Holding

The Supreme Court held that the 15‑day period in Rule 48‑L is directory, a Form 37‑1 filed after that period is not void, and the Appropriate Authority, having failed to order purchase within three months, must issue a no‑objection certificate under Section 269‑UL.

Summary

Two real‑estate developers (DLF Universal Ltd. and Ansal Properties) entered into agreements for the sale of flats that were still under construction and filed Form 37‑1 before the Income‑Tax Appropriate Authority seeking a no‑objection certificate for registration. The Authority issued notices under Section 269‑UC(4) pointing out defects and required a revised form within 15 days; the parties filed the revised form after the 15‑day period and the Authority rejected the form as belated, holding that the 15‑day limit in Rule 48‑L was mandatory. The Delhi High Court set aside the Authority’s orders, directing a fresh decision, and the Authority appealed. The Supreme Court held that the 15‑day period in Rule 48‑L is directory, not mandatory, and a Form 37‑1 filed after 15 days is not deemed never furnished. Since the Authority failed to pass an order for purchase within three months of receipt, it is bound to issue a no‑objection certificate under Section 269‑UL. The Court also clarified that Form 37‑1 is a composite form, need not contain all particulars, and that “agreement for transfer” in Chapter XX‑C refers to the statutory statement in Form 37‑1.

Issues considered

The 15‑day period prescribed in Rule 48‑L for filing Form 37‑1 is mandatory or directory.
Whether a Form 37‑1 filed after 15 days is deemed never furnished under Section 269‑UC(4).
Obligation of the Appropriate Authority to issue a no‑objection certificate if it does not order purchase within three months.
The requirement of particulars in Form 37‑1, especially paragraphs 12 and 13.
The interpretation of “agreement for transfer” under Chapter XX‑C – whether it means the private agreement or the statutory statement in Form 37‑1.
Whether the Authority may consider variables such as price escalation and external development charges in exercising its jurisdiction.

Legislation cited

Income Tax Act, 1961s. 269-UA, s. 269-UC, s. 269-UD, s. 269-UE, s. 269-UF, s. 269-UH, s. 269-UK, s. 269-UL, s. 269-UM, s. 276-AB, s. 278-AA
Income Tax Rules, 1962s. Rule 48-L

Subjects

Income TaxChapter XX‑CForm 37‑1No Objection CertificateAppropriate AuthorityAgreement for TransferRule 48‑LStatutory InterpretationTax EvasionUnder‑valuation

Judgment

A D.L.F. UNIVERSAL LTD.
.I v.
APPROPRIATE AUTHORITY AND ANR. ETC.

MAY4, 2000

B [D.P. WADHWAANDRUMAPAL,JJ.]

Income Tax Act, I961-Sections 269 UA to 269 UM (Chapter XX-C),
276 AB-Income Tax Rules, 1962-Rule 48L, From 37-1-Transferor and
transferee of a flat filing From 37-I before the Appropriate Authority seeking
c no objection to the registration of the flat with the registering authority-
Appropriate authority pointing out certain defects in Fonn 37-I and requiring
filing of a revised fonn within 15 days-Revised fonn filed after 15 days,
rejected-Tenability of-Held, the 15 days period in Rule 48L is not manda-
tory and the Appropriate Authority was not correct in holding that the
statement in Fonn 37-I after 15 day was deemed never to have been
D furnished-Rejection of Fonn 37-I on the ground that requisite particulars .
were not furnished was inappropriate as it a composite fonn not requiring all
particulars to be furnished-Appropriate Authority to either pass an order for
purchase by the Central Government of the ifrimovable property in question
or issue a no objection cert;ficate-In tJrt pfesent case, no such order for
E purchase having been made within three nionths of the receipt of Fonn 37-I,
Appropriate Authority duty bound to issue no objection certificate to the
transfer of the property.

Interpretation of Statutes :

F Chapter XX-C, Income Tax Act, 196I-Object of, restated-Such object
to be the consideration while examination of the statement in Fonn 37-I-
Appropriate Authority not to act in a mechanical fashion and pass its order on
irre Levant considerations.
•
Won:lr and Phrases:
G
'Agreement for transfer'-Meaning of

Two companies being engaged in the business of developing and
dealing in real estate, entered into agreements with private parties for sale
H of flats/apartments. Formal agreements; incorporating the terms of sale
970
D.L.F. UNNERSAL LTD. v. APPROPRIATE AUTIIORITY 971
were entered into. Subsequently, the two companies as transferors and the A
private parties as transferees filed Form 37-1 of the Income Tax Rules,
1962 before the Appropriate Authority seeking no objection to the regis-
tration of the flats/apartments with the registering authority. The Appro-
priate Authority sent notices to the transferors and the transferees under
Section 269 UC(4) of the Income Tax Act, 1961 pointing out certain defects
B
in Form 37-1 and requiring them to remove the defects within 15 days by
filing revised Form 37-1. Replies thereto were filed. However, by orders
made under Section 269 UC(4) of the Income Tax Act, Appropriate Au-
thority held that !)>rm 37-1 had been belatedly field in contravention of
Rule 48-L and was not maintainable.
c
Against the aforesaid orders of the Appropriate Authority rejecting
J;'orm 37-1, writ petitions were filed and the High Court allowed the same,
setting aside the orders of the Appropriate Authority. Aggrieved, Appro-
priate Authority filed all the present appeals except one preferred by one
of the transferor-companies being aggrieved by the interpretation given by D
the High Court to Section 269 UC of the Income Tax Act and Rule 48-L
and Form 37-l of the Income Tax Rules.

On behalf of the Appropriate Authority, it was contended that 15
days period In Rule 48-L was mandatory and that Section 276 AB pro-
vided for prosecution in case there was failure to comply with the provi- E
sions of Section 269 UC; that the Appropriate Authority could exercise its
jurisdiction to acquire the property if consideration agreed to was less
than 15 per cent of the market value; that the agreement for transfer
contained variables and unless all these were known, it would be handi-
capped in making an order under Section 269 UD of the Income Tax Act. F
Disposing of the appeals, the Court

HELD: 1.1. Statementin Form 37-1 was in order and was furnished
to the Appropriate Authority within the time prescribed. The Appropriate
Authority did not make any order within three months of its receipt of the G
said statement for purchase by the Central Government of the immovable
property in question. That being the position, the Appropriate Authority is _
duty bound to issue no objection certificate to the transfer of the property
in the circumstances of the case. The Appropriate Authority is directed to
grant no objection certificate to the parties forthwith. [994-B-C} H
972 SUPREME COURT REPORTS [2000] 3 S.C.R.

A MOL Engineering ud. and Another v. Appropriate Authority and 0th- ).. ~
ers, (1992) 198 ITR 270; Murlidhar Ratanlal Exports ud. v. Appropriate
Authority, (1998) 101 Taxman 562 (DB) (Cal.), approved.

Tanvi Trading and Credits P. Ltd. v. Appropriate Authority, (1991) 188
ITR 623; Shree Digvijay Cement Co. Ltd. v. Appropriate Authority, (1998) 99
B Taxman 32 (Cal.), referred to.

