REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos.9800­9801 OF 2010

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

VERSUS

Union of India & Ors.            …Respondent(s)

WITH

CIVIL APPEAL No.9901 2010

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

VERSUS

Mithlesh Kumari & Ors.            …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

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C.A. Nos.9800­9801/2010

1.These   appeals   are   directed   against   the   final

judgment and order dated 31.05.2007 passed by the

High Court  of     Judicature for  Rajasthan  Bench at

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

the Division Bench of the High Court dismissed the

special appeal filed by the appellants herein and the

final judgment and order dated 24.07.2007 in D.B.

Civil   Review   Petition   No.80   of   2007   by   which   the

review   petition   arising   out   of   SA   744/94   was   also

dismissed. 

2.In order to appreciate the controversy involved in

these appeals, it is necessary to set out the relevant

facts infra.

3. The appellants are the writ petitioners whereas

the   respondents     are   the   respondents   of   the   writ

petition out of which these appeal arise.

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4.The dispute relates to a land measuring around

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

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

standing thereon, which are part of Khasra No. 126

situated in village Durgapur, Tahsil Sanganeer, Jaipur

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

5. One­Smt.   Mithilesh   Kumari   [respondent   No.   3

herein   (since   deleted)]   and   Smt.   Krishna   Kumari

Roongta jointly owned the suit land. The suit land

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

Industrial   Company,   which   consisted   of   several

partners along with Smt. Mithilesh Kumari and Smt.

Krishna Kumari Roongta. This partnership was later

dissolved   by   a   dissolution   deed   dated   31.03.1986

executed by the partners. In terms of the dissolution

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

th

undivided share in the suit land fell to the share of

Smt. Mithilesh Kumari.

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6.On   11.11.1993,   the   appellants   (prospective

buyers) herein entered into an agreement with Smt.

Mithilesh Kumari for purchase of the suit land for a

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

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

to   Smt.   Mithilesh   Kumari   towards   the   advance   for

purchase of the suit land. According to the appellants,

they were placed in possession of the two godowns and

other structures standing on the suit land. So far as

1/4

th

   land was concerned, the appellants were given

symbolical possession of the suit land.

7.The   appellants   then  furnished   the  information

about the purchase of the suit land in accordance with

the requirements of Section 269UC of the Income Tax

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

appropriate authority in Form No. 37 and submitted

the copy of the agreement dated 11.11.1993. 

8.The   valuation   officer   of   the   Income   Tax

Department vide his letter dated 18.01.1994 informed

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the appellants that he would inspect the suit land on

21.01.1994. He also sought certain information from

the   appellants   in   relation   to   the   suit   land.   The

valuation officer then made an inspection of the suit

land   and   submitted   his   report   to   the   appropriate

authority. 

9.The   appropriate   authority,   on   receipt   of   the

report, issued a show cause notice on 08.03.1994 to

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

stating therein that the apparent sale consideration, as

disclosed by the appellants in the sale agreement, was

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

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

than the agreed rate specified in the agreement. 

10.It was mentioned in the show cause notice dated

08.03.1994 that the Jaipur Development Authority on

07.11.1992 had sold a plot of land at A­90 Triveni

Nagar, Near Durga Pura Railway Station in auction at

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

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that  if an adjustment of 5% is made towards less

development whereas 10% is allowed on account of

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

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

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

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

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

value   determined   by   the   appropriate   authority   at

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

two godowns nor it takes into account the commercial

potential of the suit land. 

11.It was thus pointed out that after taking into

consideration all these aspects, the value of the suit

land   would   still   be   higher   than   what   was   agreed

between the parties in the agreement and what the

appropriate authority has determined. The show cause

notice, therefore, concluded in saying as to why pre­

emptive purchase order, as envisaged by Section 269

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

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in relation to the suit land. The appellants were asked

to file reply to the show cause notice. 

12.     The appellants (prospective buyers) and the

vendor (R­3) filed their respective replies to the show

cause notice.  According to them, firstly, comparison of

small developed plot of land in Triveni Nagar with the

suit land for determination of the value of the suit land

was not justified; Second, development of land would

need   40%   deduction   for   amenities   such   as   park,

roads,   electricity,   water   supply   and   all   other   civic

amenities;   third,   the   market   rate   of   the   area   in

question as on 01.04.1991 for the first category was

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

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

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

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

sub­division of the suit land would be required to be

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

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

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and lastly, one plot measuring 116.3 sq. meters was

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

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

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

determined   by   the   Department   in   the   show   cause

notice   appears  to be  justified  and   hence  the  show

cause notice be withdrawn by allowing the parties to

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

consideration shown in the agreement.

