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Sri Goswami, on the other hand, has submitted that under the scheme of the Act the registering authority is competent to make a reference for determination of the market value where the market value set forth in the instrument is less than the minimum value as prescribed by the Collector under the Rules. He has also submitted that it is not a Court sale but a sale by the Official Liquidator and, therefore, there is no hurdle in determining the market value of the property under Section 47-A of the Act. In support he has placed reliance upon a decision of this Court reported in 2004 (96) RD 635 Vishwanath Agarwal Vs. State of U.P. and others which has also been relied upon by the authorities below.
A comparison of the language employed in Section 47-A(1) and 47-A(3) would bring out the distinction between the two sub-sections. Under sub-section (1) of Section 47-A the reference is made by the registering officer before registration if the market value of the property set forth in the instrument presented for registration is less than even the minimum value prescribed in accordance with the rules framed under the Act. This provision does not contemplate that the reference has to be made if there is reason to believe that the market value has not been truly set forth in the instrument. In contrast, sub-section (3) of Section 47-A envisages a reference by the Court or by the authorities under Act or on suo motu action by the Collector after registration of the instrument provided there is "reason to believe" that the market value of the property has not been truly set forth in the instrument. In this way, there is a marked departure in the language employed in the two sub-sections for making reference to the Collector at two different stages. In the later reference there has to be a reason to believe that the market value has not been truly set forth in the instrument whereas in the former no such opinion is necessary. Secondly, under sub-Section (1) of Section 47-A of the Act reference is made before registration of the instrument whereas under Section 47-A(3) it is made after registration.
Similarly, the authorities of the Calcutta High Court reported in AIR 2001 Calcutta 76 Nitya Hari Kundu and others Vs. State of W.B. and others and Madras High Court reported in AIR 2003 Madras 142 S. Jayalakshmi Vs. Government of Tamilnadu and others laying down that there can not be a reason to believe that the market value set forth in the instrument is not proper in the absence of material or when the sale deed was executed by the Government itself would not be applicable.
The existence of material for formation of opinion as to "reason to believe" that the market value of the property has not been truly set forth in the instrument and, as such, requires re-determination of the market value by the Collector is not postulated by Section 47-(A)(1) of the Act. The submissions made in this regard by learned counsel for the petitioner as such has no merit and is not tenable.
A plain reading of the above authority may seem to have covered the controversy at hand, but it is no so. The said authority is a case from Tamil Nadu where there is a State amendment in the Act. If the provisions of Section 47-A of the Act as applicable to the State of Tamil Nadu are compared to the provisions as applicable to the State of U.P. a vast difference between the two could easily be noticed. In the State of Tamil Nadu reference can only be made if the authority is satisfied that there is sufficient "reason to believe" that the market value of the property has not been truly set forth in the instrument. There is no provision for prescribing the minimum market value, unlike the one prevailing in U.P. In the State of U.P., as discussed earlier, there are two different stages at which a reference can be made. In the first stage, reference can be made before registration by the registering authority and in the second stage, after registration by the authorities under the Act or by the Collector on suo motu exercise. In the second stage reference is made on objective satisfaction on the basis of material that there is "reason to believe" that the market value has not been truly set forth in the instrument. In the first stage a reference can be made simply if the market value of the property as set forth in the instrument is below the minimum market value prescribed. No such provision is there in the State of Tamil Nadu. There reference can only be made if the authority is satisfied that there is sufficient "reason to believe" that the market value of the property has not been truly set forth in the instrument. In contrast in U.P. a reference can also be made if the market value of the property is not truly set forth in the instrument and is below the minimum market value prescribed or notified by the Collector as per the Rules. Thus, the aforesaid case law is distinguishable and is not applicable under the legal situation prevailing in the State of U.P. Sri Goyal has attempted to submit that a reference to the Collector can only be made after registration of the document as has been held by the Supreme Court in the case of M/s. Residents Welfare Association, Noida Vs. State of U.P. and others JT 2009(6) SC 448 and there can be no reference without registering the instrument.