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U.S Awasthi And Another v. Inspecting Assistant...

Allahabad High Court

Jul 11, 1975

Judgment

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Factual and Procedural Background

The petitioners are Sri U.S. Awasthi (a practising advocate at Allahabad) and his wife. They, with others, purchased bungalow No. 15, Sarojini Naidu Marg, Allahabad and adjacent vacant land of about 5,992–6,000 sq. yards for Rs. 37,150.40 (Rs. 6.20 per sq. yard). The vendors were Sri M.L. Dave and Smt. Sudha Dave. The sale deed was executed and registered on 29 December 1973.

On 19 August 1974 the Inspecting Assistant Commissioner of Income-tax, Acquisition Range, Lucknow issued a notice under section 269D(1) of the Income-tax Act, 1961 stating that the fair market value (FMV) of the property exceeded the apparent consideration by more than 15% and that full consideration had not been shown in the sale deed; initiation of proceedings under section 269C for acquisition followed. The petitioners replied and then filed the present writ petitions challenging the initiation of acquisition proceedings as being without jurisdiction.

The court heard extensive factual and legal contentions and decided to deal with the connected petitions together because they arose from common facts and involved the same question of law. The ultimate outcome was that the court allowed the petitions, quashed the notice dated 19 August 1974 initiating acquisition proceedings, and awarded costs to the petitioners.

Legal Issues Presented

Whether the competent authority had sufficient material and had recorded reasons to form the requisite reason to believe under section 269C so as to validly initiate acquisition proceedings under Chapter XXA.
Whether a preliminary notice under section 269D(1) must be published in the Official Gazette and, if so, whether such publication must occur within nine months from the end of the month in which the instrument of transfer is registered in order to vest jurisdiction in the competent authority.
Whether the ancillary modes of bringing the notice to the attention of interested persons (service on parties, affixing on office or property) can substitute for or cure the absence of publication in the Official Gazette within the statutory period.
Whether the competent authority's initiation of proceedings was vitiated by arbitrariness, discrimination as between co-purchasers, or other procedural infirmities (including alleged mechanical issuance of the notice and interpolation in the date).
Whether the competent authority could acquire an improvement or building that the transferee had constructed after purchase but before initiation of proceedings under Chapter XXA (raised but left undecided as not necessary to the disposal).

Arguments of the Parties

Petitioners' Arguments

The initiation of acquisition proceedings was without jurisdiction — the competent authority lacked adequate material to form the required belief that the FMV exceeded Rs. 25,000 and that the sale consideration was understated by at least 15%.
The competent authority did not record reasons as required before initiating proceedings and acted mechanically or as a matter of routine in issuing a printed notice.
The consideration shown in the sale deed was fair and had apparently been fixed earlier (petitioners alleged a prior agreement of sale), so there was no motive to understate the consideration.
The petitioners complained of discrimination because other purchasers of land in the same premises had not been subject to similar proceedings.
They had begun construction after purchase and argued that acquisition proceedings should not cover a completed building or that compensation provisions for buildings were absent.
Crucially, the petitioners contended that the preliminary notice was not validly published in the Official Gazette within nine months from the end of the month of registration and therefore proceedings were void ab initio.

