Karnataka High Court
Smt.Savitha Pai vs The Regional Commissioner on 9 February, 2026
Author: M.G.S. Kamal
Bench: M.G.S. Kamal
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NC: 2026:KHC:7603
WP No. 15790 of 2022
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 9TH DAY OF FEBRUARY, 2026
BEFORE
THE HON'BLE MR. JUSTICE M.G.S. KAMAL
WRIT PETITION NO. 15790 OF 2022 (GM-ST/RN)
BETWEEN:
SMT. SAVITHA PAI
AGED ABOUT 47 YEARS,
WIFE OF SRI T ARVIND PAI,
RESIDING AT APARTMENT NO.5143
TOWER-5, PRESTIGE SOUTH RIDGE
NO. 125, HOSAKEREHALLI, 3RD STAGE
BANASHANKARI, BENGALURU- 560085
...PETITIONER
(BY SRI. GEORGE JOSEPH., ADVOCATE)
AND:
1. THE REGIONAL COMMISSIONER
Digitally signed
BENGALURU DIVISION,
by SUMA B N 2ND FLOOR, BMTC BUILDING
Location: HIGH
COURT OF KH ROAD, SHANTHINAGAR
KARNATAKA
BENGALURU- 560 027.
2. THE DEPUTY COMMISSIONER AND DISTRICT
REGISTRAR OF STAMPS SHIVAJINAGAR
REGISTRATION DISTRICT, 4TH FLOOR
MONARCH CHAMBERS NO.122/2, INFANTRY ROAD,
BENGALURU- 560 001.
3. THE SUB REGISTRAR
SHIVAJINAGAR
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NC: 2026:KHC:7603
WP No. 15790 of 2022
HC-KAR
NO 122/2, INFANTRY ROAD,
BENGALURU- 560001
...RESPONDENTS
(BY SMT.B.SUKANYA BALIGA, AGA FOR R1 TO R3)
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO-QUASH THE
ORDER DTD 14.06.2022 PASSED BY THE R-1 IN CASE
NO.STP(APPEAL)/01/2022 VIDE ANNX-A AND THE ORDER DTD
06.12.2021 PASSED BY THE R-2 IN CASE
NO.DUS/SJN/25/2020-21 VIDE ANNX-B., AND ETC.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING
IN B GROUP, THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:
CORAM: HON'BLE MR. JUSTICE M.G.S. KAMAL
ORAL ORDER
The petitioner is before this Court being aggrieved by the order passed by the first respondent dated 14.06.2022, produced as Annexure-A and by the second respondent by order dated 06.12.2021, produced as Annexure-B and for further direction to refund a sum of Rs.12,16,350/-, with deficit stamp duty, deficit Cess of Rs.1,19,250/- and deficit Registration Fee of Rs.2,38,500/- -3-
NC: 2026:KHC:7603 WP No. 15790 of 2022 HC-KAR together with interest at the rate of 12% per annum from 29.01.2022 till date of repayment.
2. The petitioner is a lessee of the property bearing Municipal No.36 (Old Municipal Nos.36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 52/1, 53, 54, 55, 56, 57, 58, 59, 60, 61 and 62) Infantry Road and Municipal Nos.47/3 & 47/3-1, 52, 53, 54, 55, 56, 57, 58, 59, 60 Central Street), Infantry Road, Municipal Ward No.110 (Old No.79), Bengaluru, in terms of lease deed dated 28.12.2020, as per Annexure-C, which provides the term of the lease for a period exceeding 60 years. That when the said document was presented for registration, process of determination and adjudication of payment of stamp duty payable therein was undertaken. That respondent No.2 determined the stamp duty, Cess, and registration fee payable therein at Rs.12,16,350/-, Rs.1,19,250/- and Rs.2,38,500/- respectively. That such determination was arrived at with reference to the provision contained under Article-30 of the Karnataka -4- NC: 2026:KHC:7603 WP No. 15790 of 2022 HC-KAR Stamp Act, 1957 (hereinafter referred to as 'Act'). Being aggrieved, the petitioner preferred an appeal before the respondent No.1, which was dismissed upholding the order passed by the respondent No.2. Aggrieved by the same, the petitioner is before this Court.
