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Delhi District Court

Rca Dj 89/18 vs Collector Of Stamps on 29 November, 2019

      IN THE COURT OF SH. M. P. SINGH, ADDITIONAL DISTRICT
     JUDGE­03, EAST DISTRICT, KARKARDOOMA COURTS: DELHI


RCA DJ 89/18
Smt. Seema Varshney
W/o Sh. Kaushal Kishore
R/o B­395, New Ashok Nagar,
New Delhi ­ 110096.                                                 .............Appellant
                                        Versus
Collector of Stamps
Govt. of NCT of Delhi,
Preet Vihar, District East, Delhi
L. M. BANDH, Shastri Nagar,
Delhi ­ 110031                                                  ........Respondent

                        Date of institution ­ 02.07.2018
                  Final arguments concluded on ­ 27.11.2019
                         Date of decision ­ 29.11.2019

                                   JUDGMENT

1. The present appeal under Rule 12 of the Delhi Stamps (Prevention of Under Valuation of Instruments) Rules, 2007 impugns Order dt. 07.07.2017 of Collector of Stamps, NCT of Delhi qua a Gift Deed dt. 23.03.2015.

2. This appeal is accompanied by an application under sections 5 and 14(1) of Limitation Act seeking condonation of delay in filing the appeal.

3. Facts are as follows: ­ I) Shyam Lal Saxena (appellant's father) gifted front portion of 2 nd floor (measuring 50 square yards) of property bearing no. B­103, opposite Mother Dairy, Patparganj Road, Pandav Nagar, Delhi ­ 92 vide a gift RCA DJ­89/18 Seema Varshney Vs. Collector of Stamps Page­1/9 deed registered on 23.03.2015 with Sub ­ Registrar VIII­A, Preet Vihar, Delhi as Instrument no. 1271 in Book no. I, Volume no. 473 on Page no. 178 to 186. In the gift deed, market value of the property was stated to be Rs. 11,00,000/­ and stamp duty of Rs. 44,000/­ thereon was paid.

II) More than two years later after registration and delivery of the instrument, respondent issued a notice dt. 29.05.2017 to the appellant stating that Sub Registrar ­ VIII­A, East District, Delhi had forwarded the aforesaid instrument for initiating necessary action under section 40 of Indian Stamp Act and payment of deficient stamp duty thereon.

III) Pursuant thereto, appellant visited the respondent and submitted that though the instrument was sufficiently stamped, but to avoid controversy she was ready to pay the alleged deficient stamp duty without prejudice to her rights and contentions. But the respondent proceeded to pass the impugned Order dt. 07.07.2017 which is not only unsustainable but also de hors the law and sans power and jurisdiction.

IV) As per the appellant after registration of the instrument, Sub­ Registrar became functus officio; that Sub­Registrar had conducted the necessary enquiries and satisfied himself with the true and correct valuation, as per the prevalent market value, of the property and sufficiency of the stamp duty before and after registration/ delivery of the instrument; that the respondent Collector of Stamps never conducted any enquiry, rather the respondent based its findings on RCA DJ­89/18 Seema Varshney Vs. Collector of Stamps Page­2/9 the audit report of Sub­Registrar, which is no evidence or material to conclude that the gift deed was undervalued; that the respondent exceeded his power and authority under the relevant laws to impose the penalty; that the respondent has no power to impose penalty on the instrument, but his duty is to correctly assess the requisite valuation and stamp duty and that too, only when the instrument had been forwarded under section 47A of the Indian Stamp Act; that in the litigations before the Court of Ld. Civil Judge, Karkardooma Courts the said instrument was never questioned or doubted and was rather given in evidence in civil suit no. 6385/2016 titled 'Vandana Saxena v. Shakti Saxena'; and that the proceedings conducted by the respondent is barred by law of limitation.

4. In the impugned order, it is stated that audit objection arose because of the characterization/ nomenclature of the property as a flat as in the instrument whilst the duty was paid as if it was part of a floor. It is further stated in the said order that there are different rates of stamp duty in case of flat, but by giving wrong nomenclature, lower stamp duty of Rs. 44,000/­ (@ 4% on valuation of Rs. 11 lakhs) and Rs. 11,000/­ towards registration fee (@ 1% of valuation) was paid. However, if the nomenclature had been correct as per calculation done by SDM/COS (Preet Vihar), stamp duty @ 4% ought to have been payable on Rs. 23,63,233/­ (cost of the property) which would have come to Rs. 95,429/­. Similarly, 1% registration fee thereon would come to Rs. 23,632/­. As the appellant had already paid a sum of Rs. 55,000/­ towards stamp duty and registration fee, the difference of amount was Rs. 64,061/­. Thereafter, penalty of Rs. 2,57,145/­ was imposed and as such the appellant was required to pay Rs. 3,21,206/­.