1.2. The Appropriate Authority was not correct in p~ing orders )t
that the statement in Form 37-I was deemed never to have been furnished,
thus creating a stalement far sale of the flats which have by now been built
c but could not be transferred. Statement filed in Form 37-I was in order.
One of.the grounds of rejection of Form 37-I was that it did not contain
particulars required by paras 12 and 13 given in the Form. It must be seen
that Form 37-I is a composite form used whether the transaction is sale,
lease or exchange. It may not, therefore, be necessary that all the paras are
required to be filled in when the transaction is either for sale or lease or
D
exchange. Para 12 requires the particulars about the acquisition of the
property which is proposed to be transferred. Requirement of Para 13 is
that names of the persons interested in the property be given and so also
the consideration specifying their shares and basis thereof. As far as paras
12 and 13 are concerned, these requirements and particulars in the case of
~
E agree.ment for transfer as in the present case would appear to be rather
unnecessary. [991-G; 990-E]

1.3. Provision of Chapter XX-C do not require the parties to enter
into more than one agreement for transfer. It is on the basis of the terms of
that agreement for transfer which is reduced into writing in the shape of
F
Form 37-I that the Appropriate Authority has to make up its mind to pass
an ord~r under Section 269 UD. These provisions do not contemplate filing
of more than one Form 37-I and grant of more than one no objection
certificate by the Appropriate Authority. When an order is made under
Section 269 UD with respect to that property, it shall place that Central
G Government in the same position in relation to such right as the person in
whom such a right would have continued to vest if such order had not been
made. The whole agreement for transfer and Form 37-I are before the ~
Appropriate Authority. It has to make its mind once and for all whether to
pass an order under Section 269 UD or not. If not, it is bound to grant no
H objection certificate as required by Section 296 UL. [989-F; 990-A-C]
J
,.
D.L.F. UNNERSAL LTD. v. APPROPRIATE AUTHORITY 973
C.B. Gautam v. Union ofIndia and Ors., (1993) 199 ITR 530, relied on. A
1.4. The very historical setting in which the provisions of chapter
XX-C were enacted indicates that it was intended to be resorted to only in
cases where there is an attempt at tax evasion by significant under-valua-
tion of immovable property agreed to be sold. It is the fair market value of
the immovable property, which is to be found out and if the Appropriate B
Authority is satisfied that the apparent consideration shown in the agree-
ment for sale is Jess than the market value by 15 per cent or more, it may
draw a presumption that this under valuation has been done with a view to
evading tax. While examining the statement in Form 37-1, thi<> object has
to be kept in view by the Appropriate Authority. It cannot act in a c
mechanical fashion and pass its order on irrelevant considerations.
Sub-section (4) of Section 269 UC is not a device for the Appropriate
Authority to raise irrelevant considerations ignoring the very object of
Chapter XX-C. [991-D-E]

Jagdish A. Sadarangani v. Government of India, (1998) 230 ITR 442; D
Appropriate Authority v. Tanvi Trading and Credits Private Ltd., (1991) 191
ITR 307, relied on.

K.P. Varghese v.1ncome Tax Officer, (1981) 131 ITR 597, referred to.

2. Agreement f~r transfer and statement in Form 37-1 are two differ- E
ent documents. Agreement for transfer can be oral as we~l as in writing but
then this agreement for transfer has to be reduced in writing in Form 37-1.
An 'agreement for transfer' is inter-parties and that can always be changed.
That the term 'agreement for transfer' in fact means statement in Form
37-1 rands its support in Section 269 UK which says that no person shall F
revoke or alter an agreement for the transfer of an immovable property or
transfer such property in respect of which a Statement has been furnished
under Section 269 UC. Reference to this statement is certainly to Form 37-
1. It would mean that agreement for transfer can be changed by the parties
but they have been forbidden from doing so after statement in Form 37-1
G
has been furnished. Foundation for exercise of jurisdiction by the Appro-
priate Authority under Section 269 UD is the statement in Form 37-1 and
not agreement for transfer. [984-G; 985-D-E]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2423 of 1999
Etc. Etc. H
974 SUPREME COURT REPORTS [2000] 3 S.C.R.
A From the Judgment and Order dated 30.11.98 of the Delhi High Court
in C.W.P. No 3440 of 1998.

K.N. Rawal, C.S. Vaidyanathan, R.N. Trivedi, Additional Solicitor
General, Harish N. Salve, P. Chidambaram, M.L. Verma, F.S. Nariman,
M.S. Syali, Ms. Vijaya Lakshmi Menon, S. Agarw~. Ranbir Chandra,
B S.W.A. Quadri, C.V.S. Rao, Ms. Sushma Suri, Ms. Geetanjali Mohan,
Satyam Sethi, Naresh K. Sharma, Ratan Lal, K. Prakash Anand, Ms. Ekta
Kapil, S.K. Dwivedi, T.C. Sharma and Ms. Neelam Sharma for the appearing
parties.

C The Judgment of the Court was delivered by

D.P. WADHWA, J. This batch of 12 appeals is directed against the
judgment dated December 1, 1998 of the Division Bench of the Delhi High
Court interpreting Section 269-UC of the Income Tax Act, 1961 (for short
the 'Act') and Rule 48-L and Form 37-1 of the Income Tax Rules, 1962 (for
D
short, the 'Rules').

A number of writ petitions had been filed in the High Court by various·
parties challenging rejection of Form 37-1 by -the Appropriate Authority. High
Court by its impugned judgment allowed the petitions, set aside the orders
E of the appropriate authority and requiring it to take fresh decision in each of
the cases in accordance with law and keeping in view the principles laid by
the High Court in its judgment. Aggrieved Appropriate Authority has filed
11 appeals. Mis. DLF Universal Ltd. (for short, 'DLF') has also filed one
appeal. It is aggrieved by that portion of the judgment of the High Court
F where the High Court said "no objection by the Appropriate Authority based
on an agreement for transfer of property which is to be constructed cannot ):
be utilised for procuring a deed for transfer of that property which has been
constructed".

To understand the controversy between the parties and findings arrived
G at by the High Court, we may examine facts in two cases, one pertaining to
DLF and the other to Mis. Ansal Properties and Industries Ltd. (for short,
'Ansal'). Both DLF and Ansal are engaged in the business of developing and
dealing in real estate, constructing multistorey buildings and selling or letting
them. Ansal floated a scheme which was widely advertised inviting applica-
H tions from the public for allotment of apartments. In one of the cases the
D.L.F. UNIVERSAL LTD. v. APPROPRIATE AUTHORITY [D.P. WADHWA, J.] 975
scheme pertained to apartments in "Celebrity Homes", Palam VIhar~ Gurgaon. A
One Mr. Sudarshan Kumar Kohli and his wife Mrs. Nibha Kohli applied on
July 13, 1995 for booking of an apartment. The application was in i-he form
prescribed by Ansal. The application contains details regarding the apartment
number, rates, accommodation available and payment plan. Initial deposit was
made at the time of booking of the apartment. Building had yet to come up
B
and payment was to be made as construction progressed. A formal agreement
incorporating the terms of sale of apartment was entered into on January 1,
1997. This agreement is in more details but incorporates all the terms of the
application for booking of the apartment which was accepted by Ansal. By
the time agreement dated January 1, 1997 was entered into, certain payment
as per the plan had already been made. In January 1997 itself, Ansal as c
transferor and Kohlis as transferee filed Form 37-1 before the Appropriate
Authority seeking no objection to the registration of the apartment with the
registering authority. On March 13/14, 1997 Appropriate Authority sent a
notice to Ansal and Kohlis under Section 269-UC(4) pointing out certain
defects in Form 37-1 and requiring them to remove these defects within 15
D
days and not later than March 28, 1997 by filing revised Form 37-1. This was
replied to by Ansal by their letter dated March 27, 1997. However, by order
dated April 28/29, 1997 made under Section 269-UC(4) Appropriate Author-
ity held that Form 37-1 had been belatedly filed in contravention of Rule
48-L and was not maintainable. In short, From 37-1 was rejected. It was
already held that From 37-I was defective inasmuch as particulars required E
in Column 12 of Form 37-I had not been furnished. Ansal challenged the
order of the Appropriate Authority by filing writ petitions.

