Allahabad High Court
Dal Jeet Singh & Another vs State Of U.P. & Others on 16 July, 2018
Author: Salil Kumar Rai
Bench: Salil Kumar Rai
HIGH COURT OF JUDICATURE AT ALLAHABAD A.F.R. Court No. - 23 Case :- WRIT - C No. - 34990 of 2008 Petitioner :- Dal Jeet Singh & Another Respondent :- State Of U.P. & Others Counsel for Petitioner :- C.S. Agnihotri,Namit Kumar Sharma,Rama Goel Bansal Counsel for Respondent :- C.S.C. Hon'ble Salil Kumar Rai,J.
1. Heard Shri Manoj Kumar Sharma assisted by Shri Namit Kumar Sharma, learned counsel for the petitioners and learned Standing Counsel representing the respondents.
2. The petitioners are vendees in the sale-deed dated 20.10.2004. The plots purchased through the aforesaid sale-deed were recorded as agricultural plots in the revenue records and stamp duty was paid on the said sale-deed accordingly. The Sub-Registrar-I, Jhansi submitted a report dated 25.10.2004 stating that the plots were adjacent to road and residential houses were constructed in front of the said plots. It was also stated in the report that electricity and water supply facilities were available in the area and thus the market value of the property was to be calculated and petitioners were liable to pay stamp duty at rates applicable for residential plots and, therefore, sale-deed dated 20.10.2004 was insufficiently stamped. On the aforesaid report of the Sub-Registrar-I, Jhansi, Case No. 7/2004-05 under Section 33/47-A of the Indian Stamp Act, 1899 (hereinafter referred to as, 'Act, 1899') was registered before the Collector, Jhansi, i.e., respondent No. 3, against the petitioners. The petitioners were issued a show cause notice in the case and in response to the show cause notice, submitted their reply stating that the plots were agricultural in nature and were also being used for the said purpose. It was stated by the petitioners that the plots were recorded as agricultural plots in the relevant revenue records and the market value of the plots and the requisite stamp duty had to be determined accordingly. However, a perusal of the objections filed by the petitioner shows that they had not denied that the plots were adjacent to residential plots. The Collector, Jhansi vide his order dated 17.7.2006, relying on the report of the Sub-Registrar dated 25.10.2004 regarding the location of the plots held that there was a deficiency in payment of stamp duty on the sale-deed dated 20.10.2004. In his order dated 17.7.2006, the Collector held that though the plots were being used for agricultural purpose but because of their location, the market value of the plots was three times the rate fixed for agricultural plots and stamp duty had to be paid accordingly. The aforesaid order dated 17.7.2006 passed by the Collector, Jhansi was challenged by the petitioner under Section 56(1) of the Act, 1899 by filing Stamp Revision No. 21 of 2005-06 before the Commissioner, Jhansi Division, Jhansi, i.e., respondent No. 2 (hereinafter referred to as, 'Commissioner'), which was dismissed by the Commissioner vide his judgement and order dated 3.8.2007. The orders dated 17.7.2006 passed by the Collector and 3.8.2007 passed by the Commissioner have been challenged in the present writ petition.
