TaxTMI 
TaxTMI 
2000 (4) TMI 4
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....reinafter the "Act", for short). A copy of the agreement was annexed with Form No. 37-I as statutorily required and as per the pro forma the names of the six transferees were mentioned in column No. 4 of Form No. 37-1. On August 12, 1994, the appropriate authority issued notice under section 269UD(1A) of the Act to the transferor and the transferees in view of its having formed an opinion that there was significant undervaluation of the property and calling upon the transferor and the transferees to show cause Why an order of compulsory purchase by the Central Government be not made. Vide para. 6 of the notice, the appropriate authority noted that out of the amount of consideration agreed upon between the parties to the agreement dated May 1, 1994, an amount of Rs. 4,55,000 was paid by way of earnest money on the execution of the agreement and the balance amount was payable within 30 days from the receipt of no objection certificate from the appropriate authority. The transferor and the transferees filed responses to the show-cause notice disputing the grounds for compulsory purchase by the Central Government. On August 30, 1994, the appropriate authority passed an order dire....
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.... claim of the transferees, appellants before us, is concerned it was neither taken note of nor honoured by the appropriate authority. On January 25, 1995, the transferees/appellants served a notice demanding payment of Rs. 5,05,000 from the appropriate authority. On March 16, 1995, they filed a writ petition in the High Court of Bombay seeking the same relief. A learned single judge dismissed the writ petition summarily forming an opinion that the remedy of the appellants was to sue the transferor for return of the earnest money and remedy of civil writ petition was misconceived. The appellants preferred a writ appeal which also has been dismissed by the Division Bench. The aggrieved appellants have come up to this court seeking special leave to appeal which leave has been granted to them. The controversy arising for decision centres around the interpretation of section 269UG of the Act. According to learned counsel for the appellants, it was statutory obligation of the Central Government to have tendered to them the amount claimed by them. Their claim having been brought to the notice of the Central Government, the appropriate authority was not justified in releasing the amount....
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....nt of the amount of consideration, set off the amount of consideration or any part thereof against such liability or sum, after giving an intimation in this, behalf to the person entitled to the consideration. (2) Notwithstanding anything contained in sub-section (1), if any dispute arises as to the apportionment of the amount of consideration amongst persons claiming to be entitled thereto, the Central Government shall deposit with the appropriate authority the amount of consideration required to be tendered under sub-section (1) within the period specified therein. (3) Notwithstanding anything contained in sub-section (1), if the person entitled to the amount of consideration does not consent to receive it, or if there is any dispute as to the title to receive the amount of consideration, the Central Government shall deposit with the appropriate authority the amount of consideration required to be tendered under sub-section (1) within the period specified therein : Provided that nothing herein contained shall affect the liability of any person who may receive the whole or any part of the amount of consideration for any immovable property vested in the Central Government ....
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....ion to be quashed and struck down from the language of section 269UE(1). Vide para. 36, this court has held : "In the result the expression 'free from all encumbrances' in sub-section (1) of section 269UE is struck down and sub-section (1) of section 269UE must be read without the expression 'free from all encumbrances with the result that the property in question would vest in the Central Government subject to such encumbrances and leasehold interests as are subsisting thereon except for such of them as are agreed to be discharged by the vendor before the sale is completed... the provisions of sub-section (6) of that section do not present any difficulty because the vesting in the Central Government would be subject to such encumbrances and leasehold rights as stated earlier." A purchase under the provisions of Chapter XX-C may be called a compulsory purchase or a pre-emptive purchase. Sub-section (1) of section 269UF obliges the Central Government to pay an amount equal to the apparent consideration by way of consideration for such purchase. Subsection (1) of section 269UG provides for the person or persons to whom the amount of apparent consideration is to be tendered by t....
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....he property and thus would be an encumbrance on the property. Section 269UE(1) as amended by the Finance Act, 1993 (with effect from November 17, 1992), reads as under : "269UE. Vesting of property in, Central Government.---(1) Where an order under sub-section (1) of section 269UD is made by the appropriate authority in respect of an immovable property referred to in sub-clause (i) of clause (d) of section 269UA, such property shall, on the date of such order, vest in the Central Government in terms of the agreement for transfer referred to in sub-section (1) of section 269UC : Provided that where the appropriate authority, after giving an opportunity of being heard to the transferor, the transferee or other persons interested in the said property, under sub-section (1A) of section 269UD, is of the opinion that any encumbrance on the property or leasehold interest specified in the aforesaid agreement for transfer is so specified with a view to defeat the provisions of this Chapter, it may, by order, declare such encumbrance or leasehold interest to be void and thereupon the aforesaid property shall vest in the Central Government free from such encumbrance or leasehold interes....
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.... will not form the charge on the property or it will be released from the charge on certain circumstances or that earnest would be forfeited under certain circumstances. In the present case, the property having been compulsorily purchased by the Central Government there was no occasion for the buyer to have improperly declined to accept delivery of the property. The amount of purchase money was properly paid by the buyer and was in anticipation of the fulfilment of the contract which would include delivery of the property. In view of the order of compulsory purchase having intervened the transferees were excluded from accepting delivery of the property. The applicability of section 55(6)(b) of the Transfer of Property Act was fully attracted. During the course of the proceedings under Chapter XX-C, the appropriate authority may, subject to the principles of natural justice, record a finding that the purchase money which purports to have been paid by the transferees to the transferor is being claimed to have been paid only with a view to defeat the provisions of this Chapter. Then the appropriate authority may make a declaration avoiding the charge claimed to have been created fo....
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....ifferently ? Form No. 37-I filed jointly by the transferees and the transferor stated purchase money to the extent of Rs. 4,55,000 having been paid by the appellants and received by the transferor. Nobody had questioned the genuineness of this payment. The transferor never disputed having received the said amount. The factum of payment of Rs. 4,55,000 finding place in the agreement which was the basis of commencement of the proceedings and formed part of Form No. 37-I could not have been treated as a disputed payment. In any case, if the appropriate authority entertained any doubt about the genuineness or otherwise of such payment then the appropriate authority should have said so in its order and then left the amount in deposit with the appropriate authority. That having not been done the vesting of the property in the Central Government under the order of compulsory purchase cannot defeat the transferees' lien under section 55(6)(b) of the Transfer of Property Act. Though a further amount of Rs. 50,000 is claimed to have been paid by the transferees to the transferor on June 4, 1994, and this payment was also brought to the notice of the appropriate authority on June 15, 1994,....
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.... the execution hereof, the vendor and the purchasers shall file the copy of this agreement along with a statement in Form No. 37-I, with the appropriate authority as required by section 269UC, sub-section (3), of the Income-tax Act, 1961. (c) In the event the appropriate authority makes an order for purchase by the Central Government of the said property under section 269UD of the Income-tax Act, 1961, then in such an event--- (i) the vendor shall be entitled to receive from the Central Government entire consideration and the purchasers hereby consent for the same ; (ii) The purchasers shall be entitled to claim from the appropriate authority the refund of Rs. 4,55,000 (rupees four lakhs fifty five thousand only) being the earnest money paid by the purchasers to the vendor. In the event the appropriate authority does not pay the said sum of Rs. 4,55,000 (rupees four lakhs fifty five thousand only) to the purchasers then the purchasers shall be entitled to recover the said earnest money from the vendor. (d) In the event the appropriate authority does not make any order for purchase by Central Government of the said property for a period of three months from the date of s....