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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
B.P. COLABAWALLA, FIRDOSH P. POONIWALLA, JJ.
Sasmita Investments Ltd. - Appellant
Versus
Appropriate Authority and Others - Respondents
Appeal No. 298 of 2014, Suit No. 2094 of 2006
Decided On : 25-04-2025
(A) Income Tax Act, 1961 - Sections 269-UN, 293, 269-UC, 269-UD, 269-UE, 269-UF, 269-UG, 269-UH - Suit dismissed by Single Judge on grounds of being barred under Sections 269-UN and 293 - Court found that the declaration sought by Plaintiff regarding abrogation of the 3rd Compulsory Purchase Order does not challenge its validity, but asserts it has abrogated by operation of law due to non-payment of consideration within stipulated time. (Paras 1, 54, 58)
(B) Jurisdiction of Civil Courts - The court held that the jurisdiction is not barred under the Income Tax Act as the Plaintiff's suit does not seek to set aside or modify any order made under the Act. (Paras 50, 52)
(C) Findings of Court - The learned Single Judge's conclusion was incorrect; the appeal succeeds and the suit is restored for trial. (Paras 58, 59)
Facts of the case:
The Plaintiff, a company, sought declarations regarding the abrogation of a Compulsory Purchase Order under the Income Tax Act, asserting that the order was abrogated due to the Government's failure to pay the consideration within the required timeframe. (Paras 4, 16)
Findings of Court:
The court found that the suit was maintainable and not barred under the Income Tax Act, setting aside the Single Judge's order. (Paras 54, 58)
Issues: The main issue was whether the suit was barred under Sections 269-UN and 293 of the Income Tax Act. (Paras 1, 50)
Ratio Decidendi: The court reasoned that seeking a declaration of abrogation does not equate to questioning the validity of the Compulsory Purchase Order, thus maintaining the jurisdiction of civil courts. (Paras 48, 54)
Result: The appeal is allowed, and the suit is restored for trial.
JUDGMENT :
B.P. COLABAWALLA, J.
1. The above appeal takes exception to the order dated 7th April 2014 [for short the “impugned order”] passed by the learned Single Judge of this Court. By the impugned order, the learned Single Judge dismissed the suit filed by the Appellant [Original Plaintiff] on the ground that it was barred under the provisions of Section 269-UN and/or Section 293 of the Income Tax Act, 1961 [for short the “IT Act, 1961”].
2. Initially, by order dated 29th January 2013, the learned Single Judge framed three preliminary issues [to be decided in the above suit] under the provisions of the Order XIV Rule 2 of the Code of Civil Procedure, 1908 [for short “CPC”]. For the sake of convenience, the issues framed by the learned Single Judge are reproduced hereunder:-
1. Whether the jurisdiction of the Hon’ble Court to try, entertain and dispose of the present suit is barred under section 269UN of the Income Tax Act, 1961 as pleaded in paragraph 1 of the Written Statement and/or section 293 of the Income Tax Act, 1961?
2. Whether the law of limitation bars the present suit?
3. Whether the plaintiff has the locus standi to maintain the present suit as pleaded in paragraph 11 of the written statement and/or is estopped from instituting the present suit?(Emphasis supplied)
3. Issue No.1 was answered in the affirmative, i.e. against the Appellant (original Plaintiff), and consequently the above suit was dismissed. Also, since the finding on Issue No.1 was in the affirmative, namely, that the suit was barred by virtue of Section 269-UN and/or Section 293 of the IT Act, 1961, the other two issues were not answered by the learned Single Judge. It is being aggrieved by this order dismissing the suit that the above appeal is filed.
FACTS OF THE CASE:
4. Before we deal with the legal issues raised in the above appeal, it would be appropriate to deal with some basic facts. For the sake of convenience, we shall refer to the parties as they were arrayed before the learned Single Judge.
5. The Plaintiff is a Company inter-alia carrying on the business of investment in properties. The 1st Defendant is the appropriate authority constituted under the provisions of Chapter XX-C of the IT Act, 1961. The 2ndDefendant is the Union of India impleaded through the Secretary, Ministry of Finance. Defendant Nos. 3 to 18 [hereinafter referred to as the “Mulanis”], as also one Mr. Omprakash Navani [i.e. Defendant No.19], are joined as Defendants as they have, together, executed a Deed of Conveyance dated 16th May 2006 in favour of the Plaintiff and sold their right, title and interest in the suit property to the Plaintiff. In the present suit, no reliefs are claimed against Defendant Nos. 3 to 19, and they have been added as proper parties and out of abundant caution.
6. On or about 16th May 1981 one Jaisingh Gopaldas Mulani and others [the Mulanis] on the one hand, and Defendant No.19 on the other, entered into an agreement for sale of 12,916 sq.ft. [approx] of unutilized Floor Space Index [FSI] forming a part of the plot of land bearing C.S. No. 152 admeasuring about 1962 square yards equivalent to 1636.30 sq.mtrs or thereabouts situated at Walkeshwar Road, Mumbai [together hereinafter referred to “the suit property”]. Thereafter, the Mulanis and Defendant No.19 [Omprakash Navani] entered into an Agreement dated 13th July 1991 with one M/s. Seawell Interdrill Services Pvt. Ltd. [for short “Seawell”] for sale of the suit property and also the rights of Defendant No.19 [Omprakash Navani] therein under the Agreement dated 16th May 1981.
7. By the time the Agreement dated 13th July 1991 was executed by the Mulanis and Defendant No.19 in favour of Seawell, Chapter XX-C [consisting of Section 269-U to Section 269-UO] of the IT Act, 1961 was brought into force. Accordingly, the Mulanis submitted Form 37-I under Section 269-UC of the IT Act, 1961 to Defendant No.1, declaring their intention to sell the suit property in terms of the said Agreement dated 13th Jul
The court ruled that a declaration of abrogation under the Income Tax Act does not challenge the validity of a Compulsory Purchase Order, thus maintaining civil court jurisdiction.
The suit for cancellation of a sale-deed was barred under Section 49 of the U.P. Consolidation of Holdings Act, as plaintiffs failed to prove the existence of a Joint Hindu Family or that the propert....
The main legal point established in the judgment is that reliance on an unregistered document and failure to seek necessary reliefs can render a suit not maintainable.
Specific performance cannot be enforced against parties not privy to the original contract, and suits lacking a cause of action are subject to rejection under Order VII Rule 11 of the CPC.
Exclusion of Civil Court's jurisdiction by special statute and the powers of the statutory tribunal were central to the Court's decision.
Suit barred due to lack of objection against record of rights; civil court jurisdiction excluded under specific statutory provisions.
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