3. Learned counsel for the petitioner, drawing attention of this Court to the definition of the term 'market value' as provided under Section-2(1)(mm) and Article- 30(1)(vi) of the Act, submits that though the aforesaid provisions indicate the manner in which the market value is to be determined, they do not take into consideration, the nature of the instrument as that one at hand, namely the 'lease deed'. He submits that the market value contemplated thereunder is basically applicable in the cases of conveyance, in the nature of sale. They do not take into consideration determination of market value in the case of a lease involving restrictive covenants, which may have effect in restricting the absolute use and enjoyment of the properties, a factor which requires -5- NC: 2026:KHC:7603 WP No. 15790 of 2022 HC-KAR determination of the market value, providing certain discount.
4. In justification of the submission, he relies upon the judgment of the Hon'ble Apex Court in the case of NEW DELHI MUNICIPAL COMMITTEE vs. M/S. GYMKHANA CLUB LIMITED AND OTHERS1. Referring to paragraph No.14 of the said judgment, he submits that in the cases where restrictive clauses contained in the lease deed, the same shall be borne in mind before determination of the market value. That the respondent Nos.1 and 2 have not adverted to this intrinsic aspect of the matter, which will have bearing on the determination of the stamp duty payable by the petitioner on the instrument, namely, the lease deed. He further submits that a blanket application of the Guidelines Value in the case of this nature is inappropriate. Hence, seeks for allowing of the petition.
1 (1994) 3 SCC 498 -6- NC: 2026:KHC:7603 WP No. 15790 of 2022 HC-KAR
5. In response, learned AGA submits that for the purpose of determination of market value, the thumb rule being applied by the Department is taking the Guidelines Value issued under the Act. She submits that there is no scope for redetermination of the matter in the nature as sought by the petitioner. Therefore, seeks for dismissal of the petition.
6. Heard. Perused the records.
7. Section 2(1)(mm) of the Act providing for the term 'market value' reads as under:
"2(1)[(mm) "market value" in relation to any property, which is the subject matter of an instrument, means the price which such property would have fetched, in the opinion of the Deputy Commissioner or the Appellate Authority or the Chief Controlling Revenue Authority if sold in open market on the date of execution of such instrument or the consideration stated in the instrument whichever is higher:
Provided that notwithstanding anything contained in this Act or in the Articles, in respect of an instrument executed by or on behalf of or in favour of the State Government or the Central Government or a Local Authority or other Authority constituted by or under any law for the time being in force or a Body incorporate wholly owned or controlled by the Central -7- NC: 2026:KHC:7603 WP No. 15790 of 2022 HC-KAR Government or the State Government, the market value of the property shall be the value of consideration for such conveyance as set forth in the instrument."
8. Article 30(1)(vi) of the Act providing for payment of the stamp duty in respect of the lease, term of which exceeds 30 years reads as under:
"(vi)where the lease purports to be for a term exceeding thirty years or in perpetuity or does not purport to be for any definite term the same duty as conveyance under article 20(1) on the total amount or value of, average annual rent, fine, premium and money advanced; or on the market value of the property; whichever is higher."
