Rajasthan H.C : To declare that the provisions of s. 269UG(3) were not attracted in the instant case and that the recourse to the said provisions was clearly without jurisdiction and absolutely illegal.

High Court Of Rajasthan : Jaipur Bench

Ratnalaya Diamonds (P) Ltd. vs. Union Of India

Section 269UG

Shiv Kumar Sharma, J.

Civil Writ Petn. No. 1475 of 1990

29th August, 2003

Counsel Appeared

Paras Kuhad, for the Petitioner : R.B. Mathur & R.S. Rathore, for the Respondent

JUDGMENT

Shiv Kumar Sharma, J. :

As questions of law and fact involved in the instant writ petitions are analogous, I propose to dispose them by a common order.

2. The petitioners in these writ petitions seek the following reliefs : (a) To quash and set aside the order dt. 28th Dec., 1989. (b) To declare that the provisions of s. 269UG(3) were not attracted in the instant case and that the recourse to the said provisions was clearly without jurisdiction and absolutely illegal. (c) To declare that the provisions of s. 269UG(1) are clearly attracted and the respondent authorities were liable to tender the amount equal to the apparent consideration to the respondent Nos. 5 and 6 within the period prescribed under s. 269UG(1) of the Act of 1961. (d) To declare that on account of the respondent authorities failure to tender the amount equal to the amount of apparent consideration to the respondent Nos. 5 and 6 within the period of 30 days from the date on which the property vested in the Central Government, i.e., before 31st Dec., 1989 the order of purchase dt. 29th Nov., 1989 stood abrogated on 31st Dec., 1989 and that the property in question, i.e., the building along with land being plot No. D-46, Subhash Marg, C-Scheme, Jaipur, stood revested in the respondent Nos. 5 & 6. (e) To direct the respondent authorities to issue the necessary no objection certificate in terms of provisions of Chapter XXC of the IT Act, 1961 to the respondent Nos. 5 and 6 so as to enable them to execute the sale deed in favour of M/s Ratnalaya Diamonds (P) Ltd.

3. The case of the petitioners is that the property in dispute, i.e., D-46 situated at Subhash Marg, C-Scheme, Jaipur was purchased by Shri Nand Lalji, who was father-in-law of Sushila Devi and father of Mahesh Chandra, who is father of petitioner No. 2 Vaibhav Mishra on 4th Aug., 1940. Mahesh Chandra expired on 29th Oct., 1962 who is husband of petitioner Sushila Devi. The property in dispute is property of HUF and it was treated as HUF property with a clear understanding between the petitioners and late Shri Nand Lalji that ownership of half undivided portion thereof vested in both the petitioners and the ownership of other undivided half share of the property vested in late Shri Nand Lalji. After the demise of Shri Mahesh Chandra a return of estate duty was filed. Consequent to that the Asstt. CED, Rajasthan by order dt. 25th July, 1989 assessed the payable on the estate of Mahesh Chandra. In 1972 Rajasthan State Co-operative Bank was inducted as tenant by Shri Nand Lal. Nand Lal Mishra expired on 2nd Oct., 1974. After his death return of Estate Duty was filed. In 1982 Smt. Sushila, petitioner inducted Jt. Director of Agriculture Ajmer Division, Jaipur as tenant. On 31st Aug., 1989 the petitioners executed a composite agreement for sale and declaration with respect to the property with M/s Ratnalaya Diamonds (P) Ltd. as the purchaser and M/s Alpha Builders (P) Ltd. as the confirming third party. The agreement to sale executed by the petitioners with M/s Alpha Builders was abrogated by the parties in the month of 9th April, 1989 and it was agreed that the petitioners shall pay a sum of Rs. 11.25 lakhs as refund considerations and damages.

