What is the meaning of ‘agreement for transfer’

“agreement for transfer” means an agreement, whether registered under the Registration Act, 1908 (16 of 1908) or not, for the transfer of any immovable property ;

“immovable property” means –

any land or any building or part of a building, and includes, where any land or any building or part of a building is to be transferred together with any machinery, plant, furniture, fittings or other things, such machinery, plant, furniture, fittings or other things also.

Explanation-For the purposes of this sub-clause “land, building, part of a building, machinery, plant, furniture, fittings and other things” include any rights therein;

any rights in or with respect to any land or any building or a part of a building (whether or not including any machinery, plant, furniture, fittings or other things therein) which has been constructed or which is to be constructed, accruing or arising from any transaction whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other Association of Persons or by way of any agreement or any arrangement of whatever nature), not being a transaction by way of sale, exchange or lease of such land, building or part of a building;

 (1999) 151 CurTR 110 : (1999) 236 ITR 793

DELHI HIGH COURT

FULL BENCH

( Before : R. C. Lahoti, J; C. K. Mahajan, J )

ANSAL PROPERTIES AND INDUSTRIES LTD. — Appellant

Vs.

APPROPRIATE AUTHORITY AND OTHERS — Respondent

Civil Writ Petition No. 1735 of 1997 and connected petitions 30 November 1998

Decided on : 30-11-1998

Income Tax Act, 1961 — Section — 269UC, 269UC(4) — Allotment of plot

Counsel for Appearing Parties

M. S. Syali and Satyen Sethi, R. C. Beri, B. B. Ahuja and Ashok Kumar Chhabr for the Assessee D. Jolly and Ajay Jha and Ms. Premlata Bansal, for the Revenu, for the Appellant;

JUDGMENT

R.C. Lahoti, J.

This common order shall govern the disposal of 73 civil writ petitions, the numbers whereof are referred to in the succeeding paragraph. There are three groups of writ petitions.

2. M/s Ansal Properties and Industries Ltd. are the petitioners in CWP Nos. 812/98, 813/98, 814/98, 815/98, 1166/98, 2443/97, 2444/97, 2446/97, 2447/97, 2448/97, 2449/97, 2450/97, 2451/97, 2452/97, 2453/97, 2454/97, 2455/97, 2456/97, 2457/97, 2458/97, 2459/97, 2437/97, 2438/97, 3538/97, 3539/97, 3540/97, 3541/97, 3542/97, 3543/97, 3545/97, 3546/97, 3547/97, 3548/97, 3549/97, 3544/97, 2441/97, 2442/97, 2445/97, 1735/97.

2.1. M/s DLF Universal Ltd. are the petitioners in CWP Nos. 917/98, 1022/98, 3107/98, 3108/98, 3259/98, 3278/98, 3403/98, 3404/98, 3440/98, 3512/98, 3513/98, 3514/98, 3527/98, 3725/98 3743/98, 3983/98, 4133/98, 4134/98, 4138/98, 4147/98, 4160/98, 4195/98, 4385/98, 4658/98, 4791/98, 4792/98, 991/98, 1776/98, 2190/98, 2191/98, 2192/98, 2436/98, 4611/97, 4612/97.

2.2. Rajdhani Estate Promoters & Developers Association, is an association of builders and estate developers established in the year 1970 and registered under the Societies Act, 1860, is the writ petitioner in CWP 2441/97.

3. All the petitioners are builders engaged in developing landed property and thereafter allotting plots, flats, houses, shops, etc., to the prospective buyers. To illustrate the nature of activities undertaken, we will briefly set out the facts of sample cases in the succeeding paragraphs. There may be variations in the matter of dates or details but those variations in the individual cases are not significant. What is of significance is the nature of activity and the transactions entered into by the several petitioners.

4. In CWP No. 1735/97, the respondent No. 2 made an application on 13-6-1996 in the perform prescribed by the petitioner M/s Ansal Properties and Industries Ltd. for allotment of a residential flat of a built up area of 350 sq. yds. (approx.). The allotment having been finalised, an agreement was entered into between the respondent No. 2 and the petitioner on 5-11-1996. The price agreed upon is Rs. 8,731 per sq. mtr. The area is admeasuring 292.60 sq. mtrs. (approx.). The allotment has been made pursuant to the application dated 13-6-1996. On 5-11-1996, itself the parties filed statement of agreement for transfer of immovable property in Form 37-I u/s 269UC of the Income Tax Act, 1961. A copy of the agreement dated 5-11-1995, is enclosed with the statement.

4.1. By notice dated 17/21-1-1996 u/s 269UC(4) the Appropriate Authority informed the transferor and the transferee that the form was defective in as much as the cost of acquisition of the property was not furnished therein in column No. 12.

4.2. Column No. 12 required the following information:

12. Particulars about acquisition of the property proposed to be transferred:

Date on which the immovable property was acquired.

Cost of acquisition of the property. If the property was constructed by the transferor/s, the cost of construction is to be given separately.

Was the property or part thereof acquired other than by way of purchase? If so, give the details of such acquisition and cost of acquisition to the previous owner. Furnish a copy of relevant document.

