High Court Of Delhi
R.S. Company vs. Appropriate Authority & Ors.
Section 269UD, Art. 226
S.B. Sinha, C.J. & A.K. Sikri, J.
Civil Writ Petn. No. 1261 of 1995
21st December, 2001
Counsel Appeared
K.K. Aggarwal, for the Petitioner : R.D. Jolly with Ajay Jha, for the Respondent Nos. 1 & 2 : Ramesh Chandra with Virendra K. Singh, for the Respondent No. 3 & 4
JUDGMENT
S.B. SINHA, C.J. :
This writ petition is directed against an order dt. 22nd March, 1995, passed by Dy. CIT, being the appropriate authority, in terms of s. 269UD(1) of the IT Act. The said authority had directed purchase of land said to be agricultural property by the Central Government bearing Khewat No. 11, Khata No. 13, Rect. No. 14, Kila No. 4/2 (2-16) Kila No. 5(80), measuring 26 kanal 16 marlas (3.35 acres) situated in the revenue state of village Fatehpur, Tehsil and district Gurgaon with electric connection tubewell and one room and trees, etc. According to the petitioner, the respondent Nos. 3 and 4 herein, are owners of the said land. It is contended that the said property was the ancestral property of the aforementioned respondents. By agreement dt. 28th Nov., 1984, the said respondents entered into an agreement to sell the said property, consideration whereof was fixed at the rate of Rs. 20,000 per acre, amounting to a total consideration of Rs. 68 lakhs inclusive of tubewell, electric connection and one room, fridge, etc. Respondents No. 3 and 4, in terms of r. 48L of the IT Rules, 1962, filed a statement of transfer of subject property as required in Form 37-I together with the said agreement. It was contended that the land in question is agricultural land. A show-cause notice dt. 15th March, 1995, was issued upon the petitioner as also the respondents No. 3 and 4 asking them to file various documents/ information relating to the said property. The said show-cause notice reads thus : “Dear Sirs, I am directed by the appropriate authority, Delhi to state as under : Statement in Form No. 37-I under r. 48L of the IT Rule, 1962 has been filed on 6th Dec., 1994, in respect of immovable property/agricultural land at Fatehpur, Tehsil & District Gurgaon. This statement is signed by the transferors, Svs. Jage Ram and Om Prakash and by Sanjeev Kumar, authoorized signatories for M/s R.S. & Co., as transferees. The apparent consideration disclosed is Rs. 68,00,000. It is also claimed that the apparent consideration includes the cost of tubewell of Rs. one lac and the balance amount represents the value of agricultural land at the rate of Rs. 20 lac per acre.
The subject property is situated in the heart of Malibu Township, Gurgaon, which has been recently developed. The subject property is have existing public roads on three sides. It is also surrounded by the developed residential flats of Malibu Town. It is learnt that the whole area has now been declared as residential, even though the subject property is claimed to be in agricultural land. The value of the subject property as disclosed is considered low if similar other sale instances of properties are considered. The sale price of plots exceeding 800 sq. mtrs. of Malibu Town which are very close to the subject property is above Rs. 2,500 per sq. mtr. The property is of 3.35 acre or 16,214 sq. yds. If 20 per cent area is left out for the roads etc. (say 3,243 sq. yds), the balance available area will be 12,971 sq. yds or 10,849 sq. mtrs. The value of such area @ Rs. 2,500 per sq. mtr. comes to 10,849 x 2,500 = Rs. 2,71,22,500. If an amount of Rs. 24,32,000 being development charges @ Rs. 150 per sq. yd. for the entire area of 16,214 sq. yds. is deducted, the net value comes to Rs. 2,71,22,500 minus 24,12,000 = Rs. 2,46,90,500. If the value of tubewell of Rs. 1 lac is added, the total value comes to Rs. 2,46,90,500 + Rs. 1 lac = Rs. 2,47,90,500 as against the apparent consideration disclosed at Rs. 68,00,000. Your attention is also invited to the sale of agricultural land in the neighbourhood, which are situated at a much inferior location. The sale deed for Rs. 6,69,375 has been registered on 17th Feb., 1995, in respect of a small portion of lands at Killa 4/24/1-25. This sale instance property consisted of 3 Kanals, 3 marlas and was sold at the rate of Rs. 17 lac per acre. On the basis of this sale instance, the value of the subject property could be assessed by enhancing the value at least by 100 per cent of this sale instance because of better location of the subject property. On this basis, the rate of the subject property will come Rs. 17 lac + Rs. 17 lac = Rs. 34 lac per acre and the value works out to Rs. 34,00,000 x 3.35 = Rs. 1,13,90,000. If the value of tubewell of Rs. 1,00,000 is further added, the total value of the subject property comes to Rs. 1,14,90,000 as against the apparent consideration of Rs. 68,00,000. You are hereby given an opportunity of being heard in this matter and to show cause as to why pre-emptive purchase order under s. 269UD(1) of the IT Act should not be made. For this