Madras High Court
The Special Deputy Collector (Stamp) vs Chemicals And Plastics Ltd., Rep. By Its ... on 12 December, 2003
Equivalent citations: AIR2004MAD362, 2004(1)CTC187, AIR 2004 MADRAS 362, (2004) 2 MAD LJ 179, (2004) 1 MAD LW 788, (2004) 24 INDLD 95, (2004) 3 CIVLJ 48, (2004) 1 CTC 187 (MAD)
ORDER E. Padmanabhan, J.
1. The above Civil Revision Petitions have been preferred respectively as against the judgment and decree dated 21.7.1992 made in CMA.Nos.68 of 1991, 66 of 1991, and 67 of 1991 by the learned Principal Subordinate Judge, (Appellate Authority), Cuddalore preferred against the order passed by the Special Deputy Collector (Stamp papers) Cuddalore,
2. Heard Mr. M.C. Swami, Special Government Pleader appearing for the revision petitioners and Mr. R. Saseedharan, learned counsel appearing for the respondents in all the revision petitions. With the consent of counsel on either side, the revision petitions are taken up for final disposal.
3. The appeals were disposed of by the learned Principal Subordinate Judge of Cuddalore as early as 21.7.1992. The Revisions were presented during the year 1993 with a delay. After condonation of the delay the revisions were numbered and posted for admission. At that stage, the counsel for the revision petitioners as well as the respondents made their submissions as any delay in the disposal of the revision petitions will affect the parties and the delay may even defeat the rights and justice.
4. The petitioners and the respondents in all the three revisions are one and the same and the contentions advanced are one and the same and therefore these revision petitions are disposed of by a common order.
5. The respondent M/s. Chemical and Plastics (India) Ltd., preferred the appeals under Sub-section (4) of Section 47-A to set aside the proceedings of the Deputy Collector, (Stamps), Cuddalore, in his office proceedings in C.Pa.No.A.8/22/91, dated 31.10.1991 before the Appellate Authority, namely the learned Principal Subordinate Judge of Cuddalore. The learned Principal Subordinate Judge of Cuddalore by a common judgment and decree dated 21.7.1992 made in CMA.Nos. 66, 67 and 68 of 1991 set aside the proceedings of the Special Deputy Collector (Stamps) Cuddalore in all the three cases and also held that the stamp duty payable has been already paid by the vendee and there is no deficit at all in the stamp duty.
6. The respondent herein purchased considerable extent of land from different owners under seventeen different sale deeds. The respondent Company paid the Stamp Duty payable on the 17 deeds of conveyances as per the guideline value. All the conveyances dated 17.8.1992 were presented. Concedingly, the respondent paid the stamp duty on the market value, viz., at the rate of Rs. 3 per sq.ft., Even according to the Registering Authority the stamp duty paid on the instrument is as per the guideline value. The documents were presented for registration. The Registering Authority completed the registration and released the deeds of conveyance to the purchasers. However the Registering Authority took the view that the properties purchased are sought to be used for industrial purpose, that it is a potential house site and therefore it has to be valued accordingly.
7. The Court below, which is the appellate authority, framed the following two points for consideration in all the appeals:
"i) Whether the deed of conveyance have been valued according to law and whether correct stamp duty has been paid on the instruments of conveyance ?
ii) Whether the appeals are liable to be allowed ?"
8. Both the points were answered in favour of the respondent/purchaser. Hence, the present revision petitions have been preferred by the Special Deputy Collector (Stamps), Cuddalore.
9. In these revision petitions, the following points arise for consideration :
"i) Whether the revision petitions are maintainable at the instance of the Special Deputy Collector (Stamps), Cuddalore ?
ii) Whether the fair order passed by the appellate authority (Subordinate Judge) is vitiated by illegalities or in excess of jurisdiction and liable to be set aside ?
iii) Whether the proceedings initiated by the Special Deputy Collector (Stamps) under the Prevention of Stamp Undervaluation Rules falls within the jurisdiction of the said authority ?
iv) Whether there could be any reference under the rules when Stamp Duty has been paid and the Registering Authority has satisfied itself on the stamp duty paid on the deed of conveyance ?
v) Whether the market value as reflected under the sale deeds executed by the vendor in favour of the vendee could be held as undervalued ? and whether the vendee is liable to pay any deficit stamp duty on the deeds of conveyance ?"
