High Court Of Karnataka
Mass Traders (P) Ltd. vs. Appropriate Authority & Ors.
Section 269UD
V. Gopala Gowda & Ravi Malimath, JJ.
Writ Appeal No. 2911 of 2005
9th June, 2009
Counsel Appeared :
G. Sarangan with Smt. Vani H., for the Appellant : M.V. Seshachala & S.G. Bhagwan, for the Respondents
JUDGMENT
V. GOPALa GOWDA, j. :
During the pendency of this appeal Misc.Writ No. 4823 of 2009 has been filed requesting this Court to permit the proposed 7th and 8th respondent to come on record as the property in question is a joint family property and their rights are involved. In support of the right claimed, learned counsel for the proposed applicants placed reliance upon the judgment of this Court in R.S.A. No. 580 of 1987 disposed of on 20th July, 2002.
The claim of the 7th respondent is seriously contested by the Department. Learned counsel for the appellant requested to reject the application. The learned counsel for the appellant also submits that the property was sold in the year 1993 and the same has been vested with the Central Government by virtue of the provisions of s. 269UD of the Act.
Sri M.V. Sheshachala, learned counsel appearing on behalf of the Department, submits that a sum of Rs. 1,82,00,000 crores has already been paid in favour of the executant of the agreement. He therefore submits that the proposed respondents are not diligent in prosecuting and defending his right.
Having regard to the submissions made that the property was sold as far as back in the year 1993 and the disputed question of fact in justification of their claims cannot be gone into by this Court in these proceedings, liberty is given to the proposed 7th and 8th respondent to establish the right, title in the property in an appropriate proceedings before the competent Court of law in accordance with law. Subject to the liberty granted, Misc.Writ No. 4823 of 2009 is rejected.
The agreement holder filed writ petition Nos. 39258 and 39259 of 1993 (IT) questioning the correctness of the order of the Appropriate Authority in selling the property on behalf of the Central Government and further directions were sought for by the appellant herein to issue no objection certificate to return bank guarantee for a sum of Rs. 2,85,00,000 to him urging various grounds. The said writ petitions were rejected by the learned Single Judge by the impugned order dt. 25th May, 2005. There is no need for us to advert to the various facts and grounds in this appeal as the learned Single Judge has extensively referred to the facts and also the earlier proceedings in writ petition No. 17478 of 1993 and an interim order was declined by this Court. Therefore, the Appropriate Authority ordered for compulsory purchase of the property in terms of the order dt. 14th June, 1993 as per the letter dt. 14th June, 1993 issued under s. 269UE(2) of the IT Act (hereinafter called as Act in short). The Supreme Court has disposed of the civil appeals vide its judgment dt. 24th Sept., 1993. The observations made in the said judgment is extracted in the impugned order and thereafter considering the statement of objections filed by the respondents herein the arguments of the learned counsel appearing for the parties were heard at length and the writ petitions were disposed of by answering both the legal contentions namely, the principles of violation of natural justice and with regard to the comparison of the market value of the property in question made by the authority and selling the same to the Central Government. On the basis of the facts placed before the learned Single Judge and on the basis of the record the learned Single Judge declined to grant the relief in favour of the appellant. The correctness of the said order is questioned in this appeal urging various grounds in this writ appeal.
The learned Single Judge has adverted to the rival legal contentions urged by the learned counsel for the appellant. The said legal contentions were rebutted by the learned standing counsel appearing on behalf of IT Department. With reference to the rival legal contentions urged, the learned Single Judge rightly referred to the same and recorded a finding of fact and held that the order sheet dt. 28th Aug., 2004 discloses that both the learned counsel wanted to put an end to the long drawn litigation and they made submissions on merits. After hearing the case on merits the learned Single Judge rightly rejected the writ petition by recording reasons at para 20. The reasons assigned by the learned Single Judge would clearly go to show that there is no violation of principles of natural justice as pleaded by the appellant, as the learned Single Judge after giving adequate opportunity to the writ petitioner and after hearing the learned standing counsel has disposed of the matter on merits.
