Delhi District Court
M/S. Lastango Fashions Pvt. Ltd vs Collector Of Stamp/Sdm (Hauz Khas) on 2 January, 2014
IN THE COURT OF SHRI R.K. GAUBA: DISTRICT &
SESSIONS JUDGE (SOUTH) : SAKET NEW DELHI
Regular Civil Appeal No. 47/2013
ID No.: 02406C0292882013
M/s. Lastango Fashions Pvt. Ltd.,
B52, Greater Kailash, PartI,
New Delhi 110048. ... Appellant
Versus
1. Collector of Stamp/SDM (Hauz Khas)
Saket, M.B. Road, New Delhi.
2. SubRegistrarV (South)
Old Tehsil Building, Mehrauli,
New Delhi 110030. ... Respondents
Instituted on: 21.10.2013
Judgment reserved on: 17.12.2013
Judgment pronounced on: 02.01.2014
J U D G M E N T
1. This appeal preferred has been under section 47A (4) of Indian Stamp Act, 1899 (as in force in National Capital Territory of Delhi) to assail the order dated 20.09.2013 passed by the Sub Divisional Magistrate (SDM) in his capacity as Collector of R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 1 of 20 Stamps (Hauz Khas) imposing a penalty of Rs. 10,00,000/ and requiring the appellant to pay Rs. 14,83,234/ in the context of the sale deed submitted in the Office of Sub Registrar (South) regarding transfer of property bearing No. 1A, B40, Greater Kailash, PartI, New Delhi.
2. On notice, the respondents have appeared to contest the appeal, challenging, at the threshold, the maintainability in which regard a note of synopsis has been submitted.
3. I have heard Shri Pradeep Mishra, Advocate assisted by Shri Daleep Dhyani, Advocate for the appellant and Shri Ajay Sharma, Advocate for the respondents at length. I have gone through the record.
4. The brief background facts need to be taken note of at the outset.
5. It is the case of the appellant that, on his application moved on 19.05.1982, M/s. Bhatia Apartment Promoter and Buildings through Shri N.K. Bhatia, A15, Kailash Colony, New Delhi had allotted flat No. 1A at ground floor in the proposed building situate at B40, Greater Kailash, New Delhi vide allotment letter dated 28.11.1984 for total consideration of Rs. 4,00,000/ which was paid through cheques whereupon the possession of the said R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 2 of 20 flat (hereinafter referred to as "the property") was delivered to the appellant on 28.11.1984. The appellant claimed that he has remained in occupation of the said flat ever since and the property therein has been mutated in his favour by the Municipal Corporation of Delhi (MCD) in 1991. The builder/vendor did not execute a proper sale deed in favour of the appellant in spite of legal notice dated 22.06.2002. For this reason, the appellant was constrained to file a civil suit (No. 122 of 2004) for specific performance which was decreed by the court of Shri A.S. Yadav, the then Additional District Judge (ADJ), Delhi vide judgment dated 02.07.2004. In spite of the decree of the suit for specific performance in favour of the appellant, the vendor/judgment debtor did not take the necessary steps due to which the appellant was constrained to take out execution proceedings in 2011.
6. The appellant further submits that the executing court presided over by Shri Rakesh Kumar, ADJ vide order dated 21.12.2011 appointed the civil Nazir (Shri Rajbir Singh) for getting the sale deed executed in favour of the appellant and appointed 03.01.2012 as the specific date for such purpose. The nominee of the court executed the sale deed in favour of the appellant in R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 3 of 20 the office of SubRegistrar (South) on 03.01.2012 and submitted the document for necessary registration. The SubRegistrar (South) did not register the sale deed taking exception to the value of the property being reflected in the document as Rs. 4,00,000/. In the tentative opinion of the SubRegistrar (South), the value of the property would come to Rs. 84,53,900/. He, thus, found the stamp duty of Rs. 24,000/ (as paid) to be deficient. In his opinion, at the valuation of Rs. 84,53,900/, the instrument was chargeable at Rs. 5,07,234/ under Article 23 of Schedule 1A of the Indian Stamps Act, 1899 read with Section 147 of Delhi Municipal Corporation Act, 1957 (DMC Act). The SubRegistrar, thus, concluded that there was a deficiency in payment of stamp duty to the extent of Rs. 4,83,243/.