3. The contention of the petitioner is that the plots were recorded as agricultural in the revenue records and were admittedly being used for agricultural purposes, therefore the market value of the plots and consequential stamp duty to be paid on the sale-deed dated 20.10.2004 were to be calculated on the rates fixed for agricultural plots. It has been contended by the learned counsel for the petitioners that, as stamp duty was payable on the basis of the nature and character of the plot existing on the date of transaction, the respondent Nos. 2 and 3 have committed an error of law apparent on the face of record by determining the market value of the plots considering their future potential because of their location. It has been further contended by counsel for the petitioners that respondent Nos. 2 and 3 had also erred in law in mechanically relying on the report dated 25.10.2004 submitted by the Sub-Registrar inasmuch as the aforesaid report was an ex-parte report and relevant only for the purpose of making a reference under Section 47-A of the Act, 1899 and could not have been relied upon to determine the market value of the plots and the stamp duty liable to be paid on the sale-deed dated 20.10.2004. It was contended by counsel for the petitioners that petitioners had filed applications before respondent Nos. 2 and 3 praying for inspection of plots by respondent Nos. 2 and 3 so that the nature and character as well as the market value of the plots could be ascertained by the Collector independent of the report of Sub-Registrar, but respondent Nos. 2 and 3 failed to take note of the application of the petitioners and the failure by respondent Nos. 2 and 3 to inspect the plots vitiates the impugned orders dated 3.8.2007 and 17.7.2006. In support of his contention, counsel for petitioners has relied on the following judgements :-
(a) Nar Singh Das Agrawal Vs. Chief Controlling Revenue Authority, 2006 (101) RD 763,
(b) Aniruddha Kumar and Ashwini Kumar Vs. Chief Controlling Revenue Authority, 2000 (3) AWC 2587,
(c) Smt. Neelam Gupta Vs. Commissioner, Kanpur Division, Kanpur & Others, 2007 (102) RD 147,
(d) Sarvahitkarini Sahkari Awas Samiti Ltd. Vs. State of U.P. and Others, 2005 (99), RD 762,
(e) Shri Sumati Nath jain Vs. State of U.P. and Others, 2016 (2) ALJ 292,
(f) Smt. Vijaya Jain Vs. State of U.P. and Others, 2016 (3) ALJ 278,
(g) Smt. Janki Devi Vs. State of U.P. and Others, 2017 (4) ALJ 515,
(h) Super Infraheights (A Partnership Firm) through its Partner and Another Vs. State of U.P. through Principal Secretary Tax & Registratiion and Others, 2017 (5) ALJ 28,
(i) Smt. Somlata Tanwar and Others Vs. State of U.P. and Others, 2017 (5) ALJ 171; and
(j) Ram Khelawan @ Bachcha Vs. State of U.P. and Another, 2005 (98) RD 511
4. I have considered the submissions of learned counsel for the petitioners and perused the record.
5. The judgements referred by the counsel for the petitioner are authorities for the propositions that :-
(i) the market value of the property is to be determined with reference to its character on the date of execution of the instrument and its potentiality as on that date. It is not liable to be determined with reference to the use to which a buyer intends to put it in future and the perceived or presumed use to which a buyer may put the property in future cannot be the basis for adjudging its value or determining the stamp duty payable,
(ii) the ex-parte report of the Sub Registrar is relevant only for initiating proceedings under Section 47-A of the Act, 1899.
There can be no disagreement with the aforesaid propositions but as would be evident from reasons given hereafter, the said propositions do not promote the case of the petitioner.
6. The market value of a property which is the subject of any instrument and the duty payable on it is determined by the Collector under Sections 47-A(2) and 47-A(3) of the Act, 1899 either suo-motu or on a reference made by the Registering Officer under Section 47-A(1)(d) of the Act, 1899 or any other officer under Section 47-A(3) of the Act, 1899. Sections 47-A(2) and 47-A(3) of the Act, 1899 are reproduced below :-
47-A(2) On receipt of a reference under sub- section (1), the Collector shall after giving the parties a reasonable opportunity of being heard and after holding an enquiry in such manner as may be prescribed by rules made under this Act, determine the market value of the property which is the subject of such instrument and the proper duty payable thereon.
47-A(3) The Collector may, suo motu, or on a reference from any Court or from the Commissioner of Stamps or an Additional Commissioner of Stamps or from a Deputy Commissioner of Stamps or from an Assistant Commissioner of Stamps or any officer authorized by the State Government in that behalf, within four years from the date of registration of any instrument on which duty is chargeable on the market value of the property, not already referred to him under sub- section (1), call for an examine the instrument for the purpose of satisfying himself as to the correctness of the market value, of the property which is the subject of such instrument and the duty payable thereon, and if, after such examination, he has reason to believe that market value of such property has not been truly set forth in such instrument, he may determine the market value of such property and the duty payable thereon:
Provided that, with the prior permission of the State Government, an action under this sub-section may be taken after a period of four years but before a period of eight years from the date of registration of the instrument on which duty is chargeable on the market value of the property.
Explanation: The payment of deficit stamp duty by any person under any order of registering officer under sub-section (1) shall not prevent the Collector from initiating proceedings on any instrument under sub-section (3).
