Calcutta H.C : This appeal is directed against the judgment and order dt. 13th Jan., 1994, passed by a single Judge of this Court in Matter No. 2552 of 1986

High Court Of Calcutta

Appropriate Authority & Ors. vs. Chandravadan Desai & Ors.

Sections 269D, 269UC, 269UD

Tarun Chatterjee & S.N. Bhattacharjee, JJ.

Matter No. 2552 of 1986

28th September, 2000

Counsel Appeared

S. Gooptu, for the Appellants : R.L. Gaggar, for the Respondents

JUDGMENT

S.N. Bhattacharjee, J. :

This appeal is directed against the judgment and order dt. 13th Jan., 1994, passed by a single Judge of this Court in Matter No. 2552 of 1986 [reported as Chandravadan Desai & Ors. vs. Appropriate Authority & Ors. (1995) 126 CTR (Cal) 351 : TC S3.207—Ed.]

2. The petitioners entered into an agreement dt. 24th June, 1985, with Ghansyam Das Thirani, Lansdowne Properties Limited (Respondent No. 4) and Onyx Estates Ltd. to the effect that the petitioners would pay to Thirani a sum of Rs. 13,03 lakhs, to Onyx Rs. 99,150 and to Lansdowne a sum of Rs. 33,000 for transferring office space Nos. 3,4, 7 and 8 measuring 4,428 sq. ft. on the fourth floor along with car parking space in favour of the petitioners in terms of the deed of agreement which is Annexure ‘B’ to the writ petition. The flats were under construction. The petitioners filed Form No. 37EE in terms of requirement under s. 269AB(2) of the IT Act, 1961 (hereinafter referred to as ‘Act’), r/w r. 48DD and the Competent Authority duly registered the said agreement under registration No. 30EE/Acq. R-III/231, dt. 22nd July, 1985. On 14th May, 1986, the petitioners received a notice dt. 14th March, 1986, under s. 269D(1) from the competent authority whereby proceeding for acquisition of the said premises under s. XX-A of the Act was sought to be initiated. The IT Act was amended by introducing Chapter XX-C w.e.f. 1st Oct., 1986, with a provision requiring the parties to the transaction to submit the statement in statutory Form No. 37-I in accordance with s. 269UC(2) r/w the r. 48L of the Act within 15th Oct., 1986, along with a penal provision in case of non-compliance therewith. Although Chapter XX-C does not apply to the instant case, the petitioners by way of abundant caution submitted the statement in Form No. 37-I of the said Rules in due time. On 18th Dec., 1986, the petitioners received a copy of the order dt. 12th Dec., 1986, under s. 269UD(1) of the Act whereby the respondent No. 1 directed that the said premises under the agreement would be purchased by the Central Government for an amount of Rs. 14,34,940. Challenging this order of acquisition the petitioners filed a writ application under Art. 226 of the Constitution of India before a learned Judge of this Court who by an order dt. 13th Jan., 1994, quashed the impugned order of the respondent No. 1, dt. 12th Dec., 1986, giving liberty to the respondents to proceed upon to the Form No. 37EE filed by the petitioners earlier on a finding that Chapter XX-C has no application to the present case.

Aggrieved by the aforesaid order the Revenue Department has come up with this appeal. In the instant case no sale deed was executed by the transferor nor delivery of possession was given to transferee as the construction was not completed. The petitioners filed the statement in Form No. 37EE under Chapter XX-A and the appropriate authority issued notice of compulsory purchase under s. 269D of Chapter XX-A of the Act. Consequent upon the application of Chapter XX-C of the Act in Calcutta w.e.f. 1st Oct., 1986, the petitioners also filed another statement in Form No. 37-I under r. 48L of Chapter XX-C. The appropriate authority again issued another notice of pre-emptive purchase under Chapter XX-C. There is no dispute that prior to 30th Sept., 1986, all the transfers of immovable property effected by registered sale deed, or by agreements for sale coupled with delivery of possession under s. 53A of the Transfer of Property Act or by mere agreement for sale came under the purview of Chapter XX-A in view of the s. 269A(e)(ii) r/w s. 269AB(1)(b) and s. 269A(h)(ii) r/w s. 269AB(1)(b) and s. 269A(h)(ii) of the Act. After incorporation of Chapter XX-C all transactions effected by agreements for sale came within its purview and it became obligatory on the part of the transferor or transferee to enter into a written agreement for sale before execution of sale deed and to inform the appropriate authority of such transaction within three months before the date of intended sale. It also cannot be disputed that where transfer of property has been effected by legal document before 30th Sept., 1986, and the property has vested in the transferee, Chapter XX-C has no application but till the right, title and interest in the property under agreement for sale does not vest in the transferee by virtue of a legal document or under any other section of any law for the time being in force, such agreement even executed prior to 1st Oct., 1986, will continue to be governed by Chapter XX-A as also by Chapter XX-C. The reason is that if a mere agreement for sale would result in the transfer of title it is not at all necessary under s. 269UC of the Act to provide that no transfer of immovable property of value exceeding Rs. 5 lakhs shall be effected, except after an agreement for transfer is entered into between the persons who intend to transfer the immovable property and the person who intends to purchase the same. This view has been taken by the Division Bench of Madras High Court in A.K. Anandam Anmal vs. Union of India & Ors. (1995) 126 CTR (Mad) 233 : (1995) 212 ITR 9 (Mad) : TC S3.205 and in another decision of Gujarat High Court in Shantivan Corporation vs. Sub-Registrar & Ors. (1990) 90 CTR (Guj) 196 : (1991) 189 ITR 583 (Guj) : TC 3R.1007 relied on upon by Mr. Agarwal, the learned counsel for the appellants. In the Gujarat case, Chapter XX-C came into operation on 1st June, 1989, and the deed of agreement was executed on 30th May, 1986, stipulating that possession was to be delivered only after the receipt of the entire amount of consideration. The amount was paid by post-dated cheques which were dishonoured and in the meantime new Chapter came into operation. Their Lordships held: “Since the ownership of the property was not transferred before 1st June, 1989, there was no sale prior to 1st June, 1989. Even if possession was transferred, it would not have affected the provisions of Chapter XX-C enabling the statutory purchase of the property by the Central Government free from all encumbrances in view of the provisions contained in Chapter XX-C. Hence, order of acquisition passed on 26th Aug., 1989, was valid.”

