AHMADI J. ( 1 ) WHERE any immovable property is subjected to acquisi- tion under the provisions of Chapter XX-A of the Income-tax Act 1961 (hereinafter called (the Act) can the tenants who are in occupa- tion of different parts of the said property be evicted therefrom under sec. 269-I of the Act with a view to vesting it absolutely in the Central Government free from all encumbrances is the question which we are required to consider in these three petitions brought by the tenants of the acquired property. The facts giving rise to these petitions briefly stated are as under. ( 2 ) THE property which is the subject matter of acquisition is a three-storeyed building known as Shamlaji-Kripa standing on a parcel of land bearing Tikka No. 8-3 Survey No. 3-7 of Revenue Survey No. 554 situate at Sayajigunj Station Road Baroda. It consists of the ground floor and three storeys. The ground floor of the said property was let sometime in November 1966 to the Union Bank of India Sayajigunj Branch Baroda on a monthly rent of Rs. 1 600 exclusive of municipal taxes. A portion of the ground floor by the side of the staircase was given on rent to Shri Manubhai S. Rajput sometime in April 1968 on a monthly rent of Rs. 125. 00 for a Pan shop. The upper floors were let to the partners of Satkar Hotel and Restaurant under two separate rent notes of March 1968 in respect of the first floor and June 1970 in respect of the second and the third floors. The rent in respect of the first floor was fixed at Rs. 1 500 per month exclusive of muni- cipal taxes. The rent in respect of the second and the third floors was fixed at Rs. 2 500 month exclusive of municipal taxes. The rest- aurant has an air conditioned hall with a capacity to accommodate 32 persons and an additional 112 persons in the remaining portion. The hotel on the second and the third floors has the capacity to accommo- date 36 beds. The partners of the said concern claim to have invested a sum of Rs 1,40,000 furnishing and equipping the premises for the purpose of running a hotel-cum-restaurant. According to them their monthly wage bill is around Rs. 5,000 and their annual turnover is around Rs. The partners of the said concern claim to have invested a sum of Rs 1,40,000 furnishing and equipping the premises for the purpose of running a hotel-cum-restaurant. According to them their monthly wage bill is around Rs. 5,000 and their annual turnover is around Rs. 7,00,000 The aforesaid three tenants who have filed the present three petitions claim that they are in occupation of different parts of the aforesaid property since the last several years. ( 3 ) MESSRS. S. S. Parshottamdas and Company the original owners of the property in question incurred heavy debts and were not able to honour their financial commitments. As the creditors were pressing hard for payment a committee consisting of eight principal creditors was appointed to manage the affairs of the said concern. By virtue of the powers conferred on the said Committee it negotiated and finalised a deal for the sale of the said property for a sum of Rs. 4,50,000 to respondents Nos. 5 to 10. A deed of conveyance was executed in favour of the said purchasers on 27/12/1973 and the same was got registered on 18/02/1974 The petitioners contend that the entire sale consideration of Rs. 4,50,000 was utilised in discharging the debts of Messrs. S. S. Parshottamdas and Company. Under the sale deed the transferors delivered constructive possession of the property to the transferees and directed the tenants to attorn to the transferees. According to the terms of the conveyance the rent falling due till the date of the execution of the document was to be recovered by the transferors and the rent for the period subsequent thereto was to be recovered by the transferees. ( 4 ) AFTER the execution of the conveyance Messrs. S. S. Parshotta- mdas and Company by their letter dated 5/02/1974 gave intimation to the tenants about the sale of the property and called upon them to pay the rent to the transferees with effect from February 1974. Pursuant to the said request the tenants attorned in favour of the transferees and started paying the rent in respect of the demised premises to the transferees. ( 5 ) IT appears that after the execution and registration of the deed of conveyance in respect of the property in question respondent No. 3 the competent authority appointed under sec. Pursuant to the said request the tenants attorned in favour of the transferees and started paying the rent in respect of the demised premises to the transferees. ( 5 ) IT appears that after the execution and registration of the deed of conveyance in respect of the property in question respondent No. 3 the competent authority appointed under sec. 269-B of the Act exami- ned the transaction and came to the conclusion that there was reason to believe that the said immovable property having a fair market value exceeding Rs. 25 0 been transferred for an apparent considera- tion which was less than the fair market value of the said property. According to him the fair market value of the property exceeded the apparent consideration by more than 15 per cent of such apparent consideration. He opined that the consideration mentioned in the deed of conveyance had not been truly stated in the said instrument with the object of (a) facilitating the reduction or evasion of the liability of the transferor to pay tax under the Act in respect of the income arising from the transfer; and/or (b) facilitating the concealment of any income or any money or other assets which have not been or which ought to be disclosed by the transferee for the purposes of the Act or the Indian Income-tax Act 1922 or the Wealth-tax Act 1957 On his having reason to so believe the third respondent initiated proceedings for the acquisi- tion of the property in question under Chapter XX-A of the Act. A notice under sub-sec. (1) of sec. 269-D of the Act was published in the Government Gazette and was also served on the transferors the trans- ferees as well as the petitioners of these three petitions in their capacity as the occupants of different parts of the said property. Annexure C to the petitions is a copy of the said notice dated 31/08/1974 printed on page 6637 of the Gazette of India of 16/11/1974 Individual notices were forwarded to the petitioners by letter of 10/12/1974 Annexure D to the petitions. After following the procedure required by law on the conclusion of the hearing of objections an order of acquisition of the property was passed under sub-sec. (6) of sec. After following the procedure required by law on the conclusion of the hearing of objections an order of acquisition of the property was passed under sub-sec. (6) of sec. 269-F of the Act on 12/12/1975 The said order became final on 27/01/1976 The third respondent there- fore in exercise of power conferred by sub-sec. (1) of sec. 269-I of the Act directed the petitioners who were the occupants of different parts of the acquired property to deliver possession thereof to the Central Government within thirty days from the date of the service of the notice dated 5/02/1976 forwarded with the forwarding letter of 7/02/1976 Respondent No. 4 was authorised to take over possession of the property in question on the expiry of the prescribed period. The petitioners apprehending that they were likely to be dispossessed preferred the present three petitions under Article 226 of the Constitution challenging the right of the competent authority to dispossess them in pursuance of the impugned notices Annexure A to the petitions. ( 6 ) BEFORE we proceed to consider the various submissions made by the learned counsel for the petitioners it would be advantageous to refer to the legislative history leading to the insertion of Chapter XX-A of the Act. The Government of India appointed the Direct Taxes Inquiry Committee under the Chairmanship of Mr. Justice K. N. Wanchoo Retired Chief Justice of India in March 1970 inter alia to recommend concrete and effective measures (i) to unearth black money and prevent its proliferation through further evasion; (ii) to check avoidance of tax through various legal devices including the formation of trusts; and (iii) to reduce tax arrears. After a preliminary study of the problem the Committee submitted an interim report towards the end of 1970 reco- mmending some important changes of a radical nature for immediate implementation. On the basis of the said interim report the Taxa- tion Laws (Amendment) Bill 1971 (No. 115 of 1971) was presented to Parliament for enacting a law inter alia for the acquisition of immovable properties in certain cases of transfer to counteract evasion of tax. this Bill was referred to a Select Committee which suggested certain amendments. A comprehensive bill incorporating the changes suggested by the Committee was presented to Parliament and was enacted as the Taxation Laws (Amendment) Act 1972 By virtue of the enactment of the said Act Chapter XX-A consisting of secs. this Bill was referred to a Select Committee which suggested certain amendments. A comprehensive bill incorporating the changes suggested by the Committee was presented to Parliament and was enacted as the Taxation Laws (Amendment) Act 1972 By virtue of the enactment of the said Act Chapter XX-A consisting of secs. 269-A to 269-S came to be inserted in the Act with effect from 15/11/1972. ( 7 ) THE Objects and Reasons for the enactment of the Taxation Laws (Amendment) Act 1972 were (i) to counter evasion of tax through under statement of the value of immovable property in sale deeds and also to check the 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 and (ii) to improve the present arrangement for valuation for the pur- poses of income-tax wealth-tax and gift-tax laws of buildings and lands and other assets by augmenting the set up of the official valuation machinery and enhancing its powers on the one hand and by bringing about better regulation and discipline over non-official valuers on the other. Bearing in mind these objects particularly the first one we may now proceed to refer to the relevant provisions in the newly inserted Chapter XX-A of the Act. ( 8 ) SEC. 269-A defines certain expressions used in the Chapter. According to the said section immovable property means any land or any building or part of a building and includes where any land or any building or part of a building is transferred together with any machinery plant furniture fittings or other things such machinery plant furniture fittings or other things also. The Explanation to that definition shows that for the purposes thereof land building part of a building machinery plant furniture fittings and other things include any rights therein. The term transfer in relation to any immovable property means transfer of such property by way of sale or exchange. The expression instrument of transfer means the instrument of transfer registered under the Registration Act 1908 In the present petitions we are concerned with the transfer of property by way of sale the instrument of transfer whereof was admittedly registered on 18/02/1974 It is in this context that we must now read the definition of the expression apparent consideration. According to clause (a) of sec. According to clause (a) of sec. 269 the expression apparent consideration in relation to any immovable property transferred means if the transfer is by way of sale the consideration for such transfer as specified in the instrument of transfer. In the instrument of transfer of the property in question the consideration mentioned is Rs. 4,50,000 We may next refer to the definition of the expression fair market value contained in clause (d) of sec. 269-A of the Act. Fair market value in relation to any immovable property transferred means the price that the immovable property would ordinarily fetch on sale in the open market