(Emphasis added) A reading of the aforesaid provisions show that before determining the market value of the property and the consequential duty to be payable thereon, the Collector shall give a reasonable opportunity of hearing to the concerned persons and shall hold an enquiry in the manner prescribed by the Rules. The relevant rule, in the present context, is Rule 7 of the Uttar Pradesh Stamp (Valuation of Property) Rules, 1997 (hereinafter referred to as, 'Rules, 1997'), which prescribes the procedure to be followed by the Collector in proceedings under Sections 47-A(2) and Section 47-A(3) of the Act, 1899. Rule 7 of the Rules, 1997 is reproduced below :-
"7. Procedure on receipt of a reference or when suo motu action is proposed under Section 47-A.-(1) On receipt of a reference or where action is proposed to be taken suo motu under Section 47-A, the Collector shall issue notice to parties to the instrument to show cause within thirty days of the receipt of such notice as to why the market value of the property set forth in the instrument and the duty payable thereon be not determined by him.
(2) The Collector may admit oral or documentary evidence, if any, produced by the parties to the instrument and call for and examine the original instrument to satisfy himself as to the correctness of the market value of the subject-matter of the instrument and for determining the duty payable thereon.
(3) The Collector may-
(a) Call for any information or record from any public office, officer or authority under the Government or a local authority;
(b) Example and record the statement of any public officer or authority under the Government or the local authority; and
(c) Inspect the property after due notice to parties to the instrument.
(4) After considering the representation of the parties, if any and examining the records and other evidence, the Collector shall determine the market value of the subject-matter of the instrument and the duty payable thereon.
(5) If, as a result of such inquiry, the market value is found to be fully and truly set forth and the instrument duly stamped according to such value, it shall be returned to the person who made the reference with a certificate to that effect. A copy of such certificate shall also be sent to the Registering Officer concerned.
(6) If, as a result of inquiry, the instrument is found to be under valued and not duly stamped, necessary action shall be taken in respect of it according to relevant provisions of the Act."
(Emphasis added) It would also be relevant to refer to Rule 349 of U.P. Stamp Rules, 1942 (hereinafter referred to as, 'Rules, 1942'). Rule 349 of the Rules, 1942 is quoted below :-
"The Collector shall, in the course of enquiry, consider such documentary evidence and take such oral evidence as may be relevant or material in regard to the subject-matter involved and complete the enquiry, as far as possible within a period of three months and determine the market value which shall not be less than that determined in accordance with Rule 341."
7. A reading of Rule 7 of the Rules, 1997 shows that the concerned person, who is liable to pay stamp duty, has to be served a show cause notice and the Collector shall determine the market value of the property and the duty payable thereon after considering his representation and evidence produced as well as the records summoned by the Collector under Rule 7(3) of the Rules, 1997. The enquiry is for determining the market value of the property. An enquiry is an investigation into disputed questions, i.e., the issues on which the parties are at variance. Under the Act, 1899, the dispute would obviously relate either to the determination of the market value of the property which would be dependent on certain factors for example the location, character, etc. of the property, nature and quality of the constructions and their potential value and consequently the rate at which stamp duty was liable to be paid on the assessed market value of the property.
