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1992 DIGILAW 292 (SC)

C. Dass v. Appropriate Authority In Tax Department

1992-03-24

S.RANGANATHAN, V.RAMASWAMI, YOGESHWAR DAYAL

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(1) LEAVE granted. (2) THE appeal is disposed of after hearing counsel for the original owner of the property, the transferee as well as the Income Tax Department. (3) THE original owner agreed to sell the property in question to the appellant before us for a consideration of Rs. 13 lakhs of which a sum of Rs. 5 lakhs has already been paid. However, the Income Tax Department intervened by passing an order under Section 269-UD of the Income Tax Act, 1961 which if valid would result in the vesting of the property in the Union subject to the terms of the section above-cited. This action of the Department has been challenged by the appellant and the writ petition is pending in the High court. In the meantime, an interim order was passed by the division bench of the High court directing that possession of the property should be handed over to the Income Tax Department with a further direction that should the appellant ultimately succeed, the Department should re-convey the property to him for a sum of Rs 13 lakhs and also deliver possession of the property without raising the plea that the rights of the third parties have intervened. Impliedly, the High court also permitted the Department to auction the property in accordance with the provisions of Ch. XX-C of the Act but of course subject to the limitation that in the event of the appellant succeeding they should not raise a plea that third partys rights have intervened. (4) THE appellant is in appeal against this order. Before us the original owner has filed an application staling that so far as he is concerned he only wants that the sale consideration should be paid to him either by the Department or by the transferee. The transferee is also willing to pay to the original owner the balance of consideration of Rs. 8 lakhs and this money has already been deposited in the High court. The appellant claims that this money may be withdrawn by the original owner subject to his giving undertaking that in the event of the writ petition succeeding, the original owner will execute a sale deed in favour of the appellant confirming the transaction of the sale already entered into between the parties. The owner has also filed an affidavit giving such an undertaking. The owner has also filed an affidavit giving such an undertaking. (5) IN the above circumstances, the question arises as to what would be the appropriate interim order to be passed pending disposal of the writ petition. We are told that the plot in question is a vacant site. The appellant claims that he is in possession of the property. After hearing all the parties, we are of the opinion that the status quo as to the possession of the property as on date should continue till the disposal of the writ petition. As already directed by this court in its interim order dated 20/11/1991, the appellant should not alienate, transfer or part with the possession of the property or encumber it or alter the condition of a the property in any manner till the disposal of the writ petition. The appellant should also not put in any additional construction of the property pending disposal of the writ petition. In the event of the writ petition ultimately failing, the petitioner should be in a position to hand over the possession of the property to the Income Tax Department under Section 269-UD of the Act, subject to the department paying him the sum of Rs. 13 lakhs which he has already parted with. (6) SO far as the original owner is concerned, we allow his application and permit him to withdraw the sum of Rs. 8 lakhs deposited by the appellant in the High court. This will, however, be subject to his complying with the undertaking which he has given in the affidavit dated 3/3/1992 filed before us in these proceedings. A question was discussed before us as to whether the owner, i.e. Respondent 4 in those proceedings should be entitled to any interest from the appellants. After hearing both parties we are of the opinion that the owner would not be entitled to any interest and that the payment of Rs. 8 lakhs will be in full satisfaction of the sale consideration of the property. This, of course, deals only with the question of the owners claim for interest as against the appellant. (7) WITH the above observations, the appeal is disposed of.