Kerala High Court
Periyar Real Estates vs State Of Kerala on 17 January, 2002
Author: B.N. Srikrishna
Bench: B.N. Srikrishna, K. Thankappan
JUDGMENT B.N. Srikrishna, C.J.
1. All these petitions under Article 226 of the Constitution of India raise a common question of law and, therefore, they can be properly disposed of by a common judgment.
2. By an order dated 23rd October, 2001, rendered in O.P. Nos. 16943, 17651 and 18089 of 2001, a learned Judge of this Court (G. Sivarajan, J.) entertained a doubt as to the correct position in law with regard to the construction of Section 45-B of the Kerala Stamp Act, 1959 and referred three original petitions for decision thereupon by a Division Bench. In view of the importance of this question, while the issue was pending before the Division Bench of this Court, the other matters were also referred to the Division Bench of this Court.
3. After hearing learned counsel, this Court formulated the question of law to be decided by this Court as under:-
"When there is a dispute as to the stamp duty payable on the instrument subject to registration, after registration, is the registering authority under the provisions of the Kerala Stamp Act entitled to retain possession of the original document or is it obliged to return the document and take appropriate proceedings under the Act?"
4. For answering the question of law, it is not necessary to go into the details of facts in each individual petition. Suffice it to say that, in each of these petitions some instrument was tendered for registration under the provisions of the Indian Registration Act. After registering the instrument, the Registering Officer, who had reason to believe that the value of the property or the consideration, as the case may be, had not been truly set forth in the instrument, decided to refer it to the Collector for determination of the value or consideration, as the case may be, and proper duty payable thereon. Consequently, the registered instrument is not being returned to the petitioners pending adjudication of the proper duty thereupon by the Collector under Sub-section (2) of Section 45-B of the Kerala Stamp Act, 1959. The petitioners are aggrieved by this action of the Registering Officer and they contend that there is no warrant or authority vested in the Registering Officer under Section 45-B of the Act to retain possession of the instrument, once the formalities of registration have been completed and the instrument has been registered. Hence, it has become necessary to construe the provisions of Section 45-B so as to answer the question referred to and formulated by this Bench in the beginning of the judgment.
5. Entry 91 in List-I of Seventh Schedule invests the Parliament with exclusive power to make Laws with respect to "rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts." Entry 6 of List-III (Concurrent List) empowers both Parliament and State Legislature to make Laws on the subject of "transfer of property other than agricultural land; registration of deeds and documents". Entry 63 in List-II (State List) empowers the State Legislature exclusively to make laws on "rates of stamp duty in respect of documents other than those specified in the provisions of List I with regard to rates of stamp duty".
6. The Registration Act, 1908 was enacted in British India as a consolidating Act relating to the subject to registration of documents. Part-II of this Act deals with the duties and powers of registering officers. Section 51 requires the Registering Officers to keep books as prescribed thereunder in different parts. Under Section 52, when the document is presented for registration, the day, hour and place of presentation, and the signature of every person presenting a document for registration, shall be endorsed on every such document at the time of presenting it. The Registering Officer shall issue receipt for such document to the person presenting it. The document admitted to registration shall, without unnecessary delay, be copied in the book appropriate therefore according to the order of this admission and all such books are to be periodically authenticated in the manner prescribed. Section 58 deals with particulars to be endorsed on the document admitted to registration. Section 59 provides that endorsements be dated and signed by the Registering Officer, Section 60 requires the endorsement of a certificate on registered document indicating the particulars specified thereunder. Then comes Section 61, which is material for our purpose. Section 61 reads as under:-
"61. Endorsements and certificate to be copied and document returned:- (1) The endorsement and certificate referred to and mentioned in Sections 59 and 60 shall thereupon be copied into the margin of the register book, and the copy of the map or plan (if any) mentioned in Section 21 shall be filed in Book No. 1.
(2) The registration of the document shall thereupon be deemed complete, and the document shall then be returned to the person who presented the same for registration, or to such other person (if any) as he has nominated in writing in that behalf on the receipt mentioned in Section 52."
7. Thus, it would appear that upon an instrument or document being presented for registration, after the endorsement and certificate mentioned in Sections 59 and 60 are made thereupon or copied into the margin of the register book and copy of the map or plan after any mention in Section 21 is filed in Book No. 1, the registration for the purpose of the Act is deemed to be completed. Sub-section (2) of Section 61 says that the document "shall be returned" to the person who presented the instrument for registration, or to such other person who has been nominated to receive the document in the receipt given under Section 52.
