PRIMA REALTY versus UNION OF INDIA AND ORS.

PRIMA REALTY versus UNION OF INDIA AND ORS.

A cheque describing the payee as a different legal entity is not valid tender of consideration under Section 269-UG(1) of the Income Tax Act, 1961; the compulsory purchase order stood abrogated and property revested in transferors as a result. Payment by cheque posted on last date is valid, but only if correctly described. Internal shortfall among persons entitled does not vitiate the tender.

Parties
Appellant Transferee: Prima Realty; Respondents: Union of India and Ors.
Jurisdiction
India
Judgment Date
18 November 1996
Procedural Posture
Civil Appeal / Appeal Against Bombay High Court Judgment Dismissing Writ Petition
Outcome
Appeal allowed; order under Section 269-UD(1) abrogated; property revested in transferors.
Legal Topics
Compulsory Purchase of Immovable Property, Payment of Consideration, Validity of Tender by Cheque, Time Limit for Payment
Income Tax Compulsory Purchase of Immovable Property Payment of Consideration Validity of Tender by Cheque Time Limit for Payment

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Parties

Prima Realty

Appellant Transferee

Union of India and Ors.

Respondents

Procedural Posture

Civil Appeal / Appeal Against Bombay High Court Judgment Dismissing Writ Petition

Legal Issues

  1. 1 Whether misdescription of payee in cheque constitutes valid tender of consideration under Section 269-UG(1) of the Income Tax Act, 1961.
  2. 2 Whether dispatch by post of cheque on the last date is valid tender under statutory requirements.
  3. 3 Whether shortfall in payment amount to transferee invalidates purchase order.

Ratio Decidendi

A cheque describing the payee as a different legal entity is not valid tender of consideration under Section 269-UG(1) of the Income Tax Act, 1961; the compulsory purchase order stood abrogated and property revested in transferors as a result. Payment by cheque posted on last date is valid, but only if correctly described. Internal shortfall among persons entitled does not vitiate the tender.

Court Disposition

Appeal allowed; order under Section 269-UD(1) abrogated; property revested in transferors.

Orders

  • Order under Section 269-UD(1) abrogated.
  • Property revested in transferors pursuant to Section 269-UH(1), Income Tax Act, 1961.