RCA DJ­89/18 Seema Varshney Vs. Collector of Stamps Page­3/9

5. In the reply dt. 28.12.2018 to the appeal, the respondent through SDM, Preet Vihar, East District, submits that: ­ "In this regard, a letter no. SR­VIII­A/Audit/2016/1400 dated 28.11.2016 received from SR­VIII (Geeta Colony) for impoundment of Gift Deeds in accordance with objection raised by AGCR Audit Party for the year 2015­16, para no. 1 (copy enclosed).

In view of the above, a notice no. F. No./COS/PV/2017/2021 dated 01.06.2017 was issued from this office in respect of Smt. Seema Varshney for personal appearance in this office for explanation under provision of the Indian Stamp Act and for payment of deficient Stamp Duty (copy enclosed) Smt. Seema Varshney appeared in the court SDM (Preet Vihar) and an order no. 337/COS/PV/2016­17/2437 dated 07.07.2017 for this office for deposit deficient stamp duty. After going through the land down provisions of the Indian Stamp Act, 1989, stamp duty on the deficiently stamped Gift Deed is calculated under the provisions of Article 33 of Schedule IA of the Indian Stamp Act as applicable in Delhi (copy enclosed)."

6. Arguments heard. Record perused.

7. I shall first deal with the application under sections 5 and 14(1) of Limitation Act seeking condonation of delay in filing the appeal. Rule 12 (1) of Delhi Stamp (Prevention of Undervaluation of Instruments) Rules, 2007 provides: ­ "any person aggrieved by an order of the Collector under sub­section (2) of Section 47­A may, within 30 days from the date of such order, prefer an appeal to the District Judge against such order." Perusal of record shows that present appeal has been filed after more than an year of passing of the order by Collector of Stamps as the appeal has been filed on 02.07.2018 whereas the impugned order is dated 07.07.2017. However, appellant's explanation as regards the delay is as follows: ­ RCA DJ­89/18 Seema Varshney Vs. Collector of Stamps Page­4/9 That as informed to her by the staff of the SDM concerned, the Appellant filed the Appeal Dated 26.07.2007 on 28.07.2017 before the District Magistrate, East District, Delhi against the Impugned order dated 07.07.2017. But the appeal was not heard and taken on board for hearing by the District Magistrate, East District, Delhi till the second week of the February, 2018, so reiterating the contents and contentions of her original Appeal Dated 26.07.2017, she again wrote the Latter Dated 09.02.2018 [which was ultimately acknowledged/ received on 14.03.2018] to the District Magistrate, East District, Delhi for considering her Appeal Dated 26.07.2017. Then Sh. Arun Gupta [SDM Preet Vihar, Delhi] gave the Reply date 10­04­2018 [which was received to the Appellant on 12­04­2018] stating that the Appellate Authority is the Divisional Commissioner/ Secretary (Revenue Department ­ HQ), 5 Sham Nath Marg, Delhi. But when she approached the aforesaid Office for filing Appeal, but no satisfactory response was given to the Appellant by it. So for seeking legal advice/ opinion, she consulted her Ld. Counsel who advised that the Appeal against the Impugned Order lies before this Hon'ble Court but not the Divisional Commissioner/Secretary. Then it took a considerable time to her in collecting all the documents to file the present Appeal, thus the same is liable to be conducted in the peculiar facts & circumstances of the matter, as the circumstances were beyond her control. Thus there is some delay in filing of this Appeal and the same was beyond her control and there was sufficient ground for its condonation and is liable to be condoned."

8. Appellant had filed appeal dt. 26.07.2017 before Collector of Stamps. She then on 14.03.2018 reiterated her appeal before the Collector of Stamps. However, vide letter dt. 10.04.2018 SDM, Preet Vihar, Delhi informed her that the appeal would lie before the Divisional Commissioner Secretary (Revenue Department ­ HQ), 5 Sham Nath Marg. Copy of the appeal dated 26.07.2017 and 14.03.2018 and the letter dt. 10.04.2018 are on record. Provision regarding condonation of delay is Rule 20 of the Delhi Stamp (Prevention of Undervaluation of Instruments) Rules, 2007, which provides that 'the appellate authority may entertain an appeal after the expiry of the period of appeal prescribed under rule 12 if it is satisfied that RCA DJ­89/18 Seema Varshney Vs. Collector of Stamps Page­5/9 there was sufficient cause for not filing it within that period'. Given the circumstances on record, it is the view of this Court that the appellant has shown sufficient cause of condonation of delay. I find it appropriate to condone the delay in filing the present appeal. The application for condonation of delay in fling the present appeal is accordingly allowed.

