S. Mohan, C.J.
1. The short facts leading to the appeal are as under :
The appellant entered into an agreement with the third respondent for the purchase of an immovable property herein described as Mohan Buildings situated at Nos. 775 to 809, Old Kacheri Road, Chickpet, Bangalore. The agreement is dated November 28, 1990. The appellant, the transferee, and the third respondent, the transferor, jointly filed a statement in Form No. 37-I prescribed by the rules framed under the Income-tax Act, 1961 (hereinafter referred to as the 'Act'), with the appropriate authority on November 30, 1990.
2. The appropriate authority passed an order on January 24, 1991, under section 269UD(1) of the Act. We will now extract the relevant portions of the order :
'Thus, a significant point in the agreement is that the transferee agrees to purchase the property with the 46 existing tenants and that taking vacant possession is restricted only to the portion occupied by the transferor itself. On payment of the second instalment of Rs. 50 lakhs, the transferor has to permit development of the property and grant necessary power of attorney in favour of Shri K. V. Shivakumar, trustee of the transferee. The nomination clause of the agreement states that, on payment of full consideration, the transferor has to execute a sale deed in favour of the transferee or its nominees. The agreement also contemplates payment of liquidated damages and right of specific performance by the parties to the agreement, in case of breach. The aggrieved party has the option to terminate the agreement and claim and recover liquidated damages of Rs. 15,50,000 being 10% of the consideration from the party committing breach, as an alternative to specific performance. An important stipulation in pages 10 and 11 of the agreement is that, in the event of the schedule property being purchased by the appropriate authority for the Central Government under section 269UD(1) of the Income-tax Act, the agreement of November 28, 1990 for sale of 'Mohan Buildings' between the transferor and the transferee will be treated as cancelled without any of the penal consequences contemplated in the agreement and the transferor has to refund the entire advance to the transferee forthwith.
7. Mohan Buildings is situated in the thickly populated commercial cradle of Bangalore, namely, Chickpet at OTC Road, also known as Chickpet Main Road. It covers a land area of 17,160 sft. - (1594.2 sqms.). Its dimensions are irregular. The width of the road on which the property is situated is 14.9 mts. It falls in Zone 'A' of CDP and enjoys an FAR of 1.25. The building covers an area of 2,742 sqms. It is a double storeyed commercial complex constructed in the year 1909, with lime mortar and bricks. The roofing is partly Madras terrace and partly Mangalore-tiled. All joinery works are with teakwood. No services have been provided except electricity, sanitary and water supply in a portion of the first floor. The building being 90 years old, it has outlived its normal span of life. No maintenance has been done for many years.
8. The discounted value of the extent of consideration has been worked out at Rs. 1,50,17,084. The working of the discounted value is given in schedule II appended to this order.'
3. Accordingly, in exercise of the power vested under section 269UD(1), the appropriate authority ordered the purchase of the schedule property by the Central Government and to pay the apparent consideration of Rs. 1,50,17,084, which was the discounted value of the consideration of Rs. 1,55,00,000. Consequent to this, the property is to vest in the Central Government free from all encumbrances by virtue of the provisions of section 269UE(2). It was also ordered that the transferor or any other person who may be in possession of the property shall surrender and deliver the property to the appropriate authority within fifteen days from the date of service of notice. A copy of this order was served on both the transferor and the transferee.
4. As per the terms of the agreement, the total consideration for the sale was Rs. 1,55,00,000. The appellant paid a sum of Rs. 50 lakhs by way of advance on the date of the agreement. It was further stipulated that an additional advance of Rs. 50 Lakhs shall be paid within ten days from the date of the receipt of the 'no objection certificate' and, finally, the appellant was to pay the balance of Rs. 55 lakhs to the transferor either at the time of the registration or within one year from the date of the agreement, whichever was earlier. Thus, it will be clear that what the appellant transferee had paid to the transferor under the terms of the agreement was Rs. 50 Lakhs by way of advance.
5. It is the common case before us that the transferor has authorised the Chief Commissioner of Income-tax to pay a sum of Rs. 50 lakhs to the appellant which the transferor had received by way of advance. It is equally the common case before us that this Rs. 50 lakhs paid by the Chief Commissioner of Income-tax was received by the appellant without any demur.