on the date of execution of the instrument of transfer of such property. It may here be mentioned that according to the revenue the fair market value of the property on the date of execution of the instrument of transfer was around Rs. 7,25,000 determined on the basis of the yield method. Sec. 269-B relates to the appointment and jurisdiction of a competent authority. Sec. 269-C empowers the competent authority to initiate proceedings for the acquisition of any immovable property which has been transferred if he has reason to believe that: (I)THE fair market value of the property in question exceeds Rs. 25,000 (ii) the property has been transferred for an apparent consideration which is less than the fair market value of the property; (iii) the fair market value of the property exceeds the apparent consideration therefor by more than fifteen per cent of such apparent consideration; and (iv) the consideration for the transfer of the property as agreed to between the parties has not been truly stated in the instrument of transfer with the object of either (a) facilitating the reduction or evasion of the liability of the transferor to pay tax in respect of any income (whether by way of capital gains or otherwise) arising from the transfer; or (b) facilitating the concealment of any income or any moneys or other assets which have not been or which ought to be disclosed by the transferee for the purposes of the Act or the Indian Income-tax Act 1922 or the Wealth-tax Act 1957. Before initiating such proceedings the competent authority must record his reasons for doing so. Sub-sec. (2) of sec. Before initiating such proceedings the competent authority must record his reasons for doing so. Sub-sec. (2) of sec. 269-C provides that where the fair market value of such property exceeds the apparent consideration therefor by more than twentyfive per cent of such appa- rent consideration it shall be conclusive proof that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer or where the property has been transferred for an apparent consideration which is less than its fair market value it shall be presumed unless the contrary is proved that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with such object as is referred to in clause (a) or clause (b) of sub-sec. (1) of that section. Once the competent authority decides to initiate proceedings for the acquisition of any immovable property sec. 269-D provides that a notice to that effect shall be published in the Official Gazette provided a period of nine months from the end of the month in which the instru- ment of transfer in respect of such property was registered has not expired In other words no proceedings for the acquisition of any immovable property can be initiated after the expiration of the period of nine months from the end of the month in which the instrument in respect of that property is registered. Sub-sec. (2) of sec. 269-D enjoins upon the competent authority to cause a notice regarding the initiation of proceedings to be served on the transferor the transferee the person in occupation of the property if the transferee is not in occupation thereof and on every person whom the competent authority knows to be interested in the property. The expression person interested as defined in clause (g) of sec. 269-A includes all persons claiming or entitled to claim an interest in the compensation payable on account of the acquisition of such property. The sub-section further requires publication of the notice by affixing a copy thereof at some conspicuous part of the property and also by making known in such manner as may be prescribed the substance of such notice at convenient places in the locality. Sec. 269-E provides for the filing of objection to the acqui- sition of the said property. The sub-section further requires publication of the notice by affixing a copy thereof at some conspicuous part of the property and also by making known in such manner as may be prescribed the substance of such notice at convenient places in the locality. Sec. 269-E provides for the filing of objection to the acqui- sition of the said property. All persons referred to in clause (a) of sub- sec. (2) of sec. 269-D as well as persons interested in the property under acquisition may file objection in writing against the proposed acquisition. On receipt of these objections the competent authority must fix a day and place for the hearing of the objections as required by sec. 269-F of the Act. All persons who have been given notice of hearing are entitled to be heard in person or through an authorised representative The section contemplates that the competent authority will after hear- ing the objections make a written order stating the reasons for his decision with respect to each objection. If after hearing the objections the competent authority is satisfied that the immovable property is of a fair market value exceeding twenty-five thousand rupees; that such property has been transferred for an apparent consideration which is less than the fair market value and that the consideration for such transfer has not been truly stated in the instrument of transfer with such object as is referred to in sec. 269-C he may make an order for the acquisition of the property after obtaining the approval of the commissioner of Income-tax specified in this behalf by the Board. If the competent authority is not satisfied on any of the points stated above he must declare that the property will not be acquired under the pro- visions of the said Chapter. If the competent authority decides to acquire the property the transferor or the transferee or any other person who has objected to the acquisition may file an appeal under sec. 269-G against the said order to the Appellate Tribunal within the prescribed period. Under sec. 269-H the Commissioner or any person aggrieved by any order of the Appellate Tribunal may within the stipulated period prefer an appeal against such order to the High Court on a question of law. 269-G against the said order to the Appellate Tribunal within the prescribed period. Under sec. 269-H the Commissioner or any person aggrieved by any order of the Appellate Tribunal may within the stipulated period prefer an appeal against such order to the High Court on a question of law. After the order for the acquisition of the property becomes final the competent authority may by notice in writing order any person who is in possession of the immovable pro- perty to surrender or deliver possession thereof to him or to any other person duly authorised by him in that behalf within thirty days from the date of service of the notice. If any person refuses or fails to comply with such notice the competent authority may take possession of the immovable property by the use of such force as may be neces- sary including the requisitioning of the services of a police officer to assist him in obtaining possession of the property. Sub-sec. (4) of sec. 269 says that once the possession of the immovable property is obtained as per the provisions of the said section the property shall vest absolutely in the Central Government free from all encumbrances. The proviso to that sub-section however clarifies that nothing in the said sub-section shall operate to discharge the transferee or any other person (not being the Central Government) from liability in respect of such encumbrances and notwithstanding anything contained in any other law such liability may be enforced against the transferee or such other person by a suit for damages. Section 269-J seeks to lay down the quantum of compensation payable by the (Central Government for the acquisition of such property. It provides that the compensation payable by the Central Government for the acquisition of the property will be equal to the aggregate of the amount of the apparent consideration plus fifteen per cent of such consideration Sub-sec. (2) of that section provides that there after the transfer of the property in question to the transferee but before the vesting of the property in the Central Government the property has been damaged or where after the transfer of such property to the transferee but before the date of publication of the notice in the Official Gazette under sub-section (1) of sec. 269-D any improvements have been made to the property the compensation payable shall be reduced or enhanced as the case may be by agreement between the competent authority and the persons entitled to compensation within fifteen days from the date of vesting and in default of such agreement as the Court may on a reference determine. Sub-sec. (4) of that section next provides that the amount by which the Compensation payable under sub-sec (1) in respect of any immovable property acquired falls short of the amount which would have been payable as compensation if that property had been acquired under the Land Acquisition Act after the issue of a preliminary notice under sec. 4 of that Act on the date of publication in the Official Gazette of notice under sub-sec. (1) of sec. 269-D shall be deemed to have been realised by the Central Government as a penalty from the transferee for being a party to a transfer with such object as is referred to in clause (a) or clause (b) of sub-section (1) of sec. 269-C and no penalty shall thereafter be levied for any assessment year on the trans- feree under clause (iii) of sub-sec. (1) of sec. 271 of the Act or under clause (iii) of sub-sec. (1) of sec. 18 of the Wealth-tax Act 1957 Sec. 269-K provides that the amount of compensation payable under sec. 269-J shall be tendered to the person or persons entitled thereto as soon as may be after the property becomes vested in the Central Government. It further provides that if there is any dispute regarding the apportionment of the compensation amongst persons claiming to be entitled thereto the amount shall be deposited in the Court to which the dispute is referred. Sec. 269-L entitles the competent authority to seek the assistance of Valuation Officers for the purpose of determining the fair market value of the property in question and for the purpose of determining the reduction or increase in the amount of compensation for any damage or improvement to the property in question. The rest of the provisions in the said chapter are not relevant for our purpose. ( 9 ) IT becomes clear from the aforesaid resume of the relevant provi- sions of Chapter XX-A of the Act that where any immovable property of a fair market value exceeding Rs. The rest of the provisions in the said chapter are not relevant for our purpose. ( 9 ) IT becomes clear from the aforesaid resume of the relevant provi- sions of Chapter XX-A of the Act that where any immovable property of a fair market value exceeding Rs. 25,000 has been transferred or an apparent consideration which is less than the fair market value and the latter value exceeds the former value by more than 15 per cent the competent authority may proceed to acquire the property after stating the reasons in support thereof in writing provided that no such acquisition proceedings shall be initiated after the expiration of nine months from the end of the month in which the instrument of transfer was registered. The proceedings for acquisition must be initiated by a notice published in the Official Gazette. The law enjoins on the competent authority to cause notice of initiation of acquisition procee- dings to be served on the transferor the transferee the person in occupation of the property and every person who is known to the competent authority to be interested in the property. On receipt of such a notice the transferor the transferee the occupant or person interested in the property sought to be acquired may file objecting against the acquisition of the said property. The competent authority must then fix the date of hearing and give notice thereof to the objectors and