All the above points could be considered together.
10. Concedingly agricultural lands were purchased by the respondent herein under various deeds of conveyance and stamp duty has been paid as agricultural lands as per the market value and stamp duty has been paid for the market value as declared by the executant. The Registering Authority also satisfied himself as stamp duty has been paid as per the guideline value register maintained by the registering authority. The Registrar also completed the registration and released the sale deeds. However, the registering authority subsequently made a reference as if the lands are going to be used for an industrial purpose and they have to be valued as house sites. On that the Special Deputy Collector (Stamps) proceeded further and assessed the market value of the lands and called upon the vendee to pay the deficit stamp duty as estimated by him.
11. It is admitted that on the date when the lands were purchased they were agricultural lands. The proposed user, namely, using the land for storing industrial effluents and using the same for treatment cannot be a ground or reason to fix the market value as a house site. The lands were all along agricultural lands and they were assessed to kist as such. Merely because the lands are adjacent to the factory, it cannot be assumed that they are not agricultural lands or ceased to be agricultural lands.
12. What is the market value of the land is what a willing buyer is ready to pay to a willing vendor at the price agreed to. It may be that the lands may be used for the purpose of letting industrial effluent and for treatment and it may incidentally be part of an industrial activity. But that cannot constitute a ground to value the land as industrial site. The vendees have produced documents to show the market value, namely, two earlier sale deeds and the market value has been assessed as such and stamp duty has been paid. But the Special Deputy Collector (Stamps) proceeded as if the lands are industrial sites and, therefore, they have to be valued as such. Even for that also there is no material.
13. The instruments, the subject matter of present appeals are deeds of conveyance as defined under Section 2(10) and there is no controversy in this respect. In terms of Schedule I entry 23, Stamp Duty is payable on the market value of the property, which is the subject matter of conveyance.
14. Section 47-A of the Stamp Act provides for the registering officer, while registering any instrument of conveyance, exchange, gift or lease of benami rights or settlement has reason to feel that the market value of the property, which is the subject matter of conveyance has not been truly set forth in the instrument, he may, after registering the said instrument, refer the same to the Collector for determination of the market value of such property and the appropriate duty payable thereon.
15. In terms of Section 47-A, it is for the registering authority appointed under the Registration Act, who should have reason to believe that the market value of the property has not been truly set forth in the instrument. This is not the case here. What is the view of the registering authority being the lands are proposed to be used for industrial purposes and, therefore, it has to be valued as such, which is not a relevant consideration at all. The market value of the land has to be valued as on the date of the deed of conveyance and it may not depend upon future or intended user of the land by the purchaser.
16. In Ponnusamy v. District Collector, Erode, 1999 (2) LW 231, this Court had occasion to consider the scope of Section 47-A as introduced by the State Legislature and in this context, this Court held thus :
"57. What is required under Sub-section (1) of Section 47-A of the Indian Stamp Act is that the Registering Authority had come to a conclusion before registration that the market value of the property, dealt under the instrument of conveyance or release, has been undervalued and he should have entertained reasonable belief in this respect and also, he should have recorded such a reason. Immediately after recording such reason, he has to complete the registration and thereafter refer the instruments to the Collector in terms of Sub-section (1) of Section 47-A of the Indian Stamp Act. Only in respect of the instruments which have not been referred to for adjudication to the Collector under Sub-section (1) of Section 47-A of the said Act, the Collector could exercise or invoke suo motu powers conferred on him under Sub-section (3) of Section 47-A and had a reference been made under Section 47-A (1) of the said Act it, would have been answered either way by the Collector, then it is obvious that the Collector cannot exercise suo motu powers in terms of Sub-section (3) of Section 47-A of the said Act.
