Chandra Estates Limited v Union of India and Others
Delhi High Court
15 November 2000
Civil Writ Petn. No. 338 of 1987.
The Judgment was delivered by VIJENDER JAIN, J. :
VIJENDER JAIN, J. :
This petition initially filed to challenge the vires and legislative competence in enacting Chapter XX-C of the IT Act, but in view of C. B. Gautam vs. Union of India 1992 Indlaw SC 1163 r/w 1993 (110) CTR(SC) 179 : 1992 Indlaw SC 1163 (SC) : TC S3.142, the petitioner confines his arguments to the applicability of Chapter XX-C of the IT Act on the ground that the said Chapter which has come into force on 1st October, 1986, could not retrospectively apply in respect of agreements for transfer of property which had already been executed before that date and transfer has taken place within the definition of Chapter XX-A of the Act, which was the law prior to Chapter XX-C of the IT Act.
Facts giving rise to the present petition are that on 1st January, 1983, petitioner entered into an agreement of sale dt. 1st January, 1983, with respondent No. 4. Pursuant to that agreement it was agreed that property situated at 23, Jorbagh, New Delhi, was to be purchased by the petitioner for a total sale consideration of Rs. 41.50 lakhs. In terms of the said agreement for sale, petitioner had paid total amount of Rs. 11.50 lakhs to respondent No. 4 and it was agreed that the balance amount would be paid thereafter. The operation of the said agreement for sale was extended from time to time. The effect of such extension and supplemental agreements was to extend the date for execution and registration of the sale deed consequent upon non-receipt of requisite approval from various authorities. It is contended before me that after the date of the execution of the agreement for sale, the petitioner paid further amounts aggregating Rs. 10 lakhs to respondent No. 4 of which Rs. 5 lakhs was paid on 1st February, 1983, and Rs. 2.50 lakhs was paid on 10th February, 1983, and the balance amount of Rs. 2.50 lakhs was paid in the year 1985. One important factor which has to be taken note of is that possession of the property was delivered by respondent No. 4 to the petitioner-company on 1st January, 1983, itself, which finds mention in terms of cl (3) of the agreement for sale dt. 1st January, 1983. A separate letter dt. 1st January, 1983, was also executed to evidence handing over of possession to the petitioner-company on 1st January, 1983.At the relevant time under s. 269AB of the IT Act, 1961, respondent No. 4 and the petitioner filed Form No. 37EE in respect of aforesaid transaction on 31st March, 1983. In the said Form 37EE it was also clearly mentioned that the possession of the property has been handed over by respondent No. 4 to the petitioner on 1st January, 1983.
The agreement of sale dt. 1st January, 1983, was duly registered by the IAC, Acqn. Range III, vide his order dt. 10th February, 1983. IAC, Acqn. Range III, initiated proceedings for acquisition of the aforesaid property vide its order dt. 10th October, 1983, issued under s. 269D(1) of the Act and also published the same in the official gazette. Valuation proceedings were taken up by the Revenue Officer prior to acquisition of the aforesaid property. A notice of hearing under s. 269F of the Act was later issued in respect of the aforesaid acquisition proceedings on 9th October, 1986. During the pendency of the writ petition, however, it has been stated by the counsel for the petitioner that the property has been deacquired pursuant to the proceedings under s. 269AB of the Act.
In terms of the amendment in Finance Act, 1986, the provision of Chapter XX-C was inserted in place of Chapter XX-A of the IT Act. Pursuant to the notification published by the Central Government in the Official Gazette dt. 7th October, 1986., the Central Government notified the said Chapter XX-C would come into force on 1st October, 1986, so far as the Union Territory of Delhi and certain other specific areas were concerned and pursuant to the Notification dt. 4th September, 1986, respondent No. 3 Central Board of Direct Taxes (CBDT) notified the Income-tax (Seventh Amendment) Rules, 1986, and the same came into force on 1st October, 1986. The said Rules were notified to prescribe certain procedural matters relating to the operation of the provisions of Chapter XX-C of the Act.In accordance with the provision of r. 48L(2)(a) notified by respondent No. 3, the petitioner again presented the required Form No. 37-I before respondent No. 2 i.e., Appropriate Authority constituted under s. 269UB of the IT Act, 1961. In the meanwhile, it seems that proceedings went on under new Chapter XX-C of the Act but the order was passed by respondent No. 2 on 23rd January, 1987, under sub-s. (1) of s. 269UD of the IT Act and it was decided to purchase the property by the Central Government for an amount equal to the apparent consideration for the transfer of the said property. On 4th February, 1987, another letter was received from respondent No. 2, inter alia, demanding possession of the aforesaid property to be surrendered and delivered to respondent No. 2. An order under s. 269UD(1) of the IT Act was passed in respect of the aforesaid property. On 6th February, 1987, this writ petition was filed and on first date of hearing, i.e., on 8th February, 1987, stay of the operation of the order dt. 23rd January, 1987, under s. 269UD of the Act was passed and petitioner was also directed to maintain status quo in respect of the property.
