M.R. Calla, J. - (1.) THE petitioner is a limited company incorporated under the Indian Companies Act, 1956, in the name and style of Rajasthan Patrika Limited, having its registered office at Kesargarh, Jawaharlal Nehru Marg, Jaipur. According to the petitioner, respondent No. 4 (J.K. Rastogi) held property comprising land area of 1,033.33 sq. yards, one building on the ground floor, part building on the first floor including roof and some construction on the second floor situated at 11, Hospital Road, Jaipur, known as Krishna Kunj. Respondent No. 4 being desirous of selling the abovesaid property and the petitioner-company being interested to purchase the same, agreed to purchase it for a sale consideration of value of Rs. 25 lakhs and for that purpose entered into an agreement for sale, which was executed on March 7, 1991, and was got registered with the Sub-Registrar, Jaipur-2, Jaipur, on March 7, 1991. THE petitioner-company parted with an amount of Rs. 8 lakhs 50 thousand on March 7, 1991, vide pay order in favour of respondent No. 4 before the Sub-Registrar at the time of the registration of the agreement of sale by way of an advance. It is also the case of the petitioner-company that respondent No. 4, as a security against the payment of Rs. 8.50 lakhs, gave the possession of certain portion of the aforesaid property as detailed in Schedule 'A' and the petitioner took possession of the said portion on March 7, 1991, and is in possession of the said portion of the property, about which the sale agreement was entered into and executed. According to the petitioner, the important salient terms of agreement of sale in brief are as under : (i) That the humble petitioner shall be entitled to use, occupy, hold and enjoy the portion described in Schedule 'A', but shall not be entitled to make any new construction in the said portion till registration of sale deed of the property ; (ii) That respondent No. 4 shall continue to remain in possession of the portion described in Schedule 'B' till the registration of sale deed and receipt of balance of Rs. 16.5 lakhs. Respondent No. 4 shall be entitled to use and occupy the said portion but shall not be entitled to sublet, assign or part with possession to any other person ; (iii) That respondent No. 4 shall take necessary steps, within 15 days from the date of agreement of sale, to make payment of income-tax, land and building tax, house tax, dues of water works, Rajasthan State Electricity Board, etc., uptill the date of registration of the sale deed and to obtain necessary tax clearance certificate under Section 230A of the Income-tax Act as well as necessary no-objection certificate under Section 269UL (Chapter XX-C of the Income-tax Act, 1961), etc., from the Income-tax Department in accordance with law and at its own cost and expenses ; (iv) That respondent No. 4 after collecting receipts of payment of taxes, obtaining tax clearance certificate/no-objection certificate/certificate from the Income-tax Department under the Income-tax Act, 1961, for registration of sale deed shall give necessary information in writing to the humble petitioner and thereafter the humble petitioner shall get prepared the sale deed for execution and registration at its own cost and shall pay the balance sale consideration before the Sub-Registrar at the time of registration of the sale deed ; (v) That if the humble petitioner fails to get executed the sale deed and get it registered after respondent No. 4's obtaining of receipts, tax clearance certificate, no-objection certificate, etc., then respondent No. 4 shall be entitled to deduct a sum of Rs. 2 lakhs by way of compensation and also to get back possession of the portion described in Schedule 'A' of the agreement of sale ; (vi) That if respondent No. 4 fails to pay the dues, produce the receipts, obtain requisite no objection certificate/tax clearance certificate/ certificate under the Income-tax Act or refuses to execute sale deed or get it registered then the humble petitioner shall be entitled to sue for specific performance at the cost of respondent No. 4 and snail also be entitled to claim a compensation of Rs. 2 lakhs ; (vii) That respondent No. 4 assured that the impugned property is free from all encumbrances, it is not under acquisition and he has valid title to transfer to the humble petitioner ; (viii) That respondent No. 4 shall hand over the original gift deed dated November 2, 1957, to the humble petitioner at the time of registration of the sale deed and any claim by any other person shall be non est in law. If on account of defective title the humble petitioner is divested of ownership or possession, then respondent No. 4 shall reimburse with compensation ; and (ix) That house tax, land and building tax, other taxes, if any, shall be paid by respondent No. 4. Stamp duty, registration fees and other expenses for execution and registration of sale deed shall be at the cost of the humble petitioner.
