2007 (6) TMI 159 - HC - Income Tax

Tamil Nadu Buildings Act not applicable to Central Govt-owned buildings post vesting in Union of India

The Court held that the Tamil Nadu Buildings Act does not apply to buildings owned by the Central Government after vesting in the Union of India under the ... Purchase of immovable property by central govt. – stay petition by tenant against eviction order of property dismissed by civil court – held that impugned revision petition is dismissible as granting stay was discretionary – moreover assessee, occupying premised, hasn’t paid rent Issues:1. Interpretation of the application of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 to buildings owned by the Central Government.2. Effect of an order made under Chapter XX-C of the Income-tax Act on tenancy rights.3. Validity of a notice requiring a tenant to surrender possession solely based on an order under the Income-tax Act.4. Dismissal of a stay petition under Section 9(3) of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971.Analysis:Issue 1: Interpretation of the application of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 to buildings owned by the Central Government.The Court considered whether the Tamil Nadu Buildings Act applies to buildings owned by the Central Government after an order under Chapter XX-C of the Income-tax Act. It was held that once a building vests in the Union of India due to such an order, the State law governing eviction ceases to apply to that building.Issue 2: Effect of an order under Chapter XX-C of the Income-tax Act on tenancy rights.The Court clarified that an order under the Income-tax Act does not automatically terminate a tenant's rights, especially if the agreement to sell does not require vacant possession. The Union of India, as the new owner, can deal with the tenant under the Public Premises Act if necessary.Issue 3: Validity of a notice requiring a tenant to surrender possession solely based on an order under the Income-tax Act.The Court ruled that a notice demanding possession solely due to an order under the Income-tax Act cannot be sustained if the agreement to sell allows the purchaser to receive rents from the tenant. The impugned notice was set aside, emphasizing that the tenancy rights were not automatically terminated.Issue 4: Dismissal of a stay petition under Section 9(3) of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971.The Court reviewed a stay petition related to an eviction order under the Public Premises Act. It was argued that the petitioner was not an unauthorized occupant and had been tendering rents, which were returned. The Court upheld the lower court's decision, stating that the petitioner had not paid rent, the premises were locked, and all legal procedures were followed. The Court directed the main appeal to be heard promptly and disposed of within six months.In conclusion, the Court dismissed the Civil Revision Petition, upholding the lower court's decision not to grant a stay. The petitioner was directed to cooperate in the main appeal proceedings, emphasizing the importance of following due process and providing necessary evidence.