8. The Kerala Stamp Act, 1959 is referable to the powers of the State Legislature under Entry 63 in List-II of Seventh Schedule of the Constitution of India and is intended to prescribe rates of stamp duty with regard to different types of instruments. Section 2(b) of the Kerala Stamp Act, 1959 defines the expression "chargeable" as the proper duty payable on the instrument as prescribed in the Schedule. Clause (e) of Section 2 defines the expression "duly stamped" as applied to an instrument to mean that the instrument bears an adhesive or impressed stamp of not less than the proper amount and that such stamp has been affixed or used in accordance with the law for the time being in force in the territories of the State of Kerala. Section 3 is the charging section and provides for the different rates of stamp duty chargeable with regard to different types of instruments as provided in the Schedule to the Act. Section 28 requires that the consideration, if any, and all others facts and circumstances affecting the chargeability of the instrument with duty, or the amount of the duty with which it is chargeable, shall be fully and truly set forth therein. Section 28-A deals with fixation of fair value of land in different areas by the Revenue Divisional Officer and notification thereof to the public by publication in such manner as provided under the rules. Under Section 31 the collector is empowered to adjudicate the proper stamp duty payable in respect of an instrument brought before him whether executed or not and whether previously stamped or not. Section 33 provides that every person having by law or consent of parties authority to receive 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. It also empowers such person to examine every instrument so chargeable and so produced or coming before him, in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in the State when such instrument was executed. In other words, this Section enables the officer mentioned therein to impugned a document, if it does not appear that the stamps chargeable on the instrument with regard to the consideration stated in the instrument have been affixed. Section 37 provides for dealing with such impound instruments and recovery of short paid stamp duty. There are provisions with regard to levy of penalty with which we are not concerned. Under Section 45-A, when a Registering Officer, while registering an instrument transferring any land, other than an instrument of partition, settlement or gift, chargeable with duty, shall verify whether the value of land or the consideration set forth in the instrument is the fair value of that land. If the value of the land or the consideration set forth in the instrument is not the fair value of the land fixed under Section 28-A, the Registering Officer is empowered to make an order directing payment of proper stamp duty on the fair value of the land fixed within the prescribed period and register it only upon payment of such deficit stamp duty. There is a provision for appeal by the aggrieved person and such appeal has to be disposed of by the Collector in the manner prescribed. Then comes Section 45-B, which is the Section which is required to be construed by us. This section was originally not there in the parent Act when the parent Act was brought into force.
9. The Kerala Stamp Act, 1959 (Act 17 of 1959) was brought into force with effect from 28.5.1959 after being reserved for and receiving the assent of the President. By an amendment introduced in the parent Act by Section 6 of Amendment Act 17 of 1967, with effect from 26.8.1967, Section 45-A, which is identical in terms with the present Section 45-B, was inserted in the parent Act. Amending Act 14 of 1988, which was reserved for and received the assent of the President, came into force on 22.4.1988. Section 6 of this Amending Act renumbered the existing Section 45-A as Section 45-B and introduced a new Section 45-A. Act 16 of 1991, which was brought into effect from 11.1.1991, deleted Section 45-A. By Finance Act of 1994, the deleted Section 45-A was re-introduced in the present Act. This is the history of the amendments carried out in the Act so far as Section 45-A and Section 45-B are concerned.
10. The contentions urged revolve on the construction of Section 45-B, which is in the following terms:-
"45-B. Instruments under valued how to be dealt with- (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 determination of the value or consideration, as the case may be, and the proper duty payable thereon."
11. A reading of the above section shows that the Registering Officer while registering an instrument transferring any property, if he has reason to believe that the value of the property/consideration has not been truly set forth in the instrument, may register the instrument and thereafter refer "the same" to the Collector for determination of the value or consideration and the proper duty payable thereon. The stand taken by the Registering Officer is that, in every case where there is reason to believe that the true value of the property/consideration has not been set forth in the instrument presented for registration, he is entitled to retain possession of the instrument and refer the instrument for determination of the true value or consideration for decision of the Collector under Sub-section (1). When a reference is made under Section 45-B(1), the Collector has to decide the issue in the manner prescribed therein and decide the amount of additional duty payable and upon it being paid, endorse a certificate of such payment of additional duty on the instrument with seal and signature.
Stand of the petitioners:
12. Learned counsel appearing for the petitioners contended that the expression 'refer the same' does not mean reference of the instrument, but reference of the doubt, reason or the belief of the Registering Officer that the true value of the property/consideration has not been set forth in the instrument.
13. The expression 'refer' is defined in the New Oxford Dictionary, 1998 Edition, as "mention or allude to; direct the attention of someone to; describe or denote." If it is with respect to a matter, it means "pass a matter to (another body, typically one with more authority or expertise) for a decision". The expression "reference" is defined as "action of mentioning or alluding to something; the sending of a matter for decision or consideration to some authority." In Black's Law Dictionary, Seventh Edition, the expression "reference" is defined thus: "The act of sending or directing to another for information, service, consideration, or decision; specifically, the act of sending a case to a master or referee for information or decision". Article 143 of the Constitution of India vests power in the President to "refer" a question of public importance to the Supreme Court for consideration. Section 113 of the Code of Civil Procedure empowers any civil court to state a case and "refer" the same for the opinion of the High Court. Similarly, Section 395 of the Code of Criminal Procedure enables the criminal court to state a case setting out its opinion and the reasons therefor and "refer" the same for the decision of the High Court. It is not necessary to multiply such instance, but when a legislation empowers one authority to "refer" to another authority, what is conveyed is that a point of law, which is of importance and requires an authoritative pronouncement, is referred to a superior authority or to the Supreme Court, as in the case of President making a reference under Article 143 of the Constitution. Reference, therefore, properly speaking, involves conveying of a doubt or dubiety with regard to a case or matter for the purpose of eliciting an authoritative pronouncement thereupon. Normally, it is not used in the sense of transmitting a physical object, a document or an instrument, to someone else, although the doubt itself may be written down on paper. In Chapter VI of the Kerala Stamp Act, 1959 there are two provisions for reference; one is under Section 54, if a Collector entertains a doubt as to the appropriate amount of duty with which any instrument is chargeable, he may draw up a statement of the case and "refer" it with his opinion thereon, for the decision of the Government. Again, under Section 55, the Government or such other authority, as may be specified by it, may state any "case referred to it" under Sub-section (2) of Section 54 or otherwise coming to its notice, and "refer" such case, with own opinion, thereon to the High Court.
