Orissa High Court
Ashok Kumar Padhy vs State Of Odisha And Others on 5 December, 2014
Equivalent citations: AIR 2015 ORISSA 37, (2015) 1 CLR 533 (ORI), (2015) 120 CUT LT 406, (2016) 121 CUT LT 101
Author: B.K. Patel
Bench: B.K. Patel
HIGH COURT OF ORISSA : CUTTACK.
W.P.(C) NO.20269 of 2014
In the matter of an application under Articles 226 and 227 of the
Constitution of India.
-------
Ashok Kumar Padhy ...... Petitioner
- Versus-
State of Odisha and others ...... Opposite Parties
For Petitioner : M/s. Pradipta Kumar Mohanty,
D.N.Mohapatra, J.Mohanty,
P.K.Nayak, S.N.Dash and A.Das.
For Opp. Parties : Additional Government Advocate
THE HONOURABLE SHRI JUSTICE B.K. PATEL
Date of Hearing: 18.11.2014 :: Date of Judgment - 5.12.2014
B.K. PATEL,J. In this writ petition, the petitioner has made prayer to
quash the proceeding in U.V.M.C. No.417 of 2008 and Certificate Case
No.26 of 2014, and consequential notices at Annexures-2, 4 series and 6.
2. Petitioner's case is that on the basis of the claim to be
the owner on the strength of Hat Patta alleged to have been granted by
the ruler of Kanika Estate, one Rabindra Nath Lenka executed in favour
of the petitioner registered sale deed no.5064 dated 24.8.2005 in respect
of the land measuring an area of Ac.2.500 pertaining to plot no.321 under
Khata No.619 of Mouza Chandrasekharpur recorded in the name of G.A.
Department of the State of Orissa. At the time of registration, the
petitioner was not aware of the fact that the above said land stands
2
recorded in the name of the Government. In such circumstances, the sale
deed executed in favour of the petitioner does not confer title over the
land to the petitioner. The petitioner also never claimed title over the land
nor possession of the land was delivered to the petitioner. The petitioner
being aware that he has not derived any title on the strength of the
aforesaid sale deed, never claimed any interest over the same. When the
matter stood thus, the petitioner received notice at Annexure-2 from the
Stamp Collector, Cuttack in U.V.M.C. No.417 of 2008 for payment of
deficit stamp duty and registration fees payable under the Indian Stamp
(Orissa Amendment) Act, 1962 purported to have been issued under Rule
25 (1) of the Orissa Stamp Rules, 1952. In response to such notice, the
petitioner filed representation at Annexure-3 stating therein that the
registered sale deed executed in favour of the petitioner having not
conferred any title, the petitioner is not liable to pay any stamp duty. It is
specifically averred at paragraphs 6 and 8 of the representation that the
petitioner is not at all interested to take advantage and benefit of the
registered sale deed in question and that he does not accept and admit
the registered sale deed and the property purported to have been
conveyed therein. No opportunity of hearing was given to the petitioner on
his representation. However, the petitioner received notice at Annexure-4
series in Misc. Case No.26 of 2014 from the Special Certificate Officer-
Cum-Sub-Collector, Berhampur with regard to requisition for certificate
received from the Stamp Collector-Cum-Deputy Inspector General of
Registration, Cuttack for payment of deficit stamp duty and registration
3
fees. The petitioner filed application denying his liability at Annexure-5
stating, inter alia, at paragraph-6 as follows:
"6. That the R.S.D. in question cannot be construed to be a
legal document, since no title has passed to the Certificate
Debtor as the property still stands as per the prevailing and the
current R.O.R. in the name of the Government, the General
Administration Department, in the district of Khurda. Hence,
the Certificate Debtor is not liable to make such payment.
The Certificate Officer also without considering the petitioner's application
at Annexure-5 has issued summon for payment at Annexure-6 in
Certificate Case No.26 of 2014 to deposit the amount with a threat of
taking further action against him. The petitioner has never claimed title,
interest and possession over the land purported to have been conveyed on
the strength of the registered sale deed and he has absolutely no right
over such land. It has also been averred that the petitioner is not at all
concerned with the registered sale deed and he has absolutely no
objection if the sale deed is treated to be cancelled, inoperative, invalid
and as a whole void for all purposes.