4.3. The parties had stated as under:

“Agricultural land purchased from time to time and developed into a residential colony”.

4.4. A revised statement was filed and this time the information was stated as under:

“Agricultural land purchased from time to time and developed into a residential colony. As per accounts up to 31-3-1996 average land cost is Rs. 194.12 per sq. yd. and accordingly cost of saleable plotted area is worked out to Rs. 352.96 per sq. yd.”

4.5. On 26-2-1997, the Appropriate Authority has passed the impugned order treating the form filed by the parties to be defective and hence not maintainable and also as having been filed belatedly beyond the period of 15 days on the following grounds:

Specific details as regards the date on which the property was acquired, its cost, along with the cost of construction in case any construction activity was carried out after the purchase of the property, needs to be given in this column. Since these facts have not been furnished, the form continues to be defective.

Besides, the perusal of the agreement further shows that the buyer had applied for allotment of a plot by way of sale vide application dated 13-6-1996 which date is much prior to the date of agreement mentioned in Form 37-I. It is also mentioned in the schedule of the agreement enclosed with the form that Rs. 3,83,203 was paid with application of allotment and a further sum of Rs. 3,83,203 was paid within 60 days, thereof. This indicates that the transaction with reference to the identification of the property as also the rate of payment and schedule of payment was finalised much prior to the alleged date of agreement mentioned in Form 37-I. It is the considered view of the Appropriate Authority that since the major terms and conditions of the transaction were finalised on 13-6-1996, the Form 37-I should have been filed within 15 days thereof. Since this was not so, the form is treated as belated form. Further, in absence of any power of condensation of delay, the form has to be treated as not maintainable.”

5. In CWP 4160/97 M/s DLF Universals Ltd. have developed a residential apartment complex in Qutub Enclave, Gurgaon (Haryana). On 12-7-1996, the respondents No. 2, 3, 4 made an application for allotment of a residential apartment undertaking to sign and execute the Apartments Buyers Agreement on the Company’s Standard Form. The builders made the allotment. On 10-10-1996 an agreement was entered into signed by both the parties.

5.1. Some of the relevant terms of the agreement are that the building plans, designs, specifications of the apartment are all tentative. The same as well as the area were subject to alteration depending on certain circumstances. The price was also liable to be amended depending on certain factors. The apartment was likely to be completed and be deliverable to the allottee within four years from the date of the agreement. There were schemes for payment spread over 7 or 12 years and the allottee could opt for any one of them. The agreement was in supersession of any other agreement executed earlier.

5.2. On 10-10-996 From No. 37-I was filed before the Appropriate Authority.

5.3. On 16-12-1996, the parties were informed that the particulars as required in columns 12 and 13 were not furnished. Further, as per schedule of payment, booking was made on 16-7-1996. calculated wherefrom the form was filed belatedly. The defects were required to be removed.

5.4. Vide order dated 28/30-1-1997, passed u/s 269UC(4) of the Act, on the grounds stated in the earlier notice, the form has been held to be defective and treated to have never been filed.

6. Rajdhani Estate Promoters and Developers Association represents its members engaged in the business of real estate, construction, development of farms, colonies, execution of construction contracts, etc. Land having potential for development is bought and after obtaining licenses/permission for development the same is developed and sold to prospective buyers for which booking is made either directly or through agents.

6.1. The applications for allotment are invited from the prospective buyers in a prescribed perform a specimen copy whereof is Annexure P- 1. The application is usually accompanied by advance payment to be adjusted against allotment of property applied for.

6.2. Pursuant to the applications received, the builders enter into agreement to sell; a specimen copy of such agreement is annexed as Annexure P-2.

6.3. From 37-I along with the agreement such as Annexure P-2 is failed with the Appropriate Authority within 15 days of entering into the agreement.

6.4. Lastly, such applications are being rejected by the Appropriate Authority usually on two grounds (i) non-furnishing of information in respect of cost of acquisition as required by column 12 and (ii) non-filing of Form 37-I within 15 days of application for allotment consequent upon such defects being held fatal by the Appropriate Authority, Form 37-I is termed as defective and deemed never to have been filed. A specimen copy of such order has been filed.

7. Without burdening this judgment with details of the facts of the several cases, it would suffice to note the relevant features generating the issues arising for decision. The intending vendors are all builders. They are engaged in the business activity of developing plots/complexes residential, office or both. The schemes are advertised; in many a cases at a point of time when the scheme of construction is only on papers. The intending buyers finalise their deals by inspecting the plans and such details thereof as can be made available. The area, dimensions, plans and layouts, even the cost, are all tentative which achieve a finality only on the plan materialising by completion of the construction and at that state while documenting actual transfer of the property, the actual description/details of the property and terms of transfer are finalised and given shape. Every scheme published before the prospective buyers attracts a good number of buyers. Generally, the number of the intending buyers exceeds the number of flats/shops/houses, etc., available under the scheme or in the complex. The intending buyers initially apply for allotment which applications may be accompanied by some money towards payment of purchase price. The builder scrutinizes the applications and makes allotments whereupon an agreement is entered into between the parties setting out the exact terms of allotment ascertainable at that stage. Form 37-I is then filed before the Appropriate Authority. In most of the cases the construction has not yet begun or not yet finalised as the same is in progress.

