REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos.9800­9801 OF 2010

Krishna Kumar Rawat & Ors.              ….Appellant(s)

VERSUS

Union of India & Ors.            …Respondent(s)

WITH

CIVIL APPEAL No.9901 2010

Union of India & Anr.               ….Appellant(s)

VERSUS

Mithlesh Kumari & Ors.            …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

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C.A. Nos.9800­9801/2010

1. These appeals are directed against the final

judgment and order dated 31.05.2007 passed by the

High  Court of   Judicature for Rajasthan  Bench at

Jaipur in D.B. Special Appeal No.744 of 1994 whereby

the Division Bench of the High Court dismissed the

special appeal filed by the appellants herein and the

final judgment and  order  dated  24.07.2007 in  D.B.

Civil Review Petition No.80 of 2007 by which the

review petition arising out of SA 744/94  was also

dismissed.  

2. In order to appreciate the controversy involved in

these appeals, it is necessary to set out the relevant

facts infra.

3. The appellants are the writ petitioners whereas

the respondents   are the respondents of the writ

petition out of which these appeal arise.

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4. The dispute relates to a land measuring around

9500 sq. yards/7945 sq. meters along with two

Godowns (Nos.13 and 14) and certain other structures

standing thereon, which are part of  Khasra No. 126

situated in village Durgapur, Tahsil Sanganeer, Jaipur

(hereinafter referred to as the "suit land”).  

5.  One­Smt.  Mithilesh Kumari [respondent No. 3

herein (since deleted)] and Smt. Krishna Kumari

Roongta jointly owned the suit land.  The suit land

then became a property of a firm called M/s Rajasthan

Industrial Company, which consisted of several

partners along with Smt. Mithilesh Kumari and Smt.

Krishna Kumari Roongta. This partnership was later

dissolved by a dissolution deed dated 31.03.1986

executed by the partners. In terms of the dissolution

deed, two godowns (Nos.13 and 14) together with 1/4th

undivided share  in the suit  land fell to the share of

Smt. Mithilesh Kumari.

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6. On 11.11.1993, the appellants (prospective

buyers)  herein entered  into  an agreement  with Smt.

Mithilesh Kumari for purchase of the suit land for a

total consideration of Rs.99,84,500/­ (Rs. 1051/­ per

sq. yard). The appellants paid a sum of Rs.40,00,000/­

to Smt.  Mithilesh Kumari towards the advance for

purchase of the suit land. According to the appellants,

they were placed in possession of the two godowns and

other structures standing on the suit land. So far as

1/4th   land was concerned, the appellants were given

symbolical possession of the suit land.

7. The appellants then furnished the information

about the purchase of the suit land in accordance with

the requirements of Section 269UC of the Income Tax

Act, 1961 (hereinafter referred to as “the Act”) to the

appropriate authority in Form No. 37 and submitted

the copy of the agreement dated 11.11.1993.  

8. The valuation officer of the Income Tax

Department vide his letter dated 18.01.1994 informed

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the appellants that he would inspect the suit land on

21.01.1994. He also sought certain information from

the appellants in relation to the suit land. The

valuation officer then made an inspection of the suit

land and submitted his report to the appropriate

authority.  

9. The appropriate authority, on receipt of the

report, issued a show cause notice on 08.03.1994 to

the appellants under Section 269 UD (1A) of the Act

stating therein that the apparent sale consideration, as

disclosed by the appellants in the sale agreement, was

on lower side for various reasons and that, as a matter

of fact, the value of the suit land was much higher

than the agreed rate specified in the agreement.  

10. It was mentioned in the show cause notice dated

08.03.1994 that the Jaipur Development Authority on

07.11.1992 had  sold  a  plot  of land  at  A­90  Triveni

Nagar, Near Durga Pura Railway Station in auction at

the rate of Rs.1781/­ per sq. meter.  It was pointed out

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that if an adjustment of 5% is  made towards less

development  whereas  10%  is  allowed on  account  of

large size of the suit land and further 12% is allowed

on account of time gap, the rate of the suit land would

work out to Rs.1692/­ per sq. meter, i.e.,

Rs.1,34,39,556/­ as against the agreed value of

Rs.99,84,568/­. It  was further  pointed out that the

value determined by the appropriate authority at

Rs.1,34,39,556/­ does not include the value of existing

two godowns nor it takes into account the commercial

potential of the suit land.  

