Judgment :- VENKATASWAMI J. All these writ petitions are directed against the order of the appropriate authority dated February 13, 1991, passed under section 269UD(1) of the Income-tax Act, 1961, in respect of the property bearing No. 40, Rajaji Salai, First Line Beach, Madras-600 001 (hereinafter called "the property") The brief facts are the following The petitioner in Writ Petition No. 16812 of 1991 is the owner of the property. For the reasons stated in the affidavit filed in support of Writ Petition No. 16812 of 1991 (with which we are not immediately concerned), the petitioner decided to sell the property, and, for that purpose, the petitioner approached this court in C. S. No. 542 of 1990. P. K. Sethuraman J., by order dated July 3, 1990, directed the petitioner to advertise in the issues of The Hindu or Indian Express and also in the issues of either Dhina Thanthi or Dhina Malar, about the sale of the property, and, accordingly, the petitioner advertised in the issue of Indian Express dated July 24, 1990, and in the issue of Dhina Malar dated July 23, 1990 When the matter was finally taken up, Maruthamuthu J., passed an order on the following lines "(a) that LP. LP AN. Annamalai, and or his nominees (including Chakiat Agencies Pvt. Ltd.) having office at Raja Rajeswari Towers, 29/30, Dr. Radhakrishnan Salai, Mylapore, Madras-4, the third party/purchaser shall be and is hereby allowed to pay Rs. 61 lakhs (rupees sixty-one lakhs only) to M. Ct. M. Higher Secondary School/Trust for the sale of the property more fully set out in the schedule hereto, free of all encumbrances; (b) That the purchaser mentioned above shall pay to the trust, viz., Sir M. Ct. M. Higher Secondary School, the plaintiff herein, within three days from this date in the following manner(i) Rs. 3 lakhs (rupees three lakhs) as earnest money; and (ii) Rs. 4, 50, 000 (rupees four lakhs and fifty thousand only) towards advance (c) That the said purchaser shall in addition furnish within seven days from this date a bank guarantee for performance of the contract, the liability thereunder being limited to Rs. 7, 50, 000 (rupees seven lakhs and fifty thousand only) to the said plaintiff/trust; (d) That the earnest money shall be adjusted against the sale price and that if the contract is defaulted by the purchaser LP. LP. AN. 7, 50, 000 (rupees seven lakhs and fifty thousand only) to the said plaintiff/trust; (d) That the earnest money shall be adjusted against the sale price and that if the contract is defaulted by the purchaser LP. LP. AN. Annamalai and/or his one such nominee being Chakiat Agencies Pvt. Ltd., the said amount shall stand forfeited; (e) That on receipt of the earnest money and advance and on delivery of the guarantee mentioned in the above clauses, the plaintiff herein shall enter into an agreement with LP.LP.AN. Annamalai and/or his nominee or nominees for the sale of the said property in the abovesaid terms and the said agreement shall be filed with appropriate authority under the Income-tax Act within 15 days from the date of the agreement and both parties shall co-operate in the matter; (f) That if the appropriate authority shall opt to purchase the said property, the plaintiff trust herein shall refund to LP. LP, AN. Annamalai the said sum of Rs. 7, 50, 000 (rupees seven lakhs and fifty thousand only), viz., earnest money deposit and advance sale consideration and shall return the guarantee duly cancelled and the entire consideration of Rs. 61, 00, 000 (rupees sixty-one lakhs only) shall be payable to the plaintiff trust by the said appropriate authority; (g) That if the appropriate authority issues a 'No objection certificate' for the said sale in favour of the third party purchaser, LP. LP. AN. Annamalai or his nominee/s the sale shall be concluded within one month thereafter, both parties performing their respective covenants, and the plaintiff shall deliver vacant possession of the said property to LP. LP. AN. Annamalai and/or his nominee or nominees;(h) That the said sale shall be made by one or more documents as the said purchasers require."* On the basis of the abovesaid order of this court, an agreement of sale was entered into by the petitioner on December 10, 1990, to sell the property in undivided shares to the following parties Sl. Name Undivided Consideration No. share payable Rs 1. LP. LP. AN. Annamalai 55% 33, 55, 000 (Petitioner in Writ Petition No. 3116/1991) 2. Chakiat Agencies 15% 9, 15, 000 (Petitioner in Writ Petition No. 2949/1991) 3. Lp. Alaghappa Chettiar 7.5% 4, 57, 500 (Petitioner in Writ Petition No. 3961/1991) 4. Lp. A. Valliammy Achi 7.5% 4, 57, 500 (Petitioner in Writ Petition No. 3117/1991) 5. LP. LP. AN. Annamalai 55% 33, 55, 000 (Petitioner in Writ Petition No. 3116/1991) 2. Chakiat Agencies 15% 9, 15, 000 (Petitioner in Writ Petition No. 2949/1991) 3. Lp. Alaghappa Chettiar 7.5% 4, 57, 500 (Petitioner in Writ Petition No. 3961/1991) 4. Lp. A. Valliammy Achi 7.5% 4, 57, 500 (Petitioner in Writ Petition No. 3117/1991) 5. L. Thevanai Achi 7.5% 4, 57, 500 (Petitioner in Writ Petition No. 3963/1991) 6. Vr. V. Visalakshi Achi 7.5% 4, 57, 500 (Petitioner in Writ Petition No. 3962/1991) 61, 00, 000 It is