Bombay High Court
M/S. Aakash _Laviesh Leisure Pvt. Ltd. & ... vs The State Of Maharashtra & Ors on 10 March, 2010
Author: Roshan Dalvi
Bench: Roshan Dalvi
1
MNM
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
APPELLATE SIDE
WRIT PETITION NO. 4084 OF 2009
M/s. Aakash _Laviesh Leisure Pvt. Ltd. & Anr. ...Petitioner
Vs.
The State of Maharashtra & Ors. ...Respondents
Mr.Kirit J. Hakani a/w Mr. Rahul Hakani, Advocate for the Petitioners
Mr.R.M.Patne, A.G.P for the Respondents 1 to 4
CORAM : SMT. ROSHAN DALVI, J.
DATED : 10TH MARCH, 2010
J U D G M E N T :
1. Rule. Rule is made returnable forthwith.
2. The Petitioner is one of the tenderers for the sale of a trust property pursuant to public notice issued by the Trust. The Petitioner made his offer.
The learned Charity Commissioner considered various offers received and accepted the Petitioner's offer and granted permission and sanction to the Trustees of the Trust to sell their property to the Petitioner under his order dated 21st June 2003. The order shows the sanction of the property to the ::: Downloaded on - 09/06/2013 15:41:39 ::: 2 Petitioner for a price of Rs.2.56 Crores on terms and conditions incorporated in the agreement annexed to the application filed by the Petitioner. The sanction was granted subject to the laws and rules applicable to the transaction and subject to the conditions that the payment would be made within 6 months from the date of the order, full consideration shall be paid before the Conveyance Deed is executed, the Petitioner shall bear the stamp duty, registration charges and other incidental charges for the execution of the Conveyance Deed, the Petitioner was to be put in possession after the execution of the Conveyance Deed and the Trustees were to make a report to the office of the Charity Commissioner within 90 days of the execution of the Conveyance Deed.
3. It may at once be mentioned that the price which is fixed as a fair and reasonable price would be such fair and reasonable price as on that date and for a reasonable period thereafter. Prices are amenable to change as per the market forces. It is, therefore, that the price which shows the market value of the property would govern on the date the price is fixed and for a reasonable period thereafter. The reasonable period during which the price so fixed was expected to remain so is itself mentioned in the order; it is for a period of 6 months. Hence the Petitioner is directed to make payment of the total consideration of Rs.2.56 Crores within a period of 6 months. This condition itself shows and implies that after a period of 6 months, for whatever reason, the price fixed by the Charity Commissioner as a fair and reasonable price will not hold good as such fair and reasonable price; it would either increase or decrease dependent upon the market forces.
::: Downloaded on - 09/06/2013 15:41:39 ::: 34. Consequently the very definition of market value in the Bombay Stamp Act, 1958 is the value which a property could fetch, if sold in open market on the date of execution of the instrument under Section 2(na) thereof, which runs thus:-
[(na) "market value" in relation to any property which is the subject matter of an instrument, means the price which such property would have fetched if sold in open market on the date of execution of such instrument] [or the consideration stated in the instrument whichever is higher]"
It can, therefore, be seen that the market value of the property sought to be purchased by the Petitioner was Rs.2.56 Crores on the date the Charity Commissioner gave his sanction. The required execution within 6 months would show the same market value for that period since it was determined by the Charity Commissioner and that extension of period was allowed by him for execution of the document.
5. On such market value of the property as fixed by the Charity Commissioner Conveyance Deed was to be executed. The Petitioner was enjoined to execute the Conveyance Deed on any date between 21st June 2003 and 21st December 2003. The Petitioner has not executed the Conveyance as directed.
::: Downloaded on - 09/06/2013 15:41:39 ::: 46. 3 Writ Petitions came to be filed bearing Nos.5556/2003, 5557/2003 and 5558/2003 in this Court challenging the permission granted by the Charity Commissioner in 2003 by some of the trustees of the Trust. An initial undertaking was sought by the Court from the Petitioners to deposit Rs.2 Crores in the Court or to make good the interest that would accrue on the sum of Rs.2 Crores, if the Writ Petitions were to be admitted. The Petitioners had given an undertaking on 4.8.2003. The undertaking was accepted. Interim relief was granted. Hence the order of the learned Charity Commissioner came to be stayed since 6.8.2003. The Writ Petitions were posted on Board for final hearing on 11.9.2003. Thereafter on 20.9.2003, the constitution of the Trust as well as the record of the Trust pertaining to the registration and the proceedings under Section 36 of the Bombay Public Trusts Act, 1950, were called. Thereafter nothing transpired in the Petitions until they came to be withdrawn on 23.1.2007.
