Delhi H.C : the petitioner has prayed for issue of a writ of certiorari for quashing of the order dt. 30th Nov., 2000 passed by the Appropriate Authority under s. 269UD(1) of the IT Act, 1961 (for brevity, “the Act”) and further to issue a writ of mandamus to issue “no objection certificate” in respect of Plot No. 20, Oak Wood Drive, Malibu Town, Sohna Road, Gurgaon

High Court Of Delhi

R. N. Soin And Sons (P) Ltd. vs. Appropriate Authority & Ors.

Section 269UC, 269UD & 269UK, Art. 226

Dipak Misra, C.J. & Manmohan, J.

Writ Petn. (C) No. 7591 of 2000

18th October, 2010

Counsel appeared :

Sandeep Sethi & Sindhu Sinha, for the Petitioner : Sanjeev Sabharwal & R.C. Beri, for the Respondent

JUDGMENT

by the court :

Invoking the extraordinary jurisdiction of this Court under Art. 226 of the Constitution of India, the petitioner has prayed for issue of a writ of certiorari for quashing of the order dt. 30th Nov., 2000 passed by the Appropriate Authority under s. 269UD(1) of the IT Act, 1961 (for brevity, “the Act”) and further to issue a writ of mandamus to issue “no objection certificate” in respect of Plot No. 20, Oak Wood Drive, Malibu Town, Sohna Road, Gurgaon.

2. The facts which are necessary to be stated for adjudication of this writ petition are that the predecessor-in- interest of the petitioner, namely, Mr. Yogeshwar K. Dhawan along with one Ms. Namita Kaul Bhattacharya submitted an application for allotment of residential plot No. 20, Oak Wood Drive, Malibu Town, Sohna Road, Gurgaon, Haryana on 24th Feb., 1994.

In pursuance of the aforesaid application, a letter of allotment was issued on 24th April, 1994 for a consideration of Rs. 23,80,387. The petitioner was assigned the allocation vide letter dt. 21st Feb., 1995. Thereafter, an agreement was entered into by the petitioner, the assignee, with the third respondent, the developer on 12th June, 1996. After the land was developed, the assignee/nominee filed an application in Form No. 37-I before the Appropriate Authority on 24th Aug., 2000. As further set forth, a notice under s. 269UD(1) of the Act determining the value at Rs. 57,39,353 on the basis of the market value on the date of determination was sent by the Appropriate Authority on 10th Nov., 2000. At that juncture, the third respondent, the developer, appeared before the Appropriate Authority and put forth its submission that the valuation should be with reference to the agreement dt. 24th Feb., 1994 as that was the date of agreement which was entered into with the original allottee by the developer.

Before the Appropriate Authority, the decision rendered in Ansal Properties & Industries Ltd. vs. Appropriate Authority (1999) 151 CTR (Del) 110 : (1999) 236 ITR 793 (Del) was pressed into service. The Appropriate Authority vide order dt. 20th Nov., 2000, rejected the contentions put forth by the petitioner as well as by the third respondent and ultimately rejected the prayer. Questioning the correctness of the order passed by the Appropriate Authority, it is submitted by Mr. Sandeep Sethi, learned senior counsel for the petitioner that the said authority has erroneously come to hold that the decision rendered in Ansal Properties & Industries Ltd. vs. Appropriate Authority (supra) has been overruled in DLF Universal Ltd. vs. Appropriate Authority (2000) 160 CTR (SC) 401 : (2000) 243 ITR 730 (SC).

Mr. Sethi, learned senior counsel for the petitioner has canvassed that the Appropriate Authority has really not addressed the issue on the ground that it can only deal with the issue when Form 37-I was filed before it though the agreement entered into by the petitioner with the developer should have been looked into by the Appropriate Authority.