common ground that in respect of all these transactions, application under Form No. 37-I was made by the petitioner in Writ Petition No. 16812 of 1991 jointly along with the prospective purchasers for permission for the proposed sales. By the impugned order, the appropriate authority ordered the purchase of the property by the Central Government for the discounted consideration of Rs. 59, 79, 448. Aggrieved by that, these writ petitions are filed In the counter-affidavit filed on behalf of respondents Nos. 1 to 3 in Writ Petition No. 2949 of 1991, etc., it is stated as follows "I deny the grounds raised in grounds (i) and (ii). I submit that this court by its decree in C. S. No. 542 of 1990 directed the parties to file Form No. 37-I within fifteen days from the date of the agreement and both the parties were directed to co-operate in the matter. This court further directed that if the appropriate authority shall opt to purchase the property, the plaintiff trust shall refund to Lp. Annamalai, the said sum of Rs. 7, 50, 000 earnest money and advance sale consideration and shall return the guarantee duly cancelled and the entire consideration shall be payable to the plaintiff trust by the said appropriate authority. I submit that this court permitted the appropriate authority to exercise the right of pre-emption to purchase the property under Chapter XX-C of the Income-tax Act, which decree has become final and binding on the parties. It is not open to the petitioner to raise the plea that the provisions of Chapter XX-C are not attracted to the facts of the case. It is not open to the petitioner to raise the plea that the provisions of Chapter XX-C are not attracted to the facts of the case. It is submitted that the provisions of Chapter XX-C of the Act, even otherwise, would apply to the sales conducted by the court, and there is nothing in Chapter XX-C which excludes the applicability of court auction sales or sales effected with the permission of the court. Further, the scope of the inquiry under Order XIII of the Original Side Rules, 1956, in the originating summons is entirely different from the scope of the inquiry conducted by the appropriate authority under Chapter XX-C of the Income-tax Act, 1961. This court in the case of Lt. Col. J. K. Dhairyam 1967 (1) MLJ 431 held that the question of the originating summons should not, as a rule, involve difficult and complicated points of law. But, as held by the Supreme Court in C. B. Gautam v. Union of India, the scope of the inquiry contemplated under Chapter XX-C is entirely differentI submit that the other grounds raised in the writ petition are concluded by the decision of the Supreme Court in C. B. Gautam v. Union of India. I submit that as per directions by the Supreme Court in C. B. Gautam's case, the impugned order is incomplete and further the inquiry directed by the Supreme Court has not been done after notice to the transferor and transferee. I, therefore, submit that as directed by the Supreme Court in Gautam's case and supplemental directions given by the Supreme Court in 1993 (199) ITR 562 in respect of the petitioner's case, the period of two months referred to in section 269UD(1) shall be reckoned with reference to the date of disposal of the writ petition by this court and this court may also be pleased to grant the other consequential directions as laid down by the Supreme Court in Gautam's case." Again, in the counter-affidavit filed in Writ Petition No. 16812 of 1991, respondents Nos. 1 and 2 have stated, inter alia, as follows: (R-2 has filed the counter-affidavit on behalf of R-1) ". . 1 and 2 have stated, inter alia, as follows: (R-2 has filed the counter-affidavit on behalf of R-1) ". . I submit that there are reasons to hold that there is a substantial undervaluation of the apparent consideration and I crave leave of this court to peruse the reasons for the issue of the impugned order which would establish that there is a substantial undervaluation of the property." From the statements made in the counter-affidavits, it will be seen that the Revenue is agreeable for this court setting aside the impugned order and for remanding the matter in terms of the judgment of the Supreme Court in C. B. Gautam's case. However, learned counsel appearing for the various proposed purchasers (Mr. P. J. George for some of the petitioners and Mr. P. P. S. Janarthana Raja for some others) submitted that there are observations in the decision of the Supreme Court, namely, C.B. Gautam v. Union of India, to the effect that section 269UD(1) cannot be invoked where the sales are by orders of court. In this connection, learned counsel invited my attention to certain observations in the judgment of the Supreme Court. They are as follows "We shall first discuss the question whether the provisions of Chapter XX-C confer an unfettered discretion on the appropriate authorities concerned to acquire immovable properties which are agreed to be sold in the areas to which the provisions of the Chapter are applicable. In this regard, as we have already pointed out, the very historical setting in which the provisions of this Chapter were enacted suggests that it was intended to be resorted