ORDER [ENTITY], J.
1. This writ petition has been filed by the petitioners for quashing the order dt. 28th Oct., 1994 passed by the Appropriate Authority (Respondent No. 1) by which it has treated the statement filed in the prescribed Form No. 37-I as required under [SECTION] of the [ACT], as non est in law and has thereby refused to exercise its powers under [SECTION] either to purchase the property in question or to issue no objection certificate under [SECTION] of the said Act. There is a further prayer of issuance of writ of mandamus directing the first respondent to issue the statutory no objection certificate forthwith.
2. The first petitioner is a private limited company registered under the provisions of the [ACT]. The second petitioner is one of its shareholders. According to the them the petitioner-company is the absolute owner of 45 acres of land with superstructures standing thereon being a part of the property, known as 'the Bangalore Palace Property' having an extent more or less of 454 acres. According to the petitioners, as disclosed in the writ petition, in the course of business, the third respondent-company, which is engaged in the business of development of properties, entered into an agreement dt. 6th July, 1994 with the first petitioner for developing 35 acres of land out of the said 45 acres by constructing residential complexes thereon with support facilities, such as club, house, school, shopping centre, community hall, etc. As per the petitioners under the said agreement, in consideration of the petitioners agreeing to transfer/convey their undivided 50% share in their property to the third respondent developer, the latter has agreed to build and deliver to the first petitioner 50% of the total buildup area of the building to be constructed on the said land.
3. Petitioners have further stated that in the said agreement between them and the third respondent it has been mentioned that the first petitioner as the owner is in quiet enjoyment of the Sch.-A property and they did not possess the property in excess of the ceiling limit as contemplated under the [ACT] (hereinafter, for brevity, 'the [ACT]'); and that they shall obtain requisite orders/endorsements from the competent authorities to re-develop and sell the said properties and also obtain requisite orders for change of land use/classification to 'residential use'. A copy of the agreement has been filed at Annexure-A to the writ petition.
4. It has further been stated by the petitioners that on having arrived at the said agreement, petitioners and the third respondent filed a joint statement in Form No. 37-I as required under [SECTION] of the [ACT]; but the same has been rejected by the impugned order as noticed above.
5. According to the petitioners, keeping in view the judicial pronouncements referred to in paragraph 7 of the writ petition, since respondent Appropriate Authority has failed to exercise its option to purchase as vested in it under [SECTION] of the [ACT] within three months from the end of the month in which statement under Form No. 37-I was received by the said authority, they are bound to issue a certificate as contemplated under [SECTION] of the [ACT], to the extent that "it has no objection to the transfer of such property for an amount equal to the apparent consideration thereof as stated in the agreement for transfer of immovable property in respect of which it has received the statement under [SECTION]."
6. According to Mr. [ENTITY], learned counsel for the petitioners, the reasons which have prevailed with the respondent Appropriate Authority for passing the impugned order declaring the statement in Form No 37-I as ab initio void and non est in the eye of law, are wholly irrelevant and extraneous since the Appropriate Authority constituted under [SECTION] of the [ACT] cannot delve upon the questions pertaining to the [ACT] having bearing on the alienable right of the owner of the land.
7. From one of the replies dt. 26th Sept., 1994 (Annexure-D) given by the petitioner company to the Appropriate Authority it transpired that [CASE NUMBER] is pending consideration before this Court in relation to the land in question. Accordingly I called for the records of the said writ petition, from which it transpired that by order dt. 27th July, 1989 the competent authority under the [ACT] had declared the entire land over and above 1000 sq. mtrs. in possession of the present first petitioner as excess vacant land keeping in view [SECTION] of the [ACT]. Paragraph 7 of this order of the competent authority which is relevant for the present purpose reads thus :
"M/s Chamundi Hotels (P) Ltd., Bangalore is deemed to hold to an extent of 3,87,138. sq. mtrs., of vacant land, after deducting the built area and the appurtenant land, roads, tanks, etc. The details of the land held by M/s Chamundi Hotels (P) Ltd., Bangalore the built area, non-vacant area and the appurtenant area are furnished in the Annexure 'B'. After allowing a share of 1000 sq. mtrs., in accordance with [SECTION] of the Act, there is an excess vacant land of 3,86,138 sq. mtrs., held by M/s Chamundi Hotels (P) Ltd., Bangalore."
