Madras High Court
M/S.Shangkalpam Industries (P) Ltd vs The Chief Controlling Revenue on 12 April, 2010
Author: R.Subbiah
Bench: R.Subbiah
In the High Court of Judicature at Madras Dated: 12.04.2010 Coram: The Honourable Mr.Justice R.SUBBIAH Civil Miscellaneous Appeal Nos.257 to 260 of 2010 M/s.Shangkalpam Industries (P) Ltd., represented by its Director Dr.K.Shanmughanathan, No.2/4, Ramarao Street, T.Nagar, Chennai-17. ..Appellant in all appeals ..vs.. 1. The Chief Controlling Revenue Authority, O/o.The I.G.of Registration, Madras-600 028. 2. The D.R.O.Stamps, O/o.The D.R.O.Chennai, Chennai Collectorate, Chennai-600 001. 3. The Joint Sub-Registrar-I, R.O.Madras Central, Chennai-600 005. ..Respondents in all appeals Civil Miscellaneous Appeals filed under Section 47-A(10) of the Indian Stamp Act, 1899 read with Rule 9(5)(a) of the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules 1968, against the order of the 1st respondent dated 17.11.2009 in Proceedings No.44506/5/09 relating to Document Nos.864/2008 and 303 to 305/2009 respectively. For Appellant : Mr.R.Subramanian for Mr.M.Sudhakar For Respondents : Mr.V.Srikanth, Spl.G.P.,(C.S) COMMON JUDGMENT
All these appeals are filed as against the order passed by the 1st respondent in his proceedings No.g/K/vz;/44506-vd; 5-09. dated 17.11.2009, whereby the market value of the property purchased by the appellant in all these appeals has been enhanced to a sum of Rs.10,350/- per sq.ft. and the appellant has been directed to pay the deficit stamp duty calculated on the basis of the market value arrived at by him.
2. The brief facts, which are necessary to dispose of all the appeals, are as follows:
The appellant herein has purchased a piece and parcel of land situated in Mylapore Village comprised in R.S.Nos.3824 and 3825 (Old S.No.932 and 934) in Block No.75 in different separate sale deeds registered as Document Nos.864 of 2008 and 303 to 305 of 2009 in the office of the 3rd respondent on 10.09.2008 and 27.04.2009. The total extent of property purchased under the 4 sale deeds is about 21 grounds and odd. At the time of registration, the appellant has paid the stamp duty on the value of the property at Rs.4,758/- per sq.ft. After registration, all the four sale deeds were referred to the 2nd respondent under section 47-A(1) of the Stamp Act and after observing all the formalities as prescribed under the said Act, the 2nd respondent has passed an order on 25.08.2009 in his Proceedings No./e/f/rp/g/vz;/m1 23/2008 by fixing the market value at Rs.10,075/- per sq.ft and directed the appellant herein to pay the deficit stamp duty on the basis of the market value at Rs.10,075/- per sq.ft. Aggrieved over the same, the appellant herein has filed appeals before the 1st respondent for reduction of the market value fixed by the 2nd respondent at Rs.10,075/- per sq.ft. But, in the appeals filed by the appellant, the 1st respondent has determined the market value at Rs.10,350/- per sq.ft.and directed the appellant to pay the deficit stamp duty on the basis of the said determined market value. Aggrieved over the same, the present appeals have been filed.
3. Learned counsel for the appellant, by relying upon the Explanation to Section 47-A of the Stamp Act, has submitted that the market value of the property should be estimated to be the price which, such property would have fetched or would fetch, if it is sold in the open market. In the instant case, the price of the property purchased by the appellant was in dispute. The learned counsel for the appellant invited the attention of this Court to a civil litigation based on a lease deed dated 16.12.1975 related to the property concerned in these cases. The brief facts of the cases are that the subject property was comprised of three different plots marked as 'A', 'B' and 'C', which are more particularly described as A' Schedule, 'B' Schedule and 'C' Schedule, attached to the deed of lease dated 16.12.1975 referred to above. The lease between the lessor and the lessee in that case was initially for a period of thirty years commencing from 16.12.1975, subject to automatic renewal for a further period of thirty years each upon the expiration of the prior period of thirty years, unless the lessee expressed its intention in writing not to renew the lease, at least three months before the expiration of the lease. While it was so, for the reason well set out in the case, namely, C.S.No.848 of 2006, the lessors and the legal heirs of some deceased lessors declined to renew the lease deed. The lessee in that case, namely, M/s.Voltas Limited filed a suit C.S.No.848 of 2006. as against the legal representatives of the vendors of the appellant, namely, defendants 1 and 17, who are alleged to have declined to renew the lease deed and on subsequent dates, the defendants, who are the legal representatives of the deceased lessors deliberately and wilfully failed to renew the lease deed, on the Original Side of this Court, for specific performance and also filed O.A.No.900 of 2006 seeking an order of interim injunction that the plaintiff's possession and enjoyment of the suit properties should not be interfered with by the respondents/defendants, who are the owners of the property. But this Court appointed an Advocate Commissioner to invite the offers for the sale of the suit properties shows as 'A' 'B' and 'C' schedules in the Judge's summons, through paper publication. Aggrieved over the same, M/s.Voltas Limited, namely, the lessee, preferred O.S.A.No.147 of 2008 against the order passed in O.A.NO. IN c.s.nO.848 of 2006 contending that the order of the learned single Judge was erroneous and liable to be set aside, besides being beyond the scope of the relief prayed for in that application. The appeal was disposed of on 19.08.2009 by a Division Bench of this Court, in which, the impugned order passed by the learned single Judge was set aside. The learned counsel for the petitioner submitted that all these facts would show that the properties were litigious properties.
