certificate from the Appropriate Authority constituted under the provisions of the Act. In accordance with the procedure prescribed, as soon as the parties enter into an agreement for the sale and purchase, the substance of the said agreement shall be reduced in writing in Form No. 37I setting forth all the particulars and shall be furnished to the Appropriate Authority and the agreement shall not be given effect at least for a period of four months from the date of the agreement. Thereafter, the Appropriate Authority has to consider whether the apparent consideration referred to in the agreement represents the fair market value or whether the apparent consideration is less by more than 15 per cent of the apparent consideration and in such case the authority may make an order for purchase by the Central Government of such property. The said exercise is to be completed within a period of three months from the end of month in which the statement in Form No. 37-I was received. Once the Appropriate Authority passes an order exercising the pre-emptive right provided under the provisions of the Act, the property shall vest in the Central Government from the date of such order in terms of the agreement presented before the Appropriate Authority. In case the Appropriate Authority does not find any variation or difference between the apparent consideration mentioned in the agreement and the fair market value, the Appropriate Authority has to issue a no-objection certificate for effecting the transfer by the seller to the purchaser. In case, the Appropriate Authority passes the order of purchase of the immovable property by the Central Government, the Government shall pay by way of consideration of such purchase, the amount of apparent consideration, which is specified in the agreement. The provisions contained in this Chapter also prohibit the registering authority from registering any document, which purports to transfer immovable property exceeding the value specified earlier, unless a certificate issued under the provisions of the Act is produced. The orders passed by the Appropriate Authority under the provisions of this Chapter shall be final and conclusive.

In conformity with the provisions of Chapter XX-C of the Act, the petitioners have filed a statement of the particulars of the agreement in Form No. 37-I on 11th Oct., 1999, seeking for the issue or a no-objection certificate. It is not in dispute that pursuant to the said action of the petitioners, the members of the first respondent authority visited the property in question on 30th Oct., 1999, as well as on 3rd Dec., 1999, and also obtained the valuation from the Valuation Cell of the Department. Though the same was not placed before this Court or the particulars of valuation, as mentioned either in the affidavit of the petitioner or in the counter of the respondent and from the material on record it is clear that according to the Appropriate Authority, the market value of the property in question exceeds the apparent consideration by more than 15 per cent. According to the petitioner, the said valuation was arrived at relying upon the sale instances of vacant plots, which are even smaller in size and according to the petitioners the smaller vacant plots would normally fetch a higher price than a larger plot, that too a plot with a building. Learned counsel also contended that the property in question is part of a property belonging to the co-operative housing society and as per the bye-laws of the said society there is a restriction to transfer the property to any third parties and a member of the society can alienate the house plot only to the members of the said society. Therefore, there is a limited market to the property in question. Apart from the above, it is contended that the second petitioner, who is the purchaser under the agreement has effected certain additions and alterations in respect of the property in question in order to be in conformity with the vassthu and the said alterations had cost about Rs. 2,55,910 and if the said amount is deducted from the market value arrived at by the Valuation Cell, there is no excess as provided under the Act. Apart from all this, the contention of the petitioners is that after the inspection of the property in question by the members of the first respondent authority, the first respondent authority issued notice calling for objections for the proposed exercise of preemptive right to purchase the property in question. To the said show-cause notice, the petitioners have filed their objections on 6th Jan., 2000. The first respondent authority instead of passing an order within the stipulated time provided under the Act, allowed the matter to lie and after the expiry of the statutory period, gave a communication through the second respondent under the impugned proceedings. According to the petitioners, as the first respondent authority did not pass orders exercising the pre-emptive right to purchase the property by the Central Government, there is no option to the first respondent authority except to issue the no-objection certificate. Therefore, the impugned communication dt. 7th Feb., 2000, is illegal and without jurisdiction. But this contention is opposed by the respondents contending that in the objections it was stated that the second petitioner has shifted his residence to the property in question and as the possession was delivered to the second petitioner, the said action amounts to transfer. When once the transfer is affected, which is prohibited under the provisions of the Act, the petitioners are not entitled for no-objection certificate. Therefore, the application of the petitioners was lodged.

From the material on record, it is clear that it is not the case of the Department that possession was delivered by the first petitioner to the second petitioner in pursuance of the agreement of sale entered into between the parties, a copy of which was even filed along with Form No. 37-I. It is also not the case of the first respondent authority when its members have inspected the property in question on 30th Oct., 1999, and on 3rd Dec., 1999, that the second petitioner was in possession of the property and that the petitioners have violated the provisions of the Act. Further, even though objections have been filed on 6th Jan., 2000, if the first respondent is of the opinion that the petitioners have violated the requirements of the provisions of the Act, and not entitled to have the no-objection certificate or even to pass an order of pre-emptive purchase, it ought to have passed an order before the expiry of the statutory period prescribed, i.e., within a period of three months from the end of the month, in which the petitioners have made the application in Form No. 37-I. Admittedly, the said Form No. 37-I was filed on 11th Oct., 1999, and the three months period, as per the provisions of the Act, would expire by 31st Jan., 2000. But, no such action was taken before the expiry of the abovesaid period and it is only on 7th Feb., 2000, that the second respondent issued a communication to the petitioners, intimating that their application was lodged. The said action of the first respondent authority is clearly in violation of the provisions of the Act.