8. It appears that similar orders were passed in respect of seven other declarants and all of them including the petitioner-company had filed appeals under [SECTION] of the [ACT] before the Karnataka Appellate Tribunal. The Tribunal by its order dt. 11th May, 1992 dismissed all the appeals thereby confirming the order of the competent authority. It also appears that the orders of the competent authority and the Tribunal have been challenged in this Court by only one of the declarants, namely Sri [ENTITY] and has obtained an interim order by filing the aforesaid [CASE NUMBER]. There was no whisper in the entire present writ petition as to whether the petitioner had also challenged the said orders appearing against them having a direct bearing on their right to transfer or alienate the property in question in any manner. It also transpires from the order of the Tribunal that during the pendency of the appeal before it, some order had been passed by this Court in the civil litigations between the parties regarding the right of share or ownership of the contenders including the petitioner-company.
9. Petitioners had nowhere whispered about the said civil litigation or the orders passed by this Court or as to whether they have also assailed the order of the competent authority and the Tribunal passed under the [ACT] by filing any writ petition in this Court or by any other available remedy, and, if they had done so what was the outcome thereof. Since in my opinion, for determining the question as to whether the Appropriate Authority under the [ACT] had erred in refusing to exercise its option under [SECTION] of the said Act, by order dt. 13th Dec., 1995, I directed the petitioners to place on record -
(i) The order passed by this Court determining the respective rights and claims of the parties including the petitioner-company in relation to the property in question;
(ii) The order passed by the competent authority and the Tribunal under the [ACT] referred to above; and
(iii) An affidavited statement of the petitioner as to whether it has challenged the orders of the competent authority and the Tribunal before any higher forum, and, if so, to set out the details thereof with the order passed therein, and the present status of those proceedings.
10. Accordingly on 19th Dec., 1995 a supplementary affidavit was filed enclosing the order dt. 26th July, 1990 passed by this Court in OSA No[SECTION] to 13 of 1989 (Annexure-L) and the order dt. 1st July, 1994 passed in [CASE NUMBER] (Annexure-M). As per the certificate issued by the Corporation of the City of Bangalore the Khata of the land stand in the name of the petitioner-company (Annexure-N). The order passed by the Additional Special Deputy Commissioner on 27th July, 1989 declaring 3,86,138 sq. mts. of land as in excess of the ceiling limit in the hands of the petitioner-company, as already referred to above, has now been placed at Annexure-P. By a subsequent memo, petitioner has also brought on record that the petitioner has now also filed a writ petition being [CASE NUMBER] challenging the order of the competent authority under the [ACT] and of the Tribunal in which further proceedings have been stayed.
11. From the documents now brought on record it transpires that the petitioner is not only guilty of suppressing the material facts but has also indulged in falsehood by asserting that he is the absolute owner of 45 acres of land in question. From the order dt. 26th July, 1990 (Annexure-L) passed by this Court in [CASE NUMBER], the material facts to the extent those are relevant for the present purpose may be noticed in brief.
12. The family of [ENTITY] of Mysore owned 454 acres of land situate on Bangalore Bellary Road. On portions of this land several buildings/structures as also the palace of [ENTITY] also stood. Sri [ENTITY] was the last ruler of the Mysore State who died on 23rd Sept., 1974. Sri [ENTITY] who was a rich building contractor and businessman had become a personal friend of the said [ENTITY]. These two persons evolved a scheme for exploitation of the said 454 acres of land by promoting and establishing two private companies one of those being the present first petitioner for starting a hotel business and the second one for doing estate business under the name and style 'Venkateshwara Real Estate Enterprises Ltd.' On 11th Dec., 1970, an agreement was entered into between the late [ENTITY] and the petitioner-company for sale of 110 acres of land for a consideration of Rs. 1,25,00,000. Out of the said amount, R[SECTION],00,000 was paid by a cheque and Rs. 18,00,000 was purported to have been paid in cash as advance, but that was actually not paid. It appears that subsequent to the death of [ENTITY], the members of two families plunged into various litigations which were subsequently brought to rest by this Court by its order dt. 26th July, 1990 (Annexure-L) passed under [SECTION] of the [ACT].
