SRI K.V. SHIVAKUMAR AND ANR.versusTHE APPROPRIATE AUTHORITY AND ORS.

                  SRI K.V. SHIV AKUMAR AND ANR.                                   A
                                      v.
            THE APPROPRIATE AUTHORITY AND ORS.

                           FEBRUARY 17, 2000

    [S.B. MAJMUDAR, D.P. MOHAPATRA AND R.P. SETHI, JJ.J                           B

      Income Tax Ac~ 1961 :

      Chapter XX-A and XX-C-Object of-Held, is to penalise those who
evade tax by undervaluing the prope1ty tra11Sfe"ed under the instrument of        C
transfer-Income Tax.

       Sections 269-UD, 269-UC and 269-UE-Compulsory purchase of im-
movable propeity by the Appropriate Autholity-Transferor receiving full con-
sideration and handing over possession to the Central Govemment-Order of
Appropriate Authority upheld by High Court-Supreme Court reversing the            D
order of the High Court fallowing C.B. Gautam 's case *-But while so revers-
ing the order of the High Court, no direction issued for de nova proceedings
or start of proceedings from anterior date-Appropriate Authority deciding
the case afresh after giving opportunity of hearing to the parties concerned in
the light of principles laid down in C.B. Gautam's case-By the fresh order
                                                                                  E
also, ordering pre-emptive punhase uf the property by the Central Guvemme/lf
lzutding that prope1ty was unde1valued under the sale agreement-Held, under
such circumstances, the fresh order of the Appropriate Authority does not
suffer from any serious illegality or infirmity wa"anting inteiference.

       Words and Phrases-Words Yails to tender''-Meaning of-In the con-           F
text of Section 269· UH of the Income Tax Act, 1961.

      Trust 'V' entered into an agreement with another Trust 'R' for sale
of an immovable property for a consideration Rs. 1,55,00,000 and the
transferor and transferee jointly submitted applications in the prescribed
form to the Appropriate Authority, an action for pre-emptive purchase of G
property was taken by him. Appropriate Authority directed that the
property be purchased by the Central Government at a discounted value
of Rs. 1,50,17,084. Both transferor and transferee challenged the order
before High Court by way of writ petitions. The writ petitions as well as
the writ appeals were dismissed by the High Court. However, a Certificate H
                                     991
    992                  SUPREME COURT REPORTS                  [2000) 1 S.C.R.
A of fitness was granted by the High Court to appeal before Supreme Court.
    The said appeal was allowed by Supreme Court relying on the decision of
    C.B. Gautam's case.

         In the meantime the said property was put up for auction sale and
  one of the trustees of Trust 'R' gave the highest bid which was accepted.
B The auction purchaser deposited 25% of the bid amount i.e., 47,01,000.
  However, auction purchaser in spite of the repeated reminder failed to
  deposit the balance amount. Auction purchaser filed a writ petition for a
  direction to the Appropriate Authority and the Chief Commissioner of
  Income Tax to evict the tenants from the property in question by taking
C recourse to Section 269-UE of the Income Tax Act and to deliver vacant
  possession or for a direction to refund the amount of 47 ,01,000 with
  interest. A writ pdition for similar relief was filed by a nominee of the
  auction purchaser. However, the writ petitions as well as the writ appeals
  were dismissed by the High Court. Appeals against the said orders were
D filed before the Supreme Court in which notice was issued.

         During pendency of these cases before Supreme Court, Trust 'V' filed
  a writ petition seeking a writ of certiorari quashing a fresh order passed
  by the Appropriate Authority under Section 269 {;D (1) of the Act and
  sought a writ of mandamus to the Chief CIT to issue 'No Objection' to
E the transferor and the proposed transferee as the property in question
  revested with the transferor after the Supreme Court reversed the earlier
  order of the High Court. Thust 'R' also filed a writ petition seeking similar
  relief. Both Trust 'V' and Trust 'R' moved a transfer petition before
  Supreme Court for the transfer of the said writ from the High Court to
F Supreme Court and the same was allowed and clubbed together with the
  earlier appeals filed by the auction purchasers and his nominee.

