P. Nataraja Sastry v. Appropriate Authority Income-Tax Department New Incometax Building

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:12.12.2006 CORAM: THE HON'BLE MR. JUSTICE P. SATHASIVAM ANDTHE HON'BLE MR. JUSTICE S. TAMILVANAN WRIT APPEAL Nos.487 and 495 of 1997 and WAMP.No.1755 of 2006 M/s. Ashok Leyland finance Limited66 Chamiers RoadChennai 600 018 rep. By itsManaging Director S. Nagarajan. .. Appellant inW.A.No.487 of 1997 P. Nataraja Sastry .. Appellant inW.A.No.495 of 1997 vs. 1. Appropriate Authority Income-tax Department New Incometax Building No.108 Uthamar Gandhi Salai First Floor, Chennai 600 034. Income-tax Department New Incometax Building No.108 Uthamar Gandhi Salai First Floor, Chennai 600 034. 2. P. Nataraja Sastry .. Respondents inW.A.No.487 of 1997. 1. Union of India rep. By Secretary to Government Secretary to Government Ministry of Finance, New Delhi. 2. Appropriate Authority Income-tax Department New Incometax Building No.108 Uthamar Gandhi Salai First Floor, Chennai 600 034. Income-tax Department New Incometax Building No.108 Uthamar Gandhi Salai First Floor, Chennai 600 034. 3. M/s. Ashok Leyland finance Limited 66 Chamiers Road Chennai 600 018 rep. By its Managing Director S. Nagarajan. 66 Chamiers Road Chennai 600 018 rep. By its Managing Director S. Nagarajan. .. Respondents inW.A.No.495 of 1997. Writ Appeals filed under Clause 15 of the LettersPatent against the common order of His Lordship Mr. JusticeJayasimha Babu in W.P.Nos.4584 and 4700 of 1993 dated 31.03.1997. W.P.Nos. 4584 and 4700/93:- Petition under Article 226 ofthe Constitution of India to issue a writ of 1. certiorarifiedMandamus to call for the records relating to the petitioner on thefile of the 1st respondent in No.AA/MDS/12/395/2/92-93 and quashthe impugned order dated 23.2.93 and consequently direct the 1strespodnent to grant no objection certificate to the Petitioner(W.P.No.4584/93) 2. Certiorarified Mandamus calling for the recordscomprised in the proceedings of the 2nd Respondent dated 23.2.1993in A.A.MDS 12 (395) /2/92-93(55)/7/90-91 and quash the same andconsequently forbearing the respodnent from taking any steps andproceedings further to acquire or purchase the property 51 I MainRoad, Gandhi Nagar, Adayar, Madras-20 terms of Chapter XXC of theIncome Tax Act (W.P.4700/93) The order of pre-emptive purchase passed by the AppropriateAuthority, Income-tax Department under Chapter XX-C of theIncome-tax Act, 1961, is under challenge in these appeals. 2. The above writ appeals are directed against the commonorder of the learned single Judge dated 31.03.1997 made inW.P.Nos.4584 and 4700 of 1993, in and by which the learned Judge,after rejecting all the contentions urged by the petitioners,confirmed the order of pre-emptive purchase made by theAppropriate Authority in respect of property at No.51, Ist MainRoad, Gandhi Nagar, Adyar, Chennai 600 020. 3. The petitioner in W.P.No.4584 of 1993, viz., M/s. AshokLeyland Finance Ltd., Chennai 18, is the appellant in W.A.No.487of 1997. The petitioner in W.P.No.4700 of 1993, P. Natarajahttps://hcservices.ecourts.gov.in/hcservices/Sastry is the appellant in W.A.No.495 of 1997. 4. Brief facts necessary for the disposal of the aboveappeals are as under: 2. The above writ appeals are directed against the commonorder of the learned single Judge dated 31.03.1997 made inW.P.Nos.4584 and 4700 of 1993, in and by which the learned Judge,after rejecting all the contentions urged by the petitioners,confirmed the order of pre-emptive purchase made by theAppropriate Authority in respect of property at No.51, Ist MainRoad, Gandhi Nagar, Adyar, Chennai 600 020. 3. The petitioner in W.P.No.4584 of 1993, viz., M/s. AshokLeyland Finance Ltd., Chennai 18, is the appellant in W.A.No.487of 1997. The petitioner in W.P.No.4700 of 1993, P. Natarajahttps://hcservices.ecourts.gov.in/hcservices/Sastry is the appellant in W.A.No.495 of 1997. 4. Brief facts necessary for the disposal of the aboveappeals are as under: M/s. Ashok Leyland Finance Limited, petitioner inW.P.No.4584 of 1993, (hereinafter referred to as "the Company")is a Company incorporated under the Companies Act, 1956 andengaged in hire-purchase and leasing business. On 30.04.1990, thepetitioner entered into an agreement with one P. Nataraja Sastry(petitioner in W.P.No.4700 of 1993) for development of theproperty situate in No.51, Ist Main Road, Gandhi Nagar, Adyar,Chennai 20, measuring a total extent of 5 grounds and 1050 sq.ft.for a sum of Rs.30,81,700/-. The Company and the said NatarajaSastry submitted a statement in Form No.37-I of the Income TaxAct, 1961 (in short "the Act") on 02.05.1990 to the firstrespondent - Appropriate Authority, Income-tax Department. Then,the first respondent passed an order dated 13.07.1990 acquiringthe property and requesting the transferor to handover theproperty within 15 days from the date of order. Nataraja Sastry(hereinafter referred to as "the petitioner") filed a writpetition (W.P.No.12608 of 1990), questioning the order passed bythe first respondent on the ground that no opportunity was givenbefore passing the order. In the meantime, the Supreme Court in199 ITR 530 (C.B.Gowtham vs. Union of India) held that, if theauthority passed non-speaking order without giving an opportunity,that would amount to violation of