14. Not only on general principles, but also on analogy with the words used in Sections 54 and 55, the expression "refer the same" used in Section 45-B of the Kerala Stamp Act, 1959 do not refer to transmission of the instrument, but to the reference of a doubt or dispute for resolution thereof by the appropriate authority, viz., the Collector.
15. Learned counsel for the petitioners urge that, if the expression "refer the same" used in Section 45-B of the Kerala Stamp Act, 1959, is to be interpreted to mean that the Registering Officer is required to refer the original instrument to the Collector under Sub-section. (1) of Section 45-B and thereafter continue to retain possession of the document until disposal of the proceedings contemplated under Section 45-B, it would run counter to the obligation of the Registering Officer under Section 61(2) of the Registration Act. The Registration Act, 1908 is a Central Act. There is an obligation cast on the Registering Officer, under Section 61(2), of returning the document as soon as the formalities connected with the registration are-completed. The State Act cannot interfere with such obligation nor can it empower the officer to retain possession of the document, contrary to the obligation cast on him by the Central Act. It is contended that, by reason of Article 254(2) of the Constitution of India, where a law made by the Legislature of a State with respect to any matter enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament, or an existing law with respect to that matter, then the law so made by the Legislature of such State shall prevail in the State only, if it has been reserved for the consideration of the President and has received his assent.
16. What is repugnancy between two statutes is made clear in Zaverbhai Amaldas v. State of Bombay, AIR 1954 SC 752. That was a case arising under Section 107 of Government of India Act, 1935, which was pari materia with Article 254(2) of the Constitution. Relying on the judgment in Attorney General for Ontario v. Attorney-General for the Domination, (1896 (AC) 348(A) arising under the Canadian Constitution, the Supreme Court held that under our Constitution, Parliament can, acting under the proviso to Article 254(2), repeal a State law. But where it does not expressly do so, even then, the State law will be void under that provision if it conflicts with a latter "law with respect to the same matter" that may be enacted by Parliament. The crucial issue with reference to Article 254(2) is, whether the legislation is "in respect of the same matter". If the later legislation deals not with the matters which formed the subject of the earlier legislation, but with other and distinct matters though of a cognate and allied character, then Article 254(2) will have no application. The principle embodied in Article 254(2) is that when there is legislation covering the same ground, both by the Centre and by the Province, both of them being competent to enact the same, the law of the Centre should prevail over that of the State. In The Bar Council of Uttar Pradesh v. The State of U.P. and Anr., AIR 1973 SC 231, this proposition was reiterated by holding that the question of repugnancy under Article 254 can only arise in matters where both the Parliament and the State Legislature have power to pass laws, ie., where the Legislature power is located in the Concurrent List.
17. In Deep Chand v. The State of Uttar Pradesh and Ors., AIR 1959 SC 648, the Supreme Court quoted with approval Nicholas in his Australian Constitution, 2nd Edition, page 303, as to the three tests of inconsistency or repugnancy:
"1) There may be inconsistency in the actual terms of the competing statutes;
2) Though there may be no direct conflict, a State law may be inoperative because the Common Wealth law, or the award of the Common Wealth Court, is intended to be a complete exhaustive code;
3) Even in the absence of intention, a conflict may arise when both State and Common-Wealth seek to exercise their powers over the same subject matter".
Accepting these principles, the Supreme Court reformulated the test of repugnancy in the following words:-
"Repugnancy between two statutes may thus be ascertained on the basis of the following principles:-
"1) Whether there is direct conflict between the two provisions;
2) Whether Parliament intended to lay down an exhaustive Code in respect of the subject matter replacing the Act of the State Legislature;
and
3) Whether the law made by Parliament and the law made by the State Legislature occupy the same field".
18. These principles were reiterated in Ukha Kolhe v. The State of Maharashtra, AIR 1963 SC 1531, and in M. Karunanidhi v. Union of India and Anr., AIR 1979 SC 898. In paragraph 8 of the decision in M. Karunanidhi (supra) the Supreme Court postulated the test of repugnancy in the following words:-
"It is therefore obvious that in such matters repugnancy may result from the following circumstances:-
1) Where the provision of Central Act and State Act in the Concurrent List are fully inconsistent and are absolutely irreconcilable, the Central Act will prevail and the State Act will become void in view of the repugnancy.
2) Where however a law passed by the State comes into collision with a law passed by Parliament on an Entry in the Concurrent List, the State Act shall prevail to the extent of the repugnancy and the provisions of the Central Act would become void provided the State Act has been passed in accordance with Clause (2) of Article 254.
3) Where a law passed by the State Legislature while being substantially within the scope of the entries in the State List entrenches upon any of the Entries in the Central List the constitutionality of the law may be upheld by invoking the doctrine of pith and substance if on an analysis of the provisions of the Act it appears that by and large the law falls within the four corners of the State List and entrenchment, if any, is purely incidental or inconsequential.