        It was contended by appellants that the Appropriate Authority com-
  mitted an error in adopting a discounted value of the property and fixing
  its apparent consideration; and that since the apparent consideration as
G prescribed in Section 269-UA(b )(i) was not tendered by the Central
  Government the order of the purchase of the building by the Central
  Government under sub- section (1) of Section 269 l:D stood abrogated aud
  the property stood revested in the transferor.

H         Dismissing the Appeals as also the Transfer cases, this Court
       K. V. SHIV AKUMAR v. THE-. APPROPRIATE AUTIIORITY              993

      HELD : 1. Chapter XX-C comprising of Section 269-U to Section A
269-UO of the Income Tax Act, 196 deals with purchase made by the
Central Government of immovable property in certain cases of transfer.
While Chapter XX-A applies to transfer made upto 30th September, 1986;
this Chapter applies to transfers made after that date. Under the
provisions power is conferred on the Central Government to purchase any
property covered by the Chapter for the same consideration for which it
                                                                              B
is proposed to be transferred. These provisions were introduced for secur·
ing the twin objective of curbing generation of black money and evasion of
tax by under-stating the value of the property in the instrument of transfer.
The scheme under Chapter XX-A and XX·C is essentially to penalise the
tax-dodgers who seek to evade payment of tax by resorting to the dubious c
method of undervaluing the property transferred under the instrument of
transfer. In CB. Gautam's the Constitutional validity of the provisions of
Chapter XX·C of the Act has been u.pheld. [998-G-H)

      *C.B. Gautam v. Union of India, [1993) l SCC 78, relied on.
                                                                            D
      2. The order passed by the Appropriate Authority does not suffer
from any serious illegality or infirmity which warrants interference. The
contention raised by the appellant that since the order of the Appropriate
Authority was set aside by this Court the property stood revested in the
transferor, in the circumstances of the case, is rejected. It was expressly E
stated in the order of the Appropriate Authority and it was not di~pnted
that after the order of the Appropriate Authority for compulsory purchase,
the transferee received the full consideration as determined therein and
delivered possession of the building to the Centr.al Government. This
Court, in its order neither directed de novo proceeding nor issued any p
direction to start the proceeding from any anterior stage. In the circumstan-
ces no exception can be taken to the procedure followed by the Appropriate
Authority in issuing a fresh notice of hearing to the proposed transferor,
tr.msferee and the interested person and disposing of the matter in the
manner discussed. The property had already vested in the Central Govern·
ment and that position remained unaltered subject to the fresh order to be G
passed by the Appropriate Authority. [1003-G-H; 1004·A·D)

      3. From the orders passed by the Appropriate Authority it is clear
that notice of the discounted value and the deductions proposed to be
made was given to the transferor. The transferor raised no objection        H
    994                  SUPREME COURT REPORTS                [2000] 1 S.C.R.
A against the discounted value or the deduction made. Indeed the transferor
  expressed its willingness to accept the balance amount of consideration.
  Accordingly, a sum of Rs. 97,67,233 was paid to the transferor by cheque.
  On receipt of the amount the transferor delivered possession of the
  property. From the record it appears that the respondents stated before
B the Authority that the alleged mistake in adjusting the tax arrears of M
  from the consideration payable to the transferor-Trust and also one of the
  persons entitled to dispose of the building could be sorted out between the
  Department and the transferor. It also appears rrom the records that M
  is one of the trustees of the transferor-Trust and also one of the persons
  entitled to dispose of the building in question. In these circumstances, it
C cannot be said that the Central Government has failed to tender or deposit
  the whole or any part of amount of consideration required to be tendered
  or deposited under Section 269-UG of the Income Tax Act which entails
  the consequence of abrogation of the purchase order and revestment of the
  property in the transferor. The use of the expression "fails to tender" in
D Section 269-UH, considered in the context of the scheme of the Act in
  Chapter XX-C connotes that the Central Government shall pay to the
  transferor the apparent consideration as determined by the Appropriate
  Authority under Section 269-UD read with Section 269-UF, within the
  prescribed time- limit. [1004-F -H; 1005-A]

E       4. Section 269-UE(l) clearly provides that where an order under
  Section 269-UD(l) is made by the Appropriate Authority in respect of an
  immovable property referred to in Section 269-UA(d)(i), such property
  shall on the date of such order, vest in the Cenfrdl Government. Even
  assuming that certain deductions made were not permissible the vesting
  order in favour of the Central Government cannot be said to be vitiated
F on that count. [1005-C-D]

          C.B. Gautam v. Union of India, [1993) 1 SCC 78, relied on.

