Smt. Shiela Sen Gupta vs Uoi And Ors.
2014 Latest Caselaw 2961 Del

* IN THE HIGH COURT OF DELHI AT NEW DELHI
                                               Decided On: 07.07.2014

+                         WP(C) No.4120/2014

       SMT. SHIELA SEN GUPTA                       .....Petitioner
                 Through: Mr. Rakesh Kumar Singh, Advocate.

                                Versus
       UOI & ORS.                                     ..... Respondents

Through: Mr. A.K. Gautam, Advocate, for Resp.

No.1.

CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE VIBHU BAKHRU

MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT) %

1. In these writ proceedings under Article 226 of the Constitution of India, the petitioner challenges the CBDT instruction no. 1908 of 19.7.1993 for discriminating between public sector undertakings and individuals, who seek to enter into negotiations for purchasing immovable property that vests in the Government, after proceedings under Chapter XX-C of the Income Tax Act, 1961.

2. The petitioner was a tenant in the premises at A-3/4, Vasant Vihar, New Delhi ("the tenanted premises"), from the time her husband executed the lease deed dated 15.11.1976. It is stated that eviction petitions against their tenancy had been dismissed twice, on 7.4.1980 and 31.5.1983. Consequently, it is averred that the landlords had lost the right to evict the tenants, despite the expiry of the lease

WP(C) No4120/2014 Page 1 period. The landlords/owners of the premises then entered into an agreement to sell with a third party, and consequently filed Form 37-I on 27.9.1996 before the Appropriate Authority. In those proceedings under Section 269 UD(1) of the Income Tax Act, 1961, the petitioner's husband was required to attend the hearing on 18.3.1997 before the Appropriate Authority, as an interested person under Chapter XXC of the Income Tax Act. The Central Government, by its order under Section 269UD(1) of the Act, on 26.3.1997, purchased the entire premises, including the tenanted premises. This pre-emptive purchase was unsuccessfully challenged in writ proceedings, and consequently, this order has attained finality. After this, an advertisement was issued on 3.12.1998 as well as on 20.8.2000 in the newspaper, announcing the public auction of the premises though, on both occasions, the auctions did not come to fruition. It is averred that the advertisements clearly adverted to and consequently, acknowledged the tenancy rights as being in the hands of the petitioner's husband.

3. The petitioner's husband received a notice dated 24.2.2005from the Appropriate Authority of the Income Tax Department, to handover physical possession of the premises, which was challenged by him in W.P.(C) 9574/2005 titled J C Sen Gupta v. Appropriate Authority IT Department, before this Court. He however passed away on 28.3.2006. The writ petition was disposed of finally on 23.11.2011, by a judgment that held that tenancy rights, being an existing encumbrance, could not be disturbed. The order further stated as follows.

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7. In the present case, the Revenue has not placed on record the agreement to sell, which was subject matter of Form 37-I. It is not the case of the Revenue that the property was to be sold "free from all encumbrances". On the other hand, the case set up by the Revenue in the counter affidavit is that the tenancy period agreed between the erstwhile owner/landlord and the petitioner had come to an end on 14th November, 1978 and after the said date, the petitioner was a statutory tenant or month to month tenant. In other words, the stand put up by the Revenue is that they are entitled to evict the petitioner from the portion in his occupation. As the property now vests with the Central Government, the Delhi Rent Control Act, 1956 is not applicable. In the counter affidavit the Revenue has stated that as per the Public Premises. (Eviction of Unauthorized Occupation) Act, 1971 notice can be issued and the petitioner can be evicted. This is the correct position in law.

8. In view of the stand taken by the Revenue in the counter affidavit it is apparent that it is not the intention of the Revenue to physically and by force throw out the petitioner from the portion in his occupation but they shall evict him/her legally as per law i.e. by due process of law. This right and power vests with Central Government and they are entitled to initiate eviction proceedings under the Public Premises (Eviction of Unauthorized Occupation) Act, 1971 and the protection of Delhi Rent Control Act, 1956 is no longer available. If we carefully read the impugned order/letter dated 20.5.2005 the same states that the petitioner was requested to vacate the premises within 10 days. It also states that petitioner was an unauthorized occupant and therefore, should vacate the property.

