TaxTMI 
TaxTMI 
2007 (10) TMI 257
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....400 058 (hereinafter will be referred to as "the property"). These petitioners will hereinafter be referred to as "the owners". 2. The owners entered into an agreement dated June 13, 1983, with one Sardar Bhupender Singh Sethi and Sardar Harbans Singh Kohli (hereinafter be referred to as "the first purchasers"). By the agreement, the petitioners agreed to sell to the first purchasers the property with the structures existing thereon. By a supplementary agreement entered into on September 24, 1986, it was agreed that the owners would be liable to get vacant possession of the premises in occupation of G. K. Makhijani. The owners and the first purchasers applied to the appropriate authority, for no objection certificate in respect of the agreement dated June 13, 1983, under Chapter XX-A of the Income-tax Act. By an order dated February 24, 1987, the competent authority certified that it has no objection to the transfer of the said property. Subsequent to the agreement, one of the first purchasers (Sardar Bhupender Singh Sethi) succeeded in getting vacant possession from five tenants after litigation. The owners, thereafter by an agreement dated June 11, 1993, agreed to sell the prope....
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....I with the appropriate authority. On July 29, 1993, according to the petitioners, the District Valuation Officer submitted a report on the valuation of the said property. Respondents Nos. 1 to 3—members of appropriate authority, inspected the property on August 24, 1993. On September 2, 1993, the owners received the show-cause notice dated August 27, 1993, calling upon them to show cause why the property may not be acquired under Chapter XX-C of the Income-tax Act. In the show-cause notice, it was stated that the owners may appear before the appropriate authority on September 14, 1993. Reference was made to the agreement dated June 11, 1993, filed with Form No. 37-I. Reference was also made, to the three sale instances, based on the F. S. I, available and taking the consideration payable, the rate was worked out at Rs. 1,356 per square foot. Taking the valuation done by the Valuation Officer, it was observed that there is significant undervaluation of the property. It was further mentioned that the consideration payable by the Government works out to Rs. 1,52,62,560. The other contentions need not be referred to. 5. The owners, on September 14, 1993, appeared before the appropri....
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....tion in Form No. 37-I, the agreement of June 11, 1993, was annexed. 7. On receipt of the order dated September 22, 1993, the owners by their letter dated October 15, 1993, requested respondents Nos. 1 to 3 not to take any further steps as the owners desired to challenge the said order. Respondents Nos. 1 to 3 informed the owners and the second purchaser that as no order has been passed by the court, respondents Nos. 1 to 3 will be taking possession of the premises by force on October 22, 1993 which was received on October 22, 1993. By letter dated October 25, 1993, the owners were informed that respondents Nos. 1 to 3 had taken possession of the property excluding the area occupied by the nine tenants. Respondents Nos. 1 to 3 also approved the discounted value, stating that this method had been confirmed by the decision of the Bombay High Court in the case of Smt. Vimla Devi G. Maheshwari v. S. K. Laul [1994] 208 ITR 734 vide order dated March 10, 1993, in Writ Petition No. 514 of 1993. 8. In this petition and other companion petitions, Damodar Gulabrai Belani and Shrichand Gulabrai Belani will be referred to as the owners. Sardar Bhupender Singh Sethi and Sardar Harbans Singh Ko....
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....urchaser. 10. Subsequent to the order dated September 22, 1993, the following claims were made before the appropriate authority. The petitioner in Writ Petition No. 2160 of 1993, Harbans Singh Kohli, one of the first purchasers, by his letter dated October 22, 1983, addressed to the appropriate authority made a demand in the sum of Rs. 96,00,000. Similarly, on behalf of Mr. Harbans Singh Kohli, one of the first purchasers, their counsel addressed a letter dated October 27, 1993, to the appropriate authority to pay their clients compensation of Rs. 96,00,000 which the intending purchaser (the second purchaser) had agreed to pay to their client as confirmed by letter dated September 18, 1993 and which according to the advocates had been forwarded to the appropriate authority by their clients letter dated September 20, 1993. 11. By their communication dated October 15, 1993, the owners, and the second purchaser informed the appropriate authority without prejudice that regarding premises which have been vacated earlier, possession of the property cannot be handed over unless the appropriate authority agreed to pay a sum of Rs. 96,00,000 as agreed between the owners and the second pur....
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....rty stands revested in the transferor in accordance with the provisions of section 269UH(2). 15. To answer the issue, we may make reference to some additional jurisdictional facts. Pursuant to the owners submitting application in Form No. 37-I on June 15, 1993, a notice was served by the appropriate authority on the owners, first and second purchasers on August 22, 1993, to show cause why order should not be made in accordance with the provisions of section 269UD(1) of the Income-tax Act, 1961. The second purchaser by communication dated September 18, 1993, informed the appropriate authority that there was no undervaluation and as such the notice served should be withdrawn. The appropriate authority by order dated September 22, 1993, passed an order for pre-emptive purchase under sub-section (1) of section 269UD of the Income-tax Act, 1961 and the same was communicated to the parties by communication dated October 12, 1993. The second purchaser intimated that further, steps should not be taken as the second purchaser proposed to move the hon'ble High Court against the said order. There is some correspondence which need not be adverted to. Suffice it to say that on October 22, 1993....
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.... month in which the immovable property concerned becomes vested in the Central Government under sub-section (1), or, as the case may be, sub-section (6), of section 269UE . . . (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 under this Chapter to pay the same to th....
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.... said that the order of acquisition stands abrogated by virtue of section 269UH of the Income-tax Act, 1961. 24. Before we answer the issue, we may refer to the judgments cited at the Bar on behalf of the petitioners. In Union of India v. Dr. A. K. Garg [2002] 256 ITR 660 (SC), properties were acquired and the amount was tendered by the Central Government on September 6, 1993. This tender was beyond the stipulated period under section 269UG. The Supreme Court held that this would attract the wrath of section 269UH of the Act resulting in abrogation of the purchase order. The defence of the Department was that the amount had been deposited by the appropriate authority but there was no material to show that the same was offered or tendered to the parties concerned. Before the apex court, there was no issue that there was dispute as to who were entitled to receive consideration. 25. Reliance was next placed on the judgment of Parasrampuria Estate Developers P. Ltd. v. Members of Appropriate Authority [2006] 282 ITR 110 (Bom). One of the contentions urged was that the order stand abrogated as compensation was not tendered to the petitioners and the same had been deposited in the acco....
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.... which reads as under: "The consideration payable by the Central Government is thus Rs. 1,52,62,560 (rupees one crore fifty-two lakhs sixty-two thousand five hundred and sixty only). This shall be payable to the parties after conditions laid down in clause 11 of the agreement are satisfied." and the order of deposit whether refers to section 269UG(3), can it be said that there was a dispute as to apportionment or title. 30. We have already reproduced the order of deposit. In the matter of apportionment of amount of compensation, there was certainly a dispute. There were claims by three claimants. Firstly, between the owners and the second purchaser on the one hand and Sardar Bhupender Singh Sethi. Secondly, between Sardar Bhupendar Singh Sethi and Sardar Harbans Singh Kohli. Thirdly, between Harsiddh Corporation and Harbans Singh Kohli. There were also suits filed by Sardar Bhupender Singh against Sardar Harbans Singh Kohli, as also two other suits, as set out earlier in the petitions. Some of these suits were for specific performance for transfer of the property. In other words, there was also a dispute as to conveyance of the title. The agreement of June 11, 1983, apart from ....