TaxTMI 
TaxTMI 
1998 (11) TMI 122
X X X X Extracts X X X X
X X X X Extracts X X X X
....5/98, 4658/98, 4791/98, 4792/98, 991/98, 1776/98, 2190/98, 2191/98, 2192/98, 2436/98, 4611/97, 4612/97. 2.2. Rajdhani Estate Promoters & Developers Association, is an association of builders and estate developers established in the year 1970 and registered under the Societies Act, 1860, is the writ petitioner in CWP 2441/97. 3. All the petitioners are builders engaged in developing landed property and thereafter allotting plots, flats, houses, shops, etc. to the prospective buyers. To illustrate the nature of activities undertaken, we will briefly set out the facts of sample cases in the succeeding paragraphs. There may be variations in the matter of dates or details but those variations in the individual cases are not significant. What is of significance is the nature of activity and the transactions entered into by the several petitioners. 4. In CWP No. 1735/97, the respondent No. 2 made an application on 13th June, 1996 in the proforma prescribed by the petitioner M/s Ansal Properties and Industries Ltd. for allotment of a residential flat of a built up area of 350 sq. yds. (approx.). The allotment having been finalised, an agreement was entered into between the respond....
X X X X Extracts X X X X
X X X X Extracts X X X X
....had applied for allotment of a plot by way of sale vide application dt. 13th June, 1996 which date is much prior to the date of agreement mentioned in Form 37-I. It is also mentioned in the schedule of the agreement enclosed with the form that Rs. 3,83,203 was paid with application of allotment and a further sum of Rs. 3,83,203 was paid within 60 days, thereof. This indicates that the transaction with reference to the identification of the property as also the rate of payment and schedule of payment was finalised much prior to the alleged date of agreement mentioned in Form 37-I. It is the considered view of the Appropriate Authority that since the major terms and conditions of the transaction were finalised on 13th June, 1996, the Form 37-I should have been filed within 15 days thereof. Since this was not so, the form is treated as belated form. Further, in absence of any power of condonation of delay, the form has to be treated as not maintainable." 5. In CWP 4160/97 M/s DLF Universals Ltd. have developed a residential apartment complex in Qutub Enclave, Gurgaon (Haryana). On 12th July, 1996, the respondents No. 2, 3, 4 made an application for allotment of a residential apartm....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Lastly, such applications are being rejected by the Appropriate Authority usually on two grounds (i) non-furnishing of information in respect of cost of acquisition as required by column 12 and (ii) non-filing of Form 37-I within 15 days of application for allotment consequent upon such defects being held fatal by the Appropriate Authority, Form 37-I is termed as defective and deemed never to have been filed. A specimen copy of such order has been filed. 7. Without burdening this judgment with details of the facts of the several cases, it would suffice to note the relevant features generating the issues arising for decision. The intending vendors are all builders. They are engaged in the business activity of developing plots/complexes residential, office or both. The schemes are advertised; in many a cases at a point of time when the scheme of construction is only on papers. The intending buyers finalise their deals by inspecting the plans and such details thereof as can be made available. The area, dimensions, plans and layouts, even the cost, are all tentative which achieve a finality only on the plan materialising by completion of the construction and at that state while do....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or not, for the transfer of any immovable property; (d) "immovable property" means - (i) any land or any building or part of a building, and includes, where any land or any building or part of a building is to be transferred together with any machinery, plant, furniture, fittings or things, such machinery, plant, furniture, fittings or other things also. Explanation-For the purposes of this sub-clause "land, building, part of a building, machinery, plant, furniture, fittings and other things" include any rights therein; (ii) any rights in or with respect to any land or any building or a part of a building (whether or not including any machinery, plant, furniture, fittings or other things therein) which has been constructed or which is to be constructed, accruing or arising from any transaction whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other AOP or by way of any agreement or any arrangement of whatever nature), not being a transaction by way of sale, exchange or lease of such land, building or part of a building; (f) "transfer",- (i) in relation to any immovable property referred to in sub-cl. (1) of cl. (d),....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e prescribed manner; and shall be furnished to the Appropriate Authority in such manner and within such time as may be prescribed, by each of the parties to such transaction or by any of the parties to such transaction acting on behalf of himself and on behalf of the other parties. (4) Where it is found that the statement referred to in sub-s. (2) is defective, the Appropriate Authority may intimate the defect to the parties concerned and give them an opportunity to rectify the defect within a period of fifteen days from the date of such intimation of within such further period which, on an application made in this behalf, the appropriate, authority may, in its discretion, allow and if the defect is not rectified within the said period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the appropriate, authority may, in its discretion, allow and if the defect is not rectified within the said period of fifteen days, or as the case may be, the further period so allowed, then not withstanding anything contained in any other provision of this Chapter, the statement shall be deemed never to have been furnish....