9. At this stage, ld. counsel for the petitioner states that the petitioner is a widow and about 83 years of age. She has been staying in the property since 1976. He states that the petitioner and her children will file an undertaking in this Court that they shall vacate the premises on or before 30th November, 2012. The said undertaking will be filed by Shiela Sen Gupta within two weeks and by her children

WP(C) No4120/2014 Page 3 within 4 weeks as it is stated that one of the children is residing abroad. The property will not be sub-let or transferred. The petitioner will continue to pay rent/occupation charges/damages at the rate of existing rate. In case there are any arrears, the same will be paid within a period of one month.

10. We are inclined to accept the said undertaking keeping in view the old age of the petitioner and also the factum that proceedings under Public Premises (Eviction of Unauthorized Occupation) Act, 1971 may take some time before an order is passed. The undertaking will bring this litigation to an end and curtail any further proceedings which may arise. It is clarified that in case there is any breach in the undertaking it will be open to the respondent to forcefully evict the petitioner or any person in occupation of the premises without taking recourse to eviction proceeding under the Public Premises (Eviction of Unauthorized Occupation) Act, 1971. Undertaking will be executed as an eviction order under the said Act. Copy of the undertaking will be also furnished to the ld. counsel for the Revenue.

4. Against this order, the Special Leave Petition (preferred by the petitioner) was disposed of by the Supreme Court, without going into merits on 16.7.2012, with the direction that the petitioner would vacate the premises and hand over possession within two years' time, on the ground that she was 87 years old. An undertaking to that effect was to be submitted within 4 weeks. Consequently, it is averred that the petitioner has had continuous possession of the premises since 1976.

5. The petitioner seeks to retain the right to reside in the premises on account of her long standing association and attachment with the house, as well as her old age, and consequently desires a settlement with the Appropriate Authority, with payment of appropriate purchase

WP(C) No4120/2014 Page 4 value. She has filed a representation dated 30.6.2013 to the President of India, which were rejected through the letters dated 12.5.2014 and 30.4.2014, stating that her representations could not be considered by the Department. She received a response from the CBDT, on 13/14.12.2013 along with a record of the findings on examination, in a report dated 22.12.2013. This report stated that para 2(vi) of the CBDT circular of 19.7.1993 did not permit the Department to enter into direct negotiations with any individual, for sale of immovable property. It is this circular of 19.7.1993 ("the impugned circular") that the petitioner seeks to challenge, as being discriminatory against private individuals and in favour of public sector undertakings/Government Departments, the latter being allowed to pursue such negotiations.

6. The petitioner argues that the CBDT, being constituted under the Central Board of Revenue Act, 1963, was State under Article 12 of the Constitution of India. Thus, the CBDT's administrative instruction barring negotiation by private individuals for purchase of public property violates Article 14 of the Constitution of India. Particularly, since the state action in question is disposal of State property, all the persons interested in purchasing the same must be invited for private negotiations, in accordance with Article 14. Next, it is argued that the Appropriate Authority under the Act, in Chapter XX-C, was vested with the power to purchase immovable properties in certain cases, to recover the tax from an assessee found to be indulging in evasion, as provided in Sections 269U - 269UO, particularly under Section 269UI. However, these provisions do not confer the power to further sell these properties, once purchased, by any mode of sale, and the

WP(C) No4120/2014 Page 5 properties are deemed to vest in the Central Government. Part III of Schedule II of the Act (on Attachment and Sale of Immovable Property) only provides procedure for public auction in cases of property attached from defaulters, and therefore cannot be applicable in this regard. Finally, it is contended that when the Appropriate Authority purchased the premises on 26.3.1997, the petitioner was a bona fide authorized tenant in terms of the order of the Additional Rent Controller dated 31.5.1983. It is submitted that the Central Government has become the owner of the premises through a pre- emptive purchase order under Section269UD of the Act, by stepping into the shoes of the transferee of the owners of the premises. This resulted in a loss of the right to shelter and housing of the petitioner, under Article 21 of the Constitution of India.