13. It has been noticed by this Court in the said order that though in respect of the properties belonging to the Ex-Ruler's family of former State of Mysore, there was an uninalienable clause, on 22nd Nov., 1993, it was declared in Rajya Sabha that after the abolition of privy purses, the uninalienable clause did not apply to private properties of former rulers. It was after this declaration that between 11th Dec., 1974 and 17th April, 1976 there were number of suits filed by the only son of late [ENTITY] questioning the right of alienation of [ENTITY] and claiming some other reliefs. As noticed above, the [ENTITY] died on 23rd Sept., 1974. Subsequently, on 26th March, 1978 there was a first compromise between said two promoter families and two companies floated by them one of which was the petitioner-company. It was inter alia, agreed that the sale of property in favour of the two companies had to be done after the properties were exempted from the operation of the [ACT] and the [ACT], which appears to have created some hurdles in retention of such a vast extent of land by the [ENTITY]'s family. But this settlement could not resolve the disputes between the parties. In June, 1987 Sri [ENTITY], the son of late [ENTITY], filed [CASE NUMBER] under [SECTION] and [SECTION] of the [ACT]. [CASE NUMBER] also came to be filed under [SECTION] of the [ACT] praying for winding up of the company. Subsequent to the dismissal of the said Petitions, [CASE NUMBER] were filed by Sri [ENTITY] which were disposed of with other appeals on 26th July, 1990 as noticed above. 110 acres of land which was intended to be sold to the petitioner-company form part of Sch.-B of the property and was delineated in the annexed plan with red and blue with all buildings and structures thereon, etc. Certain directions made in the aforesaid order dt. 26th July, 1990, which are relevant for the present purpose, read as under :
"8. The appellant and Sri [ENTITY] representing the respondents shall make joint efforts for pursuing the proceedings for grant of exemption of the land in Bangalore Palace Property, from the restrictive provisions of the [ACT] regarding ceiling in respect of which an application has been made before the State Government under [SECTION] thereof on the ground of undue hardship because of the huge tax and other liabilities of the late [ENTITY], for clearing of which also the lands were sought to be developed by promoting the two companies. As both the parties are equally interested in securing the exemption, either of the parties may pursue the remedies to secure such exemption, informing and/or impleading the other party, as a party in such proceedings.
9. If pursuant to such effort exemption from the provisions of the [ACT], is secured in respect of 110 acres of land, earmarked in the 'B' Schedule, then the extent of 45 acres out of the marked red therein in the plan attached to the agreement with the easementary right of way from the Palace road through the Palace Main Gate through the said portion shall vest in favour of Chamundi Hotels Pvt. Ltd. or Chamaraju Group, absolutely free of all encumbrances, at the expense of the said company or Chamaraju Group. The appellant shall execute all necessary documents, deeds and/or instruments as may be required by M/s Chamundi Hotels Pvt. Ltd. or Chamaraju Group in this behalf at their expense.
25. Neither of the parties by themselves or through M/s Chamundi Hotels Pvt. Ltd. directly or indirectly alienate, sell, mortgage, lease, encumber or otherwise transfer any interest in any part of any portion of the property included in Sch.-B."
14. Subsequently, a joint memo was filed by the parties in the said appeals whereupon on 1st July, 1994 the following order was passed by a Bench of this Court :
"These appeals were disposed of by consent of parties on 26th July, 1990 by a Division Bench of this Court and certain directions were issued as agreed to between the parties. In those directions liberty was reserved to the parties to seek necessary clarifications of these directions if there were to be of any practical difficulties in their implementation and further directed that the matter be brought before the Court after 15 days for reporting the handing over of control of M/s Venkateshwara Real Estate Enterprises Pvt. Ltd. by the respondents to the appellant. That is how the matters were posted for being spoken to. Today a memo has been filed by the parties and the learned counsel for the parties, on instruction submits that all the directions contained in the aforesaid order of the Court have been complied with and this fact they wanted to place on record. The memo duly signed by the parties and their counsel is kept on record. Therefore, all the directions contained in the aforesaid order are treated to have been complied with. No further orders are necessary.
Sd/- ([ENTITY]) Chief Justice Sd/- ([ENTITY]) Judge."
15. Petitioner-company has also brought on record a certificate issued by the Corporation of City of Bangalore dt. 26th July, 1988 (Annexure-N) wherefrom it transpires that the property No. 1 on Bangalore Palace Compound road falling in Division No. 71 has been recorded in the Khata of the petitioner-company.
16. I am to observe here that though the competent authority under the [ACT] had already passed its order dt. 27th July, 1989 under [SECTION] of the [ACT] declaring the entire land in question except 1000 sq. mts. as excess, the same was possibly not brought to the notice of this Court. But, it may be relevant to notice here as to how the competent authority treated the petitioner as a holder of the land in terms of [SECTION] of the [ACT].
