AI Structured Summary
Not yet generated for this judgment
Judgment
M. Venugopal, J.—W.P. No. 29721 of 2003 is filed by the writ petitioner praying for issuance of a writ of certiorarified mandamus, to call
for the records relating to the impugned proceedings in Tha.Ka. No. 250 of 2003(Form-I) dated 9.9.2003 issued by the first respondent and to
quash the same with a direction to return the original sale deed dated 14.8.2003 bearing Doc. No. 3027 of 2003.
W.P. No. 29722 of 2003 is filed by the writ petitioner praying for issuance of a writ of certiorarified mandamus, to call for the records relating to
the impugned proceedings in Tha.Ka. No. 251 of 2003(Form-I) dated 9.9.2003 issued by the first respondent and to quash the same with a
direction to return the original sale deed dated 14.8.2003 bearing Doc. No. 3028 of 2003.
W.P. No. 34104 of 2003 is filed by the writ petitioner praying for issuance of a writ of certiorarified mandamus, to call for the records relating to
the impugned proceedings in Tha.Ka. Nos. 90/02 and 91/202 of 2003(Form-I) dated 3.4.2002 issued by the first respondent and to quash the
same with a direction to return the original sale deed dated 7.2.2001 bearing Doc. Nos. 417 and 418/01.
W.P. No. 34105 of 2003 is filed by the writ petitioner praying for issuance of a writ of certiorarified mandamus, to call for the records relating to
the impugned proceedings in Tha.Ka. No. 92/202 of 2003(Form-I) dated 3.4.2002 issued by the first respondent and to quash the same with a
direction to refund the excess stamp duty of Rs. 2,26,508/- which it has been illegally collected by the respondent in respect of the sale deed dated
7.2.2001 bearing Document No. 419/01.
The petitioner in W.P. No. 29721/2003 along with his son A.K. Nageshwara Rao and the petitioner in W.P. No. 29722 of 2003 along with his
father A.N. Kupparam purchased the house property bearing D. No. 540, Plot Nos. 1 and 2, Sri Venkatesh Perumal Nagar, Arumbakkam
Village, Egmore, Nungambakkam Taluk, measuring 5,400 sq.ft in public auction held on 25.6.2002 respectively by virtue of the power conferred
with the mortgagee Park Town Benefit Fund Limited u/s 69 of the Transfer of Property Act. The petitioner in W.P. No. 34104 of 2003 along with
his wife purchased the house property and land bearing (Old D. No. 60/61H) New No. 293, Purasawalkam High Road, Purasaiwalkam,
Chennai-600 010 measuring 2859 sq.ft land along with constructed area of 1966 sq.ft respectively in public auction held on 7.11.2000 by virtue
of the power conferred with the mortgagee, the Muthialpet Benefit Fund Limited u/s 69 of the Transfer of Property Act. After due compliance of
the auction conditions, the sale was confirmed. In W.P. Nos. 29721 and 29722 of 2003, the execution of sale deed was delay in view of the
proceedings initiated by the Mortgagor in O.S. No. 3702 of 2002 on the file of VI Assistant Judge, City Civil Court, Madras and ultimately after
dismissal of the application by an order dated 29.7.2003, the petitioner took steps for registration of sale deeds along with his son. The sale deed
was executed on 14.8.2003. In W.P. Nos. 34104 and 34105 of 2003, the execution of the sale deed was delayed in view of the proceedings
initiated by the mortgagor in C.S. No. 912 of 2000 on the file of this Court, Madras, and ultimately after dismissal of the application by an order
dated 12.01.2001, the petitioners took steps for registration of the sale deeds along with his wife and the sale deeds were executed on 7.2.2001.
The second respondent registered the sale deed but committing an error in referring the same to the first respondent as per Section 47A(1)(3) of
the Indian Stamp Act and thereby withhold the original sale deed. Later, on receipt of the impugned order from the first respondent, the petitioners
in W.P. Nos. 29721 and 29722 of 2003 made a representation on 21.9.2003 and petitioners in W.P. Nos. 34104 and 34105 of 2003 made a
representation on 17.10.2002 mentioning that there was no scope for evasion of any stamp duty as the sale effected u/s 69 of the Transfer of
Property Act that the consideration recited in the instrument was the market value for the purpose of registration of the document and the question
of reference u/s 46A of the Indian Stamp Act was misconceived and requested the first respondent to return the original sale deeds and since they
had not acceded to the request, the petitioners was perfused to project these writ petitions before this Court.
