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Income-tax Act, 1961 · Chapter XX-C · Historical provision

Section 269UM: Immunity to Transferor Against Claims of Transferee

Section 269UM addresses a specific consequence of a Central Government purchase of immovable property under the former Chapter XX-C pre-emptive purchase mechanism. It protects a transferor from a transferee's claim arising solely because the agreed transfer cannot be completed as promised after the Government makes a purchase order.

Important applicability update: Under Section 269UP, Chapter XX-C does not apply to transfers of immovable property effected on or after 1 July 2002. Section 269UM is therefore primarily relevant to historical transactions and disputes, not ordinary present-day property registrations.

What does Section 269UM provide?

The section gives a narrowly defined statutory immunity to the transferor when the Central Government orders the purchase of an immovable property under Chapter XX-C. In that situation, the transferee cannot maintain a claim against the transferor by reason of the transfer not being in accordance with their agreement.

The words notwithstanding anything contained in any other law, instrument or agreement give this protection overriding effect for the particular kind of claim described in the section. They do not establish blanket immunity from every conceivable contractual, statutory or fraudulent act.

Section 269UM: statutory rule and effect

Where the Central Government makes an order to purchase immovable property under Chapter XX-C, no claim by the transferee lies against the transferor merely because the transfer is not completed in accordance with the agreement between them. This rule operates notwithstanding contrary provisions in another law, document or agreement.

For the statutory context, the Government's purchase order is contemplated by Section 269UD. The protection is triggered by the purchase order, subject to the express exception below.

When does the immunity cease? Section 269UH exception

The proviso to Section 269UM expressly states that the immunity does not apply if the Government's purchase order is abrogated under Section 269UH(1).

Under Section 269UH, failure by the Central Government to tender or deposit the required consideration within the prescribed period can result in the purchase order standing abrogated and the property re-vesting in the transferor. In that event, Section 269UM cannot be relied upon as a defence to the kind of transferee claim it otherwise bars. Whether any particular claim succeeds still depends on the agreement, applicable law and facts.

Important legal terms

Transferor
The person transferring, or agreeing to transfer, the immovable property; in an ordinary sale, generally the seller.
Transferee
The person to whom the property is to be transferred under the agreement; in an ordinary sale, generally the buyer.
Appropriate authority
The authority constituted for the Chapter XX-C pre-emptive purchase procedure, with relevant terms addressed in Section 269UA and connected provisions.
Abrogation
The statutory cancellation or cessation of the Government purchase order in the circumstances prescribed by Section 269UH.
Immovable property
Property falling within the specific definition used for Chapter XX-C under Section 269UA; the statutory definition must be consulted for historical cases.

Illustration

Suppose a seller and buyer entered into a qualifying agreement during the period when Chapter XX-C applied. If the appropriate authority made an effective purchase order for the Central Government, the buyer could not sue the seller solely because the seller did not transfer the property to the buyer as agreed. However, if the purchase order was subsequently abrogated under Section 269UH(1), Section 269UM's express immunity would not apply.

Does Section 269UM apply to a property sale in 2026?

No, not as a Chapter XX-C restriction or immunity for a new transfer. Section 269UP excludes property transfers effected on or after 1 July 2002 from that Chapter. Modern transfers may be governed by other registration, stamp duty, tax deduction and property laws, depending on the facts. This article explains the historic statutory rule rather than suggesting that a new Government purchase order can be made under Chapter XX-C.

This is general legal information about a historical provision. For an old transaction or ongoing dispute, examine the applicable statutory text, dates, orders and judicial decisions.