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Acquisition of property by the Appropriate Authority
Krishnaswamy S.PD. and Another vs. Union of India & Ors. (
281 ITR 305 SC).
The appellant had entered into the agreement on 16th July,
1987 for purchase of the premises at Bangalore for Rs. 18 lakhs when the
appellant had paid advance of Rs. 6 lakhs. The Appropriate Authority purchased
the said property by its order dated 18th December, 1987. The appellant filed
a writ petition challenging the said order. The said order of the appropriate
authority was stayed. On 1st August, 1991, the said stay was vacated by the
High Court stating therein that the vendor would deliver the possession to the
Income-tax department and it was open to the department to bring the property
to public auction. It was made clear that the order relating to delivery of
possession and payment of amount should be subject to the ultimate result of
the writ petition.
In view of the vacating of the interim stay the sale
consideration paid by the department was accepted by the vendor. Thereafter,
the property was auctioned on 26th March, 1992 and the purchaser was put in
possession as he made the full payment. On 17th November, 1992, the
Constitutional Bench of the Supreme Court delivered the judgment in the case
of C.B. Gautam vs. Union of India (199 ITR 530) wherein the Court held
that the intending purchaser and the indenting seller must be given a
reasonable opportunity of showing cause against the order for compulsory
purchase being made by the appropriate authority. Subsequently, on 27th
November, 1992, the Supreme Court issued certain clarifications in regard to
pending matters. As the cases where public auction had already been held were
excluded from the directions relating to pending matters, the clarifications
did not apply to such cases.
Subsequently, the writ petition filed by the appellant were
taken up for hearing wherein the only point urged was that in the impugned
order no reasons were stated, as to on what basis the valuation of the
property was arrived at and since the order had no reason and without giving
opportunities to the appellant the same was liable to be quashed.
The High Court dismissed the writ petition of the appellant
and held that because of the clarificatory order of the Supreme Court, the
appellant was not entitled to any relief. With reference to the interim order
it was held that though the interim order is always subject to the final
order, the effect was different in the present case as the transaction had
already been completed, the possession of the property had been given and the
amount had been returned back, the same was received without protest. Merely
because of the writ petition was pending it could not be said that the
transaction was not completed.
The Supreme Court held that there was no quarrel with the
proposition that an act of a court cannot affect a party. The Supreme Court
observed that from the order dated 1st August, 1991 vacating the interim stay
it was clear that the submission was made on behalf of the appellant that the
sum of Rs. 6 lakhs paid by way of advance be refunded. By seeking the return
of advance, the appellant had acquiesced in the property being sold in
auction. The Court further held that the requirement relating to the hearing
read into provisions of section 269UD by the Supreme Court would not apply to
the transaction which had become final or transaction where the department had
already auctioned the acquired property.