the transferee whether or not he has lodged his objec- tions against the proposed acquisition. The competent authority will then proceed to dispose of each and every objection in writing by stating the reasons in support of his decision. If the competent authority is satisfied that (a) the immovable property to which the proceedings relate is of a fair market value exceeding Rs. The competent authority will then proceed to dispose of each and every objection in writing by stating the reasons in support of his decision. If the competent authority is satisfied that (a) the immovable property to which the proceedings relate is of a fair market value exceeding Rs. 25,000 (b) the fair market value exceeds the apparent consideration by more than 15 per cent of the apparent consideration and (c) the consideration for such transfer has not been truly stated in the instrument of transfer with the object of facilitating the reduction or evasion of liability of the transferor to pay tax in respect of the income arising from the transfer or facilitating the concealment of any income or moneys or other assets which has not been or which ought to be disclosed by the transferee for the purposes of the Act the Indian Income-tax Act 1922 or the Wealth-tax Act 1957 he may after obtaining the approval of the Commissioner make an order for the acquisition of the said property. This decision is subject to appeal to the Appellate Tribunal and the decision of the Tribunal is subject to appeal to the High Court on a point of law. After the decision to acquire the property becomes final the competent authority is empowered to issue a notice calling upon the occupant of the said property to surrender or deliver possession of the premises in his occupation to him or his delegate within thirty days of the receipt of the notice. If the occupant fails to comply with the notice he may be dispossessed by use of force and if necessary by requisitioning the services of the police. On the possession of the acquired property having been thus obtained the law says that the property shall vest absolutely in the Central Government free from all encumbrances. Provision for the payment of a quantified amount by way of compensation is also made in section 269-J of the Act. This broadly speaking is the scheme of Chapter XX-A of the Act. Provision for the payment of a quantified amount by way of compensation is also made in section 269-J of the Act. This broadly speaking is the scheme of Chapter XX-A of the Act. ( 10 ) AT the hearing of these petitions the learned counsel for the petitioners made the following submissions : (1) The subject matter of acquisition under Chapter XX-A can only be the bundle of rights in the property that is transferred under the instrument of transfer and since the tenancy rights of the petitioners in the said property were not transferred constructive possession only having been delivered to the transferee the acquisition proceedings could never be in respect of the said tenancy rights and hence the consequential order calling upon the petitioners to deliver actual vacant possession of the premises in their occupation is unsustainable. (2) There being no express provision in Chapter XX-A empowering acquisition of tenancy rights and since such a power cannot be implied tenancy rights cannot be the subject matter of acquisition under the said Chapter. (3) The phrase free from all encumbrances used in sub-sec. (4) of sec. 269-I would not take within its ambit leasehold or tenancy rights which are not encumbrances in the strict sense of the term and hence the petitioners cannot be evicted from the premises in their occupation. (4) If it is held that under the scheme of Chapter XX-A tenancy rights can also be the subject matter of acquisition it would tantamount to deprivation of property without payment of compensation and would therefore be violative of Articles 19 (1) (f) and 31 (as it then stood) of the Constitution. (5) The object of Chapter XX-A being to penalise tax-dodgers who have been guilty of understating the value of the property sold under the instrument of transfer third parties such as tenants who are not parties to the instrument of transfer cannot be penalised by being deprived of the possession of the demised premises in their actual occupation. (6) If it is held that Chapter XX-A permits acquisition of tenancy rights and taking over of possession from the tenants in actual occupation of the required property a different procedure for eviction of tenants of such property from the normal procedure under the Bombay Rent Act would be resorted to in contravention of Article 14 of the Constitution. (6) If it is held that Chapter XX-A permits acquisition of tenancy rights and taking over of possession from the tenants in actual occupation of the required property a different procedure for eviction of tenants of such property from the normal procedure under the Bombay Rent Act would be resorted to in contravention of Article 14 of the Constitution. (7) If it is held that Chapter XX-A permits acquisition of tenancy rights and eviction of tenants the said provisions would encroach upon Entry 18 of List II of the Ceventh Schedule to the Constitution and would therefore be beyond the competence of Parliament to enact the said law. (8) If it is held that Chapter XX-A permits acquisition of tenancy - rights the said provisions would he liable to be struck down - on the ground- that they suffer from the vice of excessive delegation without proper guidelines. (9) Chapter XX-A can either be a law relating to acquisition under Article 31 (2) or a law relating to tax or penalty under Article 31 (5) of the Constitution. If it is a law relating to acquisition compensation cannot be illusory and if it is a law relating to taxation or penalty it must not infringe Article 19 (1) (f) of - the Constitution since the protection of Article 31 (2b) will not be available to such law. Viewed in any manner therefore if Chapter XX-A permits acquisition of tenancy rights it is liable to be struck down as unconstitutional (10) The impugned action is contrary to the instructions of the Central Board of Direct Taxes as averred in paragraph 11 (T) (1) of the petition which instructions have a binding effect on the revenue; and (11) The impugned action has been initiated mala fide as averred in paragraph 11 (p) of the petition. ( 11 ) THE first three contentions being interconnected may be dealt with together. We have already indicated the provisions of Chapter XX-A and the scheme thereof and we have no hesitation in coming to the conclusion the at Chapter XX-A is a Code by itself and provides for acquisition of immovable properties to counteract the evasion of tax. Before the competent authority can initiate proceedings for the acquisition of any property certain fundamental facts set out in sec. 269-C (1) have to be established. Before the competent authority can initiate proceedings for the acquisition of any property certain fundamental facts set out in sec. 269-C (1) have to be established. It is only after the competent authority has reason to believe that any immovable property of a fair market value exceeding Rs. 25 0 has been transferred for an apparent consideration which is less than the fair market value and that the consideration for such transfer has not been truly stated in the instrument of transfer with the object of facilitating the reduction or evasion of the liability of the transferor to pay tax under the Act in respect of any income arising from the transfer or facilitating the concealment of any income or any moneys or other assets which have not been or which ought to be disclosed by the transferee for the purposes of the Act or the Indian Income-tax Act 1922 or the Wealth- tax Act 1957 that the competent authority can initiate proceedings for the acquisition of such property provided of course he must have reason to believe that the fair market value of the property exceeds the apparent consideration therefor by more the 15 per cent of such apparent consideration. It is only thereafter that the competent authority can issue the preliminary notice under sec. 269 D (1) of the Act. Clause (a) of sub-sec. (2) of that section is important for our purpose and may be reproduced at this stage: " (2) The competent authority shall - (a) cause a notice under sub-sec. (1) in respect of any immovable property to be served on the transferor the transferee the person in occupation of the prop- erty if the transferee is not in possession thereof and on every person whom the competent authority knows to be interested in the property. "a plain reading of this sub-section makes it clear that the law requires the person in actual occupation of the property if the transferee is not in occupation thereof to be served with an individual notice to enable him to file objections under sec. 269-E of the Act against the pro- posed acquisition. Thus once the competent authority has reason to believe that the jurisdictional facts set out in sec. 269-C exist he may initiate proceedings for the acquisition of the property by notice to that effect published in the Official Gazette. 269-E of the Act against the pro- posed acquisition. Thus once the competent authority has reason to believe that the jurisdictional facts set out in sec. 269-C exist he may initiate proceedings for the acquisition of the property by notice to that effect published in the Official Gazette. In addition to this general notice published in the Official Gazette the competent authority is enjoined with the duty to serve individual notices on the transfer or the transferee and the person in occupation of the property if the transferee is not in occupation thereof as well as on every person known to be interes- ted in the property. If it was not the intention of Parliament to acquire tenancy rights or rights of persons in occupation of the property there was no need to provide for the service of individual notices on such occupant or occupants. Sec. 269-E further provides for preferring of objections against the proposed acquisition by the transferor or the transferee or any other person referred to in clause (a) of sub-sec. (2) of sec. 259-B within the prescribed period. Sub-sec. (3) of sec. 269-E clarifies that objection may be made under sub-sec. (1) that the provisi- ons of clause (a) of sub-sec. (2) of sec. 269-C do not apply in relation to any immovable property on the ground that the fair market value of such property does not exceed the apparent consideration therefor by more than 25 per cent of such consideration. This is with a view to rebutting the presumption arising under clause (a) of sub-sec. (2) of sec. 269 of the Act. Therefore the person in actual occupation of the property has a right to object to the proposed acquisition if he is likely to be adversely affected by the proposed acquisition. If his right or in- terest in the property under acquisition was not intended to be extingu- ished. there was no point in conferring upon him a right to file objections against the proposed acquisition. Sec 269-F enjoins upon the competent authority the duty to fix a day and place for the hearing of the object. ions by giving notice thereof to every person who has objected to the proposed acquisition. Sub-sec. (2) of sec. 269-F further provides that every person to whom a notice is given under sub-sec. (1) shall have the right to be heard on his objections. ions by giving notice thereof to every person who has objected to the proposed acquisition. Sub-sec. (2) of sec. 269-F further provides that every person to whom a notice is given under sub-sec. (1) shall have the right to be heard on his objections. The competent authority has to record his decision in writing giving reasons for the decision with respect to each objection. Sub-sec. (8) thereof requires the competent authority to serve a copy