3. A counter affidavit has been filed on behalf of opposite
party nos.1 to 4 by opposite party no.3-Deputy Inspector General of
Registration, Odisha. It is averred that the stamp duty and registration
fees having been detected to be undervalued, there is no infirmity in
initiating proceeding under Section 47-A of the Indian Stamp Act, 1899
(for short, 'the Act') followed by certificate proceeding as provided under
Section 48 of the said Act. Upon reference to Section 47-A read with
Section 2(14) of the Act, it is averred that the sale deed executed in favour
of the petitioner is an 'instrument' of conveyance by way of sale and as
4
such chargeable with duty. Provisions under Registration Act, 1908 and
the Act regulate procedure for registration of chargeable instruments. Sale
deed executed in favour of the petitioner contains recital regarding
payment of consideration amount. By executing the sale deed the vendor
of the petitioner purported to transfer the right in favour of the petitioner.
In view of non-payment of required stamp duty and registration fees,
proceedings were initiated against the petitioner for realization of deficit
stamp duty and registration fees in accordance with statutory provisions.
The petitioner ought to have resorted to statutory provisions for redressal
of his grievance. It is further averred that validity of document has no
concern with the chargeability of stamp duty. Whether the person
executing the instrument is authorized to execute is not material and
relevant. The only thing which is relevant is that the document should be
an instrument chargeable to stamp duty which is realizable on its
execution. In the present case, the registering authority, while checking
the valuation of the property purported to be sold to the petitioner, upon
reference to other sale deeds concerning the similar nature of land, found
the sale deed to have been undervalued and submitted report to the
Stamp Collector. The Stamp Collector disposed of the matter by order
dated 18.12.2013 at Annexure-A after complying with the requirements of
Section 47-A of the Act. The petitioner was directed to deposit the deficit
stamp duty and registration fees by issuing of notice at Annexure-B to the
counter affidavit, copy of which is also at Annexure-2 to the writ petition.
As the petitioner did not deposit the dues, the matter was referred to
5
Collector, Ganjam for collection of Government dues by resorting to
provisions under the Orissa Public Demands Recovery Act vide requisition
at Annexure-C. It is further averred that in view of provision under
Section 55 of the Transfer of Property Act providing for rights and
liabilities of the seller and buyer, the parties to the sale deed have
executed the document after ascertaining the entire facts. Reiterating
that the validity of the document has no concern with the chargeability of
stamp duty, it is averred that unless the sale deed is declared null and
void, the petitioner is liable to pay deficit stamp duty and registration
fees. It is also averred that examining the status of land transacted
through an instrument is beyond the purview of the Stamp Collector and
moreover, the petitioner had never raised any objection before the Stamp
Collector in the under valuation proceeding. Under valuation is no way
related to the right, title, interest and status of the land. The petitioner
ought to have participated in the under valuation proceeding or before
appropriate fora against the orders passed by Stamp Collector and
Certificate Officer instead of filing the writ petition.