6. The appellant filed W. P. No. 5614 of 1991 praying to quash the order of the appropriate authority dated January 24, 1991, passed under section 269UD(1) of the Act. In that writ petition, an additional prayer was made to direct the respondent to issue a no objection certificate under section 269UL of the Act. The learned single judge, Justice S. R. Rajasekhara Murthy, was of the opinion that, in so far as the appellant before us (the writ petitioner) had received the sum of Rs. 50 lakhs paid by way of advance under the agreement dated November 28, 1990, he has no right to challenge the order of the appropriate authority. Therefore, he dismissed the writ petition.
7. In this appeal before us, Mr. K. Srinivasan, learned counsel for the appellant, strenuously urges as follows :
No doubt the appellant is only a person who had entered into an agreement for the purchase of the property. It may be true that, under ordinary law, a person who merely enters into an agreement for sale cannot claim any interest in the immovable property, but the income-tax Act treats him as a person interested in the property. When clause (e) of section 269UA talks of person interested, it is an inclusive definition. Under the rules of interpretation, an inclusive definition must be interpreted as to include every other person so as to enlarge the scope of the definition. In other words, it cannot be restricted to persons who are mentioned in that definition. Then again, under section 269UD(2), the appropriate authority is to serve a copy of the order under sub-section (1) of the definition. In other words, it cannot be restricted to persons who are mentioned in that definition. The again, under section 269UD(2), the appropriate authority is to serve a copy of the order under sub-section (1) of the said section on the transferee as well. Equally so, under section 269UL(3), when the authority desires to issue a 'no objection certificate', a copy of the same is to be given not only to the transferor but the transferee as well. As a matter of fact, the Bombay High Court, in CIT v. Vijay Flexible Containers : [1990]186ITR693(Bom) , has taken the view that the right to obtain conveyance of immovable property fall within the expression 'property of any kind' used in section 2(14) of the Act. Equally, in Andalammal v. Alamelu Ammal, : AIR1962Mad378 , it has been held as such a right to get reconveyance of his property is capable of assignment. Then again, in CIT v. Tata Services Ltd. : [1980]122ITR594(Bom) , it has been held at page 599 that such right to obtain a conveyance of the immovable property was clearly a property as contemplated under section 2(14) of the Income-tax Act. Therefore, it is submitted before us that the transferee has every right or locus standi to questions the order of the appropriate authority dated January 24, 1991. On the applicability of the principle of acquiescence, he would state that the appellant was not entitled to receive the money. It was due only to the transferor to whom alone, under section 269UG(1), the consideration is liable to be paid. Further, under subsection (3) of the said section, the Central Government is enabled to deposit if the person entitled to the amount of consideration does not consent to receive it. Where, therefore, the money was legitimately due to the transferor, the mere fact that the transferee had received the same does not mean that the principle of acquiescence could be applied. Looked at from that the point of view, the judgment of the learned judge is incorrect. As a matter of fact, in Writ Appeals No. 621 and 622 of 1988, this court has taken a view in favour of the appellant. The same ratio will have to be applied in this case.
8. Mr. Chandra Kumar, learned counsel for the revenue, who had entered caveat would submit that, first and foremost, a person like the appellant who is no more than the holder of an agreement for purchase of an immovable property can not claim any interest in the immovable property. As a matter of fact, section 54 of the Transfer of Property Act puts this matter doubt. It has also been held in Satyabrata Ghose v. Mugneeram Bangur and Co., : AIR1954SC44 , in paragraph 18, that such a person has a mere right to get a deed of conveyance but, by no stretch of imagination, could it ever be said that the contract of sale of immovable property itself creates any interest in the property. To the same effect is the decision in Ram Baran Prasad v. Ram Mohit Hazra, : [1967]1SCR293 . This principle has been applied departing from the position in English law. It has been reiterated in Bai Dosabai v. Mathurdas Govinddas, : [1980]3SCR762 , wherein it was held that a mere contract does not create any interest or charge on the property but merely creates an obligation annexed to the ownership of immovable property not amounting to an interest in property. Therefore, the transfree by himself cannot question the correctness of the order of the appropriate authority. The ruling in Vijay Flexible Containers' case : [1990]186ITR693(Bom) , does not in any way whittle done this concluded position under the transfer of Property Act. That was a case in which a consent decree for specific performance had been passed. A question arose as to whether an assessee had a right to immovable property conveyed to him under the decree and in such an event, whether it would amount to a capital assess within the meaning of section 2(14) of the Act. As a matter of fact, in that