11. It  was thus pointed out that after taking into

consideration all these aspects, the value of the suit

land would still be higher than what was agreed

between  the  parties in the  agreement  and what the

appropriate authority has determined. The show cause

notice, therefore, concluded in saying as to why pre­

emptive purchase order, as envisaged by Section 269

UD (1) of the Act, be not made against the appellants

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in relation to the suit land. The appellants were asked

to file reply to the show cause notice.  

12.    The  appellants (prospective  buyers)  and  the

vendor (R­3) filed their respective replies to the show

cause notice.  According to them, firstly, comparison of

small developed plot of land in Triveni Nagar with the

suit land for determination of the value of the suit land

was not justified; Second, development of land would

need 40% deduction for amenities such as park,

roads, electricity, water supply and all other civic

amenities; third, the market rate of the area in

question as on 01.04.1991 for the first category was

fixed  at  Rs.550/­  per  sq.  meter  and  for the  second

category, it was fixed at Rs.450/­ per sq. meter and if

one would add 12% due to time element of two years,

it would work out to Rs.690/­ per sq. meter; fourth,

sub­division of the suit land would be required to be

got approved from the JDA and, if it is done, it would

leave 30% to 40% of the land open for civic amenities;

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and lastly, one plot measuring 116.3 sq. meters was

sold at the rate of Rs.861.10 per sq. meter whereas the

rate of the area was fixed by the DAC at Rs.600/­  per

sq. meter and, therefore, in no case, the value

determined by the Department in the show cause

notice appears to be justified and hence the show

cause notice be withdrawn by allowing the parties to

give  effect to the  sale  agreement,  as  agreed, for the

consideration shown in the agreement.

13. The appropriate authority, after making inquiries

and hearing the parties passed an order dated

30.03.1994 under Section 269UD (1) of the Act.   The

appropriate authority overruled the appellants’

objections  and  directed  compulsory  purchase  of the

suit land by the  Central  Government  at  an amount

equal to the apparent consideration fixed by the

parties in the agreement dated 11.11.1993. The

authority further directed the Income Tax Department

to serve a copy of the order passed for purchase of the

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suit land by the Central Government to the appellants

for their information. The order also directed that in

terms of Section 269UE (1) of the Act, the suit  land

stood vested in the  Central  Government  with effect

from 30.03.1994. The appellants were directed to

deliver possession of the suit land to Shri RS Sagar,

DVO,  Income Tax Department,  Jaipur who, in  turn,

wrote to the appellants to intimate the time and the

date of handing over the possession to the Income Tax

Department.

14. With these background facts, the appellants

herein felt aggrieved by the pre­emptive purchase

order dated 30.03.1994 passed by the appropriate

authority  of the  Income Tax Department and filed a

writ  petition (W.P.  No.1899/1994) on  13.04.1994 in

the High Court of Rajasthan, Bench at Jaipur

questioning therein the legality and correctness of the

order dated 30.03.1994. The respondents (Income Tax

Department) contested the writ petition and defended

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the pre­emptive purchase order as being legal and

proper on the reasoning stated therein.  

15. The Single Judge, by order dated 14.09.1994,

dismissed the writ petition and upheld the order dated

30.03.1994 as being legal and proper. The appellants

felt aggrieved and filed appeal (D.B.S.A. No.744/1994)

before the Division Bench of the High Court. The

vendor (respondent No.3) also filed appeal (SAW

No.188/95) against the order of the Single Judge.

Both the appeals  were disposed of by the  Division

Bench consisted of (Chief Justice S.M. Jha and Justice

Mohammad Rafiq) by order dated 31.05.2007.   So far

as the appellants’ appeal (No.744/1994) is concerned,

it  was  dismissed  and  so far  as the vendor’s  appeal

(SAW No.188/1995) is concerned, it was partly allowed

with the direction that upon department taking over

possession of the suit land, prospective buyers would

be entitled to claim refund of the amount paid to the

vendor together  with interest  @ 6% p.a., out  of the

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maturity amount of the FDR (created by the

department) and the remaining amount shall be paid

to the vendor.  

16. The appellants felt aggrieved and filed review

petition in the High Court. The Division Bench, which

heard the review  petition,  was consisted of (Justice

R.M. Lodha (as His Lordship then was and later

became the  CJI) and Justice Rafiq because in the

meantime, the Chief Justice S M Jha, who was

member of the main judgment had retired).  