(2.) A copy of the agreement dated March 7, 1991, has been annexed with the writ petition as annexure 'A'. Chapter XX-C entitling purchase by the Central Government of immovable properties in certain cases of transfer was inserted in the Income-tax Act by the Finance Act, 1986, with effect from October 1, 1986, vide Notification No. S. O. 480(E), dated August 7, 1986 (see [1986] 162 ITR (St.) 1). The provisions of this Chapter have been made applicable to Delhi, Greater Bombay, Calcutta Metropolitan Area and Madras Metropolitan Planning Area. The provisions of this Chapter XX-C were also made applicable on the property situated at Jaipur on, and from June 1, 1989, vide Notification (see [1989] 177 ITR (St.) 238), dated May 8, 1989. Thus the provisions of Chapter XX-C became applicable in respect of the aforesaid property situated at Jaipur, in respect of which the agreement was entered into on March 7, 1991, as aforesaid, that is a date subsequent to June 7, 1989. The provisions of this Chapter XX-C are not applicable in respect of transfer of any immovable property of a value up to Rs. 10 lakhs as prescribed under Rule 48K of the Income-tax Rules, 1962, as inserted by the Income-tax ( Seventh Amendment) Rules, 1986. Thereafter, Form No. 37-I (statement of transfer of immovable property to be furnished to the appropriate authority under Section 269UC) was got prepared, the authorised signatory of the petitioner, namely, Laxmi Narain, appended his signatures thereon and the same was handed over to respondent No. 4 for submission to the appropriate authority for obtaining no-objection certificate, so that sale deed may be executed and got registered. Respondent No. 4 submitted the said statement in Form No. 37-I in the office of the Deputy Commissioner of Income-tax Department, Jaipur, along with the agreement of sale on March 22, 1991. The District Valuation Officer (AA) Appropriate Authority, Income-tax, Jaipur, sent a notice dated April 19, 1991, to respondent No. 4 as well as to the petitioner, to produce the documents detailed therein on any working day up to April 24, 1991, and it was proposed that the property shall be inspected on April 25, 1991, and the parties were requested to arrange for the same and to be present personally or through authorised agents. The District Valuation Officer with his subordinates inspected the property. The appropriate authority (respondent No. 2) did not afford any opportunity of hearing to the petitioner or respondent No. 4 after furnishing the statement in Form No. 37-I and the petitioner received information, vide letter dated May 30, 1991, from respondent No. 3, i.e., the Deputy Commissioner of Income-tax, appropriate authority containing the findings of respondent No. 2 and this letter dated May 30, 1991, was received by the petitioner by registered post on June 1, 1991, which has been filed with the writ petition as annexure "D". Thereafter, a show-cause notice under Section 276AB of the Income-tax Act, 1961, dated June 3, 1991, issued by respondent No. 3 was received by registered post on June 5, 1991, requiring the petitioner and respondent No. 4 to show cause on or before June 20, 1991, as to why prosecution proceedings should not be launched against them under Section 276AB of the Act. This show-cause notice dated June 3, 1991, has been filed with the writ petition as annexure "E". The petitioner sent a telegram dated June 14, 1991, requesting respondent No. 2 to issue no objection certificate under Section 269UL(3) of the Act, which was followed by a letter of confirmation dated June 14, 1991, but no reply or any other communication was received. At this juncture, the present writ petition was filed before this court on June 17, 1991, during vacation and on June 19, 1991, the vacation judge while directing that this writ petition involving challenge to the validity of the provisions of the Income-tax Act be laid before the Division Bench in the first week of July, 1991, ordered that no further action be taken against the petitioner in pursuance of the show-cause notice dated June 3, 1991, annexure "E". On July 17, 1991, the writ petition was admitted and notices were directed to be issued and the writ petition was directed to be listed along with D. B. Civil Writ Petitions Nos. 6162 of 1990, 6163 of 1990, 6164 of 1990, 6165 of 1990, 6210 of 1990, and 6211 of 1990. On the very same date, i.e., July 17, 1991, notices of the stay application were also ordered to be issued and in the meanwhile the prosecution of the petitioner under Section 276AB of the Income-tax Act, 1961, was stayed. In this writ petition, the petitioner has prayed for the following reliefs : (a) declare Chapter XX-C of the Income-tax Act as unconstitutional, ultra vires and null and void ; (b) issue a writ of certiorari or any other writ, direction or order in the nature thereof quashing the order contained in letter dated May 30, 1991 (annexure "D") ; (c) declare the letter dated May 30, 1991 (annexure "D") a nullity ; (d) issue a writ of certiorari or any other writ, direction or order in the nature thereof directing respondents Nos. 2 and 3 not to take any action under Section 276AB of the Act ; (e) grant a writ of mandamus commanding respondent No. 2 to issue a no objection certificate under Section 269UL(3) of the Act ; (f) grant further writs, directions and orders as may be necessary, directing the respondents to desist from effecting' any of the provisions of Chapter XX-C of the Income-tax Act and the impugned letter and the show-cause notice or any other relief as may be deemed just and proper on the facts and circumstances of the case ; and (g) award the costs, of the writ petition.