          Vidyavathi Kapoor Tmst v. Chief Commissioner of Income Tax, (1992)
G   194 ITR584 (Kant) and Government of lndia v.Ma.ximA. Lobo, (1991) 190
    ITR 101 (Mad.) (DB), referred to.

          CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1~15-
    1416 of 2000.

H         From the Judgment and Order dated 152.96 of the Karnataka High
     K. V. SHIVAKUMAR v. 1Ht. APPROPRIATEAU1HORffY [D.P. MOHAPATRA. J.J   995

Court in W.A. Nos. 696-697 of 1992.                                             A
      M.S. Usgaoncar, R.N. Trivedi, Additional Solicitor Generals,
Joseph Vdlappally, G.L. Sanghi, T.L.V. Iyer, N. Santosh Hegde, R.F.
Nariman, K.N. Shukla, G.S. Bhat, R.S. Hegde, P.P. Singh, N.D.B. Raju,
Guntur Prabhakar, B.K. Prasad, A.T.M. Sam.path, S. Rajappa, V. Balaj~ S.
Ganesh, G. V. Chandrasekhar, C. Paramasivan, Goodwill Indeevar, Nilan-          B
gikarangutkar, Mrs. Bharathi Raju, S.K. Dwivedi, Ms. Asha Gopalan Nair,
Nilangi K. for the appearing parties.

      The Judgment of the Court was delivered by

       D.P. MOHAPATRA, J. Leave granted in Special Leave Petition
                                                                                c
(Civil) Nos. 13085-86/1996.

     All the cases were heard together with the consent of the parties
and are being disposed of by this judgment.
                                                                                D
        The controversy raised in these cases relate to the validity of the
pre-emptive purchase of a building in the city of Bangalore under Section
269-L'E of the Income Tax Act, 1961 (for short 'the Act') and its sale by
the Central Government. This is the second round of this litigation to this
Court. The exercise which started towards the end of 1990 is yet to reach
finality.                                                                       E

      The property in controversy is a double storied building bearing Nos.
775 to 809 situated at Old Taluk Cutchery Road, Bangalore. It consists of
shops presently in occupation of tenants. M/s. Vidyavati Kapoor Trust
represented by Mohan Lal Kapoor entered into an agreement with M/s. p
Rajatha Trust represented by Shiv Kumar on 28.11.1990 for sale of the said
property for a consideration of Rs. 1,55,00,000. When transferor and the
transferee jointly submitted application in the prescribed form to the
Appropriate Authority under Section 269-UC of the Act, action for pre-
emptive purchase of the property was taken by the Appropriate Authority.
The Authority beingprima facie satisfied that the property has been under G
valued with a view to evade tax initiated action for pre-emptive purchase
of the property by the Central Government by the Order dated 24th June,
1991. The Appropriate Authority directed that the property be purchased
by the Central Government at a discounted value of Rs. 1,50,17,084. The
proposed transferor and transferee challenged the said order in Writ H
    996                   SUPREME COURT REPORTS .                (2000) 1 S.C.R.
A Petition Nos. 5614 and 6516 of 1991 before Kamataka High Court. Both
    the writ petitions were dismissed by the single Judge by the Order dated
    April 19, 1991. The writ petitioners preferred Writ Appeal Nos. 1297 and
    1318 of 1991 before Division Bench of the High Court. The appeals were
    dismissed by the Division Bench by judgement dated August 23, 1991. A
B   Certificate of fitness for filing appeal before the Supreme Court was
    however, granted by the Division Bench. Th.: transforur prefem:d Civil
    Appeal No. 3849 of 1991 before this Court. By order dated 13th March,
    1996, a Bench of three learned judges of this Court allowed the appeal
    relying on the decision of the Constitution Bench in C.B. Gautam v. Union
    of India & Others, [93 [ I SCC 78. Since it will be necessary to refer to the
C   said order later in this judgmtont, the order is quoted in extenso :

                                       "Order

             This appeal by Certificate is against the decision of the Karnataka
             High Court reported in 194 ITR 584 (Vidyavati Kapoor Trnst v.
D
             Chief Commissioner of Income Tax and Ors.) which was affirmed
             by the Division Bench of that Court in 194 ITR 593. During the
             pending of this appeal, the Constitution Bench of this Court in
             C.B. Gautam v. Uniot1 of India and Ors., [1993) 1 SCC 78 has
             overruled the impugned judgment of the Karnataka High Court
E            stating clearly that the view taken in the impugned judgment of
             the Karnataka High Cvurt docs nut lay down the correct law. This
             being so, the impugned judgment has to be rcvtrsed following the
             decision of the Constitution Bench in CB. Gautam 's case.