7. On 21.02.2012, the SubRegistrar impounded the document under section 33 of Indian Stamp Act, 1899 and referred the matter for further necessary action, under section 40 of the said Act, to the Collector of Stamps.
8. It is admitted case for the appellant that upon receiving the said reference under section 33 read with section 40 of Indian Stamp Act from the the SubRegistrar, the Collector of Stamps issued notice to him on 27.12.2012 to which a reply was submitted. The R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 4 of 20 Collector of Stamps passed the final order in the matter on 20.09.2013 rejecting the contention of the appellant that the existing circle rates, as in force at the time of registration of the document, would not apply since the sale deed was being executed pursuant to decree of the civil court in the suit for specific performance. In the opinion of the Collector of Stamps, the stamp duty is leviable at the rates applicable "at the time of execution of the instrument". It may be added here that, during the course of hearing, the counsel for the respondents referred to section 33 (2) and explanation appended to section 47A of Indian Stamps Act to submit that the contentions of the appellant to the contrary were against the letter and spirit of the law on the subject.
9. Be that as it may, the appellant has come up in appeal under section 47A (4) of Indian Stamps Act to contend that the view taken by the Collector of Stamps was incorrect, in as much as the reference by the SubRegistrar under section 33 to the former was improper on account of he having failed to apply the correct procedure as envisaged under section 47A, inserted by way of local amendment primarily to deal with the situation where the registering officer (when called upon to register a R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 5 of 20 document transferring a property) finds the valuation to be deficient.
10.Per contra, the respondents argue that recourse to Section 33 by the SubRegistrar leading to order under Section 40 of Indian Stamp Act is within the scheme of the law and so can not be taken exception to. It is argued that since Section 47A has not been invoked, the appeal under that provision does not lie.
11. In support of the above contention, reliance is placed on the view taken by Hon'ble High Court in Sudeer Associates Vs. Union of India & Others [W.P. (C) 1807779/2006 decided on 06.05.2009], Seema Grover Seth Vs. Govt. of NCT of Delhi & Others [W.P. (C) 13122/2009 decided on 08.11.2011] and Advent Hospitality (P) Ltd. Vs. Govt. of NCT of Delhi & Anr. [W.P. (C) 4397/2013 decided on 11.10.2013]. The respondents also refer to judgment in Jt. Sub RegistrarI Vs. Prasanth Chandran, AIR 2005 Mad 354.
12.It is necessary at this stage to take note of the relevant provisions of Indian Stamp Act, 1899. They are as under : "33. Examination and impounding of instruments (1) Every person having by law or consent of parties authority to receive R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 6 of 20 evidence, and every person in charge of a public office, except an officer of police before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall if it appears to him that such instrument is not duly stamped, impound the same.
(2) For that purpose every such person shall examine every instrument, so chargeable and so produced or coming before him order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in India when such instrument was executed or first executed:
Provided that (a) nothing herein contained shall be deemed to require any Magistrate of Judge of a Criminal Court to examine or impound, if he does not think fit to do, any instrument coming before him in the course of any proceedings other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1985 (5 of 1898);
(b) in the case of a Judge of a High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf.
(3) For the purposes of this section, in cases of doubt
(a) the State Government may determine what offices shall be deemed to be public offices; and R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 7 of 20
(b) the State Government may determine who shall be deemed to be persons in charge of public offices.
38.Instruments impounded how dealt with (1) Where the person impounding an instrument under section 33 has by law or consent of parties authority to receive evidence and admits such instrument in evidence upon payment of a penalty as provided by section 35 or of duty as provided by section 37, he shall send to the Collector an authenticated copy of such instrument, together with a certificate in writing, stating the amount of duty and penalty levied in respect thereof, and shall send such amount to the Collector, or to such person as he may appoint in this behalf.
(2) In every other case, the person so impounding an instrument shall send it in original to the Collector.