Respondents' Arguments

The petition was premature because only a show-cause (preliminary) notice under section 269D(1) had been issued; the petitioners could file objections, lead evidence, and, if dissatisfied with the final order, take statutory appeals — therefore writ relief was inappropriate or barred by alternative remedy.
The competent authority had material — an inspector's report (dated 19 August 1974 by Inspector Gopi Chand) estimating FMV at Rs. 10 per sq. yard (total ~Rs. 59,920) — and recorded reasons indicating initiation of proceedings; hence initiation was lawful.
The printed notice appeared in the Official Gazette dated 28 September 1974 and the respondents contended that publication was complete on the date of printing (28 September 1974), thus within the nine-month time limit (they disputed the petitioners' account of Gazette availability dates).
With respect to other purchasers, proceedings had been initiated only against those properties which, on available material, showed FMV in excess of Rs. 25,000; others were not proceeded against because FMV did not exceed the statutory threshold.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Makhdoom Khan v. District Magistrate, Moradabad [1974] ALJ 412 (All)	Held that publication in the Official Gazette is not complete unless the Gazette containing the notification becomes available to the public (i.e., mere printing is insufficient).	The court referenced this view as supporting the position that publication requires availability to the public; it formed part of the authorities considered on the completeness of Gazette publication.
Akhtar Hussain v. District Magistrate, Moradabad (Special Appeal No. 87 of 1974, decided 5 April 1974)	Division Bench decision upsetting the above, holding that non-compliance with publication timing did not vitiate the election where the programme had otherwise been notified by other means (i.e., suggested Gazette publication was not strictly mandatory in that context).	The court noted this decision as an instance where the earlier view was overturned, but ultimately did not follow it because a later Full Bench (Hiralal) took a contrary position.
Hiralal v. District Magistrate, Etah (Full Bench, Civil Misc. Writ No. 8935 of 1974, decided 19 March 1975)	Full Bench held that the requirement of publication in the Official Gazette was mandatory and that publication is complete only when the Gazette containing the notification becomes available to the public (mere printing is not publication).	The court expressly adopted the Full Bench's rule: publication in the Gazette is mandatory for vesting jurisdiction and is complete only when the Gazette is publicly available. The court applied this principle to hold that the competent authority lacked jurisdiction because the Gazette was not available within the statutory period.

Court's Reasoning and Analysis

The court proceeded in a structured manner, first identifying and summarising the relevant statutory scheme and then analysing each principal contention in light of the material on record.

Statutory framework considered:

Chapter XXA (sections 269A–269S) was added by the Taxation Laws (Amendment) Act, 1972 (Act No. 45 of 1972) to permit acquisition of immovable property in cases where apparent consideration is understated so as to counteract tax evasion.
Section 269C permits the competent authority to initiate acquisition where it has reason to believe that (a) FMV of the property exceeds Rs. 25,000 and (b) the apparent consideration in the transfer instrument is understated with the requisite object; the authority must record reasons before initiating proceedings and must have the required belief (including the 15% shortfall threshold).
Section 269D(1) requires initiation of proceedings by publication of a preliminary notice in the Official Gazette and sets a limitation that such proceedings cannot be initiated after nine months from the end of the month in which the instrument of transfer is registered. Section 269D(2) prescribes ancillary modes of serving and publishing notices locally (service on parties, affixation), but these are ancillary and do not substitute for Gazette publication.
Section 269E ties the right to object to the prior publication in the Official Gazette—objections arise only where the preliminary notice was published in the Gazette as required by section 269D(1).

Analysis of "material" and recording of reasons:

The court examined the inspector's report (by Inspector Gopi Chand dated 19 Aug 1974) which estimated FMV at Rs. 10 per sq. yard and set out factual reasoning (comparisons with other sales, leasehold nature and remaining lease period, etc.). That report was filed as annexure A.
The competent authority (K.N. Misra) issued short written orders (reproduced as annexures) recording that he had seen the inspector's report, considered sale deeds and other documents, and directed initiation of proceedings under section 269D(1); a separate order recommended publication in the Gazette. The court treated these orders as the required recording of reasons.
The court held that at the initiation stage the competent authority need only have a prima facie case; material need not be conclusive. The inspector's detailed report and the competent authority's orders constituted sufficient material and recorded reasons for initiation, so the challenge that initiation was arbitrary or mechanical failed on this ground.
The court considered but rejected as irrelevant at this stage the petitioners' assertion of a prior private agreement fixing price (and their failure to disclose it in Form No. 37-G). Whether or not such an agreement existed or was registered was not decisive for the limited purpose of whether the competent authority had prima facie material to begin proceedings.

Analysis of discrimination and other procedural complaints:

The petitioners' complaint of discrimination was examined against the material showing that proceedings were initiated only where FMV on available material exceeded Rs. 25,000 (e.g., proceedings had been initiated against A.D. Giri and Smt. Sarla Naithani but not against others whose FMV did not exceed Rs. 25,000). The court found no justification for the discrimination claim and rejected it.
The court also addressed a technical inconsistency in the date on the printed notice (an apparent interpolation changing "10" to "19") but declined to draw an adverse inference since nothing turned on that fact given the other material and orders. The court noted that if the notice had truly been issued before the inspector's report this would justify petitioners' grievance, but the record supported issuance after the inspector's report.
On the issue of improvements erected by the petitioners after purchase, the court observed the point and admonished the competent authority to act quickly to prevent undue further investment; however it expressly declined to decide whether the construction of a new building on previously vacant land constitutes an "addition or alteration" within the compensation provisions, as that question was not necessary for disposal.