4. Learned counsel further submitted that though all these facts were brought to the notice to the appellate authority in the appeals filed under section 47-A(5) of the Stamp Act, none of these points was considered by the appellate authority. Though a judgment was cited by the appellant reported in 2009-3-L.W.326 in the case of V.N.Devadoss.. vs.. CCRA in support of his contention, the appellate authority has not accepted the submission made by the appellant stating that the principle laid down in the said judgment cannot be applied to the facts of these cases since in that case, the Government was one of the parties, whereas in the present case, the transaction is in between the two private parties. Learned counsel further contended that the appellate authority, taking into consideration the pendency of litigation in respect of the property, ought not to have fixed the market value at the higher rate of Rs.10,350/- per sq.ft and that the said reasonings arrived at by the authority below are not correct. In this regard, the learned counsel relied on the decisions reported in 1997-2 L.W.579 (S.P.PADMAVATHI ..vs.. STATE OF TAMIL NADU), (2004) 2 SCC 9(R.SAI BHARATHI ..vs.. J.JAYALALITHA AND OTHERS), 2009-3-316 (M/s.RESIDENTS WELFARE ASSOCIATION, NOIDA ..vs.. STATE OF U.P.AND OTHERS) and 2009-3-L.W.236 (V.D.DEVADOSS ..vs..CHIEF REVENUE CONTROLLING OFFICER-CUM-INSPECTOR GENERAL OF REGISTRATION, CHENNAI) in support of his contention.
5. Further, the learned counsel for the appellant contended that under Rule 5 of the Tamil Nadu Stamp (Prevention of Under-valuation of Instruments) Rules, 1968, the authority has to consider any other features having a special bearing on the valuation of the site and any special feature of the case represented by the parties. In the instant case, though it was represented to the authorities concerned about the pending litigation of the suit property, they have not considered the same. Further, the Registering Officer must have a reason to believe that the market value of the property which is the subject of conveyance has not been truly set forth in the instrument. But, in the instant case, the documents were referred to since the guideline value of the property is more than the value fixed in the document. The 1st respondent has also come to a conclusion that since the guideline value is more than the market value fixed in the instrument, the appeal could not be entertained, but, the guideline value cannot be taken into consideration for referring the document under Section 47-A of the Stamp Act. Hence, the impugned order passed by the 1st respondent is liable to be set aside.
6. Per contra, the learned Special Government Pleader appearing on behalf of the respondents has submitted that the guideline value of the area in question was Rs.10,500/- per sq.ft. at the relevant point of time. But the appellant had paid the stamp duty valuing the market value at Rs.4,758/- per sq.ft. When compared to the guideline value, the market value set forth in the document is far below the guideline value. Under such circumstances, the reference made by the 3rd respondent under Section 47-A cannot be found fault with. Moreover, the dispute referred to by the appellant is personal in nature, which will not bring the market value of the property down. Further, the learned Special Government Pleader submitted that the judgments relied on by the learned counsel for the appellant cannot be made applicable to the facts of the present case because the finding depends upon the facts and circumstances of each case. That apart, the learned Special Government Pleader also submitted that as per Rule 12 of the Tamil Nadu Stamp (Prevention of Undervauation of Instruments), Rules, 1968, the appellate authority, after considering all the evidence adduced and representations made on behalf of the appellant and examining the records, shall decide whether or not the market value of the properties as determined in the order of the 2nd respondent is correct or not. In addition to that, the Appellate Authority is also empowered to determine the market value without accepting the valuation of properties fixed by the subordinate officers. Therefore, no fault could be found in enhancing the market value in the appeals filed by the appellant.
