Compulsory purchase order fails where vendor lacked authority to sell the entire flat and title depended on pending civil litigation.

A compulsory purchase order under section 269UD(1) could not be sustained where the purported vendor held only a 50% share in the flat and had no authority to transfer the entire property without the co-owner's consent. The order was expressly made subject to the result of pending civil proceedings, and those proceedings ended in a consent decree confirming the co-owner's 50% share. The authority was a party to the suit, raised no objection to the consent decree, and the consent terms were found not to be fraudulent. In these circumstances, the purchase order was unsustainable and liable to be quashed.

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Issues: Whether the compulsory purchase order under section 269UD(1) of the Income-tax Act, 1961 could be sustained when the vendor had only a 50% share in the flat and the order itself was made subject to the outcome of pending civil proceedings.

Analysis: The purchase order expressly stated that it would be subject to the result of the pending suit. The civil suit later ended in a consent decree confirming that the petitioner's co-owner held a 50% share in the flat. On that basis, the purported vendor could not transfer the entire flat without the co-owner's consent. The authority was party to the suit and did not object to the consent decree. The record also showed that the consent terms were not fraudulent.

Conclusion: The compulsory purchase order was unsustainable and was rightly liable to be quashed.

Ratio Decidendi: A compulsory purchase order cannot stand where the transfer itself is invalid because the vendor lacked authority to sell the entire property, especially when the order was expressly made subject to the outcome of pending litigation determining title and shares.

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