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Case Number

Writ Petition No. 5097 of 1990

Advocates

For the Appellant: S.R.Ashok, Advocate.

Judges

Jagannadha Rao
Eswara Prasad, JJ.

Acts

Sec. 269 UG (2). Similarly, the provisions in sub-clause (3) of Sec. 269 UG of the Income-Tax Act
provisions of Part IX of the Indian Registration Act, 1908. Section 42
provisions of Sec. 213 of the Indian Succession Act, 1925.
provisions of sub-clause (ii) of sub-section (2) of Sec. 213
SECTION 42 INDIAN REGISTRATION ACT
provisions of Sec. 30 of the Land Acquisition Act. Sec. 30
SECTION 269 UG INCOME TAX ACT
Section 31(2) of the Land Acquisition Act. Sec. 31(2)
Sections 18 (1) and 30 of the Land Acquisition Act
sub-clause (4) of Sec. 269 UG and these provisions
sub-clause (iii). Sub-Clause (2) of Section 45
SECTION 33 LAND ACQUISITION ACT
Sec. 269 UH (2) of the Income-Tax Act, 1961,
Section 269 UG (3) of the Income Tax Act
Section 30 and in sub-sec. (2) of Sec. 31
Section 45(2) of the Registration Act.
Sec. 31(2) of the Land Acquisition Act
Sec. 30 of the Land Acquisition Act
sub-section (6) of Section 269 UE.(2)
Sec. 4 of the Land Acquisition Act
sub-clause (3) of Section 269(UG).
provisions of Section 268 UC
LAND ACQUISITION ACT 1894
sub-clause (3) of Section 269
sub-clause (4) of Section 269
Act under Sec. 269 UG (1)
Section 269 UG (1)
Section 269 UG (3).
Section 269 UE (i)
Section 269-UH.4.
Section 269 UF

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Smart Summary

Judgment Summary — Jagannadha Rao, J.

Factual and Procedural Background

The petitioners, claiming to be executors under the will of the late Mrs. Z.R. Ranji (who died on 29-10-1988), filed a writ petition seeking a writ of mandamus directing the appropriate Income-Tax authority at Bangalore (1st respondent) to declare that its order dated 16-2-1990 stood abrogated from 1-4-1990, that the property re-vested in the petitioners, to grant copies of the order, to deliver possession of the premises and to issue a no-objection certificate under Section 269UL(3).

The petitioners assert that Mrs. Ranji executed a will on 22-5-1987 appointing them executors and directing sale proceeds to charities. The petitioners entered into a sale agreement dated 14-12-1989 with the 3rd respondent for Rs. 15,60,000. Because the apparent consideration exceeded Rs. 10 lakhs, the agreement was submitted under Section 269UC of the Income-Tax Act.

The appropriate authority (referred to variably as the 1st and 2nd respondents in the opinion) made an order under Section 269UD(1) for purchase by the Central Government at a discounted price of Rs. 15,31,640 and, by Section 269UE(i), the property was held to have vested in the 2nd respondent with effect from 16-2-1990; possession was taken on 22-3-1990. The petitioners had earlier filed W.P. No. 2978/90 challenging the compulsory acquisition provisions and the vesting order; that writ was admitted on 8-3-1990 and remained pending.

The petitioners contended that the Central Government/2nd respondent neither tendered nor validly deposited the consideration in accordance with Section 269UG(2)/(3), and therefore the property re-vested in the petitioners under Section 269UH. The authorities, however, made a deposit described as being under Section 269UG(3) on 30-3-1990 (demand draft dated 29-3-1990). The validity of that deposit and the correctness of the authority's reasons for treating the case as one covered by Section 269UG(3) were challenged in this writ petition.

Legal Issues Presented

Whether the deposit of consideration by the Central Government/2nd respondent on 30-3-1990 could properly be treated as a deposit under Section 269UG(3) of the Income-Tax Act.
Whether, because the deposit was so treated, the statutory re-vesting in the apparent owners under Section 269UH was prevented from taking effect.
Whether the pendency of W.P. No. 2978/90 (challenging the provisions of Chapter XXC of the Income-Tax Act and the vesting order) amounts to a "dispute as to the title to receive the amount of consideration" or a dispute as to "entitlement" within the meaning of Section 269UG(3), thereby justifying deposit instead of tender under Section 269UG(1).

Arguments of the Parties

Petitioners' Arguments

The petitioners contended that the conditions for invoking Section 269UG(3) were not present, so the deposit made on 30-3-1990 could not be treated as a valid deposit under that sub-section and must be ignored; consequently Section 269UH would operate to re-vest the property in them.
They argued that the impugned order's reasons did not demonstrate any real dispute about title or entitlement: specifically, the non-production of the original will (the executors explained the original was deposited with the Sub-Registrar) and lack of probate were not valid grounds to conclude there was a dispute permitting deposit under Section 269UG(3).
The petitioners relied on statutory provisions (Registration Act and Succession Act) to show they could not have produced the original will and that probate was not necessary in the circumstances.