The learned Counsel for the petitioners urges before this Court that the impugned order of the first respondent was nonest one and the second
respondent being a Quasi Judicial authority should have accepted the consideration mentioned in the sale deed as per principle laid down in the
decision in AIR 1997 Madras, 296 and as per Section 47A of the Madras Amendment Act 24 of 1967, the consideration mentioned as the
market value in given instrument brought for registration should be taken to be correct one, unless circumstances exist which suggest fraudulent
evasion as held in the decision reported in The State of Tamil Nadu Vs. T.N. Chandrasekharan, and the action of the respondents in keeping the
original sale deeds without returning the same on the basis of the erroneous invocation of power u/s 47A of the Stamp Act deprived the petitioners
from enjoying the property mentioned in the sale deed and the respondents in law had no jurisdiction to retain the original sale deeds as per the
decision reported in 2001(2) CTC 449 (District Collector, Erode District, Erode v. V.M. Ponnusamy and therefore prays for allowing these writ
petitions to prevent an aberration of justice.
The stand of the respondents 1 and 2 is that since there was a wide difference between the value mentioned in the instruments and the guide line
provision of Section 47A of the Indian Stamp Act was pressed into service and the petitioners without exhausting an appeal remedy provided as
per Sub-section 5 of Section 47A of the Indian Stamp Act had approached this Court prematurely and therefore prays for dismissal of these writ
petitions. Also the contention is put forth on the side of the respondents to the effect that Section 47A of the Indian Stamp Act was meant only to
reconcile the dispute in regard to the value of the property and therefore, the action of the first respondent was still within the parameters of law.
The learned Counsel for the petitioners submits that the market value mentioned in the sale deed produced for registration must be taken to be
correct unless circumstances exist which suggest fraudulent evasion and in support of the said contention, he relies on the decision reported in The
State of Tamil Nadu Vs. T.N. Chandrasekharan, at page 118 in paragraph 5 wherein it is held as follows:
Having regard to the object of the Act, we are inclined to think that normally the consideration stated as the market value in a given instrument
brought for registration should be taken to be correct unless circumstances exist which suggest fraudulent evasion. Even in such a case, we trust
that disputes will not be raised for petty sums. Unless the difference is considerable or sizeable and it appears patent that the amount mentioned in
the document is a gross undervalue, no disputation as to value is expected to be started.
He also cites the decision of this Court in S.P. Padmavathi Vs. State of Tamil Nadu and Others, wherein it is held thus:
Power u/s 47A of the Act can only be exercised when the Registering Officer has reason to believe that the market value of the property, which is
the subject of conveyance, has not been truly set forth, with a view to fraudulently evade payment of proper stamp duty. Mere lapse of time
between the date of agreement and the execution of the document will not be the determining factor that the document is undervalued and such
circumstance by itself is not sufficient to invoke the power u/s 47A of the Act, unless there is lack of bona fides and fraudulent attempt on the part
of the parties to the document to undervalue the subject of transfer with a view to evade payment of proper stamp duty.
He seeks in aid of the decision of this Court in B. Rajappa v. The Special Deputy Collector (Stamps) The Office of the Collectorate (V Floor)
Mr. Singaravelar Maligai Rajaji Salai, Madras 2002 (3) CTC 544 wherein it is observed as follows:
The said view of this Court has been affirmed by the Division Bench in The District Collector, Erode and Ors. v. M. Ponnusamy 2001 (2) CTC
449 : 2001 (2) M.L.J. 458 wherein it has been held thus:
27) On the question of limitation, the learned Judge has taken the view that Sub Section (1) of Section 47A as well as Sub-Section (3) of Section
47A of the Stamp Act applied to different contingencies which cannot be read conjointly nor it could be held that the Registering Authority could
make a reference under Sub-section (1)of Section 47A of the Act without any time-limit nor the contention that the reference under Sub-section
(1) of Section 47A of the said Act is not controlled by limitation of two years prescribed under Sub-sec(3) of Section 47A of the said Act is
acceptable. The learned Judge held that the Registering Authority has not entertained any reasonable belief with respect to valuation of the
property as prescribed by Sub-section (1) of Section 47A and held that before completing the registration, there cannot be a subsequent
reference, much less after two years from the date of completion of the registration. While assailing this view of the learned Judge, it is submitted
that the Section does not contemplate any time limit and, therefore, a reference can be made at any time. We are unable to countenance such a
stand. In the absence of any time limit provided for u/s 47A(1) and in the light of the analysis of the process involved in reference to Sub-section
(1) of Section 47A of the Act, there is no scope for holding that reference can be made any point of time....