In the case of DLF, a scheme was advertised for sale of flats in
Richmond, a multistorey complex which was to come up in DLF Qutub F
Enclave, Gurgaon. Mrs. Ranjana Singh applied for allotment of a flat by
making an application on April 9, 1997. DLF agreed to allot a flat to Mrs.
Singh. All the relevant terms and conditions find mention in the letter of
allotment. It gives the details of accommodation, mode of payment as and
when construction progressed 'and in the table for office use in the application
for allotment, details of the price etc., were all mentioned including the initial G
payment received on making of the application. A more detailed agreement
called the "Apartment Buyers' Agreement" was then entered into on January
2, 1998. By this time, some payments towards construction of Richmond
apartments had already been made by Mrs. Singh. On January 30, 1998,
statement in Form 37-1 was filed by DLF and Mrs. Singh before the H
976 SUPREME COURT REPORTS [2000) 3 S.C.R.
A Appropriate Authority. A notice under Section 269-UC(4) of the Act was
issued by the Appropriate Authority to both DLF and Mrs. Singh on April
2/3, 1998 requiring them to remove certain defects within 15 days failing
which it was intimated that Form 37-1 shall be deemed not to have been
furnished. DLF sent their reply on April 13, 1998 giving the relevant
information. However, by order dated April 30, 1998 passe<;l under Section
B
269-UC(4) of the Act Appropriate Authority held as under :

"It is the considered view of the Appropriate Authority that the
transaction would fall into sub-clause (ii) of clause 'd' of Section 269-
UA and once the property is not in existence, only the rights therein
c can be transferred. Since the major terms and conditions were
fmalised on the date of booking/allotment, the form 37-1 should have
been filed within 15 days thereof. Since this was not so, the form is
treated as belated form. Further in absence of any power of condonation
of delay, the form has to be treated as non-maintainable."

D This was challenged by DLF by filing writ petition in the High Court. These
are some of the bare details.

We may now examine certain provisions of law relevant to the issues
before us. Chapter XX-C consisting of Sections 269-U to 269-UO was
E inserted in the Act by the Finance Act, 1986 w.e.f. October l, 1986. This was
to·curb the menace of black money. The basic scheme of Chapter XX-C is
that the immovable property can be acquired by the Central Government if
the apparent consideration as agreed to between the transferor and the
transferee under agreement to sell does not represent the true market value
of the property. The provisions spread a wide not by expanding the definition
F of immovable property and the transfer of such property. They envisage
transfer of immovable property yet to be constmcted. "Agreement for trans-
fer'' is defined in clause (a) 1 of Section 269-UA, "immovable property" in
I. 269-UA. (a) ~agreement for transfer" means an agreement, whether registered under the
Registration Act, 1908 (16 of 1908) oi not, for the transfer of any immovable property.

G 2. 269-UA (d) "imm<;>vable property" means, -
(i) any land or any building or part of a building, and includes where any land « any
building or part of a building is to be transfei:red together with any machinery, plant,
furniture, fittings or other things, such machinery, plant, furniture, fittings « other
things also.
Explanation. For the puipOses of this sub-clause, "land, building, part of a
building machine.)', plant, furniture, fillings and other things" include any rights
H therein,
D.L.F. UNIVERSAL LTD. v. APPROPRIA1:E AUTHORITY [D.P. WADHWA, J.] 977

clause (d)2 and "transfer" in clause (f)3 thereof. For the performance of A
provisions under Chapter XX-C, an Appropriate Authority is constituted
under Section 269-UB. Section 269-UC4 provides for restrictions on transfer
of immovable property. Under Rule 48L5 Form 37-1 is prescribed which is
to be filed before the Appropriate Authority signed by both the transferor and
the transferee within 15 days from the date on which the agreement for
B
transfer is entered into. This is the requirement of Rule 48-L of the Rules.
Section 269-UD6 deals with the order by Appropriate Authority for purchase
by the Central Government of immovable property subject matter of the
agreement to sell. This the Appropriate Authority does after examining Form
37-I. As to how the immovable property which is yet to be constructed could
vest in the Central Government after order by the Appropriate Authority is c
mentioned in sub-sections (6)7 and (7) 8 of Section 269-UE. If there is failure
on the part of the Central Government to make payment as required under
Section 269-UG, the property revests in the transferor as provided under
Section 269-UH. Section 269-UK.9 provides that after Form 37-1 has been
filed the agreement for transfer could not be revoked or altered. Section 269- D
UL10 places restrictions on the registering authority from registering a deed

of transfer of immovable property unless no objection certificate has been
issued by the Appropriate Authority. When order for purpose of any immov-
able property by the Central Government is made, transferor is indemnified

(ii) any rights in or with respect to any land or any building or a part of a building E
(whether or not including any machinecy, plant, furniture, fittings or other things
therein) which has been constructed or which is to be constructed accruing or arising
from any transaction whether by way of becoming a member of, or acquiring shares
in, a co-operative society, company or other association of persons or by way of
any agreement or any arrangement of whatever nature), not being a transaction by
way of sale, exchange or lease of such land, building or part of a building.
269-UA(f) "transfer", -
F
(i) in relation to any immovable property referred to in sub-clause (i) of clause (d),
means transfer of such property by way of sale or exchange or lease for a term of
not less than twelve years, and including allowing the possession of such property
to be taken or retained in part performance of a contract of nature referred to in
section 53-A of the Thinsfer of Property Act, 1882 (4 of 1882).
Explanation - For the purpose of this sub-clause, a lease which provides for G
the extension of the term thereof by a further term or terms shall be deemed to be
a lease for a term of not less than twelve years, if the aggregate of the term for
which such lease is to be granted and the further term or terms for which it can
be so extended is not less than twelve years;
(ii) in relation to any immovable property of the nature referred to in sub-clause (Ji)
of clause (d). means the doing of anything (whether by way of admitting as a
member of or by way of transfer of shares in a co-operative society or company H
978 SUPREME COURT REPORTS [2000] 3 S.C.R.
A from any claim that the transferee may have against him under the agreement
for transfer (Section 269-UM 11). If we concentrate on the relevant provisions
of Chapter XX-C as applicable in the present appeals, it will be seen that ·.
immovable property means any right in or with respect to any building or
part of a building which is yet to be constructed which right accrues or arises
B from any transaction i11.cluding that by was -of any agreement or any arrange-
ment of whatever nature or being a transaction by way of sale exchange or