Respondent / Department's Arguments

The Department (2nd respondent) maintained that the deposit was made under Section 269UG(3) because there was a dispute as to the entitlement to receive the consideration — in particular because the petitioners had filed W.P. No. 2978/90 challenging the provisions of Chapter XXC and the vesting order.
The Department also pointed to alleged non-production of certain original documents (two other documents dated 4-1-1955 and 30-9-1937) during argument, though the court noted these points were not relied upon in the impugned order or in its counter-affidavit and therefore could not be raised for the first time in argument.
The Department argued that a challenge to the vesting order and the compulsory acquisition provisions constituted sufficient dispute as to entitlement to justify deposit under Section 269UG(3).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Grant v. State of Bihar (AIR 1966 SC 237)	Explains Sections 18(1) and 30 of the Land Acquisition Act — Collector's powers to refer disputes for apportionment and differences between Sec. 18 and Sec. 30.	Court used the decision to show that an authority may either refer a dispute or deposit the amount, and that depositing under a statutory provision can be an available course when disputes exist; analogy employed to interpret Sections 269UG(2)/(3).
Special Land Acquisition Officer v. Natwarlal Jamnadas (A.I.R. Bombay)	Interprets the word "dispute" in Section 30 and Section 31(2) of the Land Acquisition Act to include cases where there may be a single claimant but the Collector has omitted or is unable to decide entitlement.	Court relied on this authority to support a broad construction of "dispute" — i.e., it can include controversies even without multiple rival claimants; used to support interpretation of "dispute" in Section 269UG(3).
State of Madras v. B.V. Subrahmania Iyer (A.I.R. 1962 Madras 313)	Held that "dispute" in Section 30 should be given a wide meaning, not a literal one; includes controversies as to title even with a single claim.	Court cited this to reinforce the view that "dispute" and "title" may be construed broadly when deciding whether deposit under the analogous provision is permissible.
Phongesh Misro v. Collector of Land Acquisition (A.I.R. 1977 Gauhati 47)	Represents a contrary view (per the opinion) that "dispute" means a quarrel between two or more rival parties.	Court expressly dissented from this narrower view and explained why it preferred the broader construction of "dispute" applied in other authorities.
R. Padma v. Appropriate Authority of I.T. Dept (1990 185 I.T.R. 269 Mad.)	Applied similar reasoning under the Income-Tax Act provisions — supportive of depositing rather than tendering where disputes/entitlement issues exist.	Court noted that its conclusion is similar to the view taken by the Madras High Court in this case, using it as supporting authority for allowing deposit under Section 269UG(3) while a challenge to vesting provisions is pending.

Court's Reasoning and Analysis

The court proceeded by identifying the four reasons given by the 2nd respondent for treating the case as one covered by Section 269UG(3): (1) original will not handed over; (2) probate not taken; (3) the petitioners had filed W.P. No. 2978/90 challenging the Act's provisions and the vesting order; and (4) resolution of executors (8-12-1989) was on unstamped paper and no general power of attorney had been executed.

The court examined each reason in turn:

On the probate point (reason 2), the court held that this was "clearly erroneous in law" in view of Section 213 of the Indian Succession Act, 1925. Because the testatrix was Parsi and the will was executed in Hyderabad (outside the ordinary original civil jurisdiction of the High Courts at Calcutta, Madras and Bombay) and did not relate to immovable property within those jurisdictions, sub-clause (ii) of Section 213(2) applied and probate was not required for the executors to establish their rights.
On the fourth reason (unstamped resolution / no general power of attorney), the court observed that the will itself authorized two executors to carry out routine administration and representation; the resolution of 8-12-1989 was a resolution made pursuant to the will's directions and the will was a registered document. Thus the unstamped resolution did not invalidate the authorization nor did it require a separate general power of attorney. The court concluded this reason was erroneous in law.
On the first reason (non-production of original will), the court reviewed the certified copy and the Sub-Registrar's endorsement and the statutory scheme under the Indian Registration Act (Part IX: Sections 42–45). The executors had informed the authorities that the original was deposited with the Sub-Registrar and offered inspection there. The certified copy showed the will had been deposited and re-deposited under the statutory provisions. The court found the authorities erred in expecting production of the original from the executors and held the first reason to be a clear error of law.

Having rejected reasons 1, 2 and 4 as legally unsound, the court turned to the third reason — the existence of W.P. No. 2978/90 challenging the Act and the vesting order — as the pivotal question: whether the pendency of that writ constituted a "dispute as to the title to receive the amount of consideration" within Section 269UG(3).

