B.N Kirpal, J.— The challenge in this writ petition is to the order dated 15th March 1990 whereby the Appropriate Authority under the Income Tax Act had not granted permission to the petition which he has sought by an application in form 37-1 of the Act.
2. Respondent No. 4 is the owner of the property bearing No. D/41. Okhla Industrial Area, Phase-I, New Delhi. It had entered into an agreement to sell the said property in favour of the petitioner. An application was filed on 31st January 1990 in form 37-I in accordance with the provisions of Section 269 UC. The Appropriate Authority by the impugned order did not grant the ‘No Objection Certificate’ nor did it exercise the right of pre-emptive purchase. It came to the conculsion that the agreement which has been entered into by the owner with the proposed transferee had resulted in the creation of certain rights in favour of the transferee in accordance with the provision of Section 53-A of the Transfer of Property Act. According to the Appropriate Authority possession of the property had been handed over to the transferee and there had been a part performance of the contract and the letter and intent of the provisions of Chapter XXC of the Income Tax Act had been violated According to the Appropriate Authority there had been a breach committed of this Chapter and prosecution could be initiated. He further came to the conclusion that the consideration shown was Rs. 24 lacs, out of which 22 lacs have already been paid and he concluded that the pre-emptive right to purchase had been defeated by the parties.
3. While challenging the aforesaid decision, the learned Counsel for the petitioner places on the decision in Tanvi Trading & Credits Pvt. Ltd., v. Appropriate Authority, 188 I.T.R 623. The provisions of Sections 262 UC, 269 UD and 269 UL were considered by a Division Bench of this Court and it was inter alia held that when an application under Section 269 UC is filed, the Appropriate Authority can either buy the property or issue a ‘No objection Certificate’. No other course was open to the Appropriate Authority. The decision in Tanvi Trading & Credits (supra) was followed by another Bench of this Court in the case of Satwant Narang v. Appropriate Authority, 188 I.T.R 656 What is of importance however, is that the Department filed an appeal against the first decision of this Court and on 23rd April, 1991 the Spreme Court, while dismissing the Special Leave Petition, passed the following orders:—
“We agree that two alternative are open under the scheme of the legislation:—(i) the Union of India through the appropriate authority could buy the property or (ii) in the event of its decision not to buy, it has to issue a ‘No Objection Certificate’ leaving it open to parties to deal with the property. In that view of the matter, the High Court was right in its conclusion. The special leave petition is dismissed. No costs.”
4. It is clear from the aforesaid decision that when the Appropriate Authority receives an application under Section 269UC then he has no jurisdiction to file that application, as had been done in the present case. He has to exercise the option which is available to him and that is either to buy the property or to issue ‘No Objection Certificate”. The right to buy the property has to be execrised within a stipulated period which is within two months from the end of the month within which a statement under Section 269 UC has been filed. In the present case the statement was filed on 31st January 1990. Two months would expire by 31st March 1990. Thereafter the Government lost its right to purchase the said property.
5. Following the ratio of this Court's decision in Tanvi Trading & Credits (supra), we allow this writ petition and quash the impugned order passed by the Appropriate Authority and further issue a writ of mandamus directing the Appropriate Authority to issue to the petitioners and to respondent No. 4, within four weeks from today a ‘No Objection Certificate’ in terms of Section 269 UL (3).
6. The petition stands disposed of. There will be no orders as to costs.
Petition allowed.