Full Judgment
K.A. Swami C.J.
1. This writ appeal is preferred against the order dated January 5, 1994, passed by the learned single judge in Writ Petition No. 15039 of 1988 (see page 267 supra). The learned single judge has held that the clarificatory observation made by the Supreme Court in C. B. Gautam v. Union of India : [1993]199ITR530(SC) would appeal the case and, therefore, the petitioner is not entitled to the application of the ratio of that decision to his case and has accordingly dismissed the writ petition.
2. The relevant facts in this case are as follows :
3. There was an agreement of sale entered into between the petitioner and the third respondent in respect of the immovable property in question on August 25, 1988, under which the third respondent agreed to sell the immovable property in question to the petitioner for a sum of Rs. 19,00,000 and out of that a sum of Rs. 1,00,000 was paid by the petitioner to the third respondent a an advance, Pursuant to the agreement, the petitioner and the third respondent applied for permission to the appropriate authority under the provision of the Income-tax Act. However, the appropriate authority exercising the power under section 269UD(1) of the Act directed pre-emptive purchase of the immovable property in question by order dated November 15, 1988. The order of purchase was served upon the third respondent on November 25, 1988, and on the petitioner on November 28, 1988. The possession appears to have been delivered by the vendor on November 29, 1988, itself to the appropriate authority though the time for delivery was up to December 10, 1988. The petitioner filed the writ petition in question on December 5, 1988, itself within a period of one week and obtained an order of injunction on December 8, 1988, itself restraining the respondents from proceeding further in the matter. However, on January 2, 1989, after hearing both sides, learned single, judge passed the following interim order :
'After hearing learned counsel on both sides, I pass the following order :
The Department, namely, respondents Nos. 1 and 2 will pay a sum of Rs. 18,00,000 to the third respondent, owner of the property within ten days from today. On such payment, the third respondent will return a sum of Rs. 1,00,000 received from the writ petitioner by way of advance. Possession of the property shall continue to be with respondents Nos. 1 and 2 pending disposal of the writ petition. In the event of the writ petitioner succeeding in the writ petition, the balance of the sale consideration now paid by respondents Nos. 1 and 2 will have to be paid by the writ petitioner to respondents Nos. 1 and 2. Before getting or taking possession from respondents Nos. 1 and 2. The writ petitioner further on payment of Rs. 1,00,000 to third respondent in the writ petition, is entitled to ask for execution of a sale deed from the third respondent. These petitions are disposed of accordingly without prejudice to the contentions of both parties in the main writ petition.'
4. The decision in Gautam's case : [1993]199ITR530(SC) was rendered by the Supreme Court on November 17, 1992, and the clarificatory note was made on November 27, 1992. Thus it is clear that the transaction had not been completed when the writ petition was filed. Though possession was delivered by the vendor, immediately the intending preacher approached the court and obtained an order of temporary injunction as pointed out above. The payment of consideration by the appropriate authority to the owner has taken place pursuant to the order of this court made on January 2, 1989, in the aforesaid terms extracted above. These facts, which are not disputed, bring the case within the ratio of our judgment dated July 13, 1994, rendered in Writ Appeals Nos. 215 and 216 of 1992 (B. Rajagopal v. Managing Director Madras Metropolitan Water Supply and Sewerage Board, Madras).
5. Accordingly, following the said decision, this writ appeal is entitled to succeed. It is accordingly allowed. The order dated January 5, 1994, passed by the learned single judge (see at page 267 supra) and also that of the appropriate authority are set aside and the following directions are issued :
(1) The applications filed for permission by the petitioner and the third respondent before the appropriate authority under Chapter XX-C of the Act is remitted to the appropriate authority for a decision in accordance with law and in the light of the observations made in Gautam's case : [1993]199ITR530(SC) , after affording an opportunity to the petitioner and the third respondent if he appears.
(2) Within four weeks from today, the petitioner/appellant shall furnish bank guarantee for a sum of Rs. 19,00,000 to the satisfaction of the appropriate authority to ensure that in the event he succeeds before the appropriate authority, he must be in a position to pay the consideration amount of Rs. 19,00,000.
(3) In the event the appropriate authority grants permission for purchasing the property by the petitioner/appellant, it is open to the appropriate authority to encash the bank guarantee. In that event, the petitioner/appellant shall pay interest at the rate of 12 per cent. on the sum of Rs. 19,00,000 to the appropriate authority from the date the appropriate authority had paid that sum to the vendor within three weeks from the date the order granting permission for sale is passed.
(4) In the event the appropriate authority decides to order compulsory purchase of the property in question, the bank guarantee of Rs. 19,00,000 furnished by the petitioner/appellant shall stand cancelled.
6. The parties shall appear before the appropriate authority on August 18, 1994. The appropriate authority shall complete the proceedings within two months from August 18, 1994. However, there shall be no order as to costs.