Madhya Pradesh High Court
Msd Real Estate Llp Through Vikas ... vs District Registrar And Additional ... on 10 June, 2020
Author: Vivek Rusia
Bench: Vivek Rusia
THE HIGH COURT OF MADHYA PRADESH
W.P. No. 8145/2020
M/s. MSD Real Estate LLP V/s. The Collector of Stamps & another.
1
Indore, dated : 10.06.2020
Petitioner by Shri V.K. Jain, Sr. Advocate with Shri
Atul Gupta, Advocate.
Respondent No.1 by Shri Pushyamitra Bhargava,
Addl. Advocate General, on advance notice.
Heard on question of admission and interim relief via VC. Per Vivek Rusia, J:
The petitioner has filed the present petition being aggrieved by notice dated 4.6.2020 issued by Addl. Tehsildar (Recovery) & Collector of Stamps, District Indore in exercise of powers u/s. 147 of M.P. Land Revenue Code,1959 (MPLRC), and notice dated 4.6.2020 for initiation of the auction proceedings. The petitioner is also assailing the validity of the order dated 4.6.2020 issued by Building Officer, Zone No.9, Indore Municipal Corporation whereby the mutation proceedings have been dropped because of suppression of fact of non-deposit of the penalty amount.
2. Facts of the case, in short, are as under :
(i) The petitioner is a registered partnership firm under the Limited Liabilities Partnership Act, 2008 engaged in the business of construction and development.
(ii) Late Shri H.C. Dhanda during his lifetime vide Will dated 26.10.2002 created a private trust called "H.C. Dhanda Trust" by appointing his son Jogesh Dhanda as Chairman and two other trustees. Later on, two more trustees were inducted in the trust.
The Board of Trustees in its meeting held on 6.4.2005 passed a THE HIGH COURT OF MADHYA PRADESH W.P. No. 8145/2020 M/s. MSD Real Estate LLP V/s. The Collector of Stamps & another.
2resolution to transfer the interest of the deceased H.C. Dhanda in favour of Jogesh Dhanda and Ishan Dhanda. To implement the aforesaid resolution, "Deed of Assent" was executed on 21.4.2005 whereby the trustees gave assent to complete the title of the properties of "Lantern Hotel" and "Jahaz Mahal" to the legatees and vested forever in their favour. The Lantern Hotel was constructed over the plot of land measuring 7082.71 Sq.ft. having Municipal No.28 situated at Ward No.47, Race Course Road, Indore (in short "property in question").
(iii) Based on the complaint made by a social worker, the Collector of Stamps registered a Case No.7777/46(B)/47(A)(3) and issued notice u/s. 48-B of Indian Stamps Act to the trustees demanding deficit stamp duty and penalty. Vide order dated 22.9.2008, the Collector of Stamps has held that the trustees have acted contrary to the intention of the executor viz. H.C. Dhanda and transferred the property in question to Jogesh Dhanda and Ishan Dhanda which is not a "Deed of Accent" but in fact a 'Gift' because no consideration was passed on for such transfer, therefore under Schedule 1-A of Article 31 of Indian Stamps Act, the duty @ 8% is liable to be paid on the market value of the property. Based on market guidelines of the year 2005-2006, the Collector of Stamps has assessed the value of the property in question at Rs.12,80,99,000/- and directed the trustees to pay the total stamp duty of Rs.1,28,09,900/- along with 10 times penalty to the tune of Rs.12,80,97,000/-.
THE HIGH COURT OF MADHYA PRADESH W.P. No. 8145/2020 M/s. MSD Real Estate LLP V/s. The Collector of Stamps & another.
3(iv) Being aggrieved by the aforesaid order dated 22.9.2008, the trustees of H.C. Dhanda Trust filed W.P. No.8888/2011 before this Court. Vide order dated 30.5.2017, the Writ Court has dismissed the writ petition.