The court analyzed Section 269UG(3) in light of analogous provisions in the Land Acquisition Act (Sections 30, 31(2), 33) and relevant case law. It considered competing submissions: the petitioners' narrow view that a "dispute" requires another claimant, and the Department's position that a dispute need not be raised by a third party and that a challenge to vesting/provisions suffices. The court relied on authorities holding that "dispute" should be given a wide meaning — including controversies affecting entitlement even when there is a sole claimant or no rival claimant.

The court interpreted "title" in Section 269UG(3) broadly to mean "entitlement" to receive the consideration. It held that when a person is challenging the vires of compulsory acquisition provisions or the validity of a vesting order, that challenge can create a bona fide doubt about the claimant's entitlement to receive consideration within the statutory period, and the department is justified in depositing the amount with the appropriate authority under Section 269UG(3) instead of tendering it under Section 269UG(1).

The court also considered that a conditional offer made by the department in earlier proceedings (to pay subject to security/bank guarantee) could not be relied upon by the petitioners as an unconditional admission; the condition demonstrated that the department entertained a doubt as to entitlement pending the writ.

Having found that the pendency of W.P. No. 2978/90 did raise a dispute as to entitlement and that the deposit of Rs. 15,31,640 on 30-3-1990 was properly made under Section 269UG(3), the court concluded the deposit prevented statutory re-vesting under Section 269UH.

Holding and Implications

Holding: The writ petition was dismissed. The court's core ruling may be summarized as:

HOLDING: The deposit of the consideration on 30-3-1990 by the Central Government/2nd respondent was properly made under Section 269UG(3) because the pendency of W.P. No. 2978/90 raised a bona fide dispute as to the petitioners' entitlement to receive the consideration and therefore the statutory re-vesting under Section 269UH was not attracted.

Immediate implications and consequences:

The petitioners are not entitled to have the property re-vested in them under Section 269UH because the authorities were justified in depositing the consideration under Section 269UG(3) while the writ challenging vesting remained pending.
The court identified two avenues by which the petitioners could obtain release of the deposited consideration: (a) withdraw W.P. No. 2978/90; or (b) furnish a bank guarantee/security acceptable to the respondents. If the petitioners do either, the respondents will release the consideration. The petitioners expressed unwillingness to withdraw the writ or furnish the bank guarantee.
The court granted a direction in respect of an investment request by the petitioners: it directed the first respondent (appropriate authority) to invest the amount of Rs. 1,31,640/- in the appropriate Capital Gains Units of the Unit Trust of India if the petitioners make an application for that purpose and are called upon to sign papers (the court directed the authority to call upon them to sign and the petitioners agreed to do so). This direction was stated to be without prejudice to the petitioners' rights.
No costs were awarded.

Note: The court applied existing statutory provisions and prior authorities to interpret "dispute" and "title/entitlement" under Section 269UG(3). The decision primarily resolves the specific dispute over the deposit and the operation of Section 269UH in the facts of this case by applying those principles.

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Mrs. Sooni Rustam Mehta, And Others v. The Appropriate Authority, Income-Tax Department, Bangalore And Others

Jagannadha Rao, J.:— The petitioners who claimed to be executors under the will of late Mrs. Z.R Ranji, have filed the present writ petition for the issue of a writ of Mandamus directing the appropriate authority Income-Tax Department, Bangalore (1st respondent) directing him (i) to make a declaration under Sec. 269 UH (2) of the Income-Tax Act, 1961, that the order passed by him on 16-2-1990 stands abrogated with effect from 1-4-1990 and the property stands re-vested in the petitioners and to grant copies of the said order and also deliver back possession of the premises and further issue a certificate of no-objection under Sec. 269 UL (3).

2. The following facts have to be stated: Mrs. Z.R Ranji who is said to be the owner of the immoveable property in Sardar Patel Road, Secunderabad, died on 29-10-1988, It is said that she had executed a will on 22-5-1987 and appointed the petitioners as executors and had directed them to dispose of the property and distribute the sale proceeds among certain named charities. It is said that the petitioners entered into an agreement of sale dated 14-12-89 with the 3rd respondent for a consideradent of Rs. 15,60,000/-. Inasmuch as the apparent consideration was above Rs. 10 lakhs, the petitioners submitted the said agreement to the 1st respontion at Bangalore as required by Sec. 269 UC of the Act. By an order under Sec. 269 UD(1) the 1st respondent ordered the purchase of the said property by the Central Government for the discounted price of Rs. 15,31,640/- and the property stood vested in the 2nd respondent under Section 269 UE (i) with effect from 16-2-1990 free from all encumbrances. The petitioners were directed to deliver possession of the property to the 2nd respondent within 15 days from the date of receipt of the said order. At that stage the petitioners' vendors filed W.P No. 2978/90 questioning the validity of the said order. It appears that the provisions of the Act relating to compulsory acquisition have been challenged in the said writ petition. That writ petition was admitted on 8-3-1990 and is still pending. Possession of the property was taken by the 2nd respondent on 22-3-1990.