F                Learned counsel for D.P. Sharma, the 4th respondent, who is
             stated to be one of the three joint purchasers during the interreg-
             num and who claimed that the sale has been confirmed in their
             favour during the pending of this appeal, submitted that the trans-
             action in their favour being complete, in view of clarification.made
             in para 43 of the decision in C.B. Gautam's case, nu interference
G            should be made in this appeal for this reason. We are unable to
             accept this submission. The other alleged joint purchasers arc not
             before us and all the necessary facts to enable llS tu take the view
             that transaction in the present case falls within the category
             specified in para 43 of the decision in C.B. Gautam's case are not
H            before us. We are, therefore, unablt to hold that notwithstanding
    K. V. SHIVAKUMAR v. THEAPPROPRIAIB AL'THORITY JD.P. MOHAP ATRA, J.J   997

        the overruling of the impugned judgment by the Constitution             A
        Bench in C.B. Gautam 's case, this appeal should not be allowed
        and the transaction should remain unaffected.

            We may, however, observe that whatever remedy is available
        to the alleged purchaser for recovery of the amoUll.t, if any, paid
        by him, would remain unaffected by this decision.                       B

           Accordingly, the appeal is allowed. No costs."

       After the two writ petitions filed by the transforor and the transferee
were dismissed by the single Judge of the High Court, the Central Govern-
ment, in whom the property vested in pursuance of the order passed by           c
the Appropriate Authority under Section 269-UD read with Section 269-
CE of the Act, put up the property for auction sale. In the sale notice it
was recited, inter alia that the property which is to be sold under Lot No.
6 is free from encumbrances except that it is occupied by tenants. In the
auction held on 28th June, 1991 KV. Shivakumar who is one of the trustees D
of Nl/s. Rajatha Trust gave the highest bid of Rs. 2,77,00,CCO. The bid was
accepted. The auction purchaser deposited 25% of the bid amount, i.e. Rs.
47,01,CCO. The balance amount was to be paid by 22nd September, 1991.
Though the auction purchaser was repeatedly reminded to deposit the
balance amount of about Rs. 2,30,00,COO he failed to pay the said amount.
                                                                                E
      On September 19, 1991, the auction purchaser filed Writ Petition No.
20686 of 1991 in the High Court of Karnataka seeking a direction to the
Appropriate Authority and the Chief Commissioner of Income Tax to evict
the tenants from the property in question by taking recourse to the
provisions of Section 269- UE of the Act and for a direction to tht: F
Authority to deliver vacant possession of the property to him within a
reasonable period; alternatively the writ petitioner prayed that in case the
Central Government cannot comply with the demand of the auction pur-
chaser then it should refund the amount of Rs. 47,00,000 with interest @
15 per cent per annum. One T.N. Omesh claiming to bt: nominee of the
auction purchaser instituted Writ Petition No. 20687 of 1991 seeking G
identical reliefs. Both the writ petitions were disposed of by the judgment
dated 26th March, 1992, rendered by a single Judge, holding, inter alia, that
the writ petitioners were not entitled to any relief in exercise of jurisdiction
under Article 226 of the Constitution. The learned single Judge held that
the auction purchaser was fully conscious that the property was in occupa- H
    998                   SUPREME COURT REPORTS                   (2000] 1 S.C.R.
A tion of tenants and it would not be possible for the Authority to deliver
    vacant possession of the property. The learned Judge further held that the
    auction purchaser having committed default in payment of the balance bid
    amount is not entitled to seek the relief sought in the writ petitions. The
    judgment of the learned single Judge was subject matter of Writ Appeal
    Nos. 696 and 697 of 1992 filed by K.V. Shivakumar and T.N. Umesh. The
B   appeals were dismissed by the Division Bench of the High Court by the
    judgment dated 15.2.1996. The said judgment was challenged before this
    Court in Special Leave Petition (C) Nos. 13085-13086 of 1996. In these
    cases this Court by Order dated 22. 7.1996 issued notice to the respondents
    indicating that the matter would be disposed of finally at the notice stage
C   itself.