17. The Review Court dismissed the review petition

by a reasoned order dated 24.07.2007 which gave rise

to filing of C.A. Nos.9800­9801/2010 in this Court by

the prospective buyers.  So far as C.A. No.9901/2010

is concerned, it is filed by the Union of India (Income

Tax Department) against that part of the order which

allowed the appeal (SAW 188/1995) filed by the vendor

wherein  directions  mentioned  above  were issued for

11

compliance.   This is how these three appeals are

clubbed for their analogous hearing.

18. So, the question, which arises for consideration

in the appeals (CA Nos.9800­9801/2010),  is whether

the High Court (Single Judge, Division Bench and

Review Bench) was justified in dismissing the

appellants’ writ petition, intra court appeal and review

petition and thereby  was justified in  upholding the

pre­emptive order dated 30.03.1994 passed by the

appropriate authority.

19. Mr. S. Ganesh, learned senior counsel appearing

for the appellants, in substance, elaborated the same

submissions,  which were urged by the appellants  in

the writ petition, writ appeal and review petition before

the High Court and also added some new arguments,

which were not urged before the High Court.   

20. In reply, learned senior counsel  Shri  Mukerjee

appearing for the respondents  (Union of  India)  while

supporting the impugned order contended that no case

12

has been made out to interfere in the reasoning and

the conclusion arrived at by the High Court and,

therefore, the appeals deserve dismissal.

21. Having heard the learned counsel for the parties

at length and on perusal of the record of the case, we

find no merit in these appeals.

22. At the outset, it is apposite to mention that the

constitutional validity of Chapter XX­C inserted in the

Income  Tax  Act,  1961  by the  Finance  Act,  1986  of

which Section 269 UE(1) is its part was challenged in

this Court  in the case of  C.B Gautam vs Union of

India  and  Others  (1993)  1  SCC  78.  Chapter  XX­C

deals with compulsory acquisition of property and

provides for pre­emptive purchase at apparent

consideration  by the  Government of any immovable

property.  

23. The then learned Chief Justice M.H.Kania,

speaking for the constitution bench, upheld the

constitutional validity of Chapter XX­C.  

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24. The question involved in these appeals is,

therefore, required to be examined keeping in view the

law laid down in the case of C.B Gautam (supra).

25. Coming first to the order dated 30.03.1994

(Annexure  P­11)  of the  appropriate  authority,  which

was  impugned  in  the  writ  petition,  we  find  from its

perusal that it was passed by the authority, which is

constituted  under Section 269  UB of the Act. This

consisted of three members, who are senior officials of

the Income Tax Department. The order runs into 16

pages and deals with all the issues on facts and law

raised in the show cause notice and its reply.

26. After setting out the facts in detail up to Para 3,

the appropriate authority examined in Paras 4 and 5

the location of the suit land, its area, and its proximity

with the main roads, industries and residential

colonies situated in the nearby areas etc. The

appropriate authority then found that having regard to

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the topography of the suit land, it has a potential

market value.

27. Thereafter, the appropriate authority in Para 7

examined  the  condition  of the two existing godowns

bearing Nos. 13 and 14 and other structures standing

on the suit land and found as a fact that the condition

of the two existing godowns was very good and these

godowns were actually being used by the appellants

for commercial purposes.  

28. Considering the rates applicable as in the case of

CPWD structures by cost  index and keeping in view

the relevant  factors such as size, location,  condition

and the commercial use of the godowns, the

appropriate authority  fixed Rs.42 lakhs as being the

market value of the two godowns.  

29. The appropriate authority then in the same para

worked out the rate of the suit land at Rs.1727.5 per

sq. meter and accordingly determined the market

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value of the suit land at Rs.1,79,21,532/­ as against

its declared value of  Rs.99,84,500/­ in the agreement.

30. It is apposite to reproduce Paras 6 and 7 infra:

“6.   The subject property is very close to Tonk Road and on the main road leading to Durgapura station and connecting to Tonk Road.   On the north side of the subject property is the main Road and on the eastern side, there is public road leading to residential  colonies which have come up  in its neighbourhood.   There are residential colonies of  Vishnu  Puri and  Mahavir  Nagar across the road on the north side and residential colonies of Green Nagar and Arjun Nagar  on the  eastern side  across the road. Immediately after this khasra No.126, there is vegetable oil factory of M/s Rohtas Industries Ltd. on the western side.