Insofar as the merit of the matter is concerned the learned Single Judge by adverting to the legal contentions has referred to the Department’s stand to pass a pre-emptive purchase order keeping in view the property in question. For the said purpose the Department’s counsel has placed reliance on the comparative sales of the property and they are compared to the property in question. Therefore, the stand taken by the Department’s counsel that the sale of the property on the basis of comparable sales does not call for interference. With reference to the said contention, the learned Single Judge has examined the same and held that in view of the agreement dt. 14th April, 1989 with reference to land area of 14,200 sq. ft. and the old building having plinth area of 4,598 sq. ft., that the said property does not have a frontage on the Infantry Road, except for a small passage having width of
20 ft. The authority has taken into account the salvage value of the building. The land allotted for the said property No. 6, Infantry Road worked out to Rs. 4/3 X 457 per sq. ft. and even with the disadvantages as stated above, the land rate of Rs. 457 per sq. ft. was considered to be too low as compared to rates prevailing in the locality. The learned Single Judge has noticed that the authority has held that the rate of the property bearing Nos. 4 and 5 ought to have been Rs. 670 per sq. ft. and further the order of the authority noticed at para 10 was also noticed by the learned Single Judge with reference to the property No. 10 which is very close to the property under consideration and it was sold in various parts. Considering the salvage life of the building, the rate was fixed at Rs. 747 per sq. ft. The authority also noticed the aforesaid relative fact and considering all the material available on record, has passed an order holding that the market value of the property under transfer was definitely in excess of Rs. 747 per sq. ft. at the time when the agreement was entered into by the appellant/respondent No. 3 and the persons who claimed as owners.
Insofar as the arguments with reference to RBI’s approval is concerned that the approval does not come in the way of re-examination in terms of s. 269UD of the Act. With reference to the said legal contention the learned Single Judge said the object and provision is to see that the evasion of the tax is avoided. Therefore the RBI’s approval is in favour of the appellant. That itself would not mean that the Department is bound by RBI. The learned Single Judge having regard to the prime locality of the commercial property in Bangalore which fetches fairly more when compared to other property in the area and that the property in question is a corner plot located at the junction of Queen’s Road and Infantry Road and therefore the learned Single Judge came to the conclusion at para 26 of the impugned order and held that the authority after noticing the comparable sales of the situated properties has come to the conclusion that the rate of the property covered in this appeal would be Rs. 1,452 per sq. ft. Therefore, the learned Single Judge has held that the property is a valuable property and the consideration is very low and it is more than 15 per cent in terms of the apex Court ruling. Therefore, the learned Single Judge held that the finding that the property purchased by entering into an agreement by the appellant is below the normal rate and therefore the impugned order does not call for any interference. Hence, the learned Single Judge has held that the selling of the property in favour of the Central Government is perfectly legal and valid. Further having regard to the decision in the case of 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) the learned Single Judge has held that there is no illegality in selling of the property. Particularly having regard to the undisputed fact that the Appropriate Authority has sold the property in favour of the Central Government and alleged purchaser even has received the consideration after accepting the same agreement holder would not have any grievance. Therefore, the finding of the learned Single Judge is perfectly legal and valid. Further with reference to the judgment of the Supreme Court in the case of Appropriate Authority & Anr. vs. Smt. Sudha Patil & Anr. (1998) 150 CTR (SC) 405 : (1999) 235 ITR 118 (SC) and also in the case of Union of India & Ors. vs. Shatabadi Trading & Investment (P) Ltd. & Ors. (2001) 169 CTR (SC) 408 : (2001) 251 ITR 93 (SC) the learned Single Judge held that in view of the apex Court decision cited supra that the Court shall only look into the material irregularity or illegality while exercising power under Arts. 226 and 227 of the Constitution, there is no illegality in selling of the property. Therefore, the finding of the learned Single Judge that no interference is called for in the impugned order is perfectly legal and valid, Therefore the writ petition has rightly been dismissed and does not call for any interference in this appeal in exercise of appellate power and jurisdiction. We are in respectful agreement that view taken by the learned Single Judge that the appeal must fail accordingly it is dismissed.
[Citation : 329 ITR 302]
