Gujarat High Court
T J Agro Fertilizers Pvt Ltd vs State Of Gujarat on 17 July, 2018
Author: A.J.Desai
Bench: A.J.Desai
C/SCA/10033/2008 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO.10033 of 2008
FOR APPROVAL AND SIGNATURE :
HONOURABLE MR.JUSTICE A.J.DESAI Sd/-
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1. Whether Reporters of Local Papers may be NO
allowed to see the judgment ?
2. To be referred to the Reporter or not ? NO
3. Whether their Lordships wish to see the fair NO
copy of the judgment ?
4. Whether this case involves a substantial NO
question of law as to the interpretation of the
constitution of India, 1950 or any order made
thereunder ?
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T J AGRO FERTILIZERS PVT LTD
Versus
STATE OF GUJARAT
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Appearance :
MR KH BAXI for the PETITIONER.
MR HARDIK SONI, AGP for the RESPONDENTS.
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CORAM : HONOURABLE MR.JUSTICE A.J.DESAI
Date : 17/07/2018
ORAL JUDGMENT
1. By way of the present petition under Articles 14, 226 and 227 of the Constitution of India, the petitioner has prayed as under :-
Page 1 of 8 C/SCA/10033/2008 JUDGMENT
"(a) admit this petition
(b) quash and set aside the order passed
by the respondent No.2 on 23.5.2008 at
Annexure - A as null and void and contrary to law;
(c) direct the respondents to refund the amount of stamp in excess valuation beyond Rs.74 Lacs of the property in question;
(d) direct the respondents by way of an interim relief to take necessary actions to refund the excess amount, pending admission and final disposal of this Special Civil Application."
2. Pursuant to the notice issued by this Court, the respondent authority has filed two affidavits dated 10.10.2008 as well as 6.9.2016 and has opposed grant of relief as prayed for.
3. The brief facts arise from the record are as under :-
3.1 That in 1990, land bearing Block Nos.41 and 42 of village Mahapur, Tal. Savli, Dist. Vadodara was purchased by one Rishabh Industries Private Limited and constructed factory shed, boundary wall security cabin etc. The said Company obtained loan from Bank of Baroda and thereafter, went into liquidation for which Official Liquidator was appointed in the year 2007. The property in question was mortgaged with Bank of Baroda. Thereafter, in company proceedings, this Court appointed Sale Committee and Page 2 of 8 C/SCA/10033/2008 JUDGMENT the said committee submitted its report stating that the offer of Rs.50 Lacs received by it be confirmed.
3.2 This Court after taking into consideration the valuation report as well as jantri rates, concluded that the value of the property would be roughly about Rs.74 Lacs. The petitioner offered Rs.74 Lacs and since its offer was found highest, sale in favour of the petitioner was confirmed and directed the Official Liquidator to execute Sale Deed.
3.3. However, the respondent No.2 vide order dated 8.2.2008 valued the property in question at Rs.5,06,97,800/- and asked the petitioner to pay stamp duty of Rs.24,84,193/-. Being aggrieved by the said order, the petitioner preferred Special Civil Application No.4430 of 2008 and the coordinate Bench of this Court vide order dated 16.4.2008 quashed the said order dated 8.2.2008 and remanded the matter for taking fresh decision.
3.4 The petitioner filed its submissions on 1.5.2008 and also remained present for personal hearing. By the impugned order dated 23.5.2008, the respondent No.2 valued the property in question at Rs.3,30,09,800/- and directed the petitioner to pay stamp duty of Rs.16,17,485/-.
3.5 Hence the present petition.
4. Mr. K. H. Baxi, learned advocate appearing for the petitioner would submit that though while deciding the matter vide oral judgment dated 16.4.2018 in Special Civil Application No.4430 of 2008, it was observed by the coordinate Bench of this Court that the matter was required to be decided afresh considering the Page 3 of 8 C/SCA/10033/2008 JUDGMENT provisions of Gujarat Stamp Act, particularly proviso to Section 32A, the authority has committed an error while determining the market value of the property in question and passed the impugned order. He would submit that the petitioner has purchased the property in a public auction in company proceedings. Though the value of the property in question was Rs.73.50 Lacs as per the Jantri value of the land and valuation of scrap, the petitioner had offered an amount of Rs.74 Lacs. Being the highest bidder, the offer was accepted by the coordinate Bench of this Court in Company Petition No.229 of 2001 and directed the Official Liquidator to execute the Sale Deed. Thereafter, the authorities under the Stamp Act again independently decided the market value, though it was aware that the property was purchased in auction. He would submit that the property was purchased by the petitioner in an auction held by the Government Officer who has been appointed by the Central Government under Section 359 of the Companies Act, 2013. He would submit that the Official Liquidator has to function as a Central Government Officer as provided under Section 360 of the Companies Act. Accordingly, after following the procedure prescribed in the Companies Act, the highest sale price was fixed, that too after considering the Valuation Report and Jantri price of the land etc. He, therefore, would submit that the respondent authority has misread the provisions of Section 32A of the Stamp Act. He would further submit that as per Section 32A of the Stamp Act, if the consideration set forth in the instrument executed by the State Government, the Central Government etc., it shall be deemed to be the true market value of the property which is the subject matter of such instrument and has to be accepted as the correct value of the instrument in question. He, therefore, would submit that the impugned order is required to be quashed and set aside.Page 4 of 8
C/SCA/10033/2008 JUDGMENT
5. On the other hand, learned Assistant Government Pleader Mr. Hardik Soni appearing for the respondents has opposed this petition and taken me through the two affidavits-in-
reply filed by the respondents and would submit that the respondent authorities have calculated the correct value as per the information received by the Officer about the value of the property. He would submit that pursuance to the order dated 16.4.2008 passed by this Court in Special Civil Application No.4430 of 2008, the respondent authority has reconsidered the case of the petitioner and reduced the market price which was decided earlier. He, therefore, would submit that the petition be dismissed.