The main contention of Mr. Amit Chadha, learned counsel for the petitioner, canvassed before me is that the provision of Chapter XX-C came into force on 1st October, 1986, could not be made retrospectively applicable in case of the agreement for transfer of property which has already been executed before that date and actual transfer has taken place within the definition of Chapter XX-A of the word ‘transfer’. It was contended that possession having been transferred in favour of the petitioner by respondent No. 4 at the time of execution of the agreement on 1st January, 1983, itself, Form No. 37EE having been submitted pursuant to Chapter XX-A, inquiry having been initiated under relevant provision of Chapter XX-A of the IT Act, there was inherent lack of jurisdiction to invoke Chapter XX-C of the IT Act. It was further contended that acquisition proceedings in terms of Chapter XX-A were initiated on 10th October, 1983, valuation report was filed on 24th October, 1983, which is at pp. 174 to 176 of the paper-book. Objections were invited under s. 269E on 9th October, 1986 which is at p. 85 of the paper-book and an order under s. 269F(7) , dt. 22nd June, 1989, was passed dropping the proceedings in the following terms :
“Order
In the case of above-mentioned property proceedings were initiated by issuing notice under s. 269D(1). The proceedings are hereby dropped.”
The said order is at p. 114 of the paper-book. It was contended that after aforesaid order has been passed on 22nd June, 1989, the Revenue could not have sustained proceedings under Chapter XX-C in the instant case.
It has been contended before me by Mr. Chadha that after coming into force of Chapter XX-C petitioner has filed Form 37-I under a mistaken notion and to avoid any technical objection and merely filing of Form 37-I pursuant to coming into operation of Chapter XX-C of the IT Act would not confer jurisdiction on respondent No. 2 under the relevant provision of Chapter XX-C, if the transfer was complete, possession has been handed over and substantial sale consideration was given.
What has been contended before me is that merely filing of Form No. 37-I would not confer jurisdiction as it will not operate as an estoppel against statute. In support of his contention, Mr. Chadha has relied upon Chiranjilal Shrilal Goenka vs. Jasjit Singh & Ors. 1993 Indlaw SC 972.