(v) Being aggrieved by the dismissal of the writ petition, the trustees of H.C. Dhanda filed W.A.No. 286/2017 before Division Bench this the High Court. After the dismissal of the writ appeal, now SLP (Civil) Diary No.30539/2017 has been filed before the Supreme Court of India. By order dated 10.11.2017, the Apex Court stayed the order qua penalty subject to the condition of payment of stamp duty within one month. Since the trustees have failed to deposit the stamp duty, therefore, vide order dated 22.4.2019 the apex Court has withdrawn the aforesaid interim protection.
(vi) After the above order dated 22.4.2019 passed by the Apex Court, the Collector of Stamps, Indore has initiated execution proceedings for recovery of stamp duty as well as penalty amount. Vide letter dated 9.1.2020, the petitioner requested for staying the recovery proceedings till the pendency of the SLP before the Apex Court. As there was no stay in favour of the Trustees, therefore the petitioner has deposited the amount of Rs.1,28,09,700/- vide Challan No.75 dated 7.11.2019. For payment of penalty amount, the petitioner has issued six post- dated cheques payable from 25.2.2020 to 25.5.2021 for payment of Rs.12,80,97,025/- to the Collector of Stamps on 22.11.2019. Vide letter dated 23.11.2019, the Collector of Stamps has THE HIGH COURT OF MADHYA PRADESH W.P. No. 8145/2020 M/s. MSD Real Estate LLP V/s. The Collector of Stamps & another.
4accepted the aforesaid six cheques and closed the recovery proceedings.
(vii) The trustees of the trust viz. Jogesh Dhanda and Ishan Dhanda have sold the property in question to the present petitioner vide registered sale-deed 23.11.2019 in Rs.67.00 Crores. The petitioner paid the stamp duty to the 1,28,09,700/-. After the execution of the aforesaid sale-deed, the petitioner applied before the Town & Country Planning Department (TNCP) for development permission. Vide order dated 18.12.2019, the TNCP has granted permission for the construction of retail shops and professional offices in the property in question.
(viii) Thereafter, the petitioner applied for the mutation before the Indore Municipal Corporation. Since there was a huge recovery of the property tax, therefore, the Commissioner has declined to mutate the name of the petitioner. Thereafter, the petitioner has deposited the property tax amounting to Rs.2,92,20,794 under protest and name of the petitioner has been mutated. Thereafter, the petitioner has applied for grant of building permission.
(ix) Since the petitioner did not deposit the penalty amount, therefore, the Addl. Tehsildar (Recovery) & Collector of Stamps issued the notice u/s. 147 of the MPLRC dated 4.6.2020 for recovery of Rs.8,80,97,025/- followed by notice dated 4.6.2020 directing Jogesh Dhanda to deposit the aforesaid amount within seven days, failing which, auction proceedings would be THE HIGH COURT OF MADHYA PRADESH W.P. No. 8145/2020 M/s. MSD Real Estate LLP V/s. The Collector of Stamps & another.
5initiated. Meanwhile, the Building Officer of Indore Municipal Corporation vide letter dated 4.6.2020 has dropped the mutation proceedings as the petitioner has suppressed the fact that there is the recovery of penalty amount of 8,80,97,025/- over the property in question.
(x) Being aggrieved by the aforesaid notices/orders, the petitioner has filed the present petition.
3. We have heard Shri V.K. Jain, learned senior counsel appearing for the petitioner and Shri Pushyamitra Bhargava, learned Addl. Advocate General appearing for respondent No.1 at length and perused the material available on record.
4. Shri Jain, learned senior counsel appearing for the petitioner, submits that the petitioner has already deposited the stamp duty as well as penalty amount of Rs.12,80,97,025/- vide six post-dated cheques. Out of six cheques, two cheques have already been encashed, therefore, the Collector of stamps has wrongly initiated the auction proceedings for recovery of the remaining amount. The SLP filed by the trustees is still pending in which order of Collector of Stamps dated 22.9.2008 is under challenge. The petitioner has also deposited a huge amount of property tax and also obtained the development permission from the TNCP. The partners of the petitioner firm are permanent residents of Indore and property in question is also situated at Indore. The amount can be recovered at any time, therefore, the auction proceedings ought not to have been initiated. He further submits that before initiating the attachment proceedings, the THE HIGH COURT OF MADHYA PRADESH W.P. No. 8145/2020 M/s. MSD Real Estate LLP V/s. The Collector of Stamps & another.