11. Even if we look into the contents from which the first respondent authority inferred that a transfer has already been effected between the parties, we do not find that possession was delivered, as contemplated under the provisions of the Act in pursuance of an agreement, as contained in s. 53A of the Transfer of Property Act. What was stated in the objections filed by the second petitioner was that—”He has requested the vendor to hand over the possession of the house to him to undertake some alterations to suit his requirement. Accordingly, he undertook the following works in the building for shifting his residence to his house for which he entered into an agreement of sale : Rs. (i) Colouring the entire building (inside and outside) 1,00,000 (ii) Revising the compound wall and fixing M.S. Grill over It is submitted that the purchaser out of ignorance carried out the above works because of the harassment being given to him by his landlord and he wanted to shift immediately. His aged father, Sri S.P. Agarwal, was in the United States of America and he was expected to come back during November, 1999. Sri Akhil Agarwal was fearing that his father after return would feel bad about the happenings at Hyderabad. Therefore, he has shifted to house bearing No. 8-2-293/82/F/46/46, Filmnagar Co-operative Housing Society Ltd.,Jubilee Hills, Hyderabad.”

12. From the above statement one can infer that the second petitioner had requested possession of the property for carrying out certain alterations and the first petitioner had permitted and at the most the same can be considered as permissive possession and not in pursuance of part-performance of an agreement of sale, as contemplated under s. 53A of the Transfer of Property Act. Even in the counter, on behalf of the third respondent, it is not the case of the third respondent that possession was delivered either under the agreement or in part-performance of the agreement of sale entered into between the parties. According to the third respondent, physical possession of the property was handed over by the first petitioner; therefore, the same is tantamount to transfer, as contemplated under s. 269UA(f) of the Act. A perusal of the abovereferred provision shows that allowing the possession to be taken or retained in part-performance of a contract of the nature referred to in s. 53A of the Transfer of Property Act, alone could be considered as transfer and not a permissive possession or any other kind of possession delivered by the seller to the purchaser. As is evident from the above facts, we do not find that there is any merit in the inference drawn by the first respondent authority that a transfer was effected before making an application in Form No. 37-I and, therefore, the action of the first respondent in lodging the application of the application of the petitioners is proper and just.

The first respondent authority also referred to two judgments in its communication dt. 7th Feb., 2000. One is the judgment of the Calcutta High Court in the case of Digvijay Cement Co. Ltd. vs. Appropriate Authority (supra). A single Judge of the Calcutta High Court held that in that case it was an admitted fact that the transferee has already taken possession of a mill, which was an act to be performed under the agreement in question, for which the application had been made in Form No. 37-I. Therefore, the application has been made after the transfer took place. Hence, the Appropriate Authority was justified in holding the transaction to be null and void. In fact, the said judgment was the subject-matter of a writ appeal and a Division Bench of the same High Court [seeMurlidhar Ratanlal Exports Ltd. vs. Appropriate Authority (2000) 160 CTR (Cal) 420—Ed.] considered and accepted the claim of the parties to the transaction that there is no transfer as possession was delivered in pursuance of a lease and not as part-performance of the agreement of sale that was entered into between the parties. In that view of the matter, the decision of the Calcutta High Court relied upon by the first respondent is not at all applicable to the facts of the present case. Similarly, the other case referred to by the first respondent is rendered by the Rajasthan High Court in the case of Rajasthan Patrika Ltd. vs. Union of India (supra). Even in that case, the admitted facts are that a part of the property agreed to be sold under the agreement was delivered possession to the purchaser. When there were admitted facts that the purchaser had acquired the right to use, occupy, hold and enjoy the portion of an immovable property, the said transaction amounts to a transfer effected before filing of the statement in Form No. 37-I and thus the parties had violated the relevant provisions of the Act. Further, it was held that the Appropriate Authority was within its right not to act upon the statement filed by the parties in Form No. 37-I. Even in this case also the admitted fact, as per the terms of the agreement, was that possession of a part of the property in question was delivered to the purchaser. Therefore, the facts of that case are totally different from the facts of the present case and, therefore, the ratio laid down therein is not applicable.

Admittedly, it was not the case of the Appropriate Authority that the terms of the agreement filed along with Form No. 37-I show that there was any delivery of possession of the property agreed to be sold under the agreement. It was also not the case of the Appropriate Authority that when their members inspected the premises the purchaser was in possession of the property. Once from the terms of the agreement it is clear that no possession was delivered in part-performance of the agreement of sale entered into, there is absolutely no transfer within the terms of s. 269UA(f). Hence, the authorities were not justified in lodging the application of the petitioners filed in Form No. 37-I, that too after the expiry of the period of three months, which was the statutory limit provided for exercise of the pre-emptive right under s. 269UD. There is an embargo on the authorities to pass an order exercising the pre-emptive right after the expiry of the period of three months. Admittedly, in the present case, the first respondent authority did not pass any order of pre-emptive purchase, though it was proposed within the statutory period of three months. Having failed to pass such an order, the option to the first respondent authority is only to issue a no-objection certificate, thereby allowing the first petitioner to sell the property in question to the second petitioner. Instead of doing so, the first respondent authority has resorted to issue a communication stating that the application of the petitioners in Form No. 37-I is lodged. The said action is clearly illegal and unsustainable. Under the above circumstances, the same is quashed. As the statutory period of three months is already over, no purpose would be served by sending the matter to the first respondent. Hence, the first respondent is directed to issue the no-objection certificate forthwith to the petitioners. Under the above circumstances, the impugned proceeding dt. 7th Feb., 2000, is quashed and, consequently, the first respondent is directed to issue the no-objection certificate, as contemplated under the Chapter XX-C of the Act forthwith to the petitioners. In the result, the writ petition is allowed. No costs. That rule nisi has been made absolute as above.

[Citation : 251 ITR 230]

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