the principles of naturaljustice. In consequence of the said judgement of the SupremeCourt, this Court set aside the order impugned therein with adirection to the first respondent to hear the matter afresh aftergiving opportunity to the transferor and transferee and pass aspeaking order. Pursuant to the same, the first respondent issueda show cause notice to the petitioner. The petitioner sent areply to the said show cause notice and after considering thereply as well as hearing the arguments advanced by the counsel forthe petitioner, the first respondent passed the impugned orderdated 23.02.1993, holding that it is a fit case for acquiring theproperty under Chapter XX-C of the Act. Questioning the saidorder, both the Company and the petitioner filed W.P.Nos.4584 and4700 of 1993 respectively, on various grounds. 5. On behalf of the first respondent, Member of theAppropriate Authority filed a counter affidavit explaining theirposition. It is stated that the Appropriate Authority consideredall relevant aspects, including the value of the property soldnext to it, guideline value of the State Registering Authority andthe law declared by the Supreme Court in (1993 (1) SCC 78 = 199ITR 530 - C.B. Gowtham vs. Union of India), and after affordingopportunity to the petitioner and the Company, exercising theright of pre-emptive purchase under Chapter XX-C of the Act, theimpugned order of purchase was passed. 5. On behalf of the first respondent, Member of theAppropriate Authority filed a counter affidavit explaining theirposition. It is stated that the Appropriate Authority consideredall relevant aspects, including the value of the property soldnext to it, guideline value of the State Registering Authority andthe law declared by the Supreme Court in (1993 (1) SCC 78 = 199ITR 530 - C.B. Gowtham vs. Union of India), and after affordingopportunity to the petitioner and the Company, exercising theright of pre-emptive purchase under Chapter XX-C of the Act, theimpugned order of purchase was passed. 6. The learned single Judge, after finding that the standtaken by the Appropriate Authority, viz., there had beensubstantial under-valuation by the petitioner, which was in excessof 15% of the market value, rejected all the contentions andhttps://hcservices.ecourts.gov.in/hcservices/finally, dismissed both the writ petitions; hence, the presentwrit appeals. 7. Heard Mr. P.S. Raman and R. Krishnamurhty, learnedsenior counsel for the respective appellants and Mrs. PushyaSitaraman, learned senior standing counsel for the Income-taxDepartment. 8. Main grounds of challenge:(i)The subject property has been compared with MalarHospitals' property by the Appropriate Authority, whichis not a fit property to be compared with the subjectproperty;(ii)The existence of long-standing tenants in the propertyhas not been properly considered;(iii)The loss of original title deeds of the property hasnot been properly considered;(iv)The order of Appropriate Authority relies on two othercomparative sale instances, for which notice was notgiven to the petitioner; and hence, it is against theprinciples of natural justice;(v)The guideline value of the property has not beenproperly considered;(vi)The purchase order stands abrogated under Sections 269-UGand 269-UH of the Act, as the apparent considerationhas neither been tendered to the vendor, nor depositedwith the Appropriate Authority by the Central Governmentwithin 30 days from the date of the order; and(vii)A subsequent sale deed in 1992 by Malar Hospitals' onthe same road at a lower rate was not taken note of bythe Appropriate Authority and the same may be consideredby this Court. 9. The learned senior standing counsel appearing for theIncome-tax Department met all the contentions by placing relevantmaterials. 10. Before considering the various contentions, it isuseful to refer the relevant provisions of the Act. Chapter XX-Cof the Act relates to Purchase by Central Government of ImmovableProperties in certain cases of Transfer. Section 269-UD enablesthe Appropriate Authority to order purchase by Central Governmentof immovable property. As per Section 269-UE, where an orderunder Sub-section (1) of Section 269-UD is made by the AppropriateAuthority, such property shall on the date of such order vest inthe Central Government. Section 269-UF speaks about considerationfor purchase of immovable property by Central Government. Section269-UG mandates that the amount of consideration payable underSection 269-UF shall be tendered to the person or persons entitledthereto within a period of one month from the end of the month inwhich the immovable property concerned is vested in the CentralGovernment under Sub-section (1), or, as the case may be, Sub-Section (6) of Section 269-UE, failure to comply with above saidprovision, Section 269-UH makes it clear that the order topurchase the immovable property by the Central Government madeunder sub-section (1) of Section 269-UD shall stand abrogated andthe immovable property shall stand re-vested in the transferorafter the expiry of the aforesaid period. With these provisions,https://hcservices.ecourts.gov.in/hcservices/let us consider the submissions made by both parties. 