Analysis of Gazette publication and jurisdiction (the decisive point):

The court carefully parsed section 269D(1) and section 269E(1) and concluded that the publication of the preliminary notice in the Official Gazette within nine months from the end of the month of registration is a condition precedent and jurisdictional: only where such publication has occurred do objections under section 269E arise.
The petitioners' uncontroverted averments in their rejoinder-affidavit indicated that although the Gazette containing the notice bore the date 28 September 1974, the Gazette issue was not despatched from the Government Press at Faridabad until several days later, was received at the Controller of Publications office on 4 October 1974 and was available for sale to the public only on 14 October 1974 (and reached various offices and libraries in mid-to-late October). These averments were not controverted by respondents.
The court adopted the Full Bench principle (Hiralal v. District Magistrate, Etah) that publication is complete only when the Gazette containing the notification becomes available to the public; mere printing is insufficient. The court therefore rejected the respondents' contention that the date of printing (28 September 1974) constituted completion of publication for statutory purposes.
Because the sale deed was registered on 29 December 1973, the nine-month period expired on 30 September 1974; the court accepted the petitioners' uncontested account that the Gazette issue was not publicly available until after that date and therefore the statutory publication did not occur within the prescribed time. Consequently the competent authority lacked jurisdiction to continue proceedings initiated by the purported preliminary notice.

Holding and Implications

Holding: The petitions are allowed and the notice dated 19 August 1974 initiating acquisition proceedings under Chapter XXA (under section 269 of the Income-tax Act as referred to in the order) is quashed.

Immediate consequences for the parties:

The initiation of acquisition proceedings against the petitioners (by the notice dated 19 August 1974) is declared void for want of jurisdiction because the statutory preliminary publication in the Official Gazette did not occur within nine months from the end of the month in which the sale deed was registered.
The petitioners were awarded costs.

Broader implications (as stated or directly supported by the opinion):

The court endorsed the legal principle (as stated by the Full Bench in Hiralal) that the publication required by statute in the Official Gazette is complete only when the Gazette containing the notification is available to the public and that this requirement is mandatory when so prescribed by the statute; ancillary modes of notifying parties do not cure failure to comply with the Gazette-publication requirement within the statutory period.
The court emphasized that at the initiation stage the competent authority is required only to have prima facie material and to record reasons in writing; conclusive valuation and final determinations are matters for the subsequent objection and hearing process under the statute.

Note: The court declined to decide the separate substantive question whether a newly constructed building erected between purchase and initiation of proceedings constitutes an "addition or alteration" for compensation purposes; that issue was left open as not necessary for the present disposal.

Show all summary ...

R.L Gulati, J.:— This and the connected writ petition arise out of a common set of facts and involve a common question of law and they are, therefore, being disposed of by this common judgment.

2. The petitioner No. 1, Sri U.S Awasthi, is a practising advocate at Allahabad and petitioner No. 2 is his wife. They, along with some other persons, purchased bungalow No. 15, Sarojini Naidu Marg, Allahabad, together with the vacant land. The petitioners purchased vacant land measuring about 6,000 sq. yards for a sum of Rs. 37,150.40, the price being Rs. 6.20 per sq. yard. The vendors are Sri M.L Dave, an Assistant Secretary in the Ministry of Defence, New Delhi, and Srimati Sudha Dave, widow of late Sri C.M Dave. The sale deed was executed and registered on 29th December, 1973. On 19th August, 1974, a notice under section 269D(1) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”), was issued to the petitioners by the Inspecting Assistant Commissioner of Income-tax, Acquisition Range, Lucknow. It was stated in the notice that the fair market value of the property exceeded the apparent consideration thereof by more than 15 per cent. and that the full consideration had not been shown in the sale deed, and, therefore, proceedings were being initiated under section 269C of the Act for the acquisition of the aforesaid property. The petitioners were required to file objection, if any, in writing, within a period of 45 days from the date of the publication of the notice in the Official Gazette or within a period of 30 days from the date of the service of the notice on them whichever period expired later. The petitioners submitted a reply and later on filed the present writ petition on the ground that they were advised that the initiation of proceedings was wholly without jurisdiction and, as such, could be challenged by means of a petition.