4) Where, however, a law made by the State Legislature on a subject covered by the Concurrent List is inconsistent with and repugnant to a previous law made by Parliament,then such a law can be protected by obtaining the assent of the President under Article 254(2) of the Constitution. The result of obtaining the assent of the President would be that so far as the State Act is concerned, it will prevail in the State and overrule the provisions of the Central Act in their applicability to the State only.
Such a State of affairs will exist only until Parliament may at any time make a law adding to, or amending, varying or repealing the law made by the State Legislature under the proviso to Article 254."
The Supreme Court also pointed out in this case that there is always a presumption in favour of the constitutionality of a statute, and before any repugnancy can arise, the following conditions must be satisfied:-
1) That there is a clear and direct inconsistency between the Central Act and the State Act.
2) That such an inconsistency is absolutely irreconcilable.
3) That the inconsistency between the provisions of the two Acts is of such a nature as to bring the two Acts into direct collision with each other and a situation is reached where there is impossible to obey the one without disobeying the other.
After considering a host a deciding cases in Canada, Australia and India the Supreme Court summarised the legal proposition emerging as under:-
"35. On a careful consideration, therefore, of the authorities referred to above, the following propositions emerge:
1) That in order to decide the question of repugnancy it must be shown that the two enactments contain inconsistent and irreconcilable provisions, so that they cannot stand together or operate in the same field.
2) That there can be no repeal by implication unless the inconsistency appears on the face of the two statutes.
3) That where the two statutes occupy a particular field, but there is room or possibility of both the statutes operating in the same field without coming into collision with each other, no prepugnancy results.
4) That where there is no inconsistency but a statute occupying the same field seeks to create distinct and separate offences, no question of repugnancy arises and both the statutes continue to operate in the same field.
Now, to apply these principles.
19. As we have already referred to earlier, the Kerala Stamp Act was intended to consolidate and amend the law relating to stamps in the State of Kerala. Entry 63 in List-II of Seventh Schedule reads as under:-
"Rates of stamp duty in respect of documents other than those specified in the provisions of List-I with regard to rates of stamp duty".
This is the Entry to which the power of enacting Kerala Stamp Act can be traced. Entry 6 in List III of Seventh Schedule reads "transferor property other than agricultural land; registration of deeds and documents". Entry 44 in List-III of Seventh Schedule also reads "stamp duties other than duties or fees collected by means of judicial stamps, but not including rates of stamp duty". A contrast between Entry 63 of List-II and Entry 44 of List-III would suggest that, when it comes to the question of prescribing rates of stamp duty, it is formulated in Entry 63, which is within the exclusive legislative power of the State. Entry 44 of List-III (Concurrent List) generally deals with "stamp duties", which would empower legislation of all matters connected in substance with the subject, other than the prescription of rates. This would include machinery for collection, adjudication and so on. Similarly, on the subject of "registration of deeds and documents", Entry 6 of List-III enable both Parliament and State to legislate with regard to the subject matter. The Indian Stamp Act and the Indian Registration Act had been enacted before the Kerala Stamp Act, 1959 was brought on the statute book. Since on the question of stamp duty (Entry 44 of the Concurrent List) another legislation was being enacted by the State, it became necessary to reserve it for and obtain the assent of the President. Hence, Kerala Stamp Act, 1959 was enacted by reserving it and obtaining the assent of the President as required under Article 254(2) of the Constitution.
20. Section 45-B was not in the parent Act which received the assent of the President. Section 45-B was introduced by Section 6 of Act 17 of 1967, which was brought into effect on 26.8.1967. There is no dispute that Act 17 of 1967 was not reserved for the assent of the President and did not receive the assent of the President. It is true that Act 14 of 1988, received the assent of the President. When we read Act 14 of 1988 we find that relevant Section 6 merely provides "Section 45-A of the principal Act shall be renumbered as "45-B" and before Section 45-B, as so renumbered, the following Section shall be inserted:-
"45-A. Instruments no bearing stamp of sufficient amount as per minimum value of land how to be dealt with.-
(1) Notwithstanding anything contained in this Act, the Registering Officer shall, while registering an instrument transferring any land or of partition of property involving land chargeable with duty verify whether the value of the land or the consideration set forth in the instrument is the minimum value of that land.
(2) Whereon such verification, the Registering Officer is satisfied that the value of the land or the consideration set forth in the instrument is the minimum value of the land, he shall duly register the instrument.
(3) Where on verification the Registering Officer finds that the value of the land or the consideration set forth in the instrument is not the minimum value of land, he shall, by order, fix the minimum value of land on the basis of the minimum value land published under Section 28A and the proper stamp duty payable thereon, and on payment of the deficient amount of duty, if any, by the person liable to pay the duty, he shall duly register the instrument.
(4) Any person aggrieved by an order of the Registering Officer under Sub-section (3), may appeal to the Collector within whose jurisdiction the land is situate and the decision of the Collector thereon shall be final.
(5) An Appeal under Sub-section (4) shall be filed within thirty days of the date of the order sought to be appealed against.
(6) The Collector shall hear and dispose of the appeal in such manner as may be prescribed by rules made under this Act within six months from the date of filing of the appeal or within such further time as may be extended by Government for reasons to be recorded in writing."