11. At the foremost, let us consider whether the adjacentproperty, viz., Door No.52, Ist Main Road, Gandhi Nagar, Adyar,Chennai 20 (Malar Hospitals' property) which had been taken forcomparison is a fit property for comparison. According to theAppropriate Authority, the documents relating to the adjacentproperty (Malar Hospitals' property), which was taken intoconsideration is a sale agreement dated 01.08.1989, under whichthe land measuring about 15120 sq.ft. (approximately 6.3 grounds)was transferred for a consideration of Rs.68 lakhs. Based on thetime schedule agreed for the payment of sale consideration, thevalue of the apparent consideration, as discounted under Rule 48-Icame to Rs.66,15,529/-, that is to say Rs.10.39 lakhs per ground.According to the Appropriate Authority, in the light of the landrate at Rs.10.39 lakhs per ground as per the sale agreement dated01.08.1989, as the date of agreement of sale in the instant caseis 30.04.1990, the Appropriate Authority added 9% thereof for thein between period of nine months and fixed the market value atRs.11.33 lakhs per ground. The Appropriate Authority has furtherstated that the extent of land under transfer in the instant casebeing 88% of 5 grounds and 1050 sq.ft., namely, 4.785 grounds, thefair market value as on 30.04.1990 would come to 4.785 x Rs.11.33= Rs.54.21 lakhs. It is the claim of the Appropriate Authoritythat against the estimated fair market value of the property atRs.54.21 lakhs, the value of apparent consideration (afterdiscounting) in the instant case is mentioned Rs.30,52,891/-,which is nearly 77.60% of the estimated fair market value.Accordingly, the Appropriate Authority has concluded that as thefair market value exceeded the apparent consideration by more than15%, it raised a presumption that there was under-statement ofsale consideration in the agreement of sale with a view to evade"tax". Pursuant to such conclusion, a show cause notice wasissued for appearance of the petitioner on 18.02.1993. Thepetitioner filed a written submission before the AppropriateAuthority highlighting various aspects. The very same objectionsprojected before the Appropriate Authority and the learned singleJudge were highlighted before us. 12. Learned senior counsel for the appellants mainlycontended that the market value of the property also depends uponthe Floor Space Index (FSI) deriving from the said property. Itis highlighted that the adjacent property measuring an extent of6.3 grounds was purchased by M/s. Malar Hospitals' underregistered Document No.4110/89 dated 14.12.1989 for the purpose ofconstructing a multi-storey Hospital complex and at the time ofsale itself, both the vendor and the purchaser, M/s. MalarHospitals' were well aware of the scope of development to be madeon the property and now the building standing on that property(seven storey hospital complex) is a testimony to the fact thatFSI in excess of 2.5 times was achieved, which vendor and thevendee would definitely have been aware even at the initial stageof negotiation. 13. As pointed out earlier, it is the opinion of theAppropriate Authority that the value of the land (Malarhttps://hcservices.ecourts.gov.in/hcservices/Hospitals') which was worked out at Rs.10.39 lakhs per ground isapplicable to all adjacent properties. As rightly pointed out by 13. As pointed out earlier, it is the opinion of theAppropriate Authority that the value of the land (Malarhttps://hcservices.ecourts.gov.in/hcservices/Hospitals') which was worked out at Rs.10.39 lakhs per ground isapplicable to all adjacent properties. As rightly pointed out by the learned senior counsel for the appellants that the value of aproperty should be assessed taking into account the prospectivedevelopmental scope of the said property. It was pointed outbefore the Appropriate Authority, the learned single Judge andbefore us that in respect of the property at No.52, the FSI inexcess of 2.5 times was ultimately achieved. Further, it ispointed out that if the market value of the property is Rs.10.39lakhs per ground, when it fetches FSI in excess of 2.5 times,then, the value of the same property will be only at 6.234 lakhsper ground, when it offers FSI in excess of 1.5 times. It isalso pointed out that the subject property measuring an extent of5.4375 grounds has leading dimensions in which the shorter side isunder "30 mts" (100 feet). It is their claim that this factoralone shows that the existing site would not lend itself fordeveloping a multi storey building upon it fetching a higher FSI. 14. The Development Control Rules (DCR) of ChennaiMetropolitan Development Authority (CMDA) is very specific aboutthe provisions for multi-storey building with FSI from 1.50 to2.75 times in excess. The pith and substance of the objection ofthe appellants against the comparison with the adjacent property,viz., M/s. Malar Hospitals', is that FSI is excess of 2.5 timeswas achieved in the Malar Hospitals' property, whereas only FSI inexcess of 1.50 times is applicable to the instant case.Therefore, according to them, the comparison is not fair. It isalso projected that inasmuch as the multi-storey constructionbeyond 1.5 FSI would not be possible in the instant case, theprice was negotiated accordingly. 