very decision itself, the learned judges have referred to the cases in Ram Baran Prasad v. Ram Mohit Hazra, : [1967]1SCR293 and Soni Lalji Jetha v. Soni Kalidas Deuchand, : [1967]1SCR873 and also the earlier ruling of the Madras High Court in Venkateswara Aiyar v. Kallor Illath Raman Nambudhri, AIR 1917 Mad 358, and held that a mere contract for a sale created a personal obligation of a fiduciary character which could be enforced by a suit for specific performance, and it does not in any way alter the position under the Transfer of Property Act. Again, in Andalammal's case, : AIR1962Mad378 , a question arose with regards to the right of reconveyance of property for the purpose of assignment. Here again, it did not say that the agreement holder could have an interest in the immovable property forming the subject matter of sale. CIT v. Tata Services Ltd. : [1980]122ITR594(Bom) , also dealt with the question whether the right of reconveyance is within the meaning of section 2(14) of the Act. Coming to clause (e) of section 269UA, if talks of persons interested in relation to any immovable property. If no interest is created in favour of the transferring by the reason of a mere contract for sale, he cannot claim to be a person interested in relation to immovable property. No doubt the definition used the word 'includes'. It is true that the inclusive definition is to be read in an enlarged manner. But, even by so reading, it cannot take in a person like the appellant to whom, under section 269UD, a notice is to be served. Likewise, under section 269UL, he is served, with the copy of the no objection certificate. That is because, under Form No. 37-1, both the transferor and the transferee seek the issue of a no objection certificate under section 269UL. Beyond that, it cannot be said that the general law in altered or that the Income-tax Act talks of the transferee differently. In any event, this is a case in which the principle of acquiescence must apply squarely. The sale had not been completed. All that the transferee would be entitled to was the repayment of Rs. 50 lakhs paid by way of advance. It is this advance which, when paid, was received without any demur. Under law, no doubt the transferor is entitled to the payment. Where, therefore, the transferee received the benefit consequent to the sale not taking place in accordance with the agreement dated November 28, 1990, he cannot approbate and reprobate. Rightly, therefore, the learned judge had applied this principle. This aspect becomes very relevant in view of clause 10.3, where it had been stipulated between the parties that, in the event of the schedule property being acquired under Chapter XX-C of the Act, the agreement shall be treated as cancelled and the appellant was to be authorised to receive the refund of advance directly from the appropriate authority. Therefore, he cannot now turn round and say that the money was paid only to the transferor under section 269UG(1) read with sub-section (3).
9. Chapter XX-C of the Income-tax Act which contains the provisions to which we have to bestow considerable attention came to be introduced by the Finance Act, 1986, with effect from October 1, 1986. In the definition under section 269UA, the important definition for our purpose is 'persons interested'. It reads thus :
''persons interested', in relation to any immovable property, includes all persons claiming, or entitled to claim, an interest in the consideration payable on account of the vesting of that property in the Central Government under this Chapter.'
10. What is required to be noted carefully is that the interest of the person must be in relation to any immovable property. No doubt it is an inclusive definition. As to how an inclusive definition is to be seen from the following passage in G. P. Singh's Principles of Statutory Interpretation, Second Edition, p. 108 :
'The definition of a word in the definition section may either be restrictive of its ordinary meaning or it may be extensive of the same. When a word is defined to 'mean' such and such, the definition is prima facie restrictive and exhaustive, whereas, where the word defined is declared to 'include' such and such, the definition is prima facie extensive. When by an amending Act, the word 'includes' was substituted for the word 'means' in a definition section, it was held that the intention was to make it more extensive. Further, a definition may be in the form of 'means and includes', where again the definition is exhaustive; on the other hand, if a word is defined 'to apply to include', the definition is understood as extensive.'
11. Again on the same subject, Bindra's Interpretation of Statutes, Sixth Edition, states thus (p. 931) :
'It is a well-known rule of interpretation that the word 'include' is used as a word of enlargement and ordinarily implies that something else has been given beyond the general language which proceeds it : to add to the general clause a species which does not naturally belong to it. When the word 'includes' was used in connection with 'income', their Lordships of the Privy Council observed in The King v. The B. C. Fir and Cedar Lumber Co. Ltd. AIR 1932 PC 121, '... their Lordships cannot doubt that in consequence the word, as used in the statute, includes, unless the context otherwise requires, not only those things which the interpretation clause declares that it shall include, but such things as the word signifies according to its natural import.'