9. Now to the merits of the appeal. Section 47­A of the Indian Stamps Act [as applicable to Delhi vide Indian Stamp (Delhi Second Amendment) Act, 2001] is as follows: ­ "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 determination of the value or con­ sideration, as the case may be, and the proper duty payable thereon. (2) On receipt of a reference under sub section (1), the Collector shall, after giving the parties a reasonable opportunity of being heard and af­ ter holding an enquiry in such manner as may be prescribed by rules made under this Act, by order, determine the value of the property 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 moto within two years from the date of the registration of any instrument not already referred to him under sub section (1), call for and examine the instrument for the purpose of sat­ isfying himself as to the correctness of its value or consideration, as the case may be, and the duty payable thereon, and if after such exami­ nation, 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 consideration and the duty aforesaid in accordance with the procedure provided for in sub section (2), and the deficient amount of duty, if any, shall be payable and 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.

RCA DJ­89/18 Seema Varshney Vs. Collector of Stamps Page­6/9 (4) Any person aggrieved by an order of the Collector under sub­sec­ tion (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 rules under this Act.

Explanation­ For the purpose of this section, value of any property shall be estimated to be the price which in opinion of the Collector or the appellate authority, as the case may be, such property would have fetched, if sold in the open market on the date of execution of the in­ strument relating to the transfer of such property."

10. It is therefore clear that under sub­section (2) of section 47A the Collector of Stamps can take action on a reference made by the Registering Authority under sub­section (1). No limitation has been prescribed under sub­section (1). But the language of sub­section (1) indicates that Registering Authority can make the reference to the Collector of Stamps only if while registering the instrument he has reason to believe that value has not been truly set forth in the instrument. This in effect means that he has to make reference immediately after registering the instrument. Under sub­section (3) the Collector can suo moto, within two years from the date of the registration of any instrument not already referred to him under sub section (1), take action. For taking action under sub­section (3) the limitation is two years.

11. In the case of Raghbir v. State of Haryana, 2003(4) RCR (Civil) 861 section 47A of the Indian Stamp Act (as applicable to State of Haryana) came up for consideration. It was observed: ­

8. We also agree with the petitioner that the notice issued by respondent No. 3 is barred by time and is liable to be quashed as such. Under Sub­section (2) of Section 47­A of the Act, the Collector can RCA DJ­89/18 Seema Varshney Vs. Collector of Stamps Page­7/9 take action on a reference made by the Registering Officer under Sub­ section (1) thereof. No limitation has been prescribed for initiation of action by the Registering Officer under Sub­section (1) of section 47­ A, but the language of that sub­section makes it clear that the officer concerned can make a reference to the Collector only if while registering the document he has reason to believe that the value of the property or consideration has not been truly set forth. This necessarily means that he has to make a reference immediately after registering the document. Under Sub­section (3), the Collector can take such action, either suo­motu or on receipt of reference from Inspector General of Registration or the Registrar of a District in whose jurisdiction the property or any portion thereof, which is subject­ matter of instrument, is situated. For taking action under Sub­section (3), limitation of three years from the date of registration of the instrument has been prescribed. In other words, no action can be taken by the Collector under Sub­section (3) after expiry of three years counted from the date of registration of the instrument. If that be the position, we have no hesitation to hold that the notice issued by respondent No. 3 after 7 years of the registration of sale deed is clearly barred by time and is liable to be quashed.

12. In the reply dt. 28.12.2018 to the appeal, the respondent through SDM, Preet Vihar, East District, stated that action was initiated pursuant to letter no. SR­VIII­A/Audit/2016/1400 dated 28.11.2016 received from SR­ VIII (Geeta Colony) for impoundment of the gift deed in accordance with objection raised by AGCR Audit Party for the year 2015­16. Therefore, it is clear that the Sub­Registrar made the reference to the Collector of Stamps after more than 20 months, and not immediately after registering the document. The fact that the Sub­registrar wrote the latter after more than 20 months of registration of the instrument makes it clear that while registering the instrument he had no reason to believe that the value of the property or consideration has not been truly set forth. Further, the reference dt. 28.11.2016 was made by the Sub­Registrar to the Collector of Stamps much after the instrument had already been delivered to the appellant. That RCA DJ­89/18 Seema Varshney Vs. Collector of Stamps Page­8/9 apart, under sub­section (3) of section 47A the Collector of Stamps can take suo moto take action only within two years of registration of the instrument in question. Given this, this action on the part of the Collector of Stamps vide the impugned order dt. 07.07.2017 is hit by Section 47A.

13. The impugned order dt. 07.07.2017 passed by the respondent is set aside. Present appeal is allowed. Copy of this order be sent to the Collector of Stamps, Preet Vihar, for information. Appeal file be consigned to record room.

Digitally signed by MURARI PRASAD SINGH 
                                                   MURARI         Location: Court
                                                   PRASAD         No.7,
                                                                  Karkardooma
                                                   SINGH          Courts, Delhi
                                                                  Date:
                                                                  2019.11.29
                                                                  15:30:52 +0530


Announced in the open Court                      (M. P. Singh)
on 29.11.2019                        Addl. District Judge­03, East District
                                           Karkardooma Courts, Delhi




RCA DJ­89/18             Seema Varshney Vs. Collector of Stamps                      Page­9/9