8. In the above said background of facts the following questions arise for consideration :

What is the meaning of agreement for transfer as used at different places in Chapter XX-C of the Income Tax Act, 1961?

When does an obligation to file Form 37-I commence and what is significance of Form 37-I ?

What is the meaning of defects of Form 37-I within the meaning of section 269UC(4)?

How the period of 15 days contemplated by rule 48-R is to be calculated ?

Whether the provisions as to filing of the form in 15 days is mandatory or directory and hence whether the delay in filing the form can be condoned ?

9. The first, foremost and the most crucial issue arising for decision in the cases is-what is the meaning of ‘agreement for transfer’, the phrase as used in Chapter XX-C of the Income Tax Act, 1961.

10. It will be useful to examine the scheme of Chapter XX-C and the relevant provisions thereof.

10.1. Chapter XX-C consisting of sections 269U to 269UO was inserted in the Act by Finance Act, 1986, with effect from 1-10-1986.

10.2. Section 269U empowers the Central Government to notify the dates on which the provisions of this chapter shall come into force. Section 269UA incorporates certain definitions which will apply unless the context otherwise requires. The definitions relevant for our purpose are three which are as under :

“269UA. In this Chapter, unless the context otherwise requires :

“agreement for transfer” means an agreement, whether registered under the Registration Act, 1908 (16 of 1908) or not, for the transfer of any immovable property ;

xxx xxx xxx

(d) “immovable property” means –

any land or any building or part of a building, and includes, where any land or any building or part of a building is to be transferred together with any machinery, plant, furniture, fittings or other things, such machinery, plant, furniture, fittings or other things also.

Explanation-For the purposes of this sub-clause “land, building, part of a building, machinery, plant, furniture, fittings and other things” include any rights therein;

any rights in or with respect to any land or any building or a part of a building (whether or not including any machinery, plant, furniture, fittings or other things therein) which has been constructed or which is to be constructed, accruing or arising from any transaction whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other Association of Persons or by way of any agreement or any arrangement of whatever nature), not being a transaction by way of sale, exchange or lease of such land, building or part of a building;

xxx xxx xxx

(f) “transfer”,-

(i) in relation to any immovable property referred to in sub-clause (1) of clause (d), means transfer of such property by way of sale or exchange or lease for a term of not less than twelve years, and includes allowing the possession of such property to be taken or retained in part -performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882).

Explanation.-For the purposes of this sub-clause, a lease which provides for the extension of the term thereof by a further term or terms shall be deemed to be a lease for a term of not less than twelve years, if the aggregate of the term for which such lease is to be granted and the further term or terms for which it can be so extended is not less than twelve years ;

(ii) in relation to any immovable property or the nature referred to in sub-clause (ii) of clause (d), means the doing of anything (whether by way of admitting as a member of or by way of transfer of shares in a co-operative society or company or other Association of Persons or by way of any agreement or arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the employment of such property. “

10.3 Section 269UB provides for Constituting the Appropriate Authority.

10.4 Sections 269UC, 269UD (relevant part thereof) and 269UL are reproduced hereunder:

“269UC Restrictions on transfer of immovable property-(1) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4 of 1882), or in any other law for the time being in force, (no transfer of any immovable property in such area and of such value exceeding five lakh rupees, as may be prescribed), shall be effected except after an agreement for transfer is entered into between the person who intends transferring the immovable property (hereinafter referred to as `the transferor’) and the person to whom it is proposed to be transferred (hereinafter referred to in `the transferee’) in accordance with the provisions of sub-section (2) at least (four) months before the intended date of transfer.

(2) The agreement referred to in sub-section (1) shall he reduced to writing in the form of a statement by each of the parties to such transfer or by any of the parties to such transfer acting on behalf of himself and on behalf of the other parties.

(3) Every statement referred to in sub-section (2) shall,-

be in the prescribed from :

set forth such particulars as may be prescribed; and

be verified in the prescribed manner, and shall be furnished to the Appropriate Authority in such manner and within such time as may be prescribed, by each of the parties to such transaction or by any of the parties to such transaction acting on behalf of himself and on behalf of the other parties.