or other association of persons or by way of any agreement or arrangement or in ): 0
any other manner whatsoever) which has the effect of transferring, or enabling the
enjoyment of, such property.
4. Restrictions 011 transfer of immovable property.
c 269-UC(J) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4
of 1882), or in any other law for the time being in force, no transfer of any
immovable property in such area and of such value exceeding five lakh rupees, as
may be prescribed, shall be effected except after an agreement for transfer is entered
into between the person who intends transferring the immovable property (herein-
after referred to as the transferor) and the person to whom it is proposed to
be transferred (hereinafter referred to as the transferee) in accordance with the
D provisions of sub-section (2) at least four months before the intended date of transfer.
(2) The agreement referred to in sub-section (1) shall be reduced to writing in the form
of a statement by each of the parties to such transfer or by any of the parties to
such transfer acting on behalf of himself and on behalf of the other parties.
(3) Evecy statement referred to in sub-section (2) shall,-
(i) be in the prescribed form;
E (ii) set forth such particulars as may be prescribed, and
(iii) be verified. in the prescribed manner,
and shall be furnished to the appropriate authority in such manner and within such
time as may be prescribed, by each of the parties to such transaction or by any of
the parties to such transaction acting on behalf of himself and on behalf of the other
parties.
F
(4) Where it is found that the statement referred to in sub-section (2) is defective, the
appropriate authority may intimate the defect to the parties concerned and give tham
an opportunity to rectify the defeat within a period of fifteen days from the date
of such intimation or within such further period which, on an appli&ation made in
this behalf, the appropriate authority may, in its discretion, allow and if the defect
is not rectified within the said period of fifteen days, or as the case may be, the further
period so allowed, then, notwithstanding anything contained in any other provision
G of this Cliapter•. the statement shall be! deemed never to have been furnished.
5. Statement to be furnished under section 269-UC(J).
48-L. (1) The statement required to be furnished to the appropriate authority under sub- ~
section (3) ·of section 269-,UC shall be in Form No. 37-1 and shall be signed and
verified in the manner indicated therein by each of the parties to the transfer referred
to in sub-section (1) of that section or by any of the parties to such transfer acting
H on behalf of himself and on behalf of the order parties.
D.L.F. UNIVERSAL LID. v. APPROPRIATE AUTHORITY [D.P. WADHWA, J.] 979
lease of such building or part of a building. "Transfer'' in relation thereto A
means the doing of anything including by way of an agreement or arrange-
ment which has the effect of transferring or enabling the enjoyment of such
immovable property; No transfer of immovable property shall be effected
except after an agreement for tr!lllsfer as defined in clause (a) of Section 269-
UA is entered into between the parties, i.e., the transferor and the transferee
B
at least four months before the intended date of transfer. This is so notwith-
standing anything contained in the Transfer of Property Act, 1882 or in any
other law. This agreement for transfer. is now required to be reduced in writing
in the form of a statement by both the parties. The statement is to be in Form
37-1 and is to be furnished to the Appropriate Authority within 15 days from
the date on which agreement for transfer is entered into. If a defective c
statement in Form 37-1 is filed Appropriate Authority is required to intimate
the defect to the parties concerned and give them an opportunity to rectify
the same within a period of 15 days or within such further period as may
be allowed by the appropriate authority. In case the statement remains
.defective, it shall be deemed never to have been furnished. If the statement D
in Form 37-1 is proper, Appropriate Authority may make an order for
purchase of the ~ovable property, subject matter of Form 37-1, by the

(2) The statement in Form No. 37-l shall be furnished, in duplicate, to the appropriate
authority E
(a) .... .
{b) .... .
(c) before tl}e expiry of 15 days from the date on which the agreement for transfer
is entered into, in cases not covered by clauses (a) and (b).
6 Order by appropricm authority for purchase by Central Government of immovable
property. F
269-UD(l) Subject to the provisions of sub-section (I-A) and (l-B), the appropriate
authority, after the receipt of the statement under sub-section (3) of section 269-UC
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, 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 G
property after the expiration of a period of two months from the end of the month
in which the statement referred to in section 269-UC in respect of such property
is received by the appropriate authority :
Provided further that where the statement referred to in section 269-UC in
respect of any immovable property is received by the appropriate authority on or ·
after the lst day of June, 1993, the provisions of the fust proviso shall have effect
as if for the words "two months", the words "three months" had been substituted. H
980 SUPREME COURT REPORTS (2000] 3 S.C.R.
A Central Government at the rate equal to the amount of ap}Jarent consideration.
In C.B. Gautam v. Union of India and Ors., (1993) 199 ITR 530 this Court
laid down principles how the Appropriate Authority would apply its mind to
the term "apparent consideration". Tune limit has been laid by which the
Appropriate Authority has to make an order for purchase by the Central.
Government of the immovable property. After an order is made, immovable
B
property vests in the Central Government in terms of the agreement for
transfer referred to under sub-section (1) of Section 269-UC. When the order
is made under Section 269-UD(l) in respect of an immovable property being
rights of the nature referred to in sub-clause (ii) of clause (d) of Section 269-
UA the order shall have the effect of vesting such right in the Central
c Government and placing the Central Government in the same position in
relation to such rights as the person in whom such a right would have
continued to vest if such order had not been made. After statement in Form
37-1 has been filed under Sectioll" 269-UC terms of agreement for transfer
cannot be altered unless of course no order has been made by the appropriate
D authority for purchase of the immovable property by the Central Government

Provided also that the period of limitation referred to in the second proviso
shall be reckoned, where any defect as referred to in sub-section (4) of section 269-
UC has been intimated, with reference to the date of receipt of the rectified statement
by the appropriate authority : ·
Provided also that in a case where the statement referred to in section 269-
E UC 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 269-UB 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 first and .second provisos 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 sub-section. ·
F Provided also that the period of limitation reference to in the second proviso
shall be reckoned, where any say has been granted by any court against the passing
of an order for the purchase of the immovable property under this Chapter, with
reference to the date of vacation of the said stay.
(1-A) Before making an order under sub-section (I), the appropriate authority shall
give a reasonable opportunity of being heard to the transferor, . the person in
occupation of the immovable property if the transferor is not in occupation of the
G property, the transferee and to every other person whom the appropriate authority
knows to be interested in the property.
(JB) Every order ma4e by the appropriate authority under sub-section (1) shall
specify the grounds on which it is made.
(2) The appropriate authority shall cause a copy of its order under sub-section (I)
in respect of ~ny immovable property to be served on the transferor, the person in
H occupation of the immovable property if the transferor is not in occupation thereof,
D.L.F. UNIVERSAL LTD. v. APPROPRIATE AUTHORITY [D.P. WADHWA, J.] 981
or the order if any made stands abrogated under Section (1) of Section 269- A
·--4
UH. Any transfer of immovable property made in contravention thereof shall
be void. Registering Officer under the Registration Act 1908 is forbidden to
register any document for transfer of immovable property unless a certificate
from the appropriate authority that it has no objection to the transfer of such
immovable property is furnished. There is also a prohibition on any person
B
from 148 any act which has the effect or transferring any immovable property
unless the Appropriate Authority certifies that there is no objection thereto.
In case no order for purchase by the Central Government is made by the
Appropriate Authority or its order stands abrogated, it shall issue a certificate
of no objection for transfer of the property. Where an order for the purchase
of immovable property by the Central Government is made, no claim by the c
transferee shall lie against the transferor by reason of such transfer not being
in accordance with the agreement for the transfer of immovable property
entered into between the parties.