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and incidental provisions which are not fully relevant for our purpose though necessary reference would be made whenever required. 12. In the IT Rules, 1962, Part X-C was added incorporating rules relating to purchase of immovable properties under Chapter XX-C. Rule 48L provides as under : "48L. Statement to be furnished under s. 269UC(3).- (1) The statement required to be furnished to the Appropriate Authority under sub-s. (3) of s. 269UC shall be in Form No. 37 -I and shall be signed and verified in the manner indicated therein by each of the parties to the transfer referred to in sub-s. (1) of that section on by any of the parties to such transfer acting on behalf of himself and on behalf of the other parties. (2) The statement in Form No. 37-I shall be furnished, in duplicate, to the Appropriate Authority- (a) before the 30th day of October, 1987, in a case where the agreement for transfer is entered into before the coming into force of Chapter XX-C in the areas comprised in the "Bangalore Metropolitan Region", and "Ahmedabad Urban Development Area" and the areas comprised in the city of Ahmedabad, as referred to in the notification of the Government of India in....
X X X X Extracts X X X X
X X X X Extracts X X X X
.................... ................................ 4. The particulars of the transferor(s) transferees), and other details about the transaction are furnished in the annexure to this agreement. The Schedule above referred to : ............................................................................................................................. VERIFICATION In witness of the above agreement for sale, the parties hereto solemnly declare that what is stated above and in the annexure (including the documents) accompanying such annexure), to the extent it relates to the respective party, is correct and complete to the best of their knowledge and belief. Each party further declares that he is competent to sign this agreement and verify its content. Transferor(s) . &nb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e title deeds of the property proposed to be transferred ? (ii) If the answer to (i) above is no, the name and address of the person in possession of the title deeds and the reasons thereof. 12. Particulars about acquisition of the property proposed to be transferred: (i) Date on which the immovable property was acquired, (ii) Cost of acquisition of the property. If the property was constructed by the transferor(s), the cost of acquisition of the land and cost of construction is to be given separately. (ii) Was the property or part thereof acquired other than by way of purchase? If so, give the details of such acquisition and cost of acquisition to the previous owner. Furnish a copy of relevant document. . . . . . . . . . . . 14. Is there any other written agreement for transfer of the said property other than the one in this form? If so, enclose a copy of this agreement. Signature(s) of transferor(s) . Signature(s) of transferee(s)" ............................................. . ............................................. Notes : 1. The statement of agreement for transfer and the annexure should be in the format prescribed above duly signed by the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 269UA shall have to be departed from while reading Chapter XX-C wherever the context otherwise requires. The learned counsel for the petitioners have developed this submission further in the manner noted in the succeeding sub-paragraphs. 16.1. Under s. 269UC(1) no transfer of any immovable property attracting applicability of the provision shall be effected except after an agreement for transfer has been entered into in accordance with the provisions of sub-s. (2) at least four months before the intended date of transfer, notwithstanding anything contained in the Transfer of Property Act or any other law for the time being in force. Such an agreement under sub-s. (2) must be in writing, in the prescribed proforma, and singed by or on behalf of both the parties. Under sub-s. (3) such an agreement must setforth the prescribed particulars and has also to be verified in the prescribed manner. It has then to be furnished to the Appropriate Authority in the manner and within the time prescribed. Whatever might have been the private agreement for transfer between the parties, once an agreement in the statutory form has been entered into, no one can revoke or alter the agreement entere....