7.  We have carefully considered the facts of the case and contentions of the ld. representatives of the transferor and transferees.   As stated earlier, there are existing godowns bearing Nos.13 and 14. Besides, there are offices and guard room etc. Considering the rates applicable as in the case of CPWD structures as up date by cost index, the  value  of the structure including godowns is estimated at Rs.42 lakhs. The main godown are of 2929 sq.  meters and other structure 171 sq. meter.  The godowns are lead bearing structure with Tubler trusses and AC sheet roofing having CC flooring in it. Proper electric installation and other services are provided as per the norms.   It is not correct to say that the  cost  of removal of debris will be more than the cost of

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structure.  As a matter of fact,  even entire iron used has a lot of value be godowns are having internal height of 18 feet and raised platform.   These were constructed some times in 1980 and are in very good condition. In view of the fact that commercial use of the property has been allowed by the Distt. Magistrate and Jaipur Development Authority, there is no need to demolish them unless the property is being exploited fro better gains.  The declared land  value  will come to Rs.99,84,700/­ minus Rs.42,00,000/­ = 57,84,500/­.  Therefore, the declared land rate works out to Rs.57,84,500/­ divided by 7943 sq. meters = Rs.728/­ per sq. meter as against the prevailing land rate of the sale instance property at Rs.1727.5 per sq. mt.   The land value  of the  subject  property  on this  basis works out to Rs.1727.5 x 7943 =Rs.1,37,21,532/­. If the value of depreciated structure of Rs.42 lakhs is added, the total value of the subject property comes to Rs.1,79,21,532/­ as against the declared value of Rs.99,84,500/­.”

31. The appropriate authority then in para 8

considered the appellants’ objections to the effect that

while determining the market value of suit land,

deduction of 30% to 40% should have been given and,

if it had been given, there would have been no

difference of 15% in the value of the suit land as was

17

required to  be  made out for invoking  powers  under

Chapter  XX­C  by the  appropriate authority for  pre­

emptive purchase of the suit land.  

32. The appropriate authority, however, rejected this

submission finding no merit therein. The appropriate

authority then examined the issue in the light of Rule

11 of the Rajasthan Urban Areas (sub division) Rules,

1975 and other relevant facts and came to a

conclusion that, if  several other aspects such as the

location of the suit  land and its commercial value is

taken into consideration, the market value of the suit

land would be substantially enhanced and would come

to Rs.1,46,58,548/­ as against the apparent

consideration of Rs.99,84,500/­ fixed in the

agreement. The appropriate authority, therefore, held

that in any case, value of the suit land was 15% higher

than the amount of the apparent consideration fixed in

the agreement.  

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33. It is apposite to reproduce paras 8 and 9, which

deal with this question:

“8.  Even  though  the  contention  of the  Ld. representatives regarding  deduction  of  30% to 40% for roads and parks etc. is not acceptable in principle.  We may work out the value  of the subject  property even  on this basis as follows:

Saleable area as per rule 11 of Rajasthan Urban Areas(sub division) Rules, 1975 is about 6%.   This rule further provides that this may be more if the plot size is small.

Assuming for arguments sake that 66% of 7,943 which is equal to 5242.38 sq. meters is available for sale, the land rate will have to be worked out on the basis of sale instance by adjustment of time gap of   +12% only.   In other words, the rate of sale instance will be 1718x1.12 = 1994.72 per sq. meter.   It is so because of the fact that the deduction of 34% contemplates absence of large size as well as “less developed”.   On that basis, the land value will be 1995x5242.38=1,04,58,548/­ if the value of structure of Rs.42 lakhs   is further out to Rs.1,46,58,548/­ as against declared apparent consideration of Rs.99,84,500/­.