to only in cases where there is an attempt at tax evasion by significant undervaluation of immovable property agreed to be sold. This conclusion is strengthened by Instruction No. 1A88 issued by the Central Board of Direct Taxes of the Government of India, Ministry of Finance, Department of Revenue, which was filed in the court by the learned Attorney-General. In the said document, it is emphasised by the Central Board that the main objective of the provisions of Chapter XX-C is to check proliferation of black money in real estate transactions and to enforce declaration of the true value of immovable properties that are the subject of transfer between the parties. In the said document, it is emphasised by the Central Board that the main objective of the provisions of Chapter XX-C is to check proliferation of black money in real estate transactions and to enforce declaration of the true value of immovable properties that are the subject of transfer between the parties. The Central Board has pointed out in the said instructions that, in administering the provisions of the said Chapter, it has to be ensured that no harassment is caused to bona fide and honest purchasers or sellers of immovable property and there is no erosion of the confidence of the public in the sense of justice and fair play of the Income-tax Department. Paragraph 3 of the Instruction makes it clear that the right of pre-emptive purchase has to be exercised by the appropriate authority only when it has good reason for acquiring the property. When the property purchased by the Central Government by an order of an appropriate authority is put up for sale, the reserve price is required to be fixed at a minimum of 15 per cent. above the purchase price shown as the apparent consideration under the agreement between the parties. Thus, it is pointed out by the Board that the right of pre-emptive purchase has to be exercised only if the fair market value is found to be at least 15 per cent. more than the apparent consideration. The instruction further provides that, in coming to the conclusion as aforestated, a reasonable margin of probable errors in estimation needs to be kept in view particularly as the law does not provide for any opportunity of being heard. The contents of the affidavit filed by one H. K. Sarangi, Under Secretary, Central Board of Direct Taxes, Department of Revenue, is also to the effect that the provisions of the said Chapter ought to be resorted to only in cases of undervaluation of immovable properties in agreements of sale to the extent of 15 per cent. or more. The said H. K. Sarangi has further pointed out that, right from the time when the provisions of the said Chapter were brought into force, they are being applied in such manner that the rights and interests of third parties unconnected with tax evasion are not affected. or more. The said H. K. Sarangi has further pointed out that, right from the time when the provisions of the said Chapter were brought into force, they are being applied in such manner that the rights and interests of third parties unconnected with tax evasion are not affected. This has also been pointed out in the main counter-affidavit of the Union of India, referred to by us earlier in paragraph 40. The said affidavit points out that, where an order is made under sub-section (1) of section 269UD for the purchase by the Central Government of any immovable property, there is no compulsory acquisition involved and hence no solatium is payable and that what the Chapter provides for is pre-emptive purchase of a property already offered for sale. It has been set out in the said affidavit that only properties with an apparent consideration above Rs. 10 lakhs are at present covered by the scheme which applies only to certain large metropolitan conglomerations. Transfers to a relative, on account of natural love and affection, are excluded from the provisions of the scheme. The appropriate authority consists of two Commissioners of Income-tax and one Chief Engineer from the Central Engineering Service. The said affidavit repeats that the pre-emptive purchase has to be resorted to only if the fair market value of the property concerned is found to be at least 15 per cent. more than the apparent consideration and this limit has not to be mechanically applied but a reasonable margin for probable error taken into account. The affidavit of Hemant Sarangi further states that the following types of properties should not ordinarily be purchased(a) cases of doubtful or disputed title/s; (b) transactions by and with Government, semi-Government organisations, public sector undertakings, universities, etc.; (c) properties with bona fide tenancies of long standing; and (d) properties with too many restrictions on user It is clarified in the affidavit (paragraph 14) that, although the appropriate authorities will not normally purchase buildings which are leased, in a few cases they may do so when it is felt that even taking into account that the property was encumbered with lease, the apparent consideration was grossly understated. The affidavit of Sarangi states that the practice uniformly followed in compulsory purchase of immovable