"Sri [ENTITY] holds this land as the legal heirs of late Sri [ENTITY] as the Kartha of the HUF, whereas the two companies possess the lands in Bangalore Palace Property as 'owner'. The explanation furnished for this definition protects the interest of both Sri [ENTITY] as well as M/s Chamundi Hotels (P) Ltd., Bangalore and M/s Sri Venkateswara Real Estate Enterprises (P) Ltd., Bangalore. The explanation makes it clear where the same vacant land is held by the person in one capacity and another person in another capacity for the purpose of this Act, such land shall be deemed to be held by both such persons herein this case Sri [ENTITY] and the four sisters and the legal heirs Smt. [ENTITY] are holding these lands in the capacity of 'the owner' and they come within the definition in [SECTION] of the Act and M/s Chamundi Hotels (P) Ltd., Bangalore and M/s Sri Venkateswara Real Estate Enterprises (P) Ltd., Bangalore falls in [SECTION] of the Act, i.e., to possess such land as owner."
16A. [SECTION] of the [ACT] reads as under :
to hold" with its grammatical variations, in relation to any vacant land, means -
(i) to own such land; or
(ii) to possess such land as owner or as tenant or as mortgagee or under an irrevocable power of attorney or under a hire-purchase agreement or partly in one of the said capacities and partly in any other of the said capacity or capacities.
Explanation : Where the same vacant land is held by one person in one capacity and by another person in another capacity, then, for the purposes of this Act, such land shall to be deemed to be held by both such persons."
17. The facts so far placed on record do not show that the title in the land at any point of time was transferred in favour of the petitioner. Therefore, it cannot be said that the petitioner is the owner of the land. Further, no doubt, it had come in possession of the land pursuant to same agreement for sale but the said possession cannot be justified as of an owner or as a tenant or as a mortgagee or under an irrevocable power of attorney or under hire purchase agreement; and, therefore, there is hardly any occasion to apply the Explanation appended to the aforesaid definition of 'to hold'. It is this aspect, though it is not very relevant for the present purposes, which amazes me as to how the competent authority has treated the petitioner-company as a holder of the land even for restricted purpose of the [ACT]. Irrespective of the said consideration, what is more material and has to ultimately clinch the issue is that admittedly the petitioner-competent is not the owner of the land in question, and to this extent the petitioners have made a blatantly false statement before this Court and possibly also before the Appropriate Authority under [SECTION] of the [ACT] representing that petitioner-company that he is the absolute owner of the land in question. At the cost of repetition, I am constrained to hold that neither at any point of time the title in the land in question was transferred in favour of the petitioner-company nor in law it could have been transferred because of the statutory bar contained under the [ACT]. It may be further to be noticed that even if the petitioner-company had acquired interest of any nature in the land, it was not competent on its part to effect transfer thereof in favour of the third respondent because of the specific bar laid by this Court in direction No. 25 of its order dt. 26th July, 1990 passed in [CASE NUMBER] under [SECTION] of the [ACT], as reproduced above.
18. The legal question that now arises for consideration is whether, in the background of the said hard facts, it be held that the Appropriate Authority has erred in refusing to act upon the agreement-statement filed by the petitioner company which was ex facie void and thus non est in law.
19. Before proceeding to adjudge the rival contentions, I find it essential to refer to the relevant statutory provisions contained in [SECTION] of the Act. They are -
"[SECTION]. In this Chapter, unless the context otherwise requires, -
(a) "agreement for transfer" means an agreement, whether registered under the [ACT] or not, for the transfer of any immovable property;
xxx xxx xxx xxx (d) "immovable property" means -
(i) any land or any building or part of a building, and includes, where any land or any building or part of a building is to be transferred together with any machinery, plant, furniture, fittings or other things also.
Explanation : For the purposes of this sub-clause, "land, building, part of a building, machinery, plant, furniture, fittings and other things" include any rights therein;
(ii) any rights in or with respect to any land or any building or a part of building (whether or not including any machinery, plant, furniture, fittings or other things therein) which has been constructed or which is to be constructed, accruing or arising from any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other AOPs or by way of any agreement or any arrangement of whatever nature), not being a transaction by way of sale, exchange or lease of such land, building or part of a building;"
xxx xxx xxx "(f) "transfer", -
(i) in relation to any immovable property referred to in [SECTION], means transfer of such property by way of sale or exchange or lease for a term of not less than twelve years, and includes allowing the possession of such property to be taken or retained in part performance of a contract of the nature referred to in [SECTION] of the [ACT].