13.The appropriate authority, after making inquiries

and   hearing   the   parties   passed   an   order   dated

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

appropriate   authority   overruled   the   appellants’

objections and directed compulsory purchase of the

suit land by the Central Government at an amount

equal   to   the   apparent   consideration   fixed   by   the

parties   in   the   agreement   dated   11.11.1993.   The

authority further directed the Income Tax Department

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

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suit land by the Central Government to the appellants

for their information. The order also directed that in

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

stood vested in the Central Government with effect

from   30.03.1994.   The   appellants   were   directed   to

deliver possession of the suit land to Shri RS Sagar,

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

wrote to the appellants to intimate the time and the

date of handing over the possession to the Income Tax

Department.

14.With   these   background   facts,   the   appellants

herein   felt   aggrieved   by   the   pre­emptive   purchase

order   dated   30.03.1994   passed   by   the   appropriate

authority of the Income Tax Department and filed a

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

the   High   Court   of   Rajasthan,   Bench   at   Jaipur

questioning therein the legality and correctness of the

order dated 30.03.1994. The respondents (Income Tax

Department) contested the writ petition and defended

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the   pre­emptive   purchase   order  as   being   legal   and

proper on the reasoning stated therein. 

15.The  Single Judge, by  order dated 14.09.1994,

dismissed the writ petition and upheld the order dated

30.03.1994 as being legal and proper. The appellants

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

before   the   Division   Bench   of   the   High   Court.   The

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

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

Both the appeals were disposed of by the Division

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

Mohammad Rafiq) by order dated 31.05.2007.  So far

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

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

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

with the direction that upon department taking over

possession of the suit land, prospective buyers would

be entitled to claim refund of the amount paid to the

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

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maturity   amount   of   the   FDR   (created   by   the

department) and the remaining amount shall be paid

to the vendor. 

16.The   appellants   felt   aggrieved   and   filed   review

petition in the High Court. The Division Bench, which

heard the review petition, was consisted of (Justice

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

became   the  CJI)  and   Justice  Rafiq   because   in  the

meantime,   the   Chief   Justice   S   M   Jha,   who   was

member of the main judgment had retired). 

17.The Review Court dismissed the review petition

by a reasoned order dated 24.07.2007 which gave rise

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

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

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

Tax Department) against that part of the order which

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

wherein directions mentioned above were issued for

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compliance.     This   is   how   these   three   appeals   are

clubbed for their analogous hearing.

18.So, the question, which arises for consideration

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

the   High   Court   (Single   Judge,   Division   Bench   and

Review   Bench)   was   justified   in   dismissing   the

appellants’ writ petition, intra court appeal and review

petition and thereby was justified in upholding the

pre­emptive   order   dated   30.03.1994   passed   by   the

appropriate authority.

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

for the appellants, in substance, elaborated the same

submissions, which were urged by the appellants in

the writ petition, writ appeal and review petition before

the High Court and also added some new arguments,

which were not urged before the High Court.  

20.In reply, learned senior counsel Shri Mukerjee

appearing for the respondents (Union of India) while

supporting the impugned order contended that no case

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has been made out to interfere in the reasoning and

the   conclusion   arrived   at   by   the   High   Court   and,

therefore, the appeals deserve dismissal.

21.Having heard the learned counsel for the parties

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

find no merit in these appeals.

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

constitutional validity of Chapter XX­C inserted in the

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

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

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

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

deals   with   compulsory   acquisition   of   property   and

provides   for   pre­emptive   purchase   at   apparent

consideration by the Government of any immovable

property. 

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

speaking   for   the   constitution   bench,   upheld   the

constitutional validity of Chapter XX­C. 

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24.The   question   involved   in   these   appeals   is,

therefore, required to be examined keeping in view the

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

25.Coming   first   to   the   order   dated   30.03.1994

(Annexure P­11) of the appropriate authority, which

was impugned in the writ petition, we find from its

perusal that it was passed by the authority, which is

constituted under Section 269 UB of the Act. This

consisted of three members, who are senior officials of

the Income Tax Department. The order runs into 16

pages and deals with all the issues on facts and law

raised in the show cause notice and its reply.

