B.N Kirpal, J.:— Rule D.B
2. The challenge in this writ petition is to the orders dated July 20, 1989, and January 22, 1990, passed by the appropriate authority purportedly under Chapter XX-C of the Income-tax Act, 1961 (hereinafter referred to as “the said Act”). Briefly stated, the facts are that respondents Nos. 3 to 10 had purchased by a registered sale deed the rear portion of 3, Prithviraj Road, abutting on Amrita Shergill Marg measuring about 5,000 sq. yards. The Competent Authority under the Urban Land (Ceiling and Regulation) Act, 1976, passed eight separate orders holding that there was a total excess vacant land of 680.26 sq. metres in the said property owned by respondents Nos. 3 to 10.
3. Vide agreement dated May 10, 1989, respondents Nos. 3 to 10 agreed to sell the aforesaid land to the petitioners for a sum of Rs. 4,15,00,000 (rupees four crores fiften lakhs) In accordance with the provisions of section 269UC, the petitioners and respondents Nos. 3 to 10 jointly filed a statement in Form No. 37-I with the appropriate authority appointed under the said Chapter for the grant of a certificate.
4. The appropriate authority passed the impugned order dated July 19/20, 1989. In this order, it was observed that it was not certain as to which portion of the land would be surrendered to the State Government in view of the orders having been passed under the Urban Land Ceiling Act declaring 680.26 sq. metres as being surplus. It was further stated that the said agreement to sell was not capable of being made certain and was void as per section 29 of the Indian Contract Act. Furthermore, according to the appropriate authority, the agreement to sell was a contingent contract depending upon the orders of the Competent Authority under the Urban Land Ceiling Act and a no-objection certificate could not be issued in respect of an agreement which the appropriate authority had termed as void or at best contingent. The appropriate authority concluded that the statement in Form No. 37-I was premature and invalid and the same was ordered to be filed.
5. On September 25, 1989, respondents Nos. 3 to 10 wrote a letter to the Competent Authority under the Urban Land Ceiling Act specifying and demarcating the excess vacant land which it surrendered and requested for the issuance of a notification under section 10 of the said Act. Immediately thereafter, on September 26, 1989, counsel for respondents Nos. 3 to 10 wrote to the appropriate authority under the Income-tax Act informing him about the demarcation of the excess vacant land and about the surrender thereof and once again requested for issuance of a “no-objection certificate”. On November 24, 1989, a fresh statement in Form No. 37-I was filed before the appropriate authority.
6. The appropriate authority passed a second order on January 22, 1990, observing that no notification under section 10 of the Urban Land Ceiling Act had been issued. It was further observed that the agreement between the petitioners and respondents Nos. 3 to 10 had been held by the earlier order of July, 1989, to be not a proper agreement and the statement now filed on the basis of the same agreement was again not a valid statement for the purpose of Chapter XX-C. The “no-objection certificate” was not issued and the statement was again directed to be filed.
7. It is against the aforesaid orders that the present writ petition has been filed.
8. It has been contended by learned counsel for the petitioners that respondents Nos. 1 and 2 had failed to exercise the jurisdiction vested in them in accordance with the provisions of section 269UD of the Act. Shri Jain, learned counsel for respondent No. 1, has, however, contended that, in exercise of the said powers, it is open to the appropriate authority to determine the legality of the proposed sale transaction. If the appropriate authority came to the conclusion that the sale transaction was being effected against the provisions of any law, then it could decline to give the certificate asked for. Reference was made to the provisions of section 269UI in an effort to show that, because of the said provisions, the provisions of section 131 of the Income-tax Act became applicable which gave a right to the appropriate authority regarding discovery, production of evidence, etc. This indicated, it was submitted, that the appropriate authority could go into the evidence and examine documents and satisfy itself with regard to the legality of the proposed transaction. It was further submitted that implied and/or inherent in the exercise of the jurisdiction under section 269UD was the right of the appropriate authority to examine the legality of the proposed sale.
9. Chapter XX-C contains provisions with regard to the purchase by the Central Government of immovable properties in certain cases of transfer. According to section 269UC, no immovable property in excess of the value of Rs. 10 lakhs shall be effected without, inter alia, the agreement being reduced to writing and a statement being furnished to the appropriate authority. sub-section (3) of section 269uc prescribes as to what the statement should contain.
10. Once the statement under section 269UC(3) is received, the provisions of section 269UD come into play. The said section reads as follows:
“269UD. (1) The appropriate authority, after the receipt of the statement under sub-section (3) of section 269uc in respect of any immovable property, may, notwithstanding anything contained in any other law or any instrument or any agreement for the time being in force, and for reasons to be recorded in writing, make an order for the purchase by the Central Government of such immovable property at an amount equal to the amount of apparent consideration:
Provided that no such order shall be made in respect of any immovable property after the expiration of a period of two months from the end of the month in which the statement referred to in section 269UC in respect of such property is received by the appropriate authority:
Provided further that in a case where the statement referred to in section 269UC in respect of the immovable property concerned is given to an appropriate authority, other than the appropriate authority having jurisdiction in accordance with the provisions of section 269UB to make the order referred to in this sub-section in relation to the immovable property concerned, the period of limitation referred to in the preceding proviso shall be reckoned with reference to the date of receipt of the statement by the appropriate authority having jurisdiction to make the order under this subsection.
(2) The appropriate authority shall cause a copy of its order under sub-section (1) in respect of any immovable property to be served on the transferor, the person in occupation of the immovable property if the transferor is not in occupation thereof, the transferee, and on every other person whom the appropriate authority knows to be interested in the property.”
