CBDT policy on disposal of Chapter XX-C properties upheld; no enforceable right to demand auction or negotiated sale.

A CBDT instruction issued under Section 119 of the Income-tax Act, 1961 permitting limited negotiated sale of Chapter XX-C properties was upheld as a policy decision not shown to be arbitrary, unreasonable, or violative of Article 14. The court held that the Act did not require disposal only by public auction and that judicial review over such administrative instructions is confined to narrow grounds. It also held that prior orders and Supreme Court observations did not create any enforceable right in favour of the petitioner or her predecessor to compel either auction or private negotiation. The petition was treated as repeated re-litigation and no relief was granted.

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Issues: (i) Whether the CBDT instruction dated 19.07.1993 was arbitrary, unreasonable, or violative of Article 14 so as to justify interference; (ii) Whether the petitioner had any enforceable right, as legal heir or otherwise, to compel private negotiation or auction of the property.

Issue (i): Whether the CBDT instruction dated 19.07.1993 was arbitrary, unreasonable, or violative of Article 14 so as to justify interference.

Analysis: The instruction was issued in the exercise of the CBDT's administrative power under Section 119 of the Income-tax Act, 1961. A circular or instruction of this nature reflects governmental policy and is open to judicial review only on narrow grounds of arbitrariness or unreasonableness. The court found that the decision to permit disposal of properties acquired under Chapter XX-C through negotiated sale in limited situations was a policy choice within the Government's discretion and that the Act did not compel disposal only by public auction for such properties.

Conclusion: The challenge to the CBDT instruction was rejected and the instruction was held not to be arbitrary or unconstitutional.

Issue (ii): Whether the petitioner had any enforceable right, as legal heir or otherwise, to compel private negotiation or auction of the property.

Analysis: The earlier orders and the Supreme Court's observations did not confer any right on the petitioner or her predecessor to insist that the property be put to auction. The only observation was that participation in auction, if held, could be considered. The court held that this did not create a substantive entitlement to demand auction or private negotiation, and the petition amounted to repeated re-litigation of matters already decided.

Conclusion: No enforceable right in favour of the petitioner was found, and the claim to compel negotiation or auction was rejected.

Final Conclusion: The petition was found to be an abuse of process and the court declined to grant any relief, leaving the earlier policy and prior determinations undisturbed.

Ratio Decidendi: An administrative policy circular issued under Section 119 of the Income-tax Act, 1961 is not liable to be struck down absent demonstrated arbitrariness or unreasonableness, and a permissive observation regarding participation in a future auction does not create a legal right to insist on auction or negotiated sale.

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