8. On a reference made to the Collector either under Section 47-A(1)(d) or Section 47-A(3) of the Act, 1899 or when the Collector takes suo motu action under Section 47-A(3) of the Act, 1899, the Collector shall issue a show cause notice under Rule 7(1) of the Rules, 1997. The requirement of a show cause notice is an ingredient of principles of natural justice incorporated in Section 47-A(2) of the Act, 1899 and Rule 7 of the Rules, 1997. A show cause notice has to contain the grounds on which the noticee would be asked to pay higher or additional duty than what had already been paid by him on the instrument. A show cause notice issued in proceedings under the Act, 1899 would have to contain the grounds for determining a higher market value of the property than what was stated in the instrument and the consequential additional/higher stamp duty to be paid on the instrument. The aforesaid proposition is supported by the judgement of Supreme Court in Collector of Central Excise, Patna and Others Vs. I.T.C. Limited and Another, 1995 (2) SCC 38. Extract of paragraph No. 4 of the aforesaid judgement, which is relevant for the purposes, is reproduced below :-
"4. Sri Sorabjee, learned Counsel appearing for the first respondent says - and which submission is recorded herewith - that the first respondent does not challenge the correctness and validity of the order in Original No. 1/86 dated April 10, 1986 passed by Shri B.K. Aggarwal, Director General of Inspection (Customs and Central Excise). The counsel, however, says that it should be open to the first respondent to question the interpretation placed upon the said order by the Revenue. It is made clear that while the interpretation of the said order shall be open in the proceedings taken herein, its correctness or its validity shall not be questioned by the first respondent. So far as the directions made by the High Court are concerned, we are substantially in agreement with it. Before the first respondent is made liable for higher or enhanced duty, it must be told on what grounds it is sought to be made liable for additional duty and it must be given an opportunity of meeting those grounds. This is the minimum requirement of the principle of natural justice which must be read into Sub-rule (5) of Rule 9B, wherever called for."
(Emphasis added) Even though the observations of the Supreme Court in the above judgement were in relation to Central Excise Rules, the same are relevant in proceedings under the Stamp Act, 1899 also as the observations relate to the contents of a show cause notice.
9. A show cause notice issued under the Act, 1899 has to contain the grounds which in the opinion of the Collector are relevant to determine the market value of the property and for imposing an additional duty and which in the opinion of the Collector have not been set forth in the instrument. On receipt of the aforesaid show cause notice, the noticee has an opportunity to deny the existence of the grounds stated in the show cause notice. In case the noticee denies the existence of the determinants stated in the show cause notice, the Collector shall proceed to ascertain the existence of those determinants in accordance with the procedure prescribed in Rule 7(3) of the Rules. The Collector, in accordance with Rule 7(3)(c) of the Rules, 1997, may also inspect the property after due notice to the parties to the instrument either suo motu or on an application made by the noticee. Sale-deeds regarding other properties situated in the area would also be relevant to determine the market value of the property and in such a situation the noticee can file documentary as well as oral evidence to establish his case and the Collector may also take steps as prescribed in Rule 7(3)(a) and (b) of the Rules, 1997. If the noticee denies the existence of any of the determinants mentioned in the show cause notice, the report of the registering officer or any other authority prepared prior to the show cause notice and which forms the basis of the show cause notice would not be a relevant evidence to determine the market value of the property as the correctness of the said report itself being denied and contested by the noticee. In such a situation the only relevant evidence would be the materials produced by the noticee and those available to the Collector by following the procedure prescribed in Rule 7(2) and 7(3) of the Rules, 1997 and in case the Collector decides the case registered before him under Section 47-A(2) and 47-A(3) of the Act, 1899 relying only on the report prepared for the purpose of reference, the judgement and order of the Collector imposing additional/higher duty on the instrument would be vitiated in law and liable to be set aside.
