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Rule 7 provides for the procedure for the Collector to determine the market value of the property, in case the Collector has reasons to believe that the market value of the property has not been correctly set forth in the instrument.
Sub section (3) of Section 47 A requires the Collector to "examine the instrument for satisfying himself of the correctness of the market value", after such examination Collector has "reasons to believe" that the market value has not been truly setforth, he may 'determine the market value of such property"

This Court in Ratna Shanker Dwivedi versus State of U.P and others4 explained the objects of the Stamp Act as follows:-

"The sole object of Stamp Act under its various provisions is to require the parties concerned to set forth correct market value of the property at which the transaction has taken place so that appropriate duty in accordance with the Act is paid by them to avoid large scale evasion of stamp duty. It also mandates that while setting forth the correct market value of the property in dispute the competent authority must not apply their mind in a fact fashion and in a haphazard way. "

Again in Ratna Shankar Dwivedi (supra) the Court held that:

"The term "market value" has not been defined under the Act. However there are some precedents laying down certain guidelines as to how and in what manner a market value would be determined. The consensus opinion is that the market value of any property is the price which the property would fetch or would have fetched if sold in the open market."

The sine qua non for invoking provisions of Section 47-A(3) of the Act is that the Collector had reason to believe, that the value had not been properly set forth in the instrument as per market value of the property. Once the instrument is registered and the stamp duty as prescribed by the Collector was paid, the burden to prove that the market value was more than the minimum prescribed by the Collector under the rules, was upon the Collector. The report of the sub-Registrar or Tehsildar was not sufficient to discharge that burden. (Vijay Kumar v. Commissioner, Meerut Division11 .

The term "reason to believe"occurring in sub section (3) of Section 47-A spells out that the Registering Officer, must have some material-direct, circumstantial or even intrinsic evidence on the basis of which he may come to a reasonable belief that the market value of the property has not been truly set forth in the instrument. (Duncans Industries Ltd. Versus State of U.P 15 (affirmed by Supreme Court in appeal)16 .

It was not enough for the authority for the purpose of invoking section 47-A of the Act that the consideration amount shown in the agreement for sale was less than the prevailing market value, but the authority must be satisfied as to an attempt on the part of the party to under value the property. (Residents Welfare Association v. State of U.P17 ) It is open to the Court to examine the question whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief and are not irrelevant or extraneous to the purposes of the section. (Dr.Pratap Singh versus Director of Enforcement Foreign Exchange Regulation Act18 ).