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2006(2) Supreme 235
Supreme Court of India
(From Karnataka High Court)
Arijit Pasayat & R.V. Raveendran, JJ.
Krishnaswamy S.Pd. & Anr. —Appellants
versus
Union of India & Ors. —Respondents
Civil Appeal Nos. 3376-3377 of 2000
Decided on 21-2-2006
Counsel for the Parties :
For the Appellants : T.L.V. Iyer, Sr. Advocate, Girish Ananthamurthy, Sanjay Gowda and P.P. Singh, Advocates.
For the Respondents : Joseph Vellapally, Harish Chandra, Sr. Advocates, Vibha Datta Makhija, Raghuvesh, Arijit Prasad, B.V. Balaram Das and B.K. Prasad, Advocates.
(ii) Income Tax Act, 1961—Sections 269UD and 269UE, Chapter XX-C—Pre-emptive purchase of property—Agreement of sale dated 16.7.1987, in respect of premises in Bangalore—Total consideration was fixed at Rs. 18,00,000/- for the property measuring 50 and 90—Appellants, purchaser paid a sum of Rs. 6,00,000/- and balance consideration was agreed to be paid at the time of registration of sale deed—Documents required under Chapter XX-C of the Act were filed—Appropriate authority passed an order purported to be u/s 269UD(1) of the Act, for pre-emptive purchase of the property—It was stated that reasons were recorded separately—Writ petitions filed challenging the order—High Court stayed order of purchase dated 18.12.1987 on 7.1.1988—Interim order of stay was subsequently modified by staying only the delivery of possession—On 1.8.1991, High Court vacated interim stay—Entire sale consideration paid by the Department was accepted by the owner—Acquired property was auctioned—7th respondent purchased the property for Rs. 46 lacs—During pendency of the writ petition, a Constitution Bench upheld validity of Chapter XX-C of the Act (C.B. Gautam case)—Reading down of Section 269UD of the Act, to uphold its validity, certain directions were issued—Whether requirement relating to hearing read into provisions of Section 269D will apply to transactions which have become final—(No)—By seeking refund of the advance, appellants have acquiesced to the property being sold in auction.
Held : The maxim ‘actus curiae neminem gravabit’ i.e. an act of Court shall prejudice no man is an important one. The maxim "is founded upon justice and good sense, and affords a safe and certain guide for the administration of the law", said Cresswell J. in Freeman v. Tranah (12 C.B. 406). An unintentional mistake of the Court which may prejudice the cause of any party must and alone could be rectified. The maxim of equity, namely, actus curiae neminem gravabit - an act of court shall prejudice no man, is founded upon justice and good sense which serves a safe and certain guide for the administration of law. The other relevant maxim is, lex non cogit ad impossibilia - the law does not compel a man to do what he cannot possibly perform. The law itself and its administration is understood to disclaim as it does in its general aphorisms, all intention of compelling impossibilities, and the administration of law must adopt that general exception in the consideration of particular cases. (Paras 16 and 17)
One thing is crystal clear from the order dated 1.8.1991 that the appellants wanted to take back the money that had been paid to the prospective vendor. Submission was made on behalf of the appellant that a sum of Rs. 6 lakhs paid by way of advance may be refunded. By seeking the return of the advance, the appellants have acquiesced to the property being sold in auction. In the order it was clearly mentioned that it was open to the writ petitioners (the present appellants) to seek refund of the same from the transferor namely, respondent No. 4. (Para 18)
It is thus clear that the requirement relating to hearing read into the provisions of Section 269D by this Court will not apply to transactions which have become final or transactions where the department has already auctioned the acquired property. (Para 20)
Judgment
Arijit Pasayat, J.—Challenge in these appeals is to the judgment rendered by a Division Bench of the Karnataka High Court dismissing the Writ Petitions filed by the appellants.
2. The factual background in a nutshell is as follows :
The fourth Respondent and appellants entered into an agreement of sale dated 16.7.1987 in respect of premises bearing No. 377 R.M.V. Extension, Bangalore measuring 50 x 90. The total consideration was fixed at Rs. 18,00,000/-. Appellants paid a sum of Rs. 6,00,000/- by two cheques dated 16.7.1987 to the fourth respondent and the balance consideration was agreed to be paid at the time of registration of sale deed. The parties to the agreement were required under Chapter XX-C of the Income Tax Act, 1961 (in short the ‘Act’) read with Rule 48(L) of the Income Tax Rules, 1962 (in short the ‘Rules’) to file a Statement in Form No. 37-I before the appropriate authority specified under Chapter XX-C. Accordingly, appellants and fourth respondent filed Form No. 37-I along with certain documents on 29.10.1987. Thereafter, the appropriate authority passed an order dated 18.12.1987 purported to be under Section 269UD(1) of the Act, for pre-emptive purchase of the said property by the Central Government at an amount equal to the apparent consideration. It was stated that the reasons were recorded separately. The said order dated 18.12.1987 was challenged before the Karnataka High Court in W.P. Nos. 247-248 of 1988. Challenge in the writ petitions was to the constitutional validity of Chapter XX-C of the Act with consequential prayer to quash the order dated 18.12.1987.
3. The High Court stayed the order of purchase dated 18.12.1987 on 7.1.1988. The interim order of stay was subsequently modified on 13.1.1988 by staying only the delivery of possession under Section 269-UE and further proceedings pursuant to vesting subject to the condition that the transferees and the transferor shall not effect any change in the nature and character of the property or alienate or encumber the property during the pendency of the writ petition. On 1.8.1991, the High Court vacated the interim stay by the following order :
"After hearing both the learned Counsel, we are of the view that stay of delivery of possession ordered by the learned Single Judge cannot be continued. Accordingly, the stay is vacated. Therefore, the transferor-respondent-4 W.G.S. Saldhana shall deliver possession in favour of respondent-3, the Income Tax Officer, without any demur. Within two weeks from the date of delivery of possession, the said W.G.S. Saldhana shall be paid by the Revenue whatever amount is due to him. It is open to the Department to bring the property to public auction. We make it clear that the order relating to delivery of possession and payment of amount shall be subject to the ultimate result of the writ petitions.
Sri Sarangan, learned Counsel for the petitioners states that a sum of Rupees Six Lakhs paid by way of advance under the agreement dated 16/7/1987 may be refunded.
It is open to the writ petitioners to seek refund of the same from the transferor namely, respondent-4."
4. In view of the vacating of the interim stay, the title-deeds relating to the property were delivered by the owner to the Income-Tax Department on 27.8.1991. The entire sale consideration paid by the Department was accepted by the owner before 15.9.1991. The acquired property was auctioned by the Department on 26.3.1992. The 7th respondent herein was the highest bidder and his bid of Rs. 46 lacs was accepted and on payment of the said price, he was put in possession on 25.5.1992. A sale-deed was executed in favour of 7th respondent by the Department on 20.7.1994. The auction purchaser was impleaded as 7th respondent in the writ petition on 25.8.1997.
5. During the pendency of the said writ petitions, a Constitution Bench of this Court by its judgment rendered on 17.11.1992, upheld the constitutional validity of Chapter XX-C of the Act in C.B. Gautam v. Union
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