Mr. Sanjeev Sabharwal, learned counsel for the respondent-Appropriate Authority submitted that the Authority assumes jurisdiction when the draft agreement is filed under Form 37-I and it has no jurisdiction to travel beyond the same and hence, no error can be found with the order passed by the Appropriate Authority. Mr. Sanjeev Sabharwal, learned counsel to bolster the said submission pressed into service the scheme of the provisions contained in ss. 269UC, 269UD and 269UK of the Act.
Mr. R.C. Beri, learned counsel appearing for respondent No. 3 submitted that the developer had applied immediately after the agreements had been entered into and “no objection certificates” were issued in all cases by the Appropriate Authority regard being had to the date of the agreement for sale but the present case unfortunately could not be processed by the developer as a consequence of which the misfortune had befallen on the petitioner. Mr. Beri further submitted that the petitioner could have itself applied but it was totally dependent on the developer which it should not have done. To appreciate the submissions raised at the Bar, we have carefully perused the order of the Appropriate Authority and on a scrutiny of the same we find that the Appropriate Authority has opined that the decision rendered by the Division Bench of this Court in Ansal Properties & Industries Ltd. vs. Appropriate Authority (supra) has been overruled in DLF Universal Ltd. vs. Appropriate Authority (supra) though actually the entire decision has not been overruled. In DLF Universal Ltd. vs. Appropriate Authority (supra) in para 6, the apex Court reproduced the conclusions arrived at by the High Court. It reads as follows (p. 742) : “6. There is no dispute that the agreement for transfer, which has been reduced into writing in Form 37-I, pertains to immovable property and amounts to transfer of immovable property within the meaning of cls. (d) and (f) of s. 269UA. The High Court, after examining the terms of the agreement and the provisions of Chapter XX-C, reached various findings in para 28 of the judgment, which we reproduce : To sum up, our findings are : (i) Agreement for transfer as defined in cl. (a) of s. 269UA refers to an agreement which is entered into privately between the parties thereto; such an agreement may be oral or in writing. (ii) An agreement for transfer entered into by the parties in Form 37-I under s. 269UC is not an agreement defined by cl. (a) of s. 269UA. It is an agreement statutorily ordained to be entered into in a prescribed proforma. (iii) ‘Agreement for transfer’, the phrase as occurring in Chapter XX-C has two meanings depending on the context where it occurs. It may be an agreement for transfer as defined in cl. (a) of s. 269UA (which in this judgment has been referred to as private agreement). It may be an agreement for transfer as defined in s. 269UC (which in this judgment has been called a proforma agreement). Since the agreement for transfer under s. 269UC is to be drawn up in the form of a statement, in Chapter XX-C, the word ‘statement’ has been used interchangeably with agreement for transfer in Form 37-I. ‘Agreement for transfer’ as occurring in s. 269UK, s. 269UM and s. 269UO is to be assigned the meaning as defined by cl. (a) of s. 269UA. At all the other places in Chapter XX-C agreement for transfer means and must be read as proforma agreement, i.e., an agreement for transfer in the prescribed Form 37-I as the context so requires. (iv) The Appropriate Authority cannot be found fault with refusing to act upon or take cognisance of proforma agreement in statement Form 37- I (i) if the requisite particulars though available are not supplied or (ii) if the requisite particulars would be available at the time when the property has reached a state in which it is proposed to be transferred and yet the particulars are not being made available with precision because the form is being filed with a view to secure NOC for a transfer in contemplation. (v) A delay in filing Form 37-I is not a defect. The period of 15 days prescribed by r. 48L is directory and not mandatory. (vi) The period of 15 days is to be calculated from the date of entering into the proforma agreement in Form 37-I and not from the date of any other proceeding private agreement between the parties. (vii) If there are agreements more than one entered into between the parties, then it is the latest of the agreements which supersedes the earlier ones which has to accompany Form 37-I when filing before the Appropriate Authority. Other agreements if relevant may be looked into by the Appropriate Authority. (viii) A defect contemplated by s. 269UC(4) is one which is capable is being cured. (ix) The stage for entering into the statutory agreement or proforma agreement in Form 37-I arises when the parties are ready to make available all the particulars contemplated by several clauses of Form 37-I consistently with the nature of the property. The date of entering into the proforma agreement must have proximity of relationship by time with the proposed transfer of property as defined in cl. (f) of s. 269UA. The test for determining proximity of relationship is the availability of the property agreed to be transferred in such status in which it is proposed to be transferred. (x) A no objection certificate issued by the Appropriate Authority based on an agreement for transfer of property to be constructed cannot be utilised for securing registration of property which has been constructed’.” Thereafter, their Lordships proceeded to state as follows (p. 744) :

‘7. Agreement for transfer and statement in Form 37-I are two different documents. As rightly held by the High Court agreement for transfer can be oral as well as in writing but then this agreement for transfer has to be reduced in writing in Form 37-I. The High Court has held that in certain sections in Chapter XX-C ‘agreement for transfer’ in fact means statement in Form 37-I as mentioned in sub-para (iii) of its findings.

