CASE NO.: Appeal (civil) 3303 of 1992 PETITIONER: RAJALAKSHMI NARAYANAN RESPONDENT: MARGARET KATHLEEN GANDHI & ORS. DATE OF JUDGMENT: 14/08/1992 BENCH: M.H. KANIA (CJ) & J.S. VERMA & S.C. AGRAWAL & Y. DAYAL & A.S. ANAND JUDGMENT:
JUDGMENT
1993 AIR 273 = 1993 (3)Suppl.SCC 296 = 1992(2) SCALE 496
The Judgment was delivered by M. H. KANIA C.J.
M. H. KANIA CJI.-
Counsel heard This appeal is directed against an interim order passed by a
Division Bench of the Delhi High Court in Civil Writ Petition No. 387 of
1988 on May 4, 1988
On December 9. 1987, a formal agreement to sell the property in question to
respondent No. 1 was signed by the appellant and her co vendor, respondent
No. 8 for a total consideration of Rs. 18 lakhs, out of which Rs. 50, 000
was already paid to them in November, 1987. A further amount of rupees one
lakh and fifty thousand was received by the vendors from the first
respondent in February, 1988. As security for the said amount the first
respondent was put in possession of a portion of the property and she
continues to be in possession of the same till date. On February 10, 1988,
the appellant entered into an agreement for the purchase of a flat in
Alaknanda, New Delhi, for a total consideration of rupees six lakhs and
seventy-five thousand, out of which Rs. 20, 000 was paid as earnest money.
On March 14, 1988, the appropriate authority under Chapter XX-C of the
Income-tax Act, 1961 It is pointed out to us by Mr. Vaidyanathan, learned
counsel for the appellant, that in the present case the appellant, namely,
the vendor, is in a completely helpless position although she is in urgent
need of money in order to acquire another flat. It is pointed out by him
that so far as the appellant is concerned, she never had any objection to
the completion of the purchase of the property by the Government nor had
she any objection to the specific performance of the agreement of sale in
favour of respondent No. 1. It was submitted by Mr. Vaidyanathan that for
no fault of his client and as a result of the order passed by the
appropriate authority and the impugned interim order passed by the Delhi
High Court she is neither able to dispose of the said property to a third
party nor she is able to get the sale price of the said property either
from respondent No. 1 or from the Government. He contended that if the
balance of the purchase price is not paid to the appellant without delay,
she will again lose interest for several years. In our opinion, in this
case, some relief should be granted to the appellant because she has
neither attempted to delay or defeat the compulsory purchase of the
property by the Government nor has she any objection to the completion of
the agreement for sale of the property to respondent No. 1. However, we are
not in a position to direct any amount to be paid to the appellant at this
stage because it is not possible to predict whether the order for purchase
of the said property made by the appropriate authority will be upheld or it
will be set aside and the sale of the property in favour of respondent No.
1 can be completed
We can safely take judicial notice of the fact that the prices of immovable
properties have shot up continuously for the last few years and today the
said property, if sold in the open market, would fetch a much larger amount
than that for which it was agreed to be sold to respondent No. 1Taking into
account these circumstances we modify the impugned order and direct that in
the event of the aforesaid order of the appropriate authority being upheld,
the Government shall pay to the appellant, as the purchase price, the
amount stated as the consideration for the sale of the said property in the
agreement entered into between the appellant and respondent No. 1 with
interest thereon at 15 per cent. per annum. In case the order of the
appropriate authority is set aside and the transaction of sale in favour of
respondent No. 1 is completed, respondent No. 1 shall pay to the appellant
interest on the balance amount payable on account of the purchase price by
respondent No. 1 interest at 20 per cent. per annum. The interest in either
eventuality will be calculated right from the day the impugned interim
order was made by the Delhi High Court
We may clarify that whether interest should be paid to the owner of an
immovable property who has entered into an agreement to sell the same which
cannot be completed by reason of an order of purchase under section 269UD
of the Income-tax Act and at what rate, will have to be decided in the
facts and circumstances of each case. All that can be observed by way of a
general principle is that where such a seller has raised no objection or
obstruction either to the purchase of his property by an order under
section 269UD or to the completion to the agreement of sale entered into by
him but is unable to get the purchase price by reason of the said order and
the stay order or orders passed by a court, interest at an appropriate rate
can, if equity so requires, be paid to him
There will be no order as to the costs of the appeal