The word 'includes' is a word of enlargement rather than of restriction.
When it is mentioned that a particular definition 'includes' certain things, it should be taken that the Legislature intended to settle a difference of option on the point or wanted to bring in other matters that would not properly come within the ordinary connotation of the word or expression or phrase in question.
'It is well known that the legislature uses the word 'means' where it wants to exhaust the significance of the term defined and the word 'includes' where it intends that while the term defined should retain its ordinary meaning its scope should be widened by specific enumeration of certain matters which its ordinary meaning may not comprise so as to make the definition enumerative but not exhaustive.''
12. Who are the persons who are included in the definition
(i) all persons claiming;
(ii) entitled to claim an interest in the consideration payable of account of vesting of the property in the Central Government.
13. Even by this inclusive definition, we are unable to see as to how a mere agreement-holder for the purchase of property could fall under this definition. While saying so, it is necessary on our part to refer to section 54 of the Transfer of Property Act to find out whether a mere agreement creates an interest in immovable property. In no uncertain terms, section 54 says :
''Sale' is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.
Such transfer, in the case of tangible immovable property of the values of one hundred rupees, such transfer may be made only by a registered instrument.
In the case of tangible immovable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.
Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.
A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on such property.'
14. While speaking of a contract for sale, in Mulla's Transfer of Property Act, seventh edition, at page 300, item 30, it is stated thus :
'(30) Does not of itself create any interest. - The last clause of the section abolishes the English doctrine that a contract for sale transfers an equitable estate to the purchaser. The law of India does not recognize equitable estates, and the English rule that the contract makes the purchaser owner in equity of the estate does not apply. In Ram Baran v. Ram Mohit, : [1967]1SCR293 , the Supreme Court has now held, settling a conflict of decisions, that a contract for sale does not create any interest in land. Hence, the Privy Council have held that apart from section 53A, 'an averment of the existence of a contract of sale, whether with or without an averment of possession following upon the contract, is not a relevant defence to an action for ejectment in India.' A person who has contracted to buy land is not the owner of any interest in the land and is, therefore, not complement to apply to set aside an execution sale of the same land. Similarly he is not entitled to mesne profits. It has also been held that even after a decree has been passed in a suit for specific performance, the purchaser has no interest in the property.
A contract for sale is therefore, merely a document creating a right to obtain another document and does not require registration. See Registration Act, section 17(2) (v) and Mulla's Registration Act. Even before the enactment of the Transfer of Property Act, the proceedings of the Legislature, when enacting the Registration Act of 1877, show that the Legislature did not regard an agreement for sale as itself creating an interest in land. This was explained by Birdwood J., in Chunilal Panalal v. Bomanji Mancherji Modi [1883] ILR 7 Bom 310, where an agreement for sale of immovable property was held to be exempt from registration even though it contained an acknowledgment of the receipt of earnest or part payment of the price. This settled rule of law was broken by the Privy Council decision in Dayal Singh v. Inder Singh [1926] AIR 1926 PC 94; 53 IA 214, 28 Bom LR 1372, but was restored by the Amending Act 2 of 1927. Some dicta in Skinner v. Skinner [1929] AIR 1929 PC 269; 56 IA 363; 33 Cal WN 1150, which may seem to infringe this rule are explained in the undernoted cases.'
15. On the same line, in Satyabrata Ghose v. Mugneeram Bangur and Co., : AIR1954SC44 , in paragraph 18, it has been held thus :
'The second contention raised by the Attorney-General can be disposed of in few words. It is true that, in England, the judicial opinion generally expressed is that the doctrine of frustration does not operate in the case of contracts for sale of land-Vide Hillingdon Estates Co. v. Stonefield Estates Ltd. [1952] 1 All ER 853 (Ch D). But the reason underlying this view is that, under the English law, as soon as there is a concluded contract by A to sell land to B at certain price, B becomes, in equity, the owner of the land subject to his obligation to pay the purchase money. On the other hand, A, in spite of his having the legal estate, holds the same in trust for the purchaser and whatever rights he still retains in the land are referable to his right to recover and receive the purchase money. The rule of frustration can only put an end to purely contractual obligations, but it cannot destroy an estate in land which has already accrued in favour of a contracting party.