3. It is the case of the petitioners that the 2nd respondent had neither tendered the money to the petitioners as required by Sec. 269 UG (2) nor deposited the money in accordance with Sec. 269 UG (3) and that therefore there was no valid deposit as per the provisions of the Act and the property stands re-vested in the petitioners under Section 269-UH.

4. The factual position however is that the 2nd respondent obtained the demand draft dated 29-3-1990 and made the required deposit under Sec. 269-UG (3) on 30-3-1990 before the 1st respondent. While making the said deposit the 2nd respondent considered that the facts of the case fitted into sub-clause (3) of Sec. 269-UG. It is the case of the writ petitioners that the conditions mentioned in Sec. 269-UG (3) were not present and that therefore the deposit made by the 2nd respondent on 30-3-1990 before the 1st respondent cannot be treated as deposit made under Sec. 269 UG (3) and that therefore the provisions of Sec. 269-UH in regard to re-vesting of the propery in the petitioners come into play, Inasmuch as the order dated 30-3-1990 is therefore in question it is necessary to extract the same in full and examine its correctness.

“In this connection it is pointed out to you that on the scrutiny of the documents submitted by you showed that the original will dt. 22-5-87 has not been handed over by you. Further, you have not taken a probate to execute the will of Late Z.R Ranji. In addition you have filed a writ petition of No. 2978/90 challenging—

(1) The provisions of Section 268 UC and UD and other relevant provisions contained in Chapter XXC of the I.T Act.

(2) To quash the order of the appropriate Authority dt. 16-2-1990 and accompanying communication dated 16-2-1990.

(3) To declare actions taken by the respondents Nos. 1 and 2 under Chapter XXC of the I.T Act as illegal and invalid.

and made certain averments in the writ petition. Further, the resolution dt. 8-12-1989 passed by the executors of the estate of Late Z.R Ranji, anthorising Mrs. Roshan M. Patel and Mr. B.K Batliwala to carry out and fulfil all procedural matters concerning the obtaining of necessary permission from the Competent Authority and Income-Tax clearance certificate from the Appropriate Authorities is on the unstamped paper and no general power of attorney has been executed by the executors in favour of Mrs. Roshan M. Patel and Mr. B.K Batliwaia.

In view of the above, as the property is not free from dispute as to the title to receive the amount of consideration, a sum of Rs. 15,31,640/- has been paid to the appropriate Authority, Bangalore as per provisions of Sec. 269 UG (3) of the I.T Act”.

5. It is this order that is mainly challenged in the writ petition. It is argued by Sri C. Ramakri???hna for the petitioners that the reasons mentioned in the abovesaid order do not bring the case under Section 269 UG (3) of the Income Tax Act and that therefore, the deposit in question cannot be treated to be an apparent deposit, that it has to be ignored and therefore, the provisions of Section 269 UH come into operation.

6. For the purpose of deciding the above question, it is necessary to refer to the provisions of Section 269 UG of the Income-Tax Act in so far as it is material for our purpose.

“Payment and deposit of consideration:— 269 UG..

(1) The amount of consideration payable in accordance with the pro visions of Section 269 UF shall be tendered to the person or persons entitled thereto within a period of one month from the end of the in which immovable property concerned becomes vested in the Central Government under sub-section (1) or, as the case may be, sub-section (6) of Section 269 UE.

(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-sec-lion (1) within the period specified therein.

(3) Notwithstanding anything contained in sub-section (1), if the person entitled to the to amount of consideration does not consent/receive it or if there is any dispute as to the title to recei??? the amount of consideration, the Cental 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 with any immoveable property vested in the Cental 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 deposited in such Government or other securities as it may think a 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 own, give the parties interested therein the same benefits therefrom as they might from the immoveable property where such amount has been deposited.

7. In the present case, the amount of consideration has not been tendered to the person or persons entitled thereto under sub-clause (4) of Sec. 269 UG. However, it is the contention of the second respondent that this is a case of deposit of the consideration before the appropriate authority under sub-clause (3) of Section 269(UG). Coming to the said sub section, it is clear that notwithstanding anything contained in sub-section (UG)(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 amount could be deposited with the appropriate authority within the period specified in sub-section (1). It is not the case of either of the parties that the petitioners did not consent to receive the consideration. Therefore, the question will be whether it is a case falling under the second limb of sub-clause (3), viz., “whether there is any dispute as to the title to receive the amount of consideration.”