9.   While coming to the above noted valuation of Rs.1,46,58,548/­ adjustment on account of the following aspects have not been made.  If these were further considered the value arrived at will still be higher:

i) Deduction of 34% only has been allowed.  The deduction can be still less if the plot is of smaller size.   This will

19

enhance the saleable land area and land value.

ii) Triveni Nagar is in the interior from main Tonk Road.   The development along Tonk Road is certainly very prestigious and valuable.  No factor has been added in the sale instance on this account.   It has been ascertained that sale instances referred to by the Ld. representative in his written submissions dated 24.3.94 of Triveni Nagar are not at all comparable for several reasons.   Plot No.B­44, Triveni Nagar (copy of sale deed in respect of this property has been filed) is near/on the nullah.   The surroundings are very poor.  Besides, this sale instance is not reliable as it has not been examined for pre­emptive purchase as the alleged apparent consideration is only Rs.1 lakh.   Details of another sale instance property at  A­256  Triveni  Nagar  have not been made available but this property is again very close to the nullah and its surroundings are also very poor.  Both of these sale instances cannot be compared  with the subject property whereas the sale instance relied by us can be comparable subject to adjustment of time gap, commercial nature etc.

iii) The  subject  property is  on  main road connecting Durgapura  station to  Tonk Road.   It is  very close to Tonk Road. The vacant land adjacent to two godowns of the subject property falls on the side of main road leading to newly developed colonies.  In other words, the subject  property  has vacant  land area

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on the main station road as well as on other side road leading to colonies. This factor  has  not  been  added  while coming to the valuation;

iv) As pointed out earlier, the nature of the subject property is commercial.   The value of  commercial  properties is  also about 50%  more than the residential properties.   If this factor is added, the present market value of the subject property will be substantially enhanced.”

    34. The appropriate authority  then  in para 10 also

examined the case keeping in view the market rates

notified by the sub­Registrar, Jaipur for the purpose of

paying stamp duty on the sale deed in relation to the

lands situated in an area called "Triveni Nagar" and

“Durgapura". The appropriate authority was, however,

of the view that the rates notified in the circular

support the case of Income  Tax  Department rather

than the case of the appellants because the minimum

reserved price notified for commercial use was at

Rs.1800/­ Per sq. meter.

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35. The appropriate authority then in para 12 dealt

with another argument of the appellants that the

adjustment of Rs.10 lakhs payable towards

registration charges and Rs.15 lakhs has to be

provided  for roads, water and electricity supply. The

appropriate authority rejected this argument because

it found that this amount was not a part of the

apparent consideration between the parties.  

36. It is after recording the  aforementioned factual

findings, the appropriate authority came to a

conclusion that the case for pre­emptive purchase of

the suit land as contemplated under Section 269UD(1)

is made out against the appellants.  

37. Now coming to the order of the writ Court(Single

Judge) dated 14.09.1994, we find on its perusal that

the writ Court  rightly observed that it could not act as

an appellate Court to examine the legality and

correctness of the pre­emptive order dated 30.03.1994

passed by the appropriate authority under Section

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269UD(1) of the Act but its jurisdiction was confined

only to examine as to whether any relevant material is

ignored or any erroneous  material is considered or

whether the order of the appropriate authority has

violated the principle of natural justice or any case is

made out for infraction of any statutory provision or

whether the decision taken by the appropriate

authority for  pre­emptive purchase is such that  no

reasonable person could ever take such decision.

38. Despite observing this, the writ Court examined

all the issues of facts arising in the case like an

appellate Court and found no merit therein.  

39. When the matter came up in intra court appeal at

the instance of the appellants herein before the

Division  Bench, the appellate  Court also, in detail,

examined each factual issue.  

40. The Division Bench, in its judgment dated

31.05.2007, minutely dealt with the contentions urged

on behalf of the appellant and concurred  with the

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reasoning and conclusion of the Single Judge and the

appropriate authority. We consider it apposite to quote

the relevant extract from the judgment with a view to

show  as to  how the issue in relation to  process  of

valuation of the suit land was dealt with by the

Division Bench. It reads as under:­

“….But on examination of the impugned order  of  preemptive  purchase,  we find  that the  Appropriate  Authority in  para  8  of the order has categorically noted this argument with reference to Rule 11 of the Rajasthan Urban Areas (Sub­Division, Reconstruction and improvement of Plots)  Rules,  1975 and noted that the said rule provides that the saleable are would be about 66% and this may be more if the plot size is smaller but assuming that only 66% would have available are for  sale,  yet  out  of  7,943 sq.  mtrs.  An area equal to 5242.38 sq. mtrs. Would have been available for sale. Appropriate Authority therefore by this alternative  mode worked out the rate of the land on the basis of comparable sale instance i.e. 5242.38 sq. mtrs. by adjustment of time gap of +12% which then would come to Rs. 1994.72 per sq. mtrs. It was noted that this was so because the deduction of 34% land contemplates absence of larger size as well as less development. On this basis the land value will be Rs. 1995 x 5242.38 = 1,04,58,548/­. Value of the constructed godowns of Rs. 42 lacs being added thereto, total value of the said property would come to Rs. 1,46,58,548/­ as against declared

