Section 269UE and pre-emptive purchase: vacant possession may follow where no subsisting leasehold right remains.

Section 269UE of the Income-tax Act was discussed in the context of Chapter XXC pre-emptive purchase and vacant possession of immovable property. The analysis notes that where the agreement for sale provides for transfer free from encumbrances and the occupant has no subsisting leasehold right, vesting in the Central Government can operate without recourse to State rent control law. The earlier Supreme Court decision was treated as fact-specific and dependent on the terms of the agreement to sell. On those facts, the provision was not shown to be unconstitutional or void, and no enforceable right to resist delivery of vacant possession survived.

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Issues: Whether section 269UE of the Income-tax Act, 1961, was unconstitutional and void for authorising vesting of immovable property in the Central Government free from all encumbrances and for enabling dispossession of an existing occupant without recourse to the State rent control law.

Analysis: The challenge turned on the effect of Chapter XXC of the Income-tax Act, 1961, and the nature of the petitioner's occupancy. The agreement for sale specifically provided for transfer free from all encumbrances, and the petitioner's own case showed that the lease had expired long before the impugned order. In that situation, no subsisting leasehold protection survived in favour of the petitioner. The reliance on the earlier Supreme Court decision did not assist the petitioner because that decision was applied on its own facts and recognised that the effect of section 269UE depends on the terms of the agreement to sell. The special machinery in Chapter XXC for giving effect to pre-emptive purchase also displaced the ordinary procedure under the State rent control law in the context of premises acquired for the Central Government.

Conclusion: Section 269UE was not shown to be unconstitutional or void on the facts of this case, and the petitioner had no enforceable right to resist delivery of vacant possession.

Final Conclusion: The writ petition failed on merits, and the impugned statutory action was upheld.

Ratio Decidendi: Where an agreement for sale contemplates transfer free from encumbrances and the occupant has no subsisting leasehold right, section 269UE cannot be struck down as unconstitutional merely because it enables the Central Government to obtain possession in aid of pre-emptive purchase under Chapter XXC.

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