Pre-emptive purchase under Chapter XX-C depends on statutory safeguards, with equitable interest protection where sale consideration is delayed.

Chapter XX-C pre-emptive purchase proceedings are discussed in the context of a court-sanctioned sale of immovable property and the role of section 269UD(1). The text notes that the Revenue asserted undervaluation and maintained that a court-directed sale did not by itself exclude statutory scrutiny, while the applicable scheme required notice and opportunity in line with Supreme Court directions. It also states that where statutory proceedings delay access to the sale consideration, equitable interest protection may be warranted for the seller, depending on the eventual outcome before the appropriate authority.

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Issues: (i) Whether the appropriate authority could invoke section 269UD(1) in respect of a sale of immovable property effected pursuant to a court-sanctioned sale process; (ii) whether the impugned order should be set aside and the matter remitted for fresh consideration with consequential directions regarding interest on the sale consideration.

Issue (i): Whether the appropriate authority could invoke section 269UD(1) in respect of a sale of immovable property effected pursuant to a court-sanctioned sale process.

Analysis: The challenge proceeded on the footing that a court-directed sale after inviting offers should not ordinarily be subjected to pre-emptive purchase under Chapter XX-C. The Revenue maintained that the court's permission to sell did not exclude the statutory power and that the authority could still examine whether the apparent consideration was substantially understated. The Court held that, on the facts, this was not the appropriate stage to decide that controversy because the Revenue had asserted substantial undervaluation and the objections could be raised before the appropriate authority in the limited enquiry contemplated under the statute.

Conclusion: The contention that section 269UD(1) was barred merely because the sale arose from a court process was not accepted at this stage.

Issue (ii): Whether the impugned order should be set aside and the matter remitted for fresh consideration with consequential directions regarding interest on the sale consideration.

Analysis: The Court applied the principle that the pre-emptive purchase scheme is to be exercised only in appropriate cases of undervaluation and that the parties must receive the notice and opportunity mandated by the Supreme Court's directions in the governing Chapter XX-C jurisprudence. Relying on the equitable principle recognised by the Supreme Court in respect of delay in completion of the transaction, the Court also held that the owner should not be left uncompensated for the period during which the sale consideration remained unavailable. It therefore set aside the impugned order, treated the already filed Form No. 37-I as filed on the date of the judgment for completing the proceedings, and fixed interest consequences depending on the eventual outcome before the appropriate authority.

Conclusion: The impugned order was set aside, the matter was remitted for fresh proceedings, and interest directions were issued in favour of the owner depending on the final decision of the authority.

Final Conclusion: The writ petitions succeeded, the pre-emptive purchase order did not stand, and the appropriate authority was directed to proceed afresh in accordance with the governing Supreme Court directions, with ancillary interest protection for the property owner.

Ratio Decidendi: A pre-emptive purchase order under Chapter XX-C cannot be sustained without compliance with the procedural safeguards laid down for that scheme, and equitable interest may be awarded where the seller is deprived of the sale consideration because of the statutory proceedings and court-imposed delay.

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