Karnataka High Court
Bangalore Villas Pvt Ltd vs The Sub Registrar on 28 January, 2013
Author: Mohan Shantanagoudar
Bench: Mohan .M. Shantanagoudar
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 28TH DAY OF JANUARY 2013
BEFORE
THE HON'BLE MR.JUSTICE MOHAN .M. SHANTANAGOUDAR
W.P.NOS.1699-1700 OF 2011 (GM-ST/RN)
BETWEEN:
1. BANGALORE VILLAS PVT LTD
A COMPANY REGISTERED UNDER
THE COMPANIES ACT,1956
NO.109, SANKEY ROAD,
BANGALORE-560070
REP BY ITS DIRECTOR
SRI J P NARAYANASWAMY
2. SRI J P NARAYANASWAMY
S/O SRI PUTTAPPA
AGED ABOUT 54 YEARS
R/AT # 350, 4TH MAIN, SADASHIVANAGAR
BANGALORE-560034
... PETITIONERS
(By Sri:VIVEK HOLLA, ADV., FOR M/S HOLLA & HOLLA)
AND
1. THE SUB REGISTRAR
GANDHINAGAR
BANGALORE
2. THE DISTRICT REGISTRAR
(UNDER -VALUATION)
GANDHINAGAR
BANGALORE
3. DEPUTY INSPECTOR GENERAL OF
2
REGISTRATION & COMMISSIONER OF STAMPS
(INTELLIGENCE)
BANGALORE
4. M/S HOTEL KRISHNA INTERNATIONAL (INDIA) LTD
REPRESENTED BY OFFICIAL LIQUIDATOR
OFFICE OF OFFICIAL LIQUIDATOR
MINISTRY OF COMPANY AFFAIRS
12TH FLOOR, RAHEJA TOWERS
M.G. ROAD
BANGALORE-560 001.
(AMENDED VIDE COURT ORDER DTD 4.7.2011)
... RESPONDENTS
(By Smt: M.C. NAGASHREE, GOVT PLEADER FOR R1-3
SRI: V. JAYARAM, ADV., FOR R4)
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THESE WRIT PETITIONS ARE FILED UNDER ARTICLE
226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING
TO QUASH THE ORDER OF THE R2 DT.12.7.04 IN CASE
NO.45/A/1/G/34/97-98 VIDE ANN-F; QUASH THE ORDER
OF THE R3, DT.14.10.10 IN APPEAL NO.PAK/STP(A) 32/08-
09 VIDE ANN-J.
THESE WRIT PETITIONS COMING ON FOR
PRELIMINARY HEARING IN 'B' GROUP THIS DAY, THE
COURT MADE THE FOLLOWING:-
ORDER
The property bearing No.5/43 situated on Seshadri Road, Anand Rao circle, Bangalore (schedule property) belongs to Hindu undivided family, of which Sri. B.K. Thirunarayana Iyengar 3 was the Karta. After his death, Sri. B.K. Ramanuja Iyengar became the kartha of the Hindu undivided family. He leased the property on behalf of Hindu undivided family to the propriety firm M/s. Sri. Venkateshwara Enterprises by virtue of duly registered lease deed dated 24.11.1979. The lease was for a period of 31 years and was extendable for further period of five years at the option of the lessee. A company under the name and style of Sri. Venkateshwara Tourist Home (Pvt.) Ltd., was inducted as a partner in the firm and the firm was subsequently dissolved and its assets and liabilities including the interest in the schedule property were taken over by the company. Thereafter, on 16.10.1992, Sri. Venkateshwara Tourist Home Pvt. Ltd., was converted into a Public Limited Company and the name was changed to M/s. Hotel Krishna International (India) Ltd., w.e.f. 16.10.1992. Thus, 4 the 4th respondent became the lessee of the schedule property. In the year 1994, the members of Hindu undivided family as joint owners of the property agreed to sell the property in favour of the 4th respondent, who agreed to purchase the lessors' interest in the property for a sum of `1.80 crores. An agreement of sale was entered into in the year 1994. The said agreement was submitted to the Appropriate Authority constituted under Chapter XXC of the Income Tax Act. The Appropriate Authority granted no objection for the sale. Thereafter, a registered sale deed was executed in favour of 4th respondent by the Hindu undivided family on 29.3.1996. Thus the 4th respondent became the absolute owner of the schedule property. However, the first respondent impounded the sale deed soon after the registration of the sale deed in exercise of its power under the provisions of 5 the Karnataka Stamp Act, 1957 alleging under valuation and referred the deed to respondent No.2 for determination of correct market value as per Section 45A of the Karnataka Stamp Act, 1957. The petitioners purchased the property in question from 4th respondent and the