40. Collector's power to stamp instrument impounded - (1) When the Collector impounds any instrument under section 33, or receives any instrument sent to him under section 38, sub section (2), not being an instrument chargeable with a duty not exceeding ten naye paise only for a bill of exchange or promissory note, he shall adopt the following procedure :
(a) If he is of opinion that such instrument is duly stamped, or is not chargeable with duty, he shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable, as R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 8 of 20 the case may be :
(b) If he is of opinion that such instrument is chargeable with duty and is not duly stamped, he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of the five rupees; or if he thinks fit, an amount not exceeding ten times the amount of proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees;
Provided that when such instrument has been impounded only because it has been written in contravention of section 13 of section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section.
(2) Every certificate under clause (a) of sub section (1) shall for the purposes of this Act, be conclusive evidence of the matters stated therein.
(3) Where an instrument has been sent to the Collector under section 38, subsection (2), the Collector shall, when he has dealt with it as provided by the section, return it to the impounding officer.
56. Control of, and statement of case to, Chief Controlling Revenueauthority (1) The power exercisable by a Collector under Chapter IV and Chapter V and under clause (a) of the first proviso to section 26 shall in all cases be subject to the control of the Chief Controlling Revenueauthority.
R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 9 of 20 (2) If any Collector, acting under section 31, section 40 or section 41, feels doubts as to the amount of duty with which any instrument is chargeable, he may draw up a statement of the case, and refer it, with his own opinion thereon, for the decision of the Chief Controlling Revenueauthority.
(3) Such authority shall consider the case and send a copy of its decision to the Collector who shall proceed to assess and charge the duty (if any) in conformity with such decision."
(emphasis supplied)
13.As observed at some length in the judgments in the cases of Sudeer Associates (supra) and Seema Grover Seth (supra), the law enacted by union legislature has been subjected to local amendment by the Government of NCT of Delhi with the prime objective of dealing with cases wherein payment of proper stamp duty was evaded in the context of instruments transferring properties. Section 47A brought in force in the Union Territory of Delhi reads as under : "47A. (1) If the Registering Officer, while registering any instrument transferring any property, has reason to believe that the value of the property or the consideration, as the case may be has not been truly set forth in the instrument, he may, after registering such instrument, refer the same to the Collector, for R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 10 of 20 determination of the value of the property or the consideration, as the case may be, and the proper duty payable thereon.
(2) On receipt of a reference under subsection (1), the Collector shall, after giving the parties reasonable opportunity of being heard and after holding an enquiry in such manner as may be prescribed by rules made under this Act, by order, determine the value of the property or the consideration and the duty aforesaid; and the deficient amount of duty, if any, shall be payable by the person liable to pay the duty and, on the payment of such duty, the Collector shall endorse a certificate of such payment on the instrument under his seal and signature.
(3) The Collector may, suo mottu, within two years from the date of registration of any instrument not only referred to him under sub section 1, call for and examine any instrument for the purpose of satisfying himself as to the correctness of its value or consideration, as the case may be, and the duty payable thereon, and if after such examination, he has reason to believe that the value or consideration has not been truly set forth in the instrument, he may determine the value or the consideration and the duty aforesaid in accordance with the procedure provided for in subsection (2), and the deficient amount of duty; if any, shall be payable to the person liable to pay the duty and, on payment of such duty, the Collector shall endorse a R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 11 of 20 certificate of such payment on the instrument under his seal and signature.
(4) Any person aggrieved by an order of the Collector under subsection (2) or subsection (3) may appeal to the District Court within whose jurisdiction the property transferred is situated.
(5) An appeal under subsection 4 shall be filed within thirty days of the date of the order sought to be appealed against.
(6) The District Court shall hear and dispose of the appeal in such manner as may be prescribed by rule under this Act."
14. Prior to the insertion of section 47A, the scheme of Indian Stamp Act, 1899 was same in all the States and Union Territories of India. The aforementioned provisions of Indian Stamp Act with panIndia applicability were considered by Hon'ble Madras High Court in the case of Jt. SubRegistrarI (supra) and following observations were made in paras 8, 11 and
13.