8. If we read the impugned order passed by the second respondent on 30th March 1990, it will be noticed that he had given four reasons. The first reason is that the petitioners have not handed over the original will dated 22.5.1987 The second reason is that the petitioners have not taken probate in respect of the will in question. The third reason is that the petitioners who filed Writ Petition No. 2978/90 challenging (i) the provisions of the Act relating to compulsory acquisition, (ii) questioning the order of the appropriate authority dated 16.2.1990 acknowledging vesting of the property and delivery of possession, (iii) to declare that the auctions conducted by the authorities under Chapter XXC of the Income-Tax Act is illegal and invalid, had made certain averments therein. The fourth reason is that resolution dt. 8.12.1989 passed by the executors of the estate authorising two of them, Messrs. Roshan M. Patel and Mr. B.K Batliwala to fulfil all procedural matters concerning obtaining of necessary permission from the competent authority and for obtaining the income-tax clearance certificate is on an unstamped paper and no General power of attorney has bee executed by the executors in favour of the said two persons. These are the four reasons given in the impugned order which have been assailed in the writ petition.

9. Before dealing with the main point arising under the fourth reason connected with Sec. 269 U.G (3), we shall deal with the first, second and third reasons given in the impugned order.

10. So far as the second reason, viz., that probate has not been obtained, is concerned, we are of the view that the same is clearly erroneous in law in view of the specific provisions of Sec. 213 of the Indian Succession Act, 1925. The testatrix was a Parsi by religion. The will was not executed within the local limits of the ordinary original civil jurisdiction of the High Courts at Calcutta, Madras and Bombay but was executed in Hyderabad nor does the will relate to immoveable property situate within the original jurisdiction of the said High Courts. Therefore, the provisions of sub-clause (ii) of sub-section (2) of Sec. 213 are attracted and the executors can establish their rights without obtaining a probate of the will. So far as the fourth reason is concerned, the will itself mentions that if for any reason any of the executors or more of them is or are not able or available to act, then the remaining executors shall jointly decide on all major matters requiring decision in the course of the administration of the estate of the testatrix. The testatrix further directed as follows:

“However, I hereby direct that any two of my executors (preferably one of them be my niece Mrs. Roshan Minoo Patel) shall be competent and entitled to carry on the actual routine or day to day administration including taking charge and realisation of my properties, execution of documents, receipts and payments of monies, operation on Bank Accounts, representation of the Estate in all proceedings whether in Court, Tribunals, Government Office Departments, or elsewhere etc. etc. and they are hereby authorised and empowered to do so.”

11. The resolution passed by the executors on 8.12.1989 which the second respondent refused to accept as it was on unstamped paper is, therefore, nothing but a resolution passed pursuant to the directions in the will itself. The will is a registered one. Therefore, the fact that the resolution is unstamped does not invalidate the authorisation nor is it necessary that any separate General power of attorney should have been executed. We are of the view that the fourth reason given in the impugned order is also erroneous in law on its face.

12. Coming to the third reason, viz., that the original of the will dated 22.5.1987 has not been handed over by the executors. it will be noticed that in the letter dated 23.3.1990 (Ex. P-15) the executors informed the office of the second respondent, that the will is a registered will and that the original is not with them. They further stated:

“You may take inspection of the same with the Sub-Registrar of Assurances, Near Muzzam Jahi Market, where it was executed.”

13. It is not denied that a xerox copy of the said will given to the executors by the Sub-Registrar was also submitted to the Department. But the authorities insisted on the original being submitted. They did not dispute that the xerox copy was a true copy of the certified copy given by the Registrar to the executors. It will be noticed that the certified copy of the will clearly re-produces the following endorsement of the Registrar of Assurances:

“Having satisfied myself that the testator hereby is dead, the sealed cover containing this will is opened on the application and in the presence of Roshan M. Patel.”

“……This will has been copied in Book 3 as No. 211 of 1988 Vol. No. 53 at pages 110 to 116 Date 7th November, 1988.”

14. It will be noticed that the will has been deposited by the testatrix under the provisions of Part IX of the Indian Registration Act, 1908. Section 42 deals with deposit of wills, Section 43 with the procedure of deposit. Section 45 deals with proceedings on death of the testator. Sec. 45 states that if on the death of the testator who has deposited a sealed cover under Sec. 42, an application be made to the Registrar who holds it in deposit to open the same, and if the Registrar is satisfied that the testator is dead, he shall, in the applicant's presence, open the cover and at the applicant's expense, cause the contents to be copied under sub-clause (iii). Sub-Clause (2) of Section 45 is important and reads as follows:—

“if such copy has been made, the Registrar shall redeposit the original will.”