10. However, in case the noticee after receiving the show cause notice does not deny the existence of the grounds specified in the show cause notice, it would not be necessary for the Collector to enquire into the correctness of the report prepared for the purpose of reference and the contents of which were incorporated in the show cause notice, as in such a situation there would be no dispute regarding the correctness of such a report so far as existence of the grounds was concerned. In such a situation no purpose would be served by asking the Collector to take steps as prescribed in Rule 7(3) of the Rules, 1997 including inspection of the property. The failure of the noticee to rebut the grounds specified in the show cause notice, would amount to an admission on the part of the noticee regarding the correctness of the report to that extent. In such a situation, the judgement and order of the Collector determining the market value of the property by taking into consideration the existence of the factors mentioned in such report cannot be faulted merely on the ground that the Collector had not inspected the property as prescribed in Rule 7(3)(c) of the Rules, 1997 and had relied merely on the report of the registering officer to determine the market value of the property imposing additional duty on the instrument. The critical element in such cases is the failure of the noticee to deny, in his reply, the existence of the factors stated in the show cause notice and to effectively controvert the contents of the show cause notice because of which no enquiry was necessary regarding the existence of the aforesaid factors. In such cases no prejudice would be caused to the noticee if the Collector does not exercise his powers under Rule 7(3) and it would be futile to ask the Collector to hold a fresh enquiry in accordance with Rule 7(3). In this context it would be relevant to refer to the judgement of Supreme Court in The Chairman Board of Mining Examination and Chief Inspector of Mines and Another Vs. Ramjee, 1977 (2) SCC 256. The relevant extracts from the aforesaid judgement are reproduced below :-
13. The last violation regarded as a lethal objection is that Board did not enquire of the respondent, independently of the one done by the Regional Inspector. Assuming it to be necessary, here the respondent has, in the form of an appeal against the report of the Regional Inspector, sent his explanation to the Chairman of the Board. He has thus been heard and compliance with Regulation 26, in the circumstances, is complete. Natural justice is no unruly horse, no lurking land mine, nor a judicial cure-all. If fairness is shown by the decision-maker to the man proceeded against, the form, features and the fundamentals of such essential processual propriety being conditioned by the facts and circumstances of each situation, no breach of natural justice can be complained of. Unnatural expansion of natural justice, without reference to the administrative realities and other factors of a given case, can be exasperating. We can neither be finical nor fanatical but should be flexible yet firm in this jurisdiction. No man shall be hit below the belt-that is the conscience of the matter.
15. These general observations must be tested on the concrete facts of each case and every miniscule violation does ,not spell illegality. If the totality of circumstances satisfies the Court that the party visited with adverse order has not suffered from denial of reasonable opportunity the Court will decline to be punctilious or fanatical as if the rules of natural justice were sacred scriptures."
(Emphasis added) As held earlier, Rule 7 incorporates the principles of natrual justice and, therefore, at this stage it would be appropriate to refer to the judgement of Supreme Court delivered in M/S Dharmpal Satyapal Limited Vs. Deputy Commissioner of Central Excise Gauhati and Others, (2015) 8 SCC 519, which deals with situations where an order would not be set aside merely because the principles of natural justice have not been followed by the authority. The relevant extracts from the aforesaid judgement are reproduced below :-
27. It, thus, cannot be denied that principles of natural justice are grounded in procedural fairness which ensures taking of correct decision and procedural fairness is fundamentally an instrumental good, in the sense that procedure should be designed to ensure accurate or appropriate outcomes. In fact, procedural fairness is valuable in both instrumental and non-instrumental terms.
38. But that is not the end of the matter. While the law on the principle of audi alteram partem has progressed in the manner mentioned above, at the same time, the Courts have also repeatedly remarked that the principles of natural justice are very flexible principles. They cannot be applied in any straight-jacket formula. It all depends upon the kind of functions performed and to the extent to which a person is likely to be affected. For this reason, certain exceptions to the aforesaid principles have been invoked under certain circumstances. For example, the Courts have held that it would be sufficient to allow a person to make a representation and oral hearing may not be necessary in all cases, though in some matters, depending upon the nature of the case, not only full-fledged oral hearing but even cross-examination of witnesses is treated as necessary concomitant of the principles of natural justice. Likewise, in service matters relating to major punishment by way of disciplinary action, the requirement is very strict and full-fledged opportunity is envisaged under the statutory rules as well. On the other hand, in those cases where there is an admission of charge, even when no such formal inquiry is held, the punishment based on such admission is upheld. It is for this reason, in certain circumstances, even post-decisional hearing is held to be permissible. Further, the Courts have held that under certain circumstances principles of natural justice may even be excluded by reason of diverse factors like time, place, the apprehended danger and so on.
39. We are not concerned with these aspects in the present case as the issue relates to giving of notice before taking action. While emphasizing that the principles of natural justice cannot be applied in straight-jacket formula, the aforesaid instances are given. We have highlighted the jurisprudential basis of adhering to the principles of natural justice which are grounded on the doctrine of procedural fairness, accuracy of outcome leading to general social goals, etc. Nevertheless, there may be situations wherein for some reason - perhaps because the evidence against the individual is thought to be utterly compelling - it is felt that a fair hearing "would make no difference" - meaning that a hearing would not change the ultimate conclusion reached by the decision-maker - then no legal duty to supply a hearing arises. Such an approach was endorsed by Lord Wilberforce in Malloch vs. Aberdeen Corporation, who said that:
"...A breach of procedure...cannot give [rise to] a remedy in the courts, unless behind it there is something of substance which has been lost by the failure. The court does not act in vain'."