         During pendency of these cases in this Court Mis. Vidyavathi Kapoor
  Trust represented by Kamal K. Kapoor filed Writ Petition No. 33470 of
  1996 in the High Court of Karnataka seeking a writ of certiorari quashing
D the order dated 28.1 l.1996 passed by the Appropriate Authority undet
  Section 269-UD(l) of the Act and seeking a writ of mandamus to the Chief
  Commissioner of Income Tax, Bangalore to issue 'No Objection' to the
  petitioner and the proposed transferee since the property in question has
  revested with the transferor. The proposed trans1eree, M/s. Rajatha Trust,
  represented by its trustee K. V. Shiva Kumar also filed Writ Petition No.
E 34820 of 1996 in the Karnataka High Court seeking similar reliefs. On the
  petitions filed by the writ petitioners for transfer of the writ petitions, this
  Court by Order dated 24th July, 1998, transferred the two writ petitions to
  this Court. The cases are numbered as Transfer Case Nos. 22 and 23 of
  1998. The appeals arising from the two SLPs and the two Transfer Cases
F have been tagged together for hearing.

        Chapter XX-C comprising of Sections 269-U to 269-UO deals with
  purchase made by the Central Government of immovable property in
  certain cases of transfer. While Chapkr XX-A applies to transfers made
G upto 30th September, 1986; this Chapter applies to transfers made after
  that date. Under the provisions power is conferred on the Central Govern-
  ment to purchase any proper:y covered by the Chapter for the same
  consideration for which it is proposed to be transferred. These provisions
  were introduced for securing the twin objective of curbing generation of
  black money and evasion of tax by under-stating the value of the property
H in the instrument of transfer. The scheme under Chapter XX-A and XX-
     KV. SHIVAKVMAR v. TilEAPPROPRIATEAL'THORITY [D.P. MOHAPATRA,J.J     999

C is essentially to penalise the tax-dodgers who seek to evade payment of       A
tax by resorting to the dubious method of undervaluing the property
transferred under the instrument of transfer.

       In C.B. Gautam's case (supra) the Constitution Bench upheld the
validity of the provisions of Chapter XX-C of the Act holding inter alia that
the said chapter providing for pre-emptive purchase of immovable property       B
proposed to be transferred does not confer arbitrary or unfettered discre-
tion· on the Appropriate Authority to compulsorily purchase immovable
property and does not violate Article 14 of the Constitution of India. This
Court observed :

        "The powers of compulsory purchase conferred under the
                                                                                c
        provisions of Chapter XX-C are intended to be (and are being)
        used only in cases where, in an agreement to sell an immovable
        property in an urban area to which the provisions of that Chapter
        apply, there is a ~ignificant undervaluation of the property by 15
        per cent, or more. If the Appropriate Authority is satisfied that       D
        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 undervaluation has been done with a view
        to evading tax. Such a presumption, however, is rebuttable and the
        intending seller or purchaser can lead evidence to rebut it.
                                                                                E
        Moreover, the reasons for such acquisition which are required by
        Section 269-UD to be in writing must be germane to the object
        for which the chapter was introduced, namely to counter attempts
        to evade tax."

     Considering the meaning and import of "free from all encumbrances"         F
under Section 269-CE this Court observed:

         "Section 269-UE must be read without the expression "free from
         all encumbrances" with the result that the property in question
         would vest in the Central Government subject to such encumbran-
         ces and leasehold interests as are subsisting thereon except for G
         such of them as are agreed to be discharged by the vendor before
         the sale is completed. If under the relevant agreement to sell the
         property is agreed to be sold free of all encumbrances or certain
         encumbrances, it would vest in the Central Government free of
         such encumbrances. Similarly, sub-section (2) of Section 269-UE H
    1000                 SUPREME COURT REPORTS                   (200011 S.C.R.