Explanation : For the purpose of this sub-clause, a lease which provides for the extension of the term thereof by a further term or terms shall be deemed to be a lease for a term of not less than twelve years, if the aggregate of the term for which such lease is to be granted and the further term or terms for which it can be so extended is not less than twelve years;
(ii) in relation to any immovable property of the nature referred to in [SECTION], means the doing of anything (whether by way of admitting as a member of or by way of transfer of shares in a co-operative society or company or other AOPs or by way of any agreement or arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, such property." "[SECTION] Notwithstanding anything contained in the [ACT], 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 [SECTION] at least four months before the intended date of transfer.
(2) The agreement referred to in [SECTION] 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) Every statement referred to in [SECTION] shall, -
(i) be in the prescribed form;
(ii) set forth such particulars as may be prescribed; and
(iii) be verified in the prescribed manner, and shall be furnished to the Appropriate Authority in such manner and within such time as may be prescribed, by each of the parties to such transaction or by any of the parties to such transaction acting on behalf of the other parties."
"[SECTION] Subject to the provisions of [SECTION], the Appropriate Authority, after the receipt of the statement under [SECTION] in respect of any immovable property, may, notwithstanding anything contained in any other law or any instrument or any agreement for the time being in force, make an order for the purchase by the Central Government of such immovable property at an amount equal to the amount of apparent consideration :
Provided that no such order shall be made in respect of any immovable property after the expiration of a period of two months from the end of the month in which the statement referred to in [SECTION] in respect of such property is received by the Appropriate Authority :
Provided further that where the statement referred to in [SECTION] in respect of any immovable property is received by the Appropriate Authority on or after the 1st June, 1993, the provisions of the first proviso shall have effect as if for the words "two months", the words "three months" had been substituted :
"[SECTION] Where an order under [SECTION] is made by the Appropriate Authority in respect of an immovable property referred to in [SECTION], such property shall, on the date of such order, vest in the Central Government in terms of the agreement for transfer referred to in [SECTION] :
"[SECTION] Where an order for the purchase of any immovable property by the Central Government is made under [SECTION], the Central Government shall pay, by way of consideration for such purchase, an amount equal to the amount of the apparent consideration.
(2) Notwithstanding anything contained in [SECTION], where, after the agreement for the transfer of the immovable property referred to in that sub-section has been made but before the property vests in the Central Government under [SECTION], the property has been damaged (otherwise than as a result of normal wear and tear), the amount of the consideration payable under that sub-section shall be reduced by such sum as the Appropriate Authority, for reasons to be recorded in writing, may by order determine."
"[SECTION] The amount of consideration payable in accordance with the provisions of [SECTION] shall be tendered to the person or persons entitled thereto, within a period of one month from the end of the month in which the immovable property concerned becomes vested in the Central Government under [SECTION], or, as the case may be, [SECTION], [SECTION] :
"[SECTION]. Notwithstanding anything contained in any other law for the time being in force, no registering officer appointed under the [ACT], shall register any document which purports to transfer immovable property exceeding the value prescribed under [SECTION] unless a certificate from the Appropriate Authority that it has no objection to the transfer of such property for an amount equal to the apparent consideration therefor as stated in the agreement for transfer of the immovable property in respect of which it has received a statement under [SECTION], is furnished along with such document.
(2) Notwithstanding anything contained in any other law for the time being in force, no person shall do anything or omit to do anything which will have the effect of transfer of any immovable property unless the Appropriate Authority certifies that it has no objection to the transfer of such property for an amount equal to the apparent consideration therefor as stated in the agreement for transfer of the immovable property in respect of which it has received a statement under [SECTION].
(3) In a case where the Appropriate Authority does not make an order under [SECTION] for the purchase by the Central Government of an immovable property, or where the order made under [SECTION] stands abrogated under [SECTION], the Appropriate Authority shall issue a certificate of no objection referred to in [SECTION] or, as the case may be, [SECTION] and deliver copies thereof to the transferor and the transferee."