4. Learned counsel for the petitioner submitted that all
non-testamentary instruments including a sale deed which purport or
operate to create, declare, assign, limit or extinguish, whether in present
or in future, any right, title or interest, whether vested or contingent, of
the value of one hundred rupees and upwards, to or in immovable
property are compulsorily registerable under Section 17(1)(b) of the
6
Registration Act, 1908 and all instruments chargeable with duty are
required to be duly stamped in view of provision under Section 17 of the
Act. However, in the present case, on the basis of false representation
made by the vendor with regard to his right, title and interest over the
land on the strength of Hat Patta issued by the ruler of Kanika Estate, the
sale deed was executed and registered. The vendor failed to establish his
title over the land and it was found that the land remained recorded in
the name of the State Government. Petitioner's vendor has no title. Upon
executing the instrument which purports to transfer title over land by way
of sale, no right or liabilities was either created or extinguished. For all
intent and purpose, registered sale deed executed in favour of the
petitioner is void ab initio. The petitioner on receipt of notice dated
18.12.2013at Annexure-2 of the Stamp Collector in U.V.M.C. No.417 of 2008 directing him to pay deficit stamp duty and registration fees, filed objection at Annexure-3 for giving an opportunity to him of being heard in the matter to contend that the sale deed was nothing but a void document. However, the Stamp Collector issued requisition to the Certificate Officer. Upon receipt of notice from the Certificate Officer, the petitioner filed objection at Annexure-5. However, the petitioner was not given an opportunity of being heard. Instead, notice at Annxure-6 was issued for taking further action. It is earnestly contended that the petitioner has already been put to loss and harassment for the conduct of his vendor. Registered sale deed executed in his favour is a sham document which does not create or extinguish any right. The petitioner 7 has availed no benefit out of it. The vendor never put the petitioner to possession over the land title of which he purported to have transferred to the petitioner. Though the sale deed has been stamped and registration fees have been paid on the same prior to registration, the document having been found to be void from the beginning, stamps used for execution of the sale deed are spoiled stamps. In such circumstances, the petitioner has approached this Court to avoid further harassment and loss. It is categorically contended that having come to know that the registered sale deed is a void document, as petitioner's vendor has no title over the land purported to have been sold therein, the petitioner has never claimed title or possession over the land and also is not capable of advancing any such claim in future. The registered sale deed being a void document, is to be treated to have been cancelled, and demand on the same is without jurisdiction.
5. Reiterating the averments made in the counter affidavit filed on behalf of opposite party nos.1 to 4, learned Advocate General argued that sale deed executed in favour of the petitioner being an instrument purporting to convey title over the land by the vendor is chargeable to stamp duty in view of provisions under Sections 2(14), 3 and 17 and is subject to provisions under Section 47-A of the Act, to be dealt with when found to have been undervalued. In accordance with Section 47-A of the Act, the deed, after registration, was referred by the Registering Officer to the Collector for realization of deficit stamp duty and registration fees. The petitioner having not paid the stamp duty, 8 proceeding under the Orissa Public Demands Recovery Act has been rightly instituted for realization of the deficit stamp duty and registration fees. It is not disputed by the learned Advocate General that the land purported to be transferred under the sale deed is recorded in the name of the State Government and the petitioner's vendor neither had title over the land, nor has acquired title in the meanwhile. It is also not disputed that petitioner's vendor has no scope to acquire title over the land in future. However, it is argued that even if the sale deed does not create any right in favour of the petitioner, and for all intent and purpose, the sale deed is a void document, validity of document has no concern with chargeability of stamp duty. The petitioner is to bear the expenses for stamp duty and registration fees. In this connection, learned Advocate General sought to derive assistance from an unreported and unauthenticated xerox copy of judgment passed by a Single Judge of the Allahabad High Court in Civil Misc. Writ Petition No.17148 of 2010 (M/S Aegis BPO Services Limited -vrs.- State of U.P. and others). In course of argument, learned Advocate General also contended that the impugned orders of undervaluation under the Act as well as for realization of stamp duty and registration fees under the Orissa Public Demands Recovery Act ought to have been assailed by the petitioner by resorting to statutory remedies available under the said Acts.