52. The suo motu powers under Sub-section (3) of Section 47 of the said Act could be exercised only in respect of those instruments, with respect to which no reference has been made by the Registering Authority in terms of Sub-section (1) of Section 47-A of the said Act and such suo motu powers have to be exercised within two years from the date of registration of the documents.
55. Section 47-A(1) of the Indian Stamp Act is a special provision, which enables the Collector to exercise suo motu powers within two years from the date of registration of instruments of conveyance, etc., and with respect to which no reference has been made under Sub-section (1) of Section 47-A of the said Act or omitted to be made. Such suo motu action has to be taken within two years by the Collector, otherwise, his action will be without jurisdiction.
54. It is to be pointed out that the Collector has no powers nor he could exercise suo motu powers beyond two years from the date of registration of instruments of conveyance or release under Sub-section (3) of Section 47-A of the said Act. That being the statutory provision, it cannot be contended that without any time limit, the Registering Authority could make a reference to the Collector in terms of Sub-section (1) of Section 47-A.
63. This statutory Rule enables the Registering Officer to hold an enquiry to find out whether the market value has been correctly furnished in the instrument by holding such enquiry. Such enquiry, as prescribed in the Rule, has to be completed before registering the document, as is evident from conjoint reading of Section 47-A of the said Act read with Rule 3 of the said Rules. Therefore, it is evident that when a document had been registered, the Registering Officer i deemed to have conducted an enquiry and satisfied himself with respect to the market value furnished in the instrument and only after such satisfaction, the instrument had been registered.
71. The retention of the original document after completion of registration of the instrument is not provided for either in the Indian Stamp Act or in the Registration Act or in the Rules framed thereunder with respect to those instruments, where a reference under Section 47-A of the Indian Stamp Act read with Tamil Nadu Stamp (Prevention of Under-Valuation of Instruments) Rules had been made or is being made.
73. The Registering Authority did not entertain any doubt, nor he had any reason to believe that the market value of the property had not been set out truly. Having completed registration, as an after thought, it is not open to the Registering Authority to refer the matter to the Collector in terms of Section 47-A of the Indian Stamp Act and at any rate after two years.
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82. In the light of the said Division Bench pronouncement, the Registering Authority has no jurisdiction to go into the market value as disclosed in the instrument and if he had reasons to believe that true market value had not been disclosed in the instrument, he has to record reasons and make a reference to the collector after completing the registration.
91. As the instruments have been registered without any reservation by the Registering Authority and as the Registering Authority had not entertained any reasonable belief with respect to the valuation of the property dealt under the instruments in question, as prescribed by Sub-section (1) of Section 47-A before completing the registration, there cannot be a subsequent reference, much less after two years from the date of completion of registration. This Court hastens to add that a reference should be made immediately after registration or so sooner the registration is completed and at any rate within three weeks from the date of completion of registration of document to refer the instrument to the Collector under Sub-section (1) of Section 47-A of the said Act, besides sending a communication to the person, who is liable to pay the stamp duty on the instrument in question.
94. In the circumstances, this Court holds that the reference made by the Registering Officer to the Collector under Section 47-A is arbitrary, as found under the statutory provisions and without jurisdiction. Hence it is accordingly quashed.
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96. Whenever a document is registered and referred to the Collector under Section 47-A of the Indian Stamp Act read with Tamil Nadu Stamp (Prevention of Under-valuation of Instruments) Rules in the absence of statutory Rules, the Registering Authority shall forthwith release the original documents with an endorsement that a reference under Section 47-A is pending in respect of the said instruments.
97. At the time of release of original documents, the Registering Authority shall intimate the parties to the instruments that a reference is being made under Section 47-A of the Indian Stamp Act read with Tamil Nadu Stamp (Prevention of Under-valuation of Instruments) Rules."