21. It is an established proposition of law that the assent of the President required under Article 254(2) is not a matter of idle formality and in order to bring about the result contemplated Clause (2) of Article 254, the President, has, at least, to be appraised of the reason by this assent is sought, if there is any special reason for doing so. If the President's assent is sought and given in general terms so as to be effective for all purposes, different considerations may legitimately arise. But if the assent of the President is sought to be Law for a specific purpose, the efficacy of the assent should be limited to that purpose and cannot be extended beyond it (see in this connection Gram Panchayat of Village Jamalpur v. Malwinder Singy and Ors., AIR 1985 SC 1394 and Minoo Framroze Balsara v. The Union of India and Ors., AIR 1992 Bombay 375). Thereis no material placed on record from which it is possible to say that the President was appraised of the fact that Section 45-B intended to make a provision which was likely to charge the Registering Officer with a right which would conflict with his obligation under the Law made by Parliament, viz., the obligation under Section 61(2) of the Registration Act. In the absence of such material, we are unable to agree with the contention of the learned Government Pleader that because Act 1988 had been reserved for the assent of the President and received the assent of the President, Section 45-B can be said to have been reserved for the assent of the President and received it. We are unable to agree with the contention of the learned Government Pleader that by reason of Article 254(2), Section 45-B would override Section 61(2) of the Indian Registration Act within the State of Kerala.
22. The Registering Officer and his duties are subject matters of legislation of which the legislative power is traceable to Entry 6 of the Concurrent List. Legislation made by Parliament would oblige the Registering Officer to hand back the document after completing the formalities of registration. The provision of Section 45-B of the Kerala Stamp Act, 1959, if interpreted in the manner as suggested by the learned Government Pleader, would obligate the Registering Officer to retain possession of the document after registration. On the subject matter of the Registering Officer's duties, the power of legislation cannot strictly be relatable to Entry 44 of the List-III; it is relatable to Entry 6 of the Concurrent List. Thus, though, the legislative competence of the State legislature of enact Kerala Stamp Act, 1959 arises on account of combined reading of Entry 44 read with Entry 6 of the Concurrent List, insofar as the Registrar's duty of retention of the document after registration is concerned, we are of the view that there is clear inconsistency between the obligation imposed on him under Section 61(2) of the Registration Act and that imposed on him under Section 45B(1) of the Kerala Stamp Act, 1959. It is trite law that the Court must construe a statute in such manner that the statute does not become unconstitutional or void. The only manner in which the situation of the pro tanto invalidity Section 45-B can be avoided, is by reading the words "refer the same" to mean reference of the dispute or doubt with regard to the true value of the property or consideration set forth in the instrument and not reading Section 45-B as empowering the Registering Officer to retain the registered document. If so read, the duty cast on Registering Officer under Section 45-B would not conflict with the duty cast under Section 61(2) of the Central Act. For this reason also, we are inclined to agree with the petitioner's contention.
23. There is another reason why we are inclined to accept the contention of the petitioner that Section 45-B does not empower the Registering Officer to retain the instrument once he has completed the formalities of registration. Under the Kerala Stamp (Prevention of Undervaluation of Instruments) Rules, 1968, rules have been formulated. Rules 3 and 4 deal with the procedure to be followed for determination of the dispute with regard to undervaluation of the property/consideration set forth in the instrument. Rule 4 provides the procedure for making a reference and states that the reference contemplated under the Section shall be accompanied by a statement in Form IA. Form-IA merely requires the particulars of the document, nature and value, stamp borne by the deed, nature, value (or consideration) of the deed as in the opinion of the Registering Officer together with the stamp duty with which it has to be charged, deficit duty and remarks to be stated. A perusal of Form I-A does not suggest that the original instrument has to be referred to the Collector under Sub-section (1) of Section 45-B. Again, the notice contemplated in Form-II and Form II-A also do not suggest that the Collector would be in possession of the original instrument while he issues such notice for adjudication of the dispute. Rule 9(2) deals with appeals and provides that they shall be accompanied by: (a) the original or certified copy of the order appealed against;
(b) the original or a certified copy of the instruments and (c) memo of grounds of appeal. If the original was to be necessarily retained with the Registering authority or the Collector, then there would be no occasion for Rule 9(2)(b) to provide that the appeal memo be accompanied by the original of the instrument.
24. These rules also evidence as to how the rule making authority interpreted the provisions of Section 45-B of the Kerala Stamp Act, under which the aforesaid Rules have been framed. By the principle of 'Contemporanea legis', the manner in which the statute has been interpreted by the rule making authority affords an acceptable guideline for construction of the statute.
25. There is also internal evidence supporting the construction which we are inclined to put on the provisions of Section 45-B. In the first place, Section 33 is a section which enables impounding of documents and dealing with them. If such a power has to be conferred on the Registering Officer under Section 45-B, the legislature would have clearly spelt out such a power. This not having been done, it suggests that the power of impounding document was not intended to confer under Section 45-B, once the registration was completed. Again, when we look at Section 31 of the Kerala Stamp Act, for the purpose of adjudication of proper stamp, Sub-section (2) of Section 31 merely requires an abstract of the instrument on the basis of which the adjudication can be done. These are internal evidences in the statute supportive of the construction of Section 45-B contended by the petitioners.