32) As rightly pointed out and which we are in full agreement, the parties to an instrument, for various reasons, will always be anxious to get the
document registered at the earliest point of time and get the document released. The parties may be in directed need, for completion of the
registration process as early as possible for so many reasons like financial, health, family and other innumerable circumstances. They would always
like to expedite the process of registration in order to avoid complications or litigations or things like that. It is rarely in few cases that the execution
is done in a leisurely manner without any urgency whatsoever. Taking advance of this plight of the parties and the varying factors in reference to the
market value and the expression being so uncertain or vague or indefinite, it is not uncommon that the registration is delayed or even if it is
registered, documents are retained. There are no guidelines set out to enforce uniformity or to avoid arbitrariness in the exercise of power. Citizens
are left with no time or energy to take up their cause in higher forums and courts. This is taken advantage of. This case illustrates the point how a
document which has been registered without any whisper whatsoever on the market value, has been retained for more than two years without
being returned or referred to the Collector. In our view this case highlights as to how arbitrariness is writ large and how it can work as an engine of
oppression against the parties. For all the above reasons, we have no hesitation whatsoever in approving the view of the learned Judge that the
document should be returned sooner its registration is complete, at any rate within three weeks from the date of completion of registration of the
document or it must be referred within a period of three weeks to the Collector under Sub-section (1) of Section 47A of the Act.
In the light of the said provisions, the learned Advocate General had to necessarily admit that the respondents have no authority or jurisdiction
to retain the documents once it has been registered. Even assuming that there is scope for reference in respect of alleged under-valuation, the
registering authority has no authority to retain the documents and this is also clear from the provisions of Sections 52, 59 and 60 of The Indian
Registration Act.
In the circumstances, while following the above pronouncements, these two writ petitions are allowed. Accordingly, there will be a direction to
the Registering Authority, namely, the 2nd respondent in W.P. No. 22998 of 2001 and the sole respondent in W.P. No. 8637 of 2002, to return
the original sale deed as registered with necessary endorsements within ten days from the date of communication of this order or a production of a
copy of the same by the respective petitioner.
While appreciating the anxiety expressed on behalf of the State by the learned Advocate General, this Court directs that:
i) It is open to the Registering Authority to affix a seal, while releasing the original deed or conveyance or any other document indicating that a
reference is pending u/s 47A with respect to under-valuation and assessment of Stamp Duty payable , as and when the proceedings reach finality,
the same shall be intimated to the person who is liable to pay stamp duty demanding payment of deficit Stamp Duty payable on the instrument.
ii) The Registrar to make corresponding entries under Sections 54, 55 of The Registration Act, 1908, in the Register of indexes as to pendency of
proceedings u/s 47A.
iii) On completion of adjudication as to the under-valuation by the competent authority as well as appeal or revision,if any, thereof, and depending
upon the ultimate decision, the said authorities to recover deficit stamp duty according to law.
iv) Till such proceeding reaches finality and deficit is paid, there will be a charge for the deficit stamp duty, which is the subject matter of transfer or
conveyance.
v) On payment of deficit stamp duty, if any payable, the Registrar may once again, on production of the original deed of transfer, make appropriate
entry and recording the additional stamp duty paid and release of charge and also make consequential entries in the registers/indexes maintained
under Sections 54, 55, etc. of The Registration Act.
Before parting with the case, with heavy heart, this Court has to point out that neither the State Government nor the Chief Controlling Authority
had intimated about the law laid down by the Division Bench of this Court and the Registrars have been flouting the dicta laid down by this Court
with impunity. Such violations are per se contemptuous. This Court pointed out this to the learned Advocate General, who in turn relied upon
certain circulars issued, but they are not towards compliance with pronouncements and in conformity with the judgment of the Division Bench .
However, this Court takes a lenient view in this respect, in view of the fair stand taken and explanation offered by the learned Advocate General.
This Court directs that the Inspector General of Registration shall issue a circular setting out the directions issued by this Court to all the
Registrars in the State and procedure to be followed by drawing their attention to the law laid down by the above pronouncements and that any
infraction by any of the Registrars will be viewed seriously.
He invites the decision of this Court in Smt. Chhaya Gupta v. The District Registrar, T. Nagar, Chennai-600 017 2003(3) CTC 129 at 130
wherein it is observed that ''recitals in instrument of partition have to be taken for purpose of levy of stamp duty and Article 45 does not employ
words like market value and proviso (b) to Article 45 provides that value has to be calculated at 20 times annual revenue in respect of properties
other than land held on revenue settlement and there is no specific provision as to how value of share has to be worked out for levy of stamp duty
and Article 45 leaves it to parties to instrument of partition to value and submit instrument for registration upon which stamp duty is leviable on
separated share or shares and levy cannot be on basis of market value of such property and it is only on the stated value.''