11. As we read section 269UD, it is clear that the only right which it confers on the appropriate authority is to enable it to make an order for purchase of the immovable property at an amount equal to the amount of the apparent consideration. Furthermore, the first proviso stipulates the time within which such an order can be passed. Section 269UD, therefore, contains the pre-emptive right of purchase by the Central Government. The said provision does not give jurisdiction to the appropriate authority to adjudicate upon the legality of the transaction which is proposed to be entered into by the applicant. It is to be remembered that Chapter XX-C was incorporated in an effort to curb sales of immovable properties for apparent consideration which would be less than the actual consideration. In other words, the effort was to see that immovable property is not transferred by taking sale consideration in black. Section 269UD was not concerned with the validity of the sale. If there was any impediment or defect in the title of the transferor or if there was any other law which was violated by such a sale, the same was to be of no consideration to the appropriate authority except that it could take all such factors into consideration while making up its mind whether to exercise the pre-emptive right of purchase or not. The appropriate authority cannot, on grounds of alleged infringement of law, exercise its right of purchase and, at the same time, refuse to grant the certificate sought by the seller.
12. An authority constituted under the Act can exercise only those powers which are, expressly or by necessary implication, conferred on it. The only power which is conferred on the appropriate authority under section 269UD is the power to decide whether to purchase the property or not. Of course, in exercise of this power, the authority will have other implied powers which will make such a power effective. The authority would be entitled to see material and documents like documents of title, agreements, etc., in order to satisfy itself whether the apparent consideration is proper or not in order to come to the conclusion whether to purchase the property or not. The investigation which will be undertaken by the appropriate authority is only with a view to determine whether the pre-emptive right of purchase should be exercised or not.
13. If the appropriate authority has reservations or doubts with regard to the legality of the proposed sale, it is open to the authority not to exercise its right to purchase. Section 269UD, however, does not contemplate the rejection of any statement by the appropriate authority. Section 269UD speaks of only one type of order which can be passed by the appropriate authority and that is an order of purchase. If the appropriate authority chooses not to purchase the property in question, then section 269UD does not contemplate the passing of any order similar to the order which has been passed by respondent No. 1 in the present case. In fact, the proviso to section 269UD says that if no such order, meaning an order referred to under 269UD(1) for purchase, is passed and the period within which such an order can be passed has expired, then no order for purchase can at all be passed. When no other order of purchase is passed, then the provisions of section 269UL come into operation, which section reads as follows:
“269UL : (1) Notwithstanding anything contained in any other law for the time being in force, no registering officer appointed under the Registration Act, 1908 (16 of 1908), shall register any document which purports to transfer immovable property exceeding the value prescribed under section 269UC unless a certificate from the appropriate authority that it has no objection to the transfer of such property for an amount equal to the apparent consideration therefor as stated in the agreement for transfer of the immovable property in respect of which it has received a statement under sub-section (3) of section 269uc, is furnished, along with such document.
(2) Notwithstanding anything contained in any other law for the time being in force, no person shall do anything or omit to do anything which will have the effect of transfer of any immovable property unless the appropriate authority certifies that it has no objection to the transfer of such property for an amount equal to the apparent consideration therefor as stated in the agreement for transfer of the immovable property in respect of which it has received a statement under sub-section (3) of section 269uc.
(3) In a case where the appropriate authority does not make an order under sub-section (1) of section 269ud for the purchase by the Central Government of an immovable property, or where the order made under sub-section (1) of section 269ud stands abrogated under subsection (1) of section 269UH, the appropriate authority shall issue a certificate of no objection referred to in sub-section (1) or, as the case may be, sub-section (2) and deliver copies thereof to the transferor and the transferee.”
14. Section 269UL(1) refers to a no-objection certificate being granted by the appropriate authority to the transfer of the property for an amount equal to the apparent consideration. This presupposes that when the statement is filed in Form No. 37-I, if a decision is taken not to purchase a property, then a specified certificate to this effect can be issued. When no order at all is passed under section 269UD(1), then the provisions of sub-section (3) of section 269UL come into play. This sub-section, inter alia, provides that where no order for purchase has been passed, then the appropriate authority shall issue a certificate of no objection referred to in sub-section (1) of section 269UL. The language of section 269UL(3) is mandatory and this also shows that the only order which can be passed under section 269UD is an order of purchase and no other order. If an order of purchase is not passed, then it is imperative and obligatory on the appropriate authority to issue the certificate under 269UL(3). We do not find any provision in this Chapter which can enable the appropriate authority to create a situation whereby neither the Government decides to purchase nor does it issue a certificate under section 269UL(3).
15. It was contended by Mr. Jain that if a certificate under section 269UL(3) is issued the effect of that would be that the Income-tax Department would have pronounced upon the legality or validity of the proposed sale. In our opinion, the apprehension of Mr. Jain is unfounded. The certificate issued under section 269UL would, in effect, only indicate that the Government is not interested in purchasing the property. The certificate so issued does not pronounce on the legality or validity of the transaction. If the transaction is otherwise illegal or invalid, it will be for some other authority, in another forum, to decide on the same. As far as the appropriate authority is concerned, the certificate which is issued has relation only to the question whether the Government is interested in purchasing the property or not. The impugned orders show that the appropriate authority has not exercised its pre-emptive right of purchase within the stipulated period. The decision not to issue a certificate under section 269UL(3) and the direction that the statement under Form No. 37-I be filed are clearly without jurisdiction.
16. For the aforesaid reasons, we issue a writ of certiorari quashing the impugned orders and we also issue a writ of mandamus directing respondent No. 1 to issue to the petitioners within four weeks from today a “no-objection certificate” in terms of section 269UL(3). There will be no order as to costs.