Gujarat High Court
Jayant Shantilal Sanghvi vs State Of Gujarat on 12 December, 2018
Equivalent citations: AIR 2019 GUJARAT 32, AIRONLINE 2018 GUJ 228
Author: Vipul M. Pancholi
Bench: Vipul M. Pancholi
C/SCA/12015/2016 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 12015 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI
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1 Whether Reporters of Local Papers may be Yes
allowed to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the No
fair copy of the judgment ?
4 Whether this case involves a substantial No
question of law as to the interpretation
of the Constitution of India or any order
made thereunder ?
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JAYANT SHANTILAL SANGHVI
Versus
STATE OF GUJARAT
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Appearance:
MR DIPEN C SHAH(3374) for the PETITIONER(s) No. 1,2,3
MS SHRUTI PATHAK, AGP for the RESPONDENT(s) No. 1,2
NOTICE SERVED(4) for the RESPONDENT(s) No. 3
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CORAM: HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI
Date : 12/12/2018
CAV JUDGMENT
1. Rule. Learned Assistant Government Pleader Ms. Pathak waives service of Rule for and on behalf of the respondents. As the issue involved in the present petition is in very narrow compass, with the consent of learned advocates Page 1 of 29 C/SCA/12015/2016 CAV JUDGMENT appearing for the parties, petition is taken up for final hearing.
2. This petition is filed under Articles 226 and 227 of the Constitution of India, in which, the petitioners have prayed that the order dated 04.02.2015 passed by the Deputy Collector, Stamp Valuation, be quashed and set aside.
3. The factual matrix of the present case is as under:
3.1. It is the case of the petitioners that one Schlafhorst Engineering India Ltd. was declared as a sick company. The Board for Industrial and Financial Reconstruction (BIFR) passed an order on 16.08.2005 in case No.318 of 1999, whereby the scheme of rehabilitation of the said company came to be sanctioned. As per Clause 6.6 of the said scheme, BIFR permitted sale of surplus properties of the said company situated at Vadodara which consist of entire land, building, surplus machinery and equipment. The market value of the premises was estimated at Rs.9,80,00,000/- as per the valuation conducted by the valuers appointed by operating agency viz. ICICI Bank. Operating agency, ICICI Bank, issued an advertisement after sanction was given by BIFR for sale of the said properties on 21.12.2005 in the local newspaper.
3.2. It is further stated that pursuant to the Page 2 of 29 C/SCA/12015/2016 CAV JUDGMENT advertisement issued in the newspaper, the petitioners participated in the auction process conducted by BIFR through its operating agency.
In the said auction process, petitioners were declared as highest bidder, whereby the petitioners offered price of Rs.15,21,00,000/-. The BIFR approved the open auction conducted by the operating agency by its order dated 22.03.2006. Pursuant to the permission given by BIFR, sale deed was executed on 04.05.2006 and the same was registered. It is specific case of the petitioners that pursuant to the registration of the sale deed on 04.05.2006, the original sale deed was returned to the petitioners.
3.3. It is further stated that on 24.03.2008, pursuant to the audit objection of Accountant General, intimation was given by the Audit Officer to Sub-Registrar to refer the said document to the Deputy Collector for determining the correct market value of the properties in question. It is stated that the property is undervalued in the instrument and there is a short levy of stamp duty of Rs.1,85,04,510/-. On receipt of the said communication, the Sub- Registrar referred the said objection to the Deputy Collector on 28.04.2008 for taking further action in the matter. The Deputy Collector, therefore, while exercising jurisdiction under Section 39(1) of the Gujarat Stamp Act, 1958 Page 3 of 29 C/SCA/12015/2016 CAV JUDGMENT (hereinafter referred to as 'the Act') issued a show cause notice in January 2011 to the petitioners and asked the petitioners to explain why deficit stamp duty of Rs.1,85,04,510/- be not levied. Petitioners have submitted their reply on 28.01.2011. However, without considering the said reply, the Deputy Collector passed an impugned order dated 04.02.2015 by which it is held that petitioner is liable to pay the deficit stamp duty of Rs.1,85,04,510/- plus penalty of Rs.18,50,450/-, total Rs.2,03,54,960/-.