15. It is, therefore, clear from the endorsement of the Sub-Registrar in the certified copy issued to the executors that the will is a will deposited under Sec. 42 and was later opened under Sec. 44 and was re-deposited under Section 45(2) of the Registration Act. The petitioners clearly informed the second respondent by their letter dated 23.3.1990 that the original of the will was not with them and that it was open to the authorities to inspect the same at the Registrar's office at Mozzamjahi Market where the will was deposited. Therefore, the reason for non-production of the will is clearly explained to the authorities. The second respondent committed an error of law in thinking that the petitioners could have produced the will.

16. During the course of the arguments, the learned counsel for the Department tried to argue that the originals of two other documents dated 4.1.1955 and 30.9.1937 were not produced before the 2nd respondent even by 26.3.1990 But inasmuch as there is no such doubt raised in the impugned order in regard to the copies of the said documents submitted to the 2nd respondent earlier, we cannot permit the counsel to raise such a question for the first time during the arguments. Even in the counter-affidavit filed in this writ petition, it has not been contended that the absence of the originals of these two other documents was the cause for passing the impugned order. For the aforesaid reasons, the first reason viz., regarding non-supply of the will also is a clear error of law.

17. The only other reason that remains is the fourth one relating to the filing of the writ petition, W.P No. 2978/1990 wherein the provisions of Chapter XXC of the Act were questioned and also the order dt. 16.2.1990 regarding acknowledgement relating to vesting and taking of possession is questioned. In fact, this is more important question that arises for consideration.

18. The learned counsel for the writ petitioner, Sri C. Ramakrishna, has contended that in the impugned order no dispute as to the title to receive the consideration has been discussed. So far as non-production of the original will is concerned, we have already accepted the contention of the learned counsel for the petitioners that even if the petitioners wanted to produce it, they could not do so in view of the provisions of Section 42 of the Indian Registration Act. Therefore, on that basis, the learned counsel contends that the conditions for making the deposit under sub-clause (3) of Section 269 UG were not in existence and that, therefore, the second respondent should have tendered the consideration to the petitioners within (he time under Section 269 UG (1) and that in the absence of such tender, the re-vesting under Section 269 UH takes place statutorily.

19. On (he other hand, it is contended by Sri S.R Ashok for the Department that the filing of the writ petition with the reliefs mentioned above must be treated as raising a dispute in relation to the entitlement of the petitioners to receive the consideration and that, therefore, the conditions in sub-clause (3) of Sec. 269 UG are satisfied.

20. Before considering Sec. 269 UG (3), it will be necessary to refer to the provisions of Secs. 30, 31 (2) a???d 33 of the Land Acquisition Act, 1894 which are somewhat similar to the provisions relating to acquisition under the Income-Tax Act. The provision relating to disputes arising as to the apportionment of the amount of consideration amongst persons claiming to be entitled thereto is somewhat similar to the provisions of Sec. 30 of the Land Acquisition Act. Sec. 30 uses the words

“if any dispute arises as to the apportionment of the same”

21. And these words are similar to those in Sec. 269 UG (2). Similarly, the provisions in sub-clause (3) of Sec. 269 UG of the Income-Tax Act stating that if there is any dispute as to the title to receive the amount of consideration, the Central Government could deposit the amount before the appropriate authority, are similar to the latter part of Section 31(2) of the Land Acquisition Act. Sec. 31(2) also uses the words:

“If there be any dispute as to the title to receive the compensation”

22. And these words are similar to those in Section 269 UG (3). So far as the manner in which the authority could invest the amount by way of deposit is concerned, the provisions are contained in sub-clause (4) of Sec. 269 UG and these provisions somewhat correspon??? to Section 33 of the Land Acquisition Act.

23. In this context it is useful to refer to the relevant rulings under the Land Acquisition Act, 1894.

24. The Supreme Court in Grant v. State of Bihar AIR 1966 SC 237. held that Sections 18 (1) and 30 of the Land Acquisition Act empower the Collector to refer a dispute to the Court for apportionment of compensation or as to the persons to whom it is payable. While the period is fixed for seeking reference under Sec. 18, no such period is prescribed under Sec. 30. Further under Sec. 18, the Collector is bound to make a reference, while under Sec. 30, there is no such obligation and the Collector may require the person raising the dispute to agitate the same in a suit. The Supreme Court also mentioned so far as Sec. 31 is concerned as follows:—

“Payment of compensation, therefore, under Sec. 31 to the person declared by the award to be entitled thereto discharges the State or its liability to pay compensation (Subject to any modification by the Court), leaving i??? open to the claimant to compensation to agitate his right in a reference under Sec. 30 or by a separate suit.”