26. Learned Government Pleader contended that we must interpret the section by using the principle 'purporsive construction' in such a manner that the purpose for which the statute was enacted is carried forward by the interpretation and not defeated. In fact, even applying this principle to the construction of Section 45B, as canvassed, no other result would be achieved. We accept the contention of the learned Government Pleader that the purpose of Section 45-B was to prevent undervaluation of instrument and dishonest evasion of stamp duty payable on instruments. Hence, Section 45-B empowers the Registering Officer, when he entertains a doubt that the true value of the property/consideration is not stated in the instrument, to make a reference of the same to the Collector. Under the Indian Registration Act, the moment instrument is tendered for registration, it has to be copied out verbatim and maintained in the registers. As a matter of practice today, the Registrar has to take out photo copies of the document and put them on the record. Under these circumstances, as to what special purpose would be achieved by retaining physical control of the original document, the learned Government Pleader was unable to point out. If the purpose of Section 45-B is to enable adjudication of undervalued instruments, we see no reason why it cannot be done after return of the registered document. There is amble power under the Stamp Act for adjudication of underpaid stamp duty and for its recover either by resort to revenue recovery proceedings (Section 46) and also by prosecution of the person who attempts to evade duty (Section 60). The construction that we are inclined to put on the provisions of Section 45-B does not in any way hinder, hamper or impede the adjudication of undervalued instrument nor the recovery of unpaid duty. The determination of the true value or consideration of property, the actual amount of duty payable or the machinery by which such duty can be collected from the defaulted executor of instrument, and finally the punishment of such a person under Section 60 and 62 remain unaffected by the construction of Section 45-B as urged. We do not think that any special purpose will be achieved by holding that Section 45-B empowers the Registering Officer to impound and retain possession of the document, even though the provisions of impounding are not extended to him and no greater objective would be achieved. For this reason also, we are inclined to agree with the contention of the petitioners.
27. Another principle of construction of statute is that a construction which leads to manifestly unjust and harsh consequences is to be avoided, as long as the objective of the statute can be achieved. The view we are inclined to take and the construction we are inclined to put on Section 45-B of the Kerala Stamp Act would sufficiently protect the objective of the statute. It is rightly contended by the learned counsel for the petitioners that the document necessarily is the property of the executor and State cannot deprive him of the possession thereof without a validly made and clearly formulated provision of law. Secondly, the document may be required by the executor for various other purposes, including for purpose of raising a loan on execution of equitable mortgage. On the one hand, no special purpose would be achieved in advancing the objective of the statute by retaining possession; conversely, manifest injustice and inconvenience would be rendered to the person executing the document. Therefore, the construction as suggested on behalf of the respondents needs to be avoided.
28. There is one more aspect of the matter which needs to be considered. The Indian Stamp Act, 1899 (Act 11 of 1899) also has a similar provision. Section 56(2) of the Indian Stamp Act provides that if any Collector, acting under Section 31, Section 40 or Section 41, feels doubt as to the amount of duty with which any instrument is chargeable, he may draw u a statement of the case, and "refer it", with his own opinion thereon, for the decision of the Chief Controlling Revenue Authority which is required to consider the case and decide it and proceed to assess charge on duty in confirmity with such decision. The Indian Stamp Act also has a provision of adjudicating of dispute as to the proper stamp duty under Section 31. Power of impounding under-stamped instruments and dealing with is provided under Section 41. In our view, if the situation can be resolved by the machinery under Section 56 of the Indian Stamp Act, 1899 by not retaining physical possession of the instrument, we see no special reason why such a power should be read into it by constitution of Section 45-B of the Kerala Stamp Act, 1959.
29. Learned Government Pleader raised several contentions for our consideration. First, the Kerala Stamp Act having received the assent of the President, when it was enacted originally in 1959, must be held to override the provisions of the Central Act, irrespective of the amendments made subsequently. This is a contention which cannot be accepted in the face of the principle laid down by the Supreme Court in Gram Panchayat of Village Jamalpur v. Malwinder Singh and Ors., AIR 1985 SC 1394. Secondly, he contended that in any event, the Amending Act 14 of 1988 was reserved for the assent of the President and received it. Section 6 of the Amending Act 14 of 1988 makes a provision to renumber the existing Section 45-A as 45-B and, therefore, the presumption is that the President must be deemed to have been made aware of the existing provision which was then numbered 45-A and renumbered as 45-B. This too is an unacceptable contention. Gram Panchayat (supra) clearly lays down that assent of the President is not a matter of idle formality and the eventuality of the possible conflict must be advised to the President and, if, thereafter, the President assents to such a conflicting provision of State Law, then only will the result contemplated by Clause (2) of Article 254 arise.
30. The learned Government Pleader strongly relied on a judgment of the Gujarat High Court in Champaklal, J. Gadani v. State of Gujarat and Ors., AIR 1988 Guj. 29 and contended that if the statute is to be construed in the manner urged by him, there is no possible conflict at all as held by this judgment. Champaklal (supra) arose under the Bombay Stamp Act. Section 32-A(1) of the Bombay Stamp Act is more or less similar to the provisions of Section 45-B of the Kerala Act. Section 32-A(1) of the Bombay Stamp Act reads as under:-
"32-A(1). If any officer registering under the Registration Act, 1908, an instrument of conveyance, exchange, gift, partition, partnership or settlement or power of attorney or any person referred to in S. 33, before whom such instrument is produced or comes in the performance of his functions, has reason to believe that the consideration set forth therein does not approximate to the market value of the property which is the subject matter of such instrument, or, as the case may be, the market value of the property which is the subject matter of such instrument, has not been truly set forth therein, he may after referring the instrument or, as the case may be, performing his functions in respect of such instrument, refer the instrument to the Collector of such district in which either the whole or any part of the property is situated for determining of the true market value of such property and the proper duty payable on the instrument under the Section".