20. In the case of [PRECEDENT] , the Supreme Court, keeping in view the legislative history of [SECTION] of the Act and the stand taken on behalf of the Revenue has held that the power of compulsory purchase conferred under the said chapter are being used and intended to be used only in cases where an agreement to sell an immovable property in an urban area to which the provision of this chapter apply, if there is a significant undervaluation of the property concerned, namely 15% or more. It has further been held that :
"If the Appropriate Authority concerned is satisfied that in an agreement to sell immovable property in such areas as set out earlier, the apparent consideration shown in the agreement for sale is less than the fair market value by 15% or more it may draw a presumption that this undervaluation has been done with a view to evade tax. Of course, such a presumption is rebuttable and the intended seller or purchaser can lead evidence to rebut such a presumption. Moreover, an order for compulsory purchase of immovable property under the provisions of [SECTION] requires to be supported by reasons in writing and such reasons must be germane to the object for which [SECTION] was introduced in the [ACT], namely, to counter attempts to evade tax."
21. The mechanism devised by the Parliament for achieving the aforesaid object is that though under the provisions of the [ACT] the transfer of immovable property, though compulsorily registerable, need not necessarily be preceded by an agreement for transfer, under [SECTION] of the Act, the execution and filing of such an agreement in the prescribed form and the manner, has been made mandatory. Disobedience of this mandate restrains registration of the instrument of transfer except on obtaining no objection certificate from the Appropriate Authority ([SECTION]), resulting in non-recognition of the intended transfer in law. With the filing of agreement referred to as the statement for statutory purposes of [SECTION], [SECTION] is activatised conferring the jurisdiction on the Appropriate Authority to make an order for purchase by the Central Government of the said immovable property at an amount equal to apparent consideration. The provisions contained in [SECTION] provide for the consequences which will flow from the exercise/non-exercise of the said jurisdiction by the Appropriate Authority. Under the scheme envisaged under [SECTION] of the Act, it is axiomatic that the said jurisdiction can be founded only on a legally enforceable agreement of transfer. To hold otherwise will not only be opposed to public policy but would also result to the detriment of public interest and will prove to be defective of other beneficial Acts.
22. To illustrate : (1) If X and Y enter into an agreement for sale of a property of Z at a miserably low consideration as compared to the market price and file a statement under [SECTION], can the Appropriate Authority, despite of having found the said fact, is still obliged to either pass an order for purchase of the property by the Central Government or to issue a statutory certificate according its no objection to such a palpably void and fraudulent transaction. (2) Similarly, if A files an agreement for sale of a property to Y which is admittedly an excess vacant land within the meaning of the [ACT], the sale whereof is completely prohibited under [SECTION] thereof declaring the intended transfer to be null and void, can even in this case also the Appropriate Authority is left with only either of the said two options. (3) Similarly, if the person files an agreement to sell the Bangalore City Railway Station for an apparent consideration of Rs. 1 lakh to some intending buyer, can the Appropriate Authority even in such a case be compelled to either make an order of purchase by the Central Government of its own property or to give a statutory consent to such palpably illegal transaction.
In my opinion, giving of such a grammatical construction to the said provisions will amount to attributing absurdity to the legislative exercise which is impermissible under the established cannons of interpretation of enactments.
23. The only conclusion, therefore, can be that the Appropriate Authority can be directed to act under [SECTION] only if it is found that the agreement filed under [SECTION] is not void, and as such is not non est in law.
This being the jurisdictional premise on which the Appropriate Authority can proceed to act, unless such premise is shown to exist, this Court under writ jurisdiction cannot issue any direction to the Appropriate Authority to act in any of the manners provided under [SECTION] of the Act.
24. [SECTION] of the [ACT] provides for a person competent to transfer the property and it reads as under :
"Every person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally, in the circumstances, to the extent and in the manner allowed and prescribed by any law for the time being in force."
25. [SECTION] of the [ACT] defines the capacity to contract as follows :
"Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind and is not disqualified from contracting by law to which he is subject."
26. In the present case, petitioners cannot be said to be the persons competent to transfer the property in question, because, as found above,
(i) they have not acquired any title over the land;
(ii) the order dt. 26th July, 1990 passed by this Court in [CASE NUMBER] has specifically restrained the petitioners from effecting any such transfer; and
(iii) the lands in question has already been declared to be excess under the [ACT] and [SECTION] of this Act declares transfer of such lands as null and void.
