case*.
SRI NANDLAL TEJMAL KOTHARI
v.
THE INSPECTING ASSISTANT COMMISSIONER OF
INCOME TAX AND ORS.
APRIL 3, 1997
[K. RAMASWAMY AND D.P. WADHWA, JJ.]
Appeal-Controversy in-Held covered by judgment in C.B. Gautam's
Income Tax Act, 1961-P. UD( l)-Compulso1y purchase.
*C.B. Gautam v. Union of India, [1993] 1 SCC 78, relied on.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3624 of
1986.
From the Judgment nd Order dated 11/12.3.86 of the Karnataka High
Court in W.P. No. 11570 of 1985.
Mukul Mudgal for the ApI>ellant.
The following Order of the Court was delivered :
The controversy raised in this appeal is covered by the judgment of
this Court in C.B. Gautam v. Union of India, [1993] 1 SCC 78 wherein it
was held that :
A
B
c
D
E
"31. The recording of reasons which lead to the passing of the F
order is basically intended to serve a two-fold purpose :
(1) that the "party aggrieved" in the proceeding before (sic the
appropriate authority) acquires knowledge of the reasons and
in a proceeding before the High Court or the Supreme Court G
(Since there is no right of appeal or revision), it has an
opportunity to demonstrate that the reasons which persuaded
the authority to pass an order adverse to his interest were
erroneous, irrational or irrelevant, and
(2) that the obligation to record reasons and convey the same to H
575
576
SUPREME COURT REPORTS
(1997] 3 S.C.R.
A
the party concerned operates as a deterrent against possible
arbitrary action by the quasi-judicial or the executive
authority invested with judicial powers.
42. We realise that if order for compulsory purchase of the proper-
ty is made hereafter the intending vendor will suffer to some extent
B
by reason of the fact that he will get the purchase amount several
years after the time he would have got it had the impugned order
been held to be valid. But on the other hand, however, he would
have retained the possession of the property in question. Taking
into account these factors and taking note of the fact that the
C
immovable properties in urban areas have gone up steeply in value
during the last few years, we direct that in case an order for
compulsory purchase is made the Central Government shall pay
to the intending seller the amount of the apparent consideration
plus interest at 9 per cent per annum from the date the impugned
order was made.
D
E
F
50. We, accordingly, clarify by this supplemental direction to be
read as part of the judgment that in respect of cases other than
that of petitioner - C.B. Gautam, the period of two months referred
to in Section 269-UD(l) shall be reckoned with reference to the
date of disposal of each of such pending matters either before this
Court or before the High Courts as the case may be. Where,
however, the stay orders inhibiting the authorities from taking
further proceedings are vacated, the period referred to in the said
Section 269-UD(l) shall be reckoned with reference to the date
of such vacating of the stay orders. This clarification and further
direction shall be supplemental to and be treated a.s parts of the
main judgment."
Following the above ratio, this appeal is disposed of. No costs.
T.N.A.
Appeal disposed of.
Lex