6. So far as the contentions with regard to availing of alternative statutory remedy is concerned, from the rival averments and contentions made on behalf of the parties, it is evident that this writ 9 petition involves resolution of legal issues only which can be decided on the basis of affidavits filed by the parties. There is no controversy with regard to factual assertions. In Government of Andhra Pradesh and others -vrs.- P. Laxmi Devi (Smt): (2008) 4 SCC 720 while dealing with demand of deficiency of stamp duty Hon'ble Supreme Court opined that even where the demand is arbitrary and exorbitant, it is always open to the party to file a writ petition challenging such demand alleging that demand made is arbitrary and/or based on extraneous considerations, and in that case it is always open for the High Court to set aside an exorbitant demand made under Section 47-A of Act by declaring the demand arbitrary. It is well settled that arbitrariness violates Article 14 of the Constitution of India. It is also well settled that rule requiring the exhaustion of alternative remedies before the writ is granted is a rule of policy, convenience and discretion rather than a rule of law. In Whirlpool Corporation -vrs.- Registrar of Trade Mark, Mumbai and others : AIR 1999 SC 22 it has been held :
"17. Specific and clear rule was laid down in State of U.P. v. Mohd.Nooh, 1958 SCR 595 : AIR 1958 SC 86, asunder(at P.93 of AIR):
'But this rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate legal remedies.'
18. This proposition was considered by a Constitution Bench of this Court in A.V.Venkateswaran, Collector of Customs, Bombay v. Ramchand Sobharaj Wadhwani, AIR 1961 SC 1506 and was affirmed and followed in the following words(para 10):
'The passages in the judgments of this Court we have extracted would indicate (1) that the two exceptions 10 which the learned Solicitor General formulated to the normal rule as to the effect of the existence of an adequate alternative remedy were by no means exhaustive and (2) that even beyond them a discretion vested in the High Court to have entertained the petition and granted the petitioner relief notwithstanding the existence of an alternative remedy. We need only add that the broad lines of the general principles on which the Court should act having been clearly laid down, their application to the facts of each particular case must necessarily be dependent on a variety of individual facts which must govern the proper exercise of the discretion of the Court, and that in a matter which is thus pre- eminently one of discretion, it is not possible or even if it were, it would not be desirable to law down in flexible rules which should be applied with rigidity in every case which comes up before the Court.'
19. Another constitution Bench decision in Calcutta Discount Co.Ltd. v.Income-tax Officer, Companies Distt. I, AIR 1961 SC 372 laid down:
'Though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment. The High Court will issue appropriate orders or directions to prevent such consequences. Writ of certiorari and prohibition can issue against Income Tax Officer acting without jurisdiction under S.34 I.T.Act.'
20. Much water has since flown beneath the bridge, but there has been no corrosive effect on these decisions which, though old, continue to hold the filed with the result that law as to the jurisdiction of the High Court in pertaining a writ petition under Article 226 of the Constitution, in spite of the alternative statutory remedies, is not affected, specially in a case where the authority against whom the writ is filed is shown to have had no jurisdiction or had purported to usurp jurisdiction without any legal foundation."
7. In the present case, the crux of contention of the petitioner is that sale deed executed in his favour being a document which is void ab initio, the Stamp Collector as well as the Certificate Officer, on consideration of objection filed by the petitioner, ought to have held that the sale deed is not chargeable to stamp duty. The petitioner, 11 thus, has assailed the demand to be arbitrary and without jurisdiction. Moreover, the parties have filed all the pleadings required for adjudication of dispute raised by the petitioner. In such circumstances, in view of above referred settled principles it shall not be in the interest of justice to direct the petitioner to approach this Court after exhausting available statutory remedies.
8. Now coming to the merit of the case it is not disputed that the sale deed executed in favour of the petitioner does not create any right in favour of the petitioner. The petitioner alleges that he has been swindled by the vendor by executing the sale deed in his favour on the false pretext of having title over the land on the basis of a Hat Patta. In M/S Aegis BPO Services Limited -vrs.- State of U.P. and others (supra), chargeability to stamp duty on a lease deed executed in favour of the petitioner was assailed. Referring to undisputed facts in the case it was pointed out that though the lessor had no right at the time of execution of the lease deed, subsequently, the lessor acquired right in the property in question with the due permission of the NOIDA and as such became entitled to let out the property to the writ petitioner. In such factual background, it was held that the lease deed having purported to create title in favour of the petitioner over the property and the lessor having acquired right over the property subsequent to the registration of the lease deed, the lease deed created right in favour of the petitioner and the petitioner was liable to pay stamp duty. Question of validity of lease deed at the time of execution lost its significance upon acquisition of right 12 in the property by the lessor. In the present case the petitioner's vendor who executed sale deed had no right or title at the time of execution of the sale deed, has not acquired right or title over the land in the meanwhile and it is not possible to acquire any right or title in future. Undoubtedly and undisputedly the sale deed is a void document. It is needless to observe that when a document is void ab initio , a decree for setting aside the same would not be necessary as the same is non-est in the eye of law, as it would be a nullity. (See Prem Singh & Ors -vs- Birbal & Ors.: AIR 2006 S.C.3608 at paragraph 16).