(4) Where it is found that the statement referred to in sub-section (2) is defective, the Appropriate Authority may intimate the defect to the parties concerned and give them an opportunity to rectify the defect within a period of fifteen days from the date of such intimation of within such further period which, on an application made in this behalf, the appropriate, authority may, in its discretion, allow and if the defect is not rectified within the said period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the appropriate, authority may, in its discretion, allow and if the defect is not rectified within the said period of fifteen days, or as the case may be, the further period so allowed, then not withstanding anything contained in any other provision of this Chapter, the statement shall be deemed never to have been furnished

(Emphasis, here italicised in print, supplied)

269UD. Order by Appropriate Authority for purchase by Central Government of immovable property.-(1) (Subject to the provisions of sub-section (1A) and (1B), the Appropriate Authority), after the receipt of the statement under subsectoin (3) of section 269UC in respect, of any immovable property, may, notwithstanding anything contained in any other law or any instrument or any agreement for the time being in force, make an order for the purpose by Central Government of such immovable property at an amount equal to the amount of apparent consideration;

xxx xxx xxx

269UL. Restrictions on registration, etc., of documents in respect of transfer of immovable property.-(l) Notwithstanding anything contained in any other law for the time being in force, no registering officer appointed under the Registration Act, 1908 (16 of 1908), shall register any document which purports to transfer immovable property exceeding the value prescribed u/s 269UC unless a certificate from the Appropriate Authority that it has no objection to the transfer of such property for an amount equal to the apparent consideration Therefore as stated in the agreement for transfer of the immovable property in respect of which it has received a statement under sub-section (3) of section 269UC, is furnished along with such document.

(2) Notwithstanding anything contained in any other law for the time being in force, no person shall do anything or omit to do anything which will have the effect of transfer of any immovable property unless the Appropriate Authority certifies that it has no-objection to the transfer of such property for an amount equal to the apparent consideration Therefore as stated in the agreement for transfer of the immovable property in respect of which it has received a statement under sub-section (3) of section 269UC.

(3) In a case where the Appropriate Authority, does not make an order under sub-section (1) of section 269UD for the purchase by the Central Government of an immovable property, or where the order made under sub-section (1) of section 269UD stands abrogated under sub-section (1) of section 269UH, the Appropriate Authority shall issue a certificate of no-objection referred to in sub-section (1) or, as the case may be, sub-section (2) and deliver copies thereof to the transferor and the transferee.”

11. Other provisions of Chapter deal with vesting of property in Central Government consequent to order of compulsory purchase and incidental provisions which are not fully relevant for our purpose though necessary reference would be made whenever required.

12. In the Income Tax Rules, 1962, Part X-C was added incorporating rules relating to purchase of immovable properties under Chapter XX-C. Rule 48L provides as under:

“48L. Statement to be furnished u/s 269UC(3)-(1) The statement required to be furnished to the Appropriate Authority under sub-section (3) of section 269UC shall be in Form No. 37-I and shall be signed and verified in the manner indicated therein by each of the parties to the transfer referred to in sub-section (1) of that section on by any of the parties to such transfer acting on behalf of himself and on behalf of the other parties.

(2) The statement in Form No. 37-I shall be furnished, in duplicate, to the Appropriate Authority-

before 30-10-1987, in a case where the agreement for transfer is entered into before the coming into force of Chapter XX-C in the areas comprised in the “Bengalore Metropolitan Region”, and “Ahemdabad Urban Development Area” and the areas comprised in the city of Ahemdabad , as referred to in the notification of the Government of India in the Department of Revenue No. S.O. 835(E), dated 21-9- 1987;

before the expiry of 15 days from the date on which the provisions of Chapter XX-C come into force in any areas, other than the areas referred to in clause (a) before the agreement for transfer is entered into before such date ; and

before the expiry of 15 days from the date on which the agreement for transfer is entered into, in cases not covered by clauses (a) and (b).”

13. Form No. 37-I has been prescribed by the rules. The relevant part thereof is also extracted and reproduced hereunder :

“FORM NO. 37-I

Statement of agreement for transfer of immovable property to be furnished to the Appropriate Authority u/s 269UC of the Income Tax Act, 1961.

Agreement made this…………………………… day of……………………………….. in the year 19……..

between …………………………………………………………………………………………………………………..

[Narrate(s) and address(es) of the transferor(s)

hereinafter called the transferor(s) of the one part and……………………………………………………….

………………………………………………………………………………………………………………………..

[Name(s) and address(es) of the transferor(s)]

hereinafter called the transferor(s) of the other part. It is hereby agreed by and between the parties as follows :

The Transferor (s) and the transferee(s) agree to transfer the immovable property located at

………………….. and prescribed in the Schedule hereunder written by way of………………………….

The total apparent consideration for the transfer of the immovable property is ………………………..

…………………………………………………………………………………………………………….

4. The particulars of the transferor(s) (transferees), and other details about the transaction are furnished in the annexure to this agreement.

The Schedule above referred to :

…………………………………………………………………………………………………………………..

VERIFICATION

In witness of the above agreement for sale, the parties hereto solemnly declare that what is stated above and in the annexure (including the documents) accompanying such annexure, to the extent it relates to the respective party, is correct and complete to the best of their knowledge and belief. Each party further declares that he is competent to sign this agreement and verify its content.

Transferor(s) Transferee (s)

……………………………….. …………………………………

Father’s/Husband’s name Father’s/Husband’s name

xxx xxx xxx

ANNEXURE

Particulars of the agreement for transfer of immovable property

1. Particulars of the transferor (s) :

xxx xxx xxx

2. Particulars of the transferee(s)

xxx xxx xxx

3. Particulars of the property sought to be transferred :

(a) Area of vacant land

Area of land occupied by the superstructure

Total land area

Floor-wise plinth areas

Plant and machinery

Furniture and fixtures attached

Other assets

Area of car-parking space

Area of terrace, if any

Permissible floor area ratio/floor space index. Enclose copies of building plan, layout plan and site plan.