9. The aforesaid provisions on the first reading of it would indicate, the market value of the property may have to be determined taking into consideration the sale of the property in open market, on the date on which the instrument is executed. In other words, it contemplates determination of market value based on the price, the property would fetch if the same was put on sale. This, as pointed by the learned counsel for the petitioner, may have to be considered differently in the light of the terms of instruments as sought to be presented for registration -8- NC: 2026:KHC:7603 WP No. 15790 of 2022 HC-KAR namely, the lease deed. In the case of lease deed, there may be possibility of restrictive covenant which cannot be equated to the absolute sale of the property. Reliance placed by the learned counsel for the petitioner on the judgment of the Hon'ble Apex Court may lend some light in this aspect of the matter. Wherein at paragraph No.10, the Hon'ble Apex Court dealing with the definition of 'annual value' as provided under Section 3 of the Punjab Municipal Act, for the purpose of determination of market value for payment of tax had at paragraph Nos.10 and 14 held as under:
"10. It is not in dispute that in the present cases, the annual value of the property has to be calculated under the provision of Section 3(1)(c) which speaks, inter alia, about "the estimated market value of the site and land attached to the house or building". As to the covenants governing the leases in the present cases the main restriction to which our attention has been drawn relates to the non-permissibility of the transfer or assignment "without the sanction of the lessor or the Chief Commissioner of Delhi in writing", all clause 2(11) of the lease deed granted to Gymkhana Club. This was the very restriction which had come up for consideration in Balbir Singh case; and so, what has been stated in this regard in that case has to be accepted on principle. Shri Sen appearing for the appellant, is fair in drawing our attention to certain other restrictions placed in the lease, -9- NC: 2026:KHC:7603 WP No. 15790 of 2022 HC-KAR one of which is that the land would not be used or permitted to be used for any purpose other than as a club and purposes like holding of banquets, concerts and dances and the lodging and boarding of members resident in the premises. This is what finds place in clause 2(6) of the perpetual lease entered on the Twenty Eighth day of February, Nineteen hundred and twenty-eight between Secretary of State for India in Council and the Imperial Delhi Gymkhana Club Limited. Sub-clause (10) requires the lessee to peaceably yield the demised premises and the club building to the lessor on determination of the lease. Clause 3 gives power of re- entry to the lessor or Chief Commissioner of Delhi on being satisfied that the demised premises have ceased to be used for the purpose of a club. Clause 4 is pressed into service by the counsel for the respondents in contending that market value of such a leasehold land cannot be taken into consideration, because that clause has stated that in cast the demised premises would be required for public purpose, the lessor could re-enter the premises and the only liability fastened is to pay compensation to the lessee "which would not exceed the amount or the proportionate part as the case may be, of the premium paid before the execution of these presents", together with the cost or the then value, whichever be less, of the buildings erected on the resumed land by the lessee in accordance with the terms of the lease.
11. xxx
12. xxx
13. xxx
14. We would, therefore, conclude by saying that for fixing the annual value of the premises at hand, it is the market value of the site and land attached to the house or building which has to be taken note of. As to what would be the market value is, however, a matter which has to be worked out by the authority concerned keeping
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NC: 2026:KHC:7603 WP No. 15790 of 2022 HC-KAR in view the restrictive clauses of each of the lease deeds, bearing in mind what has been stated in this regard in Balbir Singh case. The notional market value shall have to be discounted appropriately, as the restrictions subject to which leases were granted, would undoubtedly depress the same."
10. Therefore, there appears to be considerable force in the submission being made by the learned counsel for the petitioner. In that, while determining the market value for the purpose of the lease, the authorities may also have to refer / advert to the terms of the lease and arrive at a conclusion that if any of the terms of the lease having an effect of causing restrictive use of property, resulting in limiting its usage, requiring discount of notional market value, the same may also have to be borne in the mind of authorities while determining the market value.
11. Accordingly, this Court in the light of the above factual and legal aspect of the matter, the following:
ORDER
(i) Writ Petition is Partly Allowed.
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NC: 2026:KHC:7603 WP No. 15790 of 2022 HC-KAR
(ii) As regards relief No.1, The Order dated 14.06.2022, passed by the respondent No.1 in Case No.Stp(Appeal)/01/2022, vide Annexure-A and the order dated 06.12.2021, passed by the respondent No.2 in Case No.Dus/Sjn/25/2020-21 vide Annexure- B are quashed.
(iii) As regards relief No.2 is concerned, the same will be subject to the outcome of the order to be passed by the respondent No.2.
(iv) The matter is remanded to respondent No.2, who shall take into consideration the terms of the lease and pass a reasoned order as to if there are any covenants in the lease, which would cast / impose restriction on the usage of the property, ultimately having effect on the market value of the property and thereafter determine the market value of the property.
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NC: 2026:KHC:7603 WP No. 15790 of 2022 HC-KAR
(v) The respondent No.2 may also have recourse to the judgment of the Hon'ble Apex court referred to above for the purpose of determining the 'annual value'.
(vi) It is made clear that this Court has not expressed any opinion as to market value and it is kept open to be determined by the respondent No.2, keeping in mind the aforesaid factors and pass order, one way or the other, within an outer limit of sixty days from the date of receipt of certified copy of this order.
Sd/-
(M.G.S. KAMAL) JUDGE JJ List No.: 1 Sl No.: 25