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

the appropriate authority examined in Paras 4 and 5

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

with   the   main   roads,   industries   and   residential

colonies   situated   in   the   nearby   areas   etc.   The

appropriate authority then found that having regard to

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the topography of the suit land, it has a potential

market value.

27.  Thereafter, the appropriate authority in Para 7

examined the condition of the two existing godowns

bearing Nos. 13 and 14 and other structures standing

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

of the two existing godowns was very good and these

godowns were actually being used by the appellants

for commercial purposes. 

28.Considering the rates applicable as in the case of

CPWD structures by cost index and keeping in view

the relevant factors such as size, location, condition

and   the   commercial   use   of   the   godowns,   the

appropriate authority fixed Rs.42 lakhs as being the

market value of the two godowns. 

29.The appropriate authority then in the same para

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

sq.   meter   and   accordingly   determined   the   market

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

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

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

“6.     The   subject   property   is   very   close   to

Tonk Road and on the main road leading to

Durgapura   station   and   connecting   to   Tonk

Road.     On   the   north   side   of   the   subject

property is the main Road and on the eastern

side,   there   is   public   road   leading   to

residential colonies which have come up in

its   neighbourhood.     There   are   residential

colonies   of   Vishnu   Puri   and   Mahavir  Nagar

across   the   road   on   the   north   side   and

residential colonies of Green Nagar and Arjun

Nagar on   the  eastern   side  across   the   road.

Immediately after this khasra No.126, there

is   vegetable   oil   factory   of   M/s   Rohtas

Industries Ltd. on the western side.

7.  We have carefully considered the facts of

the   case   and   contentions   of   the   ld.

representatives   of   the   transferor   and

transferees.     As   stated   earlier,   there   are

existing   godowns   bearing   Nos.13   and   14.

Besides, there are offices and guard room etc.

Considering   the   rates   applicable   as   in   the

case of CPWD structures as up date by cost

index,   the   value   of   the   structure   including

godowns   is   estimated   at   Rs.42   lakhs.   The

main   godown   are   of   2929   sq.   meters   and

other structure 171 sq. meter.  The godowns

are lead bearing structure with Tubler trusses

and AC sheet roofing having CC flooring in it.

Proper electric installation and other services

are   provided   as   per   the   norms.     It   is   not

correct  to   say   that   the   cost   of   removal   of

debris   will   be   more   than   the   cost   of

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structure.   As a matter of fact, even entire

iron used has a lot of value be godowns are

having internal height of 18 feet and raised

platform.     These   were   constructed   some

times in 1980 and are in very good condition.

In view of the fact that commercial use of the

property   has   been   allowed   by   the   Distt.

Magistrate   and   Jaipur   Development

Authority, there is no need to demolish them

unless   the   property   is   being   exploited   fro

better   gains.     The   declared   land   value   will

come   to   Rs.99,84,700/­   minus

Rs.42,00,000/­ = 57,84,500/­.  Therefore, the

declared   land   rate   works   out   to

Rs.57,84,500/­ divided by 7943 sq. meters =

Rs.728/­   per   sq.   meter   as   against   the

prevailing   land   rate   of   the   sale   instance

property at Rs.1727.5 per sq. mt.   The land

value  of  the  subject property on  this basis

works   out   to   Rs.1727.5   x   7943

=Rs.1,37,21,532/­. If the value of depreciated

structure of Rs.42 lakhs is added, the total

value   of   the   subject   property   comes   to

Rs.1,79,21,532/­   as   against   the   declared

value of Rs.99,84,500/­.”

31.The   appropriate   authority   then   in   para   8

considered the appellants’ objections to the effect that

while   determining   the   market   value   of   suit   land,

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

if   it   had   been   given,   there   would   have   been   no

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

17

required to be made out for invoking powers under

Chapter XX­C by the appropriate authority for pre­

emptive purchase of the suit land. 