"8. ............ Under Section 31 of the Indian Stamp Act, the Collector has been empowered to determine the duty (if any) with which in his judgment, the instrument that is brought before him is chargeable whether such instrument was executed or not and whether properly stamped or R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 12 of 20 not. Under Section 33 (1) (b), irrespective of what it provided under Section 31, the Collector before whom any instrument is brought for determining the duty with which the instrument is chargeable can impound the same if such instrument is not duty stamped. Under Section 40 (1)(b) of the Act, the Collector, who after impounding an instrument under Section 33 is of the opinion that such instrument is chargeable with duty is not duly stamped, can require the payment of proper duty or the amount required to make up the same together with a penalty of five rupees; or if he thinks fit, an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees. While Section 33, 38 and 40 fall under Chapter IV of the Act. Section 56 of the Act prescribes that the powers excercisable by a Collector under Chapter IV and V acting under Section 40 of the Act, develops any doubt as to the amount of the duty with which any instrument is chargeable, can draw up a statement of the case, and refer it, with his own opinion thereon, for the decision of the Chief Controlling Revenue Authority. Thereafter, it is for the Chief Controlling Revenue Authority to consider the case and send a copy of its decision to the Collector to proceed further...............
11. A conspectus reading of Sections 31,33 (2) and 40 (1) (b) along with the above referred to Notifications stated to have been passed under R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 13 of 20 Section 2 (9) of the Indian Stamp Act, and the Indian Registration Act, makes it clear that whomever has been notified as "Collector" could impound a document when it comes before him and when it appears to him that such instrument is not duly stamped. Thereafter by virtue of Section 40 (1)(b), penalty as prescribed under the said provision. After any such order is passed by the Collector, invocation of Section 56 automatically coming into play.
13. Under Section 56 (1), the powers exercisable by a Controller under Chapter IV and V as well as Clause (a) to the first proviso to Section 26, in all cases will be subject to the control of Chief Controlling Revenue Authority. Under Subsection (3) of Section 56. It is provided that the Chief Controlling Revenue Authority should consider the case and send a copy of its decision. Therefore a conjoint reading of Section 40 (1)(b) and 56 makes it clear that the Chief Controlling Revenue Authority has been invested with the necessary appellate jurisdiction over the decision of the Collector in respect of determination of any duty payable on any instrument in exercise of his powers under Section 40 (1)(b). In this context, it will also be relevant to refer to Section 57 (1) of the Act wherein, the Chief Controlling Revenue Authority has been invested with the powers to make a further reference to this Court for its decision.
Section 57 (1) is couched in the following words.
"The Chief Controlling Authority may state in a R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 14 of 20 case referred to it under Section 56, Subsection (2), or otherwise, coming to its notice, and refer such case, with its own opinion thereon."
(emphasis supplied)
15.The counsel on both sides agreed that a sub registrar is a person "in charge of a public office" who is empowered by section 33 of Indian Stamp Act to "impound" "any instrument" chargeable with duty upon it being produced before him or it coming up in the "performance of his functions" in the event of it appearing to him to be one "not duly stamped".
16.If one goes by the position of the law prior to insertion of section 47A by Delhi Government, an instrument of such nature presented before the registering authority for recording the transfer of an immovable property would be subjected to scrutiny by such authority for reaching satisfaction about the due payment of stamp duty payable thereupon and in case the stamp duty paid is found to be deficient, to "impound" the instrument and refer it "in original" under section 38 to the Collector of Stamps who is then required to take further action in terms of section 40. The counsel on both sides also agreed that the Collector of Stamps has been vested with the jurisdiction, by virtue of section 40 (1) (b), to not only require R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 15 of 20 realization of the deficient stamp duty but also to impose "penalty" which may extend to an amount ten times the amount of proper duty or the deficient portion thereof.
17. Under the aforesaid scheme, the document is returned under section 40 (3) to the "impounding officer" (here, the sub registrar) after the order has been passed requiring the deficient stamp duty to be paid with the penalty as imposed under section 40 (1).