to the Collector for adjudication of the true market value of the property and the proper duty payable on the instrument. This was, therefore, not a case of construction of the statute, because the statute clearly intended it. An argument was presented to the Division Bench of the Gujarat High Court that the obligation under 32-A(1) was clearly inconsistent with the obligation under Section 61(2) of the Indian Registration Act to return the instrument after registration. The learned Judges of the Gujarat High Court dismissed the argument by observing that Sections 60 and 61 cannot be so interpreted as to impose an absolute obligation the Registering Officer to return the document immediately after registration even though it becomes necessary for him either to retain the same or to deal with it in a similar manner if some other law requires that to be done. The Court took the view that both the provisions are complementary to each other and cannot be considered as contradictory in nature. With great respect to the learned Judges of the Gujarat High Court, we are unable to agree. The tests as to what is inconsistency between two statutes is clearly postulated in the judgment of the Supreme Court in M. Karunanidhi (supra). Applying those tests to the situation before the Gujarat High Court, there are clearly an inconsistency or conflict between the Central statute and the State legislation. Fortunately for us, the situation is not as irretrievable as in Bombay. Here, the statute, namely, Section 45-B does not, in terms, say that the "instrument" has to be referred to the Collector for adjudication of the true value of the property for determination of the proper stamp duty. In our judgment, Section 45-B is ambiguously worded and capable of more than one construction. In such a situation, we prefer to adopt the construction advanced by the petitioners so as to avoid a possible conflict between the obligations arising under Section 61 and 62 of the Registration Act on the one hand and Section 45-B of the Kerala Stamp Act, 1959 on the other.
31. Learned Government Pleader then referred to Molar Mal (Dead) through Lrs. v. Kay Iron Works (P) Ltd., (2000) 4 SCC 285. In our view this judgment has no application at all. Learned Government Pleader relied on Craies on Statute Law (Seventh Edition, page 64) and contended that it is a cardinal principle of construction of statutes that the construction must advance the object sought to be achieved by the statute. We already have shown that the construction we are inclined to put on Section 45-B really advances the object of the statute without causing inconviencence and injustice to the citizens.
32. Learned Government Pleader cited State of Maharashtra and Ors. v. Santhosh Shankar Acharya, (2000) 7 SCC 463. In our view, this judgment has no application to the facts of the case before us.
33. Learned Government Pleader referred to a judgment dated 7.8.2001 of the learned Single Judge (Abdul Gafoor, J.) in O.P. No. 20416/2000. After careful consideration the discussion in the judgment, we do not think that the contentions presented to us were presented to the learned Single Judge, nor were they considered and decided by him. On the facts of the case, by an executive order the Registering Officer was directed to exercise his discretion in a particular manner and the learned Single Judge held that it could not be so done. It is also true that the learned Single Judge dismissed the petition by holding that as long as a proceeding under Section 45-B of the Kerala Stamp Act pending, the petitioner could not seek return of the document. No contentions as such appear to have been canvassed and considered. In any event, we are unable to agree with the view taken by the learned Single Judge.
34. In the result, we hold that Section 45-B of the Kerala Stamp Act, 1959 cannot be construed as empowering the Registering Officer to retain possession of the original instrument after registration. He has to comply with the obligation under Section 61(2) of the Registration Act, 1908 by returning it. Any other construction would give rise to a conflict of obligations under the provisions of Section 45-B and Section 61(2) of the Indian Registration Act, in which event, Section 45-B not having been reserved for and received the assent of the President, must be held to be pro tanto void as to the power of the Registering Officer to retain the document. For both reasons, we uphold the contentions of the petitioners and answer the question referred to us as under:-
"Even if there is dispute as to the stamp duty payable on the instrument subject to registration, after registration of the instrument, the registering authority is not entitled to retain possession of the original document under Section 45-B of the Kerala Stamp act, 1959. By reason of Section 61(2) of the Registration Act, 1908, it is obliged to return the document and thereafter take appropriate proceeding under Section 45-B and other provisions of the Kerala Stamp Act for adjudication and recover the underpaid duty".
Hence the following orders:-
O.P. No. 17651 of 2001:
We allow the Original Petition and issue a writ directing the respondents to return the registered document to the petitioner with liberty to the respondents to take appropriate proceeding under Section 45-B or any other provision of the Kerala Stamp Act, 1959.
W.A. No. 3181 of 2000:
We allow the writ appeal, set aside the order of the learned Single Judge and allow O.P. 22268 of 2001 in terms of prayer (b) without prejudice to the right of the respondents to adopt appropriate proceedings under Section 45-B and other provisions of the Kerala Stamp Act.
W.A. No. 3369 of 2001:
In view of this judgment, the question has to be answered in favour of the appellants. We set aside the judgment of the learned Single Judge dated 16th August, 2001 in O.P. No. 24219/2001 and dispose of the same with a direction to the respondents to abide by this judgment. Writ Appeal is, accordingly, allowed.