27. The said view taken by me finds ample support from a Division Bench judgment of the Bombay High Court in the case of [PRECEDENT], wherein Mrs. [ENTITY], J. as she then was, has held at pages 596 as follows :
"In our view such is not the intention of [SECTION] and [SECTION], nor need the sections be interpreted in this manner. [SECTION] comes into picture when the sale of a property is intended to take place. At least three months before such sale the statement is required to be furnished. This would necessarily imply that the statement must refer to an agreement of sale which is capable of being put into effect. In the present case, the trust property cannot be validly sold without the permission of the Charity Commissioner. Hence, such an agreement of sale cannot be acted upon by the IT authorities. We are not dealing with a situation where there may be disputes between various parties as to their right to the property in question, their right to enter into the agreement of sale, etc., Here is a case where the sale cannot take effect by reason of a statutory bar on such sale without the approval of the Charity Commissioner. Therefore, [SECTION] can come into operation only after the approval is granted by the Charity Commissioner for such sale. The period of filing such a statement has to be computed with reference to the approval granted by the Charity Commissioner for the sale of the property, bearing in mind the public purpose underlying such approval. The Department was, therefore, right in considering the form in question as invalid."
28. Mr. [ENTITY] sought to submit that the view taken by the Bombay High Court in [PRECEDENT]'s case (supra) has been overruled in a subsequent case in [PRECEDENT]. But, I find the contention to be erroneous, because the factual premises leading to challenge of the orders passed by the Appropriate Authority were quite different in the two cases; and as such in the latter case the first was found to be distinguishable. In the first case, as noticed hereinafter the Court had found the agreement of sale to be unenforceable, whereas in the second case it has been observed that :
"It cannot be said that the said agreement for transfer entered by and between the first petitioner and respondents 6 to 8 is contrary to law or void."
29. Now, I may proceed to discuss the decisions cited at the bar on behalf of the petitioners. In the case of [PRECEDENT] petitioner-company was admittedly the owner of the land involved therein. It was declared to be a sick industrial unit within the meaning of the [ACT]. In order to help raise finance so that it could be revitalised it entered into an agreement to sell part of its land. The State Bank of India and the State of West Bengal had given consent to the transactions. Accordingly, the petitioner company entered into an agreement on 1st Sept., 1988 for sale with Granite Ceramics Pvt. Ltd. Thereupon it filed an application under [SECTION] as required under [SECTION] of the Act; but the Appropriate Authority refused to act thereon on the ground that it was premature. The reason given was that the petitioner may choose to surrender the subject property as excess land under the provisions of the [ACT] in preference to its other lands. On these facts, the Court held the order of the Appropriate Authority as unsustainable in law by inter alia, observing that "Under the present concept of law, the prospective transferor and the transferee have right to enter into an agreement for sale if there is no bar or impediment in law. The sale is proposed without offending any provisions of law prohibiting such transfer". It was further held that the Appropriate Authority as the pre-emptor cannot demand to better the title before he exercises the right of pre-emption. The Court after noticing that it was nobody's case that the transferor-company had no title to the property in question and, therefore, the only option left with the Appropriate Authority was either to purchase the property by exercising the right under [SECTION] of the Act or else to issue 'no objection' certificate.
30. In the case of [PRECEDENT] , the ownership of the transferor was admitted. Nonetheless the Appropriate Authority has refused to act upon the statement filed in Form No. 37-I of the Act mainly on the ground that the division of the property of which the land under sale formed part was not done in accordance with the municipal laws. The Court held on the facts of the case that there was no scope on the part of the Appropriate Authority to examine as to whether the division of property was done in accordance with or contrary to the municipal laws, and that he could have merely acted by either exercising the right of purchase with all the defects, shortcomings and limitations of the property which was the subject-matter of the statement or he should have issued a certificate of 'no objection'.
31. In the case of [PRECEDENT] petitioner was undisputedly found to be the owner of the freehold immovable property which was the subject-matter of the statement filed in Form No. 37-I. Here also the Appropriate Authority refused to act on the said statement by alleging that the division of the property between the petitioner and his son was irregular and illegal being violative of the provisions of the municipal bye-laws. The Court found such consideration to be extraneous and issued a direction for issuance of no objection certificate under [SECTION] of the Act.
