RESERVED ON : 19.09.2017 DELIVERED ON : 03.10.2017 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 03.10.2017 CORAM THE HON'BLE MR. JUSTICE M.DURAISWAMY W.P.Nos.18768, 19296 & 20788 of 2017 W.M.P. Nos. 20289, 20290 & 20800 of 2017 M/s.Hindustan Motor Finance Corporation Limited Adigathur Kadambathur P.O. Tiruvallur – 631 203 Reprsened by its General Manager N.Kannabiran ... Petitioner in all Wps v.
1. The District Regsitrar Kancheepuam District
2. Sub-Registrar Office of the Sub-Registrar Manavallanallur Tiruvallur District – 602 002.
Sub-Registrar Office of the Sub-Registrar .. Respondents in W.P.Nos.17768 and 20788/2017 Tiruvallur ... Respondent in W..No.19296/2017 Writ Petition No.18768/2017 filed under Article 226 of the Constitution of India to issue a Writ of Certiorari calling for the records in relation to the impugned proceedings of the 1st respondent District Registrar of Kancheepuram bearing Na.Ka.No.2453/Aa3/2017, dated Nil.07.2017 and quash the same.
Writ Petition No.19296/2017 filed under Article 226 of the Constitution of India to issue a Writ of Mandamus directing the respondent to register and release the sale deed dated 10.04.2017 executed in favour of the petitioner.
Writ Petition No.20788/2017 filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus to call for the records in relation to the impugned proceedings of the 1st respondent District Registrar of Kancheepuram bearing Na.Ka.No.2453/Aa3/2017, dated Nil.07.2017 and quash the same and consequently direct the second respondent to register and relese the sale deed dated 28.07.2017 executed in favour of the petitioner.
For Petitioner : Mr.V.Prakash, Senior Counsel for Ms.Shalini in all Wps For Respondents : Mr.V.S.Sethuraman Addl. Advocate General for Mr.S.V.Doraisolaimalai, Addl. Govt. Pleader and Mr.Era.Premnath, Govt. Advocate COMMON ORDER Writ Petition No.18768 of 2017 has been filed by the petitioner company to issue a Writ of Certiorari to call for the records in relation to the proceedings of the 1st respondent dated Nil.07.2017 and to quash the same.
2. Writ Petition No.19296 of 2017 has been filed by the petitioner company to issue a Writ of Mandamus directing the respondent to register and release the sale deed dated 10.04.2017 executed in favour of the petitioner company.
3. Writ Petition No.20788 of 2017 has been filed by the petitioner company to issue a Writ of Certiorarified Mandamus to call for the records in relation to the proceedings of the 1st respondent dated Nil.07.2017, to quash the same and consequently direct the second respondent to register and release the sale deed dated 28.07.2017 executed in favour of the petitioner company.
4. Since the issues involved in all the writ petitions are common, by consent of both the parties, all the writ petitions are disposed of by this common order.
5. The brief case of the petitioner company necessary for the disposal of the three writ petitions, is as follows:-
(i) According to the petitioner, the Government of Tamil Nadu acquired the land measuring an extent of 291.80 acres comprised in several survey numbers in Melnallathur Village, Adigathur Village, Selai Village and Nungambakkam Village in Tiruvallur District. Thereafter, the Government of Tamil Nadu executed the Assignment Deed dated 26.5.1988 in favour of M/s.Hindustan Motors Limtied and conveyed the said lands for the purpose of establishment of an industrial undertaking to manufacture crawler tractors, dumpers, motorised scrapers and front end loaders or any other product licensed to be manufactured by the Government.
(ii) In the year 2000, Hindustan Motors Limited transferred the business of the Earthmoving Equipment Division to M/s.Caterpillar India Private Limited, as a plan of company restructure and also transferred the lands measuring 19.63 acres in Melnallathur and Nungambakkam Villages. The Government of Tamil Nadu also accorded its sanction under section 44-A of the Land Acquisition Act, 1894 to the said transfer, by its Government Order dated 22.01.2015. Thereafter, Hindustan Motors Limtied transferred the business of Chennai Car Plant to the petitioner by way of Business Transfer Agreement dated 14.02.2014. By virture of the said transfer agreement, the Hindustan Motors Limited approached the Government of Tamil Nadu seeking transfer under section 44-A of the Land Acquisition Act for transfer of land measuring an extent of 172.17 acres comprised in Adigathur, Melnallathur and Selai Villages. Accordingly, the Government of Tamil Nadu also accorded its sanction under section 44-A of the Land Acquisition Act, 1894 to the said transfer by Hindustran Motors Limited to and in favour of the petitioner, vide its Government Order dated 22.01.2015.