Counsel for the petitioner has further contended that the object of incorporating Chapter XX-A and Chapter XX-C is the same and when recourse has been taken by the Revenue under Chapter XX-A, the provision of Chapter XX-C will not be applicable. The object for incorporating Chapter XX-A and XX-C are same and in this connection learned counsel for the petitioner has placed reliance on Rambhai Manjanath Nayak & Ors. vs. Union of India & Ors. 1992 Indlaw SC 1164 : 1992 Indlaw SC 1164 : TC S3.140. The relevant portion from the above Authority is as under :
“The Government of India appointed the Direct Taxes Inquiry Committee under the chairmanship of Justice K. N. Wanchoo, former Chief Justice of India in 1970 to recommend concrete and effective measures inter alia to unearth black money and prevent its proliferation through further evasion; to check avoidance of tax through various legal devices, including the information of trusts; and to reduce tax arrears. Pursuant to some recommendations of the committee, the Taxation Laws (Amendment) Act, 1972 was enacted incorporating those suggestions whereby Chapter XX-A was inserted in the Act w.e.f. 15th November, 1972. The statement of objects and reasons for the enactment mentioned that it was to counter evasion of tax through understatement of the value of immovable property in sale deeds and also to check circulation of black money by empowering the Central Government to acquire immovable properties, including agricultural lands, at prices which correspond to those recorded in the sale deeds; to improve the present arrangement for valuation for the purposes of income-tax, etc. and other ancillary matters. The provisions contained in the newly inserted Chapter XX-A of the Act have to be understood in this background. Obviously, the legislation was enacted and the provision for acquisition of property made therein for a public purpose. We may here mention that subsequently Chapter XX-C was inserted by the Finance Act, 1986
It was also contended by Mr. Chadha that r. 48L was directory and not mandatory and has cited DLF Universal Ltd. vs. Appropriate Authority & Anr. 2000 Indlaw SC 736 : 2000 Indlaw SC 736 in support of his contention :
“Now Appropriate Authority is obliged to give opportunity to the parties to rectify the defects, if any, in Form 37-I within a period of 15 days or such extended period as the Appropriate Authority may allow. If we considered s. 269UC(4) vis-a-vis r. 48L scenario or setting is rather incongruous. If statement in Form 37-I has no defect r. 48L mandates that it should be filed within 15 days but if it is defective then opportunity can be granted by the Appropriate Authority under sub-s. (4) of s. 269UC to correct mistakes even before the period of 15 days after filing of the statement in Form 37-I. It would appear that no thought was given to amend cl. (c) of sub-r. (2) of r. 48L while inserting sub-s. (4) of s. 269UC of the Act. It would further appear as rightly held by the High Court that r. 48L is only directory and not mandatory.”
On the basis of the aforesaid observation of the Supreme Court, Mr. Chadha has contended that r. 48L is a subordinate piece of legislation and cannot operate retrospectively when the main enactment does not operate retrospectively. In support of his contention, he has cited Maharaja Chintamani Saran Nath Shahdeo vs. State of Bihar & Ors. 1999 Indlaw SC 763 :
“This Court in Hitender Vishnu Thakur vs. State of Maharashtra has culled out the principles with regard to the ambit and scope of an amending Act and its retrospective operation as follows :
(i) A statute which affects substantive rights is presumed to be prospective in operation unless made retrospective, either expressly or by necessary intendment, whereas a statute which merely affects procedure, unless such a construction is textually impossible, is presumed to be retrospective in its application, should not be given an extended meaning and should be strictly confined to its clearly defined limits.
(ii) Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal even though remedial is substantive in nature.
(iii) Every litigant has a vested right in substantive law but no such right exists in procedural law.
(iv) A procedural statute should not generally speaking be applied retrospectively where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accomplished.
(v) A statute which not only changes the procedure but also creates new rights and liabilities shall be construed to be prospective in operation, unless otherwise provided, either expressly or by necessary implication.
We are unable to accept the contention of the respondent State that s. 6 of the Amending Act of 1974 is retrospective. In sub-s. (2) of s. 1 the legislature clearly stated that the Act would come into force at once i.e., from the date of publication in the Gazette. Neither in s. 6 nor in any other section of the Amending Act was it mentioned that the Act would have retrospective effect. If we hold that the Act would have retrospective effect it would go against the intention of the legislation.”
It was also contended that pursuant to the order passed by the Revenue on 22nd June, 1989, under s. 269F(7) of the IT Act, proceedings under Chapter XX-A were dropped and it was found that there was no evasion of tax, the applicability of Chapter XX-C will automatically come to an end. It was further contended that r. 48L of the IT Rules, made pursuant to s. 269UC(3) by IT (Seventh Amendment) Rules, 1986, the word “transfer” has been defined under s. 269UA under sub-s. (f) and the word ‘immovable property’ has been defined in sub-s. (d) whereas under Chapter XX-A pari materia words ‘immovable property’ and ‘transfer’ have been defined under s. 269A in sub-ss. (e) and (h), respectively. It was contended that if the transfer is complete, within the definition of s. 269A(h) under Chapter XX-A then r. 48L of the Rules will not cover such transfer. It was contended that r. 48L of the Rules will not hold the field retrospectively to the transfer which is complete under Chapter XX-A. In support of his contention, he has cited Capt. Sanjeev Sethi vs. Union of India & Ors. 1991 Indlaw DEL 102 : 1992 (1) Delhi(Lawyer) 50 : TC 3R.1019.
