Madras High Court
Bharath Petroleum Corporation Limited vs The District Revenue Officer (Stamps) on 8 September, 2022
Author: N.Sathish Kumar
Bench: N.Sathish Kumar
W.P.No.16834 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 08.09.2022
CORAM
THE HONOURABLE MR.JUSTICE N.SATHISH KUMAR
W.P.No.16834 of 2017
& W.M.P.No.18282 of 2017 &
W.M.P.No.19633 of 2022
Bharath Petroleum Corporation Limited,
Rep. by its Territory Manager (Retail), Chennai
No.1, Renganathan Gardens,
Opposite to 11th Main Road, Anna Nagar (West),
Chennai - 600 040. ... Petitioner
Vs.
1. The District Revenue Officer (Stamps)
District Collector's Office,
Fifth Floor, Singaravelar Building,
Rajaji Salai, Chennai - 600 001.
2. The Sub-Registrar,
Thiruvottiyur,
Chennai - 600 019. ... Respondents
Writ Petition is filed under Article 226 of the Constitution of India,
for issuance of a Writ of Certiorarified Mandamus calling for the records on
the file of the respondent leading to the impugned notices being Form 1
Page 1/14
https://www.mhc.tn.gov.in/judis
W.P.No.16834 of 2017
Notice dated 22.08.2016 and Final Notice dated nil in T.P.No.106/16/A4
issued by the 1st respondent and quash the same and direct the 2 nd
respondent to release the Transfer Deed registered as Document No.4499 of
2016 on 27.06.2016.
For Petitioner : Mr.M.Vijayan
For M/s.King and Partridge
For Respondents : Mr.L.S.M.Hasan Fizal
Additional Government Pleader
ORDER
This Writ Petition has been filed against the Form I Notice dated 22.08.2016 issued under Section 47A (1) & (3) of the Indian Stamps Act, 1899 and the Final Notice dated nil in T.P.No.106/16/A4) issued by the 1st respondent herein.
2. The brief facts of the case as averred in the plaint are as follows :
i) The petitioner namely Bharat Petroleum Corporation Limited had purchased a land an extent of 100 acres in R.S.Nos.354/1 pt and 1556-B pt in Athipattu Village and Vallur Village in Ennore Area near Chennai from Page 2/14 https://www.mhc.tn.gov.in/judis W.P.No.16834 of 2017 the Government of India, Represented by Department of Industrial Policy and Promotion, Salt Division, for a total sale consideration of Rs.73,37,90,306/-. The petitioner was directed to pay a sum of Rs.73,24,006/- per acre i.e. Rs.73,24,00,600/- for 100 acres, arrived on base value of Rs.36,69,418/- per acre on 09.04.2010 with 20% annual increase to PAO, DIPP, New Delhi by means of a cheque subject to differential amount if any as per calculation of value of lands as mentioned in DIPP Order No.04011/9/2010 dated 03.01.2014. As directed by the Government, the petitioner had paid the sale consideration of Rs.73,37,90,306/- by way of two cheques one bearing number 900353 dated 15.01.2014 for Rs.73,24,00,600/- and the differential provisional value of Rs.13,89,706/-
for the period from 18.01.2014 to 21.01.2014 was paid through cheque bearing number 900359 dated 21.01.2014.
ii) Pursuant to the payment of sale consideration, the petitioner was put in possession of the said land on 21.01.2014, and thereafter, a transfer deed dated 24.06.2016 was executed by the Government of India in respect of the above land situated at Athipattu and Vallur Village in favour of the Page 3/14 https://www.mhc.tn.gov.in/judis W.P.No.16834 of 2017 petitioner and the same was registered as Document No.4499 of 2016 dated 27.06.2016. At the time of execution of the sale deed, the petitioner had paid the entire stamp duty and registration charges for the actual sale consideration paid to the Government. However, instead of releasing the sale deed, the 2nd respondent, without giving an opportunity to the petitioner to present its case, had made a reference under Section 47A to the District Revenue Officer (Stamps) to ascertain the actual stamp duty payable by the petitioner. The petitioner was further served with a copy of Form-I Notice dated 22.08.2016 from the 1st respondent, demanding a sum of Rs.10,12,34,465/- towards alleged difference in stamp duty. Hence, the impugned notices are sought to be quashed on the ground that the reference cannot be made under Section 47A of the Indian Stamp Act, 1899, without any evidence to show lack of bonafides on the part of the parties to the document.