32.The appropriate authority, however, rejected this

submission finding no merit therein. The appropriate

authority then examined the issue in the light of Rule

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

1975   and   other   relevant   facts   and   came   to   a

conclusion that, if several other aspects such as the

location of the suit land and its commercial value is

taken into consideration, the market value of the suit

land would be substantially enhanced and would come

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

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

agreement. The appropriate authority, therefore, held

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

than the amount of the apparent consideration fixed in

the agreement. 

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

deal with this question:

“8.  Even  though  the  contention  of  the  Ld.

representatives  regarding   deduction  of   30%

to   40%   for   roads   and   parks   etc.   is   not

acceptable in principle.  We may work out the

value   of   the   subject   property   even   on   this

basis as follows:

Saleable   area   as   per   rule   11   of

Rajasthan   Urban   Areas(sub   division)

Rules,   1975   is   about   6%.     This   rule

further provides that this may be more

if the plot size is small.

Assuming   for   arguments   sake   that   66%   of

7,943 which is equal to 5242.38 sq. meters is

available for sale, the land rate will have to be

worked out on the basis of sale instance by

adjustment of time gap of     +12% only.   In

other words, the rate of sale instance will be

1718x1.12 = 1994.72 per sq. meter.  It is so

because of the fact that the deduction of 34%

contemplates absence of large size as well as

“less   developed”.     On   that   basis,   the   land

value will be 1995x5242.38=1,04,58,548/­ if

the   value   of   structure   of   Rs.42   lakhs     is

further   out   to   Rs.1,46,58,548/­   as   against

declared   apparent   consideration   of

Rs.99,84,500/­.

9.     While   coming   to   the   above   noted

valuation of Rs.1,46,58,548/­ adjustment on

account   of   the   following   aspects   have   not

been made.  If these were further considered

the value arrived at will still be higher:

i) Deduction   of   34%   only   has   been

allowed.  The deduction can be still less

if the plot is of smaller size.  This will

19

enhance the saleable land area and land

value.

ii)Triveni   Nagar   is   in   the   interior   from

main   Tonk   Road.     The   development

along   Tonk   Road   is   certainly   very

prestigious and valuable.  No factor has

been added in the sale instance on this

account.   It has been ascertained that

sale   instances   referred   to   by   the   Ld.

representative   in   his   written

submissions   dated   24.3.94   of   Triveni

Nagar   are   not   at   all   comparable   for

several reasons.   Plot No.B­44, Triveni

Nagar (copy of sale deed in respect of

this property has been filed) is near/on

the nullah.   The surroundings are very

poor.  Besides, this sale instance is not

reliable as it has not been examined for

pre­emptive   purchase   as   the   alleged

apparent   consideration   is   only   Rs.1

lakh.   Details of another sale instance

property   at   A­256   Triveni   Nagar   have

not   been   made   available   but   this

property   is   again   very   close   to   the

nullah   and   its   surroundings   are   also

very poor.  Both of these sale instances

cannot   be   compared   with   the   subject

property   whereas   the   sale   instance

relied by us can be comparable subject

to adjustment of time gap, commercial

nature etc.

iii)The subject property is on main road

connecting Durgapura station to Tonk

Road.   It is very close to Tonk Road.

The   vacant   land   adjacent   to   two

godowns of the subject property falls on

the side of main road leading to newly

developed colonies.  In other words, the

subject property has vacant land area

20

on the main station road as well as on

other   side   road   leading   to   colonies.

This  factor  has  not  been   added   while

coming to the valuation;

iv)As pointed out earlier, the nature of the

subject   property   is   commercial.     The

value of commercial properties is also

about   50%   more   than   the   residential

properties.   If this factor is added, the

present   market   value   of   the   subject

property   will   be   substantially

enhanced.”

34.The appropriate authority then in para 10 also

examined the case keeping in view the market rates

notified by the sub­Registrar, Jaipur for the purpose of

paying stamp duty on the sale deed in relation to the

lands situated in an area called "Triveni Nagar" and

“Durgapura". The appropriate authority was, however,

of   the   view   that   the   rates   notified   in   the   circular

support the case of Income Tax Department rather

than the case of the appellants because the minimum

reserved   price   notified   for   commercial   use   was   at

Rs.1800/­ Per sq. meter.

21

35.The appropriate authority then in para 12 dealt

with   another   argument   of   the   appellants   that   the

adjustment   of   Rs.10   lakhs   payable   towards

registration   charges   and   Rs.15   lakhs   has   to   be

provided for roads, water and electricity supply. The

appropriate authority rejected this argument because

it   found   that   this   amount   was   not   a   part   of   the

apparent consideration between the parties. 