purpose, you may appear before the appropriate authority on 21st March, 1995, at 10.30 A.M. Either personally or through your authorized representative. You are also requested to produce before the appropriate authority on the aforesaid date and time the original title deed of the property together with photocopies thereof for verification and return. In case of failure to arrange representation on the aforesaid date and time, necessary orders will be passed in accordance with law on the basis of material already available on record without any further reference to you. Yours faithfully, Sd/(S.L. Kanaugia) Income Tax Officer O/O A.A. Delhi” The petitioner filed a detailed reply vide letter dt. 21st March, 1995, wherein, inter alia, it had been contended : “(i) That opportunity of being heard as provided by s. 269UD(1A) w.e.f. 17th Nov., 1992, as held by Supreme Court in C.B. Gautam vs. Union of India (1992) 108 CTR (SC) 304 r/w (1993) 110 CTR (SC) 179 : (1992) 65 Taxman 440 (SC) : TC S3.142, was not reasonable as specification of comparable agricultural plot were not furnished other relevant date/reasons which have prevailed in taking the proposed action was also not furnished. (a) That as per bye-laws the appropriate land authority requires a minimum of 10 acres of land for changing the use of the land from agricultural to residential and the subject property measures only 3.35 acres thus its status cannot be changed from agricultural to residence purposes, so the sale instance of the land of Malibu Estate (being residential and developed) cannot be compared with the subject property while computing the valuation of the subject property. (iii) That even if (for the purposes of arguments) it were to be assumed that the subject property was comparable to the sale instance of the residential land of Malibu estate and is thus valued at the rate of Rs. 2,500 per sq. mtr. then after paying the relevant external and development charges, the value of the subject property after calculation would be Rs. 17,30,000 which is still far less than the value at which the subject property has been purchased. (iv) That while comparing the sale instance of other agricultural land with the subject property, the respondent authority cited the example of land registered on 17th Feb., 1995, i.e., after 2-1/2 months of purchase of subject property and that too of the rate of Rs. 17 lacs per acres which was much less than Rs. 20 lacs at which the subject property was registered. (v) That the owner of Malibu Township have purchased the land adjoining their township in the last four months at the rate of Rs. 10 lacs to 16 lacs per acres and the NOC has been granted by the IT authority to them, Whereas the subject property was purchased, that the value of Rs. 20 lacs per acre prior to the purchase by the owners of Malibu Township.” The appropriate authority, however, considered the said land to be residential one of Malibu Townership and rejected the submissions that the value of the subject-matter of the property cannot exceed Rs. 68 lakhs. In terms of the said order, the valuation of land was fixed at Rs. 2,500 per sq. mtr.
2. Mr. K.K. Aggarwal, learned counsel appearing on behalf of the petitioner, would submit that the respondents had wrongly proceeded on the basis that the lands in question are not agricultural lands. According to the learned counsel, there had been no conversion of the said land and in any event, having regard to the statutory provisions, 10 acres of land is required for constructing commercial building complex. The learned counsel would urge that the area of the said land is 3.35 acres and contended that having regard to the fact that 45 per cent thereof is to be left out for the roads, the value thereof should not be taken for computation purpose. It was further urged that the respondent authority failed to apply its mind that even if for the sake of arguments, it is treated that the subject property is the residential land, the value of the land after paying the external and internal development charges should be Rs. 17,30,000 as per the following calculations : “Total Land : 3.35 acres or 16,214 sq. yds. or 13,561 sq. mtr. 45 per cent left out for the roads = 6,102 sq. mtr. (as per the laws of land authority, 45 per cent area must be left for roads, etc. Balance 55 per cent (13,561-6,102) = 7,459 sq. mtr. The total value of the land at the rates mentioned by the respondent authority of Rs. 2,500 per sq. mtr. will be Rs. 1,86,47,500. Less development charges being paid to the land authority. (a) External development charges @ Rs. 34 lacs per acre. (b) Internal development charges @ Rs. 16.50 lakhs per acre. Total charges payable to land authority would be Rs. 50.50 lacs i.e. (34.00 + 16.50) lacs x 3.35 acres = Rs. 1,69,17,500 The value of the land comes out to be Rs. 1,86, 47,500 Rs.1,69,17,500 Rs.17,30,000 Thus the value of Rs. 17,30,000 is still over than the consideration at which the subject property has been purchased.”