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (4) parties are free to settle only such terms on which they are ad idem may leave other terms to be settled at a later date. (5) consideration must be determined with clarity, so as to spell out apparent consideration enabling comparison with value of similar properties. (5) consideration may be left to be determined for future or made dependent on variable factors. (6) has to be filed before the prescribed authority in the prescribed manner and within the prescribed time. (6) if in writing-need only accompany proforma agreement. (7) defects, if any, open to scrutiny by AA and must be removed. (7) cannot be interfered with, not even scrutinised for fault-finding by AA. (8) cannot be revoked or altered once furnished under s. 269UC. (8) parties are free to revoke/alter/novate the terms agreed upon or the agreement itself. (9) on order being passed under s. 269UD (1), the property vests in Central Government in terms of such agreement. (9) the terms of agreement become redundant on property vesting in Central Government under s. 269UD(1); even the transferee may not sue the transferor on such terms (under s. 269UM). 18. It is, therefore, clear that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nto an agreement, one of them may resile from the contract and may not agree to the proforma agreement being filed before the Appropriate Authority. The party in breach may be sued by the other party in a Court of law and having been successful may have a decree for specific performance of contract for sale. By that time a period of years and months, much beyond the period of 15 days, must have rolled by. If the period of 15 days was to be calculated from the date of the agreement or the period of 15 days was to be held mandatory then the said period having expired compliance of Chapter XX-C would never be secured. The decree, would be rendered a waste piece of paper. The Registrar of Deeds would not register the document executed in execution of the decree. On the other hand, if the period of 15 days has to be calculated from the date of proforma agreement being drawn up then on the decree for specific performance having been passed, on behalf of the JD the proforma agreement shall be signed by the person authorised to act on behalf of the JD and compliance with Chapter XX-C shall be secured, also the decree will be successfully executed. Any other interpretation would result into....
X X X X Extracts X X X X
X X X X Extracts X X X X
....increases and so increases the price at which the property is actually transferred. 24. Sec. 269UC(3) contemplates particulars being prescribed which must be set forth in the prescribed proforma agreement. Such particulars have been prescribed by the rules. The availability of such particulars has a significant object to achieve. It is not a matter of mere formality. The Appropriate Authority has to form an opinion if the property has been undervalued and, therefore, whether the discretionary jurisdiction in directing compulsory purchase of the property by the Central Govt. should be exercised. In the absence of the requisite particulars being available how can the authority compare the value of the property with the value of comparable properties and take a decision whether the property is undervalued or not. It is pertinent to note that though the act as enacted provides for the property forming subject-matter of agreement vesting in the Central Govt. free from all encumbrances but the phrase "free from all encumbrances" has been held to be ultra vires the Constitution and directed to be struck down by the Supreme Court in the case of C.B. Gautam vs. Union of India (1992) 108 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....perty which has been constructed. 27. There are one or two anomalies which may emerge and immediately we proceed to notice them. 27.1. The parties may enter into any private agreement for transfer. They must wait for the arrival of the day on which the property has assumed the shape in which it is proposed to be transferred. On that day they must enter into the proforma agreement (Form 37-I) and file the same seeking no-objection from the Appropriate Authority. It was submitted that this interpretation may put the parties to the agreement in a disadvantageous position. The initial private agreement may have been made in the year 1990. The property may take the shape in which it is to be transferred in the year 1998. The price would be one agreed upon between the parties in the year 1990. The value as shown on the date of proforma agreement in Form 37-I would appear to be undervalued persuading Appropriate Authority to direct the purchase of the property by the Central Government. This is a misapprehension which has to be dispelled. The proforma agreement of the year 1998 would be accompanied by the private agreement entered into in the year 1990 and that will be a relevant fa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n called a proforma agreement). Since the agreement for transfer under s. 269UC is to be drawn up in the form of a statement, in Chapter XX-C, the word 'statement' has been used interchangeably with agreement for transfer in Form 37-I. "Agreement for transfer" as occurring in s. 269UK, s. 269UM and s.269UO is to be assigned the meaning as defined by cl. (a) of s. 269UA. At all the other places in Chapter XX-C, agreement for transfer means and must be read as proforma agreement i.e., an agreement for transfer in the prescribed Form 37-I as the context so requires. (iv) The Appropriate Authority cannot be found fault with refusing to act upon or take cognizance of proforma agreement in statement Form 37-I (i) if the requisite particulars though available are not supplied, or (ii) if the requisite particulars would be available at the time when the property has reached a state in which it is proposed to be transferred and yet the particulars are not being made available with precision because the form is being filed with a view to secure NOC for a "transfer in contemplation". (v) A delay in filing Form 37-I is not a defect. The period of 15 days prescribed by r. 48L is directory....