Agreement-holder lacks standing to challenge pre-emptive purchase, and acceptance of refund bars later objection by acquiescence.

A mere agreement-holder under Chapter XX-C of the Income-tax Act lacked locus standi to challenge a pre-emptive purchase order because a contract for sale does not create any interest in immovable property, and the procedural service of copies under sections 269UD and 269UL did not confer substantive rights. Acceptance of the contractual refund of advance after compulsory purchase also amounted to acquiescence, so the transferee could not later ignore the refund clause or invoke section 269UG to continue the challenge. The writ appeal therefore failed on both standing and acquiescence grounds.

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Issues: (i) Whether a mere agreement-holder/transferee had locus standi to challenge an order of pre-emptive purchase under Chapter XX-C of the Income-tax Act, 1961; (ii) Whether acceptance of refund of advance under the agreement attracted the principle of acquiescence and barred the challenge.

Issue (i): Whether a mere agreement-holder/transferee had locus standi to challenge an order of pre-emptive purchase under Chapter XX-C of the Income-tax Act, 1961.

Analysis: The definition of "persons interested" in section 269UA(e) was held to be inclusive but confined to persons claiming or entitled to claim an interest in the consideration payable on vesting of the property in the Central Government. On the settled law under section 54 of the Transfer of Property Act, 1882, a contract for sale does not by itself create any interest in immovable property. The service of copies under sections 269UD(2) and 269UL(3) was explained as a procedural step to inform both parties who had joined in Form No. 37-I, and not as conferring substantive title or interest on the transferee.

Conclusion: The transferee had no locus standi to question the order under section 269UD(1) of the Income-tax Act, 1961.

Issue (ii): Whether acceptance of refund of advance under the agreement attracted the principle of acquiescence and barred the challenge.

Analysis: Clause 10.3 of the agreement provided that if the property was acquired under Chapter XX-C, the agreement would stand cancelled and the advance would be refunded. The transferee had already received the advance without demur. In that setting, the Court held that the transferee could not contend that the refund arrangement was irrelevant or that the benefit accepted under the agreement could be ignored. The plea based on section 269UG of the Income-tax Act, 1961, was rejected, and the conduct of the transferee was treated as acceptance of the contractual consequence of compulsory purchase.

Conclusion: The principle of acquiescence applied, and the challenge was barred on that ground.

Final Conclusion: The writ appeal failed because the appellant was neither a person with enforceable interest in the property for the purpose of challenging pre-emptive purchase nor entitled to avoid the consequences of the contractual refund clause after accepting the advance.

Ratio Decidendi: A mere agreement to purchase immovable property does not create an interest in the property for purposes of standing under Chapter XX-C, and acceptance of contractual benefits upon compulsory purchase may preclude a challenge by acquiescence.

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