4. The petitioners averred that on 29th Nov., 1989 Dy. CIT (Appropriate Authority), New Delhi under Chapter XXC of the IT Act, 1961 initiated proceedings in respect of immovable property situated at D-46, Subhash Marg, C-Scheme, Jaipur. The petitioners were directed to surrender or deliver the possession of the immovable property to the Valuation Officer, Income-tax, Jaipur and they were further directed to intimate in advance before 14th Dec., 1989 the date and time to surrender or deliver of the possession of the immovable property. Along with this notice, copy of order under s. 269UD(1) of IT Act was also enclosed. By the order dt. 29th Nov., 1989, Appropriate Authority ordered under s. 269UD(1) for purchase by the Central Government of the immovable properties described in the Schedule enclosed with the order, i.e., Plot No. D-46, Subhash Marg, C-Scheme, Jaipur. By another communication dt. 5th Dec., 1989 the Dy. CIT, Jaipur in pursuance to the order dt. 29th Nov., 1989 authorised the Chief CIT, Rajasthan, Jaipur to tender the amount equal to the amount of apparent consideration under ss. 269UF and 269UG of the Act and the petitioner of writ petition 1605/1990 was directed to hand over the possession. In the said letter dt. 5th Dec., 1989, the Chief CIT was also directed to tender the payment and the petitioner was directed to produce receipts for payment of the following taxes, dues, etc. : (i) Receipts for payment of House-tax/Property-tax to JDA/Municipal Council/Urban Land & Building Tax Dett. upto the date of handing over possession. (ii) Receipts for payment of ground rent to JDA/Municipal Council/Urban Land & Building Tax Deptt., Jaipur and also interest if any levied or leviable upto the date of handing over possession. (iii) Receipts for payment of water charges to Public Health Engineering Deptt. upto the date of handing over possession (Please also give water connection numbers). (iv) Receipts for payment of electricity charges to Rajasthan State Electricity Board upto the date of handing over possession (Please also give electric connection Nos.) (v) Receipts for payment of unearned increase if levied/leviable to Jaipur Development Authority, Jaipur. (vi) Receipts for payment of society charges upto the date of handing over possession.

The petitioners further pleaded that by another order dt. 28th Dec., 1989 as there was a dispute regarding ownership of the property the amount of consideration of Rs. 18 lacs were deposited with the Appropriate Authority as per provisions of s. 269UG of the IT Act by the Chief CIT, Jaipur. On 29th Dec., 1989 the Valuation Officer wrote a letter to the Secretary, Jaipur Development Authority, Jaipur informing that in accordance with the provisions of s. 269UF the property, i.e., D46, Subhash Marg, C-Scheme, Jaipur vest in the Central Government free from all encumbrances and a further request was made that the records of the rights of the above property may be corrected and a fresh certificate declaring co-ownership of the Central Government may be issued. By another letter dt. 29th Dec., 1989 M/s Rajasthan State Co-operative Bank was requested to deposit 50 per cent of the rent of the premises to the Appropriate Authority. By letter dt. 9th Jan., 1990, issued to the respondent No. 6, the Chief CIT, Jaipur requested him to hand over the original title deed of the property latest by 12th Jan., 1990. The Dy. CIT, i.e., Appropriate Authority, New Delhi vide letter dt. 16th Jan., 1990 in view of the letter of M/s Ratnalaya Diamond (P) Ltd., i.e., the petitioner of writ petition 1475/1990 was advised to sort out the matter with the transfer to whom the earnest money was paid by him, i.e., Rs. 14,35,000.

The respondent No. 3 filed reply to the writ petition. The respondent Nos. 5 to 7 (private parties Smt. Manjulika Mishra, Ku. Ambika Mishra and Ku. Aditi Mishra, who are wife and daughters of petitioner Vaibhav Mishra) have also filed separate reply to the writ petition.

The respondent No. 3 averred in the reply that the impugned order has been passed by the Appropriate Authority after complying with the provisions of the Act. The reasons have been recorded in the order sheet and are not required to be recorded in the order itself. The petitioner was not entitled to any opportunity because the Central Government has purchased the property at the same price and considerations as mentioned in the agreement. M/s Ratnalaya Diamonds (P) Ltd. has no locus standi and cannot claim the amount. The agreement between M/s Ratnalaya Diamonds (P) Ltd. and petitioner is a matter which can be decided by the civil Court. Since there was a dispute with regard to the title, the amount has been deposited with the Appropriate Authority in accordance with the provisions of s. 269UG of the Act. There was no probate in favour of the petitioners nor any satisfactory evidence and the allegations of malice, fraud, arbitrariness or illegality are without any basis. The respondents have not modified the orders of the Central Government. Provisions of s. 269UG(2) and (3) are not attracted and the only provisions of sub-s. (1) are attracted. The property was not reverted with the petitioners.

