AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 549
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....ary. 4. Petitioner No.2 is a company incorporated under the Companies Act, 1956 whereas petitioner No.1 is one of its Directors. 5. Petitioner No.1 on behalf of petitioner No.2 had entered into an agreement for sale dated 04.05.1994 with Mrs. L. (Noreen) I. Pereira and others for purchase of 2/3rd undivided shares of the land bearing Survey Nos.262/19, 265/A/1, C.T.S. Nos.1170 and 1159 situated at Sherley Mala Road, Bandra (West), Mumbai admeasuring 995 sq.mtrs. By the said agreement, Mrs. Pereira and the others had agreed to sell and petitioners had agreed to purchase the said undivided 2/3rd share of the land for a total consideration of Rs. 2,30,93,000.00, out of which an amount of Rs. 65,93,334.00 was paid by the petitioners to the vendors as earnest money and the balance amount of Rs. 1,55,00,000.00 was payable within 30 days of receipt of certificate from the appropriate authority under Section 269 UC of the Income Tax Act, 1961. The balance consideration of Rs. 10,00,000.00 was payable on execution of the deed of conveyance and other formalities by the vendors. 6. Subsequently, petitioner No.1 on behalf of petitioner No.2 entered into another agreement for sa....
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....pectively paid by the petitioners to the vendors as earnest money. 12. It is stated that petitioners desired to withdraw the two writ petitions. As per instructions of the petitioners, their counsel submitted praecipe before the Court seeking withdrawal of the two writ petitions but at the same time seeking a direction to respondent No.1 to make payment to the petitioners of the aforesaid two amounts together with accumulated interest thereon. However, the two writ petitions were disposed of on withdrawal vide orders dated 28.04.1999 without any order or direction as to payment of principal as well as interest. 13. Counsel on behalf of the petitioners by their letters dated 28.04.1999 informed respondent No.1 about withdrawal of the two writ petitions whereby objection of the petitioners to the pre-emptive purchase orders was withdrawn and therefore, respondent No.1 was called upon to make the requisite payments to the petitioners along with accrued interest thereon. 14. It is stated that respondent No.1 had paid the balance of the apparent consideration money to the vendors and took over possession of the two properties. 15. Respondent No.1 by letter dated 05.05.1999 i....
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....e counter claim of the respondents far exceeds the interest earned on the aforesaid two principal amounts. Therefore, petitioners are not entitled to the claim of interest. 19.4. It is further stated that following withdrawal of the two writ petitions, respondent No.1 immediately paid the two principal amounts to the petitioners vide cheque Nos.406147 and 406146, both dated 21.05.1999. 20. Dr. Chandrachud, learned counsel for the petitioners has taken us to the provisions of Chapter XXC of the Act, more particularly to Section 269UG(4) thereof to contend that the appropriate authority is under a legal obligation to consider payment of interest on the consideration amount deposited with the appropriate authority, which is invested by the said authority in Government or other securities. Refusal on the part of the appropriate authority to pay interest on the ground that there was no order to that effect by the Court while allowing withdrawal of the two writ petitions is not justified. The appropriate authority has to apply its mind and act in a fair and reasonable manner while deciding claim of interest which he failed to do in the present case. He submits that while sub....
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....rnment under Chapter XXC. 23.1. While Section 269UC places restrictions on transfer of immovable property, Section 269UD provides for passing of order by appropriate authority for purchase of the immovable property in question by the Central Government. As per sub-section (1), the purchase of immovable property by the Central Government should be at an amount equal to the amount of apparent consideration. 24. Where an order is passed under Section 269UD(1), the property in question shall on the date of such order vest in the Central Government in terms of the agreement for transfer. This provision is contained in subsection (1) of Section 269UE. It says that where an order is made by the appropriate authority in respect of an immovable property under subsection (1) of Section 269UD, such property shall vest in the Central Government on the date of such order in terms of the agreement for transfer. 25. As per Section 269UF, where an order for purchase of immovable property by the Central Government is made under sub-section (1) of Section 269UD, the Central Government shall pay by way of consideration for such purchase, an amount equal to the amount of apparent consideratio....
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....t upon the appropriate authority to invest the amount of consideration deposited by the Central Government and pay the interest accrued thereon to the parties interested. 28. Insofar the present case is concerned, facts are not in dispute. Order for purchase of immovable property by the Central Government was passed by the appropriate authority under Section 269UD(1) on 30.08.1994. As per affidavit of respondent No.1, cheques for the two amounts of Rs. 65,93,334.00 and Rs. 32,96,667.00 were issued to the petitioners on 21.07.1995 but petitioners refused to accept the two cheques following which the two cheques were deposited in Fixed Deposit Account and earned interest of Rs. 8.66,417.00 and Rs. 4,33,208.00 respectively upto 12.05.1999 when the two principal amounts (without the interest amounts) were repaid to the petitioners following withdrawal of the two writ petitions. 29. As discussed above, once an order is passed under Section 269UD(1) of the Act, the immovable property in question covered by the said order shall vest in the Central Government. As per sub-section (1) of Section 269UG, the amount of consideration payable on account of such purchase shall be tendered to....