15. It is not in dispute that FSI does play a crucial rolein the determination of market value of properties. It is alsonot in dispute that under the DCR of CMDA, there are severalcriteria laid down covering the permissible FSI, such as land usezone in which the property is situated, road width, size of theplot, frontage, etc. There is no dispute that both the lands viz.properties at Door Nos.51 and 52 are on the same First Main Road,Gandhi Nagar, Adyar, Chennai 20. As far as the size of theproperties is concerned, the property at Door No.51, i.e., thesubject property is about 5.44 grounds, whereas the adjacentproperty at door No.52 with which comparison is made is about 6.3grounds. It is also not in dispute that the frontage available inthe instant case is 90 feet, while the adjacent property withwhich comparison was made has a frontage of 102 feet. Further,both the properties are situated in Mixed Residential Zonefetching the same FSI of 1.5. As rightly argued by the learnedsenior counsel for the appellants, the advantages found in theadjacent property are not available to the subject property. Theclaim of the appellants that the purchaser of the adjacentproperty had in their mind to construct building for hospital andthereby achieving FSI in excess of of 2.5 times, and hence theyoffered higher price. On the other hand, such advantages are notavailable to the subject property. Further, as admitted by theAppropriate Authority, the frontage of the subject property isonly 90 feet, whereas in the adjacent property the same is 102https://hcservices.ecourts.gov.in/hcservices/feet. All these relevant aspects, though available before theAppropriate Authority, were not properly considered. Likewise, the learned single Judge did not consider those relevant factswhen the adjacent property (52 Ist Main Road, Gandhi Nagar, Adyar,Chennai 20) was compared with the property in question. Theobjection of the appellants with regard to comparison of theadjacent property at No.52, Ist Main Road, Gandhi Nagar, Adyar,Chennai 20, with the subject property is well founded. 16. Next it is contended that the Appropriate Authority hasnot considered the instances of long standing tenant in thesubject property. In support of the above contention, appellantshave submitted a copy of letter dated 31.08.1989 received from thetenant, viz., Animal Welfare Board of India signed by itsSecretary Mr. M. Sureshkumar addressed to Mr. Nataraja Sastry.The said letter was placed before the Appropriate Authority. Thelearned senior counsel for the petitioners pointed out that thesaid letter clearly shows the efforts taken by the Statutory Bodyfor housing its office and in that letter the State Governmentwas also requested to provide accommodation. It is alsohighlighted that the appellants were able to pressurise the AnimalWelfare Board to vacate the premises and the petitioner/P.Nataraja Sastry, on obtaining possession, arranged for demolitionof existing superstructure. The application for demolition ofexisting structure was submitted to the Competent Authority -Corporation of Madras in December, 1989. The Corporation, afterscrutinising the said application, issued demolition advice byproceedings dated 15.12.1989. The petitioner/P.Nataraja Sastryalso remitted demolition charges on 19.12.1989. The copies ofdemolition advice and challan for remittence were placed beforethe Appropriate Authority. Though on the date of agreement thesubject property was free from tenancy as seen from Column 3 of37-I statement dated 02.05.1990, the claim of the appellantsregarding various efforts into evicting the tenant, viz., AnimalWelfare Board from the premises in question, we are of the viewthat though the said aspect is not a primary factor, but it isone of the relevant factor to be considered while arriving atvalue of the property. 17. It is the claim of the appellants that the loss oforiginal title deeds of the property has not been properlyconsidered by the Appropriate Authority as well as the learnedsingle Judge. It is the case of the appellants that the propertyin question was mortgaged in Indian Bank, Madras and after theredemption of mortgage, the said Bank did not return the originaltitle deeds relating to the property and the bank informed thatthe title deeds had been lost, but refused to admit the same inwriting. It is also brought to our notice that the said propertyhad got entangled in the litigation with "Daily Thanthi". Insupport of the fact that the Indian Bank had lost the title deedsof the property in question,it is brought to our notice that apublic notice calling for claims in respect of the property fromany person having charge, mortgage, etc. issued in "The Hindu"dated 09.08.1989 and "Daily Thanthi" on 11.08.1989 and no claimwas received by the petitioner, P. Nataraja Sastry. It is alsotrue that the encumbrance certificate produced for the period fromhttps://hcservices.ecourts.gov.in/hcservices/01.01.1959 to 08.06.1989 does not reveal any existing encumbranceover the property. Though the Appropriate Authority concluded that in view of the legal opinion giving clean chit as to thetitle, despite loss of title deeds, it cannot be accepted thatmere loss of title deeds should decrease the value of theproperty, the fact that the petitioner/vendor was not havingoriginal title deeds at the time of transaction is a relevantfactor and undoubtedly, it would have the bearing on the price, aswell as the mind of the intending purchaser. Though theAppropriate Authority and the learned single Judge considered thisaspect, loss of title deeds of the property in question is one ofthe relevant factors, undoubtedly, it would diminish the value ofthe property. 