25. In our opinion, what is important to note from the above decision is that there is no obligation on the Collector under Section 30 of the Act (i) to refer a matter to the civil court, but he can as well deposit the money under Sec. 31 and (ii) if he makes such a deposit, instead of referring the matter to the civil court, parties have to get a declaration from the civil court, regarding rights.

26. In the present case, it is contended that so far as sub-clause (4) is concerned, there is no power conferred on the Collector for rendering a decision on the question of title. In our view, under Sec. 31(2) of the Land Acquisition Act in cases where the Collector does not exercise the jurisdiction to refer the matter to the court under Sec 30, it is for the parties to obtain the necessary rights declared in a civil court.

27. The main dispute, however, is with regard to the interpretation of ???he words ‘if there is any dispute as to the title to receive the amount of consideration’ mentioned in sub-clause (3) of Section 269 UG. While it is contended by the petitioners that a dispute must necessarily be raised by another claimant, it is contended for the Department that it is not necessary that the dispute should be raised by a third party for the purpose of sufficient compliance with sub-clause (3) of Section 269 UG. It is also argued for the Department that in view of the challenge to the provisions of the Act and to the order of vesting by the petitioners by filing the earlier writ petition, viz., W.P No. 2978/93, they cannot be treated as persons entitled to re???eive the amount of compensation under Clause (3).

28. It has been held in Special Land Acquisition officer v. Natwarlal Jamnadas A.I.R???9???8 Bombay 31. that the words ‘dispute’ as used in Section 30 and in sub-sec. (2) of Sec. 31 must be given the same meaning and if, however, the word ‘dispute’ is construed as being applicable only where there is more than one party to a dispute but not otherwise, the two sections will not provide as to what should happen when the Collector is unable or unwilling or has omitted to decide the question whether the sole claimant appearing before him is or is not entitled to the compensation. Therefore, in spite of the fact that the natural meaning of the word ‘dispute’ presupposes two persons and Section 30 uses the word ‘persons’ in plural, Sec. 31(2) must be construed as covering the case where the Collector is unable or unwilling or has omitted to decide whether the sole claimant appearing before him is or is not entitled to the property acquired and the compensation thereof. Similarly, it has been held in the State of Madras v. B.V Subrahmania I???er A.I.R 1962 Madras 313. that the word ‘dispute’ is used in the context of Section 30 in a wide and not a literal sense and implies any controversy as to title whether as between the actual claimants or with respect to a single claim as appearing from the documents made by the Government. We respectfully agree with the abovesaid decisions. We, however, dissent from the contrary view of the Gauhati High Court in Phongesh Misro v. Collector of Land Acquisition A.I.R 1977 Gauhati 47. wherein the learned Judges took the view that the word ‘dispute’ mentioned in Sec. 30 of the Land Acquisition Act means a quarrel between two or more rival parties.

29. For the aforesaid reasons, we are of the view that merely because there is no rival claimant to the consideration, Sec. 269 UG (3) does not necessarily compel the authority to tender the apparent consideration under Sec. 269 UG (1) of the Act. If the authorities have a bona fide or genuine doubt as to the title of the apparent vendor, it is open to them not to tender consideration under sub-clause (1) of Sec. 269 UG but make a deposit under Sec. 269 UG (3).

30. But the question still remains whether in this case there is a bona fide dispute as to the title of the petitioners to receive the amount of consideration. It is true that there are no rival claimants. But the question still is whether there can be said to be any dispute as to title of the executors to receive the amount of consideration.

31. In our view, the word ‘title’ in sub-clause (3) of Sec. 269 UG should be considered not merely as relating to the ‘ownership’ of the part or whole of the consideration but as referable to the ‘entitlement’ of the persons to receive the consideration. The word ‘entitlement’ would necessarily give a wider meaning to the word ‘title’, thereby taking in, even ??? dispute as to the entitlement of the person challenging the provisions of the Act or the order of vesting earlier passed by the authorities. The position is that when a person is challenging the vires of the provisions relating to compulsory acquisition under the Income-Tax Act, and is consequentially challenging the validity of the order of vesting, or is independently challenging the order of vesting, it would, in our view, be not unreasonable for the income-tax department to say that such a person is not unconditionally entitled to receive the apparent consideration within the period specified in Sec. 269 UG (1) and that there is a dispute as to the entitlement of the person to receive the consideration. In such an event, it would be open to the department not to tender the apparent consideration under Sec. 269 UG (1) but to desposit the same before the appropriate authority under sub-clause (3). It a person is questioning the validity of the provisions relating to compulsory acquisition or the order of vesting, he could not claim to receive the apparent consideration as a matter of right or unconditionally even before a decision is rendered as to the vires of the provisions or as to the validity of the order of vesting. If a deposit could therefore be made under Sec. 269 UG (3) the provisions relating to re-vesting in the apparent owner under Sec. 269 UH would not be attracted. The position is similar to a case where a person files a writ petition and challenges the validity of Sec. 4 of the Land Acquisition Act or a notification made thereunder. Such a person cannot, while the writ is pending, seek to receive the compensation. So also if vendor is challenging an agreement of sale executed by him as bad, he cannot, before the said question is decided, seek to receive the entire consideration. The position here is analogous. If the amounts are paid in the meantime before the said disputes are decided, it might in deed become difficult to recover them back again.