There is no dispute that agreement for transfer, which has been reduced
into writing in Form 37-1, pertains to immovable property and amounts to D
transfer of immovable property within the meaning of clauses (d) and (t) of
the transferee, and on every other person whom the appropriate authority knows to
be interested in the property.
7. 269-UF (6) Where an order under sub-section (1) of section 269-UD is made in respect
>- of an immovable property, being rights of the nature referred to in sub-clause (ii) of clause
(d) of section 269-UA, such order shall have the effect of -
E
(a) vesting such right in the Central Government, and
(b) placing in Central Government in the same position in relation to such rights
as the person in whom such a right would have continued to vest if such order had
not been made.
8. 269-UE (7) Where any rights in respect of any immovable property, being rights in, or
with respect to, any land or any building or part of a building which has been constructed
F
J.. or which is to be constructed, have been vested in the Central Government under sub-
section (6), the provisions of sub-sections (1), (2), (3) and (4) shaU so far as may be,
have effect as if the references to immovable property therein were references to such
land or building or part thereof, as the case may be.
.... 9. Restrictions on revocation or alteration of certain agreements for the transfer of immov-
able property or on transfer of certain immovable property.
G
269-UK (l) Notwithstanding anything contained in any other law for the time being in
force, no person shall revoke or alter an agreement for the transfer of an immovable
-1 property or transfer such property in respect of which a statement has been furnished
under section 269-UC unless, -
(a) the appropriate authority has not made an order for the purchase of the
immovable property by the Central Government under section 269-UD and the
period specified for the making of such order has expired; or H
982 SUPREME COURT REPORTS [2000] 3 S.C.R.
A Section 269•UA. High Court, after examining the terms of the agreement and )- .;:._
the provisks of Chap'ter XX-C, reached various findings in paragraph 28
of the ju~ ent, which we reproduce :

"To sum up, our findings are :

B (i) Agreement for transfer as defined in clause (a) of Section 269-
UA refers to an agreement which is entered into privately
between the parties thereto; such an agreement may be oral or
in writing.

(ii) An agreement for transfer entered into by the parties in Form
c 37-1 under Section 269-UC is not an agreement defmed by
clause (a) of Section 269 UA. It is an agreement statutorily
ordained to be entered into in a prescribed proforma.

(iii) Agreement for transfer, the phrase as occurring in Chapter XX-
C has two meanings depending on the context where it occurs.
D It may be an agreement for transfers defmed in Clause (a) of
Section 269-UA (which in this judgment has been refereed to
as private agreement). It may be an agreement for transfer as
defmed in Section 269-lJC (which in this. judgment has been

E (b) in a case where an order for the purchase of the immovable property by the
....
Central Government has been made under sub-section (I) of section 269-UD, the
order stands abrogated under sub-section (I) of section 269-UH.
(2) Any transfer of any immovable property made in contravention of the provisions
of sub-section (I) shall be void.
IO Restrictions on registration, etc. of docwnents in respect of transfer of immovable property
F 269-Ul (I) 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. exceed-
ing the value prescribed under section 296-UC unless a certificate from the appro-
priate authority that it has no objection to the tran~fer 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-
....
G section (3) of Section 269-UC, is furnished along with such document.
(2) Notwithstanding anything contained in any other law for the time being in foi:ce,
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 thereof 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
H section 269-UC.
D.L.F. UNIVERSAL LID. v. APPROPRIA1E AUTHORITY [D.P. WADHWA, J.] 983
called a proforma agreement). Since the agreement for transfer A
under Section 269-UC is to be drawn up in the form of a
statement, in Chaprer XX-C, the word 'statement' has been used
interchangeably with agreement for transfer in Form 37-1.
"Agreement for transfer" as occurring in Section 269-UKI,
Section 269-UM and Section 269-UD is to be assigned the
B
meaning as defined by Clause (a) of Section 269-UA. At all the
other places in Chapter XX-C, agreement for transfer means and
must be read as proforma agreement i.e., an agreement for
transfer in the prescribed form 37-1 as the context so requires.

(iv) The Appropriate Authority cannot be found fault with refusing c
to act upon or take cognisance of proforma agreement in
statement form 37 -1 (i) if the requisite particulars though
available are not supplied or (ii) if the requisite particulars
would be available at the time when the property has reached
a state in which it is proposed to be transferred and yet the
particulars are not being made available with precision because D
the form is being filed with a view to secure NOC for a transfer
in contemplation.

(v) A delay in filing Form 37-1 is not a defect. The Period of 15
days prescribed by Rule 48-L is directory and not mandatory. E
(vi) The period of 15 days is to be calculated from the date of
entering into the proforma agreement in Form 37-1 and not from

(3) In a case where the appropriate authority does not make an order under sub-section
(I) of section 269-UD for the purchase by the Central Government of an immovable p
property, or where the order made under sub-section (I) of section 269-UD stands
abrogated under sub-section (I) of section 269-UH, 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.
11. Immunity to transferor against claims of transferee for transfer.

- 269-UM Notwithstanding anything contained in any other law or any instrument or any
agreement for the time being in force, when an order for the purchase of any
immovable property by the Central Government is made under this Chapter, no claim
G
by the transferee shall lie against the transferor by reason of such transfer being not
in accordance with the agreement for the transfer of the immovable property entered
into between the transferor and transferee :
Provided that nothing contained in this section shall apply if the order for the
purchase of the immovable property by the CentlaI Government is abrogated under
sub-section (1) of section 296-UH. H
984 SUPREME COURT REPORTS [2000] 3 S.C.R.

A the date of any other proceeding private agreement between the ).... c
parties.

(viit If there are agreement more than one entered into between the
parties, then it is the latest of the agreement which supersedes
the earlier ones which has to accompany form 37-1 when filing
B
before the Appropriate Authority. Other agi:-eements if relevant
may or !ooked into by the Appropriate Authority.

(viii) A defect contemplated by Section 269-UC(4) is one which is
capable is being cured.
c
(ix) The stage for entering into the statutory agreement or proforma
agreement in Form 37-1 arises wqen the parties are ready to
make available all the particulars contemplated by several
clauses of Form 37-1 consistently with the nature of the prop- ~-
erty. The date of entering into the proforma agreement must
D
have proximity of relationship by time with the proposed
transfer of property as defined in clause (f) of Sec. 269-UA The
test for determining proximity of relationship is the availability
of the property agreed to be transferred in such statuS in which
it is proposed to be transferred.
E ,.._
(x) A no objection issued by appropriate authority based on an
agreement for transfer of property to be constructed cannot be
utilised for securing registration of property which has been
constructed."
F
Agreement for transfer and statement in Form 37-1 are two different
documents. As rightly held by the High Court agreement for transfer can be
oral as well as in writing but then this agreement for transfer has to be reduced

G
in writing in Form 37-1. High Court has held that in certain sections in chapter
XX-C 'agreement for transfer' in fact means statement in Form 37-1 as
mentioned in sub-para (iii) of its findings.

