Madhya Pradesh High Court
Himatlal Vadaliya And Ors. vs Union Of India (Uoi) And Anr. on 9 May, 1996
Equivalent citations: [1997]227ITR406(MP)
Author: C.K. Prasad
Bench: C.K. Prasad
JUDGMENT C.K. Prasad, J.
1. The petitioners by this writ application seek to impugn the order dated November 30, 1994, passed by the appropriate authority under Section 269UD(1) of the Income-tax Act ordering compulsory purchase of the land in question, as contained in annexure-H of the writ application. The petitioners further pray for quashing of the consequential order dated December 14, 1994 (annexure "K"), by which possession of the property has been taken.
2. The property in dispute is 33,333 sq. ft. of land of Municipal Plot No. 7 at Yeshwant Niwas Road, in the town of Indore. The total area of Municipal Plot No. 7 is 1,00,000 sq. ft. Respondents Nos. 4 and 5, i.e., the transferors, agreed to sell the property to the petitioners by agreement dated July 29, 1994, for a sum of Rs. 90,00,000. The statement of proposed transfer was submitted to the appropriate authority. The appropriate authority in exercise of its power under Section 269UD(1A) of the Income-tax Act required the petitioner to show cause as to why an order of preemptive purchase be not made in accordance with the provisions of Section 269UD(1) of the Income-tax Act, 1961. In the show-cause notice it has been stated that, according to the agreement, the apparent rate of land per sq. ft. of the property under consideration comes to Rs. 270 whereas 10,000 sq. ft. of land sold by the National Textile Corporation of land in the month of October, 1991, was at the rate of Rs, 375 per sq. ft. The show-cause notice, however, stated that the land of the National Textile Corporation is slightly superior to the property under consideration. The show-cause notice also stated that the minimum land rate prescribed under the guidelines issued by the District Collector of Indore, for the financial year 1994-95 for Yeshwant Niwas Road is Rs. 350 per sq. ft. According to the show-cause notice, the rate of Rs. 270 per sq. ft. for which the property is sought to be purchased is undervalued by more than 15 per cent. and accordingly the appropriate authority felt satisfied that it is a fit case for the issue of show-cause notice for pre-emptive purchase under Chapter XX-C of the Income-tax Act, 19.61.
3. The petitioners showed their cause and the appropriate authority by the impugned order dated November 30, 1994 (annexure "H"), held that on consideration of the relevant facts and materials the property is fit for pre-emptive purchase under Chapter XX-C of the Income-tax Act and consequently in exercise of the power vested in the appropriate authority under Section 269UD(1) of the Act ordered purchase of the immovable property.
4. The petitioners filed the present writ application impugning the aforesaid order as also the consequential order passed on January 6, 1995. This court by its order dated January 9, 1995, directed issuance of notice. However, no stay was granted against the order impugned. In the meanwhile, steps were taken by the authorities for sale of the property by public auction. The petitioners made a prayer for stay of the auction sale. This court by its order dated February 28, 1996, directed that "any settlement made during the pendency of the petition shall be subject to the decision of the writ petition". The auction was held on February 28, 1996, and the highest bid offered for the property is Rs. 2 crores and 5 lakhs. The highest bidder also paid the earnest money of Rs. 35 lakhs and the highest bidder's offer has been accepted.
5. Shri S.C. Bagadiya, appearing on behalf of petitioners, advanced various submissions to assail the impugned order. However, in view of the subsequent events I am not inclined either to incorporate or adjudicate the points raised, as the writ petition is bound to fail on a very short ground.
6. In my opinion, there is no bar to the subsequent event being considered by this court in exercise of its writ jurisdiction. The agreement to sell was arrived on July 29, 1994, and the property has been valued at Rs. 90,00,000. In the absence of any stay granted by this court, auction has been held on February 28, 1996, and the offer made for the purchase of the said property is Rs. 2 crores 5 lakhs.
7. According to Shri Bagadiya, this phenomenal price was offered as according to the draft development plan, the land of Yeshwant Niwas Road has been shown as commercial-cum-residential whereas at the time when the petitioners agreed to purchase the land, its use was residential. In answer thereto, respondent No. 3 has stated that the property in question can be used for construction of hotel business, office, hospitals, petrol pump, etc., which would be apparent from the letter of the Assistant Director of Town and Country Planning dated March 23, 1094, even at the time when the petitioners agreed to purchase the land. According to the respondents, the contention of the petitioners that the price of the land in question has increased because of the new draft plan has no substance.
8. Having given my most anxious consideration to the rival submissions, I am of the considered opinion that the draft plan has no bearing on the price fetched for the land in auction. The draft plan has not altered its use so as to increase the price of the land to the extent as offered in the auction sale. The price offered in the auction sale is about 150 per cent. above the price offered by the petitioners. Thus subsequent events preclude me from exercising my discretionary writ jurisdiction under the Constitution of India.
9. Accordingly, I dismiss the writ petition on this short ground alone with costs to be paid by the petitioners to respondents Nos. 1 to 3, Counsel's fee assessed at Rs. 2,500.