On the other hand, Mr. R. D. Jolly, learned counsel for the respondents, has contended that the petitioner has filed Form No. 37-I on 29th November, 1986. He has further contended that the petitioner was obliged to file Form 37-I under the relevant rules particularly r. 48L of the IT Rules, as it stood after 1st October, 1986. He has contended that as per the declaration made by the petitioner in Form 37-I, property was still in the possession of respondent No. 4 and therefore, there was no transfer within the meaning of the definition of the word transfer under the Act. Mr. Jolly has contended that in terms of s. 269UC , the transfer under the Act is contemplated “Notwithstanding anything contained in theTransfer of Property Act “, except in terms of s. 269UC of the Act. Sec-s. (3) of s. 269UC of the Act, inter alia, lays down as follows :
“(3) Every statement referred to in sub-s. (2) 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 acting on behalf of himself and on behalf of the other parties.”
On the basis of the aforesaid sub-section Mr. Jolly has contended that all particulars have been prescribed and the same were to be verified in the prescribed manner. Relying upon Tanvi Trading & Credits (P) Ltd. & Ors. vs. Appropriate Authority & Ors. 1990 Indlaw DEL 242 : 1990 Indlaw DEL 242 (Del) : TC 3R.1046 decided by Division Bench of this Court, counsel for the respondent has contended that there is no jurisdiction vested on the Appropriate Authority to adjudicate upon the legality of the transaction which was proposed to be entered into by the applicant as s. 269UD was not concerned with the validity of the same. The Appropriate Authority could not go and decide that there is any impediment or defect in the title of the transferor or there is any other law which would be violated by the proposed sale is of no consequence to the Appropriate Authority except that it can take all such factors into consideration while making up its mind whether to exercise the pre-emptive right to purchase or not. According to Mr. Jolly, Appropriate Authority has to pass appropriate order either to purchase the property or grant a no objection certificate. It did not had any other option or discretion.
Mr. Jolly has contended that agreement for sale is inter-parties and that can always be changed and an agreement for transfer, in fact, means statement in Form No. 37-I and once the petitioner himself has made a statement in Form 37-I, no other meaning could be assigned except what has been the statement of the petitioner in Form No. 37-I. In support of his connection, he has also relied upon DLF Universal Ltd. vs. Appropriate Authority & Anr. 2000 Indlaw SC 736 : (200)2000 Indlaw SC 736 (SC). On the basis of DLF Universal (supra) Mr. Jolly has contended that foundation for exercise of jurisdiction by the Appropriate Authority under s. 269UD is the statement in Form No. 37-I and not agreement for transfer and, therefore, no fault could be found with the impugned order.I have given my careful consideration to the arguments advanced by learned counsel for both the parties. Having regard to the agreement entered into between the parties on 1st January, 1983, the fact that the petitioner applied under Chapter XX-A and filed Form No. 37EE, the petitioner specifically mentioned that the possession of the property has been transferred in favour of the petitioner by the respondent No. 4, acquisition proceedings having been initiated on 10th October, 1983, under Chapter XX-A of the Act, valuation report having been filed on 24th October, 1983, are certain facts which are not disputed. Reliance has been placed by the Revenue on filing of Form 37-I by the petitioner pursuant to coming into force of Chapter XX-C of the Act and the statement made therein that the property has not yet been transferred in favour of the petitioner. In Form No. 37EE under s. 269AB(2) of the IT Act under column (8), the name of the petitioner was mentioned as ‘occupier of the property’. The covering letter by which Form No. 37-I was filed, agreement for sale dt. 1st January, 1983, was enclosed and this is how the petitioner wrote by a regd. AD letter on 19th November, 1986, to the Appropriate Authority while submitting Form No. 37-I as follows :
“We are resubmitting herewith the statement in Form 37-I in duplicate, duly signed by the transferor as desired by the Appropriate Authority on 15th October, 1986. The papers could not be submitted earlier as both the transfer, and the Power of Attorney holder were away from India.