According to the Indian law which is embodied in section 54 of the Transfer of Property Act, a contract for sale of land does not of itself create any interest in the property which is the subject-matter of the contract. The obligations of the parties to a contract for sale of land are, therefore, the same as in other ordinary contracts and, consequently, there is no conceivable reason why the doctrine of frustration should not be applicable to contracts for sale of land in India. This contention of the Attorney General must, therefore, fail.'
16. In Ram Baran's case, : [1967]1SCR293 , in paragraph 11, it has been observed that it is manifest that a mere contract for sale of immovable property does not of itself create any interest in or charge on such property. Again, in Bai Dosabai's case, : [1980]3SCR762 , this position has been further elucidated and it reads :
'We do not wish to go in any detail into the question whether the English equitable doctrine of conversion of realty into personalty is applicable in India. However, we do wish to say that the English doctrine of conversion of realty into personalty cannot be bodily lifted from its native English soil and transplanted in statute-bound Indian law. But, we have to notice that many of the principles of English equity have taken statutory from in India and have been incorporated in occasional provisions of various Indian statutes such as the Indian Trusts Act, the Specific Relief Act, Transfer of Property Act, etc., and where a question of interpretation of such equity-based statutory provisions arises, we will be well justified in seeking aid from the equity source. The concept of creation of duality of ownership, legal and equitable, on the execution of an agreement to convey immovable property, as understood in England, is alien to Indian law which recognises one owner, i.e., the legal owner : vide Ram Baran Prasad v. Ram Mohit Hazra : [1967]1SCR293 and Narandas Karsondas v. S. A. Kamtam : [1977]2SCR341 . The ultimate paragraph of section 54 of the Transfer of Property Act make it clear that such a contract creates an obligation annexed to the ownership of immovable property, not amounting to an interest in the property, but which obligation may be enforced against a transferee with notice of the contract or a gratuitous transferee of the property. Thus, the equitable ownership in property recognised by equity in England is translated into Indian law as an obligation annexed to the ownership of property not amounting to an interest in the property, but an obligation which may be enforced against a transferee with notice or a gratuitous transferee.'
17. Thus it is clear that the Transfer of Property Act does not create any interest in the immovable property. Then, the question would be whether the said definition under section 269UA(e) gives an enlarged right to a transferee or a mere agreement holder. We have already noted that the inclusive definition takes within it only persons claiming or entitled to claim an interest in the consideration payable as a result of the property being vested in the Central Government. How could it be said that an agreement holder has an interest in the consideration payable As a matter of fact, under section 269UG, when the property vests, as to how the payment is to be made is dealt with. We extract the section at this stage. It reads :
'269UG. (1) The amount of consideration payable in accordance with the provisions of section 269UF shall be tendered to the person or persons entitled thereto, within a period of one month from the end of the month in which the immovable property concerned becomes vested in the Central Government under sub-section (1), or, as the case may be, sub-section (6), of section 269UE :
Provided that if any liability for any tax or any other sum remaining payable under this Act, the Wealth-tax Act, 1957 (27 of 1957), the Gift-tax Act, 1958 (18 of 1958), the Estate Duty Act, 1953 (34 of 1953), or the Companies (Profits) Surtax Act 1964 (7 of 1964), by any person entitled the the consideration payable under section 269UF, the appropriate authority may, in lieu of the payment of the amount of consideration, set off the amount of consideration or any part thereof against such liability or sum, after giving an intimation in this behalf to the person entitled to the consideration.
(2) Notwithstanding anything contained in sub-section (1), if any dispute arises as to the apportionment of the amount of consideration amongst persons claiming to be entitled thereto, the Central Government shall deposit with the appropriate authority the amount of consideration required to be tendered under sub-section (1) within the period specified therein.
(3) Notwithstanding anything contained in sub-section (1), if the person entitled to the amount of consideration does not consent to receive it, or if there is any dispute as to the title to receive the amount of consideration, the Central Government shall deposit with the appropriate authority the amount of consideration required to be tendered under sub-section (1) within the period specified therein.
Provided that nothing herein contained shall affect the liability of any person who may receive the whole or any part of the amount of consideration for any immovable property vested in the Central Government under this Chapter to pay the same to the person lawfully entitled thereto.
(4) Where any amount of consideration has been deposited with the appropriate authority under this section, the appropriate authority may either of its own motion or on an application made by or on behalf of any person interested or claiming to be interested in such amount, order the same to be invested in such Government or other securities as it may think proper, and may direct the interest or other proceeds of any such investment to be accumulated and paid in such manner as will, in its opinion, give the parties interested therein the same benefits therefrom as they might have had from the immovable property in respect whereof such amount has been deposited or as near thereto as may be.'