That apart the learned Counsel for the petitioners drawn the attention of this Court to the decision in State of Tamil Nadu by District Collector,
Tiruchirapallai v. Janab Habeeb Jan. K 2008 (1) L.W. 743 wherein it is held thus:
Upon hearing the arguments advanced on both sides and after perusing the records, we are of the considered view that there is no infirmity or
discrepancy in the order passed by the learned Single Judge, by which the impugned order of the second appellant herein has been quashed. The
learned Single Judge relied on the decision made by this Court in Narayanaswamy Naicker- v- District Collector of Chengalpattu and Ors.
reported in 1998(3) LW 254 and held that in case of execution of sale deed through Court in pursuance of a decree for specific performance,
demand made on the purchaser for payment of stamp duty on the basis of market value as on the date of execution and registration of the
document would not be legal. We are in complete agreement with the above said proposition of law.
On behalf of the learned Counsel for the petitioners invites the attention to the decision of this Court in Tata Coffee Limited v. The State of
Tamil Nadu by the Secretary to Government, Commercial Taxes and Registration and Ors. 2008 (3) L.W. 286 at 287 wherein it is held that'' after
registration of a document, the Registering Authority has no power to retain the document and also further observed that '' if the Registering
Authority still has reason to believe that the market value has not been truly set forth in the instrument, he has right to refer the instrument to the
Collector as per Section 47A(1) of the Act for determination of market value for the purpose of ascertaining the proper duty under the document
and it is incumbent on the part of the Registering Authority to give his reasons to arrive at such conclusion.'' Added further in paragraph 13, it is
further observed that '' this procedure of conducting enquiry by the Collector as per issuance of Form I notice is made applicable in respect of
power of the Collector too conduct suo motu enquiry as per Section 47A(3) of the Act and also that the suo motu power of the Collector is
restricted to five years from the date of registration of the instrument etc., Significantly, as per Section 61 of the Registration Act, after completion
of the registration, the Registration Officer is to return the document to the individuals concerned or such other person who has been nominated in
that behalf''.
In regard to the contention that the property sold in auction by means of statutory power and where the terms of bargain are open and clear,
the order demanding higher stamp duty cannot stand in the eye of law, the learned Counsel for the petitioners cites the decision of this Court in A.J.
Mapillai Mohadeen represented by Power of Attorney Holder, A.J. Mapillai Mohadeen Vs. Sub-Registrar, Registration Department and Others,
wherein it is observed that '' Authority cannot press into service Section 47A unless fraudulent attempt on the part of parties to document to evade
payment of proper stamp duty is manifest and document has been undervalued in opinion of authority and further in regard to the property sold in
auction in terms of statutory power and where terms of bargain are open etc., the order of demanding higher stamp duty is liable to be set aside.
It is to be noted that if two persons mutually Exchange two things and fixed the value of Exchange things in current coins, they must be held to
be sale as per decision in 37 MAD 423. The term ''sale'' is Species and Exchange is Genesis. Further, a sale is when price is paid or promise to be
paid as per the decision in 1953 TC 161. However, the rationale behind Section 47A of Indian Stamp Act is only to neutralise the effect of under
valuation of property with a view to evade stamp duty as per decision in Collector of Nilgiris at Ootacamund Vs. Mahavir Plantations Pvt. Ltd., .
Except the Collector, no authority of the Registration Department in any other capacity, could fix the market value and decide upon the proper
stamp duty payable in respect of any instrument covered by Section 47A.
As far as the present cases are concerned, in W.P. No. 29721 of 2003, the impugned proceedings issued by the first respondent dated
9.9.2003 mentions that the value as per the guide line register determined by the Registration Officer for the property in issue comes to Rs.
57,25,981/- and the extent was 1149 sq.ft and it was assessed at Rs. 1149 per sq.ft. But in the sale deed the value was mentioned as per
document was also Rs. 20,00,000/- and as per Sub Registrar land value was Rs. 31,02,300/- and the building value was estimated at Rs.
26,23,681/- and accordingly, the petitioner was to pay a sum of Rs. 7,44,380/- as stamp duty but paid only Rs. 2,60,000/- and therefore, he was
to pay balance stamp duty of Rs. 4,84,380/- and as such the petitioner was directed to pay the said stamp duty within a period of two months
from the date of passing of the order failing which the same will have to be paid along with 2% interest per month.