Chapter XX-C applies to transfer of immovable property taking effect from 1st October, 1986 (vide Notification No. SO 480(E) dt. 7th August, 1986). In the case under reference, the agreement for sale was concluded on 1st January, 1983, and hence the provisions of Chapter XX-C are not applicable. Without prejudice to the contention, we are filing statement as required under the IT Rules.In regard to this property, statement in Form 37EE was already filed before the competent Authority and the notice received under s. 269UD(1) of the IT Act, 1961, from the IAC. Acquisition Range-III, Asaf Ali Road, New Delhi with his letter No. IAC/ACQ/III/37EE/2.83/108/ 9, dt. 10th October, 1983, is under correspondence.”
On 21st January, 1987, again a letter was written by the petitioner to respondent No. 2 that notice under s. 269D(1) of the Act has been issued by the IAC, Acqn. Range III, New Delhi, on 10th October, 1983, and the proceedings were initiated and were still pending for disposal. In the next paragraph it was inter alia, stated in the aforesaid letter that the provision of Chapter XX-C of the Act would not at all be attracted to the said transfer of property. Form No. 37-I had, in fact, only been filed to avoid harassment by launching of prosecution proceedings, etc. It was requested to drop the proceedings for valuation of the said property as Valuation Officer (A.A.) had taken up proceedings for valuation of the said property. Another letter dt. 5th February, 1987, was written to respondent No. 2 for rectification of a mistake apparent from record. The petitioner in para. 2 of the said letter mentioned that in the said Form No. 37-I, it was wrongly mentioned that the property in question was in occupation of respondent No. 4. As a matter of fact, the said property right from the date of execution of the agreement for sale i.e., from 1st January, 1983, has been in possession of the petitioner.
It is in this background that the short question for determination is whether the transfer for the purpose of Chapter XX-A of the Act and Chapter XX-C of the Act took place prior to 1st October, 1986 or thereafter. From what have been stated above, there cannot be any doubt that the possession of the property has been handed over to the petitioner and he has been in enjoyment of the same. The agreement created a right in favour of the petitioner to enjoy, the property. Even assuming that there was only part-performance of the contract, the said part-performance was clearly one falling within s. 53A of the Transfer of Property Act. In the circumstances, the petitioner came squarely within the provision of s. 269AB of Chapter XX-A of the Act.In Sunshine Travels & Tours (P) Ltd. & Anr. vs. Union of India & Ors. 1994 (213) ITR 749 (Del) : 1994 Indlaw DEL 178 it was observed :
“In both the writ petitions on facts we are of the view that the agreements in question have enabled the vendees to enjoy the respective properties or at any rate they have enabled the vendees to enjoy certain rights with respect to the properties in question and those rights are deemed to be immovable properties both under Chapter XX-A and XX-C.”
Sec. 269A(e) defines the term ‘immovable property’. Its sub-cl. (1) refers to tangible immovable properties, such as land or building, etc. sub-cl. (ii) refers to certain rights of the nature referred to in cl. (b) of sub-s. (1) of s. 269AB. In order to understand the said rights referred to in sub-cl. (ii) one has to refer to s. 269AB(1)(b). The same is as follows :
“269AB(1)(b) every transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other AOP or by way of any agreement or any arrangement of whatever nature whereby a person acquires any rights in or with respect to any building or part of a building (whether or not including any machinery, plant, furniture, fittings or other things therein) which has been constructed or which is to be constructed not being a transaction by way of sale, exchange or lease of such building or part of a building which is required to be registered under the Registration Act, 1908 (16 of 1908)”
.
A conjoint reading of the aforesaid section would mean that certain rights are to be considered as immovable properties by reading s. 269A(e)(ii) and s. 269AB(1)(b) together and these rights are covered by s. 269A(h)(ii).
