Madras High Court
Kalimuthu vs The Sub-Registrar on 11 September, 2009
Author: T.S.Sivagnanam
Bench: T.S.Sivagnanam
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 11/09/2009 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM W.P.(MD) No.11458 of 2008 Kalimuthu ... Petitioner Vs The Sub-Registrar, Perungaloor, Pudukottai Taluk, Pudukottai District. ... Respondent Prayer Petition filed under Article 226 of the Constitution of India for issuance of a Writ of Certiorari to call for the records of the respondent in document No.1450/2008 dated 27.11.2008 and quash the same and direct the respondent to release the petitioner's sale deed. !For Petitioner ... Mr.N.Balakrishnan ^For Respondents ... Mr.D.Gandhiraj Government Advocate :ORDER
By consent of both sides, the Writ Petition is taken up for final disposal.
2.The above Writ Petition has been filed to quash the proceedings of the respondent dated 27.11.2008 and direct the respondent to release the sale deed executed in favour of the petitioner.
3.The petitioner purchased the property in question in an auction sale conducted by the Tamil Nadu Industrial Investment Corporation (hereinafter referred to as 'TIIC') and a sale deed dated 31.10.2008 was executed in favour of the petitioner after the corporation received the entire sale consideration of Rs.3,10,000/-. The sale deed was presented before the respondent for registration on 04.11.2008 and the same was registered, but the document was not released. On 27.11.2008, the respondent sent a communication to the petitioner calling upon the petitioner to pay additional stamp duty of Rs.1,60,296/- in addition to the stamp duty already remitted by the petitioner to the tune of Rs.24,800/-. The petitioner contended that there is no question of under valuation of the property, since, the petitioner had purchased the same in an auction sale conducted by TIIC and by relying upon the law laid down by this Court reported in 2008 (4) CTC 486, it was contended that the respondent cannot insist upon the demand on stamp duty as per the guideline value. On the above grounds, the petitioner sought for release of the documents.
4.The learned Government Advocate appearing for the respondent would submit that the Department is justified in demanding for additional stamp duty, since the property in question is undervalued based on the guidelines fixed by the Government. It was further submitted that if at all the petitioner is aggrieved, the remedy is available for the petitioner by way of filing an appeal before the Inspector General of Registration and the Writ Petition is not maintainable.
5.I have considered the submissions made by the learned counsel for the petitioner as well as the learned Government Advocate appearing for the respondent.
6.It is not in dispute that the property in question was purchased by the petitioner pursuant to the auction sale conducted by the TIIC. It is also not in dispute that the entire sale consideration, the auction purchase amount has been remitted by the petitioner and proper stamp duty has been fixed on the said value. Therefore, in such circumstances, it is to be seen that whether there is any undervaluation of the document in question. In a recent judgment of the Hon'ble Supreme Court in V.N.Devadoss vs. Chief Revenue Control Officer-cum- Inspector and others reported in 2009(7)SCC 438, the Apex Court was considered an identical issue, where the petitioner purchased the property in question pursuant to a sale conducted by inviting public tenders pursuant to the directions issued by the BFIR. The Hon'ble Supreme Court considered the scope of Section 47A (1) and (3) of the Stamp Act and held as follows:
" 13.Sub-sections (1) and (3) of Section 47-A clearly reveal the intention of the legislature that there must be a reason to believe that the market value of the property which is the subject-matter of the conveyance has not been truly set out in the instrument. It is not a routine procedure to be followed in respect of each and every document of conveyance presented for registration without any evidence to show lack of bona fides of the parties to the document by attempting fraudulently to undervalue the subject of conveyance with a view to evade payment of proper stamp duty and thereby cause loss to the revenue. Therefore, the basis for exercises of power under Section 47-A of the Act is wilful undervaluation of the subject of transfer with fraudulent intention to evade payment of proper stamp duty.
14.In the instant case, the factual scenario shows that the vendors of the appellant i.e. M/s.Dunlop India Ltd. Became a sick industry and was declared so under the provisions of the 1985 Act. Consequent upon such declaration, surplus properties and assets belonging to the said Company were disposed of on the basis of orders passed by BIFR and AAIFR by forming an Assets Sales Committee. The appellant submitted that his tender along with others and his offer of Rs.24.34 crores approximately was the highest, and the same was accepted by the Assets Sales Committee and also by the statutory authorities. The Company was granted permission to execute the sale deed in favour of the appellant.
15.The stand of the State is that what has been disclosed is clearly a sale value and the same cannot be termed as market value. There is fallacy in this argument.
16.Market value is a changing concept. The Explanation to sub-rule (5) makes the position clear that (sic market) value would be such as would have fetched or would fetch if sole in the open market on the date of execution of the instrument of conveyance. Here, the property was offered for sale in the open market and bids were invited. That being so, there is no question of any intention to defraud the revenue or non-disclosure of the correct price. The factual scenario as indicated above goes to show that the properties were disposed of by the orders of BIFR and AAIFR and that too on the basis of value fixed by Assets Sales Committee. The view was expressed by the Assets Sales Committee which consisted of members such as representatives of IDBI, debenture- holders, Government of West Bengal and Special Director of BIFR. That being so, there is no possibility of any undervaluation and therefore, Section 47-A of the Act has no application. It is not correct as observed by the High Court that BIFR was only a mediator. "
7.The law laid down by the Hon'ble Supreme Court is squarely applicable to the facts and circumstances of the case, since there is no scope of entertaining a doubt in the present transaction and there was no undervaluation since, the property in question was purchased in a public auction conducted by TIIC. Therefore, there is no scope for exercising a power under Section 47-A of the Stamp Act as there is no basis for even entertaining a belief that the market value of the property, which is a subject matter of the conveyance has not been truly set out the said value with a view to fraudulently evade payment of proper stamp duty.
8.In view of the above, the Writ Petition is allowed and the respondent is directed to register and release the sale deed to the petitioner in document No.1450 of 2008 dated 27.11.2008 within a period of two weeks from the date of receipt of a copy of this order. No costs.
To The Sub-Registrar, Perungaloor, Pudukottai Taluk, Pudukottai District.