of his order on every person who has objected to the proposed acquisition. This is because the objector has a right to prefer an appeal under sec. 269-G to the Appellate Tribunal against an order made by the competent authority for the acquisition of the immovable property. The scheme of secs. 269-D 269 and 269-F is therefore akin to the provisions of secs. 4 5 and 6 of the Land Acquisition Act. The Act however gives additional rights of appeal under secs. 269-G and 269-H which are not to be found in the Land Acquisition Act. It is only after the order of acquisition made under sub-sec. (6) of sec. 269-F becomes final that the competent authority is entitled to issue a notice ordering the person in actual possession of the property to surrender or deliver possession thereof to him or his delegate within thirty days from the receipt of the notice. If such occupant refuses or fails to comply with the notice the competent authority or his delegate is empowered to dispossess him if necessary by the use of force including seeking of assistance of a police officer. After the possession of the immovable property is thus obtained from the occupant or occupants the law declares that of the property shall vest absolutely in the Central Govern- ment free from all encumbrances. The language of this provision is similar to section 16 of the Land Acquisition Act which says that after the Collector has made his award under sec. 11 he may take possession of the acquired land which shall thereupon vest absolutely in the Government free from all encumbrances. The language of this provision is similar to section 16 of the Land Acquisition Act which says that after the Collector has made his award under sec. 11 he may take possession of the acquired land which shall thereupon vest absolutely in the Government free from all encumbrances. These provisions indi- cate beyond any manner of doubt that once the immovable property in question is acquired under the provisions of Chapter XX-A of the Act the interest of the occupant in the said property if there be a person other than the transferee in occupation thereof would also be acquired and would stand extinguished on the property vesting absolu- tely in the Central Government free from all encumbrances. ( 12 ) UNLIKE the provisions in the Land Acquisition Act for the determination of compensation sec. 269-J (1) of the Act provides that where any immovable property is acquired under the provisions of the said chapter the Central Government shall pay for such acquisition Compensation which shall be a sum equal to the aggregate of the amount of the apparent consideration for its transfer and 15 per cent of the said amount. The additional 15 per cent to be paid over and above the aggregate of the apparent consideration is akin to solatium to be paid under the Land Acquisition Act. The Act therefore does not leave the question of determination of compensation open but quantifies the compensation under sec. 269-J (1) of the Act. Sec. 269-K (1) next provides that the amount of compensation payable under sec 269 shall be tendered to the person or persons entitled thereto as soon as may be after the property becomes vested in the Central Govern- ment. Sub-sec. (2) of sec. 269-K next provides that if any dispute arises as to the apportionment of compensation amongst the persons claiming to be entitled thereto the Central Government shall deposit in Court the compensation required to be tendered under sub-sec. (1) and refer such dispute for the decision of the Court which decision shall be final. Court according to clause (c) of sec. 269-A means a principal civil court of original jurisdiction unless the Central Govern- ment has appointed any special judicial officer to perform the functions of the Court under the said chapter. (1) and refer such dispute for the decision of the Court which decision shall be final. Court according to clause (c) of sec. 269-A means a principal civil court of original jurisdiction unless the Central Govern- ment has appointed any special judicial officer to perform the functions of the Court under the said chapter. Therefore the dispute as to the apportionment of compensation has to be referred to the Court for its decision that is for judicial adjudication. The words person or persons entitled there to used in sub-sec. (1) of sec. 269-K clearly contemplate that there may be persons other than transferee who may claim to be entitled to compensation. If these words are read in conjunction with the provisions of sub-sec. (2) of sec. 269-D 269 and 269-F of the Act it becomes clear that besides the transferee the persons who may claim to be entitled to compensation could be the occupants of the acquired property from whom actual possession of the property is obtained. We may with advantage refer to the observations of this Court in COMMISSIONER OF INCOME-TAX V. VIMLABEN BHAGWANDAS PATEL (1979) 118 I. T. R. 134 @ 194:". . THE decision of the competent authority to acquire would expose not only the transferee to the consequences of being deprived of the property but also the transferor to the liability of capital gains and in a given case may affect also the persons interested in the said property having tenancy rights or any encumbrance thereon. " (Emphasis supplied ). It is therefore difficult to accede to the contention that the Act does not provide for payment of compensation to the occupants of the acquired property. There is therefore no substance in the contention that tenancy rights are not contemplated to be the subject matter of acquisition under Chapter XX-A of the Act. ( 13 ) IN order to escape from this inevitable conclusion counsel for the petitioners made bold to contend that tenancy rights not being an encumbrance would not vest in the Central Government under sub- sec. (4) of sec. 269-I of the Act. In support of this contention counsel invited our attention to the following observations in DISTRICT BANK LIMITED V. WEBB and OTHERS (1958) 1 ALL E. R. 126-"in the first place I am not satisfied that a lease was an incumbrance to these parties. (4) of sec. 269-I of the Act. In support of this contention counsel invited our attention to the following observations in DISTRICT BANK LIMITED V. WEBB and OTHERS (1958) 1 ALL E. R. 126-"in the first place I am not satisfied that a lease was an incumbrance to these parties. It is true that in certain circumstances a lease may be regarded as an incumbrances but it seems to me that an incumbrance normally is something in the nature of a mortgage and not something in the nature of a lease or tenancy. "these observations themselves Suggest that in certain circumstances a lease may be regarded as an encumbrance. In the facts of that case the lease was executed on 25/03/1952 whereby Mr. and Mrs. Webb demis- ed the property to Mr. George Edward Webb and his partner Mr. Donald Martin for a period of 21 years. On 28/07/1954 a Memorandum was executed by Mr. and Mrs. Webb to secure the latters bank account. On 14/10/1954 another Memorandum was executed to secure Mrs. Webbs bank account. On 8/11/1954 the property was conveyed by Mr. and Mrs. Webb for * 4 200 which contained a recital that the vendors are seized in unincumbered fee simple in possession upon trust for sale of the property in question. The contention raised was that by reason of this recital in the conveyance Mr. and Mrs. Webb were estopped from setting up the existence of the lease. The question which arose for consideration was whether the representation contained in the conveyance created an estoppel. The context in which the recital was used in the conveyance led the Court to observe that the lease of 25/03/1952 was not intended to be covered by the expression incumbrance used in the recital in the conveyance deed. The decision therefore cannot be read as laying down a broad proposition that a lease or a tenancy can never be an encumbrane. In our view the question whether a lease or a tenancy is ail encumbrance must depend on the context and setting in which the said expression is used. ( 14 ) THE contention urged on behalf of the petitioners that tenancy right is not an encumbrance may be examined jurisprudentially. Salmond on Jurisprudence 12 Edition. In our view the question whether a lease or a tenancy is ail encumbrance must depend on the context and setting in which the said expression is used. ( 14 ) THE contention urged on behalf of the petitioners that tenancy right is not an encumbrance may be examined jurisprudentially. Salmond on Jurisprudence 12 Edition. at page 241 observes as under:"rights may be divided into two kinds distinguished by the civilians as jura in re propria and jura in re aliena. The latter may also be conveniently termed encum- brances if we use that term in its widest permissible sense. A right in re alicna or encumbrance is one which limits or derogates from some more general right belonging to some other person in respect of the same subject matter. All others are jura in re propria. . . . . . The terms jus in re propria and jus in re aliena were devised by the commentators on the civil law and are not to be found in the original source. Their significance is clear. The owner of a chattel has jus in re propria a right over his own property; the pledgee or other encumbrancer of it has jus in re aliena a right over the prop- erty of someone else. There is nothing to prevent one encumbrance from being itself subject to an- other. Thus a tenant may sublet; that is to say he may grant a lease of his lease and so confer upon the sub-lessee a jus in re aliena of which the immediate subject matter is itself merely another right of the same quality. The right of the tenant in such a case is dominant with regard to that of the land owner but servant with regard to that of the sub-lessee. Proceeding further on page 243 the learned author further observes:"the chief classes of encumbrances are four in number namely Leases Servitudes Securities and Trusts. A lease is the encumbrance of property vested in one man by a right to the possession and use of it vested in another. "these observations leave no doubt in our minds that the expression encumbrance in its wider connotation takes within its fold the right of a tenant to occupy the property of another under an agreement of lease. A lease is the encumbrance of property vested in one man by a right to the possession and use of it vested in another. "these observations leave no doubt in our minds that the expression encumbrance in its wider connotation takes within its fold the right of a tenant to occupy the property of another under an agreement of lease. ( 15 ) THE scheme of Chapter XX-A with which we are concerned clearly shows that once the competent authority initiates proceedings for the acquisition of any immovable property a notice is required to be published in the Official Gazette and individual notices are required to be served on the transferor the transferee the person in occupation of the property and every other person who is interested in the property. The recipients of such notices are entitled to file obje- ctions and the statute enjoins upon the competent authority to accord them a hearing. After the competent authority has heard the objectors he has to dispose of each objection in writing by stating the reasons in support of his decision. If the competent authority then decides to acquire the property in question after that decision becomes final he is required to call upon the occupant to surrender or deliver possession of the property to him or his delegate. If the occupant fails to comply with his requisition he may be evicted by use of such force as is considered necessary. The law therefore clearly envisages the removal of the occupant from the acquired property before the property vests in the Central Government. It is in this setting that the Court has to consider the effect of the