6procedure prescribed u/s. 146 of the MPLRC has not been followed by the Addl. Tehsildar. The petitioner has no intention to commit any default in payment of the remaining amount of penalty, hence, the impugned recovery be stayed and the Indore Municipal Corporation be directed to consider the application for building permission in favour of the petitioner.
5. On the other hand, Shri Pushyamitra Bhargava learned Addl. Advocate General appearing for respondent No.1, submits that initially, the Apex Court granted the interim protection to the petitioner subject to payment of stamp duty, but for two years, the petitioner enjoyed the stay without depositing the stamp duty, therefore, the interim protection has now been withdrawn. As on today, there is no interim protection in favour of the Trustees and petitioner as well, therefore, recovery proceedings have rightly been initiated against the petitioner who has purchased the property in question with all liability including deposit f the penalty amount. At present, the State is in the need of funds to fight with Corona (Covid-19) epidemic. The petitioner purchased the property in question in Rs.67.00 Crores, despite knowing that there is recovery of stamp duty with 10 times penalty. The present petition is not maintainable before this Court because of the pendency of the SLP in which the interim protection has not been granted to the predecessor of the petitioner. The action of the respondent Addl. Tehsildar & Collector of Stamps is legal and proper t. He further submits that for recovery of the penalty amount there is no provision of THE HIGH COURT OF MADHYA PRADESH W.P. No. 8145/2020 M/s. MSD Real Estate LLP V/s. The Collector of Stamps & another.
7payment of penalty amount in equal instalments, hence in absence of any statutory right, no writ/ order and writs/ orders can b issued in favour of the petitioner.
6. By way of the present petition, the petitioner is not assailing its liability to pay the stamp duty as well as the penalty amount, for which the SLP is pending before the Hon'ble Apex Court. Initially, vide interim order dated 10.11.2017 there was a stay on the recovery of penalty amount subject to deposit of stamp duty within one month. Since the trustees of H.C. Dhanda have failed to deposit the amount of stamp duty within the stipulated time, therefore, vide order dated 22.4.2019 stay has been vacated. Thereafter, the petitioner agreed to purchase the property in question from the trustees of H.C. Dhanda with the condition to clear all tax liabilities. The petitioner deposited the stamp duty on 7.11.2019 and for payment of penalty amount, issued six post-dated cheques. Shri V.K. Jain learned senior counsel appearing for the petitioner has failed to point out any provision in the Stamps Act regarding payment of penalty amount by way of post-dated cheques. Therefore, in the absence of any provision, such a facility by the respondent cannot be approved by this Court. Admittedly, as of today, there is no interim protection in favour of the petitioners in the pending SLP. The petitioner being a subsequent purchaser of the property in question is liable to pay the penalty amount.
7. So far as non-compliance of provisions of Section 146 and 147 of the MPLRC is concerned, the petitioner is THE HIGH COURT OF MADHYA PRADESH W.P. No. 8145/2020 M/s. MSD Real Estate LLP V/s. The Collector of Stamps & another.
8having remedy before the revenue authorities under the MPLRC. During pendency of the above SLP, this Court lacks jurisdiction to grant any relief in favour of the petitioner against recovery of the stamp duty and penalty.
8. So far as order dated 4.6.2020 issued by the Building Officer of Indore Municipal Corporation is concerned, at this stage, no interference is called for as the petitioner has failed to deposit the penalty amount and this fact was suppressed in the application submitted for building permission. After payment of the penalty amount in toto, the petitioner would be free to apply afresh for building permission again. After the deposit of the stamp duty and the penalty, the Municipal authorities are directed to reconsider the application for building permission.
9. In view of the foregoing discussion, in the considered opinion of this Court, no interference is called for. The petition is accordingly dismissed.
No order as to costs.
( S.C. SHARMA ) ( VIVEK RUSIA )
JUDGE JUDGE
Alok/-
Digitally signed by Alok Gargav
Date: 2020.06.12 18:18:26 +05'30'