7. The stay order came to be vacated in these 3 Writ Petitions on 23 rd January 2007. The Petitioner was not a party in those Writ Petitions. He did not seek to intervene. Yet it was considered that as the Petitioner had not made payment as directed by the Charity Commissioner, time to enable the Petitioner to make payment came to be extended till 2nd April 2007 and all other conditions imposed were directed to remain.
8. We would have to see what were the other conditions. The other conditions were the execution of the Conveyance Deed, payment of the stamp duty, registration charges and other incidental charges for the ::: Downloaded on - 09/06/2013 15:41:40 ::: 5 execution of the Conveyance Deed, the report to be made to the office of the Charity Commissioner within 90 days of the execution of the Conveyance Deed under Section 22 of the BPT Act and the Petitioner to be put in possession after execution of the Conveyance Deed. All these, therefore, had to be done on or before 2nd April 2007, the extended date.
9. The sanction of the Charity Commissioner was accorded subject to the laws and rules applicable to the transaction. One of the laws and rules applicable is the Bombay Stamp Act. Under Bombay Stamp Act the stamp duty had to be paid on the Conveyance to be executed in favour of the Petitioner.
10.The learned A.G.P drew my attention to the definition of "chargeable" under Section 2(d) of the Stamp Act, which runs thus:-
"(d) "Chargeable" means, as applied to an instrument, executed or first executed after the commencement of this Act, chargeable under this Act, and as applied to any other instruments, chargeable under the law in force in the State when such instrument was executed or, where several persons executed the instrument at different times, first executed;"
(under lining supplied) Hence the stamp duty was chargeable when the Conveyance was executed. It had to be executed on or before 2nd April 2007. The stamp duty chargeable was, therefore, the stamp duty chargeable on the dates between ::: Downloaded on - 09/06/2013 15:41:40 ::: 6 23rd January 2007, the date of the High Court order and 2nd April 2007, the extended period of time granted by the High Court.
11.The stamp duty payable and in fact the very value of the property representing the consideration under the Conveyance Deed in favour of the Petitioner, which was payable initially in 2003, was sought to be paid under the Conveyance executed in 2007. The stamp duty that applies would, therefore, the stamp duty as chargeable in 2007.
12.The Petitioner sought to pay stamp duty on the valuation of the property as fixed by the Charity Commissioner on 21st June 2003 in 2007.
13. It is the contention of the Petitioner that the stamp duty payable by the Petitioner would be as of the year 2003 because the Petitioner would have and could have executed the Conveyance in 2003, but was prevented from executing the Conveyance from 2003 until 2007 in view of the aforesaid 3 Writ Petitions filed and the stay order obtained since 2003 which came to be vacated only on 23rd January 2007.
14.The Stamp Duty Collector, Andheri rejected the Petitioner's contention. He considered that the Conveyance Deed titled as a Lease of Assignment was registered on 2nd April 2007, the last date on which it could have been registered under the extended period of time allowed by the High Court. He considered that the permission to sell the property was granted by the Charity Commissioner on 21st June 2003. He computed the market value as Rs.14.11 Crores and calculated the stamp duty payable thereon.
::: Downloaded on - 09/06/2013 15:41:40 ::: 715.The Petitioner challenged that order before the Additional Controller of Stamps. After giving the Petitioner the requisite opportunity to put forth the Petitioner's case the Additional Controller of Stamps revised the stamp duty considering certain rebates to be granted as per rules and circulars of their office for the recreational area within the proposed layout plans of the Petitioner for availing of the lesser percentage of F.S.I. thereon.
16.The Petitioner's land is stated to fall under Zone 37/190 in the Ready Reckoner issued by the Stamp Office. The rate of developed land upon FSI-1 is Rs.43,000/-. Under Rule 18(b) thereunder the No Development Zone was to be valued at 33% of the rate applicable to the developed land if that land was accessible by road. Part of the Petitioner's land for development has a recreation ground. It would otherwise be in the No Development Zone. It had to be used as recreational/amenity upon space.
The Additional Controller of Stamps in his impugned order dated 25th March 2009 has considered inter alia the Government circular dated 13th October 2006 and Rule 23 of the Development Control Regulations for Greater Mumbai 1991 (D.C.Rules) for computing the market value as per FSI-1 of that land which is included in the land sought to be purchased by the Petitioner and developed by the Petitioner. Consequently the Additional Controller of Stamps set aside the order of the Collector of Stamps and valued the property sought to be purchased by the Petitioner Trust at Rs. 7 Crores. The circular dated 13th October 2006 inter alia allows valuation of Trust properties by the Charity Commissioner, if the specified mode of determination of fair market value was followed. The circular shows that ::: Downloaded on - 09/06/2013 15:41:40 ::: 8 that would be by a public auction held upon giving public notice for the valuation received for the open auction.