3. A large number of grounds have been raised but before dealing with these grounds it is necessary to notice the relevant provisions of law. Chapter XXA, covering sections 269A to 269S, was added to the Act by the Taxation Laws (Amendment) Act, 1972 (Act No. 45 of 1972), with effect from 15th November, 1972. It provides for the acquisition of immovable properties in certain cases of transfer to counteract the evasion of tax. Section 296C provides:

“269C. Where the competent authority has reason to believe that any immovable property of a fair market value exceeding twenty-five thousand rupees has been transferred by a person……. to another person……. for an apparent consideration which is less than the fair market value of the property and that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with the object of—

(a) facilitating the reduction or evasion of the liability of the transferor to pay tax under this Act in respect of any income arising from the transfer; or

(b) facilitating the concealment of any income or any moneys or other assets which have not been or which ought to be disclosed by the transferee for the purposes of the Indian Income-tax Act, 1922.or this Act or the Wealth-tax Act, 1957,

the compentent authority may, subject to the provisions of this Chapter, initiate proceedings for the acquisition of such property under this Chapter:

Provided that before initiating such proceedings, the competent authority shall record his reasons for doing so:

Provided further that no such proceedings shall be initiated unless the competent authority has reason to believe that the fair market value of the property exceeds the apparent consideration therefor by more then fifteen per cent. of such apparent consideration.”

4. Section 269D provides for a preliminary notice. Sub-section (1) says:

“(1) The competent authority shall initiate proceedings for the acquisition, under this Chapter, of any immovable property referred to in section 269C by notice to that effect published in the Official Gazette:

Provided that no such proceedings shall be initiated in respect of any immovable property after the expiration of a period of nine months from the end of the month in which the instrument of transfer in respect of such property is registered under the Registration Act, 1908 (16 of 1908)…”

5. Sub-section (2) then provides that the competent authority shall cause a notice under sub-section (1) in respect of any immovable property to be served on the transferor, the transferee, the person in occupation of the property, if the transferee is not in occupation thereof, and on every person whom the competent authority knows to be interested in the property. It also provides for the publication of the notice in the office of the competent authority by affixing a copy thereof to a conspicuous place and in the locality in which the immovable property to which it relates is situate by affixing a copy thereof to a conspicuous part of the property and also by making known in such manner as may be prescribed the substance of such notice at a convenient place in the said locality.

6. Section 269E then provides for objections and section 269F for hearing of the objections and for passing of a final order. It may be mentioned here that the competent authority has been defined in section 269A to mean an Assistant Commissioner of Income-tax authorised by the Central Government under section 269B to perform the functions of a competent authority under this Chapter. It is under these provisions that the impugned proceedings were initiated by the competent authority, namely, the Assistant Commissioner of Income-tax, Acquisition Range, Lucknow, on the ground that the fair market value of the property was more than Rs. 25,000 and the full sale consideration had not been shown in the sale deed. This, in the opinion of the competent authority, had been done in order to facilitate the evasion of tax by the vendors as well as by the petitioners.

7. On behalf of the respondents a preliminary objection has been raised. It is urged that only a show-cause notice has been issued to the petitioners and no final order has yet been passed. The petitioners can file their objections and thereafter can lead evidence to substantiate such objections and in case they are not satisfied with the final order they have the right of appeal. In other words, it was urged that the petition is premature and, in any case, is barred because of the existence of an alternative remedy. It is true that the question with regard to the fair market price is a question of fact which has to be decided by the competent authority on the basis of evidence brought on record and such a question cannot be agitated or decided in a writ petition. But, if the contention of the petitioners is that initiation of proceedings itself is without jurisdiction for the reason that it is barred by time or that it has been made without the existence of condition precedent then certainly this court can intervene and prevent the further exercise of jurisdiction in order to avoid harassment, inconvenience and unnecessary expenditure. We have, therefore, decided to examine the contentions of the parties on merits.