Relying on these comments, Brandon LJ opined in Cinnamond v. British Airports Authority that:
"...no one can complain of not being given an opportunity to make representations if such an opportunity would have availed him nothing."
In such situations, fair procedures appear to serve no purpose since "right" result can be secured without according such treatment to the individual.
40. In this behalf, we need to notice one other exception which has been carved out to the aforesaid principle by the Courts. Even if it is found by the Court that there is a violation of principles of natural justice, the Courts have held that it may not be necessary to strike down the action and refer the matter back to the authorities to take fresh decision after complying with the procedural requirement in those cases where non-grant of hearing has not caused any prejudice to the person against whom the action is taken. Therefore, every violation of a facet of natural justice may not lead to the conclusion that order passed is always null and void. The validity of the order has to be decided on the touchstone of 'prejudice'. The ultimate test is always the same, viz., the test of prejudice or the test of fair hearing.
(Emphasis added)
11. In their reply (annexed as Annexure No. 4 to the writ petition) to the show cause notice issued in Case No. 7/2004-05 the petitioners did not dispute the correctness of the report of the Sub-Registrar and the description of the property as reproduced in the show cause notice stating that the plots were located adjacent to road, in an area where electricity and water supply were available and that residential houses had been constructed adjacent to the plots purchased by the petitioners. The show cause notice (annexed as Annexure No. 3 to the writ petition) issued to the petitioners contained the details regarding the location/situation of the property, the existence of residential buildings in the vicinity of the plots and the facilities available in the area as reported by the Sub-Registrar in his report dated 20.10.2004. It is the aforesaid situation/location of the plots as reported by the Sub-Registrar and narrated in the show cause notice that was considered by the Collector, Jhansi in his judgement and order dated 17.7.2006 while determining the market value of the property and the additional stamp duty to be paid on the instrument.
12. The Collector, Jhansi has not rejected the contention of the petitioners that the plots purchased through sale-deed dated 20.10.2004 were agricultural plots. However, the market value and the stamp duty payable on the sale-deed has been calculated by the Collector, Jhansi taking into consideration the location of the plots, which had not been controverted by the petitioners in their reply to the show cause notice. In their reply the petitioners had merely stated that the plots were being used for agricultural purposes, and therefore, the market value of the plots was to be determined accordingly. In their reply, the petitioners had not denied the location of the plots or the nature of the plots in their neighbourhood, which were also relevant for determining the market value of the property and the consequential stamp duty payable on the instrument. It is the failure of the petitioners to controvert the facts stated in the show cause notice because of which the impugned orders passed by respondent Nos. 2 and 3 cannot be invalidated merely because they relied on the report of the Registering Officer while determining the market value of the property.
13. It is evident that the petitioners contested the case mainly on the ground that the plots were recorded as agricultural in the revenue records and they were being used for agricultural purposes. The entries in the revenue records are not the only relevant factors to determine the market value of the property as even the present user and character of the property cannot be necessarily determined by the entries in the revenue records. Merely because a declaration under Section 143 of Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (hereinafter referred to as, 'Act, 1950) had not been issued in relation to the plots does not necessarily prove that the plot was being used for agricultural purposes only and not for any purpose other than agriculture. Under Section 142 of the Act, 1950, a Bhumidhar had the right to use the land for any purpose whatsoever and a declaration under Section 143 of the Act, 1950 was merely a recognition that the land was being used for purposes not connected with agriculture, horticulture and animal husbandry. The aforesaid would be evident from a reading of Section 143 of the Act, 1950 itself which starts with the phrase, 'where a Bhumidhar with transferable rights 'uses' his holding or part thereof...' Thus, a declaration under Section 143 of the Act, 1950 (or presently under Section 80 of the of Uttar Pradesh Revenue Code, 2006) is not a precondition for using the agricultural plot for any purpose not connected with agriculture, horticulture and animal husbandry. It was held by this Court in Haroon Ahmad and Another Vs. State of U.P. and others, 2012 (4) ADJ 179 as follows :-
"17. So far as the issuance of the notification under Section 143 of the U.P. Zamindari Abolition and Land Reforms Act is concerned, this Court may record that under Section 142 of the U.P. Zamindari Abolition and Land Reforms Act, a Bhumidhari gets a right to use the land in whatever manner he likes. Petitioner has become a Bhumidhari of the land after purchase, therefore, he gets a right to use the land in the manner he likes. Mere non-issuance of the notification under Section 143 of the U.P. Zamindari Abolition and Land Reforms Act will not in any was hamper his right to use the land in the manner he desires.