3.4. The petitioners have stated that they have preferred an appeal under Section 53(1) of the Act before the Appellate Authority with a prayer to exempt the petitioners from depositing 25% of duty payable until the preliminary issue of jurisdiction of the Deputy Collector is decided. However, without deciding the said prayer of the petitioners, Superintendent of Stamps refused to register the appeal without depositing 25% of stamp duty adjudicated by order dated 04.02.2015. It is stated that petitioners have, therefore, filed the present petition under Articles 226 and 227 of the Constitution of India.
4. Heard learned advocate Mr. Dipen C. Shah for the petitioners and learned Assistant Government Pleader Ms. Shruti Pathak for the respondents.
Page 4 of 29 C/SCA/12015/2016 CAV JUDGMENT5. Learned advocate Mr. Shah appearing for the petitioners, at the outset, submitted that though an alternative remedy of filing an appeal before the Appellate Authority is provided under the Act, the said remedy is not an efficacious alternative remedy and in the facts and circumstances of the present case, when the impugned order passed by the respondent No.2 - Deputy Collector is without jurisdiction and is also in violation of principles of natural justice, the present petition is filed and therefore this Court may entertain the petition. Learned advocate for the petitioners has placed reliance upon the decision rendered by the Hon'ble Supreme Court in the case of Committee of Management and Another v. Vice-Chancellor and others, reported in (2009) 2 SCC 630, wherein the Hon'ble Supreme Court has held that availability of an alternative remedy by itself may not be a ground for the High Court to refuse to exercise its jurisdiction. It was held that it may exercise its writ jurisdiction despite the fact that alternative remedy is available in a case where the same would not be an efficacious one. Further, when an order has been passed by the authority without jurisdiction or in violation of principles of natural justice, the Superior Courts shall not refuse to exercise their jurisdiction although there exists an alternative Page 5 of 29 C/SCA/12015/2016 CAV JUDGMENT remedy.
5.1. Learned advocate Mr. Shah has also placed reliance upon the decision rendered by the Hon'ble Supreme Court in the case of Whirlpool Corporation v. Registrar of Trade Marks, reported in (1998) 8 SCC 1.
5.2. On merits, learned advocate for the petitioners would contend that invocation of jurisdiction by Deputy Collector under Section 39 of the act is illegal and not permissible. It is contended that existence of jurisdictional fact primarily required for invocation of Section 39 of the Act is exercise of powers under Sections 33 or 37 of the Act of impounding the instrument by a person having authority to receive evidence. In the present case, the instrument being sale deed dated 04.05.2006 having registration No.3590 in book 1 was duly returned by the concerned authority to the petitioners after registration. Thus, the Deputy Collector has passed the impugned order without having any jurisdiction and therefore only on this ground the impugned order be quashed and set aside.
5.3. In support of the said contention, learned advocate Mr. Shah has placed reliance upon the decision dated 20.02.2008 rendered by the Division Bench of this Court in the case of Page 6 of 29 C/SCA/12015/2016 CAV JUDGMENT Amarsinhji Stationery Industries Limited v. State of Gujarat, reported in 2009 LawSuit(Guj) 151. Learned advocate has referred paragraph 4, 7, 11 and 12 of the said decision.
5.4. Learned advocate Mr. Shah has also placed reliance upon another decision dated 24.04.2013 rendered by the Division Bench of this Court in the case of Bileshwar Industrial Estate Developers Pvt. Ltd. v. State of Gujarat in Letters Patent Appeal No.1332 of 2012. He has referred para 2, 9, 10 and 12 of the said decision.
5.5. At this stage, learned advocate for the petitioners has also placed reliance upon the order dated 23.02.2010 passed by learned Single Judge of this Court in Special Civil Application No.18319 of 2007 and allied matters as well as order dated 27.10.2005 passed by learned Single Judge of this Court in Special Civil Application No.17916 of 2003.
5.6. Learned advocate Mr. Shah further submits that the impugned order passed by the Deputy Collector is non-speaking order and the said order was passed without giving reasonable opportunity of being heard to the petitioners. While passing the said order, the respondent Deputy Collector has also not considered the Page 7 of 29 C/SCA/12015/2016 CAV JUDGMENT reply dated 28.01.2011 submitted by the petitioners in pursuant to the show cause notice issued by the respondent No.2. It is submitted that there is no reference in the impugned order with regard to the said reply. In the said reply, it has been specifically contended that after the registration of the sale deed, the same is duly returned to the petitioners and therefore notice issued by the Deputy Collector under Section 39 of the Act is required to be withdrawn. It was also stated that on what basis it is stated in the show cause notice that petitioners have not paid proper stamp duty while executing the sale deed in question; and such evidence is not given to the petitioners. Learned advocate Mr. Shah, therefore, urged that the impugned order passed by the Deputy Collector be quashed and set aside on this ground also.