Nature of interest or right proposed to be transferred. Please indicate whether the property consists of :

ownership, or

membership of co-operative society, or association of person, or a company (please indicate the number of shares and their value, or

lease, or

right to possession taken or retained in part-performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 or any agreement or arrangement of whatever nature, or

any other (please specify).

Particulars of consideration for transfer :

(i) If the transfer is by way of sale, please state the consideration as per the agreement for transfer in respect of various assets :

xxx xxx xxx

11. If the property is not in the possession of the transferor, please given details of the person(s) in possession of the property, his/their address(es) and the nature of the possession by the occupant(s) :

(i) Is the transferor in possession of the title deeds of the property proposed to be transferred ?

(ii) If the answer to (i) above is no, the name and address of the person in possession of the title deeds and the reasons thereof.

12. Particulars about acquisition of the property proposed to be transferred:

Date on which the immovable property was acquired,

Cost of acquisition of the property. If the property was constructed by the transferor(s), the cost of acquisition of the land and cost of construction is to be given separately,

Was the property or part thereof acquired other than by way of purchase? If so, give the details of such acquisition and cost of acquisition to the previous owner. Furnish a copy of relevant document.

xxx xxx xxx

14. Is there any other written agreement for transfer of the said property other than the one in this form? If so, enclose a copy of this agreement,

………………………………………… …………………………………..

Signature(s) of transferor(s) Signature(s) of transferee(s)

Notes:

1. The statement of agreement for transfer and the annexure should be in the format prescribed above duly signed by the transferor(s) and the transferee(s) on each page and furnished along with requisite copies of the documents.

xxx xxx xxx

(Emphasis,here italicised in print, supplied)

14. It is pertinent to note that it was the proliferation of the black money evident in the transfer of immovable properties which persuaded the Parliament to enact Chapter XX-C. One way of tackling problem of tax evasion thought fit was to confer on the government the pre-emptive right to acquire any immovable property undergoing a transfer for consideration above a certain value. The assumption of the powers by the Central Government to purchase immovable properties in certain cases of transfer thus has the object of inducing the transferors and transferees to declare full amount of consideration in the agreement for transfer. The provisions of Chapter XX-C do not provide for compulsory acquisition of immovable property but merely enable the Central Government to purchase a property which has already offered for sale since the transferee does not suffer any inconvenience in this process there is no provision for a solatium. [See Departmental Circular No. 461, dated 9-7-1986].

15. It is also relevant to note that Chapter XX-C is not in any manner intended to prohibit or even regulate the right to transfer immovable properties under the general law. The provisions have been introduced solely for the purpose of guarding the economic interest of the State and the welfare of the society which is held at ransom on account of black money entering the economy.

Only so much restrictions are to be read, interpreted and applied with caution as would enable the object behind enactment of Chapter XX-C being achieved and not beyond. Else the provisions of Chapter XX-C may amount to an unreasonable and arbitrary encroachment on the rights of the citizens to enter into transactions relating to immovable property having no nexus with the object sought to be achieved and hence would be vulnerable to article 14 of the Constitution.

16. In this background now we may notice the submission of the learned counsel for the petitioners. It was submitted that the phrase “agreement for transfer” as occurring at several places in Chapter XX-C of the Act and the rules has to be assigned a meaning which fits in the scheme and objective of the enactment. It has to be a connotation other than what it has under the general law relating to transfer of properties. Even the definition of agreement for transfer as given in clause (a) of section 269UA shall have to be departed from while reading Chapter XX-C wherever the context otherwise requires. The learned counsel for the petitioners have developed this submission further in the manner noted in the succeeding sub-paragraphs.

16.1. u/s 269UC(1) no transfer of any immovable property attracting applicability of the provision shall be effected except after an agreement for transfer has been entered into in accordance with the provisions of sub-section (2) at least four months before the intended date of transfer, notwithstanding anything contained in the Transfer of Property Act or any other law for the time being in force. Such an agreement under sub-section (2) must be in writing, in the prescribed proforma, and singed by or on behalf of both the parties. Under sub-section (3) such an agreement must set forth the prescribed particulars and has also to be verified in the prescribed manner. It has then to be furnished to the Appropriate Authority in the manner and within the time prescribed. Whatever might have been the private agreement for transfer between the parties, once an agreement in the statutory form has been entered into, no one can revoke or alter the agreement entered into in the prescribed a and filed before the Appropriate Authority.

16.2. It is this proforma agreement which is the foundation for the subsequent rights and obligations conferred or cast on the parties u/s 269UL. The registration authority cannot register any document at variance with the apparent consideration recited in the proforma agreement. No objection certificate contemplated by sub-section (3) of section 269UL is also to be based on the proforma agreement.