36.It is after recording the aforementioned factual

findings,   the   appropriate   authority   came   to   a

conclusion that the case for pre­emptive purchase of

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

is made out against the appellants. 

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

Judge) dated 14.09.1994, we find on its perusal that

the writ Court  rightly observed that it could not act as

an   appellate   Court   to   examine   the   legality   and

correctness of the pre­emptive order dated 30.03.1994

passed   by   the   appropriate   authority   under   Section

22

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

only to examine as to whether any relevant material is

ignored or any erroneous material is considered or

whether the order of the appropriate authority has

violated the principle of natural justice or any case is

made out for infraction of any statutory provision or

whether   the   decision   taken   by   the   appropriate

authority for pre­emptive purchase is such that no

reasonable person could ever take such decision.

38.Despite observing this, the writ Court examined

all   the   issues   of   facts   arising   in   the   case   like   an

appellate Court and found no merit therein. 

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

the   instance   of   the   appellants   herein   before   the

Division Bench, the appellate Court also, in detail,

examined each factual issue. 

40.The   Division   Bench,   in   its   judgment   dated

31.05.2007, minutely dealt with the contentions urged

on behalf of the appellant and concurred with the

23

reasoning and conclusion of the Single Judge and the

appropriate authority. We consider it apposite to quote

the relevant extract from the judgment with a view to

show as to how the issue in relation to process of

valuation   of   the   suit   land   was   dealt   with   by   the

Division Bench. It reads as under:­

“….But   on   examination   of   the   impugned

order of preemptive purchase, we find that

the Appropriate  Authority  in  para  8  of the

order has categorically noted this argument

with reference to Rule 11 of the Rajasthan

Urban   Areas   (Sub­Division,   Reconstruction

and improvement of Plots) Rules, 1975 and

noted   that   the   said   rule   provides   that   the

saleable are would be about 66% and this may

be   more   if   the   plot   size   is   smaller   but

assuming that only 66% would have available

are for sale, yet out of 7,943 sq. mtrs. An

area equal to 5242.38 sq. mtrs. Would have

been available for sale. Appropriate Authority

therefore   by   this   alternative   mode   worked

out   the   rate   of   the   land   on   the   basis   of

comparable   sale   instance   i.e.   5242.38   sq.

mtrs.   by   adjustment   of   time   gap   of   +12%

which then would come to Rs. 1994.72 per

sq.   mtrs.   It   was   noted   that   this   was   so

because   the   deduction   of   34%   land

contemplates absence of larger size as well as

less   development.   On   this   basis   the   land

value   will   be   Rs.   1995   x   5242.38   =

1,04,58,548/­.   Value   of   the   constructed

godowns of Rs. 42 lacs being added thereto,

total value of the said property would come

to   Rs.   1,46,58,548/­   as   against   declared

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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 1/3

rd

 land would in fact make

the remaining 2/3

rd

 land developed and with

the sub division of lands into plots of smaller

sizes, it would no longer remain a large size

undeveloped   agricultural   land.   In   fact,

making provision of all these civic amenities

and facilities by using 1/3

rd

 of the land would

considerably   enhance   its   saleability   and

appreciate the value of the remaining 2/3

rd

 of

the land.”

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

when the matter was taken up in review jurisdiction at

the   instance   of   the   appellants   herein   against   the

judgment   of   the   appellate   Court,   Justice   Lodha

speaking for the Bench, again went into each issue on

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

25

the   issues.     The   Review   Court,   therefore,   also

dismissed the review petition by a well reasoned order.

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

appropriate authority, writ Court, appellate Court and

lastly,   review   Court   consistently   against   the

appellants,   the   question,   which   arises   for

consideration in this appeal is whether any case is

made out to interfere in the impugned order.

43. Though learned counsel for the appellants with

his usual fairness vehemently reiterated more or less

the same submissions, which were addressed in the

High Court and also added some new submissions but

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

the appropriate authority and the High Court were

right in their respective approach, the reasoning and

the conclusion.  This we say for the following reasons.