5.7. Learned advocate for the petitioners thereafter contended that while determining the so-called market value of the properties in question, the respondent authority has not followed the procedure prescribed in Bombay Stamp (Determination of Market Value of Property) Rules, 1984 (hereinafter referred to as the Rules). It is stated that notice under Rule 4 of the Rules has not been issued and no proceedings have been conducted for determination of the market value of the property in question. Thus, Page 8 of 29 C/SCA/12015/2016 CAV JUDGMENT it is submitted that in absence of determination of the market value under the aforesaid Rules, levy of additional stamp duty is arbitrary and without following the procedure established by law. Thus, on this ground also the impugned order be set aside. Learned advocate Mr. Shah has, therefore, urged that this petition be allowed by quashing and setting aside the impugned order passed by the respondent No.2.
6. On the other hand, learned Assistant Government Pleader Ms. Pathak has opposed this petition and raised preliminary objection about maintainability of the present petition. It is contended that this Court may not entertain this petition on the ground that the petitioners are having alternative remedy for filing an appeal before the Appellate Authority. It is submitted that the petitioners have in fact filed the appeal, however the petitioners were not inclined to deposit 25% amount of the deficit stamp duty, the said appeal was not registered. Thus, this petition be dismissed only on this ground. In support of the said contention, learned AGP Ms. Pathak has placed reliance upon the decision rendered by the Hon'ble Supreme Court in the case of Hameed Kunju v. Nazim, reported in (2017) 8 SCC 611. She has also placed reliance upon the decision rendered by the Hon'ble Supreme Court in the case of Punjab National Bank v. O.C.Krishnan Page 9 of 29 C/SCA/12015/2016 CAV JUDGMENT & Ors., reported in (2001) 6 SCC 569. Learned Assistant Government Pleader Ms. Pathak has also referred the order dated 05.02.2018 rendered by learned Single Judge of this Court in Special Civil Application No.8654 of 2016.
6.1. Learned Assistant Government Pleader has thereafter referred page 59 of the compilation i.e. part II of the report of the Audit Officer. It is submitted that as per the remarks made in the said Audit Report, the consideration set forth in the documents was lower than the market value of the properties as per schedule rate (i.e. jantri rate) available with the SR. However, the said document was registered and not referred to the Deputy Collector for determining the true market value of the properties till the time of the audit. It is submitted that when the said objection was raised, the concerned Sub- Registrar referred the matter to the Deputy Collector and thereafter the Deputy Collector has exercised the powers under Section 39 of the Act and therefore the Deputy Collector has not committed any illegality as alleged by the petitioners. At this stage, learned Assistant Government Pleader has referred the provisions contained in Section 39 of the Act read with Section 33, 32A and 37 of the Act and submitted that no error is committed by the respondent No.2 Page 10 of 29 C/SCA/12015/2016 CAV JUDGMENT while passing the impugned order and therefore this Court may dismiss the petition.
7. This Court has heard the submissions canvassed by learned advocates appearing for the parties and perused the material produced on record. This Court has also considered the relevant provisions of the Act and the Rules and also gone through the decisions upon which the reliance is placed by the learned advocates. From the material produced on record, it would emerge that the petitioners purchased the properties in question in an open auction conducted by the BIFR through its operating agency ICICI Bank. The petitioners were the highest bidders. The sale was approved by the BIFR and thereafter sale deed was executed on 04.05.2006 which was registered as registration No.3590 in book 1 with the concerned Sub-Registrar. It is not in dispute that the original sale deed was returned to the petitioners by the concerned Sub-Registrar after its registration and the original sale deed is in custody and possession of the petitioners. In fact the respondent No.2 has not denied the said aspect in the affidavit-in-reply filed in the present petition. It would further emerge that pursuant to the audit objection raised by the office of the Accountant General, the concerned Sub-Registrar referred the matter to the Deputy Page 11 of 29 C/SCA/12015/2016 CAV JUDGMENT Collector and therefore the Deputy Collector - respondent No.2 herein issued a show cause notice in January 2011 to the petitioners wherein petitioners were asked to explain why deficit stamp duty of Rs.1,85,04,510/- with penalty may not be recovered from the petitioners. It is further revealed that petitioners submitted reply to the said show cause notice on 28.01.2011. Thereafter, the impugned order dated 04.02.2015 has been passed by the respondent No.2 by which the petitioners are held liable to pay deficit stamp duty of Rs.1,85,04,510/- plus penalty of Rs.18,50,450/-, total Rs.2,03,54,960/-.
