2000 Supreme(SC) 398

2000(3) Supreme 272
SUPREME COURT OF INDIA
(From Karnataka High Court)
S.B. Majmudar, D.P. Mohapatra and R.P. Sethi, JJ.
Sri K.V. Shivakumar & Anr. -Appellants
versus
The Appropriate Authority & Ors. -Respondents
Civil Appeal Nos. 1415-16 of 2000
(Arising out of SLP © Nos. 13085-86 of 1996)
(With Transfer Case Nos. 22 and 23 of 1998)
Decided on 17-2-2000
Counsel for the Parties :
For the Appearing Parties : M.S. Usgaoncar, R.N, Trivedi, Additional Solicitor Generals, Santosh Hegde, Joseph Vellappally, G.L. Sanghi, T.L.V. Iyer, N.S. Hegde, R.F. Nariman, K.N. Shukla, Sr. Advocates, G.S. Bhat:, R.S. Hegde, P.P. Singh, N.D.B. Raju, Guntur Prabhakar, B.K. Prasad, A.T.M. Sampath, S. Rajappa, V. Balaji, S. Ganesh, G.V. Chandrasekhar, C. Paramasivan, Goodwill Indeevar, Nilangikarangutkar, Mrs. Bharathi Raju, S.K. Dwivedi, Ms. Asha Gopalan Nair, Nilangi K., Advocates.

Headnote:(i) Income Tax Act, 1961-Sections 269UD and 269UE-Pre-emptive purchase-Validity of order-Challenge to purchase order dismissed by High Court-Supreme Court reversed order following C.B. Gautam s case (1993(1) SCC 78)-Appropriate authority gave fresh opportunity of hearing and passed order purchasing property stating reasons stated in first purchase order still held good-Appropriate Authority did not pass order u/s 269UD(2) as property already stood vested in Central Government pursuant to earlier order of purchase-Transferor s plea that after setting aside of High Court order by Supreme Court property revested with transferor and entire acquisition proceedings should have been started de novo instead of merely giving notice to parties-Held : Order did not suffer from any serious illegality-Transferor received full consideration and delivered possession to Central Government-Supreme Court neither directed de novo proceedings nor ordered to start proceedings from any anterior stage-Procedure adopted by Appropriate Authority unexceptionable.

       Held : We are not satisfied that the order dated 28.11.1996 passed by the Appropriate Authority suffers from any serious illegality or infirmity which warrants interference. The relevant points of law arising in the case have been dealt with by the Constitution Bench in C.B. Gautam v. Union of India & Ors., 1993(1) SCC 78 and the validity of the Act has been upheld. We are in respectful agreement with the said decision. The contention raised by the learned counsel for the appellant that since the order of the Appropriate Authority was set aside by this Court the property stood revested in the transferor, is in the circumstances of this case unacceptable and is rejected. It was expressly stated in the order of the Appropriate Authority and it was not disputed before us that after the order of the Appropriate Authority for compulsory purchase the transferee received the full consideration as determined therein and delivered possession of the building to the Central Government. Thereafter, they challenged the order in the Writ Petitions filed in the High Court which were rejected and the matter was carried to this Court in the appeal which was allowed, relying on the C.B. Gautam case (supra). This Court, in its order neither directed de novo proceeding nor issued any direction to start the proceeding from any anterior stage. In the circumstances no exception can be taken to the procedure followed by the Appropriate Authority in issuing a fresh notice of hearing to the proposed transferor, transferee and the interested person and disposing of the matter in the manner discussed earlier, the property had already vested in the Central Government and that position remained unaltered subject to the fresh order to be passed by the Appropriate Authority. (Para 19)

       (ii) Income Tax Act, 1961-Section 269UD read with Sections 269UG and 269UH-Pre-emptive purchase-Revesting of property/abrogation of purchase order-Plea that discounting of value from apparent consideration was erroneous and deduction of amount from discounted consideration towards I.T. and W.T. dues illegal-Plea that since full apparent consideration not paid to transferor purchase order abrogated and property stood revested-Pleas, on facts, untenable-Notice of discounting value given to transferor-No objection raised and balance consideration received by transferor-Alleged mistake in adjusting tax arrears also sorted out as per as agreed by purchaser-No failure to tender or deposit whole or any part of consideration.

       Held : From the discussions in the orders passed by the Appropriate Authority it is clear that notice of the discounted value and the deductions proposed, to be made were given to the transferor. The transferor raised no objection against the discounted value or the deduction made. Indeed the transferor expressed its willingness to accept the balance amount of consideration. Accordingly, a sum of Rs. 97,67,233 was paid to M/s. Vidyawati Kapoor Trust by cheque. On receipt of the amount the transferor delivered possession of the property. From the record it appears that the respondents stated before the Authority that the alleged mistake in adjusting the tax arrears of Mohanlal Kapoor from the consideration payable to M/s. Vidyawati Trust could be sorted out between the department and the transferor. It also appears from the record that Mohanlal Kapoor is one of the trustees of M/s. Vidyawati Trust and also one of the persons entitled to dispose of Mohan building . In these circumstances, it cannot be said that the Central Government has failed to tender or deposit the whole or any part of the amount of consideration required to be tendered or deposited under section-269 UG of the Act which entails the consequence of abrogation of the purchase order and revestment of the property in the transferor. The use of the expression fails to tender in section 269UH, considered in the context of the scheme of the Act in chapter XX-C, connotes that the Central Government shall pay to the transferor the apparent consideration as determined by the Appropriate Authority u/s 269UD read with section 269 UF, within one month from the end of the month in which the immovable property concerned becomes vested in the Central Government under sub-section (l) or as the case may be, under sub-section (6) of section 269UE. Section 269UE clearly provides that where an order under sub-section (1) of section 269 UD is made by the Appropriate Authority in respect of an immovable property referred to in sub-clause (1) of clause (d) of section 269 UA, such property shall on the date of such order, vest in the Central Government. Indeed, in this case the Appropriate Authority clearly stated in the order passed on 24.1.91 that the property stood vested in the Central Government and the said position was reiterated in the order passed by the Authority on 26.11.1996. Even assuming that certain deductions made were not permissible the vesting order in favour of the Central Government cannot be said to be vitiated on that count. (Para 20)