8. The first ground of attack is that there was no material before the competent authority to form the belief that the fair market value of the property in question had not been truly stated in the transfer deed. It is urged that before the competent authority can initiate proceedings, it must have adequate material before it to form the belief that the fair market value of the property which has been the subject-matter of a sale exceeds Rs. 25,000 and the consideration shown in the sale deed has been understated by at least 15 per cent. It is only then that the provisions contained in Chapter XXA are attracted. It is submitted that these initial requirements are lacking in the instant case and the competent authority has, as a matter of routine, issued a printed notice to the petitioners without applying his mind to the facts of the case. It is further urged that before the initiation of proceedings the competent authority had to record its reasons but no such reasons were recorded.

9. Shri Bishambhar Nath, who is the competent authority at present, has filed a counter-affidavit and in the connected writ petition counter-affidavit has been filed by Sri K.N Misra, who was the competent authority, who initiated the proceedings. From these two counter-affidavits it appears that one Sri Gopi Chand, Inspector of Income-tax, made a report dated 19th August, 1974, to the effect that the fair market value of the land in dispute should be Rs. 10 per sq. yard. A copy of this report has been filed as annexure “A” to the counter-affidavit and since it is material, it is reproduced below:

“One of the transferor, Sri M.L Dave, who is Joint Secretary in the Ministry of Defence at New Delhi, is karta of his Hindu undivided family and the other transferor, Smt. Sudha Devi, is karta of her own branch. The land is situated far off the market towards Rajapur. Sale rate has been disclosed at Rs. 6.20 per sq. yard which appears to have been understated in the sale deed. In this connection I may mention that land rate has been adopted by the valuation officer, Allahabad, in the case of G.I.R No. 58-A, Smt. Sheokali Devi and others at Beli Road, Allahabad, which was sold on September 10, 1973, at Rs. 50 per sq. yard, which is a free-hold one. The area of Sarojini Naidu Marg which is in Civil Lines is reported to be in a better situation. In another case in G.I.R No. 17-S, Sri Anil Kumar Sidhwani & others at Chintamani Road, Allahabad, sale rate was adopted at Rs. 50 per sq. yard by the valuation officer. Sale was effected on April 18, 1973. The land in this case was also freehold. However, considering the fact that the present land is a leasehold one and the lease is for a period of about 14 years only, I estimate the fair market value of the land at Rs. 59,920 for 5,992 sq. yards, which has been arrived at by applying a rate of Rs. 10 per sq. yard. The case may kindly be referred to the valuation officer for its proper valuation.

Submitted.

(Sd.) Gopi Chand,

I.T.I (Acq.).

19-8-74.”

10. On the foot of this report Sri K.N Misra passed the following order:

“Seen the report and considered also the sale deeds and other documents on file. Start proceedings under section 269D(1).

(Sd.) K.N Misra.

19-8-74.”

11. On the same date he passed a separate order in the following words, a copy whereof is annexure “B” to the counter-affidavit and is reproduced below:

“Seen inspector's report submitted by him. This case appears to be fit for initiation of acquisition proceedings. Send notice to Government. Press for publication in the Gazette of India.

(Sd.) Illegible,

I.A.C (Acq.).”

12. From these documents it is clear that the competent authority did not act arbitrarily or without any material. The inspector had made a detailed report disclosing the reason for assessing the property at Rs. 10 per sq. yard. In our opinion, this constituted sufficient material for the competent authority to make up its mind for the initiation of proceedings. The fact that the inspector at the end of the report recommended the case to be referred to the valuation officer for proper valuation does not, in any way, detract from the weight of the report. It must be remembered that at the stage of initiation of proceedings, the competent authority is expected to have a prima facie case only. It is not expected that the material available at that stage should be of a conclusive nature. The correct valuation of the property has to be arrived at after hearing the objections and considering the evidence which may be brought on record by either side. Annexure “B” reproduced above contains the reasons of the competent authority which it is required to record in writing, before initiating proceedings. Thus, in our opinion, both the requirements of law in this respect have been fully complied with and no fault can be found with the initiation of the proceedings.