17. The above said view of this Court has also been confirmed by a Division Bench of this Court in District Collector, Erode v. M. Ponnusamy 2001 (2) CTC 449. The Division Bench held thus :
"27. On the question of limitation, the learned Judge has taken the view that Sub-section (1) of Section 47-A as well as Sub-section (3) of Section 47-A of the Stamp Act applied to different contingencies which cannot be read conjointly nor it could be held that the Registering Authority could make a reference under Sub-section (1) of Section 47-A of the Act without any time-limit nor the contention that the reference under Sub-section (1) of Section 47-A of the said Act is not controlled by limitation of two years prescribed under Sub-section (3) of Section 47-A of the said Act is acceptable. The learned Judge held that the Registering Authority has not entertained any reasonable belief with respect to valuation of the property as prescribed by Sub-section (1) of Section 47-A and held that before completing the registration, there cannot be a subsequent reference, much less after two years from the date of completion of the registration. While assailing this view of the learned Judge, it is submitted that the Section does not contemplate any time limit and, therefore, a reference can be made at any time. We are unable to countenance such a stand. In the absence of any time limit provided for under Section 47-A(1) and in the light of the analysis of the process involved in reference to Sub-section (1) of Section 47-A of the Act, there is no scope for holding that reference can be made at any point of time."
18. The above is the settled legal position. In fact, in Padmavathy v. State of Tamil Nadu, 1997 (2) LW 579, a Division Bench of this Court held that in respect of a deed of conveyance executed pursuant to a decree passed for specific performance, in the absence of any material to show fraudulent evasion of stamp duty, lack of bona fides, it was held that power under Section 47-A cannot be invoked. K.A. Swami, C.J. speaking for the Bench, held thus :-
"28. For all the above reasons, we answer point No. 2 as follows :
In the case of instrument of conveyance executed pursuant to the decree for specific performance passed by the Civil Court, in which there is no allegation of deliberate undervaluation or lack of bona fides in valuing the subject of transfer with a view to evade payment of proper stamp duty, the mere fact that there is a time gap between the agreement of sale and the execution of the document by itself is not sufficient for the Registering Officer to invoke his power under Section 47-A of the Stamp Act, unless there are reasons to believe that there is an attempt on the part of the parties to the instrument to undervalue with a view to evade payment of proper stamp duty."
19. In Collector of Nilgiris v. Mahavir Plantations Pvt. Ltd., , while considering the scope of Section 47-A of The Stamp Act, this Court held thus :
"The valuation guidelines prepared by the Revenue Officials at the instance of the Board of Revenue were avowedly intended merely to assist the Sub-Registrars to find out, prima facie, whether the market value set out in the instruments had been set forth correctly. The guidelines were not intended as a substitute for market value or to foreclose the inquiry by the Collector which he is under a duty to make under Section 47-A. The valuation guidelines were not prepared on the basis of any open hearing of the parties concerned or of any documents. They were based on data gathered broadly with reference to classification of lands, grouping of lands and the like. This being so, the Collector acting under Section 47-A cannot regard the valuation guidelines as the last word on the subject of market value. To do so would be to surrender his statutory obligation to determine market value on the basis of evidence, which is a judicial or a quasi judicial function which he has to perform."
20. In the light of the above consistent views, having found that stamp duty has been paid as per the market value payable on the instrument on the date of sale with reference to the existing ground conditions or for that purpose assuming that the guideline value reflects the market value for the purpose of arguments, there is no authority or jurisdiction on the part of the registering officer thereafter to refer the instrument. In the present case market value has been declared by the executant and stamp duty payable as per the prevailing market value has been paid on the instrument and there is no quarrel. What is the controversy is the proposed user of the land for industrial purpose, which cannot be taken as a governing factor to fix the market value or to assess the market value. It may be that the purchaser may use it on any future date for industrial purpose. The purchaser may be an industrial establishment, but on that score it cannot be said that the market value is something different from what is the prevailing market value of identical lands in the locality.