8. In the aforesaid factual matrix of the case, the provisions contained in Section 39 of the Act are required to be considered. Section 39 of the Act provides as under:
"39. Collector's power to stamp instruments impounded.- (1) When the Collector impounds any instrument under section 33, or receives any instrument sent to him under sub-section (2) section 37, not being an instrument chargeable with a duty of twenty naye paise, or less, he shall adopt the following procedure :-
(a) if he is of the opinion that such instrument is duly stamped or is not chargeable with duty, he shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable, as the case may be;Page 12 of 29 C/SCA/12015/2016 CAV JUDGMENT
(b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of five rupees; or, if he thinks fit, an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees.
Provided that, when such instrument has been impounded only because it has been written in contravention of section 13 or section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section.
(2) every certificate under clause (a), of sub-section (1) shall, for the purposes of this Act, be conclusive evidence of the matters stated therein.
(3) Where an instrument has been sent to the Collector under sub-section (2) of section 37 the Collector shall, when he has dealt with it as provided by this section, return it to the impounding officer."
9. Thus, in the aforesaid Section 39 of the Act, there is a reference of Section 33 as well as Section 37 of the Act. Therefore, at this stage, this Court would like to refer and reproduce the provisions of Sections 33 and 37 of the Act, which read as under:
"33. Examination and impounding of instruments.-(1)[Subject to the provisions Page 13 of 29 C/SCA/12015/2016 CAV JUDGMENT of Section 32-A, 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.
(2) For that purpose every such person shall 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 for the time being in force in the State when such instrument was executed or first executed :
Provided that, -
(a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898 (V of 1898);
(b) in the case of a Judge of High Court, the duty of examining and impounding any instrument under this Section may be delegated to such officer as the Court may appoint in this behalf."
37. Instruments impounded how to be dealt with.- (1) When the person impounding as instrument under Section 33 has by law or consent of parties authority to receive evidence and admits such instrument in evidence upon payment of a penalty as provided by Section 34 or of duty as Page 14 of 29 C/SCA/12015/2016 CAV JUDGMENT provided by Section 36, he shall send to the Collector an authenticated copy of such instrument, together with a certificate in writing, stating the amount of duty and penalty levied in respect thereof, and shall send such amount to the Collector, or to such person as he may appoint in this behalf.
(2) In every other case, the person so impounding an instrument shall send it in original to the Collector."
10. If the aforesaid provisions are read together, it can be said that under Section 39 of the Act any instrument which has been impounded by the Collector under Section 33 or has received any instrument under Section 37(2) of the Act and if he is of the opinion that such instrument is not duly stamped, he shall require the payment of proper duty together with penalty and in case of document received under Section 37(2) of the Act, return the same to the impounding officer after its examination is completed. Thus, it is clear that powers under Section 39 of the Act can be exercised with respect to such instruments which are either impounded by the Collector himself or by any other authority referred in the aforesaid provisions. Admittedly, in the present case, as observed hereinabove, document/sale deed in question was never impounded. Thus, the respondent No.2 - Deputy Collector had no authority to follow the procedure under Section 39 of the Act and demand deficit stamp duty and Page 15 of 29 C/SCA/12015/2016 CAV JUDGMENT penalty from the petitioners. Thus, exercise of powers by the respondent No.2 under Section 39 of the Act was without jurisdiction in the facts of the present case. Thus, when the respondent No.2 has selected wrong provision to initiate any proceedings, such act cannot be considered as legal and within powers and jurisdiction of the respondent No.2.