properties under the provisions of Chapter XX-C is as set out earlier. The affidavit of Sarangi states that the practice uniformly followed in compulsory purchase of immovable properties under the provisions of Chapter XX-C is as set out earlier. Statements annexed to the affidavit of H. K. Sarangi show that the several properties which were purchased under the provisions of Chapter XX-C have brought much higher amounts than the purchase price when sold at public auctions which would clearly suggest that in the relevant agreements for sale the apparent consideration was significantly understated." The contention of learned counsel was to the effect that when the court has ordered the sale after inviting offers from the intending purchasers, there is no justification for invoking section 269UD(1) of the Income-tax Act, which would amount to doubting the action of the court. On that ground, learned counsel wants this court to issue a direction to the appropriate authority not to invoke the provisions of section 269UD(1) of the Income-tax Act On the other hand, Mr. N. V. Balasubramanian, learned counsel appearing for the Revenue, submitted that the very fact that the court has granted permission subject to the clearance by the Income-tax Department will show that the appropriate authority's option to purchase the property is not taken away. He also submitted that the order passed by the court on originating summons is different from the scope of enquiry conducted by the appropriate authority under Chapter XX-C of the Act and, therefore, merely on the ground that the court has permitted the sale, the appropriate authority cannot be prevented from invoking section 269UD, if circumstances warrant the sameI have considered the rival submissions On the facts of this case, I am of the view that this is not the appropriate stage to probe into this matter as the Revenue has stated in the counter-affidavit that there are reasons to hold that there is substantial undervaluation of the apparent consideration. All these objections can be raised by the petitioners in the enquiry to be held though limited/summary in nature by the appropriate authority, as per the direction of this court There is one other point raised by learned counsel for the petitioner in Writ Petition No. 16812 of 1991 for the consideration by this court. Mr. All these objections can be raised by the petitioners in the enquiry to be held though limited/summary in nature by the appropriate authority, as per the direction of this court There is one other point raised by learned counsel for the petitioner in Writ Petition No. 16812 of 1991 for the consideration by this court. Mr. C. Ramakrishnan, learned counsel appearing for the petitioner, submitted that for no fault of the petitioner (the owner of the property), the trust is deprived of the sale consideration being put into use in any manner considered advantageous to the trust. According to learned counsel, the value of the property has appreciated very much from the date of agreement to this date. He also invited my attention to the order passed by Kanakaraj J., in W. M. P. No. 4536 of 1991 in Writ Petition No. 2949 of 1991. The order passed by the learned judge reads as follows "The writ petition is against an order dated February 13, 1991, made by the second respondent exercising option under Chapter XX-C of the Income-tax Act in respect of the property in question. I admitted the writ petition on March 5, 1991, and in W. M. P. No. 4777 of 1991, I issued a limited injunction order restraining the respondents from selling or taking any action towards the sale of the property. When the application is taken up for final hearing, learned counsel appearing for the Income-tax Department says that unless an absolute order of injunction is granted, the Department will be prejudiced because they will be forced to pay the amount of consideration. On the other hand, the seller (the fourth respondent in Writ Petition No. 3117 of 1991) is interested in getting the sale price. After considering the rival submissions and certain earlier decisions, I am of the view that no useful purpose will be served by directing the Department to deposit the amount. This is because the entire issue is said to be pending in the Supreme Court of India. But the seller has a grievance that he should at least have the benefit of the amount in a bank so that it will earn interest. This is because the entire issue is said to be pending in the Supreme Court of India. But the seller has a grievance that he should at least have the benefit of the amount in a bank so that it will earn interest. To provide for such a contingency, I suggested to counsel that the Income-tax Department can be directed to pay the amount, in the event of the writ petition ultimately being dismissed, with interest at the current bank rates and counsel agreed to this proposition provided the Department pays interest on the entire amount including the advance paid by the purchaser (writ petitioners)Accordingly, I direct that there will be an absolute stay of the impugned orders. The statement of Mrs. Nalini Chidambaram, counsel appearing for the Income-tax Department, that the