21. Even the purchaser may use it for an industrial purpose immediately or on any future date or it may even retain the same as such for number of years together. Therefore, merely because an industrial establishment or a company has purchased the land, the market value cannot be different from what is prevailing market value in the locality. The expression market value has not been defined under the Stamp Act. Therefore the registering authority has no jurisdiction at all in this matter or he has exceeded his jurisdiction in referring the instrument to the Special Deputy Collector.
22. In exercise of powers conferred under Sections 47-A and 75 of the Indian Stamp Act, 1899, the Governor of Tamil Nadu has framed the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968. According to the said rules, the executant has to file a statement of market value of each item separately and the same shall be attached to the instrument duly signed by the party executing the instrument furnishing therein information about the items of properties involved in the transaction and his own assessment of the market value of each items dealt in the documents supplied.
23. Rule 3(1)(A) requires particulars with respect to the land and building or details thereof to be set out by the executant. Sub-rule (2) of Rule 3 provides that the registering officer shall before registering an instrument satisfy himself that the party has attached with the instrument a statement duly signed by the party executing the instrument giving the market value for each of the property separately as required by Sub-rule (1) and (1)(A). If such statement is not duly signed by the party executing the instrument, the registering officer shall refuse registration of the document.
24. Sub-rule (3) confers power on the registering officer, for the purpose of finding out whether the market value has been correctly furnished in the instrument, make such enquiries as he may deem fit and he may also elicit from the authorities concerned any information bearing on the subject and call for and examine any record kept with any public officer or authority. The sub-rule provides that the registering officer may also look into the guidelines register containing the value of property supplied to them for the purpose of verifying the market value. Explanation to Sub-rule (4) provides that the guideline register supplied is intended merely to assist the registering officer to ascertain prima facie whether the market value has been duly set forth in the instrument and it cannot be a substitute for market price and the entries in the guideline register will not foreclose the enquiry of the Collector under Section 47-A of the Act or fetter the discretion of the authorities concerned to satisfy themselves on the reasonableness or otherwise of the value set forth in the documents.
25. In the present case the registering officer has accepted the value as declared by the executants of the documents and the market value was in conformity with the guideline register supplied to the registering officer. Rule 4 of the rule prescribes the procedure to be followed under Section 47-A. Rule 5 prescribes the principles for determination of market value. For determination of market value the Collector as far as possible shall have regard to the classification of the land as dry, manavari, wet and the like or classified under various tharams under the settlement register and accounts or the rate of revenue assessment for which classification, other factors which influence the valuation of the land in question, value of the adjacent land or lands in the vicinity, average yield from the land, nearness to road and market, distance from village, city, etc., the nature of crops raised on the land, the use of land, domestic, commercial, industrial or agricultural purpose and also the appreciation in value when an agricultural land is being converted to a residential, commercial or an industrial land.
26. In respect of house sites, different factors have been enumerated. Rule 6 provides the procedure to be followed and Rule 4 provides for passing of final order determining the market value. Sub-rule (2) of Rule 7 provides for copy of the order to be communicated to the registering officer concerned for his record as well as to the parties and steps have to be taken to collect the difference in the amount of stamp duty, if any. An appeal is provided under Rule 9 of the rules as it existed prior to 2001 amendment.
27. In terms of the Stamp Under-valuation Rules, when once either initial authority or the appellate authority decides, there is no further provision either for the registering authority or the Special Deputy Collector (Stamps) to file an appeal or revision by the said authority and such revision or appeal by the Collector (Stamps) is not maintainable. In the absence of provisions they having exercised quasi-judicial adjudicatory function has neither the authority or competence to prefer revision or appeal. They are aggrieved parties. The statutory provision enables only the person affected or who is liable to pay stamp duty to prefer appeal or revision. These revisions are liable to be rejected on this ground as well.
28. The learned counsel for the petitioner, assuming that revision is maintainable is unable to point out any illegality or error of jurisdiction or material irregularity or any error apparent on the face of the record warranting interference. In the light of the above discussions and in the circumstances, all the points have to be answered against the revision petitioner.
29. In the result, this Court holds that no interference is called for with the order passed by the court below. Accordingly, these revision petitions are dismissed, but without costs.