18. Learned senior counsel for the appellants next pointedout that the Appropriate Authority relied on two other comparativesale instances at the time of passing the final order.Admittedly, notice regarding the said sales was not given to theappellants, hence it is against the principles of natural justice.It is not in dispute that in the show cause notice dated03.02.1993, the authority has referred only to the adjacentproperty, viz., Door No.52, Ist Main Road, Gandhi Nagar, Adyar,Chennai 20 (Malar Hospitals' property). While passing the finalorder, the authority relied not only the said adjacent property,but also two other properties, viz., door No.47, Ist Main Road,Gandhi Nagar, Adyar, Chennai 20 and door No.12, Ist Main Road,Kasturibha Nagar, Adyar, Chennai 20. In the order of theAppropriate Authority, the adjacent property viz., 52, Ist MainRoad, Gandhi Nagar, Adyar, Chennai 20, was chosen as the mostappropriate and relevant by virtue of its location, as theimmediate adjacent property next to the subject property inquestion, but absolutely there is no reference as to other twoproperties situate at First Main Road, Gandhi Nagar and KasturbhaNagar respectively. In para 7.1 of the order, the AppropriateAuthority has taken note of all the three instances, including theMalar Hospitals' property for comparison with the subjectproperty. In the same paragraph, the Appropriate Authority, afteradverting to the details regarding the properties at Door No.47,Ist Main Road, Gandhi Nagar, and No.12 Ist Main Road, KasturbhaNagar, arrived at a conclusion that in the instant case the priceat Rs.6.38 lakhs per ground, is below 15% margin fixed by theSupreme Court. It is clear from the above order of theAppropriate Authority that, particularly, para 7.1 and 7.2, thesaid Authority heavily relied on the other two properties whichwere admittedly not mentioned in the show cause notice. In suchcircumstances, as rightly pointed out by the learned seniorcounsel for the appellants, the appellants were not givenopportunity to ascertain the details of those properties, whichwere discussed and considered by the Appropriate Authority. It isa relevant aspect affecting the principles of natural justiceand we are of the view that both the Appropriate Authority and thelearned single Judge have failed to consider the grievance of theappellants on this aspect. 19. Now, let us consider the claim of the appellants thatthe guideline value of the property was not considered by thehttps://hcservices.ecourts.gov.in/hcservices/Appropriate Authority as well as learned single Judge. It is truethat if we consider the guideline rate applicable to the area in question, the value mentioned in the sale agreement cannot be saidto be unreasonable. However, as rightly observed by theAppropriate Authority, the guideline value is for the purpose ofregistering the document and the same cannot be considered as themarket value/real value of the property prevailing on the relevantdate. In such circumstances, we are of the view that thegrievance of the appellants relating to non-consideration ofguideline value of the property cannot be accepted. 19. Now, let us consider the claim of the appellants thatthe guideline value of the property was not considered by thehttps://hcservices.ecourts.gov.in/hcservices/Appropriate Authority as well as learned single Judge. It is truethat if we consider the guideline rate applicable to the area in question, the value mentioned in the sale agreement cannot be saidto be unreasonable. However, as rightly observed by theAppropriate Authority, the guideline value is for the purpose ofregistering the document and the same cannot be considered as themarket value/real value of the property prevailing on the relevantdate. In such circumstances, we are of the view that thegrievance of the appellants relating to non-consideration ofguideline value of the property cannot be accepted. 20. The learned senior counsel for the appellantshighlighted that subsequent sale deed of the year 1992 by the verysame Malar Hospitals' on the same road at a lower rate may beconsidered by this Court. In fact, a petition in WAMP.No.1755 of2006 was filed under Section 151 read with Order 41 Rule 27 ofthe Code of Civil Procedure, praying this Court to accept a copyof the sale deed, registered as document No.3658/1992 asadditional evidence. As stated earlier, the main ground forrejection of the consideration mentioned in the sale agreementdated 30.04.1990 is that the sale agreement dated 01.08.1989 inrespect of Malar Hospitals property situated at No.52, Ist MainRoad, Gandhi Nagar, Adyar, Chennai 20 reflected a higher saleconsideration of 10.39 lakhs per ground compared to the subjecttransaction, viz., Rs.6.38 lakhs per ground. Though it was arguedon behalf of the petitioners before the Appropriate Authority andbefore the learned single Judge that the properties were notcomparable and that the requirement of the purchaser woulddetermine the sale consideration, such argument was rejected byboth the Appropriate Authority as well as the learned singleJudge. It is brought to our notice that, the petitioner recentlycome to