(3.) A reply to the writ petition was filed on behalf of respondent No. 2, i.e., the appropriate authority, on August 30, 1991, and a rejoinder thereto was filed by the petitioner on October 8, 1991. Respondent No. 4, J.K. Rastogi, expired during the pendency of the writ petition on April 16, 1992, and an application for substitution of his legal heirs was filed on June 24, 1992, under Order 22, Rule 4, Civil Procedure Code, by the petitioner and Shri J.S. Rastogi, advocate, who entered appearance on behalf of the legal representatives of respondent No. 4 has supported the writ petition. Respondent No. 2 through the reply has traversed the petitioner's claim submitting therein, that the provisions of Chapter XX-C are fully constitutional, are neither bad, illegal, arbitrary or violative of the principles of natural justice or unconstitutional and further that it shall be showing the file to prove that there was understatement of consideration as well, that the notice had been issued to comply with the principles of natural justice, that after committing an offence the petitioner cannot get the certificate under Section 269UL(3), the respondent has acted in accordance with law, that the petitioner after committing an offence and transferring the property, could not have submitted an application in Form No. 37-I, that the petitioner is not entitled to any no objection certificate and the petitioner has no enforceable right and is, therefore, not entitled to any relief. Shri N.M. Ranka, senior advocate, appearing on behalf of the petitioner, has not addressed any argument on the question of the constitutional validity of the provisions of Chapter XX-C of the Income-tax Act, 1961, and rightly so because the constitutional validity of the same has already been upheld by the Supreme Court. It was also stated by Shri N.M. Ranka during the course of arguments that D. B. Writ Petitions Nos. 6162 of 1990, 6163 of 1990, 6164 of 1990, 6165 of 1990, 6210 of 1990, and 6211 of 1990 have already been dismissed as withdrawn or not pressed as in these writ petitions the validity of the provisions of Chapter XX-C of the Income-tax Act was under challenge and the Supreme Court had already upheld the constitutional validity of these provisions. Mr. N. M. Ranka has challenged the validity; legality, Correctness and propriety of annexure "D" (May 30, 1991) and annexure "E", dated June 3, 1991, whereby, the decision of the appropriate authority was conveyed that the statement in Form No. 37-I had defeated the very provision of law under which it was purported to have been submitted and the same was void vis-a-vis Section 269UL(2) of the Act and the question of acting on such a void statement does not arise and the petitioner was afforded an opportunity to show cause as to why prosecution proceedings should not be launched against the petitioner under Section 276AB of the Act. Mr. N.M. Ranka, on behalf of the petitioner, has made the following submissions : 1. Chapter XX-C is a self-contained Code in itself. It overrides the provisions contained in the Transfer of Property Act or any other law for the time being in force. Reference has been made to the provisions as under : (i) Section 269UA : (a) "agreement for transfer" (b) "apparent consideration" (c) "appropriate authority" (d) "immovable property" . (e) "persons interested" (f) "transfer" (ii) Section 269UB--appropriate authority (iii) Section 269UC--Restrictions on transfer of immovable property (iv) Section 269UD--Order by appropriate authority for purchase (v) Section 269UE--Vesting of property in Central Government : (1) free from all encumbrances ; (2) possession to be delivered within 15 days by transferor or any other person who may be in possession ; (3) may take possession and may use such force as may be necessary ; (4) requisition the services of any police officer to assist. (vi) Section 269UF--Consideration for purchase (vii) Section 269UG--Payment or deposit of consideration. (viii) Section 269UL,-- (a) restrictions on registration ; (b) issuance of a certificate of no objection. (ix) Section 269UM--Immunity to transferor against the claims of transferee for transfer. 2. That annexure "A" is an agreement for proposed transfer and not for transfer deed/sale deed. Regular sale deed has to be executed after fulfilling of various conditions contained therein including the obtaining of the no-objection certificate under Section 269UL(3) of the Act after submission of Form No. 37-I. Form No. 37-I is the bedrock or foundation for exercise of the option under Section 269UD(1) or in the alternative for issuance of a no-objection certificate. Any agreement inter se the parties, i.e., the petitioner, and respondent No. 4 is not to be recognised for Chapter XX-C. Such agreement is only for the parties inter se. Any condition contrary to the provisions of law would be void ab initio and inoperative and Chapter XX-C does not recognise such terms and conditions. The terms and conditions contained in Form No. 37-I alone are recognised and such terms and conditions are binding on the transferor as well as the transferee. None of them can back out of the terms incorporated in Form No. 37-I. Annexure "A" when read as a whole and construed reasonably is an agreement for sale simpliciter. Overriding and omnipotent statutory powers have been conferred by the statute requiring the transferor or any other person in possession to hand over possession and the property vests free from all encumbrances on the making of an order under Section 269UD(i) by the appropriate authority. The transferor becomes entitled to receive the apparent consideration from the Central Government. ;