( 1 ) IN a suit for specific performance of an agreement to sell dated 14th January, 1985 relating to property bearing plot No. G-1, Rajouri Garden, New Delhi issues had been framed on 25th July, 1991 and it has been ordered that issue No. 4 be heard as a preliminary issue. Issue No. 4, reads as under:-

"whether the suit is maintainable in view of provisions of Section 269 UC of the Income-tax Act? If so, its effect?"

( 2 ) IT is submitted by Mr. Makhija, counsel for the plaintiff that Section 269 UC of the Income-tax Act (hereinafter referred to as the act ) is not attracted since it is an agreement to sell the property, specific performance whereof is claimed in the suit and the consideration is more than Rs. 5 lakhs. That in the present case the agreement is dated 14th January, 1985 and Section 269 UC of the Act came into force in 1987. That apart from the relief of specific performance, the suit of the plaintiff is for compensation and damages and suit would be maintainable and the question of non maintainability of the suit will not come in the way of the plaintiff.

( 3 ) AS against this, it is submitted by Mr. R. G. Srivastava, counsel appearing for defendants 1 to 3 that Section 269 UC of the Act contains mandatory requirement and under Section 269 UC of the Act transfer is prohibited in absence of the compliance with the requirement of obtaining Income-tax Clearance Certificate. That there is no time limit for the validity of the certificate under Section 269 of the Act. That the agreement is not a contract and the suit is not maintainable.

( 4 ) IT is submitted by Ms. Geeta Mittal counsel for defendant No. 4 that the agreement to sell dated 14. 1. 1985 would be void under Section 23 of the Contract Act for want of compliance with the requirement of Section 269 UC of the Act. That the purpose of Section 269 UC is the public policy.

( 5 ) THAT in the present case, the plaintiff alleges an agreement to sell immovable property, namely, plot executed by defendants 1 to 3 and admittedly at the stage much prior to executing the regular conveyance or sale deed the question of non compliance with Section 269 UC of the Act is raised.

( 6 ) IN the plaint, the plaintiff has prayed for the relief of specific performance of the agreement dated 14th January, 1985 and in the event of the failure of the defendants to execute the sale deed in favour of the plaintiff inspite of decree by the Court then the sale deed be drawn up, executed and is registered by appointing a officer of the Court for the said purpose and the plaintiff be put in actual physical vacant possession of the suit plot.

( 7 ) THE question therefore would be as to what are the requirements of Section 269 UC of the Act and at what stage the same can be invoked. Section 269 UC of the Act provides as under:-

" (1) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4 of 1882), or in any other law for the time being in force, no transfer of any immovable property of such value exceeding five lakh rupees as may be prescribed, shall be effected except after an agreement for transfer is entered into between the person who intends transferring the immovable property (hereinafter referred to as the transferor) and the person to whom it is proposed to be transferred (hereinafter referred to as the transferee) in accordance with the provisions of sub-section (2) at least (four) months before the intended date of transfer. (2) The agreement referred to in sub-section (1) shall be reduced to writing in the form of a statement by each of the parties to such transfer or by any of the parties to such transfer acting on behalf of himself and on behalf of the other parties. (3 ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . "

( 8 ) IT would be seen from the above reproduced provions contained in Section 269 UC (1) and (2) of the Act, the transfer of immovable property, the value whereof exceed five lakh rup