A           will be read down so that if the holder of an encumbrance or an
            lessee is in possession of the property and under the agreemt:nt to
            sell the propt:rty, it is not provided that the sale would be free of
            such encumbrances or leasehold interests, the encumbrance holder
            or the lessee who is in possession will not be obliged to deliver
            possession of the property to the appropriate authority or any
B           person authorised by it and thc provisions of sub-section (3) also
            would not apply to such persons.'

         Summing up its conclusion this Court gave certain directions in
  relation to completed transactions as well as matters pending before the
C Courts or other authorities. The relevant portion of the Judgment reads :

            "This brings us to the question of relief. We find that the order for
            compulsory purchase under Section 269-UD{l) of the Income Tax
            Act which was served on the petitioner on the night of December
            15, 1986, has been made without any show-cause notice being
D
            served on the petitioner and without the petitioner or other af-
            fected parties having been given any opportunity to show cause
            against an order for compulsory purchase nor were the reasons
            for the said order set out in the order or communication to the
            petitioner or other concerned parties with the order. In view of
E           what we have stated earlier, the order is clearly bad in law and it
            is set aside.                                                           >

                The next question is as to the consequence to follow. In view
            of the fact that the obiect of the provisions of Chapter XX-C is a
F           laudable object, namely, to counter evasion of tax in transactions
            of sale of immovable property, we consider it necessary to limit
            the retrospective operation of our judgment in such a manner as
            not to defeat the acquisitions altogether. We find that, if the
            original timt:-frame pr ~scribed in Chapter XX-C is rigidly applied,
            it would not be possible for the Appropriate Authority concerned
G           to pass an order under Section 269-UD(I) at all in n:spect of the
            property in question. In order to avoid that situation and, yet to
            ensure that no injustice is caused to the petitioner, we order, in
            the facts and circumstances of the case, that the statement in Form
            No. 37-I submittt:d by the petitiom:r as set out earlit:r shall be
H           treated as if it were submitted on the date of the signing of this
     KV. SHlVAKCMAR '· 1HJ::APPROPRIATE AUTHORITY [D.P. :v!OHAPA1RA J.I    IC:)J

        judg1m:nt. Then:after, if the Appropriate Authority com,id.::rs it fit,    A
        it may issm: a show-cause notice calling upon the pt:titioncr and
        other concc:rned parties to show cause why an order for compul-
        sory purchase of the property in question should not be made
        under the provisions of sub-section (1) of Section 269-CD and give
        a reasonable opportunity to the petitioner and such other con-
        cerned partit:s to show cause against such an ordt:r being made.
                                                                                   B

            We may clarify that, as far as completed transactions are
        concerned, namely, where, after the order for compulsory purchase
        under Section 269- CD of the Income-tax Act was made and
        posst:ssion has been taken over, compensation was paid to the              c
        owner of the property and accepted without protest, we see no
        reason to upset those transactions and hence, nothing we have said
        in the judgment will invalidatt: such purchases. The same will b..:
        the posttion where publk auctions have been hdd of the properties
        concerned and they arc purchased by third partit.:s. ln those cases
        also, nothing which we:. have stated in this judgm<.:nt wiU invalidat<.:   D
        the purchases.

           In the rtsult, the writ petJt10n transferred is allowed to the
        extent aforestated. Considering the facts and circumstances of the
        case, there will be no order as to costs."
                                                                                   E
     This Court overruled the decision of Karnataka High Court in
Vidyawathi Kapoor case (supra) and affirmed the decision of the Madras
High Court in GO! v. Maxim Alobo, (1991) 190 ITR 101 (~lad).

       Subsequently on an application fih:d by the Union of India for certain      F
clarifications and directions this Court passed an order nf clarification in
the form of <I further direction which is reported in : 1993 J I sec 78
(Paragraphs 45-52).