8. The question that arises for consideration is if the period of 15 days, as mentioned in r. 48L, is to be calculated from the date when a prospective buyer applies for allotment of a flat or from the date when a regular agreement called the ‘Apartment Buyers Agreement’ is entered into between the transferor and the transferee or when the agreement for transfer is reduced into writing in Form 37-I. The Appropriate Authority has held that 15 days are to be counted from the date when booking of the flat is done by the DLF or Ansal as the letter for booking and the official endorsements thereon constitute a regular agreement between the parties. This question, however, becomes academic if we hold that 15 days period is to be counted from the date when the agreement for transfer is reduced into writing in the form of statement (Form 37-I). Can it be said under r. 48L that the term ‘agreement for transfer’ mentioned in cl. (c) of sub-r. (2) thereof in fact means statement in Form 37-I ? If we take the literal meaning, this provision will become rather otiose. An ‘agreement for transfer’ is inter partes and that can always be changed. That the term ‘agreement for transfer’ in fact means statement in Form 37-I, we can get clue from s. 269UK which says that no person shall revoke or alter an agreement for the transfer of an immovable property or transfer such property in respect of which a statement has been furnished under s. 269UC. Reference to this statement is certainly to Form 37-I. It would mean that agreement for transfer can be changed by the parties but they have been forbidden from doing so after statement in Form 37-I has been furnished. We have, therefore, to give appropriate meaning to the term ‘agreement for transfer’ appearing in cl. (c) of sub-r. (2) of r. 48L and cannot just adopt literal meaning. Foundation for exercise of jurisdiction by the Appropriate Authority under s. 269UD is the statement in Form 37-I and not agreement for transfer.” Eventually, their Lordships in para 14 held as follows (p. 748) : “14. DLF and Ansal have strong objection to findings of the High Court in sub-paras (ix) and (x) in para 28 of the judgment reproduced above. However, according to the Appropriate Authority keeping in view the principles laid by this 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) it can exercise its jurisdiction to acquire the property if consideration agreed to is less than 15 per cent, of the market value. Mr. Verma, who appeared for the Appropriate Authority, said that the agreement for transfer contains variables and unless all these are known, the Appropriate Authority will be handicapped in making an order under s. 269UD. The variables which form terms in the agreement for transfer are external development charges that may be levied by the State of Haryana and price escalation upto 20 per cent, of the agreed consideration. It is a matter of common knowledge that in course of time, there can be escalation in the prices of various articles like steel, cement, labour etc. One can say with certainty that price escalation would be within the limit of 20 per cent, escalation and the external development charges that may be levied by the State of Haryana would be on certain set principles. The provisions of Chapter XX-C do not require the parties to enter into more than one agreement for transfer. It is on the basis of the terms of that agreement for transfer which is reduced into writing in the shape of Form 37-I that the Appropriate Authority has to make up its mind to pass an order under s. 269UD. These provisions do not contemplate filing of more than one Form 37-I and grant of more than one no objection certificate by the Appropriate Authority. We may in this connection refer to sub-ss. (6) and (7) of s. 269UE. Immovable property, the subject-matter of transfer is of the nature referred to in sub-cl. (ii) of cl. (d) of s. 269UA and when an order is made under s. 269UD with respect to that property, it shall place the Central Government in the same position in relation to such right as the person in whom such a right would have continued to vest if such order had not been made. The whole agreement for transfer and Form 37-I are before the Appropriate Authority. It has to make its mind once for all whether to pass an order under s. 269UD or not. If not, it is bound to grant no objection certificate as required by s. 269UL. We do not, therefore, think that the High Court was right in its findings as given in sub- paras (ix) and (x) of para 28 of its judgment.”

12. Mr. Sandeep Sethi, learned senior counsel for the appellant submitted that in Ansal Properties & Industries Ltd. vs. Appropriate Authority (supra) in para 27.1, the conclusion has not been overruled. The Division Bench has stated thus (p. 812) : “27.1 The parties may enter into any private agreement for transfer. They must wait for the arrival of the day on which the property has assumed the shape in which it is proposed to be transferred. On that day they must enter into the proforma agreement (Form 37-I) and file the same seeking no-objection from the Appropriate Authority. It was submitted that this interpretation may put the parties to the agreement in a disadvantageous position. The initial private agreement may have been made in the year 1990. The property may take the shape in which it is to be transferred in the year 1998. The price would be one agreed upon between the parties in the year 1990. The value as shown on the date of proforma agreement in Form 37-I would appear to be undervalued persuading the Appropriate Authority to direct the purchase of the property by the Central Government. This is a misapprehension which has to be dispelled. The proforma agreement of the year 1998 would be accompanied by the private agreement entered into in the year 1990 and that will be a relevant fact to be kept in view by the Appropriate Authority while exercising its jurisdiction under Chapter XX-C.”

13. In view of the aforesaid, we find that there is substantial force in the submission of Mr. Sandeep Sethi in as much as the Division Bench in Ansal Properties & Industries Ltd. vs. Appropriate Authority (supra) has held that a proforma agreement can be looked into by the Appropriate Authority.

14. We have been apprised by Mr. Sethi, learned senior counsel for the petitioner that the agreement filed in Form 37-I was accompanied with the agreement that was entered into with the original allottee as well as the agreement that was entered into with the assignee namely, the present petitioner.

15. In view of the aforesaid, we think it is a fit case where the Appropriate Authority should consider the agreements as per 27.1 in Ansal Properties & Industries Ltd. (supra) take a decision. Accordingly, we quash the order passed by the Appropriate Authority and remit the matter to the said authority to be decided by it after affording adequate opportunity of hearing to the petitioner. The said exercise shall be completed within a period of four months from the date of receipt of order passed today.

16. The writ petition is allowed to the extent indicated above. There shall be no order as to costs.

[Citation : 330 ITR 455]