know about the sale deed of the year 1992 registeredsubsequent to the subject transaction. The said sale deed wasregistered as document No.3658/1992 in respect of anotherproperty in the same area situated at 55, Ist Main Road, GandhiNagar, Adyar, Chennai 20, and the said property was purchased byMalar Hospitals. In the said sale deed, the sale considerationis shown as Rs.6.09 lakhs per ground. By pointing out the saiddocument it is argued that the said sale deed is relied upon onlyto demonstrate the fact that the sale consideration mentioned inrespect of the property at No.52 Ist Main Road, Gandhi Nagar,Adyar (Malar Hospitals') would not reflect the actual price inthat area at the relevant point of time and that the property atNo.52 (Malar Hospitals') itself is incapable of being comparedwith subject property. As rightly pointed out, it can be foundfrom document No.3658/1992 that in respect of the property on thesame road purchased three years after the subject transaction, thesale consideration is only stated to be Rs.6.09 lakhs per ground.In the light of the subsequent transaction referred to above whichreflects a lesser sale consideration, the appellants' contentionregarding the consideration mentioned in the sale deed inquestion has to be accepted. It is relevant to note that thepetitioner has contended that the Appropriate Authority took intoconsideration an incomparable property (Malar Hospitals') forcomparison. We are also satisfied that the sale deed of the year1992 gives a true picture of the market value in the area inhttps://hcservices.ecourts.gov.in/hcservices/question. We accept the contention of the appellants withreference to the transaction that took place in 1992, which is also relating to a property adjacent to the property in question.Hence, we allow WAMP.No.1755 of 2006. also relating to a property adjacent to the property in question.Hence, we allow WAMP.No.1755 of 2006. 21. Finally, let us consider whether the purchase orderstands abrogated under Sections 269 UG and 269 UH of the Act, asthe apparent consideration has neither been tendered to the vendornor deposited with the Appropriate Authority by the CentralGovernment within 30 days of the order as stipulated in thoseprovisions. "269UG.Payment or deposit of consideration (1) The amount of consideration payable inaccordance with the provisions of Section 269UFshall be tendered to the person or personsentitled thereto, within a period of one monthfrom the end of the month in which theimmovable property concerned becomes vested inthe Central Government under sub-section (1),or, as the case may be, sub-section (6), ofsection 269UE: Provided that if any liabilityfor any tax or any other sum remaining payableunder this Act, the Wealth-tax Act, 1957 (27 of1957), The Gift-tax Act, 1958 (18 of 1958), theEstate Duty Act, 1953 (34 of 1953), or theCompanies (Profits) Surtax Act, 1964(7 of1964), by any person entitled to theconsideration payable under Section 269UF, theappropriate authority may, in lieu of thepayment of the amount of consideration, set offthe amount of consideration or any part thereofagainst such liability or sum, after giving anintimation in this behalf to the personentitled to the consideration." "269UH. Re-vesting of property in thetransferor on failure of payment or deposit ofconsideration.(1) If the Central Government fails to tenderunder sub-section (1) of said section 269UG ordeposit under sub-section (2) or sub-section(3) of the said section, the whole or any partof the amount of consideration required to betendered or deposited thereunder within theperiod specified therein in respect of anyimmovable property which has vested in theCentral Government under sub-section (1) or, asthe case may be, sub-section (6) of section269UE, the order to purchase the immovableproperty by the Central Government made undersub-section (1) of section 269UD shall standabrogated and the immovable property shallstand re-vested in the transferor after theexpiry of the aforesaid period." https://hcservices.ecourts.gov.in/hcservices/ It is clear that Section 269 UG of the Act mandates that theamount of consideration shall be tendered to the person entitledthereto within a period of one month from the end of the month inwhich the immovable property concerned becomes vested in theCentral Government. Section 269 UH of the Act makes it clear thatif the Central Government fails to tender or deposit either wholeor any part of the amount of consideration required to be tenderedor deposited within the period specified in Sub-section (1) ofSection 269 UG, the order to purchase the immovable property bythe Central Government made under Sub-section (1) of Section 269UD shall stand abrogated, and it revest in the transferor afterthe expiry of the aforesaid period. The above provisions havebeen interpreted in various decisions. 22. In the case of M.P. Poddar vs. Appropriate Authority(1999 ITR Vol.240 page 372), a Division Bench of Delhi HighCourt, after considering the relevant provisions in Chapter XX-Chas held that as per the Scheme of the said Chapter, even thoughthe agreement between the parties provides for deferred payment ofconsideration for transfer it is made obligatory for the CentralGovernment to tender the entire consideration within thestipulated period, i.e., within a period of one month from the endof the month in which the immovable property vests in the CentralGovernment, namely, on the date of purchase order and failure totender the consideration within the said period results inabrogation of the said order. 