(iii) In order to establish the significant presence in the Indian Market as a part of a strategic plan, the petitioner has entered into a strategic alliance with PSA Group, France, for vehicle manufacture and distribution from the Chennai Car Plant located in Tiruvallur.
(iv) As a part of this strategic plan, the petitioner entered into the Asset Transfer Agreement dated 14.2.2017 with PCA Automobiles India Private Limited, which is a subsidiary of PSA Group, France and have agreed to sell and transfer the lands measuring an extent of 172.17 acres comprised in Adigathur, Melnallathur and Selai Villages. In order to comply with the said condition precedent in the said Asset Transfer Agreement, M/s,Hindustan Motors Limited executed one sale deed dated 10.04.2017 in favour of the petitioner in respect of an extent of 133.82 acres falling within the jurisdiction of Sub Registrar Office, Manavalanagar for the market value of Rs.66,36,74,000/- and the petitioner has paid the stamp duty of Rs.4,64,57,180/-.
(v) Similarly, Hindustan Motors Limited executed the second sale deed dated 10.04.2017 in favour of the petitioner in respect of an extent of 1.50 acre falling under the jurisdiction of Sub Registrar Office, Tiruvallur for the market value of Rs.52,50,000/- and the petitioner has paid the stamp duty of Rs.3,67,500/-.
(vi) Both the sale deeds have been duly stamped in the manner stated above, based on the guideline value published by the Government of Tamil Nadu in the public domain maintained by the Registration Department and also on the basis of the information received by the petitioner from the 1st respondent under the RTI Act. Though the sale deeds were executed on 10.04.2017 before the Sub Registrar, Manavallanagar, the same were not registered in spite of the petitioner paying stamp duty as required. The petitioner had also done independent valuation by a third party, who had valued the entire lands, i.e., 173.4 acres and building @ Rs,73,88,80,000/-, which is actually lower than the real value.
(vii) After the presentation of the sale deed for registration, the vendor, viz., Hindustan Motors Limited had received the impugned proceedings of the 1st respondent dated Nil.07.2016 wherein, they have stated that the valuation has been done by the District Registrar on the basis of her personal inspection and the value of the nearby lands and based on the circular of the Inspector Genral of Registration dated 27.01.2014, valued the property at Rs.500/- per square feet stating that the subject lands are industrial Type -II. Challenging the impugned proceedings dated Nil.07.2016, the petitioner has filed the above writ petitions.
6. The brief case of the respondents is as follows:-
(i) According to the respondents, the land in question being one of the industrial lands that have already been put into use by the vendor of the petitioner company, the same cannot not be construed as agricultural land or ordinary residential site and as such, value needs to be assessed and recommended by the 2nd respondent as per the circular of the Inspector General of Registration dated 27.01.2014. Hence, the 2nd respondent made a reference to the 1st respondent to assess the industrial site value of the survey number in question as per the above said circular of the Inspector General of Registration.
(ii) The 1st respondent, taking into account of the surrounding values of the survey numbers and by personal inspection, classified the lands in question as Industrial Type II and fixed the value at Rs.500/- per sq.ft. by proceedings dated 12.07.2017. Even if the procedure adopted, the value as found in the the Guideline Register, it is the Registering Officer, who has the discretionary power under sub- section (1) of section 47-A of the Indian Stamp Act, 1899, to decide whether the value set-forth in the sale deed is in accordance with the open market value.
(iii) In the instant case, the subject matter of lands being assigned to the vendor of the petitioner company by the Government was only for industrial purpose and hence, the status of the land as on the date of execution of the sale deed being industrial site, the guideline value, which has the value for the survey numbers in question as applicable to agricultural lands cannot be adopted. The guideline as applicable to the agricultural lands cannot be applied to the Industiral lands. Hence, a preliminary fixation of value by the higher authority is required. If the petitioner is aggrieved on the value fixed by the 1st respondent, it may file its objection before the District Registrar (Stamps), Chennai , who is notified as Collector under section 2(9) read with section 47-A(1) of the Indian Stamp Act to determine the true market value. In these circumstances, the respondents prayed for dismissal of the writ petitions.