18. Even here, nowhere is the transferee thought of. It is with reference to this that section 269UA(e) must be interpreted.
19. With this, we shall refer to the cases relied on by Mr. K. Srinivasan. earned advocate for the appellant. The first case that is relied on is CIT v. Vijay Flexible Containers : [1990]186ITR693(Bom) . In that case, a question arose as to whether the right to accord the conveyance of immovable property would fall within the expression 'property of any kind' under section 2(14) of the Income-tax Act. The answer was in the affirmative. It is also required to be noted that, in that case, the assessee had entered into an agreement for purchase of an immovable property and had paid a certain sum as earnest money. Later on, a suit for specific performance was filled. That ended in a consent decree in favour of the assessee for a certain sum. Therefore, when the assessee wanted to have the immovable property conveyed to him, the question was whether it was appropriate to add any kind so as to include it under capital asset. It is interesting to note in the very decision, paragraph 3 states as follows (at p. 696) :
'Under the provisions of section 54 of the Transfer of Property Act, 1882, a contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties and it does not of itself, create any interest in or charge on such property. Section 40 states that where a third person is entitled to the benefit of an obligation arising out of contract and annexed to the ownership of immovable property, but not amounting to an interest therein or easement thereon, such right or obligation may be enforced against a transferee with notice thereof or a gratuitous transferee of the property affected thereby, but not against a transferee for consideration without notice of the right or obligation nor against such property in his hands. The illustration to section 40 reads thus :
'A contracts to sell Sultanpur to B. While the contract is still in force he sells Sultanpur to C, who has notice of the contract. B may enforce the contract against C to the same extent as against A'. In the case of Ram Baran Prasad v. Ram Mohit, : [1967]1SCR293 , the Supreme Court held that it was manifest that a contract for sale of immovable property did not create any interest in immovable property. In Soni Lalji Jetha v. Soni Kalidas Devchand, : [1967]1SCR873 , the Supreme Court came to the conclusion that a contract for sale of immovable property, while it did not create interest in immovable property, created a personal obligation of a fiduciary character which could be enforced by a suit for specific performance not only against the vendor but also against a purchaser for consideration with notice. The Madras High Court, in Venkateswara Aiyar v. Kallor Illah Raman Nambudhri, AIR 1917 Mad 358, held that an executory contract for the conveyance of land was not a mere right to sue. The right to sue was no doubt involved in it on breach sounding in damages and where the specific enforcement of the contract could not be obtained.
The after going discussion leads, we think, to the conclusion that the right to obtain a conveyance of immovable property falls within the expression 'property of any kind' used in section 2(14) of the Income-tax Act and is, consequently, a capital asset.'
20. Therefore, it is one thing to say that the right to obtain a conveyance would be 'property of any kind' under section 2(14) of the Income-tax Act and, consequently, a 'capital asset' while it is a totally different thing to say that a mere agreement-holder could have an interest in the immovable property by reason of that agreement. In Andalammal's case, : AIR1962Mad378 , it is stated thus :
'The other grounds are hardly intelligible, and do not need any discussion. There is absolutely no question of any fraud in this case, and the learned Subordinate Judge seems to obtain a reconveyance, from assigning that right, notwithstanding the fact that he is a lessee in respect of the same property, and that some rents are due. A contract of lease is totally a different matter, and the law adequately provides for the enforcement of Madras Act I of 1955, can prevent the plaintiff appellant (assignee) from enforcing the right obtained by the assignment. First of all, section 7(1) refers to a transfer of 'immovable property', and the section might have to be strictly construed. More importantly, it is limited to a presumption which applies to the transferor alone. I know of no principle of law, including any part of the right to obtain a reconveyance, was also a lessee who owned some arrears. It is true that Venkataswami Naidu is not a party to the present action. But, obviously, upon the facts as stated by me, he would be estopped from claiming that his assignee could not enforce the right to reconveyance of which he took the assignment.'
21. The learned single judge, Justice Anantanarayanan, as he then was, dealing with the assignment of right of reconveyance and, in that context, a question arose as to whether it could cause property capable of assignment. That case does not afford any assistance to the appellant.