16.3. There are two yet other vital clues supporting the plea that agreement for transfer in the prescribed proforma is something different from a private agreement for transfer between the parties. Property in Central Government vests in those terms which are stated in the agreement for transfer referred to in sub-section (1) of section 269UC, i.e., the proforma agreement. u/s 269UM no claim by the transferee shall lie against the transferor by reason of transfer in favor of the Central Government being not in accordance with the private agreement entered into between the parties.

16.4. Clause (14) of Form 37–I requires the private agreement for transfer of the said property being filed along with Form No. 37-I if such private agreement be in writing.

17. We see merit in the submission of the learned counsel for the petitioners. For the sake of convenience and to effectively demonstrate the distinction between a private agreement for transfer of immovable property entered into between the parties and an agreement for transfer of immovable property in the prescribed proforma contemplated by Chapter XX-C we set out the distinction between the two in a tabular form hereunder:

Proforma agreement to transfer immovable property as contemplated by section 269UC(l)	Agreement to transfer immovable property under the general law
(1)(i) shall be reduced to writing, (ii) in the form of a statement.	(1) may be oral; no formalities required even if reduced to writing.
(2) must be signed by each of the parties or by one acting on behalf of other.	(2) may be signed by one party; may be spelled out even by correspondence.
(3) must be verified in prescribed manner.	(3) no verification required; may not be even attested by witnesses.
(4) must set forth the prescribed particulars; parties are compelled to be ad idem on all such terms as are contemplated by prescribed particulars.	(4) parties are free to settle only such terms on which they are ad idem may leave other terms to be settled at a later date.
(5) consideration must be determined with clarity, so as to spell out apparent consideration enabling comparison with value of similar properties.	(5) consideration may be left to be determined for future or made dependent on variable factors.
(6) has to be filed before the prescribed authority in the prescribed manner and within the prescribed time.	(6) if in writing-need only accompany proforma agreement.
(7) defects, if any, open to scrutiny by AA and must be removed.	(7) cannot be interfered with, not even scrutinised for fault-finding by AA.
(8) cannot be revoked or altered once furnished u/s 269UC.	(8) parties are free to revoke/alter/novate the terms agreed upon or the agreement itself.
(9) on order being passed u/s 269UD(1), the property vests in Central Government in terms of such agreement.	(9) the terms of agreement become redundant on property vesting in Central Government u/s 69UD(l); even the transferee may not sue the transferor on such terms (under section 269UM).

18. It is, Therefore, clear that whatever be the private agreement entered into between the parties, it is the proforma agreement signed by the parties which must be filed before the Appropriate Authority within fifteen days of signing thereof. The Act nowhere prescribes for a proforma agreement being drawn up, entered into and signed by the parties within a period of 15 days from the date of private agreement between the parties. Sub-section (3) of section 269UC provides inter alia for the time being prescribed by rules within which statement referred to in sub-section (2), i.e., the proforma agreement Form 37-I is to be furnished to the Appropriate Authority. The period of 15 days in rule 48L(2) has to be read in the light of the Act. The time-limit of 15 days has been prescribed in exercise of the power conferred by the Act. The rule cannot be so read as to calculate the limitation from the date of any agreement other than the one entered into in Form 37-I. Else the rule itself would be ultra vires the rule-making authority of Central Government. If the Act does not prescribe a limitation nor does it expressly delegate the power to do so, limitation cannot be prescribed by rules. [See Bharat Barrel & Drums Mfg. Co. (P) Ltd. vs. ESIC AIR 1972 SC 193].

19. The time of fifteen days as appointed by rule 48L is directory and not mandatory. This we say for many a reasons. The law nowhere provides that in the absence of proforma agreement being drawn up pursuant to the private agreement between the parties or the same having not been filed before the Appropriate Authority or the same having been rejected, the private agreement (oral or in writing) as entered into between the parties is rendered void or stands vitiated in any manner whatsoever. On the general law relating to transfer of property as contained in Transfer of Property Act and Contract Act, etc., the provisions of Chapter XX-C of the Income Tax Act can make an inroad only to the extent specifically provided for and not beyond. The only penalty which the parties to a private agreement suffer by not complying with the provisions of Chapter XX-C where its applicability is attracted is that a deed of transfer pursuant to the agreement should not be registered. However, the rights and obligations incurred by the parties to a private agreement do not fall to the ground and are not avoided.

20. Look at it from the point of view of securing a specific performance of a contract for sale through a court of law. Parties having entered into an agreement, one of them may resile from the contract and may not agree to the proforma agreement being filed before the Appropriate Authority. The party in breach may be sued by the other party in a court of law and having been successful may have a decree for specific performance of contract for sale. By that time a period of years and months, much beyond the period of 15 days, must have rolled by. If the period of 15 days was to be calculated from the date of the agreement or the period of 15 days was to be held mandatory then the said period having expired compliance of Chapter XX-C would never be secured. The decree, would be rendered a waste piece of paper. The Registrar of Deeds would not register the document executed in execution of the decree. On the other hand, if the period of 15 days has to be calculated from the date of proforma agreement being drawn up then on the decree for specific performance having been passed, on behalf of the JD the proforma agreement shall be signed by the person authorised to act on behalf of the JD and compliance with Chapter XX-C shall be secured, also the decree will be successfully executed. Any other interpretation would result into valuable right of specific performance of a contract for sale of immovable property being defeated; a situation which leads to anomaly and certainly not contemplated by law.