18.The counsel on both sides further agreed that by virtue of section 56 (1), the orders passed by the Collector of Stamps under section 40 are subject to the "control" of the "Chief Controlling Revenue Authotity". Both sides fairly conceded that this provision contained in section 56 (1) has always been considered and understood to vest in the Chief Controlling Revenue Authority, a revisional jurisdiction over and above the power of the Collector under section 40. It may be added that in para 13 of the judgment in the case of Jt. Sub Registrar (supra) which has been extracted above, Hon'ble Madras High Court equated it with "appellate jurisdiction".
19.With the insertion of section 47A in the Indian Stamp Act, there is now a special provision in place in Delhi to deal with R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 16 of 20 cases wherein instrument transferring a property when brought before the registering authority are found to be under valued and consequently with deficient payment of stamp duty. Under the scheme of section 47A, the registering officer first registers the instrument and, thereafter, considers the question of valuation and for such purposes, refers the matter to the Collector of Stamps who is vested with the power and jurisdiction to determine "the value of the property or the consideration" and the proper duty payable thereon under section 47A (2). The Collector of Stamps holds an inquiry in which he gives opportunity to the parties of being heard and, thereafter, passes the necessary order determining the value of the property or the consideration and the stamp duty payable. The order of the Collector of Stamps if passed under section 47 A (2), is subject to challenge in appeal before this court under section 47A (4).
20.In the case at hand, even the pleadings of the appellant show that the provisions contained in section 47A (1) or (2) have not been resorted to either by the subregistrar or by Collector of Stamps. Instead, the route of section 33 leading to the order of Collector of Stamps under section 40 of Indian Stamps Act has R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 17 of 20 been taken to determine the liability towards stamp duty on the instrument in question.
21. The counsel for the appellant was at pains to argue that, after insertion of section 47A, the registering authority did not have a choice as it was bound to follow the procedure laid down in law for the special category of valuation at the time of registration of transfer documents. In his submission, the registering authority should have first registered the instruments and, thereafter, made over the case to the Collector of Stamps for determining the value and the stamp duty chargeable thereupon. He argued that the provisions contained in the Indian Stamp Act, after insertion of section 47A, require harmonious construction. He submitted that even if the subregistrar in the case at hand has not referred to section 47A and has instead resorted to his jurisdiction under section 33 (1), the effect of the special provision (47A) cannot be wished away. He submitted that the demands of harmonious construction would weigh in favour of all these provisions to be read together, thus rendering the remedy of appeal envisaged in section 47A (4) before this court available to a party aggrieved with the order of Collector of Stamps, even if it may have been passed in exercise of R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 18 of 20 jurisdiction under section 40.
22.The Indian Stamp Act is a fiscal/taxation statute. It requires to be construed strictly. Undoubtedly, with no corresponding amendments carried out in section 33 and 40, the insertion of section 47A by way of local amendment has created some confusion. When dealing with cases of such nature as at hand, two courses seem to have been made available to the registering authority; one, through the erstwhile route of section 33 (1) and, the other, by way of the new power conferred by section 47A (1). The difficulty with section 47A appears to be stemming from the fact that it does not confer on the Collector of Stamps the power to impose penalty in the manner possible under section 40 (1) (b). But then, there is no guideline in the law as to in which factsituation the registering authority would resort to section 47A (1) and in what situation the existing law under section 33 (1) would be the proper course. There can, however, be no doubt that the law as it stands does not permit both routes to be intermixed.
23.In the appeal at hand, the question as to whether the registering authority was within its rights to ignore section 47A while resorting to section 33 of Indian Stamp Act does not even arise. R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 19 of 20 The very fact that section 47A has not been taken recourse to, either by the subregistrar or by the Collector of Stamps, the remedy of appeal under section 47A (4) cannot be invoked, in as much as it is not available against an order passed under section 33 read with section 40. For an order under the latter category, the jurisdiction of Chief Controlling Revenue Authority under section 56 (1) is the proper remedy.
24.For the foregoing reasons, the appeal is held to be not maintainable. It stands disposed of with these observations.
25.File of the appeal be consigned to record room. Announced in open Court today on this 2nd day of January, 2014 (R.K. GAUBA) District & Sessions Judge (South) Saket/New Delhi R.C.A. No. 47/13 M/s. Lastango Fashions Pvt. Ltd. Vs. Collector of Stamp & Anr 20 of 20