KRISHNA KUMAR RAWAT & ORS. versus UNION OF INDIA & ORS.
[2019] 10 S.C.R. 333, Supreme Court of India, 2019
Outcome: Disposed off
Segment: Body
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KRISHNA KUMAR RAWAT & ORS.
 v.
UNION OF INDIA & ORS.
(Civil Appeal Nos.9800-9801of 2010)
 JULY 29, 2019
[ABHAY MANOHAR SAPRE AND
DINESH MAHESHWARI, JJ.]
Income Tax Act, 1961 – ss.269UC, 269UD (1A), 269UE (1),
269UG (4) and Chapter XX-C – Rajasthan Urban Areas (Sub
Division) Rules, 1975 – r.11 – Vesting of Property in Central
Government – Appellants (Prospective buyers) entered into an
agreement for purchase of the suit land for a total consideration of
Rs.99,84,500/- – Appellants furnished information about the
purchase of the suit land u/s 269UC of the Act to the appropriate
authority – Appropriate authority issued a show cause notice u/
s.269UD (IA) of the Act stating that sale consideration disclosed by
the appellants was very low – After making inquiries and hearing
the parties, the appropriate authority passed an order dated
30.03.1994, directing that in terms of s.269UE(1) of the Act, the
suit land stood vested in the Central Government – Writ petition –
Single Judge of the High Court upheld the order dated 30.03.1994
– The appellants and vendor (respondent No.3) filed separate intra
court appeals before the Division Bench of High Court – Division
Bench of the High Court dismissed the appellants’ appeal, however,
partly allowed the vendor’s appeal with the direction that upon
department taking over possession of the suit land, prospective
buyers were entitled to claim refund of the amount paid to the vendor
together with interest @ 6% p.a., out of
the maturity amount of the
FDR (created by department) and the remaining amount to be paid
to the vendor – Review Petition was also dismissed – On appeal,
held: Appropriate authority examined the location of the suit land,
its area and its proximity with main roads, industries and residential
colonies situated in the nearby areas and determined the market
value of the suit land at Rs.1,46,58,548/- as against the apparent
consideration of Rs.99,84,500/- fixed in the agreement – It was after
recording the factual findings, the appropriate authority came to a
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conclusion that the case for pre-emptive purchase of suit land as
contemplated u/s. 269UD(1) was made out against the appellants –
Findings recorded by the writ Court, appellate Court and review
Court were consistently against the appellants – These findings were
based on appreciation of evidence and in conformity with
requirements of s.269UD – Hence, the same are upheld – Insofar
the entitlement of the prospective buyers to the refund amount is
concerned, the Division Bench of the High Court did not take into
consideration s.269UG(4) of the Act – Thus, decision to be taken
by the appropriate authority for disbursement of the amount of
consideration, as required u/s. 269UG(4) of the Act in accordance
with law.
Dismissing the C.A.No.9800-9801/2010 and partly allowing
the C.A.No.9901/2010, the Court
CIVIL APPEAL Nos.9800-9801/2010
HELD: 1. Appropriate authority after setting out the facts
in detail, the appropriate authority examined 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 the
topography of the suit land, it has a potential market value.
[Para 26] [343-B]
2. Thereafter, the appropriate authority 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. [Para 27] [343-C]
3. 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. [Para 28] [343-D]
4. The appropriate authority then worked out the rate of
the suit land at Rs.1727.5 per sq. meter and accordingly
determined the market value of the suit land at Rs.1,79,21,532/-
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as against its declared value of  Rs.99,84,500/- in the agreement.
[Para 29] [343-E]
5. The appropriate authority then 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 required to be made out
for invoking powers under Chapter XX-C by the appropriate
authority for pre-emptive purchase of the suit land. [Para 31]
[344-G-H]
6. 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. [Para 32]
[345-A-C]
7. It is after recording the aforementioned factual findings,
the appropriate authority came to a conclusion that the case for
pre-emptive purchase of the suit land as contemplated
under
Section 269UD(1) of the Income Tax Act, 1961 is made out against
the appellants. [Para 36] [347-D]
8. Now coming to the order of the writ Court(Single Judge)
dated 14.09.1994, this Court finds 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 pre-emptive order
dated 30.03.1994 passed by the appropriate authority under
Section 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
KRISHNA KUMAR RAWAT & ORS. v. UNION OF INDIA
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or any case is made out for infraction of any statutory provision
or whether the decision taken by the appropriate authority for
pre-emptive purchase is such that no reasonable person could
ever take such decision. [Para 37] [347-E-F]
9. 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. [Para 42] [349-C-D]
10. 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 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. [Para 44]
[349-E]
11. The findings are based on appreciation of evidence. The
Court does 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. This Court also find that these
findings are in conformity with the requirements of Section 269
UD of the Act and the law laid down by the Constitution Bench in
the case of C.B. Gautam v. Union of India & Others. [Para 45]
[349-G-H; 350-A]
CIVIL  APPEAL NO 9901/2010
12. Division Bench of High Court dismissed the appeal filed
by the prospective buyers and partly allowed the appeal filed by
the vendor. This Court finds 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 relation to amount of
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consideration is finally required to be dealt with by the appropriate
authority in a case of this nature. [Para 3, 4] [351-F; 352-A-B]
13. Therefore, this Court is 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. [Para 6] [352-E]
C.B Gautam v. Union of India and Others (1993) 1 SCC
78 : [1992] 3 Suppl. SCR 12 – relied on.