Department will pay interest on the entire sale consideration including the advance amount is recorded. The interest shall be at the rate of 18 per cent. per annum. No further directions are necessary." In view of the above order, the Department is certainly liable to pay interest as directed above, in the event of the writ petitions being dismissed. Learned counsel further submitted that in the event of the appropriate authority deciding to order purchase of the property by the Central Government, there must be a direction to pay interest at 18 per cent. per annum, by the Central Government, as the owner of the property (petitioner in Writ Petition No. 16812 of 1991) is deprived of the use of the sale consideration for a long period. He further submitted that in the event of the appropriate authority deciding not to order the purchase of the property by the Central Government, the agreement-holders must be directed to pay interest at 18 per cent. per annum or above, as decided by this court, for the same reason. In support of that, he placed reliance on a passage in the decision of the Supreme Court in Rajalakshmi Narayanan v. Margaret Kathleen Gandhi. per annum or above, as decided by this court, for the same reason. In support of that, he placed reliance on a passage in the decision of the Supreme Court in Rajalakshmi Narayanan v. Margaret Kathleen Gandhi. "We can safely take judicial notice of the fact that the prices of immovable properties have shot up continuously for the last few years and today the said property, if sold in the open market, would fetch a much larger amount than that for which it was agreed to be sold to respondent No. 1 Taking into account these circumstances, we modify the impugned order and direct that in the event of the aforesaid order of the appropriate authority being upheld, the Government shall pay to the appellant, as the purchase price, the amount stated as the consideration for the sale of the said property in the agreement entered into between the appellant and respondent No. 1 with interest thereon at 15 per cent. per annum. In case the order of the appropriate authority is set aside and the transaction of sale in favour of respondent No. 1 is completed, respondent No. 1 shall pay to the appellant interest on the balance amount payable on account of the purchase price by respondent No. 1 at 20 per cent. per annum. The interest in either eventuality will be calculated right from the day the impugned interim order was made by the Delhi High CourtWe may clarify that whether interest should be paid to the owner of an immovable property who has entered into an agreement to sell the same which cannot be completed by reason of an order of purchase under section 269UD of the Income-tax Act and at what rate, will have to be decided in the facts and circumstances of each case. All that can be observed by way of a general principle is that where such a seller has raised no objection or obstruction either to the purchase of his property by an order under section 269UD or to the completion to the agreement of sale entered into by him but is unable to get the purchase price by reason of the said order and the stay order or orders passed by a court, interest at an appropriate rate can, if equity so requires, be paid to him." Mr. N. V. Balasubramanian, learned counsel appearing for the Revenue, however, submitted that inasmuch as the owner of the property (petitioner in Writ Petition No. 16812 of 1991) has challenged the order of the appropriate authority, he is not entitled to ask for the payment of interest I do not think learned counsel appearing for the Revenue is right in his contention, in view of the consent given by learned counsel for the Revenue on an earlier occasion while Kanakaraj J., passed the order in WMP No. 4536 of 1991 in WP. No. 2949 of 1991 (extracted above) I hold that in the event of the appropriate authority deciding to order purchase of the property by the Central Government, once again, pursuant to this order of remand, the Central Government must pay interest at the rate of 18 per cent. per annum on the sale consideration from February 13, 1991, till date of payment to the owner of the property (petitioner in WP. No. 16812 of 1991). On the other hand, in the event of the appropriate authority deciding not to invoke section 269UD(1) of the Income-tax Act, the agreement-holders, who are six in number, will pay interest to the owner of the property (petitioner in WP No. 16812 of 1991) at the rate of 21 per cent. per annum from December 10, 1990, till the date of paymentApplying the ratio laid down by the Supreme Court in Rajalakshmi Narayanan's case, the impugned order of the appropriate authority, which is common in all these cases, is set aside, and the appropriate authority will take it that Form No. 37-I already filed shall be deemed to have been filed as on this date (January 5, 1994), for the purpose of completion of the proceedings in terms of section 269UD(1) of the Act. I make it clear that the opportunity to be given to the petitioners must be in terms of the judgment of the Supreme Court in C. B. Gautam's case. The writ petitions are allowed accordingly. No costs.