      After disposal of the appeal by fois Court setting aside: the judgment
of the High Court relying on C.B. Gautam case (supra) the Apprupriatt: G
Authority gave an opportunity of hearing to the partit!s and dispost!d of
the matter afresh by the order dated 28.11.96. from the order it appears
that the Appropriate Authority has complied with the direction in the
order passed by this Court and has deait with the matter in the light of the
principles decided in CR Gautam case (supra). From the: discussions in H
    1002                  SUPREME COURT REPORTS                    [2C00] 1 S.C.R.
A the order it is also clear that the contention which had been raised by the
    transferor and the transferee and the intt:restcd party (D .P. Sharma) at the
    earlier stages of the proceeding wen: with some modifications reiterated
    before the Authority. On behalf of the transferor challenge was raised to
    the notice dated 5.6.96 as being barred by time; objection was also raised
    against the valuation of the property determined by the Appropriate
B   Authority and satisfaction of the Appropriate Authority regarding under-
    valuation. The question was also raised whether the transferee was entitled
    to deliver vacant possession of the building after getting the tenants evicted.
    In the order these contentions have been dealt with in detail and cogent
    reasons have been given for their rejection by the Authority. After a
C   thorough discussion of the entire case the Appropriate Authority recorded
    its conclusions in these words :

             "The reasons recorded by the learned Members of the Appropriate
             Authority as on 24.1 .1991 already communicated to all the parties
             concerned, are still valid and have not been n:butted. We therefore
D            estimate the market value of Mohan Building in its tenanted state
             is Rs. 2,00,CO,OOO as on 28.11.1990. Thus, there is an under-valua-
             tion of namely 33% in the agn::ement dated 28.11.1990 between
             M/s. Vidyavathi Kdpoor Trust and M/s. Rajatha Trust.

E                In view of the above conclusion, the Appropriate Authority is
             convinced that there is under-valuation of the apparent considera-
             tion in this case. They have no doubt that this under valuation has
             been resorted to with an intention to evade tax."

F          The Appropriate Authority in ext:rcise of the powers vested in it
    under Section 269-lJD(l) of the Act ordered pre-emptive purchase of the
    immovable propcrty in qut:stion and further ordered thdt in vit:w of the
    fact that the prop;;rty has already been handed over to tht: Central Govern-
    ment by the transferor on 26.2.1991 no separate ordt:r under Section
    269-UD(2) was passed. Reiterating the statutory provisions the Ap-
G   propriate Authority ordered :

             "It is hert:by declared that nothing in this ordt:r shall operate to
             discharge the Transferors/Transferees or any other person (not
             being the Central Government) from liability may be enforced
H            against the transferors/transferet:s or such other persons.
    K. V. SH!VAKU.1AR v. THEAl'PRUPR!ATEAt.:THORI1Y :D.P. MUHAPA1RA,J.,   !003

            Notwithstanding anything contained in any other law or any           A
        instrument or agreement for the time bei.ng in force as the Ap-
        propriate Authority has ordered the purchase of the Scht:duk
        property, no claim by the transforees shall lie against the trans-
        ferors for the reason of such transfer being not in accordanct: with
        the agrt:ement for the transfor of the impugned property entered
                                                                                 B
        into betwt:en the transforors and the transforces:·

      Shri S. Ganesh, learned counsd appearing for the appd!ant raised
the contention that in view of the order of this Court sdting aside the
judgment of the High Court the property in question revested in the
transferors and therefore the entire proceeding should have bern started         c
de 11ovo instead of merely giving a notice of hearing to the parties.

       Referring to the transfer cases the learned counsel appearing for t!1c
petitioner contended that the Appropriate Authority cummittt!d an t:rror
in adopting a discounted value of the property and fixing its apparent
consideration at Rs. 1,50, 17,084 as against the consideration of Rs. D
1,55,CO,L'OO specified in the agreement b<.:tween the parties. He further
contended that from the discounted value a sum uf Rs. 2,49,851 stated to
be due towards arrears of income-tax and wealth-tax in the cas<: of 'vlohan-
lal Kapoor was illegally deducted. According to the learned cnunsd since
the apparent consideration as prescribed in Section 269- CA(b)(i) was not E
tendered by the C.:ntral Government the order of purchase of the building
by the Central Government under sub-section ( 1) of Section 269-CD stood
abrogated and the property stood revested in the transferor.

       Shri G.L. Sanghi, learned senior counsel appearing for the purchaser
D .P. Sharma supported the order of the Appropriate Authority and furtht:r       F
contended that the purchaser has bct:n seriously prejudiced on account of
the delay in ddivery of posst:ssion of the property.

