Allahabad High Court
M/S Solid Properties Private Limited vs State Of U.P. And 3 Others on 24 October, 2024
Author: Saumitra Dayal Singh
Bench: Saumitra Dayal Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD ?Neutral Citation No. - 2024:AHC:170898-DB Court No. - 39 Case :- WRIT - C No. - 35377 of 2024 Petitioner :- M/S Solid Properties Private Limited Respondent :- State Of U.P. And 3 Others Counsel for Petitioner :- Nikhil Agrawal,Sanjay Kumar Mishra,Saurav Pandey Counsel for Respondent :- C.S.C. Hon'ble Saumitra Dayal Singh,J.
Hon'ble Donadi Ramesh,J.
1. Heard Shri Nikhil Agrawal, learned counsel for the petitioner and Shri Arimardan Singh Rajpoot, learned Additional Chief Standing Counsel for the State.
2. Present petition has been filed, that the petitioner has purchased unused Floor Area Ratio (FAR) of Princely Estate, State Project Plot No. GH-02/04A, Sector-76, Noida, from the Court Receiver Mr. R. Venkataramani Senior Advocate, under the order of the Hon'ble Supreme Court dated 29.03.2023 in Writ Petition (Civil) No.940 of 2017 (Vikram Chatterji and Other Vs. Union of India and Others).
3. To the above, there can be no doubt. For the purpose of payment of stamp duty, since the immovable properties are located inside the State of Uttar Pradesh, the matter fell in the hands of the respondent- State authorities. The grievance of the petitioner is, overlooking the mandate of Section 47A read with Article 18(1)(c) of Schedule-1 of the Indian Stamp Act, 1899, and overlooking the binding law declared by the Supreme Court in Registrar of Assurances and Another Vs. ASL Vyapar Private Limited and Another 2022 SCC OnLine SC 1554, the respondent no.3 demanded stamp duty Rs.5,10,86,000/- on the market value of the FAR purchased by the petitioner overlooking the actual sale consideration Rs.43 crores.
4. The petitioner deposited the above amount of the stamp duty demanded, under protest. The demand of stamp duty at market value rate being clearly impermissible, the petitioner has thereafter represented to respondent no.3 and to respondent no.1 seeking refund of the excess amount of stamp duty paid. That representation filed on 30.07.2024 and 05.08.2024 (Annexure Nos. 8 and 9 to the writ petition), have remained pending.
5. Though, no final decision is to be made at this stage, prima facie case does exist in favour of the petitioner. It requires serious consideration by the highest State authority so that a uniform policy decision may flow. In that regard, we may note that in Registrar of Assurances (supra), it has been observed as below:-
"25. That the Hon'ble Apex Court in the matter of V.N. Devadoss v. Chief Revenue Control Office-cum-Inspector, (2009) 7 SCC 438, held that it is not a routine procedure to be followed in respect of each and every document of conveyance presented for registration without any evidence to show lack of bona fide of the parties. Therefore, the basis for the exercise of power under section 47A of the Act is the wilful undervaluation of the subject of transfer with fraudulent intention to evade payment of proper stamp duty. The Registering Officer cannot have any reason to believe that the market value of the property was not truly set forth in an instrument of transfer executed pursuant to the order of a court, when the property was sold at a public auction after the publication of the advertisement in newspapers.
26. That the Hon'ble Apex Court in a recent judgment and order dated 10.11.2022, in the matter of Registrar of Assurances and Another vs. ASL Vyapar Private Ltd. and Another, reported in 2022 SCC OnLine SC 1554, while considering the valuation in case of auction of property, for the purposes of levy of stamp duty has inter-alia held the following:
"24. On the conspectus of the matter, we have not the slightest hesitation in upholding the view that the provision of Section 47A of the Act cannot be said to have any application to a public auction carried out through court process/ receiver as that is the most transparent manner of obtaining the correct market value of the property.
25. It is no doubt true that in a court auction, the price obtainable may be slightly less as any bidder has to take care of a scenario where the auction may be challenged which could result in passage of time in obtaining perfection of title, with also the possibility of it being overturned. But then that is a price obtainable as a result of the process by which the property has to be disposed of. We cannot lose sight of the very objective of the introduction of the Section whether under the West Bengal Amendment Act or in any other State, i.e., that in case of under valuation of property, an aspect not uncommon in our country, where consideration may be passing through two modes- one the declared price and the other undeclared component, the State should not be deprived of the revenues. Such transactions do not reflect the correct price in the document as something more has been paid through a different method. The objective is to take care of inch a senario so that the State revenue is not affected and the price actually obtainable in a free market should be capable of being stamped. If one may say, it is, in fact, a reflection on the manner in which the transfer of an immovable property takes place as the price obtainable in a transparent manner would be different. An auction of a property is possibly one of the most transparent methods by which the property can be sold. Thus, to say that even in a court monitored auction, the Registering Authority would have a say on what is the market price, would amount to the Registering Authority sitting in appeal over the decision of the Court permitting sale at a particular price.