3. The respondents have filed a counter affidavit and raised an objection to the above averments stating that the value of the land as per guideline registers is at Rs.500/- per sq.ft, but the value of the land put forth Page 4/14 https://www.mhc.tn.gov.in/judis W.P.No.16834 of 2017 in the document is at Rs.168.30/- per sq.ft. Hence, they issued Form-I Notice under Section 47A (1) & (3) of the Indian Stamps Act, 1899, calling for the explanation from the petitioner. Since the explanation given by the petitioner was not satisfactory, the 1st respondent sent an another notice in the same number fixing the hearing on 24.04.2017. The petitioner in their letter dated 08.05.2017 had requested the 1st respondent to advice the 2nd respondent to release the document by considering their earlier explanation given on 28.04.2017.
4. It is also stated in the counter affidavit that the impugned notices are only show cause in nature, hence it is liable to be upheld. Further, it is stated that the petitioner company is not a government department and it is only a government entity corporate body, and it has not obtained the exemption of Stamp Duty under Provisions of Section 9 and Registration Fees under Provisions of Section 78A of Indian Registration Act, to register the instance case deed on the basis of consideration amount without reference to the market value. It is also stated that if the petitioner is not satisfied by the aforesaid proceedings, it is open to him to redress his Page 5/14 https://www.mhc.tn.gov.in/judis W.P.No.16834 of 2017 grievances by way of an appeal provided in Section 47A(5) of the said Act, to the Inspection General of Registration. Since this matter is not finalized by the 1st respondent and an alternative remedy is available by an appeal, seeking remedy by filing of this Writ Petition is not maintainable.
5. Moreover, it is stated that since this instance case document involving deficit levies, the question of return of original document at this stage is not maintainable as per the decisions of the Hon'ble Division Bench of the Madurai of this Court in W.A.Nos.1176 to 1179 of 2017 and others dated 09.10.2017 in the matter of Special Deputy Collector Stamps, Thirunelveli and others vs M.Alfred and others, wherein, it has been held as follows :
“ ..... Though, payment of duty is one thing and release of the document is the other thing both are intertwined with each other. The enactment merely provides for registration, notwithstanding the issue pertaining to undervaluation. The said factor cannot be extended for the release of the document in the absence of any provision. To that extent, there is no conflict between the two enactments. With the above said Page 6/14 https://www.mhc.tn.gov.in/judis W.P.No.16834 of 2017 understanding of the provisions of the two enactments, let us go into the contentions raised.”
6. Furthermore, it is stated that as per the submissions in supra, the impugned notices are mere show cause in nature. Since this instance case involving undervaluation of market value to the tune of several crores of rupees, the prayer of the petitioner to return the document without subjecting the market value determination procedure as per the legal statue is untenable and it deserves to be dismissed as devoid of merits.
7. Heard both sides and perused the materials available on record.
8. First of all, it is not in dispute that the property has been transferred vide Transfer Deed dated 24.06.2016 in favour of the petitioner by the Government of India, Represented by Deputy / Assistant Salt Commissioner, Chennai. As per the sale deed, the sale consideration set out in the document is a sum of Rs.73,37,90,306/- only. Also, it is stated in the sale deed that the possession was handed over to the writ petitioner. Now, the notice in Form No.I under Section 47A is issued merely on the ground Page 7/14 https://www.mhc.tn.gov.in/judis W.P.No.16834 of 2017 that the guideline value of the property is Rs.500/- per sq.ft. Whereas, the property has been registered at the rate of Rs.168.30 per sq.ft. Hence, the differential stamp duty of Rs.10,12,34,465/- to be demanded by the respondents. For that purpose, the document has been referred under Section 47A of the Indian Stamp Act, 1899.
9. While making the reference, the Registrar should satisfy the provisions contained in Section 47A of the Indian Stamp Act, 1899. It makes it clear that, if the Registrar has reason to believe that the market value of the property 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 market value.
10. The Hon'ble Supreme Court also in (2009) 7 SCC 438 in the case of V.N.Devadoss vs. Chief Revenue Control Officer Cum Inspector and Others, has held as follows :
“.... 13. Sub-sections (1) and (3) of Section 47-A clearly Page 8/14 https://www.mhc.tn.gov.in/judis W.P.No.16834 of 2017 reveal the intention of the legislature that there must be a reason to believe that the market value of the property which is the subject matter of the conveyance has not been truly set out in the instrument. 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 fides of the parties to the document by attempting fraudulently to undervalue the subject of conveyance with a view to evade payment of proper stamp duty and thereby cause loss to the revenue. Therefore, the basis for exercise of power under Section 47-A of the Act is wilful undervaluation of the subject of transfer with fraudulent intention to evade payment of proper stamp duty.”