22. In CIT v. Tata Services Ltd. : [1980]122ITR594(Bom) , a Division Bench of the Bombay High Court held thus :
'What is a capital asset is defined in section 2(14) of the Income-tax Act, 1961. Under that provision, a capital asset means property of any kind held by an assessee, whether or not connected with his business or profession. The order sub-clauses which deal with what property is not included in the definition of capital asset are not relevant. Under section 2(47), a transfer in relation to a capital asset is defined as including the sale, exchange or relinquishment of the asset or the extinguishment of any right therein or the compulsory acquisition thereof under any law. The word 'property', used in section 2(14) of the Income-tax Act, is a word o! the widest amplitude and the definition has assigning this by the use of the words 'of any kind'. Thus, any right which can be called property will be included in the definition of 'capital asset'. A contract for sale of land is capable of specific performance. It is also assignable. (See Hochat Kizhakke Madathil Venkateswara Aiyar v. Kallor Illah Raman Nambudhri, AIR 1917 Mad 358). Therefore, in our view, a right to obtain conveyance of immovable property was clearly 'property' as contemplated by section 2(14) of the Income-tax Act, 1961.'
23. It could clearly be seen there again that the question was as to what was the meaning attributable to 'property of any kind' as a 'capital asset' under section 2(14). Therefore, this also does not lend credence to the argument advanced by Mr. Srinivasan. He also brought to our notice that, under section 269UD, a copy of the order is to be served on the transferor as well as the transferee and on every other person whom the appropriate authority knows to be interested in the property. As we have noted above, the appellant is not having any interest in the property, since no interest is created in the immovable property in his favour. It is true that a copy of the order is served on the transferee. But, that by itself does not clothe him with any interest. The reason is not far to seek as to why the copy of the order is served. It may be useful to remember that in Form No. 37-I it is both the transferor and the transferee who seek a no objection certificate. Therefore, when an order is passed by the appropriate authority for purchase by the Central Government under section 269UD, a copy of the order is served on the transferee to enable him to know as to what the Revenue has done. Equally when, under section 269UL(3), in the absence of an order under section 269UD(1), the appropriate authority is to issue the no objection certificate and deliver copies thereof to the transferor and the transferee, here again, it is in consequence of the fact of the application being made in Form No. 37-I, both by the transferor and the transferee. Hence, they are put on information as to the course of action adopted by the Revenue. Therefore, neither by reason of section 269UD(2) nor section 269UL(3) could a transferee contend that he has secured an interest in the immovable property contrary to the settled law as adumbrated that under section 54 of the Transfer of Property Act and various rulings of the Supreme Court. Thus, we conclude that the appellant has no locus standi. We may also add that merely because section 269UD(2) says 'every other person whom the appropriate authority knows to be interested in the property', it does not bring a transferee who has no interest in the property in whose favour no interest is created by reason of the contract for sale. In the result, we hold that a transferee had no locus standi to question the order of the appropriate authority made under section 269UD(1).
24. Now we pass on to the question of the application of the principle of acquiescence. One of the important terms of the agreement dated November 28, 1990, is 10.3. It reads as under :
'In the event of the Schedule Property being acquired under the provisions of Chapter XX-C of the Income-tax Act, 1961, then this agreement shall be treated as cancelled without any of the aforementioned penal consequences and the vendors shall refund the entire advance to the purchasers forthwith; such refund shall be by authorising the purchasers to receive the refund of advance to the purchasers to receive the refund of advance directly from the appropriate authority, Income-tax Department, from out of the sale price; in the event of the entire amount being received by the vendors directly from the Income-tax Department, then the vendors shall forthwith refund the advance to the purchasers.'
25. Where, therefore, the appellant has received without any demur the sum of Rs. 50 lakhs paid by way of advance, in view of the specific terms of the above clause, we do not think that it is open to him to say that, under section 269UG, the money is due only to the transferor and, therefore, the payment to him and the acceptance thereof will be of no consequence. As rightly contended by Mr. Chandra Kumar, had not the agreement fractioned into a sale, all that the transferor is entitled to is the refund of the advance because it was not paid as earnest money but only by way of advance. In this connection, we may add that section 269UG(3) which enables the Central Government to deposit will have no bearing on this issue. Therefore, the principle of acquiescence fully applies as rightly held by the learned single judge. In writ Appeals Nos. 622 and 622 of 1988, this aspect of the matter did not come up for consideration. Even otherwise, that was only an interim order and the does not purport to lay down any principle of law. For these reasons, we dismiss the writ appeal.