26. It is not as if a public auction is carried out just like that. The necessary prerequisites require fixation of a minimum price and other aspects to be taken care of so that the bidding process is transparent. Even after the bidding process is completed the court has a right to cancel the bid and such bids are subject to confirmation by the court. Once the court is satisfied that the bid price is the appropriate price on the basis of the material before it and gives its imprimatur to it, any interference by the Registering Authority on the aspect of price of transaction would be wholly unjustified.
27. We may only note that this Court in P. Lavemi Devi15 case bas opined the purpose behind bringing into force Section 47A in the Andhra Pradesh State, i.e., in case of large scale under-valuation of the real value of property in the sale deed, the Government is defrauded of a proper revenue. It was to take care of the absence of any provision in the original Stamp Act empowering revenue authority to make an inquiry about the value of the conveyed property, that the Amendment was brought forth so that the revenue did not suffer. The judgment in V.N. Devadoss case albeit in respect of Amendment in Tamil Nadu, opined that it was not a routine procedure to be followed in respect of each and every document of conveyance presented for registration without any evidence to show a lack of bona fides of the parties. There has to be a willful under-valuation of the subject of transfer with fraudulent intention to evade payment of proper stamp duty.
25. We do not accept the contention that the mere wordings of these different provisions in any way take away the fundamental intent with which the provision was brought into force and specifies so in the same manner though albeit in a different Language. In a court auction following its own procedure, the Registering Officer cannot have any reason to believe that the market value of the property was not duty set forth a pre-requisite for a Registering Authority to excercise its power under the said Section.
30. In the company matter, repeated auctions were held and it is in the negotiated bid that the higher price was obtained. It was court monitored. There would be no occasion for the court to accept the bid if it was not satisfied with the process and the valuation. A correct value of a property is the one where there is a purchaser and a seller ad idem on the price (the actual price). The market value is, thus, the value which the highest bidder is willing to pay in the facts and prevailing circumstances and not a notional price.
31. We find hardly any rational in adopting the submissions on behalf of the appellant. The provisions are not dissimilar in the different enactments in its fundamentals; the "reason to believe" of a Registering Officer has to be based on ground realities and not some whimsical determination; the Registering Authority cannot be permitted to doubt the liquidation proceedings as having some superior knowledge when it is a court monitored process where the court would take care of aspects such as cartelization; the Registering Authority can hardly be said to be the only authority with knowledge of the subject to the exclusion of the court; the independent determination by a Registering Officer would not apply to a court sale but to a private transaction; the Stamp Act being a fiscal statute, while being interpreted strictly and literally would not imply some kind of absolute power.
32. The decision of this Court in V.N. Devadoss case can hardly be said to be per incuriam. No doubt a court monitored auction is a forced sale, but then it has a competitive element of a public auction to realize the best possible price. In many court cases, this is the process followed by the court to get the best obtainable price taking due precaution.
33. We are, thus, of the view that this reference is required to be answered by opining that in case of a public auction monitored by the court, the discretion would not be available to the Registering Authority under Section 47A of the Act."
6. At present it does appear that no contrary law exists.
7. Accordingly, we disposed of the present writ petition with the following directions:-
(i) the petitioner may file a fresh representation before respondent no.1 enclosing thereto order of the Hon'ble Supreme Court, copy of this writ petition and such documents on which the petitioner may seek to rely. The said respondent may proceed to deal and decide the petitioner's fresh representation. Such compliance may be made within a period of two weeks from today.
(ii) subject to above compliance made, respondent no.1 may call for appropriate reports from the subordinate/ other authorities and pass appropriate reasoned order dealing with the claim of the petitioner raised specifically in view of law laid down by the Hon'ble Supreme Court in Registrar of Assurances (supra). Such exercise may be completed within a period of one month from the date of compliance shown by the petitioner.
8. We also make it clear that the petitioner may be heard before appropriate order is passed. Any amount found due and payable may be paid out to the petitioner within a further period of one month thereafter. We also expect, once a decision would have been made by the respondent no.1, appropriate and necessary direction would be issued to all the stamp authorities in the State of Uttar Pradesh, to ensure uniform mandatory compliance.
Order Date :- 24.10.2024 A Gautam (Donadi Ramesh,J.) (S.D. Singh,J.)