Kerala High Court
District Registrar vs Lake Paradise on 18 September, 2001
Equivalent citations: AIR2002KER105, AIR 2002 KERALA 105, (2001) ILR(KER) 3 KER 515, (2001) 2 KER LJ 517, (2001) 3 KER LT 521, (2002) 1 CIVLJ 389
JUDGMENT R. Bhaskaran, J.
1. These appeals are filed against the judgment of the District Judge, Ernakulam, against an order passed under S.45(B) of the Kerala Stamp Act. The delay of more than 556 days in filing the appeals was already condoned. The order passed by the District Registrar shows that it is a printed order in all the cases filling up the figures only and without giving any reason for demanding enhanced stamp duty on the documents executed by the respondent herein. It is also stated in that order that the respondent should pay the deficit stamp duty within 15 days of receipt of the order. The District Court has allowed the appeals holding that it is the consideration which was passed between the parties that is relevant for fixing the stamp duty and it is not the market value of the property that is to be taken into account under S.45 of the Act.
2. The learned Government Pleader appearing for the State submitted that the appeal was decide without hearing the respondent and there was no opportunity to put forward the case of the Government before the District Court. No reason is stated in the memorandum of appeal which prevented the appellant's counsel from appearing in and arguing the matter before the District Court. The learned Government Pleader submitted that the order issued by the District Registrar is only a provisional order and therefore no appeal was maintainable before the District Court from that order. A reading of the order produced in this second appeal shows that it was not a provisional order inasmuch as the order demanded payment of the deficit stamp duty within 15 days. If it was a provisional order, it should have been passed under R.6 of the Kerala Stamp (Prevention of Undervaluation of Instruments) Rules, which says that the Collector shall communicate a copy of his order provisionally determining the value of the properties or the consideration thereof and the duty payable to all the persons who are liable to pay the duty along with a notice in Form III or Form IIIA, as the case may be, and call upon the parties to lodge their objections, if any, to such determination of the value or consideration within the time specified in the notice. Inasmuch as the order produced along with the second appeal does not show that the parties were given notice to lodge their objections, it cannot be said that the order is a provisional order. Therefore, the first question of law raised in these second appeals, viz., whether the court below is justified in entertaining an appeal filed against a provisional order issued by the District Registrar under S. 45B of the Kerala Stamp Act, 1959, is without any basis. The next question of law framed by the appellant is whether the court below is justified in placing reliance on the decision in Balakrishnan v. Collector (1996 (1) KLT SN 31, Case No.41) in the peculiar facts and circumstances involved in the case. That decision shows that it is necessary while fixing stamp duty it is the consideration which passes between the parties and not the market value of the property that is to be taken into account. No other decision taking a contrary view has been pointed out by the Government Pleader. Nothing has been stated to show that the decision is in any way wrong. The third question of law framed is whether the appellant is not entitled to be heard before passing the judgment setting aside the impugned order. The appellant has no case that at the time of hearing, no notice was given to the Government Pleader before hearing the appeal. If the Government Pleader was absent and the matter was decided in their absence, the appellant could have filed an application before the District Judge himself for re-hearing the matter and the same was also not done. In such circumstances, I do not find any reason to admit these second appeals.
3. A perusal of the Kerala Stamp Act and the Kerala Stamp (Prevention of Undervaluation of Instruments) Rules, 1968, shows that detailed procedures are prescribed before an order is passed determining the value of the properties or consideration thereof and duty payable on the instrument which according to the Collector is undervalued and insufficient stamp duty paid at the time of registration of the document. S. 45A(3) of the Act states that where on verification set forth in the instrument is less than the fair value of the land fixed under S. 28A, he shall, by order, direct the payment of proper stamp duty on the fair value of the land fixed within a period of seven days. Any person aggrieved by the order may file an appeal to the Collector. S.45B(1) of the Act says that if the Registering Officer while registering an instrument has reason to believe that the value of the property or the consideration 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 of consideration. Thereafter, the Collector shall give notice to the parties and after giving an opportunity of being heard and after holding an enquiry in such manner as may be prescribed determine the value of the consideration and the duty payable and the deficient amount shall be payable by the person liable to pay the duty and on such payment the Collector shall endorse a certificate on the instrument under his seal and signature. Under sub-s. (3) of S. 45B, the Collector may suo motu within two years from the date of registration of any instrument not already referred to him under sub-s.(1) call for and examine the instrument for the purpose of satisfying himself as to the correctness of its value or consideration and if after such examination he has reason to believe that the value or consideration has into been truly set forth in the instrument, he may determine the value or consideration in accordance with the procedure provided for in sub-s. (2). Any person aggrieved by the order of the Collector may file appeal to the District Court.