21. There is no res judicata so far as filing of Form 37-I is concerned. One form having been rejected, another would be filed so long as the parties are agreeable with each other and are prepared to honour the agreement. If a new agreement could be entered into by the parties and filed before the Appropriate Authority within 15 days from the date of entering into thereof why not permit an agreement already entered into being filed, though beyond 15 days.

22. A mere delay in filing Form 37-I does not defeat the object sought to be achieved by filing thereof. On the other hand, the object is fulfillled. Excluding Form 37-I from consideration on the ground of delay would result into the transaction for transfer of immovable property being excluded from the tax-net and considered by the Appropriate Authority. On the other hand, if the form is permitted to be filed even with delay the object sought to be achieved by Chapter XX-C is fulfillled. The delay, does not make a difference. The prescribed limitation of 15 days is Therefore directory.

23. These cases relate to agreement by builders. This class of agreements has certain peculiar features of its own looking at the modus operandi of the builders. As we have already noticed a private development scheme having been published prospective buyers are attracted. They apply for allotment and in the event of succeeding details of allotments are finalised and given the shape of agreement. An application for allotment followed by a letter of acceptance from the builder may not necessarily amount to an agreement. Even if it does, it stands superseded and noated by the agreement entered into between the parties. As we have noticed in the earlier part of the judgment many a terms are not yet finalised and are allowed to be determined at a future date. In any case, in the builder’s agreement the possibility of variation between the terms of agreement and final deed of transfer cannot be ruled out. Such an agreement has an element of elasticity-mostly the builders stretching or bending the elasticity to their advantage at the time of striking the final deal. In good number of cases, looking to the inflationary tendencies the construction cost increases and so increases the price at which the property is actually transferred.

24. Section 269UC(3) contemplates particulars being prescribed which must be set forth in the prescribed proforma agreement. Such particulars have been prescribed by the rules. The availability of such particulars has a significant object to achieve. It is not a matter of mere formality. The Appropriate Authority has to form an opinion if the property has been undervalued and, Therefore, whether the discretionary jurisdiction in directing compulsory purchase of the property by the Central Government should be exercised. In the absence of the requisite particulars being available how can the authority compare the value of the property with the value of comparable properties and take a decision whether the property is undervalued or not. It is pertinent to note that though the act as enacted provides for the property forming subject matter of agreement vesting in the Central Government free from all encumbrances but the phrase “free from all encumbrances” has been held to be ultra vires the Constitution and directed to be struck down by the Supreme Court in the case of C. B. Gautam v. Union of India (1993) 199 TTR 530 (SC). Thus, the property shall vest in the Central Government along with the encumbrances. The fact remains that u/s 269UD(l) the property vests in the Central Government in terms of the agreement for transfer referred to in sub-section (1) of section 269UC.

25. A review of the above said provisions of law manifests the legislative intention that the agreement in Form 37-I cannot be entered into unless the situation is so ripe as to make available the prescribed particulars for being filed up in the form. Sub-section (1) of section 269UC contemplates the agreement for transfer being entered into at least four months before the intended date of transfer. It is also suggestive of there being a proximity of time between the date of agreement and proposed transfer. Transfer must not be a transfer in remote contemplation but a proposed transfer. A transaction between the intended buyer and the builder when merely an application for allotment has been made and allowed, is certainly not the stage contemplated by section 269UC for filing the proforma agreement in Form 37-I.

26. It is that immovable property as defined in clause (d) of section 269UA includes any rights in property which has been constructed or which is to be constructed. Meaning thereby even a property which is to be constructed can be transferred and rights created therein by an agreement for transfer. However, still looking to the scheme of Chapter XX-C and the underlying object we are of the opinion that there should be an identity in the status/description/details of the property between the agreement filed before the Appropriate Authority by reference to which no-objection is obtained and the property proposed to be transferred. This is possible only when there is some proximity of time (which cannot be defined with exactness and shall vary from case to case) between the date of the agreement and the transfer. An agreement for transfer of property which is to be constructed may be filed before the Appropriate Authority but the same will ensure to facilitate transfer of property which is to be constructed. In other words, no objection by Appropriate Authority based on an agreement for transfer of property which is “to be constructed” cannot be utilised for securing for a deed of transfer of that property which has been constructed.

27. There are one or two anomalies which may emerge and immediately we proceed to notice them.

27.1. The parties may enter into any private agreement for transfer. They must wait for the arrival of the day on which the property has assumed the shape in which it is proposed to be transferred. On that day they must enter into the proforma agreement (Form 37-I) and file the same seeking no-objection from the Appropriate Authority. It was submitted that this interpretation may put the parties to the agreement in a disadvantageous position. The initial private agreement may have been made in the year 1990. The property may take the shape in which it is to be transferred in the year 1998. The price would be one agreed upon between the parties in the year 1990. The value as shown on the date of proforma agreement in Form 37-I would appear to be undervalued persuading Appropriate Authority to direct the purchase of the property by the Central Government. This is a misapprehension which has to be dispelled. The proforma agreement of the year 1998 would be accompanied by the private agreement entered into in the year 1990 and that will be a relevant fact to be kept in view by the Appropriate Authority while exercising its jurisdiction under Chapter XX-C.