11. At this stage, it is also required to be noted that the respondent No.2 issued a show cause notice in January 2011 to the petitioners on the basis of the audit objection raised by the Audit Officer. Pursuant to the said notice, petitioners have submitted their reply on 28.01.2011 and specifically stated that the document in question has been returned to the petitioners by the concerned Sub-Registrar after the same was registered. It was specifically stated that the evidence with regard to the market value of the property fixed is not provided to the petitioners and therefore the said show cause notice is not acceptable to the petitioners. Powers under Section 39 of the Act cannot be exercised and therefore it was requested to withdraw the said notice issued under Section 39 of the Act. It is required to be noted that in spite of the aforesaid specific reply, while passing the impugned order, the respondent No.2 has not at all referred the said reply nor the contents of the said reply are Page 16 of 29 C/SCA/12015/2016 CAV JUDGMENT considered. It is further required to be noted that reasonable opportunity of hearing was also not provided to the petitioners and it is only stated in the impugned order that petitioners have not remained present on the date of hearing. Thus, the impugned order has been passed by the respondent No.2 without considering the reply give by the petitioners to the show cause notice and without affording reasonable opportunity of hearing to the petitioners. The impugned order is passed only on the basis of the objections raised by the office of Accountant General. Further, no reasons are assigned by the respondent No.2 while passing the impugned order.
12. From the record, it further transpires that the respondent No.2 has not even followed the procedure prescribed under Rule 4 of the Rules for determination of the correct market value of the property in question. Rule 4 of the Rules provides as under:
"[4.(1) On receipt of the instrument under sub-section (3) of section 31 or sub-section (1) of Section 32-A, the Collector of the District, where he thinks fit to do so, may for the purpose of his inquiry:-
(a) call for any information or record having bearing, on the question before him from any public office, officer or authority under the Central Government, State Government or any local authority;Page 17 of 29 C/SCA/12015/2016 CAV JUDGMENT
(b) examine and record statements from any member of the public, officer or the authority under the Central Government or State Government or any local authority, and
(c) inspect or empower any officer under him to inspect the property after due notice to the parties concerned.
(2) After examining the said information, records and evidence, if any, before him the Collector of the District shall issue a notice showing the basis on which true market value of property and proper duty payable thereon has been provisionally determined by him to every person to whom according to the provisions of section 30 is liable to pay stamp duty in respect of such instrument requiring such person to submit within 15 days from the date of the service of the notice upon such person, his representation in writing along with all the evidence in support of such representation.
(3) The Collector of the District shall after considering the representation, if any, received by him under sub-rule (2) pass an order determining the true market value and the proper duty payable on the instrument.]"
13. It is not in dispute that the procedure prescribed in the aforesaid Rule has not been followed and no opportunity of hearing was given to the petitioners before fixing the market value of the properties in question. Only on the basis of the report given by the Audit Officer, the respondent No.2 has fixed the market value of the Page 18 of 29 C/SCA/12015/2016 CAV JUDGMENT properties in question. Even the documents for determining the market value of the properties in question were not supplied to the petitioners. Thus, the respondent No.2 has violated the principles of natural justice while determining the market value of the properties in question.
14. In the aforesaid facts and circumstances of the present case, the contention raised by the learned Assistant Government Pleader with regard to the alternative remedy of filing an appeal is required to be considered.
15. Learned Assistant Government Pleader has placed reliance upon the decision of the Hon'ble Supreme Court in the case of Hameed Kunju (supra), wherein the Hon'ble Supreme Court has held in para 24 as under:
"24 In the first instance itself, the High Court, in our view, should have dismissed the writ petition in limine on the ground that since all the 4 orders impugned in the writ petition were amenable to their challenge before the appellate authority, the writ petition was not the proper remedy without first filing the appeal and get the same decided by the appellate Court on its merit in accordance with law. In other words, the High Court should have declined to entertain the writ petition under Article 227 on the ground of availability of an alternative remedy of appeal to the respondent. Indeed the respondent had actually filed appeal in the first round of litigation against the Page 19 of 29 C/SCA/12015/2016 CAV JUDGMENT orders of the Trial Court.
16. Learned Assistant Government Pleader Ms. Pathak has also placed reliance upon the decision of the Hon'ble Supreme Court in the case of Punjab National Bank (supra), wherein the Hon'ble Supreme Court has observed in para 5 as under:
"5. In our opinion, the order which was passed by the Tribunal directing sale of mortgaged property was appealable under Section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short "the Act"). The High Court ought not to have exercised its jurisdiction under Article 227 in view of the provision for alternative remedy contained in the Act. We do not propose to go into the correctness of the decision of the High Court and whetehr the order passed by the Tribunal was correct or not has to be decided before an appropriate forum."
