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3. The third appellant herein all of a sudden, during the beginning of the year 2000, started issuing notices demanding additional stamp duty on the instruments purporting to exercise powers under Section 47-A of the Indian Stamp Act. The reason for demand of additional stamp duty was that market value of the property as on the date of the registration has not been taken into consideration by the Sub Registrar, Thiruverumbur while registering the sale deeds.

4. The writ petitioners formed an association viz., Trichy Navalpatti Police Colony Owners and Occupants Association and they submitted representation to the third appellant herein stating that the power under Section 47-A of the Stamp Act can only be exercised by the Registering Officer when he has reason to believe that the market value of the property which is the subject matter of conveyance, has not been truly set forth with a view to fraudulently evade payment of stamp duty and that mere lapse of time between the date of agreement and the execution of document will not be the determining factor that the document is under value. The third appellant in turn had sent a communication dated 20.12.2000 to the second appellant herein stating that all the sale deeds given by Tamil Nadu Police Housing Corporation in favour of the allottees/writ petitioners may be registered on the basis of the real value of the property agreed between the said Corporation and the allottees.

It has been further held in the said decision that the determination of market value in land acquisition proceedings cannot be adopted either as the basis or even as one of the piece of evidence, for the purpose of determining the market value under Section 47-A of the Indian Stamp Act. The learned Judge in the said decision has taken into consideration the judgment of a Division Bench of this Court reported in AIR 1974 (Mad.) 117 - State of Tamil Nadu vs. Chandrasekharan, which considered rationale behind Section 47-A of the Stamp Act. In the above said decision, the observations made are as follows:-

21. In 1999 (2) L.W. 231 - M.Ponnusamy and others vs. The District Collector, Erode and others, the act of reference made to the Collector under Section 47-A(2) of the Indian Stamp Act after lapse of two years and retention of the sale deeds after completion of registration came up for consideration and it has been held as follows:-

"It is obvious that before registering the document, the Registering Officer has to come to a prima facie conclusion that in the instrument, the market value of the property has not been truly set forth and thereafter, complete registration and refer the same for determination of the market value. The language of Section 47-A of the Indian Stamp Act is very clear. The condition precedent for making a reference is, there must be reason for the Registering Authority to believe that the market value of the property has not been truly set forth in the document presented for registration. Hence, it follows that the reasons must be recorded, however short it may be. It is the duty of the Registering Authority to record reasons for his belief that true market value has not been set out in the document, complete registration and thereafter refer the matter to the Collector for determination of the market value of the property and the proper duty payable thereon.
What is required under Sub-Section (1) of Section 47-A of the Indian Stamp Act is that the Registering Authority had to come to a conclusion before registration that the market value of the property, dealt under the instrument of conveyance or release, has been under-valued and he should have entertained reasonable belief in this respect and also, he should have recorded such a reason. Immediately after recording such reason, he has to complete the registration and thereafter refer the instruments to the Collector in terms of Sub-Section (1) of Section 47-A of the Indian Stamp Act. Only in respect of the instruments, which have not been referred to for adjudication to the Collector under Sub-Section (1) of Section 47-A of the said Act, the Collector could exercise or invoke suo motu powers conferred on him under Sub-Section (3) of Section 47-A and had a reference been made under Section 47-A(1) of the said Act it would have been answered either way by the Collector, then it is obvious that the Collector cannot exercise suo motu powers in terms of Sub-Section (3) of Section 47-A of the said Act."