7. Heard the learned counsel for both parties and perused the materials available on record.
8. On going through the records, it is clear that there was a litigation over the property between the vendors of the appellant and M/s.Voltas Limited. The factum of the said litigation was brought forth to the notice of the 1st respondent. But, in his order, the first appellate authority has not properly dealt with the contentions put forth by the appellant in his appeals. The first appellate authority rejected the contentions of the appellant by way of passing remarks stating that since the transaction is between two individuals, the judgment relied upon by the appellant in 2009-3-L.W.236 (cited supra), wherein the Government is a party, cannot be accepted. In my considered opinion, the first appellate authority ought to have dealt with the various contentions raised by the appellant to the effect that whether the litigation over the suit property would bring the market value down or not. Further, I find that the market value determined by the 1st respondent in the appeals filed by the appellants, without issuing notice to the appellant by expressing his intention to determine the market value, is patently illegal. In this regard, I am of the view that when an order is passed affecting a person, he should be heard before passing such an order by issuing a notice, expressing the intention of the appellate authority for determining the market value, particularly, in the absence of any specific provision to enhance the market value in an appeal filed by the purchaser without issuing any notice and affording an opportunity of being heard. Under such circumstances, I am not inclined to accept the submissions made by the learned Special Government Pleader to the effect that the appellate authority is empowered to determine the value of the property on his own without issuing notice to the appellants. Though reliance is placed by the learned Special Government Pleader on Rule 12 in support of his contention that the said Rule empowers the appellate authority to fix the correct market value, it does not mean that, without issuing prior notice to the appellant, the market value could be enhanced by the appellate authority in the appeal filed by them for reduction of the market value fixed by the authorities.
9. In my conclusion, the main and centre point of this appeal for consideration is summarized as follows:
All the three respondents, starting from the 3rd respondent i.e.the Registering officer (the Joint Sub- Registrar) upto the appellate authority (Chief Controlling Review Authority), as prescribed in sub-section (5) of Section 47-A, as inserted in the State of Tamil Nadu by way of amendment to the Indian Stamp Act in the ascending manner are, expected to estimate the price that would have fetched to the property, if sold in the open market, on the date of the execution of the concerned Instrument of Conveyance, in that third respondent registered the document on payment of the stamp duty estimating the value of the property at Rs.4,758/- per sq.ft. The 2nd respondent, the District Revenue Officer, on reference made by the 3rd respondent under Section 47-A(1) of the Act and on receipt of the same, passed an order, determining the market value of the property under Section 47-A(2) at Rs.10,075/- and lastly, on an appeal preferred before the 1st respondent by the appellant on being aggrieved by the order of the 2nd respondent, which appeal shall be "heard and disposed of" in terms of sub-section (5) of Section 47-A of the Act referred to above and in such manner, as may be, prescribed by the Rules made under this Act, the 1st respondent has estimated the price at Rs.10,350/- per sq.ft. without giving notice to the affected party/appellant and thereby without giving any opportunity for the appellant to put forth his defence which amounts to violation of the cannons of the principles of natural justice and bypassing the statutory mandate, as embodied in sub-section (5) of Section 47-A of the Indian Stamp Act (Tamil Nadu Amendment), which reads as follows:
"Any person aggrieved by an order of the Collector under sub-section (2) or sub-section (3), may appeal to such authority as may be prescribed in this behalf. All such appeals shall be preferred within such time, and shall be heard and disposed of in such manner, as may be prescribed by Rules made under this Act".
10. In this context, reference also may be had to the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968, which were made in exercise of the powers conferred by Section 47-A and 75 of the Indian Stamp Act, 1899, explaining the procedures to be adopted in the disposal of appeals preferred by the appellant under sub-section 5 of section 47-A of the Stamp Act.
11. Rule 9 deals with the appeals before the appellate authority i.e.the 1st respondent herein. This Rule 9 was substituted by G.O.Ms.No.35, CT (JI), dated 09.03.2001.
12. Rules 10, 11, 11-A and 12 deal with the procedures to be followed and guidelines to be adopted for disposal of appeals filed under section 47-A(5) of the Indian Stamp Act.
13. Rule 11 reiterates the principles laid down in section 47-A(5), which directs the Authority to hear the aggrieved person serving notice and receiving any evidence on his behalf.
15. When the sub-section(5) of Section 47-A of the main Amendment Act introduced by the Tamil Nadu Government and Rules 9 and 12 framed thereunder are conjointly examined, it makes it clear that the 1st respondent in this case has not strictly adhered to the mandatory direction of sub-section (5) of Section 47-A and the Rules made thereunder, particularly Rule 11. Thus, it is manifestly clear that these mandatory provisions of the Act as well as the Rules are overlooked and violated by the appellate authority viz., the 1st respondent herein in estimating the value of the property. The failure on the part of the 1st respondent to follow the mandatory directions of sub-section (5) of Section 47-A and the Rules framed thereunder warrants interference by this Court. Hence, I am of the view that the market value fixed by the 1st respondent is not just, proper and reasonable and the same is liable to be set aside.
Therefore, the impugned order passed by the 1st respondent in respect of Documents Nos.864 of 2008 and 303 to 305 of 2009 is hereby set aside and all the appeals are allowed and the matters are remitted to the 1st respondent for fresh consideration. The 1st respondent is directed to issue notice to the appellant and conduct fresh enquiry, by giving opportunity to the appellant to put forth their contentions and complete the proceedings, within two months from the date of receipt of a copy of this order. No costs.
gl To
1. The Chief Controlling Revenue Authority, O/o.The I.G.of Registration, Madras-600 028.
2. The D.R.O.Stamps, O/o.The D.R.O.Chennai, Chennai Collectorate, Chennai-600 001.
3. The Joint Sub-Registrar-I, R.O.Madras Central, Chennai 600 005