Sahib Singh Kalha & Ors. v. Amritsar Improvement Trust
& Ors. (1982) 1 SCC 419 ;  Lal Chand v. Union of
India & Anr. (2009) 15 SCC 769 : [2009] 13 SCR
622 ;  Executive Engineer, Karnataka Housing Board
v. Land Acquisition Officer, Gadag & Ors. (2011) 2 SCC
246 : [2011] 1 SCR 600 – referred to.
Case Law Reference
[1992] 3 Suppl. SCR 12     relied on
Para 22
(1982) 1 SCC 419
     referred to
Para 48
[2009] 13 SCR 622
     referred to
Para 48
[2011] 1 SCR 600
     referred to
Para 48
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 9800-
9801 of 2010
From the Judgment and Order dated 31.05.2007 of the High Court
of Judicature  for Rajasthan, Bench at Jaipur in D.B. Special Appeal
No. 744 of 1994 and order dated 24.07.2007 in D.B. Civil Review Petition
No. 80 of 2007
    With
Civil Appeal No. 9901 of 2010.
S. Ganesh, Rana Mukherjee, Sr. Advs.,  Naveen Chawla, Mayank
Baghani, T. Mahipal, Arijit Prasad, T. M. Singh, (for Mukesh Kumar
Maroria & Mrs. Anil Katiyar), Ms. Shobha Gupta, Rajendra Kumar
Panigrahi, Advs. for the appearing parties.
KRISHNA KUMAR RAWAT & ORS. v. UNION OF INDIA
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The Judgment of the Court was delivered by
ABHAY MANOHAR SAPRE, J.
C.A. Nos.9800-9801/2010
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.
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. One-Smt. 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.
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
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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 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 A-90 Triveni Nagar, Near Durga Pura Railway Station in auction
at the rate of Rs.1781/- per sq. meter.  It was pointed out 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
KRISHNA KUMAR RAWAT & ORS. v. UNION OF INDIA
. [ABHAY MANOHAR SAPRE, J.]
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by Section 269 UD (1) of the Act, be not made against the appellants 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 (R-3) 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, sub-division 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; 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 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.
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14. With these background facts, the appellants herein felt
aggrieved by the pre-emptive 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 the pre-emptive
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 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.9800-9801/
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 compliance.  This is how these three appeals are clubbed
for their analogous hearing.
KRISHNA KUMAR RAWAT & ORS. v. UNION OF INDIA
[ABHAY MANOHAR SAPRE, J.]
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18. So, the question, which arises for consideration in the appeals
(CA Nos.9800-9801/2010), 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 pre-emptive 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 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 XX-C 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 XX-C
deals with compulsory acquisition of
property and provides for pre-emptive 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 XX-C.
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 P-11)
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
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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 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 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.
KRISHNA KUMAR RAWAT & ORS. v. UNION OF INDIA
[ABHAY MANOHAR SAPRE, J.]
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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
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 required to be made out for invoking powers
under Chapter XX-C by the appropriate authority for pre-emptive
purchase of the suit land.
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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.
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:
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i)   Deduction of 34% only has been allowed.  The deduction
can be still less if the plot is of smaller size.  This will
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.B-
44, 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
pre-emptive purchase as the alleged apparent
consideration is only Rs.1 lakh.  Details of another sale
instance property at A-256 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 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.”
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34. The appropriate authority then in para 10 also examined the
case keeping in view the market rates notified by the sub-Registrar,
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.
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 pre-emptive
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 pre-emptive order dated 30.03.1994 passed by the
appropriate authority
under Section 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 pre-emptive
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.
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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 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
(Sub-Division, 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 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
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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 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 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
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the 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 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 pre-emptive 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.
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.
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50. In view of the foregoing discussion, we find no merit in C.A.
Nos.9800-9801/2010. 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 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 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.”
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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 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.
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.
 Ankit Gyan
                                         Appeals disposed of.