3. Mr. R.D. Jolly, learned counsel appearing on behalf of respondent Nos. 1 and 2 would submit that the jurisdiction of this Court in a matter of this nature is limited. He would contend that the appropriate authority had arrived at finding of fact as regards the value of the land upon compliance of the principles of natural justice and, thus, the same cannot be interfered with. The learned counsel would, therefore, contend that no cause for judicial review under Art. 226 of the Constitution of India has been made out. Our attention has been drawn to the fact that before passing the said order, the sale instances had been taken into consideration. It has further been stated that the documents filed as Annexure P-5 to the writ petition had never been placed on record by the petitioner before the appropriate authority. He would urge that even no NOC has been issued by the appropriate authority in relation to the said sale instances cited in Annexure P/5 which pertain to sale of less than worth Rs. 10 lakhs. In the said order, the appropriate authority has found that the land in question is situated in the heart of the Malibu Town. The learned counsel would contend that only 20 per cent of the area has to be left out for roads. Having regard to the decision of the apex Court in C.B. Gautam vs. Union of India & Ors. (1992) 108 CTR (SC) 304 r/w (1993) 110 CTR (SC) 179 : (1993) 199 ITR 530 (SC) : TC S3.142 only 15 per cent of the area may not be taken into consideration for the purpose of computation of the value thereof. Thus, according to the learned counsel, even if the lands are to be considered to be agricultural in nature, no case has been made out for interference with the impugned order.
4. Learned counsel appearing on behalf of respondent Nos. 3 and 4, on the other hand, would submit that for the last six years, his client had not received any consideration and as such, he prays for invocation of equity jurisdiction of this Court so that a direction can be issued for payment of interest as also the enhancement in value of the land which had taken place.
5. The judicial review jurisdiction of this Court is limited. In Brindco Sales Ltd. vs. Appropriate Authority & Ors. (2000) 164 CTR (Del) 148 : (2001) 248 ITR 465 (Del), having regard to the statutory pre-emptive right granted in favour of the Central Government in terms of s. 269UD of the IT Act, the apex Court held that : “Sec. 269UD has no conditions precedent except to the extent that property is situated in an area to which the Chapter is applicable and a statement has been received in respect thereof. A preemptive right has been bestowed by s. 269UD, on the authority having jurisdiction over the area where the property is situated to make an outright final order for purchase by the Central Government of such immovable property at an amount equal to the amount of apparent consideration as per the statement submitted to it under s. 269UC. The action in question does not depend upon any special circumstances. Use of the expression “notwithstanding anything contained in any other law or any instrument or any agreement for the time being in force” makes the position crystal clear. It is a pre-emptive right based on State prerogative, which reigns supreme over those of individuals. But the powers have to be exercised within a limited time span. That is the statutory circumspection on the powers conferred under s. 269UD. Sec. 269UD(1B) mandates recording of reasons specifying the grounds on which it is made. This is a salutary provision as an act uniformed by reason in prima facie arbitrary. It is to be noted that s. 269UD as originally enacted did not contain sub-ss. (1A) and (1E). They appear to have been introduced to get over the deficiencies pointed out by 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. But the earlier provision also warranted recording of reasons.”
6. Dealing in details, the power of the Court under Arts. 226 and 227 of the Constitution of India, it was held that the said power can be exercised in the following situations : (i) Erroneous assumption or excess of jurisdiction. (ii) Refusal to exercise jurisdiction. (iii) Error of law apparent on the face of the records are distinguished from a mere mistake of law or error or law relating to jurisdiction. (iv) Violation of the principles of natural justice. (v) Arbitrary or capricious exercise of authority or discretion. (vi) Arriving at a finding which is perverse or based on no material. (vii) A patent or flagrant error of procedure. (viii) Order resulting in manifest injuries. The case does not come within the purview of any of the aforementioned factors. Even on the basis of the valuation of the land calculated at the rate of Rs. 2,500 per sq. mtr., the entire value of the property of 16,214 sq. mtr. would be Rs. 4,05,35,000. Having regard to the statutory provisions, the petitioner may be held to be entitled to 20 per cent towards road and 15 per cent for other purposes. Even then, the value of the land would be much more than Rs. 68,00,000. For the reasons mentioned hereinbefore, no case is made out for interfering with the impugned order. So far as the submission of respondent Nos. 3 and 4, is concerned that the amount in question had not been paid by the respondent in view of the interim order of status quo dt. 18th April, 1995, passed by this Court which was made absolute on 22nd Nov., 1995, this Court also cannot grant any relief by way of interest and enhancement in the value of the land in the meantime in favour of the said respondents as the questions raised by them are not subject-matter of the writ petition. Respondent. Nos. 3 and 4 therefore, may take recourse to such remedies as may be available to them in law. The petition is disposed of accordingly.
[Citation : 256 ITR 220]
