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Krishna Kumar Rawat & Ors. v. Union of India & Ors.

Civil Appeal · 2019 INSC 819Decided 29 Jul 2019
Civil Appeal Nos. 9800-9801 of 2010
Justice Abhay Manohar Sapre · Justice Dinesh Maheshwari

Background

The appellants had agreed to purchase a large plot of land with two godowns in Jaipur for about Rs. 99.8 lakh. The Income Tax Department's "appropriate authority," believing the declared price was significantly under-valued, exercised its power under Section 269UD of the Income Tax Act to compulsorily purchase the land itself at the agreed price rather than let the private sale go through. The buyers challenged this pre-emptive purchase order through a writ petition, an intra-court appeal, and a review petition in the Rajasthan High Court, all of which went against them, before approaching the Supreme Court. A connected appeal by the Union of India challenged a High Court direction on how refund/interest from the deposited sale amount should be disbursed to the buyers and seller.

Decision Breakdown

The Supreme Court held that the appropriate authority, the Single Judge, the Division Bench, and the Review Court had all consistently and correctly found, based on detailed evidence including comparable sales and valuation of the godowns, that the suit land's fair market value was at least 15% higher than the price stated in the sale agreement, which justified the pre-emptive purchase under Section 269UD. The Court declined to re-examine these factual findings under its limited Article 136 jurisdiction, rejected arguments about procedural infirmities (such as non-disclosure of the godown valuation), and dismissed the buyers' appeals. On the connected appeal, the Court held that the High Court had wrongly decided how the deposited sale proceeds should be disbursed instead of leaving that question to the appropriate authority under Section 269UG(4), and set aside that part of the High Court's order, leaving the disbursement issue to be decided afresh by the appropriate authority.

Lesson Learnt

When a government valuation authority compulsorily pre-empts a property sale on the ground of under-valuation, courts will not re-open settled factual findings on value unless they are shown to be arbitrary, perverse, or contrary to law, so a buyer challenging such an order must raise every factual objection (such as missing valuation reports) at the earliest possible stage, not for the first time much later.

Official source (sci.gov.in)View Judgment (PDF)

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