18. Non-issuance of the notification under Section 143 of the U.P. Zamindari Abolition and Land Reforms Act cannot be the basis for questioning the determination of the market value of land. Section 143 of U.P. Zamindari Abolition and Land Reforms Act is for different purposes and cannot control the determination of the market value under the Indian Stamp Act.
19. Impact of Section 142 of U.P. Zamindari Abolition and Land Reforms Act as well as the purpose of issuance of notification under Section 143, vis-a-vis its applicability on the provisions of the Indian Stamp Act, has not been considered in the judgements relied upon by the petitioner. This Court finds no reason to accept the submission raised by the petitioner nor the judgements relied upon by the petitioner can be the reason for questioning the determination of the market value of the land under transfer in the facts of the case.
20. This Court has no hesitation to hold that the provisions of U.P. Zamindari Abolition and Land Reforms Act are clearly distinct and operate in different field. Determination of the market value of plot under sale is to be made under the Indian Stamp Act as per the procedure prescribed under Rule 7 of U.P. Stamp (Valuation of Property) Rules, 1997. Such determination is not controlled in any manner by the provisions of U.P. Zamindari Abolition and Land Reforms Act. Notification under Section 143 of the U.P. Zamindari Abolition and Land Reforms Act can at best be one of the factors for consideration at the time of determination of the market value under the Indian Stamp Act."
(Emphasis added) It was also held by this Court in P.P. Buildcon Pvt. Ltd. Vs. Chief controlling Revenue and Others, 2014 (7) ADJ 663 as follows :-
"14. For the purpose of determining market value, it is not bare entry in revenue record, which is conclusive but entire state of affairs, as were available on the date of execution of sale-deed, have to be looked into..."
14. Apart from the above, the present user of the property is also not the sole criterion for determining the market value of the property. The user of the plots in the neighbourhood of the property would also be relevant to determine the market value of the property. It was held by this Court in D.P.R. Food Pvt. Ltd. Through Its Director Vs. State of U.P. and Others, 2010 (6) ADJ 341 as follows :-
"I have gone through the judgments and I am in respectful agreement with the same. The burden of proof lies upon the Collector regarding the market value of the land. Although, this has not been denied that this land can be used for commercial purpose. Further, the Collector after considering the materials available, has recorded finding that all around the property commercial activities are going on which is also not denied by the petitioner in his objection and not even during the arguments before the courts below.
Under these circumstances, I do not see how the petitioner would fortify his claim that the said property is residential and not commercial. The property in question has 30 feet high wall and huge gates which is normally not the case with residential properties. Besides, it is also not denied that on the gate "Tata Khad and Beej Godam" was mentioned. It is unlikely that such writing would be made on the gates of residential properties. It appears that the property in question is in the middle of a commercial hub and the property in question would be put to use as per the sole discretion of the owner but so far as determination of stamp duty is concerned market value of the property has to be seen irrespective of the fact whether it is residential, commercial or agricultural. Since no procedure has been prescribed for determination of the fair market value of any property, the same principle is to be adopted which is normally undertaken for determination of compensation to be paid to the owners in the land acquisition proceedings under the Land Acquisition Act. This view has also been taken by this Court in the case of Ram Khelawan @ Bachcha Vs. State of U.P. and Ors. reported in 2005 (2) A.W.C. 1087. Therefore, once market value is to be determined as stated above then the nature of the land or its current use may not be very relevant if all around the plot in question properties are being sold and bought at the commercial rate then for determination of stamp duty the market value of the property would be the same as that of the property bought for commercial use."