4. The procedure to be followed while realising the deficit stamp duty is prescribed under the Kerala Stamp (Prevention of Undervaluation of Instruments) Rules, 1968. This is not a case where the Registering Officer had referred the matter to the Collector under sub-s. (1) of S.45B of the Act. Whether it is under reference from the Registering Officer or on suo motu action by Collector, R.4 of the Rules mandates the Collector to issue a notice in Form II or Form IIA as the case may be asking the person by whom and in whose favour the instrument has been executed to submit a representation in writing to show that the consideration has been truly set for the in the instrument and produce evidence. The Collector may also record a statement from any person to whom a notice is issued. He can call for any information or record from any public officer, examine and record statements and inspect the property after due notice. After considering the representation and after examining the records and evidence, the Collector shall pass an order in writing provisionally determining the value of the consideration and the duty payable. The basis on which the provisional value of consideration was arrived at shall be clearly indicated in the order. After passing a provisional order, the Collector shall communicate a copy of such order and the duty payable to persons who are liable to pay the duty along with a notice in Form III of Form IIIA and call upon the parties to lodge their objections and after consideration of the objections and all other relevant facts and evidence placed before him, pass an order determining the value of the properties or consideration therefo and the duty payable on the instrument and the time within which the deficient amount of stamp duty is to be paid and communicate the order to the parties.
5. It can be seen from the above procedures prescribed that the provisional order determining the value of the property should contain the basis on which the provisional value of consideration is arrived at. In the absence of the same, it is not possible for the parties to give an effective reply. The learned Government Pleader submitted that the order passed is a provisional order. In the order produced (assuming that it is a provisional order), the basis on which the provisional value or consideration was arrived at is not indicated. The order itself shows that only the figures are filled up in the printed order which shows that there was no application of mind with reference to the facts of the present case. The order also shows that notice was issued calling for explanation. It contains clauses stating that explanation was received/not received leaving it to the officer to strike off whichever is not applicable. But the order without the unnecessary clause being sturck off. In subsequent paragraphs also this is repeated. The respondent is finally directed to pay the deficit stamp duty and not to submit objections for the same. Therefore, it is not a provisional order but a final order. Though the counsel for the respondent submitted that none of the procedures prescribed under the Rules has been followed before issuing the order, the learned Government Pleader was not in a position to produce any record to show that the procedure was actually followed. Such a contention is contrary to the very contention raised in the second appeal that the order is only a provisional order. The appeal also shows that it is a suo motu proceedings taken by the Collector under S. 45B whereas the order refers tot he report of the Sub Registrar as the basis of the action. As already noted, there are several portions of the printed order which were to be scored off if not applicable. Since it is not done it is not possible to know what exactly was intended by the order. Therefore, it is always necessary that the Registrar shall pass a formal order giving the basis of his conclusions whether tentative or final as otherwise it is not possible for the executant of the document to file an effective reply if it is provisional or the appellate authority (District Court) to know the basis of the decision.
6. Before parting with the judgment, I have also to note the obvious mistake in R.4 of the Kerala Stamp (Prevention of Undervaluation of Instruments) Rules, 1968, where it refers to sub-s. (3) of S.45A. It could only e sub-s. (3) of S.45B as it is only under that section that the Collector has got power to take suo motu action for collecting the deficit stamp duty on instruments which were registered showing incorrect value or consideration.
7. In view of the above discussion, all the second appeals fail and they are dismissed.