22. In the case of M.P. Poddar vs. Appropriate Authority(1999 ITR Vol.240 page 372), a Division Bench of Delhi HighCourt, after considering the relevant provisions in Chapter XX-Chas held that as per the Scheme of the said Chapter, even thoughthe agreement between the parties provides for deferred payment ofconsideration for transfer it is made obligatory for the CentralGovernment to tender the entire consideration within thestipulated period, i.e., within a period of one month from the endof the month in which the immovable property vests in the CentralGovernment, namely, on the date of purchase order and failure totender the consideration within the said period results inabrogation of the said order. 23. In the case of Union of India vs. Dr. A.K. Garg (2002ITR Volume 256 Page 660), the Hon'ble Supreme Court has held thatthe amount under Section 269 UG had to be tendered or even ifthere was any dispute, the same should have been deposited withthe Appropriate Authority. After finding that there is nomaterial forthcoming to show that an offer was made before thecut-off date, viz., 30[th ]June, 1993, accepting the stand taken bythe Delhi High Court, the Supreme Court dismissed the appeal filedby Union of India. It is therefore clear from the above saiddecision that even if there is any dispute, the amount has to bedeposited, failing which Section 269 UH will come into operation. 24. In the case of Sita Cherian Mukherjee vs. AppropriateAuthority (1997 ITR Vol.228 Page 236), Calcutta High Court hasheld that, Section 269UG of the Act clearly lays down that theamount of consideration payable in accordance with the provisionsof Section 269UF shall be tendered to the person or personsentitled thereto, within the period prescribed therein, failingwhich the rigour of Section 269UH is squarely attracted. TheCourt further held that the consequences as stipulated in Section269UH are mandatory and inescapable. 25. In the case of Ashis Mukherji vs. Union of India (1996ITR Vol.222 Page 168), a Division Bench of Patna High Court hasheld, "Under section 269UH, the property revests inthe transferor on failure of payment or deposithttps://hcservices.ecourts.gov.in/hcservices/of consideration. In the present case we havefound that the payment has not been tendered in terms of sub-section (1) of section 269UG. Theproperty, therefore, which had been vested inthe Central Government by virtue of order madeunder section 269UD(1), that order standsabrogated and the property now revests in thetransferor, i.e., the petitioner. ...." 26. In the case of Hotel Mardias Private Limited vs. Unionof India and others (1996 Vol.220 ITR Page 94), a Division Benchof Gujarath High Court has concluded,"Once we have come to the conclusion that theamount of consideration was not tendered withinthe time prescribed under section 269UG andthere was no ground for making deposit to theappropriate authority the consequence which hasbeen provided under section 269(UH) wouldnecessarily follow, namely the order ofpurchase shall stand abrogated and theimmovable property shall stand reverted to thetransferor on the expiry of the period in whichamount was to be tendered but has not been sotendered." 26. In the case of Hotel Mardias Private Limited vs. Unionof India and others (1996 Vol.220 ITR Page 94), a Division Benchof Gujarath High Court has concluded,"Once we have come to the conclusion that theamount of consideration was not tendered withinthe time prescribed under section 269UG andthere was no ground for making deposit to theappropriate authority the consequence which hasbeen provided under section 269(UH) wouldnecessarily follow, namely the order ofpurchase shall stand abrogated and theimmovable property shall stand reverted to thetransferor on the expiry of the period in whichamount was to be tendered but has not been sotendered." 27. The learned senior standing counsel for the Income TaxDepartment, relying on a decision of this court in the case ofR. Padma vs. Appropriate Authority reported in (1990 Vol.185 ITRPage 269) contended that if there is an order of stay at theinstance of any of the parties to the agreement of sale, theCentral Government cannot be blamed for not tendering ordepositing the amount. No doubt, in the penultimate paragraph,the Division Bench has observed that in matters of this nature,whenever a stay order is obtained at the instance of any of theparties to the agreement of sale and if there is any interdictionby the court preventing the authorities from pursuing furthersteps consequent to the issue of order under Section 269 UD (1),then there would be no directive from the Court to the Income-taxDepartment to pay the sale consideration during the pendency ofproceedings in Court. 28. Apart from the said decision, she also relied on thecase of Mrs. Sooni Rustam Mehta vs. Appropriate Authority (1991Vol.190 ITR Page 290), wherein the Division Bench of AndhraPradesh High Court held that the petitioners had filed a writpetition challenging the provisions of the Act and so long as thewrit petition was pending, there was a dispute as to theentitlement of the petitioners to receive the amount ofcompensation and the authorities were justified in not makingdeposit with the appropriate authority. 