vesting in the Central Government. The word vest is one of variable import and does not have a fixed connotation. It would take colour from the context in which it is used in a given piece of legislation. In some cases it may convey the mean- ing that the vesting is in title and in some other cases the vesting may be in possession only. In the context in which the word is used in sub-sec. (4) of sec. 269-I have not the slightest hesitation in con- cluding that the vesting in the Central Government is absolute that is to say free from all encumbrances. In the context in which the word is used in sub-sec. (4) of sec. 269-I have not the slightest hesitation in con- cluding that the vesting in the Central Government is absolute that is to say free from all encumbrances. It is only after all interests-propri- etary as well as possessory are extinguished on the acquisition of the property that the property vests absolutely in the Central Government free from all encumbrances. In the context encumbrances must be given the widest possible meaning and would certainly include leasehold or tenancy rights. Section 16 of the Land Acquisition Act which employs a similar phraseology reads as under:" When the Collector has made an award under sec. 11 he may take possession of the land which shall thereupon vest absolutely in the Government free from all encumbrances. "in COLLECTOR OF BOMBAY V. NASSERVANJI RATANJI MISTRY A. I. R. 1955 S. C. 298 the Supreme Court after examining the scheme of the statute which is similar to chapter XX-A of the Act explained the meaning of the expression encumbrance in the following words:"under sec. 16 when the Collector makes an award she may take possession of the land which shall thereupon vest absolutely in the Government free from all encumbrances. The word encumbrance in this section can only mean interests in respect of which a compensation was made under sec. 11 or could have been claimed. "while explaining the term interest Their Lordships observed as under:-"in its normal acceptation interest means one or more of those rights which go to make up ownership. It with include for example mortgage lease charge easement and the like. "these observations therefore make it crystal clear that the vesting in the Government of the acquired land is absolute and free from all encumbrances such as mortgage lease charge easement and the like. Again in FRUIT AND VEGETABLE MERCHANTS UNION V. DELHI IMPROVEMENT TRUST A. I. R. 1957 S. C. 344 while referring to secs. 16 and 17 of the Land Acquisition Act Their Lordships of the Supreme Court observed as under:-"on the other hand secs. 16 and 17 of the Land Acquisition Act (Act I of 1894) provide that the property so acquired upon the happening of certain events shall vest absolutely in the Government free from all encumbrances. In the cases contemplated by secs. 16 and 17 of the Land Acquisition Act (Act I of 1894) provide that the property so acquired upon the happening of certain events shall vest absolutely in the Government free from all encumbrances. In the cases contemplated by secs. 16 and 17 the property acquired becomes the property of the Government without any conditions or limitations either as to title or possession. The Legislature has made it clear that the vesting of the property is not for any limited purpose or limited duration. "a Division Bench of this Court in MANGALJIBHAI ROOPJIBHAI V. STATE. (1972) 13 G. L. R. 649 AT 656 AFTER REPRODUCING SEC. 53 OF THE BOMBAY TOWN PLANNING ACT (XXVII OF 1955) observed as under:"when lands required by the local authority vest absolutely in the local authority free from all encumbrances under sec. 53 clause (a) all persons in occupation of such lands would cease to be entitled to occupy the same. Such persons would have to be evicted from the lands and possession of the lands would have to be handed over to the local authority. "this in the opinion of the Court would be the result as under sec. 53 all lands required by the local authority must vest absolutely in the local authority free from all encumbrances. ( 16 ) WE do not consider it necessary to multiply authorities because it is plain to us that the context and setting in which the phrase is used in sub-sec. (4) of sec. 269-I envisages absolute vesting in title free from all encumbrances that is extinction of interests of all persons interested in the property including tenants in occupation thereof. ( 17 ) WE have already pointed out earlier that Chapter XX-A was inserted in the Act on the basis of the recommendations made by the Wanchoo Committee in its interim report submitted sometime in December 1970. That Committee was appointed inter alia to recommend concrete and effective measures to unearth black money and prevent its proliferation through further evasions to check avoidance of tax through various devices and to reduce tax arrears. In Chapter 2 of its final report submitted in December 1971 the Committee observed as under. :"black money and tax evasion which go hand in hand have also the effect of seriously undermining the equity concept of taxation and warping its progressive- ness. In Chapter 2 of its final report submitted in December 1971 the Committee observed as under. :"black money and tax evasion which go hand in hand have also the effect of seriously undermining the equity concept of taxation and warping its progressive- ness. Together they throw a greater burden on the honest taxpayer and lead to economic inequality and concentration of wealth in the hands of the unscrupulous few in the country. In addition since black money is in a way cheap money too because it has not suffered reduction by way of taxation there is a natural tendency among those who possess it to use it for lavish expenditure and conspic- uous consumption. The existence of black money has to a large extent been responsible for the inflationary pressures shortages rise in prices and economically unhealthy speculation in commodities. Part of black money which is not utilised in lavish consumption goes into the purchase of bullion precious stones and other valuable articles. This in turn encourages large scale smuggling of gold etc. into the country causing considerable strain on its already tight balance of pay- ments position. Further by keeping their in gotten gains outside the country as deposits in foreign banks or with their own associate concerns whether earned in deals abroad or transferred out of India through clandestine channels the tax evaders deprive the country of a part of its wealth which could have been put to productive use. "dealing with the question of checking under valuation of immovable properties the Committee made the following observations in paragraph 2. 194 of its report:"2. 194. Evasion of direct taxes in our country is closely linked with the practice of undervaluation of properties by the taxpayers whether in the transfer docu- ments relating to immovable properties or in their returns of net wealth or when explaining the source of cost of construction. The absence of a proper valuation machinery in the Income-tax Department helps the tax dodgers in more than one way. It facilitates utilisation of unaccounted money in investments. It also provides scope for reduction of liability to direct taxes whether on income capital gains wealth or gifts. Due to the opportunities available for understating the value of assets in the guise of honest difference of opinion tax-dodgers are able to evade the penal consequences and merrily continue their game of tax evasion. It also provides scope for reduction of liability to direct taxes whether on income capital gains wealth or gifts. Due to the opportunities available for understating the value of assets in the guise of honest difference of opinion tax-dodgers are able to evade the penal consequences and merrily continue their game of tax evasion. "proceeding further the Committee in paragraph 2. 206 of its report pointed out that one of the convenient devices frequently adopted for secretly utilising black money is to invest it in immovable property by understating the purchase price. This not only saves stamp duty but also results in evasion of income-tax and wealth-tax in the hands of the investor while the vendor escapes his proper liability to capital gains tax. In addition it creates a fresh nucleus of black money in the hands of the vendor which leads to its proliferation in the economy. The Committee therefore pointed out that it was for this reason im- pelled to recommend in its interim report compulsory acquisition of immovable properties in certain cases where the sale deeds do not reflect the fair market value. The Committee felt that such a measure would act as an effective deterrent and curb the tendency to under- slate the consideration in documents relating to transfer of immovable properties. It is in this context that Chapter XX-A came to be inserted in the Act by the Taxation Laws (Amendment) Act 1972 with effect from 15/11/1972 The constitutional challenge to the provisions of Chapter XX-A of the Act must be viewed in this background. ( 18 ) BEFORE we proceed to deal with the constitutional challenge to the provisions of Chapter XX-A of the Act it would be advantageous to refer to the relevant entries in the Seventh Schedule to which our attention was drawn by the learned counsel for the petitioners. Entry 82 in List I (Union List) reads:"taxes on income other than agricultural income. "entry 18 in List II (State List) reads as under:"land that is to say rights in or over land land tenures including the relation of landlord and tenant the collection of rents; transfer and alienation of agri- cultural land; land improvement and agricultural loans; colonisation. "entry 42 in List III (Concurrent List) provides for acquisition and requisitioning of property. "entry 18 in List II (State List) reads as under:"land that is to say rights in or over land land tenures including the relation of landlord and tenant the collection of rents; transfer and alienation of agri- cultural land; land improvement and agricultural loans; colonisation. "entry 42 in List III (Concurrent List) provides for acquisition and requisitioning of property. It was contended that if the Court takes the view that the newly added Chapter XX-A also envisages acquisition of tenancy rights its constitutionality would be open to challenge on the grounds: (i) it violates Articles 19 (1) (f) and 31 (2) as they then stood; (ii) it transgresses the field occupied by Entry 18 List II; (iii) it is ultra vires Article 14 inasmuch as the protection accorded to tenants against eviction by the Bombay Rent Act is sought to be taken away from this class of occupants while tenants of other properties continue to receive the same protection; (iv) it is ultra vires Article 31 (2) as the compensation provided is illusory and (v) it suffers from the vice of excessive delegation. ( 19 ) ARTICLE 19 (1) (f) as it then stood conferred on all citizens the right to acquire hold and dispose of property. Clause (S) of Article 19 however limited the operation of the said fundamental right by providing that nothing in sub-clause (f) of clause (1) of Article 19 shall affect the operation of any existing law insofar as it imposes or prevents the state from making any law imposing reasonable restrictions on the exercise of any of the rights conferred by the said sub-clause either in the interest of the general public or for the protection of the interests of any scheduled tribe. Article 31 (as amended by the twentyfifth amendment with effect from 20/04/1972 provided for compulsory acquisition of property before its repeal with effect from 20/06/1979 by the 44th Amendment Act 1978 It read as under:" (1) No person shall be deprived of his property save by authority of law. Article 31 (as amended by the twentyfifth amendment with effect from 20/04/1972 provided