In the Madras case, agreement for transfer was dt. 24th Feb., 1986. The new Chapter XX-C came into operation on 1st Oct., 1986. Form No. 37-I was filed, and order of pre-emptive purchase was issued in December, 1986, under new Chapter but the parties herein did not object to the order of pre-emptive purchase, pursuant to the order, possession was delivered. After obtaining possession, the appropriate authority put up the property for auction and the auction purchase was put in possession on 14th Sept., 1987. To set aside the order of pre-emptive purchase, Their Lordships held. “The provisions contained in s. 269UC of IT Act, 1961, could be applied and enforced in the present case even though the agreement for transfer of property was entered into prior to the coming into force of Chapter XX-C of the Act.”

5. Mr. Moorarka, the learned counsel, appearing for the respondents herein cited decisions of the Delhi High Court in Sunshine Travels & Tours (P) Ltd. vs. Union of India (1995) 213 ITR 749 (Del) where the Division Bench of Delhi High Court held: “Thus, a transaction effected prior to 1st Oct., 1986, which involves the transfer of a right enabling the transferee to enjoy the building to be constructed becomes a statutory transfer for purposes of Chapter XX-A and such a ‘transfer’ is exposed to the statutory steps contemplated by s. 269C.

The creation of any right enabling the taking of possession for enjoyment of a building to be put up, under a transaction effected prior to 1st Oct., 1986, would, therefore, attract the application of Chapter XX-A, just like any other ‘transfer’, including a transfer involved in an agreement referred to in s. 53A of the Transfer of Property Act. If by the time Chapter XX-C came into force, there has been already a transaction resulting in a ‘transfer’ as defined, the Court cannot read Chapter XX-C so to make it retrospective to operate on that transaction of ‘transfer’. The term ‘transfer’ has to be considered in the light of the provisions operating at the time of the ‘transfer’.—Rambai Manuanath Nayak vs. Union of India (1992) 108 CTR (SC) 294 : (1993) 201 ITR 422 (SC) : TC S3.140 applied.”

The Division Bench of Madras High Court, however, differed from the views expressed by the Division Bench of Delhi High Court in Captain Sanjeev Sethi vs. Union of India (1992) 101 CTR (Del) 81 : (1992) 195 ITR 338 (Del) : TC 3R.1019. In Sanjeev Sethi’s case it was held that r. 48L has no retrospective operation and would not apply to an agreement entered into prior to 1st Oct., 1986, specially to such cases where the provisions of Chapter XX-A were applicable.

6. Coming to the instant case before us it would be noticed that the facts of this case stand distinguished from those cited above. In none of the aforesaid cases a statement in Form No. 37EE under r. 48DD of Chapter XX-A was filed or the Appropriate Authority issued preliminary notice under s. 269D which was issued in this case by the statutory authority before the application of Chapter XX-C in the city of Calcutta. As soon as the proceedings for purchase by Central Government was initiated in accordance with the Chapter XX-A all the procedural safeguards and remedies thereunder would be available to the petitioners. The provisions of pre-emptive purchase under Chapter XX-C being more onerous the petitioners cannot be deprived of the procedural benefits available under Chapter XX-A, despite the fact that provisions of Chapter XX-C were also applicable to the agreements for sale prior to 1st Oct., 1986. The appellants cannot abandon the procedures of acquisition of property by Central Government under Chapter XX-A and switch over to the more onerous procedure prescribed for pre-emptive purchase under Chapter XX-C, despite amendments in partial compliance with the decision of the apex Court in C.B. Gautam vs. Union of India (1992) 108 CTR (SC) 304 r/w (1993) 110 CTR (SC) 179 : (1993) 199 ITR 530 (SC) : TC S3.142 causing procedural prejudice to the respondent. In course of hearing Mr. Moorarka showed us a letter written by the Addl. CIT dt. 29th May, 2000, addressed to the respondent and the said letter is reproduced below to show that the proceedings under Chapter XX-A have not been abandoned by the Appropriate Authority even today. No. 37EE/231/2000-2001/ACQ R. Addl. CIT (Acquisition) Range-1. Dt. the 29th May, 2000. To Shri Chandravadan Desai (Karta), P-39/40, Ezra Street, Calcutta-1. Sub : Notice under s. 269D(1) of the IT Act,

1961 Ref : Property at 2/6, Sarat Bose Road. Please refer to the above subject and reference. Matters relating to Form No. 37EE filed by you and Mr. G.D. Thirani will be heard by the undersigned on 9th June, 2000 at 11 A.M. You are requested to attend the said hearing and submit all your objection if any, for concluding this long pending case. Kindly note that further opportunities will not be given. (H. Raikhan) Addl. CIT, Acq. Range-1, Cal.” Although the letter does not form the part of the paper book and was not filed in compliance with formalities, the Revenue did not disown such a letter.

We, therefore, hold that for reasons stated above the impugned notice dt. 12th Dec., 1986, has been rightly quashed by the learned single Judge by his order under appeal and we do not find any cogent reason to interfere with the same. The appeal is dismissed. There will be no order as to costs.

Tarun Chatterjee, J. :

I agree.

[Citation : 249 ITR 114]

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