Gian Devi vs Uoi & Ors
2012 Latest Caselaw 3263 Del

         THE HIGH COURT OF DELHI AT NEW DELHI
%                                      Judgment delivered on: 16.05.2012

+       W.P.(C) 692/1994

GIAN DEVI                                                   ... Petitioner

                                         versus

UOI & ORS                                                   ... Respondents
Advocates who appeared in this case:
For the Petitioner                     : Mr Luv Kumar Aggarwal
For the Respondent                     : Mr Ajay Vohra, Mr Amit Sachdeva for R- 4 to 6.
                                         Mr B.B. Gupta for LRs of R-7
                                         Ms Suruchi Aggarwal

                                       AND

+       W.P.(C) 1427/1994

HARI RAM SAINI                                                     ... Petitioner

                                         versus

UOI & ORS                                                   ... Respondents
Advocates who appeared in this case:
For the Petitioner                     : Mr Ajay Vohra, Mr Amit Sachdeva for Petitioner
                                         Nos. 2 to 5
                                       : Mr B.B. Gupta for LRs of P-1
For the Respondent                     : Ms Suruchi Aggarwal




CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE V.K. JAIN


WP (C) Nos. 692/94&1427/94                                                   Page 1 of 6
                                 JUDGMENT

BADAR DURREZ AHMED, J (ORAL)

1. These writ petitions raise common and identical issues and therefore

they are being disposed of together.

2. The challenge in these writ petitions is to the order dated 25.01.1994

under section 269UD (1) of the Income Tax Act, 1961 (hereinafter referred

to as the 'said Act'). By virtue of the impugned order the appropriate

authority had come to the conclusion that the apparent consideration of the

property in question was under stated by 27%, as compared to the property

at E-23 East of Kailash, New Delhi, and by 33%, when compared to the

property at E-124, East of Kailash, New Delhi. Consequently, the order for

pre-emptive purchase of the property in question under section 269UD (1)

of the said Act was passed.

3. The property in question is E-41, East of Kailash, New Delhi. It is a

residential property and measures 450 Sq. Yrds. or 376.25 Sq. Mtr. There

is a built up structure of approximately 2000 Sq.Ft. on that property.

4. The learned counsel for the petitioner pointed out that the only

reason for the respondent to arrive at the conclusion that the property in

question had been sold at an undervalued apparent consideration was on the

basis of two purported comparable sale instances in respect of the said

properties at E-23, East of Kailash, New Delhi, and E-124 at East of

Kailash, New Delhi.

5. Several points were urged by the learned counsel appearing on behalf

of the petitioner. First of all, they stated that the so-called comparable

instances were not comparable at all. Secondly, it was contended that once

the DDA had fixed the market value of the land while computing the

unearned increase, that value was binding and if that value was to be taken,

there was no question of the difference in the apparent consideration being

less than the fair market value by more than 15%. In fact, according to the

learned counsel for the petitioners, the fair market value arrived at on the

basis of the DDA computation would be even less than the apparent

consideration. Thirdly, it was contended that the respondent had ignored

the sale instance of another property just across the road being E-227, East

of Kailash, New Delhi, which had been sold for a consideration of `. 16

lakh on 29.08.1986. The size of the property was 500 Sq. Yrds. Fourthly,

it was contended on behalf of the petitioner that the methodology adopted

for computing the market value of the comparable property was also wrong.

6. However, the learned counsel for the petitioners pointed out that

even if all the contentions are kept aside and the sale instance in respect of

E-23, East of Kailash, New Delhi, itself is taken into account, the difference

between the apparent consideration and the said sale instance value would

be less than 15% and therefore the pre-emptive purchase could not have

been ordered.

7. We have heard the learned counsel for the Revenue also on the

aforesaid aspects. However, we feel that the last point urged by the

petitioner clinches the issue in their favour. It is an admitted position that

the property in question had been agreed to be sold for a consideration of `.

21 Lakh plus the amount of unearned increase to be charged by the DDA

for the said transfer. The sale agreement was entered into on 21.05.1987.

There is no dispute that after the unearned increase amount is taken into

account, as indicated by the DDA, the value of the apparent consideration

of the property in question comes to `. 29,54,800/-. The consideration for

the property at E-23, East of Kailash, New Delhi, which was sold by virtue

of a sale deed on 03.09.1987, was `. 33,80,000/-. Without going into any

adjustments with regard to the difference in points of time on which the

said two transactions were finalized, the difference between the two values

i.e, `. 33,80,000 and `. 29,54,800/- comes to about 14.42 % which is clearly

less than the figure of 15% which is necessary for triggering any pre-

emptive purchase under section 269UD (1) of the said Act. We may point

out at this juncture that the area of E-23, East of Kailash, New Delhi, was

376 Sq. Mtr. whereas the area of the property in question was 376.25 Sq.

Mtr. The constructed area was also virtually almost the same in both the

cases. The two properties, in these respects, were comparable.

8. There is, however, only one difference in the two properties and that

is that a small portion of E-23, East of Kailash, New Delhi, was tenanted

when it was sold. Whereas the property in question was fully vacant and

was in the possession of the owner/vendor. However, there is no material

placed before us to indicate as to whether the fact that a small portion of the

property at E-23, East of Kailash, New Delhi, was tenanted would result in

any alteration in the valuation indicated in the sale deed itself. Therefore,

there is no necessity for us to examine what would have been the fair

market value of E-23, East of Kailash, New Delhi, had it been wholly

vacant. Once, the respondents have accepted the sale consideration in

respect of E-23, East of Kailash, New Delhi, as being comparable to the

sale in respect of the property in question, all that we have to see is the

consideration in the two instances. We have already indicated above that,

comparing the two values, the difference is less than 15%.

9. Insofar as the second instance of E-124, East of Kailash, New Delhi,

is concerned, that, clearly is not comparable to the property in question.

The size of E-124, East of Kailash, New Delhi, is only 104.52 Sq. Mtr.

whereas the size of the property in question is 376 Sq. Mtr. Therefore, that

cannot be regarded as comparable instance. It is also well known that

smaller plots tend to fetch much higher prices per Sq. Mtr. than the larger

plot.

10. In view of the foregoing, since the difference in the consideration of

the comparable property and the apparent consideration of the property in

question is less than 15%, the order under section 269 UD (1) of the said

Act for pre-emptive purchase of the property in question could not have

been passed. As a result, the impugned order is set aside. The writ

petitions are allowed. There shall be no orders as to costs.

BADAR DURREZ AHMED, J

V.K. JAIN, J MAY 16, 2012 kb