      We have perused the relevant records and carefully considered the
entire matkr. We art: not satisfit:d that the order dated 28.11.1990 passed
by the Appropriate Authority suffers from any serious illt:gality Dr infirmity   G
which warrants inkrference. The relevant points of law arising in tht: case
have been dealt with by the Constitution Bench in C.B. Gautam (supra)
and the validity of the Act has been upheld. Wt: are in n:spt:ctful agm.:mcnt
with the said decision" The contention raist:d by the learnt:d counsd for
the appellant that since the order of the Appropriate Authority was set          H
    1004                 SUPREME COURT REPORTS                 [2000] 1 S.C.R.
A aside by this Court the property stood rnvested in the transferor, is in the
  circumstances of this case unacceptable and is rejected. It was expressly
  stated in the order of the Appropriate Authority and it was not disputed
  before us that after the order of the Appropriate Authority for compulsory
  purchase the transferee received the full consideration as determined
B therein and delivt:red possession of the building to the Central Govern-
  ment. Thereafter, they challenged the order in the Writ Petitions filed in
  the High Court which wer~ rejected and the matter was carried to this
  Court in the appeal which was allowed relying on the C.B. Gautam case
  (supra). This Court, in its order neither directed de nova proceeding nor
  issued any direction to start the proceeding from any anterior stage. In the
C circumstances no exception can be taken to the procedure followed by the
  Appropriate Authority in issuing a fresh notice of hearing to the proposed
  transferor, transferee and the interested person and disposing of the matter
  in the manner di5CUssed earlier. The property had already vested in the
  Central Govefnment and that position remained unaltered subject to the
D fresh order to be passed by the Appropriate Authority.

        In the order passed by the Appropriate Authority the working of the
  discounted value of the apparent consideration of Rs. 1,55,00,000 and the
  deductions made towards advance received by the transferor from the
  transferee and the amount outstanding against Mohanlal Kapoor were set
E out. From the discussions in the orders passed by the Appropriate
  Authority it is clear that notice of the discounted value and the deductions
  proposed to be made were given to the transferor. The transferor raised
  no objection against the discounted value or the deduction made. Indeed
  the transferor expressed its willingness to accept the balance amount of
F consideration. Accordingly, a sum of Rs. 97,67,233 was paid to Mis.
  Vidyavathi Kapoor Trust by cheque. On receipt of the amount the trans-
  feror delivered possession of the property. From the record it appears that
  the respondents stated before the Authority that the alleged mistake in
  adjusting the tax arrears of Mohanlal Kapoor from the consideration
  payable to M/s. Vidyavathi Trust could be sorted out between the depart-
G ment and the transforor. It also appears from the record that Mohanlal
  Kapoor is one of the trustees of M/s. Vidyavathi Trust and also one of the
  persons entitled lo dispose of 'Mohan building'. In these circumstances, it
  cannot be said that the Central Government has failed to tender or deposit
  the whole or any part of the amount of consideration required tu be
H tendered or deposited under Section 269-UG of the Act which entails the
     KV. SHIVAKUMAR v. TI!E APPKUPKIATE AUTl!URlTY [D.P. MOHAPATRA,J.]   1C05

consequence of abrogation of the purchase order and revestment of the           A
property in the transferor. The use of the expression 'fails to tender' in
section 269-L'H, considered in the context of the scheme of the Act in
chapter XX-C, connotes that the Central Government shall pay to the
transferor the apparent consideration as determined by the Appropriate
Authority u/s 269-CD read with section 269-UF, within one month from
the end of the month in which the immovable property concerned becomes
                                                                                B
vested in the Central Government under sub-section (I) or as the case may
be, under sub-section (6) of section 269-UE. Section 269-UE clearly
provides that where an order under sub-section (1) of section 269-UD is
made by the Appropriate Authority in respect of an immovable property
referred to in sub-clause (l) of clause( d) of section 269-UA, such property    c
shall on the datt: ot such order, vest in the Central Government. Indeed,
in this case the Appropriate Authority clearly stated in the order passed
on 24.1.91 that the property stood vested in the Central Government and
the said position was reiterated in the order passed by the Authority on
26.11J996. Even assuming that certain deductions made were not permis-          D
sible the vesting order in favour of the Ct:ntral Government cannot be said
to be vitiated on that count. The contention raised by the learned counsel
for the petitioner is rejected.

      On the discussions in the foregoing paragraphs and for the reasons
stated therein the appeals and th<: transfor cases arc dismissed. No costs.     E
RK.S.                                          Appeals and T.C. di;inissed.