17. This Court cannot dispute the proposition of law laid down by the Hon'ble Supreme Court in the aforesaid cases. However, it is required to be noted that in the case of Hameed Kunju (supra), the Hon'ble Supreme Court has observed in para 23 that, "in our considered view, there was no case made out on facts or/and in law by the respondent for entertaining his writ petition and interfere with the orders impugned therein." Thus, in the facts and circumstances of the said case the Hon'ble Supreme Court observed that High Court has committed an error while exercising Page 20 of 29 C/SCA/12015/2016 CAV JUDGMENT jurisdiction under Article 227 of the Constitution of India when the alternative remedy is available. Even the decision rendered by the Hon'ble Supreme Court in the case of Punjab National Bank (supra) would not be applicable to the facts of the present case.
17.1. As discussed hereinabove, though the petitioners tried to file an appeal before the Appellate Authority, the same was not registered as 25% of the amount fixed by the Deputy Collector was not deposited. Even the Appellate Authority has refused to consider the preliminary objection with regard to the jurisdiction of the Deputy Collector. Thus, alternative remedy in the facts of the present case, cannot be considered as an efficacious remedy.
18. Learned counsel for the petitioners has placed reliance upon the decision rendered by the Hon'ble Supreme Court in the case of Committee of Management & Anr. (supra), wherein the Hon'ble Supreme Court has held in para 23 as under:
"23. Furthermore, when an order has been passed by an authority without jurisdiction or in violation of the principles of natural justice, the superior courts shall not refuse to exercise their jurisdictions although there exists an alternative remedy. In this context, it is appropriate to refer to the observations made by this Court in Whirlpool Corpn. v. Registrar of Trade Page 21 of 29 C/SCA/12015/2016 CAV JUDGMENT Marks: (SCC p.10, para 15) "15.....But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the fundamental rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged."
(See also Guruvayoor Devaswom Managing Committee v. C.K.Rajan.)"
19. The Division Bench of this Court in Amarsinhji Stationery Industries Limited (supra), observed in paragraphs 4, 7, 11 and 12 as under:
"4. The appellants resisted the said proceedings. However, the Deputy Collector passed an order dated 23.1.1995 and demanded additional stamp duty of Rs. 7,71,400/. He further observed that on the said additional stamp duty, ten times penalty could be imposed. However, considering long passage of time, he demanded penalty of half that much i.e. Rs.42,23,000/. He also demanded additional registration fee of Rs. 31,175/. In aggregate, he demanded additional sum of Rs. 50,26, 625/from the appellants. Said order was challenged by the appellants before this Court in Special Civil Application No. 1172/1995 which was initially admitted and interim protection was granted in favour of the appellants. Learned Single Judge however, by his impugned order dated 25.6.2008 dismissed the petition on the sole ground that the order passed by the Deputy Collector challenged by the appellants in the main Page 22 of 29 C/SCA/12015/2016 CAV JUDGMENT Special Civil Application was appealable and thus the appellants had alternative statutory remedy available. It is against the said order that the appellants have approached this Court by filing Letters Patent Appeal.
xxx xxx xxx
7. The main question however, is whether the Deputy Collector could have levied the additional stamp duty and consequential penalty from the appellants?
xxx xxx xxx 11. Reading the above provisions in
conjunction, it can be seen that under Section 39 of the Bombay Stamp Act, any instrument which has been impounded by the Collector under Section 33 himself or has received any instrument under Subsection(2) of Section 37 and if he is of the opinion that such instrument is not duly stamped, he shall require the payment of proper duty together with penalty and in case of document received under Subsection(2) of Section 37, return the same to the impounding officer after its examination is completed. Thus powers under Section 39 can be exercised with respect to such instruments which are either impounded by the Collector himself or any other authority referred to in Section 33(1) and which has been after impounding sent by such authority as provided under Subsection(2) of Section
37. Admittedly, in the present case, document in question was never impounded. This has been the case of the appellants from the beginning and it has not been seriously disputed by the respondents. However, to put the matter beyond any possible controversy, we had specifically inquired with the learned AGP whether at Page 23 of 29 C/SCA/12015/2016 CAV JUDGMENT any point of time either the Collector or any other competent authority had impounded the document in question. After taking instructions in this regard, it was stated before us that the document was never impounded.
12. Under the situation, the Collector or as in the present case his delegatee had no authority to follow the procedure under Section 39 of the Act and demand additional stamp duty and other charges including the penalty."