7. Heard Mr.V.Prakash, learned Senior Counsel appearing for the petitioner and Mr.V.S.Sethuraman, learned Additional Advocate General appearing for the respondents.
8. Mr.V.Prakash, learned Senior Counsel appearing for the petitioner submitted that the valuation has to be done by the Sub Registrar and only if the Sub Registrar has reason to believe that the market value of the property which is the subject matter of conveyance has not been truly set-forth in the instrument he can invoke the procedure under section 47-A of the Indian Stamp Act. Further, the learned Senior Counsel submitted that the proceedings have been issued without any application of mind and the fixation of the value at Rs.500/- per sq.ft. by the 1st respondent is without any basis. That apart, the learned counsel also submitted that the adjacent lands that are sold to Caterpillar India Private Limited which are more proximal to the main road, a lesser rate was fixed. Further, the learned Senior Counsel submitted that the circular No.01 of 2014 of the Inspector General of Registration cannot survive and it is not valid in view of Section 47-AA of the Indian Stamp Act. In support of his contentions, the learned Senior Counsel relied upon the following judgements:-
(i) AIR 1990 Madras 251 [M/s. Park View Enterprises and another v. State Of Tamil Nadu And Others] wherein the Division Bench of this Court held as follows:-
“82. Section 3 of the Act is the charging section, which compels payment of stamp duty in respect of instruments, described in Schedule I to the Act. Section 17 states that all instruments chargeable with duty and executed by any person in India shall be stamped before or at the time of the execution. Sections 4, 5 and 6 deal with more than one instrument involved in a single transaction and relate to distinct matters and coming under several descriptions in Schedule I and as to what could be done under such circumstances Section 27 enjoins upon the parties to the instrument to disclose the consideration and the market value and all other facts and circumstances affecting the chargeability of the instrument with duty and that they shall be fully and truly set forth in the instrument. Section 47A introduced by Tamil Nadu Act 24 of 1967 and amended by T. N. Act 42 of 1981 Act, deals with certain kinds of documents, and if undervalued, how they are to be dealt with. The decisions referred to in the previous paragraphs are to the effect that it is not open to the Registering Authority to go behind the recitals and terms in the instrument produced for registration and find out as to what is the object of the transaction and whether the said transaction between the parties was something different from what the document discloses. Their power to fix the proper stamp duty on the document, does not go to the extent of discharging the functions of a Court, which could, by taking into account all the surrounding circumstances and the nature of document and the conduct of the parties and the terms agreed to between them, etc. could determine the intention of the parties under a document. This right is not conferred upon the Registering Authority. He could only find out, whether the executants who appear before him are the persons who have executed the document and on going through the document find out under what description in Schedule 1 it could be classified, and what proper stamp duty is payable thereon. As far as valuation is concerned, if it is a document which comes under Sec. 47A; and if he finds that the market value has not been properly set forth in the instrument, his first duty is to register the instrument and then refer such a document to the Collector for determining the correct market value and recover the proper duty payable thereon. In respect of any other instrument listed in Schedule I, Sec. 47A procedure cannot be followed.
83. It is no doubt obligatory on the part of the parties to the instrument to disclose fully and trully the consideration and the market value of the instrument relating to its chargeability and in the event of contra-vention. the course open is to prosecute the person under Sec. 64 of the Act. For instruments not covered by S. 47A this is the available recourse. None of the sections ever confer upon him any authority to go behind the terms of the document and find out as to what arc the other transactions which have been entered into between the parties to an instrument. Learned Advocate- General refers to Rule 3(3) of the Tamil Nadu (Prevention of Undervaluation of Instruments) Rules. 1968. which reads as follows : The registering officer may. for the purpose of finding out whether the market value has been correctly furnished in the instrument make such enquiries as he may deem fit. He may elicit from the parties concerned any information bearing on the subject and call for and examine any records kept with any Public Officer or authority.' Mr. Venkatasubramaniam, learned Counsel, would point out rightly, that, what he could ask tor is confined to the chargeability of the instrument and beyond the transaction covered by it. he has no jurisdiction whatsoever to demand production of documents, which are not referable to the instrument at all. What-ever particulars he could call for the (sic) confined only to the value pertaining to the nature of interest dealt with in the document and no more. Apart from the aspect of market value; as new other aspect, he has jurisdiction to call for particulars or summon production of documents. If he is to call for and examine any records, it could be only with reference to what any public office or authority may be keeping, and not what the parties are having. He would rather submit this rule will have reference only to Sec. 47A which was amended with effect from 24-4-1968 and not relating to any other section.