11. It is to note that the sale consideration has been paid to the Government of India. It is nobody case is that apart from the sale consideration, other amount is also to be paid which has not been reflected in the transfer deed. It is also to note that when the actual sale consideration was paid to the Government, the question of suppressing the real market value and referring the document for differential value does not arise at all and such interrence are not permissible under law. Page 9/14 https://www.mhc.tn.gov.in/judis W.P.No.16834 of 2017
12. The main ground on which, the document was referred under Section 47A is that it does not contain the guideline value. It is relevant to note that the guideline value is prepared by the Revenue Officials, for that, the same cannot be equated with market value. In this regard, this Court in Collector of Nilgiris vs. M/s. Mahavir Plantations Pvt. Ltd., (A.I.R. 1982 Mad. 138), has held as follows :
“The valuation guidelines prepared by the Revenue Officials at the instance of the Board of Revenue were avowedly intended merely to assist the Sub-Registrars to find out, prima facie, whether the market value set out in the instruments had been set forth correctly. The guidelines were not intended as a substitute for market value or to foreclose the inquiry by the Collector which he is under a duty to make under Sec. 47-A. The valuation guidelines were not prepared on the basis of any open hearing of the parties concerned or of any documents. They were based on data gathered broadly with reference to classification of lands, grouping of lands and the like. This being so, the Collector acting under Sec.47-A cannot regard the valuation guidelines as the last word on the Page 10/14 https://www.mhc.tn.gov.in/judis W.P.No.16834 of 2017 subject of market value. To do so would be to surrender his statutory obligation to determine market value on the basis of evidence, which is a judicial or a quasi judicial function which he has to perform.”
13. Therefore, merely because the guideline value is higher than the market value, it cannot be said that the differential stamp duty also to be paid. The purpose of the guideline value is to have a prima facie idea about the value of the land by the Registrar. When the Government has sold the property and received the sale consideration, at no strech of imagination it could be inferred that the property value has been undervalued only to avoid the stamp duty. Therefore, this Court is of the view that invoking provision under Section 47A for reference itself is not according to law and it is not the case of the respondents that undervaluation has been done for the purpose of avoiding the stamp duty.
14. In the absence of any evidence in material to suggest under valuation, as a matter of right proceedings under Section 47A cannot be invoked. Therefore, this Court is of the view that the Government of India Page 11/14 https://www.mhc.tn.gov.in/judis W.P.No.16834 of 2017 has sold the property and received the sale consideration. Merely because the sale consideration is not on par with the guideline value fixed by the authorities, the reference cannot be made under Section 47A of the Indian Stamp Act, 1899.
15. In a similar case, reported by this Court in 2002 (2) CTC 329 in the case of R.Sukumaran and Seven Others v. State of Tamil Nadu, the Tamil Nadu Housing Board entered into a lease cum sale agreement. On payment of all monthly installments, sale deed was executed by the Housing Board conveying the allotted properties. However, the Registration Department Authorities had demanded stamp duty on the basis of the market value. The Court has held that the statutory body like housing board could not receive consideration more than what has been recited in the document executed by the board in favour of the authorities, and no discretion at all is available to the Registering Authority to entertain any doubt regarding the payment of consideration for the deed of conveyance which is being executed by the statutory body like Housing Board. Page 12/14 https://www.mhc.tn.gov.in/judis W.P.No.16834 of 2017
16. On considering the said judgment, this Court is of the view that, as the document has been executed by the Government of India and consideration also has been received by them, it may not be said that the property has been undervalued to defeat the provisions of Stamp Act to invoke Section 47A reference. This Court is also of the view though impugned notices are only a show cause in nature and it may not be questioned at this stage as invocation of the reference under Section 47A itself is not in according to law, this Court can quash the show cause notices which are result of the reference which is not legally sustainable.
17. Accordingly, this Writ Petition is allowed and the impugned show cause notices issued by the 1st respondent are set aside. The 2nd respondent is directed to release the transfer deed dated 27.06.2016 within a period of two months from the date of receipt of a copy of this order. No costs. Consequently, connected miscellaneous petitions are closed.
08.09.2022 raja Page 13/14 https://www.mhc.tn.gov.in/judis W.P.No.16834 of 2017 Internet : Yes / No Index : Yes / No Speaking order / Nonspeaking order N.SATHISH KUMAR, J.
raja W.P.No.16834 of 2017 & W.M.P.No.18282 of 2017 & W.M.P.No.19633 of 2022 08.09.2022 Page 14/14 https://www.mhc.tn.gov.in/judis