The question tha~ arises _for consideration is if the period of 15 days, 'r
-
,..-

.. ~

as mentioned in Rule 48-L, is to be calculated from the date when a
prospective buyer applies for allotment of a flat or from the date when a
H regular agreement called the "Apartment Buyers' Agreement" is entered into
D.L.F. UNIVERSAL LID. v. APPROPRIATE AUTIIORITY [D.P. WADHWA, J.] 985
between the transferor and the transferee or when the agreement for transfer A
is reduced into writing in Form 37-1. Appropriate Authority has held that 15
days are to be counted from the date when booking of the flat is done by
the DLF or Ansal as the letter for booking and the official endorsements
thereon constitute a regular agreement between the parties. This question,
however, becomes academic if we hold that 15 days period is to be counted
B
from the date when agreement for transfer is reduced into writing in the form
of statement (Form 37-1). Can it be said under Rule 48-L that the term
'agreement for transfer' mentioned in clause (c) of sub-rule (2) thereof in fact
means statement in Form 37-1? If we take the literal meaning, this provision
will become rather otiose. An 'agreement for transfer' is inter-parties and that
can always be changed. That the term 'agreement for transfer' in fact means c
statement in Form 37-1, we can get clue from Section 269-UK which says
that no person shall revoke or alter an agreement for the transfer of an
immovable property or transfer such property in respect of which a statement
has been furnished under Se:ction 269-UC. Reference to this statement is
certainly to Form 37-1. It would mean that agreement for transfer can be D
changed by the parties but they have been forbidden from doing so after
statement in Form 37-1 has been furnished. We have, therefore, to give
appropriate meaning to the term 'agreement for transfer' appearing in clause
(c) of sub-rule (2) of Rule 48-L and cannot just adopt literal meaning.
Foundation for exercise of jurisdiction by the Appropriate Authority under
Section 269-UD is the statement in Form 37-1 and not agreement for transfer. E
In C.B. Gautam v. Union of India and Others, (1993) 199 ITR 530,
reference was made to an earlier decision by this Court in the case of K.P.
Varghese v. Income-tax Office1; (1981) 131 ITR 597 where the following
·. passage was quoted with approval :
F
"The court observed that the task of inteipretation of a statutory
enactment is not a mechanical task. The famous words of Judge
Learned Hand of the United States of America that " ......it is true that

........
the words used even in their literal sense are the primary and
ordinarily the most reliable source of inteipreting the meaning of any
writing : be it a statu:te, a contract or anything else. But it is one of
G
the surest indexes of a mature and developed jurisprudence not to
make a fortress out of the dictionary; but to remember that statutes
always have some puipose or object to accomplish, whose sympa-
thetic and imaginative discovery is the surest guide to their meaning"
were quoted with approval." H
·~

986 SUPREME COURT REPORTS [2000] 3 S.C.R.
A It has, therefore to be held that his term 'agreement for transfer' in clause
(c) of sub-Rule (2) of Rule 48-L has reference to statement in Form 37-1.

The next question that arises for consideration is if clause (c) is
mandatory or the Appropriate Authority has power to extend the time if the
circumstances so require. Sub-rule (2) of Rule 48-L in which clause (c) occurs
B .was substituted by the Income-tax (Seventh Amendment) Rules, 1987. Sub-
section (4) of Section 269-UC was inserted by Finance Act. 1995 with effect
from 1.7.1995. Before the insertion of sub-section (4) this Court in Appro-
priate Authority v. Tanvi Trading and Credits P. Ltd, (1991) 191 ITR 307
approved the decision of the Delhi High Court in Tanvi Trading and Credits
C P. Ltd v. Appropriate Authority, (1991) 188 ITR 623 by holding :

"We agree that two alternatives are open under the scheme of the
legislation. - (i) The Union of India through the Appropriate Author-
ity 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 the
D parties to deal with the property. In that view of the matter t'he High
Couri was right in its conclusion. The special leave petition. is
dismissed. No costs."

Sub-section (4) of Section 269-UC was considered by this Court in Jagdish
A. Sadarangani v. Government of India, (1998) 230 ITR 442. That case
E related to the inteipretation of the provisions of sub-section (4) of Section
269-UC of the Act. Sadarangani, the appellant entered into an agreement
dated September 9, 1995 for purchase of certain property in Madras for a sum
of Rs. 5.50 crores. The property comprised upon land and built-up area. On
the same date application in Form 37-1 was filed before the Appropriate
F Authority. A letter dated October 30, 1995 was addressed by the Appropriate
Authority to both the transferors and the transferees seeking certain clarifi-
cations in respect of certain points. After reply was received the Appropriate
Authority by order dated December 11, 1995 held that in view of the
provisions of Section 5 of the Tamil Nadu Urban Land Ceiling Act the
agreement dated September 7, 1995 to transfer entire land including ·the
G excess vacant land shall be deemed to be null and void and in that view of
the matter Appropriate Authority could not effectively exercise its powers )r
with regard to pre-emptive right to purchase the subject property. This Court
referred to its earlier decision in Appropriate Authority v. Tanvi Trading and
Credits P. Ltd, (1991) 191 ITR 307, which approved the decision of the Delhi
H High Court as follows:
D.L.F. UNIVERSAL LID. v. APPROPRIATE AUTIIORITY [D.P. WADHWA, J.] 987
"Sub-section (4) was inserted in Section 269-UC by the Finance· A
Act, 1995, with effect from July l, 1995. Section 269-UC, as it stood
before the said amendment of 1995, came up for consideration before
the various High Courts. In Tanvi Trading and Credits P. lld. v.
Appropriate Authority, (1991) 188 11R 623, a Division Bench of the
Delhi High Court has considered the provisions contained in Sections
B
269-UC, 269-UD and 269-UL of the Income-tax Act. It has been held
that the only right which section 269-UD of the Act confers on the
Appropriate Authority is to enable it to make an order for pmpose of
the immovable property at an amount equal to the amount of the
apparent consideration and that it does not give jurisdiction to the
Appropriate Authority to adjudicate upon the legality of the transac- c
tion which is proposed to be entered into by the applicant and that
section 269-UD is not concerned with the ·validity of the sale.
According to the said decision of the High Court the only order which
can be passed under section 269-UD is an order to purchase and not
other order and if an order of purchase is not passed then it is
D
imperative and obligatory on the part of the Appropriate Authority to
issue the certificate of no objection under section 269-UL(3). The said
decision of the Delhi High Court came up for consideration before
his court in Appropriate Authority v.. Tanvi Trading and Credits P.
lld., (1991) 191 ITR 307. This court, while dismissing the special
leave petition against the said judgment of the Delhi High Court has E
said (page 308) :

"We agree that two alternatives 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, p
it has to issue a 'no objection certificate' leaving it open to the parties
to deal with the property. In that view of the matter the High Court
was right in its conclusion."

Then this Court construed sub-section (4) of Section 269-UC as
under:
G

"We are unable to construe the provisions contained in sub-section (4)
of section 269-UC as conferring a power on the Appropriate Author-
ity to decide the question about the legality of the agreement which
has been entered into by the parties and on the basis of which the H
988 SUPREME COURT REPORTS (2000] 3 S.C.R.
A statement under section 269-UC(2) has been submitted. What is
contemplated by sub-section (4) of section 269-UC is that if there is
a defect in the statement submitted under Section 269-UC(2), which
must comply with the requirements of sub-section (3), then the
Appropriate Authority may intimates to the parties concerned about
the said defect and give them the opportunity to rectify the defect
B
within a period of fifteen days from the date of such intimation or
within such further period as may be allowed by the Appropriate
Authority on an application made in this behalf. The said provision
in sub-section (4) of Section 269-UC envisages a defect which can
be removed/rectified within the period of fifteen days or the further
c period which is given ·by the Appropriate Authority. A defect
regarding the legality and validity of the agreement which renders the
agreement void and unenforceable cannot be rectified. Since a defect
which cannot be rectified was not within the contemplation of the
Legislature in enacting sub-section (4) of section 269-UC a defect
D regarding the legality or validity of the agreement could not fall
~ithin the ambit of the said provision. The objects and Reasons of
the Bill which was enacted as Finance Act, 1995, also do not give an
indication that by inserting sub-section (4) in section 269-UC Parlia-
ment intended to confer a power on the Appropriate Authoricy to go
E into the legality or validity of the agreement."