O.P. No. 35532 of 2001:
We dispose of the Original Petition by granting prayer (a) to return the sale deed Ext. P1 after registration, without prejudice to the rights of the respondents to take action under Section 45-B or any other provisions of the Kerala Stamp Act. The petitioner shall be at liberty to challenge the order at Ext. P3 by an appeal under Section 45-B of the Act. The Original Petition is accordingly disposed of.
O.P. No. 32210 of 2001:
We grant prayer (ii) and direct the respondents to return the registered document No. 1824/2001 after registration without prejudice to the rights of the respondents to continue proceedings initiated by Exts. P2 and P4 notices and to take appropriate proceedings under any other provisions of the Kerala Stamp Act for recovery of alleged underpaid duty, if any. The Original Petition is, accordingly, disposed of.
O.P. No. 26966 of 2001:
We grant prayer (b) directing the 1st respondent to release document No. 3227/2001 after registration without prejudice to the rights of the respondents under Section 45-B or under any other provision of the Kerala Stamp Act, 1959 for recovery of alleged underpaid duty, if any. The Original Petition is, accordingly disposed of.
O.P. No. 21327 of 2001:
We allow the petition in terms of prayer (b) to return the original instrument already registered without prejudice to the rights of the respondent under Section 45-B or under any other provision of the Kerala Stamp Act, 1959 for recovery of alleged underpaid duty, if any. The Original Petition is, accordingly, disposed of.
O.P. No. 27101 of 2001:
Petition is allowed in terms of prayer (i) directing the 4th respondent to return the document No. 1525/1 registered on 31.5.2001 to the petitioners without prejudice to the rights of the respondents under Section 45-B or under any other provision of the Kerala Stamp Act, 1959 for recovery of alleged underpaid duty, if any. The petitioner shall be at liberty to challenge Ext. P3 order by an appeal under Section 45-B. The Original Petition is, accordingly, disposed of.
O.P. No. 32143 of 2001:
Petition is allowed in terms of prayer (i) directing the respondents to return the original sale deed No. 1149/2001 registered in Kattoor Sub Registry, to the petitioner without prejudice to the rights of the respondent under Section 45-B or under any other provision of the Kerala Stamp Act, 1959 for recovery of alleged underpaid duty, if any. The Original Petition is, accordingly, disposed of.
O.P. No. 24954 of 2001:
Petition is allowed in terms of prayer (iii) directing the 3rd respondent District Registrar to return Ext. P1 sale deed after registration without prejudice to the rights of the respondents under Section 45-B or under any other provision of the Kerala Stamp Act, 1959 for recovery of alleged underpaid duty, if any. The Original Petition, is accordingly, disposed of with liberty to the petitioner to challenge Ext. P5 order in an appeal under Section 45-B of the Act.
O.P. No. 29855 of 2001:
Petition is allowed in terms of prayer (ii) directing the respondents to return the document No. 1654 of 2001 of Adoor Sub Registry to the petitioner without prejudice to the rights of the petitioners to challenge the order passed under Section 45-B in accordance with law. The Original Petition is, accordingly, disposed of with liberty to the petitioner to challenge Ext. P4 by an appeal under Section 45-B of the Act.
O.P. No. 24114 of 2001:
Petition is allowed in terms of prayer (ii) directing the respondents to return the registered document No. 1485/2001 to the petitioner without prejudice to the rights of the respondents to proceed under Section 45-B or under any other provision of the Kerala Stamp Act, 1959 in accordance with law. The Original Petition is, accordingly, disposed of.
O.P. No. 28367 of 2001:
Petition is allowed in terms of prayer (i) directing the respondents to return the original document No. 2502/2001 of SRO, Tirur to the petitioner after registration without prejudice to the rights of the respondents to proceed in accordance with law under Section 45-B or any other provision of the Kerala Stamp Act, 1959. The Original Petition is, accordingly, disposed of.
O.P. No. 32056 of 2001:
Petition is allowed in terms of prayer (i) directing the respondents to return the document No. 3283/2001 of SRO, Ernakulam, without prejudice to the rights of the respondent to proceed under Section 45-B or any other provision of the Kerala Stamp Act, 1959. The Original Petition is accordingly, disposed of.
O.P. No. 37897 of 2001:
Petition is allowed in terms of prayer (i) directing the respondents to return document No. 2696/2001 registered on 28.9.2001 without prejudice to the rights of the respondents to proceed under Section 45-B or any other provisions of the Kerala Stamp Act for recovery of underpaid stamp duty, if any. The Original Petition is, accordingly, disposed of.
O.P. No. 37946 of 2001:
Petition is allowed in terms of prayer (b) directing the respondents to return document No. 3559/2001 of Muvattupuzha SRO without prejudice the rights of the respondents to proceed under Section 45-B or any other provisions of the Kerala Stamp Act, 1959 for recovery of underpaid stamp duty, if any. The Original Petition is, accordingly, disposed of.
O.P. No. 37366 of 2001:
Petition is allowed in terms of prayer (b) directing the 4th respondents to return document No. 2031/2001 after registration without prejudice to the rights of the respondents to proceed under Section 45-B or any other provisions of the Kerala Stamp Act, 1959 for recovery of underpaid stamp duty, if any. The Original Petition is, accordingly, disposed of with liberty to the petitioner to challenge order Ext. P2 by an appeal under Section 45-B of the Act.