29. On going through the factual details, we are of theview that both the decisions relied on by the learned seniorstanding counsel for the Income-tax Department are not helpful tothe Department . In the Andhra Pradesh case, there is no disputeas to the entitlement of the petitioners to receive the amount ofcompensation. Secondly, the decision of the Division Bench ofhttps://hcservices.ecourts.gov.in/hcservices/this Court in 185 ITR 269 (cited supra) deals with the later partof Section 269 UD(1), wherein the 5[th] proviso to Sub-section (1) 29. On going through the factual details, we are of theview that both the decisions relied on by the learned seniorstanding counsel for the Income-tax Department are not helpful tothe Department . In the Andhra Pradesh case, there is no disputeas to the entitlement of the petitioners to receive the amount ofcompensation. Secondly, the decision of the Division Bench ofhttps://hcservices.ecourts.gov.in/hcservices/this Court in 185 ITR 269 (cited supra) deals with the later partof Section 269 UD(1), wherein the 5[th] proviso to Sub-section (1) makes it clear that where any stay has been granted by any courtagainst the passing of an order for the purchase of immovableproperty, the said period is to be excluded. Section 269 UDrelates to order by appropriate authority for purchase by CentralGovernment. But, there is no similar proviso in 269 UG(1),excluding the period of stay by the Court. In thosecircumstances, even if we accept that the appellants have filedwrit petitions before this Court questioning the order ofAppropriate Authority, in the absence of any such saving clause,merely because the writ petitions were pending, non compliance of269 UG (1) within the time prescribed, undoubtedly, would attractthe revesting of the property in question in favour of thetransferor under Sub-section (1) of Section 269 UH. We are of theclear view that under Section 269UH (1) if the payment has notbeen tendered in terms of sub-section (1) of Section 269 UG, thesaid order stands abrogated and the property which had been vestedin the Central Government by virtue of the order made underSection 269 UD (1), stands revested in the transferor, i.e., thepetitioner. To put it clear, under Section 269 UH, the propertywill stand revested in the transferor on failure of payment ordeposit of consideration. In our case, admittedly, there is nooffer or communication regarding the deposit of amount with theAppropriate Authority. Inasmuch as the amount of considerationhas not been tendered in terms of Sub-section (1) of Section 269UG to the transferor, the order passed under Section 269 UD(1)stands abrogated. In view of the admitted factual positionregarding non compliance of the above mandatory provision, theorder of the Appropriate Authority is liable to be quashed on thisground also. These aspects have not been properly considered bythe learned Judge. 30. The analysis of various instances pointed out by theappellants clearly show that all of them are relevant factors invaluing the property. The power vested in the authority underChapter XX-C of the Act is a special power which is required tobe exercised with great care and with atmost fairness. When theprovisions enable the Government to take over any property, theauthorities cannot exercise the power in an arbitrary manner. Theobject for which the provision was introduced cannot be ignored.It is needless to mention that it is meant to disclose the trueprice for the property brought to sale and thereby to preventevasion of tax by parties to transaction. It is not in disputethat Chapter XX-C of the Act itself had been deleted from thestatute book with effect from 01.07.2002. Further, failure totender or deposit the amount of consideration within theprescribed period, the order to purchase immovable property by theCentral Government under Sub-section (1) of Section 269UD shallstand abrogated and the property shall stand revested in thetransferor. Having regard to the materials before the AppropriateAuthority, it is clear that the market value of the property atthe time of transaction could not be said to have been higher thanthe rate at which the appellants had agreed to sell and purchasethe property. We are satisfied that the learned single Judgehttps://hcservices.ecourts.gov.in/hcservices/failed to take note of all the above mentioned relevant aspectsbut merely approved the order of the Appropriate Authority, which cannot be sustained on facts and on the basis of statutoryprovisions referred to above. Under these circumstances, the common order of the learnedJudge dated 31.03.1997 made in W.P.Nos.4584 and 4700 of 1993, isset aside and the order of pre-emptive purchase passed by theAppropriate Authority, Income-tax Department, dated 23.02.1993, isquashed. Accordingly, both the writ appeals are allowed. Nocosts. Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.khTo 1.The Secretary to GovernmentUnion of India Ministry of Finance, New Delhi.2. Appropriate Authority Income-tax Department New Incometax Building No.108 Uthamar Gandhi Salai First Floor, Chennai 600 034. W.A.Nos.487 & 495 of 1997BV (CO)kk 18/12