44.It is not in dispute that the appropriate authority

laid a factual foundation in the show cause notice to

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

26

authority,   was   15%   higher   than   the   apparent

consideration.   It   is   also   not   in   dispute   that   a

categorical finding was recorded by the appropriate

authority that the fair market value of the suit land

was   15%   more   than   the   apparent   consideration

mentioned in the agreement of sale by the parties. As

mentioned above, these findings were examined by the

writ Court, intra appellate Court and lastly the review

Court   in   their   respective   jurisdiction.     They   were

upheld. 

45.In   our   considered   opinion,   these   findings   are

based on appreciation  of  evidence. We do not  find

these   findings   to   be   either   arbitrary   or   illegal   or

against any statutory provisions and nor they can be

regarded   as   being   perverse   to   the   extent   that   no

reasonable man could ever reach to such conclusion.

We also find that these findings are in conformity with

the requirements of Section 269 UD of the Act and the

27

law laid down by the Constitution Bench in the case of

C.B. Gautam (supra).   

46.  Learned   counsel   for   the   appellants,   however,

argued that since there was no reference of the two

godowns in the show cause notice and secondly, the

appellants were also not served with the copy of the

valuation report of the two godowns,   the impugned

orders are rendered bad in law on account of these two

infirmities. 

47.We find no merit in this submission for three

reasons.   First,   the   appellants   did   not   raise   this

objection at any stage of the proceedings. We cannot,

therefore,   entertain   this   submission   at   this   stage:

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

appellants because all relevant documents were filed

on this issue in the writ proceedings. The appellants,

therefore,   had   full   opportunity   to   deal   with   these

documents which they also availed of and lastly, this

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

28

reasons,   we   do   not   find   any   substance   in   this

submission.

48.Learned counsel for the appellants then took us

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

comparable sales relied on by the Department to prove

the value of the suit land etc.  These submissions were

urged essentially with a view to show that the value of

the suit land mentioned in the show cause notice was

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

pre­emptive purchase of the suit land is bad in law.

Learned counsel, in support of his submissions, also

placed reliance on the decisions in Sahib Singh Kalha

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

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

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

Karnataka   Housing   Board   vs.   Land   Acquisition

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

examined   the   submissions   keeping   in   view   the

decisions cited. 

29

49. As mentioned above, these issues were gone into

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

then by writ Court followed by intra court appeal and

lastly   by   review   Court   on   facts   and   were   rejected

finding no merit. In an appeal filed under Article 136

of the Constitution, we cannot hold   de novo inquiry

into these issues again.   In our view, these findings

have   been   recorded   in   conformity   with   the

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

deserve to be upheld.  They are accordingly upheld. 

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

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

accordingly dismissed. 

CIVIL APPEAL No.9901 2010

1.This appeal is directed against the final judgment

and order dated 31.05.2007 passed by the High Court

of   Judicature   for   Rajasthan   Bench   at   Jaipur   in

Division   Bench   Special   Appeal   No.188   of   1995

whereby the appeal filed by the vendor (respondent

30

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

31

the concerned authorities had invested the amount of

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

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

extended from time to time, pending appeal. 

3.Taking into consideration these facts and other

relevant   circumstances,   the   Division   Bench   while

dismissing the appeal filed by the prospective buyers,

partly   allowed   the   appeal   filed   by   the   vendor   and

issued the following directions:­

“   ……..but   the   appeal   filed   by   the   vendor

(SAW No. 188/95) is partly allowed with the

direction that upon department taking over

possession   of   the   subject   property,

prospective   buyers   would   be   entitled   to

refund   of   the   amount   paid   to   the   vendor

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

maturity amount of the aforementioned FDR

and remaining amount shall be paid to the

vendor. In the facts of the case, however, we

leave   the   parties   to   bear  their  own   costs.”

4.We find that while passing the aforesaid order,

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

Act were not taken into consideration by the Division

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

32

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. 

33

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

filed by Union of India to the extent that the above­

mentioned directions issued by the High Court are

hereby set aside and the matter is left open for the

decision to be taken  by the appropriate authority as

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

accordance with law.

8.The appeal is accordingly allowed in part.   The

impugned  directions contained in the concluding para

of the impugned order are set aside.    

     ………...................................J.

[ABHAY MANOHAR SAPRE ]

    …...……..................................J.

                [DINESH MAHESHWARI]

New Delhi;

July 29, 2019

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