Now Appropriate Authority is obliged to give opportunity to the parties
to rectify the defects, if any, in Form 37-1 within a period of 15 days or such
extended period as the Appropriate Authority may allow. If we consider
Section 269-UC(4) vis-a-vis Rule 48-L scenario or setting is rather incongru-
F ous. If statement in Form 37-I has no defect Rule 48-L mandates that it should
be filed within 15 days but if it is defective then opportunity can be granted
by the Appropriate Authority under sub-section (4) of Section 269-UC to
correct mistakes even beyond the period of 15 days after filing of the
statement in Fonn 37-1. It would appear that no thought was given to amend
G clause (c) of sub-rule (2) of Rule 48-L while inserting sub-section (4) of
Section 269-UC of th~ AcL It would further appear as rightly held by the
High Court that Rule 48-L is only directory and not mandatory.

We may also note the agreement of the Appropriate Authority which
H was pressed into service to support its plea that 15 days period in Rule 48-
D.L.F. UNIVERSAL LTD. v. APPROPRIATE AUTHORITY [D.P. WADHWA, J.] 989
Lis mandatory and that Section 276AB provides for prosecution in case there A
is failure to comply with the provisions of Section 269UC. Submission of
Form 37-1 within the prescribed period is not the only requirement of Section
269UC. Then under Section 278AA1 2 if a person proceeded against under
Section 276AB 13 and shows rea~onable cause for his failure to file the
statement in Form 37-1 within the prescribed period, he cannot be punished.
We do not think that the provisions of Section 276-AB makes R:iles 48-L
B
in any way mandatory.

DLF and Ansal have strong objection to findings of the High Court in
sub-para (ix) and (x) in para 28 of the judgment reproduced above. However,
according to the Appropriate Authority keeping in view the principles laid C
by this Court in G.B. Gautam's case it can exercise its jurisdiction to acquire
the property if consideration agreed to is less than 15 per cent of the market
value. Mr. Verma, who appeared for the Appropriate Authority, said that the
agreement for transfer contains. variables and unless all these are known,
Appropriate Authority will be handicapped in making an order under Section
269UD. The variables which f?rm terms in the agreement for transfer are D
external development charges tJ1at may be levied by the State of Haryana and
price escalation up to 20 per cent of the agreed consideration it is a matter
of common knowledge that in course of time, there can be escalation in the
prices of various articles like steel, cement labour etc. One can say with
certain!} that price escalation, woulci be within the limit of 20 per cent E
escalation and the external de"t>dopment charges that may be levied by the
State of Haryana would be on certain set principles. Provision of Chapter
XX-C do not require tlie parties to enter into more tlian one agreement for
transfer. It is on tJie basis of the terms of tJiat agreement for transfer which
is reduced into writing in the shape of Form 37-1 tJiat tlie Appropriate
F
~ 12. Punishment not to be imposed in certain cases.
278-AA Notwithstanding anything contained in the provisions of section 276-A, section
276-AB, or section 276-B, no pecion shall be punishable for any failure referred to
in the said provisions if he proves that there was reasonable cause for such failure.
13. Failure to comply with the provisions of sections 269-UC, and 269-UL
276-AB Whoever fails to comply with the provisions of section 269-UC or fails to G
surrender or deliver possession of the property under sub-section (2) of section 269-
UE or contravenes the provisions of sub-section (2) of section 269-UL shall be
punishable with rigorous imprisonment for a term which may extend to two years
and shall also be liable to fine :
Provided that in the absence of special and adequate reason to the contrary
to be recorded in the judgment of the cobrt, such imprisonment shall not be for less
than six months. H
990 SUPREME COURT REPORTS [2000) 3 S.C.R.
A Authority has to make up its mind to pass an order under Section 269-UD.
These provisions do not contemplate filing of more than one Form 37-1 and
grant of more than one no objection certificate by the Appropriate Authority.
We may in this connection refer to sub-sections (6) and (7) of Section 269-
UE. Immovable property, subject matter of transfer, is of the nature refened
to in sub-clause (ii) of clause (d) of Section 269-UA and when an order is
B
made under Section 269-UD with respect to that property, it shall place the
Central Government in the same position in relation to such right as the
person in whom such a right would have continued to vest if such order had
not been made. The whole ~gree~ent for transfer and Form 37-1 are before
the Appropriate Authority. It has to make its mind once and for all whether
c' to pass an order under Section 269-UD or not. If not, it is bound to grant
no objection certificate as required by Section 269-UL. We do not, therefore,
think that the High Court was right in its findings as given in sub-paras (ix)
and (x) of para 28 of its judgment.

One of the grqunds of rejection of Form 37-1 was that it did not contain
D particulars required by paras 1214 and 13 15 given in the Form. It must be seen
that Form 37 -I is a composite form used whether the transaction is sale, lease
or exchange. It may not, therefore, be necessary that all the paras are required
to be filled in when the transaction is either for sale or lease or exchange.
Para 12 requires the particulars about the acquisition of the property which
E in proposed to be transfened. Requirement of para 13 is that names of the
persons interested in the property be given and so also the consideration
specifying their shares and basis thereof. As far as paras 12 and 13 are
concerned, these requirements and particulars in the case of agreement for
transfer as in the present case would appear to be rather unnecessary. When ·

F
14. 12. Particulars about acquisition of the property proposed to be transferred :
(i) Date on which the immovable property was acquired.
(ii) Cost of acquisition of the property. If the property was constructed by the transferor(s),
the cost of acquisition of the land and cost of construction is to be given separately.
(iii) Was the property or part thereof acquired other than by way of purchase'? If so, give
G the details of such acquisition and cost of acquisition to the previous owner. Furnish
a copy of relevant document.
15. 13. Persons interested in the property and in the consideration specifying their shares and )-
basis thereof.
(i) ........... ..
(ii) ............ .
H Ciiil ........ ..
D.L.F. UNNERSAL LTD. v. APPROPRIATE AUTHORITY [D.P. WADHWA, J.] 991
the Appropriate Authority pointed out that this was a defect and required A
Ansal to remove the defect, it was submitted by Ansal that it had purchased
agricultural lands from time to time, obtained the licences for sale of plots,
houses, flats etc., and after obtaining the licences, plots, houses and flats etc.
,were being sold regularly. It was further submitted that since" last so niany
years permission under Chapter :XX-C was also being given regularly and
further that the lands were being developed by Ansal and were in their
B
possession. Similarly, DLF had stated in Form 37-1 with reference to paras
12 and 13 that immovable property was acquired from October 25, 1980
onwards and costs of acquisition of land worked out Rs. 1,534.00 per square
meter. We do not think anything mofe was required to be stated in paras 12
and 13 of Form 37-1. As pointed out by this Court in C.B. Gautam's case c
(1993) 199 ITR 530 that the very historical setting in which the provisions
of Chapter XX-C were enacted indicates that it was intended to be resorted
to only in cases where there is an attempt at tax evasion by significant under-
valuation of immovable property agreed to be sold. It is the farr market value
of the immovable property, which is to be found out and if the Appropriate
D
Authority is satisfied that the apparent consideration shown in the agreement
for sale is less than the market value by 15 per cent or more it may draw
a presumption that this under valuation has been done with a view to evading
tax. While examining the statement in Foi:m 37-1 this object has to be kept
in view by the Appropriate Authority. It cannot act in a mechanical fashion
and pass its order on irrelevant consideration. Sub-section (4) of Section 269- E
UC is not a device for th~ Appropriate Authority to raise irrelevant consid-
erations ignoring the very object of Chapter XX-C Paras 12 and 13 of Form
37-1 cannot be said to be relevant in the present cases. We, therefore, fail to
understand as to what prevented the Appropriate Authority to exercise
jurisdiction under Section 269-UD. The view which we have taken of Rule F
48-L there is no delay in submission of statement in Form 37-1 in any of the
cases. Thus, taking note of all the relevant consideration, we are of the
opinion that the Appropriate Authority was not correct in passing orders that
the statement in Form 37 -I was deemed never to have furnished, thus, creating
a stalemate for sale of the flats which have by now been built but could not
be transferred. G