13. To show that the competent authority had not applied its mind and had issued the impugned notice mechanically, a photostat copy of the notice under section 269D(1) has been annexed to the writ petition and the original notice has also been produced before us. It does appear that the notice was prepared on 10th August, 1975, the figure 10 appears, later on, to have been changed to 19. This fact has been stated by the petitioners in their rejoinder-affidavit and, as such, there is no reply of the respondents in their counter-affidavit. Therefore, we do not know as to under what circumstances the interpolation in the date of the notice was made. We, however, do not think it necessary to ask for a further counter-affidavit from the respondents, because, in our opinion, nothing turns on this fact. May be the notice had been prepared beforehand by the office in anticipation of the inspector's report but they were not issued until the inspector's report had been received and examined by the competent authority. The respondents could have easily destroyed the notice originally prepared and could have issued a fresh one. Had the notice been issued before the inspector's report the petitioners' grievance would have been justified. In these circumstances we are not prepared to draw an inference that the impugned notice had been issued by the competent authority without applying his mind or without any material before him.

14. It was then urged that the consideration shown in the sale deed was fair and true and there was no valid reason for the petitioners to understate the price in the sale deed because according to the petitioners the price had been fixed in the year 1968 long before Chapter XXA came to be added. This has been encountered by saying that there was no prior agreement of sale and the petitioners themselves had not disclosed any such agreement in the declaration furnished by them in Form No. 37-G under section 269P(1) of the Act as prescribed by rule 48G. The petitioners had scored out the columns relating to the information with regard to an agreement of sale. It has further been stated that in any case no such agreement could be taken notice of unless it was a registered one. In our opinion, this controversy is wholly irrelevant at this stage. The tendency to understate the sale price of immovable property in sale deeds with a view to evading tax and utilising unaccounted money was prevalent long before Chapter XXA was added to the statute. Chapter XXA merely provided a mode for the prevention of such evasion by giving an option to the Government to acquire the property in case it was considered that its price had been understated in the sale deed. Even assuming, therefore, that the petitioners did enter into some sort of agreement with the vendors with regard to the price of the land in dispute, the motive to understate the price was very much there even before Chapter XXA was introduced.

15. The petitioners have also complained of discrimination. They say there are, besides the petitioners, the following other persons who have also purchased land out of the same premises for prices mentioned against their names and no action has been taken against them:

Name of the purchaser Area of land Price Date of execution of sale deed Rs. Sri V.D Singh, Advocate 1,347 sq. yds. 8,350 29th Dec, 73. Sri K.N Tripathi 923 sq. yds. 5,723 do. A.N Sapru & B.N Sapru 2,104 sq. yds. 13,045 do. Sri A.D Giri 5,200 sq. yds. 32,000 do. Smt. Sarla Naithani 4,739 sq. yds. plus buildings standing thereon

16. In paragraph 5 of the counter-affidavit the competent authority has stated that proceedings under Chapter XXA have been initiated against Sri A.D Giri and Smt. Sarla Naithani but no action has been taken against the remaining vendees because the competent authority did not have reason to believe that the fair market value of the property was in excess of Rs. 25,000 on the material available to him at that time. We have already noticed that proceedings under Chapter XXA are contemplated only in respect of properties whose fair market value exceeds Rs. 25,000. On the basis of the inspector's report the fair market value of the land purchased by Sri V.D Singh, K.N Tripathi and B.N Sapru, did not exceed Rs. 25,000 and, as such, the competent authority was not authorised to initiate proceedings against them. Proceedings have been initiated against the remaining two as the property purchased by them is admittedly worth more than Rs. 25,000. The charge of discrimination, therefore, fails and is rejected.