32. In the case of [PRECEDENT] , the facts need to be noticed in slightly greater detail. In this case the transferee was the petitioner before the High Court. He had challenged the order of the Appropriate Authority dt. 20th July, 1989 and 22nd July, 1990 purported to have been passed under [SECTION] of the Act. Admittedly 8 transferors (respondents 3 to 10) were owning 5000 sq. yds. of land in Delhi on the date of enforcement of the [ACT]. Out of the said lands, the competent authority declared 680.26 sq. mts. owned by the said respondents as excess vacant lands. Under an agreement dt. 10th May, 1989, the said respondents agreed to sell the aforesaid lands to the petitioners and accordingly filed a statement in Form No. 37-I with the Appropriate Authority for grant of 'no objection certificate'. The Appropriate Authority refused to act on the said statement on the ground as indicated in his order dt. 20th July, 1989 that it was not certain as to which portion of the land will be surrendered to the State Government since part of it has been declared to be excess under the [ACT]. Thereupon on 25th Sept., 1989, the transferor-respondents wrote a letter to the competent authority under the [ACT] specifying and demarcating the excess vacant land which they surrendered with a request for issuance of a Notification under [SECTION] of the said Act. Immediately thereafter the Appropriate Authority was apprised of the said fact with a request for issuance of the desired no objection certificate. On 24th Nov., 1989, even a fresh statement in Form No. 37-I was filed for securing the said object. But again the Appropriate Authority held it to be invalid statement keeping in view its earlier order dt. 20th July, 1989.
On these facts, after examining the scheme under [SECTION] of the Act, the Court held as under :
"If the Appropriate Authority chooses to purchase the property in question then [SECTION] does not contemplate the passing of any order similar to the order which has been passed by respondent No. 1 in the present case. In fact, the proviso to [SECTION] says that if no such order, meaning an order referred to under [SECTION] for purchase, is passed and the period within which such an order can be passed has expired, then no order for purchase can at all be passed. When no other order of purchase is passed, then the provisions of [SECTION] come into operation."
33. The Appropriate Authority had filed a SLP before the Supreme Court against the judgment in Tanvi Trading & Credits' case (supra), which was dismissed by the Supreme Court by its order reported in [PRECEDENT] , which reads as under :
"Counsel for the petitioners fairly tells us that a "no objection certificate" was issued as early as on 15th Jan., 1991. The suggestion that it was issued under pressure and thereat of a contempt proceeding is made out from the record.
We agree that two alternatives are open under the scheme of the legislation : (i) the Union of India through the Appropriate Authority could buy the property, or (ii) in the event of its decision not to buy, it has to issue a "no objection certificate" leaving it open to the parties to deal with the property. In that view of the matter, the High Court was right in its conclusion. The SLP is dismissed. No costs."
34. The judgment of the Delhi High Court as approved by the Supreme Court with the observations noticed above has been followed in the cases of [PRECEDENT] ; [PRECEDENT]; [PRECEDENT] and [PRECEDENT] (supra).
35. From the resume of the reported cases noticed above, it will be found that in none of the cases it could have been said that in the eye of law the agreements of transfer of immovable properties filed by the transferors under [SECTION] were void either for want of title or because of specific statutory or judicial restraints prohibiting such transfer. Therefore, the pronouncements made in the judgments cited on behalf of the petitioners cannot help them in seeking the relief which they have desired in the present writ petitions.
36. So far as the declaration of law made by the Supreme Court in the case of [PRECEDENT]'s case (supra) is concerned, that has to be viewed in the light of the facts which were before their Lordships. It is well settled that ratio of the judgment has to be discerned keeping in view the factual background in which the judgment was rendered. In the case before the Supreme Court, the facts were of too-telling spelling out unwarranted inactions resulting in gross harassment. It was not a case where the transferor lacked competence to contract or was not entitled to any transferable property within the meaning of [SECTION] of the [ACT].
37. As found above, in the present case, petitioners have neither acquired any ownership over the property in question nor even otherwise are competent to transfer any interest in the property because of the judicial restraints embodied in the order dt. 26th July, 1990 passed by this Court in [CASE NUMBER]. Moreover, the lands have already been declared to be excess under the [ACT] by the competent authority and transfer of such lands would be null and void under [SECTION] thereof. For all these reasons, it has to be held that the agreement for sale entered into between the petitioner and the 3rd respondent and filed in the form of a statutory statement in Form No. 37-I purported to be one under [SECTION]/[SECTION] is void and non est in law and no proceedings under [SECTION] of the Act can be validly founded thereon.
38. Petitioners are also guilty of suggestio falsi, suppressio veri having falsely stated in the writ petition that they are the owners of the property in question and for having suppressed material facts as noticed above.
39. For the said reasons, I am not inclined to issue a writ of mandamus as sought for by the petitioners. Writ petition is accordingly dismissed with costs assessed at Rs. 5,500.
40. Let a copy of this judgment be placed on record in [CASE NUMBER].