9. It is evident that even the stamps used for execution of void sale deed stands spoiled. For such contingency statutory remedy has been provided. The Act itself provides for allowance for spoiled stamps in certain cases. Section 49 (d)(1) of the Act provides for allowance for stamps used for an instrument executed by any person thereto which has been afterwards found to be absolutely void in law from the beginning. The relevant provision occurring under Chapter-V of the Act reads as follows:
"49. Allowance for spoiled stamps - Subject to such rules as may be made by the State Government as to the evidence to be required or, the enquiry to be made, the Collector may, on application made within the period prescribed in Sec.50, and if he is satisfied as to the facts, make allowance for impressed stamps spoiled in the cases xx xx xx xx xx:
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
(d) the stamp used for an instrument executed by any party thereto which-
(1) has been afterwards found to be absolutely void in law from the beginning;13
xx xx xx xx xx xx xx xx xx xx xx xx xx x xx xx xx xx xx xx xx xx xx xx xx xx xx x."
Rules 19 and 20 of the Orissa Stamp Rules, 1952 provide for procedure for allowance by way of refund which read as follows:
"19. Evidence as to circumstances of claim to refund or renewal - The Collector may require any person claiming a refund or renewal under Chapter V of the Act or his duly authorised agent to make an oral deposition on oath or affirmation, or to file an affidavit, setting forth the circumstances under which the claim has arisen, and may also, if he thinks fit, call for the evidence of witnesses in support of the statement set forth in any such deposition or affidavit.
20. Payment of allowances in respect of spoiled or misused stamps or on the renewal of debentures - When an application is made for the payment of under Chapter V of the Act, of an allowance in respect to stamp which has been spoiled or misused or for which the applicant 'has had no immediate use or on the renewal of a debenture, and an order is passed by the Collector sanctioning the allowance or calling for further evidence in support of the application, then, if the amount of the allowance of the stamp given in lieu thereof is not taken, or if the further evidence required is not furnished, as the case may be, by the applicant within one year of the date of such order, the application shall be struck off, and the spoiled or misused stamp (if any) sent to the Superintendent of Stamps or offer officer appointed in this behalf by the State Government for destruction."
10. There being statutory mandate for allowance by way of refund for spoiled stamps used on a void document, it would certainly be discriminatory, arbitrary and, consequently, without jurisdiction on the part of the Stamp Collector to insist upon payment of any further duty or fees on an instrument which has already been found to be void ab initio. Such action would be violative of Article 14 of the Constitution of India. 14
11. In the present case, the petitioner was purported to be conferred with the status of buyer on execution of a sale deed which is being found to be void ab initio inasmuch as right purported to have been created by execution of the sale deed is never capable of being enforced in law. In such circumstances, the petitioner is entitled under law to be protected against payment of stamp duty and registration fees on a document which is void from the beginning. The sale deed being a void document be treated as cancelled. The Stamp Collector and the Certificate Officer have utterly failed to consider the petitioner's contention that no liability arises for payment of stamp duty on an instrument which has been found to be void ab initio. Therefore, proceedings in U.V.M.C. No.417 of 2008 and Certificate Case No.26 of 2014 are liable to be dropped and are, accordingly, dropped.
The writ petition is, accordingly, disposed of.
.......................
B.K. Patel, J.
Orissa High Court, Cuttack Dated 5th December,,2014/Palai