17. The petitioners have raised another contention. It is urged that soon after the sale deed was registered they took steps to set up a building on the land purchased by them and at the time when proceedings under Chapter XXA were initiated against them, they had almost completed the building. The competent authority had jurisdiction only to take acquisition proceedings with regard to the vacant land but it had no jurisdiction to take such proceedings in respect of a completed building and, in any case, there is no provision in the Act for payment of compensation with regard to a building in case the vacant land was sought to be acquired. It is true that some sort of structure had been set up by the petitioners before the impugned proceedings had been initiated against them. There is a provision in the Act for payment of compensation in case some addition or alteration to the property had been made between the time of its purchase and initiation of proceedings under Chapter XXA but whether the construction of an altogether new building on a vacant land amounts to addition or alteration to the property is a moot question. However, we do not propose to decide this question because it is not necessary for the disposal of the present writ petition. We do wish to observe that the competent authority must act as quickly as possible to prevent further investment on the property sought to be acquired. If this is not done, undue hardship is likely to arise. At the same time we think that a person who purchases immovable property worth more than Rs. 25,000 must wait for a reasonable time, if not for full 9 months, before spending any further money on it so that in a case of acquisition he is not put to any further loss. In the instant case the competent authority did act with undue delay and aft the same time the petitioners also acted with undue haste in setting up a building.

18. The last contention put forward on behalf of the petitioners is that there was no publication of the notice within a period of 9 months as required by section 269D of the Act and for that reason the proceedings against the petitioners are void ab initio. Sub-section (1) of section 269D provides for a preliminary notice. It is the preliminary notice which initiates the proceedings and the preliminary notice has to be given by publication in the Official Gazette. Unless this preliminary notice is published in the Official Gazette within 9 months from the end of the month in which the instrument of transfer is registered, proceedings cannot be said to have been initiated. Thus, the condition precedent for the initiation of proceedings is the publication of the preliminary notice in the Official Gazette within a period of nine months from the end of the month in which the sale deed is registered. In other words, it is the publication of the notice in the prescribed manner which confers jurisdiction upon the competent authority to take further proceedings under Chapter XXA. Subsection (2) of section 269D no doubt requires the competent authority to cause a notice under sub-section (1) to be served upon the transferor, the transferee and other interested persons. It also requires a notice to be published by affixing a copy thereof in a conspicuous place in the office of the competent authority and on a conspicuous part of the property itself but these notices are not jurisdictional notices. They have to be issued after the preliminary notice has been published in the Official Gazette within the statutory time. If a notice is not published in the Official Gazette within the prescribed time, the issuance of notice to the vendors and vendees and other interested persons and affixing notices in the office of the competent authority and on a conspicuous part of the property will not vest the competent authority with the jurisdiction to commence proceedings under Chapter XXA of the Act. These notices are ancillary notices meant only to bring to the notice of the persons concerned the initiation of proceedings under Chapter XXA. The notices contemplated by sub-section (2) do not provide an alternative mode of publication of the preliminary notice. This being the state of law what we have to see is as to whether the requirements of law as contained in section 269D(1) have been complied with, viz., whether a preliminary notice had been published in the Official Gazette within a period of 9 months from the end of the month in which the sale deed was registered. Now, the sale deed was registered on the 29th December, 1973. On the 19th August, 1974, the competent authority directed the publication of the preliminary notice under section 269D(1) in the Official Gazette. The notice was actually printed in the Gazette on September 28, 1974. This was within nine months but the Gazette was not available for sale until long after 9 months had expired. This has been stated by the petitioners in paragraph 18 of their rejoinder-affidavit. This is what they have stated:

“The petitioners have learnt from Sri Pramod Swarup, Advocate on record, Supreme Court of India, and from the record of Writ No. 105 of 1975 pending in this court that the Gazette dated September 28, 1974, was not despatched from the Government Press at Faridabad till several days after 28th September, 1974, and was received in the office of the Controller of Publications, Civil Lines, Delhi, on 4-10-1974. It was available for sale at the counter to the public on 14th October, 1974. It was despatched by post to the regular subscribers also after 14th October, 1974. The Gazette was received in the judges library, High Court, Allahabad, on October 17, 1974. It was received in the office of the Advocate-General, U.P, Allahabad, on or after October 17, 1974, and it was received in the High Court Bar Association, Allahabad, on or after October 20, 1974, and it was also received in the Accountant-General's office on or after October 17, 1974.”

19. These averments have not been controverted. From these averments the earliest date upon which the Gazette could be said to be available to the public was 4th October, 1974, when it was received in the office of the Controller of Publications, Civil Lines, Delhi. If the publication of a notification in the Gazette can be said to have taken place on the date when the Gazette becomes available to the public then clearly the publication of the preliminary notice in the instant case was made after 30th September, 1974, which was the date on which the period of 9 months expired.