The respondent Nos. 5 to 7 submitted reply to writ petition and prayed that the writ petition be dismissed and the entire amount of apparent consideration be paid to the petitioners and no objection certificate be ‘issued’ to petitioners to enable them to execute the sale deed in relation to the property sold in the agreement dt. 31st Aug., 1989 in favour of M/s Ratnalaya Diamonds (P) Ltd. It was further prayed that the balance amount of maintenance till date out of the share of petitioner Vaibhav Mishra from apparent consideration lying deposited with the Appropriate Authority be paid to them. I have heard the rival submissions and scanned the material on record.

Before proceeding further it would be appropriate to refer to the relevant provisions of s. 269UG of the IT Act, which are as follows : “26UG.(1) The amount of consideration payable under s. 269UF shall be tendered to the person or persons entitled thereto, within a period of one month from the end of the month in which the immovable property concerned becomes vested in the Central Government under s. 269UG. (2) If any dispute arises as to the apportionment of the amount of consideration amongst persons claming to be entitled thereto the Central Government shall deposit with the Appropriate Authority the amount of consideration required to be tendered under sub-s. (1) within the period specified therein. (3) If the persons entitled to the amount of consideration does not consent to receive it, or if there is any dispute as to the title to receive the amount of consideration, the Central Government shall deposit with the Appropriate Authority the amount of consideration required to be tendered under sub-s. (1) within the period specified therein : Provided that nothing in the said section shall affect the liability of any person who may receive the whole or any part of the amount of consideration for any immovable property vested in the Central Government to pay the same to the person lawfully entitled thereto. (4) Where any amount of consideration is deposited with the Appropriate Authority he may order the same to be invested in securities and may direct the interest or other proceeds of such investment to be accumulated and paid in any such manner as will in its opinion give the parties interested therein, the same benefits therefrom as they might have had from the immovable property in respect of whereof such amount has been deposited.”

11. The Division Bench of the Andhra Pradesh High Court in Mrs. Sooni Rustum Mehta vs. Appropriate Authority (1991) 98 CTR (AP) 84 : (1991) 190 ITR 290 (AP) indicted that the word “dispute” is used in a wide sense and implies any controversy as to title whether as between the actual claimants or with respect to a single claim. Merely because there is no rival claimant to the consideration, s. 269UG(3) does not necessarily compel the authority to tender the apparent consideration under s. 269UG(1) of the Act. If the authorities have a bona fide genuine doubt as to the title of the apparent vendor, it is open to them not to tender consideration under sub-s. (1) of s. 269UG but make a deposit under s. 269UG(3). The word “title” in sub-s. (3) of s. 269UG should be considered not merely as relating to the “ownership” of the part or whole of the consideration but as referable to the “entitlement” of the persons to receive the consideration. A look at the impugned order dt. 28th Dec., 1989, demonstrates that the Appropriate Authority recorded satisfaction as there was a dispute regarding the ownership of the property by Smt. Sushila Devi and Shri Vaibhav and there was no document of the joint ownership of the property as mentioned in the will and the remaining 1/2 share for which the will was executed and as there was a dispute as to title to receive the amount of consideration, the amount of consideration was deposited with the Appropriate Authority as per the provision of s. 268UG of the Act.

I have closely scanned the case law placed before me by Mr. Paras Kuhad, the learned counsel, for my perusal. I find myself unable to agree with the submissions advanced before me by the leaned counsel for the petitioner. According to me, the orders under challenge do not suffer from any infirmity. I am of the opinion that the provisions of s. 269UG(3) are attracted in the instant cases and s. 269UG(1) is not applicable. Thus, no declaration or directions sought in the writ petitions can be made under Art. 226 of the Constitution of India.

The writ petitions being devoid of merit stand dismissed, without any order as to costs.

[Citation : 270 ITR 436]

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