6. I have heard learned advocates appearing for the respective parties. It is an undisputed fact that the property in question belonged to one Rushabh Industries Private Limited Company. However, since the Company had gone in liquidation, the Official Liquidator was appointed by this Court by its order dated 18.10.2007. The Official Liquidator appointed under the Companies Act initiated auction proceedings after receiving the details about the value of the land i.e. Valuation report and jantri price, scrap etc. and fixed value of the property. However, it was specifically brought to the notice of this Court in company proceedings that the correct value of the property including the land and the scrap would fetch Rs.73.50 Lacs whereas the petitioner had offered Rs.74 Lacs and accordingly, the offer made by the petitioner of the property was accepted by this Court. The Company Petition was disposed of after accepting the offer made by the petitioner to the tune of Rs.74 Lacs on certain terms and conditions which have been complied with by the petitioner.
Page 5 of 8C/SCA/10033/2008 JUDGMENT
7. It is an undisputed fact that the property was sold in an open market by a public auction. Section 2 (na) of the Stamp Act which defines "market value" reads as under :-
"(na) "market value", in relation to any
property which is the subject matter of an
instrument means the price which such property would have fetched if sold in open market on the date of execution of such instrument."
8. When the property was sold in an open market in auction, the price at which it is sold is required to be treated as market value and accordingly, stamp is required to be fixed on the said market value. Even otherwise, proviso to Section 32A of the Stamp Act makes it clear that where the property value speaks an instrument, the consideration set forth in the instrument executed by the State Government, the Central Government etc. shall be deemed to be the true market value of the property and the same is to be accepted as true market value. Section 32A of the Stamp Act reads as under :-
"32A :- Determination of market value of
property which is the subject matter of
conveyance, etc., :-
(1) Every instrument of conveyance,
exchange, gift, certificate of sale,
partition, partnership, settlement, power of attorney to sell immovable property when given for consideration or transfer of lease by way of assignment, presented for registration Page 6 of 8 C/SCA/10033/2008 JUDGMENT under provisions of the Registration Act, 1908 (XVI of 1908) shall be accompanied by a true copy thereof; [and the Statement in such form as may be prescribed by rules] and if an officer registering such instrument under the aforesaid Act or any person referred to in Section 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 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 [shall before] registering the instrument or, as the case may be, performing his functions in respect of such instrument, refer the instrument or true copy thereof to the Collector of such district in which either the whole or any part of the property is situated for determining the true market value of such property and the proper duty payable on the instrument under this section.] [Provided that for the purpose of this Sub-
section, the consideration set forth in an instrument executed by the State Government, the Central Government, a local authority, Gujarat Housing Board, Gujarat Slum Clearance Board or Gujarat Industrial Development Page 7 of 8 C/SCA/10033/2008 JUDGMENT Corporation, shall be deemed to be the true market value of the property which is the subject matter of such instrument.] [2] .........................
[3] ......................."
9. In the present case, the Official Liquidator has been appointed by the Central Government in a liquidation proceedings in pursuance of an order passed by this Court and when the property was sold in open market in public auction which was confirmed by this Court, I am of the opinion that the case would fall under combined reading of Section 2 (na) and proviso under Section 32A of the Stamp Act. Hence the present petition requires consideration and hence, the same stands allowed. The impugned order dated 23.5.2008 passed by the respondent No.2 is hereby quashed and set aside. Rule is made absolute to the above extent.
10. Since the petition is allowed, the amount of stamp in excess valuation beyond Rs.74 Lacs deposited by the petitioner shall be refunded by the respondent authorities to the petitioner within a period of four weeks from the date of receipt of the writ and/or certified copy of this order, whichever is earlier. If the amount is not refunded within a period of four weeks, the respondents shall pay interest @ 6% p.a. thereafter till realization.
Direct service is permitted.
Sd/-
(A.J.DESAI, J) SAVARIYA Page 8 of 8