27.2. Section 269UD(l) does not lay down any guidelines acting on which the Appropriate Authority shall make an order for the purchase by the Central Government. In C.B. Gautam’s case (supra) their Lordships have noticed departmental instructions advising the Appropriate Authority to direct such purchase if only there is a significant under-valuation of the property as evidenced by the apparent consideration being lower than the fair market value by 15 per cent or more. Similar guidelines can be issued so as to exercise the jurisdiction for directing purchase by the Central Government by finding out under-valuation by reference to the date of the first ever agreement entered into between the parties. Such executive instructions are available to be issued in the field left open by legislation.

27.3 Another anomaly which may arise is that in the event of a purchase by Central Government being ordered the amount to be tendered by way of consideration u/s 269UF for such purchase shall be an amount equal to apparent consideration specified in the proform agreement. This price was agreed upon between the parties about 8 years before. The amount tendered by way of consideration by the Central Government shall be far below the market value of the property on the date of purchase. The Act does not make a provision for payment of solarium to the parties adversely affected. This is an aspect which has to be taken care of by suitable amendment in the legislation.

28. To sum up, our findings are:

(i) Agreement for transfer as defined in clause (a) of section 269UA refers to an agreement which is entered into privately between the parties thereto; such an agreement may be oral or in writing.

(ii) An agreement for transfer entered into by the parties in Form 37-I u/s 269UC is not an agreement defined by clause (a) of section 269UA. It is an agreement statutorily ordained to be entered into in a prescribed proforma.

(iii) “Agreement for transfer”, the phrase as occurring in Chapter XX-C has two meanings depending on the context where it occurs. It may be an agreement for transfer as defined in clause (a) of subsectoin 269UA (which in this judgment has been referred to as private agreement). It may be an agreement for transfer as defined in section 269UC (which in this judgment has been called a proforma agreement). Since the agreement for transfer u/s 269UC is to be drawn up in the form of a statement, in Chapter XX-C, the word ‘statement’ has been used interchangeably with agreement for transfer in Form 37-I. “Agreement for transfer” as occurring in section 269UK, section 269UM and section 269UO is to be assigned the meaning as defined by clause (a) of section 269UA. At all the other places in Chapter XX-C, agreement for transfer means and must be read as proforma agreement i.e., an agreement for transfer in the prescribed Form 37-I as the context so requires.

(iv) The Appropriate Authority cannot be found fault with refusing to act upon or take cognizance of proforma agreement in statement Form 37-I (i) if the requisite particulars though available are not supplied, or (ii) if the requisite particulars would be available at the time when the property has reached a state in which it is proposed to be transferred and yet the particulars are not being made available with precision because the form is being filed with a view to secure NOC for a “transfer in contemplation”.

(v) A delay in filing Form 37-I is not a defect. The period of 15 days prescribed by rule 48L is directory and not mandatory.

(vi) The period of 15 days is to be calculated from the date of entering into the proforma agreement in Form 37-I and not from the date of any other preceding private agreement between the parties.

(vii) If there are agreements more than one entered into between the parties, then it is the latest of the agreements which supersedes the earlier ones which has to accompany Form 37-I when filing before the Appropriate Authority. Other agreements if relevant may be looked into by the Appropriate Authority.

(viii) A defect contemplated by section 269UC(4) is one which is capable of being cured.

(ix) The stage for entering into the statutory agreement or proforma agreement in Form 37-I arises when the parties are ready to make available all the particulars contemplated by several clauses of Form 37-I consistently with the nature of the property. The date of entering into the proforma agreement must have proximity of relationship by time with the proposed transfer of property as defined in clause (f) of section 269UA. The test for determining proximity of relationship is the availability of the property agreed to be transferred in such status in which it is proposed to be transferred.

(x) A no-objection issued by Appropriate Authority based on an agreement for transfer of property to be constructed cannot be utilised for securing registration of property which has been constructed.

29. In some of the petitions there would have been no occasion for filing the same if only the view which we have taken hereinabove would have been available. Some of the statements in Form 37-I are premature and in some of the cases the impugned orders would not prevent filing of a fresh statement in Form 37-I. However, we leave those aspects now to be examined afresh by the Appropriate Authority.

30. Before parting we would like to place on record that no decided case governing the issues at hand has come or was brought to our notice. We have proceeded to formulate our opinion on the first principles and well established rules of interpretation of statutes.

31. For the foregoing reasons the impugned orders passed by the Appropriate Authority in all the cases at hand cannot be sustained on the view of law which we have taken hereinabove. All the petitions Therefore deserve to be allowed.

32. All the petitions are allowed. The impugned orders passed by the Appropriate Authority are hereby set aside. Appropriate authority shall take decision afresh in each of the cases in accordance with law and consistently with the principles stated hereinabove which may be done within a period of three months. No order as to costs.