Andhra HC (Pre-Telangana)
Meghraj Rathi And Anr. vs Joint Sub-Registrar And Anr. on 14 June, 2005
Equivalent citations: AIR2006AP140, 2005(5)ALD178, 2005(4)ALT419, AIR 2006 ANDHRA PRADESH 140, 2006 ALL LJ EE 173, 2006 (3) ALL LJ NOC 610, 2006 (3) AKAR (NOC) 270 (AP), 2006 A I H C (NOC) 62 (AP), (2005) 5 ANDHLD 178, (2005) 3 RECCIVR 766, (2005) 4 ANDH LT 419
Author: L. Narasimha Reddy
Bench: L. Narasimha Reddy
ORDER L. Narasimha Reddy, J.
1. This revision, under Article 227 of the Constitution of India, is directed against the order passed by the Primary Authority under Section 47 (sic. 47-A) of the Indian Stamp Act (for short 'the Act'), as confirmed by the Appellate Authority, under that provision.
2. Petitioners purchased premises Door Nos. 6-9-31 to 45 of Santhapeta, of Vizianagaram town, from one Lakshmi Chand Nathani, for a consideration of Rs. 27,05,600/-. They presented a sale deed for registration before the Joint Sub-Registrar R.O. (OB), Vizianagaram. The sale deed was written on a stamp paper, worth Rs. 3,24,700/-.
3. The registering authority took the view that the petitioners ought to have paid the stamp duty of Rs. 4,27,620/-, on the assumption that the market value of the property is Rs. 35,63,500/-. In arriving at this figure, he relied upon the guidelines contained in Circular dated 21-08-2001 issued by the State Government. Since the petitioners did not agree to pay the deficit stamp duty, he referred the matter to the District Registrar and Collector, Vizianagaram, the 2nd respondent herein, for adjudication under Section 47-A of the Act. The 2nd respondent passed an order dated 30-12-2002, determining the market value of the property as Rs. 33,58,616.20, and required the petitioners to pay the differential amount.
4. Aggrieved by the order of the 2nd respondent, the petitioners filed C.M.A. No. 3 of 2003 before the Court of Senior Civil Judge-cum-Appellate Authority, Vizianagaram under Section 47-A of the Act. The appeal was dismissed through order dated 7-2-2004.
5. Sri Venkateswara Rao Gudapati, learned counsel for the petitioners submits that the very basis adopted by the registering authority, primary and appellate authorities, under Section 47-A, is contrary to the provisions of the Act and without any basis. He submits that the authorities were guided by the potential of the premises, than its actual value. He also contends that an artificial formula was adopted by the 2nd respondent, by dividing the property into commercial premises, residential premises, and land, separately. According to the learned counsel, such a division is impermissible and the only basis for invoking the provisions under Section 47-A is to see whether the properly in question has been under valued.
6. Learned Government Pleader for Appeals on the other hand, submits that the market value of the property would naturally depend upon the probable use that it can be put to, and no exception can be taken, to the formula adopted by the 2nd respondent.
7. Registration of a transaction, which was initially conceived as a mechanism to provide a conclusive and authoritative proof, had slowly been treated as a source of revenue to the Government. With the passage of time, the 2nd aspect assumed a greater emphasis than the first one. It was in this context, that Section 47-A came to be enacted. Under that provision, if the registering authority has any reason to believe that the market value of the subject-matter of the instrument has not been truly set forth, he can refer the matter to the Collector, for determination, by keeping the very registration pending.
8. The subject-matter of the present proceedings, is a building, constructed over an area of about 350 sq. yards. The petitioners purchased the same for a consideration of Rs. 27,05,600/-. Consideration of any property would depend upon the factors like, the need and purpose of the seller in alienating the property, and the corresponding willingness of the purchaser. If the need of a seller is imminent and the purchaser is reluctant, the property may be sold at relatively lesser price. On the other hand, if the sale is accentuated, more by the need of the purchaser, the seller would be in a better position to dictate terms and the consideration is bound to be higher. No hard and fast rule can be laid, to find out whether the market value for a transaction is adequate or not. The matter has to be determined on broader aspects, and on the basis of attendant circumstances. While taking a decision under Section 47-A, the registering authority is required to form an opinion on the basis of objective criteria. His guesswork, that the property may fetch a higher price, does not constitute the basis for initiating steps under Section 47-A.
9. In the instant case, the registering authority took into account certain guidelines in Circular dated 21-8-2001. This Circular was issued as a supplement to G.O.Ms. No. 35, dated 27-2-1997. It prescribes the procedure to determine Annual Rental Value in various local authorities, such as, municipalities, municipal corporations etc. The G.O., in turn, was issued for "rationalization of the present system, on selection and fixation of rent, for the private buildings taken on lease by the Government departments". Applying the same, in the context of determining the market value, while registering a document, is a clear case of, either non-application of mind, or perverse exercise of power.
10. The curious part of the matter is that the 2nd respondent has not only applied the guidelines issued for fixation of rent for the buildings taken by the Government on lease, in the context of registering a document, but went a step further and had proceeded to evaluate the property under three separate heads, viz., (a) commercial premises, (b) residential building, and (c) the site. For arriving at the value of the premises for commercial and residential building, he appears to have proceeded as though the structure exists in air, and separately determined the value of the land. Thus, the whole exercise of power under Section 47 (sic. 47-A) by the 2nd respondent was arbitrary, irrational and contrary to the very letter and spirit of the very activity of registration. Such a lopsided implementation of the provisions of the Registration Act, and Stamp Act, cannot be countenanced. It is rather unfortuate that a judicial forum, which was conferred with appellate powers, did nothing more than put its seal of approval on a patently illegal order passed by the 2nd respondent herein.
11. A perusal of the order of the 2nd respondent, or for that matter, that of the appellate authority, does not disclose that any finding was recorded by them, that the petitioners have suppressed the actual value of the property. Through a catena of decisions, this Court held that even a basic value register cannot constitute the guiding factor, and when consideration is found truly set forth in the instrument, the registering authority cannot deny the registration. [See The Vidya Nagar Housing Co-op. Society Ltd. v. The State of A.P., and Jawajee Nagnatham v. Revenue Divisional Officer .
12. For the foregoing reasons, the C.R. P. is allowed, and the orders passed by the 2nd respondent and the lower appellate Court are set aside. The registering authority is directed to register and release the sale deed in favour of the petitioners, without insisting on payment of any additional stamp duty. The stamp duty, if any, paid by the petitioners, as a condition precedent, while making a reference under Section 47-A, or to avail the remedy of appeal, shall be refunded to the petitioners, within four weeks from the date of receipt of copy of this order. There shall be no order as to costs.