2006 (7) TMI 152

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....leased out to a Government of India undertaking but after the tenant vacated the premises, Dr. Prakash decided to sell the same. The petitioner's case is that since he was insisting on payment of the entire consideration for the flats by cheque/bank draft, he found very few takers for his property. He was, therefore, advised by the property dealers to fall in line with the market practice of receiving the sale consideration in the ratio of 60:40 in which 60 per cent. of the amount would be paid in white while the rest would be paid under the table in the form of black money. This method, the petitioner was told, would obviate the need for obtaining permission from the appropriate authority under section 269UC of the Income-tax Act, 1961, which would otherwise be necessary if the sale consideration of the flats was more than Rs. 10 lakhs. The petition goes on to state that Dr. Prakash refused to fall in line with what was suggested to him as a device for avoiding the straight and the honest method of transferring his property and insisted that he would comply with the provisions of law and accept the consideration for the flats only by cheque or bank draft. The petitioner's effor....

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....t disclosed in the applications seeking permission. Possession of the property was pursuant to the said orders taken over by the respondents. The present writ petition was then filed in March 1995. Nearly one year thereafter, the owner Dr. Anand Prakash passed away and was substituted by his widow Smt. Laxmi Anand. It is noteworthy that during the pendency of this petition, the petitioner was paid a sum of Rs. 11,51,400 and Rs. 13,02,450 representing the sale consideration of the two flats which amount was directed to be refunded to the Government in terms of the order of this court dated August 19, 2004. There was, during the intervening period, some controversy regarding the settlement of the matter on terms which were not, according to the petitioner, correctly recorded necessitating a clarification of the order of this court dated November 22, 2001, by order dated December 21, 2001. Learned counsel for the parties, however, agreed that nothing really turned on that part of the controversy. The writ petition was, therefore, argued by them on the merits. Appearing for the petitioner, Mr. Saurav Prakash contended that the order passed by the appropriate authority was in gros....

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....in C. B. Gautam's case [1993] 199 ITR 530 (SC), that the petitioner was entitled to assail the legality of the order as the compulsory purchase carried a stigma which the petitioner insists, should not attach to his name. On behalf of the respondents, it was argued by Mr. Jolly that there was no illegality in the impugned orders passed by the appropriate authority nor was there any violation of the principles of natural justice as alleged. The show-cause notice had, according to learned counsel, disclosed the particulars of the flat in Ansal Tower with which the property owned by the petitioner was being compared. The non-furnishing of the copy of the document under which the sale transaction in respect of Ansal Towers was finalised was, therefore, inconsequential according to learned counsel. It was further submitted that the deposit of the amount in question was made on December 29, 1994, which was within the outer limit stipulated under section 269UG of the Act. The deposit was valid according to learned counsel as the petitioner had declined to receive the amount. There was, argued Mr. Jolly, no illegality in the order passed by the appropriate authority even on the me....

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....ropriate Authority (I. T. Dept.) [1997] 223 ITR 572. The courts have in these pronouncements declared that with holding of the relevant information and material which the appropriate authority proposes to rely upon while making an order will violate the principles of natural justice and vitiate the order of compulsory purchase. A contrary view is not in our opinion logically available. Once it is held that the affected parties are entitled to a hearing before an order of compulsory purchase is made by the appropriate authority, the duty to disclose to the affected parties the material sought to be relied upon will be implicit in any such hearing. A hearing will be no more than a mere ritual if it is not meaningful and effective. It cannot be meaningful and effective unless the affected party knows what precisely is being used against it in the form of documents or information. It is only when documentary and other material collected by the appropriate authority for use against the affected parties is disclosed to such parties that the affected parties can make an effective representation against the same either to show that the material is unworthy of credit or that it is insuffici....

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....ondents do not claim to have furnished to the petitioner the information and the documents demanded by the petitioner before passing the impugned orders. Such being the position, we have no hesitation in holding that the documents relied upon by the prescribed authority were denied to the petitioner thereby violating the principles of natural justice. The next question then is whether we ought to remand the matter back for a proper hearing by the appropriate authority as was done by the Supreme Court in Appropriate Authority v. Varshaben Bharatbhai Shah (Smt.) [2001] 248 ITR 342. That was a case where the validity of an order was questioned before a Division Bench of the High Court of Gujarat who allowed the said petition and quashed the order of compulsory purchase inter alia on the ground that the affected parties had not been afforded a fair opportunity to oppose the proposed action. The Supreme Court had, keeping in view the facts and circumstances of that case, remitted the matter back to the appropriate authority for a fresh hearing after the affected parties were furnished the material including reports relied upon by the appropriate authority. A similar order in the pres....