20. The contention of the learned counsel for the respondents is that the publication was complete on 28th September, 1974, when the notice was printed in the Official Gazette. We have to see whether this contention is correct. In Makhdoom Khan v. District Magistrate, Moradabad [1974] ALJ 412 (All) one of us (hon'ble C.S.P Singh J.) held that the publication of a notice in the Official Gazette as required by paragraph 6 of the U.P Notified Areas (Conduct of Election of President & Election Petitions) Order, 1964, would not be complete unless the Gazette containing the notification became available to the public. This decision was upset by a Division Bench on special appeal in Akhtar Hussain v. District Magistrate, Moradabad (Special Appeal No. 87 of 1974 decided on April 5, 1974), on the ground that even though there was non-compliance of the provisions of para. 6(1) inasmuch as the notification fixing the election programme had not been published in the Official Gazette before the date of nomination yet since the programme was otherwise notified for the information of the public and for the members concerned under paragraph 6(2), the non-compliance with the requirements of paragraph 6(1) did not vitiate the election. In other words, it was; held that the requirement of publication in the Official Gazette was not a mandatory requirement and if the programme had otherwise been notified by individual notices, etc., under paragraph 6(2) the requirement of the law would be deemed to have been met. This case came up for further consideration before a Full Bench in Hiralal v. District Magistrate, Etah (Civil Misc. Writ No. 8935 of 1974, decided on 19th March, 1975 [FB]). The Full Bench held that the requirement of law contained in paragraph 6(1) was mandatory inasmuch as publication in the Official Gazette was the only method prescribed for fixing an election programme; the giving of notices under paragraph 6(2) could not dispense with the requirement of the notification in the Official Gazette. It was also held that the publication of a notification was complete only when the Gazette containing the notification became available to the public. Mere printing of the notification was not publication. In our opinion, the same is the position in the case before us. The initiation of proceedings under Chapter XXA of the Act can be done only by the publication of the preliminary notice in the Official Gazette within the prescribed time. The fact that individual notices were given to the petitioners within the prescribed period will not dispense with the requirement of the publication of the notice in the Official Gazette. We have already indicated that the issuance of a notice to the transferee or transferor and other interested persons and its affixation on the notice board in the the office of competent authority or at a conspicuous part of the property in question do not provide an alternative method of initiating the proceedings. The requirements contained in sub-section (1) of section 269D of the publication of the notice in the Official Gazette within the prescribed time is a mandatory requirement and if this requirement is not met the entire proceedings fail. This is clear from section 269E, sub-section (1) whereof is in the following words:

“269E. (1) Objections against the acquisition of the immovable property in respect of which a notice has been published in the Official Gazette under sub-section (1) of section 269D may be made—

(a) by the transferor or the transferee or any other person referred to in clause (a) of sub-section (2) of that section, within a period of forty-five days from the date of such publication or a period of thirty days from the date of service of notice on such person under the said clause, whichever period expires later;

(b) by any other person interested in such immovable property, within forty-five days from the date of such publication.”

21. Thus, it is clear that the objections are contemplated only against the acquisition of immovable property in respect of which a notice has been published in the Official Gazette. It does not envisage objections in respect of property where no notice has been published in the Official Gazette even if notices have been served upon the interested persons under sub-section (2) off section 269D. The publication of the notice in the Official Gazette within the meaning of section 269E will obviously be the publication as contemplated by sub-section (1) of section 269D, namely, that the notification not only must be printed in the Gazette but the Gazette containing the notification must also be available to the public within the statutory period. We have already stated above that according to the averments of the petitioners in the rejoinder-affidavit, no Gazette containing the notification was received in the office of the Controller of Publications, Civil Lines, Delhi, before 4th October, 1974, and was not available to the public before 14th October, 1974. This being the state of affairs, we have no hesitation in holding that the competent authority did not acquire jurisdiction to continue the proceedings as the proceedings had not been commenced within the statutory period.

22. In the result, the petitions succeed and are allowed. The notice dated 19th August, 1974, initiating acquisition proceedings under section 269 of the Income-tax Act are quashed. The petitioners are entitled to the costs.