20. The learned Single Judge of this Court in the order dated 23.02.2010 passed in Special Civil Application No.18319 of 2007 and allied matters, has observed in para 5 as under:
"5. As a result of hearing and perusal of the record, it is found that Section 39(1)
(b) of the Act refers to the Collector's power to stamp instruments, which are impounded, the pre-requisite to exercise the power under Section 39 of the Act being impounding of the instrument by the Collector under Section 33 of the Act, or the Collector receiving any instrument sent to him under Section 37(2) of the Act. There is no indication in the notice as to how, if at all, this pre-requisite and for exercise of jurisdiction under Section 39 of the Act is complied with.
The impugned notices which have been issued are based upon the comments of the Auditor General. The comments of the Auditor General are not supplied to the petitioner. It is also found that impugned notices have been issued after a period of more than five years from the date of registration of the instrument, It is also Page 24 of 29 C/SCA/12015/2016 CAV JUDGMENT clear that order of impounding of document by the competent officer was forwarded to the Deputy Collector. It is also found that Deputy Collector, has no powers to re-open the matter by calling upon the petitioners to show cause as to why additional stamp duties should not be levied when once the instrument has been duly stamped under the relevant provisions of the Act."
21. Similarly, the learned Single Judge of this Court in the order dated 27.10.2005 passed in Special Civil Application No.17916 of 2003, has observed in para 8 as under:
"8. I am of the opinion that in view of the aforesaid position when the property was purchased in an auction and the respondent Corporation, which is a Government Corporation, has fixed the upset price of the property and accepted the highest bid as the consideration of the property, the respondent authority ought not to have proceeded as if the property has been purchased at a lesser value. The Government Corporation has disposed of the property in public auction more than the price fixed by the respondent Corporation. I am of the view that such a price cannot be disputed by the respondent authorities. Therefore, the impugned orders are required to be quashed and set aside."
22. Keeping in view the aforesaid decisions rendered by the Hon'ble Supreme Court and Division Bench as well as learned Single Judge of this Court, if the facts of the present case, as Page 25 of 29 C/SCA/12015/2016 CAV JUDGMENT discussed hereinabove are considered, it can be said that this Court can exercise powers under Articles 226 and 227 of the Constitution of India though alternative remedy is available under certain circumstances viz. when the order passed by the authority is without jurisdiction or in violation of principles of natural justice. In the facts of the present case as discussed hereinabove, the respondent No.2 was not having power to proceed under Section 39 of the Act when the instrument in question has not been impounded. Thus, the order passed by the respondent No.2 is without jurisdiction. Further, reasonable opportunity of being heard is not provided to the petitioners and while passing the order even reply given to the show cause notice is not considered. Further, while determining the market value of the properties in question, procedure prescribed under Rule 4 of the Rules has not been followed and no opportunity of hearing was given to the petitioners before determining the market value of the properties in question. Thus, in the facts of the present case, this Court is inclined to exercise the powers under Articles 226 and 227 of the Constitution of India and therefore petitioners are not relegated to the Appellate Authority.
23. In the present case, when the petitioners have purchased the properties in auction held before BIFR conducted through operating agency Page 26 of 29 C/SCA/12015/2016 CAV JUDGMENT ICICI Bank and the sale was approved by the BIFR, it cannot be said that petitioners purchased the property in question at a lesser value than the market value. Thus, such price cannot be disputed by the respondent authorities. At this stage, this Court would like to refer Section 32A(1) of the Act, which 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, deed of settlement or transfer of lease by way of assignment, presented for registration 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 a proximate 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 [ 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 Districts in which either the whole or any part of the Page 27 of 29 C/SCA/12015/2016 CAV JUDGMENT 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 Corporation, shall be deemed to be the true market value of the property which is the subject matter of such instrument.]
24. Thus, from the proviso contained in the aforesaid Section, it is clear that 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 Corporation, shall be deemed to be the true market value of the property which is the subject matter of such instrument. Thus, when the petitioners have purchased the properties in question in an open auction held before BIFR and when the petitioners were the highest bidders and the sale was approved by the BIFR in favour of the petitioners in pursuant to which sale deed was executed, the consideration set forth in the instrument in question is required to be considered as the true market value of the properties in question.
Page 28 of 29 C/SCA/12015/2016 CAV JUDGMENT25. In view of the aforesaid discussion, petition is allowed. Impugned order dated 04.02.2015 passed by respondent No.2 is quashed and set aside. Rule is made absolute.
(VIPUL M. PANCHOLI, J) Jani Page 29 of 29