for compulsory acquisition of property before its repeal with effect from 20/06/1979 by the 44th Amendment Act 1978 It read as under:" (1) No person shall be deprived of his property save by authority of law. (2) No property shall be compulsorily acquired save for a public purpose and save by authority of a law which provides for acquisition or requisitioning of the pro- perty for an amount which may be fixed by such law or which may be determined in accordance with such principles and given in such manner as may be specified in such law: and no such law shall be called in question in any Court on the ground that the amount so fixed or determined is not adequate or that the whole or any part of such amount is to be given otherwise than in cash. . . . . (2b) Nothing in sub-clause (f) of clause (1) of Article 19 shall affect any such law as is referred to in clause (2) xxx xxx xxx xxx xxx (5) Nothing in clause (2) shall affect (b) the provisions of any law which the State may hereafter make- (i)for the purpose of imposing or levying any tax or penaltywe may next refer to Article 31-C as it then stood:"notwithstanding anything contained in Article 31 no law giving effect to the policy of the State towards securing the principles in clause (b) or clause (c) of Article 39 shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by Article 14 Article 13 or Article 31 and no law containing a declaration that it is for giving effect to such policy shall be called in question in any Court on the ground that it does not give effect to such policy; "the latter part of this Article was declared invalid by the Supreme Court in KESHAVANANDA BHARTI V. THE STATE OF KERALA A. I. R. 1973 S. C. 1481 Article 39 which forms part of the Directive Principles of State Policy gives a mandate to the State to direct its policy towards securing inter alia: (b) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good; and (c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment. ( 20 ) MR. Raval the learned counsel for the petitioners submitted that the provisions in Chapter XX-A insofar as they seek to deprive sitting tenants of their right to occupy the demised property fall within the scope of Entry 18 of List II inasmuch as the said provisions seek to encroach upon the relationship of landlord and tenant in respect of the acquired properly. We find it difficult to accept this contention. Chapter XX-A introduces a deterrent by way of acquisition of im- movable property in cases of undervaluation of property to counteract evasion of tax. It makes no provision to regulate the relationship of landlord and tenant. We find it difficult to accept this contention. Chapter XX-A introduces a deterrent by way of acquisition of im- movable property in cases of undervaluation of property to counteract evasion of tax. It makes no provision to regulate the relationship of landlord and tenant. Like the Land Acquisition Act it also provides for acquisition of interest of all persons interested in the property which is the subject matter of acquisition. It seeks to acquire all interests in the property including the interests of tenants so that the property can ultimately vest absolutely in the Central Government free from all encumbrances. The provisions of Chapter XX-A therefore can by no stretch be said to bear on the relationship of landlord and tenant and therefore it is difficult to uphold the argument that the said provisions encroach upon the field covered by Entry 18 of List II in the Seventh Schedule to the Constitution. In this view that we take it is not nece- ssary for us to examine the submission of Mr. Shelat learned counsel for the revenue that Entry 18 of List II merely governs the relationship of landlord and tenant in respect of open lands and not buildings and that such relationship insofar as buildings are concerned may be governed by Entries 6 or 7 of List III in the Seventh Schedule to the Constitution. . ( 21 ) ENTRY 82 in List I empowers Parliament to levy taxes on income- other than agricultural income. Income-tax therefore is a tax on income. Now there are three stages in the imposition of tax namely (i) declaration of liability; (ii) assessment of tax; and (iii) recovery of tax. The last would include coercive measures for the realisation of tax from those who are unwilling to pay tax which is legally due from them. One of the methods of disciplining such reluctant tax-payers is imposition of penalty. Undervaluation of immovable property at the time of transfer is one of the causes which has led to the generation of black money. The large scale evasion of tax by understating the value of the immovable property transferred had to be plugged by far more drastic measures as the existing penal provisions in the Act were found to be inadequate. The Wanchoo Committee in its interim report therefore recommended realisation of penalty to the extent stated in sub-sec. (4) of sec. The large scale evasion of tax by understating the value of the immovable property transferred had to be plugged by far more drastic measures as the existing penal provisions in the Act were found to be inadequate. The Wanchoo Committee in its interim report therefore recommended realisation of penalty to the extent stated in sub-sec. (4) of sec. 269-J of the Act by acquisition of the immovable property so transferred. The provisions of Chapter XX-A were therefore introduced for securing the twin objective of curbing generation of black money and evasion on tax by understating the value of the property in the instrument of transfer. The scheme of Chapter XX-A is essentially to penalise the tax-dodgers who seek to evade payment of tax by resorting to the dubious method of undervaluing the property transferred under the instrument of transfer. The said Chapter was introduced in the Act to cure the economy of the State by operating upon the cancerous growth which is destroying every live tissue and fibre of the Nation by curbing black money and tax evasion which have the pernicious effect of seriously undermining the equity concept of taxation and warping its progressiveness. That is why a Division Bench of this Court in COMMISSIONER OF INCOME-TAX V. VIMLABEN BHAGWANDAS PATEL (1979) 118 I. T. R. 134 concluded that the nature of the power conferred by the said provisions was penal and proceedings were quasi-criminal. That is because sub-sec. (4) of sec. 269-J seeks to forfeit the difference between the market value of the property at the date of publication of notice under sec. 269-D (1) and the compensation payable under sec. 269 to the Government by way of penalty. The primary purpose of the introduction of Chapter XX-A under the Act is therefore to penalise the tax-dodgers who by resorting to the dubious method of undervaluing the immovable property transferred under the instrument of transfer seek to evade the payment of tax. Acquisition of immovable property which is the subject matter of undervaluation is therefore an integral part of the said scheme of imposition of penalty introduced in the Act with a view to securing the twin objectives of curbing genera- tion of black money and preventing evasion of tax. In pith and substance therefore the provisions in Chapter XX-A are intended to penalise the tax-dodgers. In pith and substance therefore the provisions in Chapter XX-A are intended to penalise the tax-dodgers. As held by the Supreme Court in THE KANNAN DEVAN HILLS PRODURE CO. LTD. V. STATE OF KERALA A. I. R. 1972 S. C. 2301 AND STATE OF KARNATAKA V. RANGANATHA REDDY A. I. R. 1978 S. C. 215 the Court must look to the pith and substance of the legislation to determine its validity. If in pith and substance the legislation belongs to Entry 82 in List I acquisition of property to achieve the avowed object of Parliament will not take it out of the purview of the said entry. We are therefore of the opinion that the newly added Chapter XX-A clearly falls within the purview of Parliament that is is squarely covered by Entry 82 in List I of the Seventh Schedule. That being so it is not required to satisfy the requirements of Article 31 (2) of the Constitution in view of the overriding effect of clause (5) (b) (i) thereof. ( 22 ) WE may now proceed to examine the validity of the provisions in the said Chapter on the assumption that they cover two distinct subjects namely: (i) acquisition of immovable property and (ii) realisa- tion of penalty. The first falls within the ambit of Entry 42 in List III- Acquisition and requisitioning of property and the second is covered by Entry 82 in List I. Parliament was indisputably competent to enact the impugned legislation even if it was covered by the aforesaid two entries. If Parlia ment had the power to legislate on both the subjects covered by the impugned provisions it could as a matter of legislative arrange- ment incorporate the provisions relating to both the subjects in a single statute. Therefore merely because provisions concerning acquisition of immovable property are incorporated in the Act their validity cannot be doubted on the ground that they are outside the scope of Entry 82 in List I. ( 23 ) BEFORE the repeal of Article 19 (1) (f) and Article 31 by the Forty-Fourth Amendment Act 1978 the right to acquire hold and dis- pose of property was a fundamental right conferred on every citizen of this country. The acquisition of private property could be effected by law which provided for payment of compensation. The acquisition of private property could be effected by law which provided for payment of compensation. The obligation to pay just compensation was considered to be an incident of the power of compulsory acquisition both under common law as well as under eminent domain. Our Constitution as it was first enacted raised this obligation to the status of a fundamental right by forbidding acquisition of property even for a public purpose except on payment of compensa- tion: (vide Article 31 (2) of the Constitution ). By the Twenty-Fifth Amendment which amended Article 31 (2) with effect from 20/04/1972 this concept regarding payment of compensation underwent a radical change. Firstly the word compensation was substituted by word amount and the question of adequacy of the amount payable for acquisition of property was made not justiciable. Secondly by the introduction of clause (2b) in Article 31 it was provided that the law enacted in accordance with the requirements of clause (2) of Article 31 will not be required to answer the challenge that it offends Article 19 (1) (f) of the Constitution. Article 31 (5) provided that nothing in clause (2) shall affect the provisions of any law which the State may hereafter make for the purpose of imposing or levying any tax or penalty. If the legislation falls solely within the purview of Entry 82 of List I it will not be required to satisfy the conditions of Article 31 (2) of the Constitution. We are however presently examining the challenge on the basis that the newly introduced Chapter in the Act covers two distinct subjects namely acquisition of immovable property and realisation of penalty. In other words we are examining the validity of the said provisions on the premise that it is partly a law providing for the acquisition of immovable property which is the subject matter of transfer the consideration whereof has been under- stated in the instrument of transfer. That is to say we are examining the validity of its provisions on the premise that Article 31 (5) has no application. That is to say we are examining the validity of its provisions on the premise that Article 31 (5) has no application. Article 31 (2) after the Twenty-Fifth Amendment says that no property shall be compulsorily acquired or requisitioned save for public purpose and save by authority of a law which provides for acquisition or requisitioning of the property for an amount which may be fixed by such law or which