17.The Additional Controller of Stamps, therefore, accepted the value fixed by the Charity Commissioner of Rs.2.56 Crores, but as in 2003. Since the Conveyance Deed was not executed as per the conditions in the Charity Commissioner's permission within 6 months of the date of the permission and since the Petitioner was to be paid inter alia stamp duty, the payment of stamp duty could not be fixed by the Additional Controller of Stamps based upon the date when the permission was granted, but the Conveyance Deed was not executed. He correctly fixed the valuation of the property chargeable to stamp duty on the date of the execution of the Conveyance Deed.
18.Mr. Hakani argued that the order of the Court cannot prejudice any man.
He contended that because of the said order of the Court the Petitioner could not execute the Conveyance and after the said order was vacated the Petitioner executed the Conveyance on the last date of the extended time.
He contends that the Petitioner would be prejudiced by order of the Court if he has to pay stamp duty on the market value of the property as on the date of its execution.
19.Mr. Hakani drew my attention to Article 25 (Explanation II(A) in Schedule- I of the Bombay Stamp Act, wherein the shares transferred to a Company amalgamated to another company requires its valuation to be fixed as on the appointed date and if not so fixed, the date of the order of the High ::: Downloaded on - 09/06/2013 15:41:40 ::: 9 Court. The illustration given by Mr. Hakani is misconceived. The illustration itself shows the date when the valuation on the transfer of shares from one company to another upon amalgamation would be fixed and be payable. A specific legislative provision for two such dates is made in the aforesaid Article. There is no such provision with regard to the fixation of the time for valuation of the property for which permission of the Charity Commissioner was obtained on any date other than the date of execution of the document.
20.The case of the Petitioner may be tested in a different light also. It is seen that the order of the Charity Commissioner was passed since as far back as 21st June 2003. Nothing prevented the Petitioner from executing the Conveyance Deed on that date itself or soon thereafter. Nothing prevented the Petitioner from making payment of the consideration under the Conveyance on that day itself or soon thereafter. The Petitioner was given a fair period of 6 months to do so. The Petitioner is a Developer. He must be taken to understand the changing market values. He must also be taken to understand the competition in his field and envisage an opposition of another tenderer, some Trustees, or any other disgruntled parties. He could have forthwith executed the documents to set at rest any future controversy. He chose not to do so. 3 Petitions came to be filed. Stay orders came to be obtained. Such is the result for a party who waits until the last date, and takes a chance of his contract being challenged. Such challenge could be collusive also. The Petitioner was not a party in the Writ Petition. He did not seek to intervene therein. He allowed the stay order to continue from 6th August 2003 to 23rd January 2007. He obtained ::: Downloaded on - 09/06/2013 15:41:40 ::: 10 extension of time to make payment to the Trust. The order shows the latent presence of the Petitioner and the orders obtained on his behalf. It can be seen that if the Petitioner in this Petition was to suffer prejudice from the order of stay granted in those Petitions on 6.8.2003, he could have moved the Court intervening in the Writ Petitions and for hearing of the Petitions. Nothing was done for three and half years.
21.Even when the stay was vacated and the Petitioner was given extended time, he executed the Conveyance Deed/Deed of Assignment on the last date of the extended time. The Petitioner must take the consequences of his own action/inaction during the period allowed to him for executing his contract as per his wish.
22.Further, the Petitioner had liberty to withdraw his offer, if it was challenged by any other party in any Writ Petition and if any stay order was obtained, which might otherwise prejudice him. The Petitioner as a businessman understands these factors and their consequences. The Petitioner, therefore, is not prejudiced by any order of the Court.
23.In any event the Petitioner could have got the stay order vacated or shown cause against the said order. The stay order of the Court, therefore could not be taken to have prejudiced the Petitioner.
24.The Petitioner is required to submit to the authority of law. One of the laws that is applicable in the transaction of the Petitioner is the Bombay Stamp Act. The Petitioner must pay stamp duty on the Conveyance ::: Downloaded on - 09/06/2013 15:41:40 ::: 11 Deed/Deed of Assignment upon such value of the property to be valued on the date of the execution of the document. The contentions of the Petitioners' Advocate that the Petitioner would be governed by the market value as on the date of the permission of the Charity Commissioner is misconceived and must be rejected.
25.Writ Petition is dismissed. Rule is discharged. The Petitioner shall be bound and liable to pay Stamp duty as on the date of the execution of the Deed of Assignment with further penalty and interest as per Law.
26.Mr. Hakani states that the Petitioner has deposited Rs.11,11,287.50 as 50% of the stamp duty of Rs.22,22,575 which was deposited in the Court. The Petitioner shall be entitled to withdraw that amount upon the Registrar (Judicial) verifying the deposit made.
27.On the application of Mr. Hakani on behalf of the Petitioners this order is stayed for 4 weeks.
(SMT.ROSHAN DALVI, J.) ::: Downloaded on - 09/06/2013 15:41:40 :::