While cl. (a) of s. 269AB(1) covers a transaction involving possession as referred in s. 53A of the Transfer of Property Act, cl. (b) operates with wider ramification to cover other kind of transactions and if a right is acquired out of such transaction that right is also an immovable property and the same is referred in the definition of the said term in s. 269A(e)(ii). In Sunshine Travels & Tours (P) Ltd. (supra) a Division Bench of this Court has observed as follows :
“As per s. 269AB(1)(b) , inter alia, every transaction whereby a person acquires any rights in or with respect to any building which is to be constructed not being a transaction by way of sale, exchange or lease of such building or part of a holding which is required to be registered under the Registration Act, 1908, should be reduced to writing, etc. and be registered with the competent Authority. While cl. (a) of s. 269AB(1) covers a transaction involving possession, as referred in s. 53A of Transfer of Property Act, cl. (b) spreads its net wider to cover other kinds of transaction out of which, one transaction is a transaction whereby a person acquires any right with respect to a building to be constructed. This right with respect to a building to be constructed is also immovable property, as this right is referred to in the definition of the said term in s. 269A(e)(ii). For the sake of convenience, we have limited the reference to the words in s. 269AB(1)(b) to the extent of their relevance to the facts before us. Therefore, if under a transaction (other than the transactions referred in the words bracketed) a person acquires any right with respect to a building to be constructed, that right is to be considered on par with the right created by an agreement covered by s. 53A of the Transfer of Property Act, because s. 269AB(1)(a) ropes in transactions to which s. 53A of Transfer of Property Act applies. ……..
The difficulty of understanding the concept of ‘transfer’ as defined in s. 269A(2)(h) , is the difficulty due to the abstract rights covered by the statutory definition. If the scope of Chapter XX-A becomes clear and a transaction falls within its net, no argument is needed to conclude that Chapter XX-C could not govern such a transaction, provided the transaction is prior to the date on the coming into force of Chapter XX-C.The width of the relevant terms referred in these two Chapters, is almost the same. The term ‘immovable properties’ is defined in s. 269UA((1), sub-cl. (ii) is on par with s. 269A(2)(e) ; similarly the concept of ‘transfer’ defined as per s. 269UA(1) in Chapter XX-C is broadly similar to the language employed by s. 269AB(2)(ii) in Chapter XX-C, as compared to the provisions of Chapter XX-A.
Any law which operates as a restriction on the rights of person has to be confined to operate strictly within the area sought to be covered by the language of the said law. If, by the time Chapter XX-C came into force, there has been already a transaction resulting in the ‘transfer’ as defined, the Court cannot read Chapter XX-C so as to make it retrospective to operate on the said transaction or transfer. The term ‘transfer’ has to be considered in the light of the provisions operating at the time of the ‘transfer’.
If a ‘transfer’ falling under Chapter XX-A has not been subjected to any acquisition proceedings under the said chapter, the immunity accrued to such a transfer under the statute cannot be easily defeated by enlarging the scope of subsequently enacted Chapter XX-C, when, the wording of Chapter XX-C clearly and unambiguously does not purport to operate on the earlier transactions. Rights and liabilities created or incurred under a prior law is always considered as continuing to exist, unless the subsequent law has manifestly expressed a contrary intention. ……….
As already found by us, the term transfer’ and referred here, is not a transfer as ordinarily understood and this term is not confined to the ‘transfers’ referred in Transfer of Property Act. The term has a wider connotation-both under s. 269UA(f) and s. 269A(2)(h) , read with the relevant definitions.”
In Capt. Sanjeev Sethi (supra) a Division Bench of this Court held that when provisions of Chapter XX-A were applicable, provision of Chapter XX-C would not become applicable and once Chapter XX-C is not applicable r. 48L of the Rules will also not be applicable :
“With regard to the applicability of r. 48L the conclusion is very simple. The said rule will apply only if Chapter XX-C applies. For the view that we have taken, on the facts of the present case, Chapter XX-C does not apply. Therefore, the question of the said rule becoming applicable does not arise. …………………….
Lastly the said r. 48L has no retrospective operation and would not apply to an agreement entered into prior to 1st October, 1986, specially to such cases where the provisions of Chapter XX-A were applicable like in the present case.”