32. We have already mentioned that Writ Petition No. 2978/90 is pending in this Court. If the said writ petition is to be allowed, the position would be that the vesting would be bad and if in the mean time, the money is tendered within the per???od mentioned in the Act under Sec. 269 UG (1) and paid without security, it would be difficult for the authorities to recover the amount from the persons who have received the same. If assuming that there is o???herwise no dispute as to the title of a seller, there will be a dispute as to the entitlement of the vendor to receive consideration if the vendor is challenging the very order of vesting or the vires the Sections under which the vesting order is passed. Therefore, in our view, even a dispute as to the validity of the provisions of the Act relating to compulsory acquisition or a challenge to the vesting order could raise a dispute as to the ‘entitlement’ of the person to receive consideration within the period mentioned in sub-clause (I) of Sec. 269 UG and therefore the authorities will be justified in not tendering the amount but in depositing the same under sub-clause (3) of Sec. 269 UG, before the appropriate authority. The view we have taken is similar to the view taken by a Division Bench of the Madras High Court in R. Padma v. Appropriate Authority of I.T Dept. 1990 185 I.T.R 269 Mad.

33. For all the aforesaid reasons, we hold that as long as the writ petition filed by the petitioners challenging the provisions of the Act is kept pending and is not withdrawn or disposed of, it must be said that there is a dispute as to the entitlement of the petitioners to receive the amount of compensation and therefore, the authorities are justisfied in making the deposit before the appropriate authority.

34. It is, however, contended that in the earlier writ petition filed by the petitioners, the respondents filed an application W.O.M.P No. 5506/90 seeking to pay the amount to the petitioners provided they furnish security. The said application came up before one of us (Jagannadha Rao, J.) and Yogeshwar Dayal, Chief Justice (as he then was) on 21-3-1990, one day before the deposit. That application was dismissed holding that the autho rities, who are the respondents in the petition filed by the executors, could no file such a petition as respondents and they could as well take recourse to sub-clause (4) of Section 269 UG. The learned counsel for the petitioners, however, wants to rely on an averment in the department's affidavit which is to the following effect:—

“As the persons who are entitled to receive the amount of consideration viz., respondents 1 to 5 filed the above writ petition..”

35. It is contended that there is an admission that the writ petitioners are entitled to receive the amount of consideration. In our view, the said averment in the affidavit filed by the Department in the earlier writ petition cannot be cut into two parts, omitting the second part relating to the condition mentioned by the Department in the said application. The department wanted the petitioners to withdraw the money only subject to furnishing security or bank guarantee. That was only a conditional offer. The petitioners cannot take advantage of the offer and avoid the condition imposed. The very imposition of the condition shows that the respondents entertained a dout as to the entitlement of the petitioners to receive the consideration pending disposal of the writ petition, though the respondents did not otherwise dispute the title of the petitioners. For the aforesaid reasons, the said conditional offer in the affidavit of the respondents in the earlier writ petition cannot help the petitioners.

36. For all the aforesaid reasons, the writ petition is liable to be dismissed. However, if the petitioners are prepared to withdraw the earlier writ petition, Writ Petition No. 2978/90, or furnish Bank guarantee the respondents will release the consideration in favour of the petitioners. If the petitioners, however, are not inclined to accept either of the said options, they will not be entitled to receive the consideration. The learned counsel for the petitioners states that the petitioners are not inclined to withdraw the writ petition or furnish Bank guarantee for the amount of Rs. Ps. 15,37,640/-. The learned counsel, however, reqes???ed that we should give a direction to the 2nd respondent to invest the said amount in the Capital Gains Units of the Unit Trust of India. It is open to the petitioners to file an application before the first respondent for the aforesaid purpose. If such an application is made we direct the first respondent to invest the said amount of Rs. 1,31,640/- in the appropriate unit under the Unit Trust of India which are statutorily recognised for the purpose of investment in the Capital Gains/Units. If any papers have to be signed by the petitioners, the first respondent may call upon them to do so. They petitioners agree to sign all the necessary papers. The above direction sought for by the petitioners is without prejudice to their rights.

37. Subject to the above directioms, the writ petition is dismissed.

38. No costs.

Mrs. Sooni Rustam Me... v. The Appropriate Auth...