may be determined in accordance with such principles and given in such manner as may be specified in such law; and no such law shall be called in question in any Court on the ground that the amount so fixed or determined is not adequate or that the whole or any part of such amount is to be given otherwise than in cash. Put in positive terms Article 31 (2) provides that private property can be compulsorily acquired by authority of law provided the acquisition is for a public purpose and the law provides for payment of an amount which is either fixed by law or is to be determined in accordance with such principles and given in such manner as is specified by such law. The law shall not be called in question in any Court on the ground that the amount so fixed or determined is not adequate. In other words private property can be expropriated for a public purpose provided the law under which it is acquired provides for the payment of an amount which is fixed by law or which is of be determined in accordance with some principle stated by such law. As pointed out by the Supreme Court in. THE STATE OF KARNATAKA V. RANGANATHA REDDY A. I. R. 1978 S. C. 215 the overwhelming view of the majority of Judges in Keshavananda Bharatis case (supra) was that the amount payable for the acquired property either fixed by the legislature or determined on the basis of principles engrafted in the law of acquisition cannot be wholly arbitrary or illusory notwithstanding the amendment of Article 31 (2) by the Twenty-Fifth Amendment. (The effect of the valid part of Article 31-C inserted by the Twenty-Fifth Amendment was however not taken into consideration while making the aforesaid observation ). (The effect of the valid part of Article 31-C inserted by the Twenty-Fifth Amendment was however not taken into consideration while making the aforesaid observation ). ( 24 ) TWO questions therefore arise for consideration namely: (i) does the newly added Chapter in the Act seek to compulsorily acquire immovable property for a public purpose; and (ii) whether the amount payable for the acquired property fixed by the impugned legislation is illusory as contended by the learned counsel for the petitioners. We need not reiterate the reasons which impelled the Wanchoo Committee to make the recommendations it made in its interim report submitted to the Government sometime in December 1970. It was on the basis of the said recommendations that the Taxation Laws (Amendment) Act 1972 inserting Chapter XX-A in the Act came to be passed. The purpose and object of this enactment is to curb the generation of black money which has permeated the whole fabric of our society and to prevent tax evasion by understating the value of the immovable property transferred under the instrument of transfer. Before Chapter XX-A was inserted in the Act provision for imposition of penalty made in the Act was found to be inadequate. That is why the Wanchoo Committee thought that drastic powers were required to curb the menace of tax evasion through undervaluation of real estate. If this was the purpose for the insertion of Chapter XX-A in the Act can it be said that it was not introduced to serve a public purpose ? We have no hesitation therefore in coming to the conclusion that provision for compulsory acquisition of immovable property in Chapter XX-A of the Act is for a public purpose. ( 25 ) THE scheme of Chapter XX-A which we have considered in extenso earlier discloses that Parliament desired to impose a penalty and sought to realise it in the manner set out in sub-sec. (4) of sec. 269 of the Act. That sub-section seeks to forfeit to the Government by way of penalty the difference between the market value of the property at the date of publication of notice under sub-sec. (1) of sec. 269-D and the compensation payable under sub sec. (1) of sec. 269-J. The realisation of this deemed penalty throws a cloak of immunity around the transferee against being penalised under clause (iii) of sub-sec. (1) of sec. (1) of sec. 269-D and the compensation payable under sub sec. (1) of sec. 269-J. The realisation of this deemed penalty throws a cloak of immunity around the transferee against being penalised under clause (iii) of sub-sec. (1) of sec. 271 of the Act or clause (iii) of sub-sec. (1) of sec. 181 of the Wealth-tax Act. On a conjoint reading of sub-sections (1) and (4) of section 269-J it becomes clear that in effect and substance full market value of the acquired property at the date of publication of notice under sub-section (1) of sec. 269-D (as it is treated as analogous to sec. 4 of the Land Acquisition Act) is paid but the amount in excess of the amount fixed under sub-section. (1) is actually forfeited or realised by way of penalty. Since the penalty is recovered in this manner from the transferee the transferee is clothed with immunity to avoid double jeopardy. In other words out of the gross amount which is payable by way of compensation under the Land Acquisition Act on the premise that publication of notice under sub- section (1) of sec. 269-D of the Act is akin to a notification issued under sec. 4 of the Land Acquisition Act one part thereof as determined by sub-section (1) of sec. 269-J is directed to be paid as compensation and the residue is directed by sub-section (4) to be forfeited as penalty. It is true that so far as the latter part that is the residue is concerned it is like paying by one hand and recovering by the other. If the residue was not realised as penalty in this manner the transferee would have to face penalty proceedings under sec. 271 of the Act and sec. 18 of the Wealth-tax Act. Since there is an automatic realisation of penalty under the scheme of Chapter XX-A the law grants immunity to the transferee so that he may not be vexed twice. The transferor will still have to face the music under sec. 52 of the Act. Viewed in this perspective it is difficult to say that the compensation payable under Chapter. XX-A is illusory. Even if this approach is not correct and sub-section (1) of sec. 269-J is read in isolation as was done by the learned counsel for the petitioners it is difficult to say that the compensation determined by the statute is illusory. Viewed in this perspective it is difficult to say that the compensation payable under Chapter. XX-A is illusory. Even if this approach is not correct and sub-section (1) of sec. 269-J is read in isolation as was done by the learned counsel for the petitioners it is difficult to say that the compensation determined by the statute is illusory. We are therefore of the opinion that even if the provisions relating to acquisition of property in Chapter XX-A pertain to the field covered by Entry 42 of List III the acquisition being for a public purpose and the amount stated in sub-section (1) of sec. 269-J not being illusory the requirements of clause (2) of Article 31 as it stood after the Twenty-Fifth Amend- ment and before its deletion by the Forty-Fourth Amendment were clearly satisfied. ( 26 ) IT was however contended by the learned counsel for the petitioners that Chapter XX-A nowhere expressly provides for the payment of compensation to the tenants of the property under acquisi- tion. He submitted that as the primary object of Chapter XX-A is to penalise tax-dodgers innocent persons such as sitting tenants who are not parties to the instrument of transfer cannot be penalised by depriving them of their right to occupy the said property. He further submitted that by acquiring the interests of tenants in the immovable property in question a different procedure for their eviction from the property is sought to be followed giving a go bye to the normal procedure under the Bombay Rent Act and to that extent Chapter XX-A is violative of Article 14 of the Constitution. There is no merit in any of these submissions. In the first place the scheme of Chapter XX-A clearly seeks to acquire interest of all persons in the property which is the subject matter of acquisition. Sub-section (2) of sec. 269-B in terms provides for service of individual notices on persons in occupa- tion of the property and on every person known to the competent authority to be interested in the property with a view to enabling him to file objections against the proposed acquisition. That means that the occupants or tenants have a right to object to the acquisition of the property occupied by them. Again under sec. That means that the occupants or tenants have a right to object to the acquisition of the property occupied by them. Again under sec. 269-F notice of the date and place of hearing has to be given to every person who has objected to the proposed acquisition. That means the occupants of the property proposed to be acquired are entitled to a hearing if they oppose the acquisition. It is only after hearing the objectors and after deciding each objection on its merit for reasons to be stated in writing that the competent authority can decide to acquire the property. That decision is subject to two appeals. It is only after the decision of the competent authority becomes final that persons in occupation of the property can be evicted therefrom in the manner set out in sec. 269 of the Act. After actual possession of the immovable property in question is obtained under sub-section (4) of that section the property vests absolutely in the Central Government free from all encumbrances. We have already pointed out earlier that the words free from all encumbrances suggest that all interests in the property must stand extinguished so that the vesting in the Central Government is complete and absolute. Sub-section (1) of sec. 269-J states the amount to be paid by way of compensation for the acquired property. The scheme is very akin to the scheme of the Land Acquisition Act. It is therefore difficult to agree with the submission that the Act does not provide for payment of compensation to occupants of the acquired property. There is nothing in the provisions of Chapter XX-A to conclude that the law does not envisage payment of compensation from the total amount stipulated in sub-sec. (1) of sec. 269-J to persons interested in the property other than the transferee. Since all interests in the property are sought to be extinguished every person having some right or interest in the property is entitled to compensation for the extinction or acquisition of that right. Therefore the submission that the newly added Chapter does not expressly or by implication provide for payment of compensation to the tenants of the property is clearly without merit. ( 27 ) IT is indeed true that the real culprits are those who are parties to the instrument of transfer. Therefore the submission that the newly added Chapter does not expressly or by implication provide for payment of compensation to the tenants of the property is clearly without merit. ( 27 ) IT is indeed true that the real culprits are those who are parties to the instrument of transfer. They are the persons who have deliberately understated the value of the immovable property transferred under the slid instrument with a view to evading tax. The newly added Chapter also seeks to penalise the transferee who has purchased the property by resorting to such a dubious method. So far as the trans- feror is concerned he cannot be penalised under the scheme of Chapter XX-A but he will certainly have to face penalty proceedings under sec. 52 of the Act. The occupants or tenants of the property are undoubtedly innocent persons but in order to achieve the object of curbing generation of black money and preventing evasion of tax individual interests have to be sacrificed in public interest. Unless all interests in the property are acquired the scheme of Chapter XX-A would be a total failure. If the interest of tenants were to be excluded from the scheme of acquisition under Chapter XX-A it would be easy to defeat the provisions