7. The core of the petitioner's case is that her right of tenancy continues, despite the expiry of the lease period, on account of the order of Additional Rent Controller of 31.5.1983, to the extent that it was even acknowledged in the advertisements of 3.12.1998 as well as on 20.8.2000 for public auction of the premises. That the petitioner has continued to reside in the tenanted premises after the order of the Additional Rent Controller does not imply that the petitioner is a bona fide tenant of the premises in question, for the simple reason that this question has been decided finally by this Court in W.P.(C) no. 9574/2005, and then confirmed by the Supreme Court in the SLP order of 16.7.2012. The question of a possible bonafide tenancy in the premises cannot thus be agitated once again before this Court, by the principle of res judicata, and the compelling interest in respecting the finality of proceedings, to prevent endless litigation. Therefore, this

WP(C) No4120/2014 Page 6 Court is not persuaded by any argument that the petitioner is being denied her right to shelter, that is protected under Article 21 of the Constitution. The petitioner ought to have handed over peaceful possession of the tenanted premises by 16.7.2014, as required by the order of the Supreme Court.

8. The next question to be answered is whether the petitioner can, given the pre-emptive purchase of the entire premises by the Government under Chapter XX-C of the Act, claim a right to negotiate with the Appropriate Authority, to be allowed to purchase the tenanted premises, which at present, vests in the Central Government. The CBDT circular of 19.7.1993 recommends that immovable properties that are pre-emptively purchased by the Central Government, that remain unsold in public auction, should be attempted to be disposed of by inviting sealed tenders. The portion of the circular sought to be challenged reads:

(vi) If the property remains unsold even after inviting sealed tenders the CCIT may enter into direct negotiations for disposal of the property but such negotiations should be entered only with public sector undertakings and the State/Central Govt. Department. The negotiations should start with themarket value estimated by the Appropriate Authority and should not go below the reserve price fixed for the sale of the property.

9. The CBDT is conferred the authority to issue circulars and instructions for proper administration of the Income Tax Act, under Section 119. A circular is thus merely an administrative instruction, and can be challenged if it overrides or seeks to supplant the parent

WP(C) No4120/2014 Page 7 statute. It is nobody's case that the impugned circular overrides the Act. Instead, what is sought to be argued is that the impugned circular violates Article 14, by permitting the CCIT to enter into negotiations for disposal of property purchased under Chapter XX-C, with only a class of entities i.e. State/Central Government Departments and public sector undertakings. This Court finds that the CBDT circular reflects a policy of the Central Government that cannot possibly be judicially reviewed, except on very narrow considerations of unreasonableness or arbitrariness. See R. D Shetty v. International Airport Authority of India,(1979) 3 SCC 489; Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir, (1980) 4 SCC 1; Col. A.S. Sangwan v. Union of India, AIR 1981 SC 1545. However, the challenge of the petitioner is that her right under Article 14 is violated since the impugned circular authorises negotiations for sale with PSUs and Government Departments, and not all private individuals. In other words, the classification is sought to be challenged. This is impermissible when the State action challenged is a policy decision.

10. This Court notes that no argument was advanced on grounds of arbitrariness of the circular. Indeed, one need not go far to seek clarity on whether this policy is arbitrary or not. That the Government/CBDT has the discretion to decide what mode of sale to adopt, to dispose of property purchased under Chapter XX-C is indubitable. Whilst it is true that public auction is a stipulated mode of sale for one particular set of immovable properties under Part III, Schedule II, i.e. immovable properties of defaulters that are attached under the Act, that fact alone does not bar the Government from prescribing public auction as a mode of sale, for disposal of immovable properties that come into the

WP(C) No4120/2014 Page 8 Government's hands by other proceedings under the Act. The silence of the Act on modes of disposal of property that are pre-emptively purchased under Chapter XX-C cannot be, by any stretch, presumed to limit or constrain the Government's discretion in disposal of the property.

11. For the above reasons, the petitioner cannot claim any relief in these proceedings. At the same time, the Court is of the opinion that the CBDT or the appropriate department of the Central Government ought to consider the best manner to dispose of the property, preferably through public auction. Its decision shall be communicated within 4 months to the petitioner. This however, shall not confer any additional advantage or release her from the undertaking that she had furnished, pursuant to the Supreme Court's order. The petition is disposed of on the above terms.

S. RAVINDRA BHAT (JUDGE)

VIBHU BAKHRU (JUDGE) JULY 07, 2014

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