(Emphasis added)
15. In their impugned orders dated 17.7.2006 and 3.8.2007, the Collector and the Commissioner have determined the market value of the plots after considering the fact that residential buildings existed in the neighbourhood of the plots and its location as specified in the report of the Sub-Registrar. A reading of the order dated 17.7.2006 passed by the Collector shows that the present user of the plots as agricultural has been considered by the Collector while fixing the rate at which proper stamp duty payable on the instrument was to be calculated. Thus, the argument of the counsel for the petitioner regarding present user of the plots and entries in the revenue records is also not acceptable and is rejected.
16. The next argument of counsel for the petitioner is that respondent Nos. 2 and 3 have committed an error of law apparent on the face of record in considering the location of the plots while determining its market value as the aforesaid amounts to considering the future potential value of the plots. The counsel for the petitioners has argued that the authorities have erred in determining the market value of the plots by a speculative inquiry on the prospective use of the plots at an uncertain future date. The said argument of the counsel for the petitioners is also not acceptable. Location of plots and the use to which other plots in the area have been put to are relevant factors to determine the potential of land on the date of execution of the instrument or a period reasonably proximate thereto. While determining the market value of the plots, respondent Nos. 2 and 3 have considered the fact that the plots were adjacent to road and residential buildings existed in the neighbourhood of the plots. The location of the plots were taken into consideration by the authorities, i.e., respondent Nos. 2 and 3 only to assess their present potential or potential in the immediate future and in view of the judgement of Full Bench of this Court in Pushpa Sareen Vs. State of U.P. 2015 (3) ADJ 136, no illegality was committed by respondent Nos. 2 and 3. Paragraph Nos. 27 and 28 of the aforementioned judgement, are reproduced hereinbelow :-
"27. Undoubtedly, the Collector is not permitted to launch upon a speculative inquiry about the prospective use to which a land may be put to use at an uncertain future date. The market value of the property has to be determined with reference to the use to which the land is capable reasonably of being put to immediately or in the proximate future. The possibility of the land becoming available in the immediate or near future for better use and enjoyment reflects upon the potentiality of the land. This potential has to be assessed with reference to the date of the execution of the instrument. In other words, the power of the Collector cannot be unduly circumscribed by ruling out the potential to which the land can be advantageously deployed at the time of the execution of the instrument or a period reasonably proximate thereto. Again the use to which land in the area had been put is a material consideration. If the land surrounding the property in question has been put to commercial use, it would be improper to hold that this is a circumstance which should not weigh with the Collector as a factor which influences the market value of the land.
28. The fact that the land was put to a particular use, say for instance a commercial purpose at a later point in time, may not be a relevant criterion for deciding the value for the purpose of stamp duty, as held by the Supreme Court in State of U.P. and Others Vs. Ambrish Tandon and another (2012) 5 SCC 566. This is because the nature of the user is relateable to the date of purchase which is relevant for the purpose of computing the stamp duty. Where, however, the potential of the land can be assessed on the date of the execution of the instrument itself, that is clearly a circumstance which is relevant and germane to the determination of the true market value. At the same time, the exercise before the Collector has to be based on adequate material and cannot be a matter of hypothesis or surmise. The Collector must have material on the record to the effect that there has been a change of use or other contemporaneous sale deeds in respect of the adjacent areas that would have a bearing on the market value of the property which is under consideration. The Collector, therefore, would be within jurisdiction in referring to exemplars or comparable sale instances which have a bearing on the true market value of the property which is required to be assessed. If the sale instances are comparable, they would also reflect the potentiality of the land which would be taken into consideration in a price agreed upon between a vendor and a purchaser."
(Emphasis added)
17. For reasons stated above, there is no illegality in the orders dated 17.7.2006 passed by the Collector, Jhansi, i.e., respondent No. 3 and 3.8.2007 passed by the Commissioner, Jhansi Division, Jhansi, i.e., respondent No. 2. The writ petition lacks merit, and is, accordingly dismissed.
Order Date :- 16.7.2018 Anurag/-