1 High Court by its impugned judgment allowed the writ petitions and
set aside the orders of the Appropriate Authority. It directed that the Appro-
priate Authority shall take decisions afresh in each of the cases in accordance
with law and consistently with the principles stated in the judgment which H
992 SUPREME COURT REPORTS [2000] 3 S.C.R.
A may be done within a period of three months. Since we have not agreed with ...._..,
all the findings of the High Court and in our opinion Appropriate Authority
was not justified in holding that statement in Form 37-1 was deemed never
to have furnished, the question arises as to how the relief is to be moulded.

Under Section 269-UD an order by Appropriate Authority has to be
B made within three months of the receipt by it of the statement in Fonn 37-
1. We have already held that statement filed in Form 37-1 was in order. Since
the Appropriate Authority did not pass any order within the prescribed period
it had to issue no objection certificate under Section 269-UL. It is no use at
this distant time sending the matter back to the Appropriate Authority for it
c again to apply its mind as period prescribed within which it has to pass order
for purchase of the property by the Central Government has long since
exprred.

In MO/ Engineering Ltd. and Another v. Appropriate Authority and
Others, (1992) 198 I1R 270, which is a judgment of the Calcutta High Court,
D one of us (Ruma Pal, J.) noted that in view of the decision of Delhi High
Court and the Supreme Court in Tanvi Trading and Credits P. Ltd. the .
Appropriate Authority, in exercise of its powers under Section 269-UD of the
Act, did not have the jurisdiction to adjudicate upon the legality of the
transaction, which was proposed to be entered into by the parties. It was also
E held that the only order which could be passed under Section 269-UD was
an order of purchase and none other. The only point, therefore, which fell
for consideration, was whether, in the circumstances, the court could direct
the Appropriate Authority to issue a "No Objection Certificate", under
Section 269-UL(3) of the Act or whether the court should direct the Appro-
priate Authority to decide the matter afresh. After examining provisions of
F Chapter XX-C and considering various decisions of the High Courts and of
this Court the order of the Appropriate Authority first holding that the
statement filed in Form 37-1 was pre-mature and then refusing to grant No
Objection Certificate, were quashed and directions were issued to the Appro-
priate Authority that No Objection Certificate 'under Section 269-UL(3) of the
G Act in respect of the transfer of the premises in terms of the agreement
between the parties be issued.

In Murlidhar Ratanlal Exports Ltd v. Appropriate Authority, (1998)
101 Taxman 562 (DB) (Cal.) the High Court was considering an appeal
against the order of the learned single Judge in Sh113e Digvijay Cement Co.
H Ltd v. Appropriate Authority, (1998) 99 Taxman 32 (CAL.). Here the
D.L.F. UNIVERSAL LTD. v. APPROPRIATE AUTHORITY [D.P. WADHWA, J.] 993
agreement of sale was dated 7.3.1994. By insertion of Section 269-UL the A
" Appropriate Authority treated the form 37-I as non-est. The only question
before the High Court was as to whether upon the submission of Form 37-
I the Appropriate Authority had any option to pass order, the like of which
it has done in the present case. In other words, under the Scheme of Chapter
XXC, particularly with reference to sections 269-UC, 269-UD and 269-Cl,
B
read with section 276-AB. Whether the Appropriate Authority is legally
bound and obliged upon submission of Form No. 37-1 only to pass order
.... either granting 'no-objection' certificate to the parties or to direct the pre-
emptive purchase of the property in terms of section 269-UD, and not to
pass any other order whatsoever. In effect and substance, therefore, the
appropriate authority has only two options, either to grant no objection c
certificate or to invoke section 296-UD. The Division Bench noticed that
under the agreement for sale, which was on the basis of Form 37-I, it was
clear that the possession of the property in question was handed over by
the vendor to the vendee ·not in pursuance of the sale agreement but as a
consequence of the agreement for lease and that, therefore, there was no
D
transfer within the meaning of clause (f) of Section 269-UA of the Act. Then
the High Court went on to hold as under :

"After having, thus, found that the Appropriate Authority acted
in violation of law and beyond the jurisdiction vested in it, we have
no hesitation in holding that it has lost the right to adjudicate upon E
the issue of the genuineness or otherwise on the apparent considera-
tion, particularly because the time during which this had to be done
has since expired. Since the Appropriate Authority failed to exercise
the jurisdiction vested in it by law, and because we are proposing
to set aside the order dated 24.6.1994, no purpose would be served
F
by sending the matter back to the Appropriate Authority for
reconsideration on the question of the appropriateness or otherwise
of the apparent consideration. As no decision was taken by the
Appropriate Authority within the time envisaged under section 269-
UD with regard to the apparent consideration, and because of the
reason that we have set aside that order, the time limit cannot be G
extended by us and, therefore, the Appropriate Authority is bound
i to issue the certificate of 'no-objection' to the parties. We are
fortified in our view by the two judgments of the Calcutta High
Court in the cases of MO! Engg. /.Jd. v. Appropriate Authority,
(1992) 198 ITR 270 and Hindustan Lever l.Jd. v. Appropriate
H
994 SUPREME COURT REPORTS [2000] 3 S.C.R.
A Authority, (1994) 207 ITR 772."

We are of the opinion that these two decisions in MO! Engineering
Ltd. and Murlidhar Ratanlal Exports Ltd. state correct principles which can
be applied in the present cases. We have held that statement in Form 37-
I was in order and was fumisht;!d to the Appropriate Authority within the
B time prescribed. The Appropriate Authority did not make any order within
three months of its receipt of the said statement for purchase by the Central
Government of the immovable property in question. That being the position,
the Appropriate Authority is duty bound to issue no objection certificate to
the transfer of the property. In the circumstances of the case we can also
C exercise jurisdiction under Article 142 of the Constitution. We would, there-
fore, direct the Appropriate Authority to grant no objection certification to
the parties forthwith.

The appeals are disposed of accordingly. Considering the issues in-
volved in these appeals we leave the parties to bear their own costs. J·
D
M.P. Appeals disposed of.