24

apparent consideration of Rs. 99,84,500/­. We  do not find any error in the approach taken by the Appropriate Authority because deduction of 34% of the land for making the provision of civic amenities like roads, parks, open spaces, electricity, water, sewerage, drainage, would essentially exclude the element of the  land area being a  large size agricultural chunk of land, which is the alternative argument made by the respondents and this would then also exclude the element of the land being less developed/under developed. In other words, making use of 1/3rd  land would in fact make the remaining 2/3rd  land developed and with the sub division of lands into plots of smaller sizes, it would no longer remain a large size undeveloped agricultural land. In fact, making provision of all these civic amenities and facilities by using 1/3rd of the land would considerably enhance its saleability and appreciate the value of the remaining 2/3rd of the land.”

41. Now coming to the  order  of the  Review  Court,

when the matter was taken up in review jurisdiction at

the instance of the appellants herein against the

judgment of the appellate Court, Justice Lodha

speaking for the Bench, again went into each issue on

facts and law in detail and found no merit in any of

25

the issues.   The Review Court, therefore, also

dismissed the review petition by a well reasoned order.

42. It is in the light of the findings recorded by the

appropriate authority, writ Court, appellate Court and

lastly, review Court consistently against the

appellants, the question, which arises for

consideration in this  appeal is  whether  any  case is

made out to interfere in the impugned order.

43.  Though learned counsel for the appellants with

his usual fairness vehemently reiterated more or less

the same submissions, which were addressed  in the

High Court and also added some new submissions but

we are unable to accept his submissions. In our view,

the appropriate authority and the  High  Court  were

right in their respective approach, the reasoning and

the conclusion.  This we say for the following reasons.

44. It is not in dispute that the appropriate authority

laid a factual foundation in the show cause notice to

prove the value of suit land, which, according to the

26

authority, was 15% higher than the apparent

consideration. It is also not in dispute that a

categorical finding  was recorded by the appropriate

authority that the fair market value of the suit  land

was 15% more than the apparent consideration

mentioned in the agreement of sale by the parties. As

mentioned above, these findings were examined by the

writ Court, intra appellate Court and lastly the review

Court in their respective jurisdiction.   They were

upheld.  

45. In our considered opinion, these findings are

based on appreciation of evidence.  We do not find

these findings to be either arbitrary or illegal or

against any statutory provisions and nor they can be

regarded as being perverse to the extent that no

reasonable man could ever reach to such conclusion.

We also find that these findings are in conformity with

the requirements of Section 269 UD of the Act and the

27

law laid down by the Constitution Bench in the case of

C.B. Gautam (supra).    

46. Learned counsel for the appellants, however,

argued that  since there was no reference of  the two

godowns in the show cause notice and secondly, the

appellants were also not served with the copy of the

valuation report of the two godowns,   the  impugned

orders are rendered bad in law on account of these two

infirmities.  

47. We find  no  merit in this submission for three

reasons. First, the appellants did not raise this

objection at any stage of the proceedings. We cannot,

therefore, entertain this submission at this stage:

Second, in any event, no prejudice was caused to the

appellants because all relevant documents were filed

on this issue in the writ proceedings. The appellants,

therefore, had full opportunity to deal with these

documents which they also availed of and lastly, this

issue was also argued on its merits.  It is for all these

28

reasons, we do not find any substance in this

submission.

48. Learned counsel for the appellants then took us

to the factual issues, such as location of the suit land,

comparable sales relied on by the Department to prove

the value of the suit land etc.  These submissions were

urged essentially with a view to show that the value of

the suit land mentioned in the show cause notice was

not the real market value and, therefore, the order of

pre­emptive purchase of the suit land is bad in law.

Learned counsel, in support of his submissions, also

placed reliance on the decisions in Sahib Singh Kalha

&  Ors. vs. Amritsar Improvement Trust &  Ors.,

(1982) 1 SCC 419,  Lal Chand vs. Union of India &

Anr.  , (2009) 15 SCC 769, and  Executive Engineer,

Karnataka Housing Board vs. Land Acquisition

Officer,  Gadag & Ors., (2011) 2 SCC 246. We have

examined the submissions keeping in view the

decisions cited.  