In W.P. No. 29722 of 2003 , the impugned proceedings issued by the first respondent dated 9.9.2003 mentions that the value as per the
guide line register determined by the Registration Officer for the property in issue comes to Rs. 59,20,231/- and the extent was 2700 sq.ft and it
was assessed as at Rs. 1149/- per sq ft, but in the sale deed, the value mentioned as Rs. 20,00,000/- and the land value as per document was also
Rs. 31,02,300/- and the building value was estimated at Rs. 28,17,931/- and accordingly, the petitioner was to pay a sum of Rs. 7,67,639/- as
stamp duty but paid only Rs. 2,60,000/- and therefore, he was to pay balance stamp duty of Rs. 5,09,639/- and as such the petitioner was
directed to pay the said stamp duty within a period of two months from the date of passing of the order failing which the same will have to be paid
along with 2% interest per month.
In W.P. No. 34104 2003, the impugned proceedings issued by the first respondent dated 3.4.2002 mentions that the value as per the guide
line register determined by the Registration Officer for the property in issue of the second petitioner comes to Rs. 29,38,944/-and first petitioner
comes to Rs. 28,73,941/- and the land value as per document was also Rs. 11,34,300/- and accordingly, the first petitioner has to pay a sum of
Rs. 3,73,620/- and the second petitioner has to pay a sum of Rs. 3,82,020/- as stamp duty but each petitioners paid only Rs. 1,47,503/- and
therefore, the first petitioner has to pay balance stamp duty of Rs. 2,26,117/- and the second petitioner has to pay a sum of Rs. 2,34,567/- and as
such the petitioners were directed to pay the said stamp duty within a period of two months from the date of passing of the order failing which the
same will have to be paid along with 2% interest per month.
In W.P. No. 34105 of 2003, the impugned proceedings issued by the first respondent dated 3.4.2002 mentions that the value as per the guide
line Register determined by the Registration Officer for the property in issue comes to Rs. 28,76,810/- but in the sale deed, the value was
mentioned as Rs. 11,34,300/-. Accordingly, the petitioner was to pay a sum of Rs. 3,74,010/- as stamp duty . But paid only a sum of Rs.
1,47,502/- and therefore, he was remitted the balance stamp duty of Rs. 2,26,508/- and as such the petitioner was directed to pay the stamp duty
within two weeks from the date of passing of the order failing which the same will have to be paid along with 2% interest per month.
On a careful consideration of the respective contentions, this Court is of the considered view that the impugned proceedings in Tha.Ka. No.
250 of 2003(Form-1) dated 9.9.2003 , Tha.Ka. No. 251 of 2003 (Form-I) dated 9.9.2003,Tha.Ka. Nos. 90/02 and 91/02 of 2003 (Form-1)
dated 3.4.2002 and Tha.Ka. No. 92/02 of 2003 (Form -1) dated 3.4.2002 claiming the dues in stamp duty, do not disclose any basis or criteria
in arriving at the valuation and in short, the same are bereft of qualitative and quantitative details and in this regard there is violation of principles of
Natural Justice and more over after registration of the document/documents, the Registering Authority has no power to retain the
document/documents and as such the impugned proceedings suffer from the vice of arbitrariness and in that view of the matter, this Court allows
these writ petitions to secure the ends of justice and accordingly, the impugned notices in Tha.Ka. No. 250 of 2003(Form-1) dated 9.9.2003,
Tha.Ka. No. 251 of 2003 (Form-I) dated 9.9.2003, Tha.Ka. Nos. 90/02 and 91/02 of 2003 (Form-1) dated 3.4.2002 and Tha.Ka. No. 92/02
of 2003 (Form-1) dated 3.4.2002 are quashed concerned in these writ petitions. The respondents are directed to release the sale deed dated
14.8.2003 bearing Doc. No. 3027 of 2003, 14.8.2003 bearing Doc. No. 3028 of 2003, 7.2.2001 bearing Doc. No. 417 and 418 of 2001 and
7.2.2001 bearing Doc. No. 419 of 2001 to the petitioners without insisting on further payment of stamp duty etc and refund the excess stamp duty
of Rs. 2,26,508/- in respect of the sale deed dated 7.2.2001 bearing Doc. No. 419 of 2001 to the petitioner in W.P. No. 34105 of 2003 within a
period of two weeks from the date of receipt of a copy of this order.
It is made clear that the order of this Court allowing these writ petitions will not preclude the authorities concerned to provide a reasonable
opportunity to the petitioners of being heard in regard to the enquiry, if they propose to conduct as per the relevant provisions of the Indian Stamp
Act ,bearing in mind of the fact that the power of conducting suo motu enquiry by the Collector as per Section 47A(3) of the Indian Stamp Act
imposes a restriction upto five years from the date of Registration of the instruments. No costs. Consequently, connected W.P.M.Ps are closed.