of the Chapter by introducing a tenant who is a friend or relative of the transferee in the property before the instru- ment of transfer is registered. In that case if the rent fixed under the tenancy agreement is low it would be inexpedient for the Central Government to acquire the property with the interest of the tenant subsisting therein. That would completely defeat the scheme of Chapter XX-A. of course in that case after the property is owned by the Central Government eviction proceedings can be taken under the ordinary law de 11ors the Act but it would be time consuming. It is for this reason that the scheme of Chapter XX-A provides for the acquisition of all interests in the immovable property in question. Besides the interest of innocent persons is not extinguished without payment of compensation. They would be entitled to compensation from the amount stipulated under sub-sec. (1) of sec. 269-J of the Act. Besides the proviso to sub-sec. (4) of sec. Besides the interest of innocent persons is not extinguished without payment of compensation. They would be entitled to compensation from the amount stipulated under sub-sec. (1) of sec. 269-J of the Act. Besides the proviso to sub-sec. (4) of sec. 269-I clearly states that the transferee shall not be discharged from liability in respect of encumbrances and such liability can be enforced against him by a separate suit for damages. In the circumstances it is difficult to hold that because the interest of innocent persons is sought to be expropriated the provisions of Chapter XX-A ate beyond the legislative competence of Parliament. ( 28 ) ONCE the interest of a tenant is compulsorily acquired his interest in the subject matter of acquisition comes to an end and he is liable to be evicted from the property. He is then entitled to compensation from the total amount stipulated in sub-sec. (1) of sec. 269 of the Act. Once his interest is extinguished he has no interest as a tenant in the property and therefore his eviction from the property cannot be compared with the eviction of a tenant whose interest has not been compulsorily acquired. The Land Acquisition Act also provides for acquisition of all interests and vesting of the property in Government free from encumbrances. Under that Act also once the interest of the tenants in the acquired property is extinguished he is liable to be evicted from the said property and his only right is to claim compensation. Even under the provisions of the Bombay Rent Act tenants of property belonging to the State Government stand on a different footing and their eviction is not regulated by the provisions of the Rent Act. Therefore merely because they are sought to be evicted under the scheme of Chapter XX-A on their interest in the property having been acquired it cannot be said that they are discri- minated in contravention of Article 14 of the Constitution in the matter of their eviction from the acquired property. We therefore do not see any merit in the contention based on Article 14 of the Constitution. ( 29 ) ON the question of constitutional validity of Chapter XX-A of the Act reliance was placed by the revenue on three decisions viz. (1) MAHAVIR METAL WORKS (P) LTD. We therefore do not see any merit in the contention based on Article 14 of the Constitution. ( 29 ) ON the question of constitutional validity of Chapter XX-A of the Act reliance was placed by the revenue on three decisions viz. (1) MAHAVIR METAL WORKS (P) LTD. V. UNION OF INDIA (1974) 95 I. T. R. 197 (2) BASUDEV SAKU V. UNION OF INDIA (1976) 102 I. T. R. 572 AND (3) TUBE MILL (INDIA) LTD. V. INSPECTING ASSISTANT COMMISSIONER OF INCOME-TAX (1980) 122 I. T. R. 72. In the first case the Delhi High Court held that the acquisition of property under Chapter XX-A was for a public purpose within the meaning of Article 31 (2) that the said provisions were neither discriminatory nor did they impose any unreasonable restriction on the right to hold property and that in any view they were protected by the umbrella of Article 31-C of the Constitution inasmuch as on a liberal construction of clauses (b) and (c) of Article 39 it is clear that the impugned legislation fulfils the object of the said two clauses. It further held that if some innocent persons are hit it cannot be helped because this was inevitable to achieve the main objective of the impugned legislation. In the second case the Orissa High Court followed the decision of the Delhi High Court and invoking the pith and substance test held that the impugned legislation fell within the ambit of Entry 82 of List I of the Seventh Schedule. In the third case a learned Single Judge of the Calcutta High Court affirmed the view expressed by the Orissa High Court. These three decisions therefore support our conclusion so far as the validity of the impugned legislation is concerned. ( 30 ) IT was faintly submitted by the learned counsel for the petiti- oners that Chapter XX-A insofar as it provides for acquisition of tenancy rights suffers from the vice of excessive delegation without proper guidelines. We see no substance in this contention. We have already pointed out earlier that in order to effectively implement the scheme to deter tax-dodgers from undervaluing the property sought to be transferred it was absolutely necessary to acquire all interests so that the property may ultimately vest absolutely in the Central Government free from all encumbrances. We see no substance in this contention. We have already pointed out earlier that in order to effectively implement the scheme to deter tax-dodgers from undervaluing the property sought to be transferred it was absolutely necessary to acquire all interests so that the property may ultimately vest absolutely in the Central Government free from all encumbrances. At times while implementing a legislative policy which subserves a public purpose individual interest have to be sacrificed. In such circumstances if innocent persons have to suffer that cannot be helped. The provisions of Chapter XX-A outline the requirements for the exercise of power of acquisition by the com- petent authority. As pointed out earlier if those jurisdictional facts do not exist the power cannot be exercised. Therefore for the exercise of power of acquisition guidelines have been indicated with sufficient clarity. But it was said that under sec. 269-I after the order for acqui- sition becomes final the competent authority may order the person in possession to surrender or deliver possession of the acquired property which shows that unfettered discretion is conferred on the competent authority to order eviction. We do not think that the use of the word may leaves any discretion in the competent authority to order eviction. It is not a matter left to the sweet will of the competent authority but the legislature has advisedly used the word may to cover situations where it may not be necessary to issue a notice for example in the case of an occupant who voluntarily hands over possession before notice is issued. If however the property is in occupation of a tenant the competent authority is bound to resort to this provision to obtain possession from him because only then can the vesting be absolute and free from all encumbrances. To complete the acquisition the compe- tent authority must obtain actual possession of the property from all those who are in possession thereof and he has no option in the matter. There is therefore no merit in the contention that the use of the word may in sec. 269-I confers a discretion without guidelines in the competent authority in the matter of eviction of the occupants from the said property. There is therefore no merit in the contention that the use of the word may in sec. 269-I confers a discretion without guidelines in the competent authority in the matter of eviction of the occupants from the said property. ( 31 ) THAT brings us to the question whether the impugned action to acquire the property was contrary to the instructions issued by the Central Board of Direct Taxes which are binding on the revenue under sec. 119 of the Act. It is contended that instructions were issued to desist from acquiring tenanted properties to avoid hardship to the tenants and their families. In the additional affidavit filed on behalf of the revenue it is stated that no such instructions have been issued but guidelines have been laid down that acquisition proceedings should be restricted to properties of comparatively large value which do not have many tenants. It is further stated that as the property in question did not have many tenants it was decided to invoke the powers of acquisition in the circumstances of the case. There is nothing on the record to come to the conclusion that instructions have been issued not to acquire any tenanted property and hence the contention must fail. ( 32 ) IT was lastly contended that the decision to acquire the pro- perty was mala fide inasmuch as it was to help a prominent Congress leader to secure possession of Nazarbaug Palace wherein the income-tax offices were presently housed. It is said that the said leader who wielded considerable influence with the powers that be in the Central Govern- ment pressurised the authorities to acquire the property so that on getting possession from the tenants the income-tax offices may be shifted therein and he may receive possession of his buildings from the said department. This allegation has been described as imaginary and ridiculous by the Under Secretary Central Board of Direct Taxes in paragraph 26 of his affidavit-in-reply. He has further stated that even if the possession of the acquired property is received it will not be sufficient to house all the offices which are presently situated in Nazar- baug Palace building and therefore the question of vacating that property does not arise. Except making certain allegations in paragraph 11 (P) of the petition which have been emphatically denied the petiti- oners have not placed any material on record in support thereof. Except making certain allegations in paragraph 11 (P) of the petition which have been emphatically denied the petiti- oners have not placed any material on record in support thereof. We must therefore reject this contention as baseless. ( 33 ) THESE were the only submissions urged before us by the learned counsel for the petitioners and as we do not see any merit in any of the grounds of challenge these there petitious must be dismissed and the rule in each of them must be discharged with costs. The interim relief granted in these three petitions will stand vacated subject to the direction given hereunder. ( 34 ) BEFORE we part we must state that at the time of admission of these three petitions Mr. Shah who represented the petitioners stated before the Court that he did not press the challenge based on Articles 14 and 19 of the Constitution. In view of this statement the petitioners were estopped from contending that the impugned action was ultra vires Articles 14 and 19 of the Constitution. However we have not brushed aside the contentions based on the said two articles on this narrow ground but have dealt with them as pure questions of law to make this judgment complete. Our thanks are due to the learned counsel for the petitioners as well as the revenue for the able assistance rendered to us. ( 35 ) MR. Raval the learned counsel for the petitioners prays for a certificate of fitness to appeal to the Supreme Court under Article 133 of the Constitution. We are of the opinion that substantial questions of law of general importance which need to be decided by the Supreme Court arise in this group of writ petitions. We therefore direct the issue of a certificate of fitness as prayed and further direct that the interim relief will continue for a period of eight weeks from to-day to enable the petitioners to obtain appropriate orders from the Supreme Court. .