stamp duty in respect of the sale deed is not in question. But the sale deed of 4th respondent is under question in respect of alleged undervaluation. Since the petitioners have purchased the property, they are fighting the litigation. After hearing the petitioners, the impugned order came to be passed by the 2nd respondent as per Annexure-F dated 12.7.2004 valuing the property at `8,36,97,103/-, consequently, the petitioners were directed to pay stamp duty of `82,12,190/- apart from `13,13,960/- towards registration charges. The said order Annexure-F was called in question before the 6 Appellate Authority. The Appellate Authority disposed of the appeal on 14.10.2010 modifying the order of the original authority by directing to pay stamp duty by reducing 7% of the valuation of the property. Both the orders are called in question in these writ petitions.
2. Sri. Vivek Holla, learned counsel for the petitioners submits that the Appropriate Authority under Chapter XXC of the Income-Tax Act which was authorized to direct the Central Government to purchase the schedule property if the same is under valued, granted no objection for the same on being satisfied that the reversionary rate for the same was reflected in the agreement; that the valuer appointed by the petitioners privately has given detailed report as per Annexure-G dated 6.9.2003, which is totally ignored by the authorities below; the valuation report of the private valuer appointed by 7 the petitioners themselves should have been treated as part of the argument of the petitioners before the authorities for coming to the conclusion; the order of the Appellate Authority is totally bald, inasmuch as, it does not assign any reason except mentioning therein that the petitioners are entitled to 7% reduction in the market value, because the property is a lease-hold property for 31 years and that the petitioners have constructed the building by spending their amount.
3. Writ petitions are opposed by learned High Court Govt. Pleader Smt. M.C. Nagashree, for respondent Nos.1 to 3 by supporting the orders of the authorities below.
4. There cannot be any dispute that the property which is subjected to lease for long period of 31 years + 5 years would definitely be 8 undervalued by intending purchaser; the property was prone to litigations before number of Courts and that the vendors of the petitioners who were lessees fought the litigations and invested huge amount of `700 crores for construction of building, that too, by raising loans; since the petitioners have not repaid the amounts as and when required, litigations are pending against the petitioners and those litigations were by the financial institutions; these factors will have to be definitely borne-in- mind while coming to the conclusion. In addition to the same, the petitioners' case that the valuer appointed by them has valued the property in accordance with law also needed to be considered by the authorities; However, it is the plea of the petitioners that the property needs to be valued keeping in mind the Parks' table which should have been considered by the authorities while coming to 9 the conclusion; since this Court is of the opinion that the First Appellate Authority has not taken note of various aspects of the matter, this Court proposes to remit the matter to the Appellate Authority for fresh consideration. It is needless to observe that what was purchased by the vendors of the petitioners was the reversionary right. The lessees are in possession of the property and they had constructed the building. In view of the above, the following order is made:-
Impugned order Annexure-J dated 14.10.2010 stands quashed. The matter is remitted to the First Appellate Authority i.e., respondent No.3 for fresh consideration as per law.
Writ petitions are disposed of accordingly.
Sd/-
JUDGE *mn/-