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49.  As mentioned above, these issues were gone into

at four stages, i.e., first by the appropriate authority

then by writ Court followed by intra court appeal and

lastly by review Court on facts and were rejected

finding no merit. In an appeal filed under Article 136

of the Constitution, we cannot hold   de novo  inquiry

into these issues again.   In our view, these findings

have been recorded in conformity with the

requirements of Section 269UD(1) of the Act and hence

deserve to be upheld.  They are accordingly upheld.  

50. In view of the  foregoing  discussion,  we  find no

merit in  C.A.  Nos.9800­9801/2010.  The appeals  are

accordingly dismissed.  

CIVIL APPEAL No.9901 2010

1. This appeal is directed against the final judgment

and order dated 31.05.2007 passed by the High Court

of Judicature for Rajasthan Bench at Jaipur in

Division Bench Special Appeal No.188 of 1995

whereby the  appeal filed  by the vendor (respondent

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No.1 in this appeal) was partly allowed with a direction

to the appellants(Income Tax  Department) that the

prospective buyers would be entitled to the refund of

the amount paid to the vendor together at the rate of

6% p.a. out of the maturity amount of the aforesaid

FDR and remaining amount be paid to the vendor.  

2. On perusal of the record, we find that the Single

Judge of the High Court had  passed an interim order

dated 14.09.1994 directing the parties to  maintain

status quo.   He also directed that the period of stay

order would be excluded for making the payment by

the respondent to the seller depending upon the

outcome of the  writ petition.   This order  was later

modified on 27.09.1994.  While extending the stay

order, the Single Judge, however, clarified that in case,

if the action impugned is held bad in law,  the vendor

would be entitled for reimbursement of the loss

occasioned to her. It was, however, submitted before

the Division Bench of High Court in the appeal that

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the concerned authorities had invested the amount of

apparent sale consideration, i.e., Rs.99,88,500/­ in a

fixed deposit (FDR) and the period of FDR was being

extended from time to time, pending appeal.  

3. Taking into consideration these facts and other

relevant circumstances, the Division Bench while

dismissing the appeal filed by the prospective buyers,

partly allowed the appeal filed by the vendor and

issued the following directions:­

“  ……..but the appeal filed by the vendor (SAW No. 188/95) is partly allowed with the direction that upon department taking over possession of the subject property, prospective buyers would be entitled to refund of the amount paid to the vendor together with interest @ 6% p.a., out of the maturity amount of the aforementioned FDR and remaining amount shall  be paid  to the vendor. In the facts of the case, however, we leave the  parties to  bear their own  costs.”

4. We find that  while passing the aforesaid order,

the provisions contained in Section 269UG (4) of the

Act were not taken into consideration by the Division

Bench, which inter alia provide as to how the issue in

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relation to amount of consideration is finally required

to be dealt with by the appropriate authority in a case

of this nature.  

5. Section 269UG (4) of the Act reads as under:­

“(4) Where any amount of consideration has been deposited with the appropriate authority under this section, the appropriate authority may, either of its own motion or on an application made by or on behalf of any person interested or claiming to the interested in such amount, order the same to be invested in such Government or other securities  as it  may think proper,  and may direct the interest or other proceeds of any such investment to be accumulated and paid in such manner as will, in its opinion, give the parties interested therein the same benefits therefrom as they  might  have  had from the immovable property in respect whereof such amount has been deposited or as near thereto as may be."

6. We are, therefore, of the view that instead of

issuing the aforementioned impugned directions in

relation to the disbursement of the amount of FDR, the

High Court should have left the matter to be decided

by the appropriate authority as required under Section

269UG (4) of the Act.  

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7. We  are, therefore, inclined to  allow the  appeal

filed by Union of India to the extent that the above­

mentioned directions issued by the  High  Court are

hereby set  aside and the matter  is left  open for  the

decision to be taken   by the appropriate authority as

required under Section 269UG(4) of the Act in

accordance with law.

8. The appeal  is accordingly allowed in part.   The

impugned  directions contained in the concluding para

of the impugned order are set aside.      

    ………...................................J. [ABHAY MANOHAR SAPRE]

   …...……..................................J.                 [DINESH MAHESHWARI]

New Delhi; July 29, 2019

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