The special leave petition filed against the decision of Capt. Sanjeev Sethi (supra) was also dismissed by the Supreme Court on 23rd August, 1993. No doubt dismissal of special leave petition will not always operate as a binding principle affirming the ratio of the decision of the High Court, but it is important to note that by that time the Supreme Court had decided C. B. Gautam’s case on 17th and 27th November, 1992. On the very day judgment in case was rendered the Supreme Court pronounced decision in Rambai Manjanath Nayak vs. Union of India 1992 Indlaw SC 1164 : 1992 Indlaw SC 1164 (SC) : TC S3.140. While considering the scope of Chapter XX-A, the Court made the following observations :
“The scheme of Chapter XX-A clearly shows that the acquisition is not merely of the proprietary rights in an acquired property but also of the possessory rights therein which would undoubtedly include the tenancy rights. This also finds support from s. 269AB which was inserted subsequently. It requires registration of certain transactions which permit possession of any immovable property to be taken or retained and whereby a person acquires any rights in or with respect to any building or part of it, which has been constructed or which is to be constructed, not being a transaction by way of sale, exchange or lease thereof which is required to be registered under the Registration Act. This provision clearly indicates that any transaction conferring a right to take or retain possession of the immovable property or whereby a person acquires any rights therein is also governed by Chapter XX-A.”
Now let met deal with the argument of Mr. Jolly that in view of the recent judgment of the Supreme Court in DLF Universal (supra) only the statement in Form No. 37-I has to be looked into. I am afraid that Authority is of no help to the case of the Revenue to the point in controversy. The Supreme Court in the above case has laid down that the provision of s. 276AB does not make r. 48L in anyway mandatory. The Court was dealing with the question with regard to the effect or changes made by the parties to an agreement when Form 37-I has already been filed. Supreme Court held :
“that it is appropriate to give meaning to the term ‘agreement for transfer’ appearing in cl. (c) of sub-r. 2 of r. 48L and cannot just adopt literal meaning. Foundation for exercise of jurisdiction by the Appropriate Authority under s. 269UD is the statement in Form No. 37-I and not agreement for transfer.”
Here in this case we are concerned with a case where the very foundation for exercise of jurisdiction under Chapter XX-C has been challenged. As discussed above, in view of the statutory definitions of the relevant terms is Chapter XX-A and XX-C and exercise of the jurisdiction by the Revenue under Chapter XX-A prior to coming into force of Chapter XX-C and in view of the material placed on record, I hold that agreement of sale entered into on 1st January, 1983, conferred a right and pursuant to the right, the possession of the immovable property was retained by the petitioner and thereby the petitioner acquired right within the meaning of Chapter XX-A of the Act. Creation of any right enabling the petitioner to take the possession for enjoyment of the property would attract the application of Chapter XX-A just like any other transfer. The Court also takes note of dropping of the proceedings vide letter dt. 22nd June, 1989, under s. 269D of Chapter XX-A of the Act.Even as per the guidelines issued by respondent No. 3 the case of the petitioner would not fall within the mischief of Chapter XX-C.
Respondent No. 3 CBDT vide its Circular No. F-316/134/86-OT, dt. 19th December, 1986, laid down the guidelines to the following effect :
“For the purpose of the application of the new Chapter XX-C, what is material is not the date of the agreement. Even if an agreement has been entered into prior to 1st October, 1986, the provisions of the new Chapter would apply if the transfer of immovable property sought to be made by such an agreement is to be effected w.e.f. 1st October, 1986. The expression of the term ‘transfer’ in s. 269UA(f) is of vide connotation, if the transfer of immovable property takes place in any of the ways contemplated in the definition after 1st October, 1986, the provisions of the new Chapter will apply after 1st October, 1986. Conversely, if the transfer within the meaning of definition has already taken place prior to 1st October, 1986, the provisions of the new Chapter would not be applicable. It has therefore, been decided that in all cases where substantially the consideration has been paid and physical possession of the property has been given before 1st October, 1986, the provisions of Chapter XX-C should not be applied.”
Judging from any angle, I have no hesitation in holding that having taken recourse to Chapter XX-A of the Act first by acquiring the property and then after dropping the same, merely on filing of Form 37-I, will not vest jurisdiction on the respondent to invoke Chapter XX-C as agreement dt. 1st January, 1983, enabled the petitioner to enjoy the property which constituted transfer prior to the enforcement of Chapter XX-C as the same was covered under the term transfer by the provision of Chapter XX-A.Writ petition is allowed. Order made under Chapter XX-C for the purpose of the property in question and consequential impugned order passed by the Central Government is quashed. Rule is made absolute.
Petition is allowed.