84. Even this rule makes it quite clear that the inquiries could be confined only relating to the market value of the property involved in the instrument and no other. As far as Sec. 27 is concerned, by the introduction of the words "and the market value", it could be only with reference to chargeability of the property involved in the instrument. If parties to the transaction choose to confine the transfer of interest, only relating to a share in the land: the power conferred on the Registering Athority. would be with reference to what are, found in Sec, 47A read with Ss. 27 and 64: and after registering the document, forward the same to the Collector for determining the correct market value of the share of land involved in the instrument. So long as the instrument is an instrument of conveyance, and when a share in the land is conveyed the statutory duty cast upon the Registrar is to register the document and forward it to the Collector for determination of market value of share of land and no other. The decision in Venkataswami Aiya In re. , above referred to, would have no application. Wherever S. 47A applies. Sec. 47A deals with instruments of conveyance, exchange, gift, release of benami right or settlement. If instruments of any one of these descriptions as found in Schedule I is produced for registration, and if the Registration Authority considers that the property chargeable to stamp duty had not been properly valued, his first duty which is a statutory duty, is to register the instrument and refer it to the Collector for determining the market value of that property, which is sought to be conveyed. If the correct market value of that property is not set forth in the document as required under Sec. 27, apart from the payment of the deficit stamp duty, which will be determined by the Collector under Sec. 47A(2). the parties to the instrument could be prosecuted under Sec. 64 of the Act. It is interesting to note that even a person engaged in the preparation of an instrument is liable to be prosecuted under Sec. 64(f) of the Act. It is only in respect of such of these instruments which do not come within the conspectus of Sec. 47A. if the proper stamp duty is not paid, as held in Venkataswami Aiya. In re , the Registering Authority can stop the registration and demand payment of proper duly. After the introduction of S. 47A, R. 3(3) being subject to the said section, it cannot empower the Registering Officer to hold an enquiry and adjudicate the correct stamp duty, and it could only enable him to prima facie find out whether to his belief the market value of the property is not properly stated has any substance or not. He has no power to adjudicate upon the market value of the property and delay the registration of the instrument. The rule only enables him to satisfy whether the proper value is given, so that, he may register the document. But, if particulars are not forthcoming or that he has reason to believe suo motu that the correct market value is not stated, thereafter the only duty is to register the document and follow procedure in S. 47A. He cannot delay the registration of the instrument of the kinds covered bv Sec.47A. Equally he has no right to go behind the terms of the document and find out whether the parties have entered into any other agreement or any other transactions. Equally, he has no jurisdiction to inspect the property. The role of the Collector is to find out the market value relating to the chargeability of the instrument and he has to go by the terms of the document regarding the nature oi the transaction. Hence, the impugned Circular is contrary to the provisions of the Act, when it directs the Registering Authorities that when sale deeds relating to sale of an undivided share in land come for registration, they must be kept pending and copies of them to be sent to the Inspector-General of Registration, and that the Deputy Inspector-General of Registration will inspect the properties and decide whether it comes under Amendment Act 38 of 1987 and he will find whether there has been any suppression of facts relating to the consideration of market value as required under Sec. 27, and communicate necessary orders to the concerned Registrar, so that shortlall notice in stamp duty could be collected and then only the documents should be registered. Therefore, this Circular in pith and substance deals with documents relating to 'Conveyance' which would en me under Art. 23 of Schedule 1 to the Act and in respect of them, as stated earlier, in view of the Sec. 47 what the Inspector-General of Registration had directed is opposed to the provisions of the Act. He has not understood the difference between Arts. 5(i) and 23 i.e. an agreement to construct a building is different from a conveyance of land. He had not issued this circular relating to agreements under Art, 5(i) which is impugned in this writ petition, though it is referred to therein inappropriately. Therefore, the impugned circular is struck down, as invalid and inoperative.
97. Therefore, the conclusions arrived at are as follows:
1. The impugned provisions of the Stamp Act and the Registration Act are valid, though badly drafted.
2. When a sale deed with a clear intention that only a share in the land is conveved, and that there is no transfer of interest between the parties in relation to the building, if any, found thereon; then the chargeability to stamp duty could be confined only to the market value of the share of the land and no other, Art. 23 alone will apply.
3. Registering authorities have no power to compel the parties to such a sale deed to register any agreement entered into between them for constructing a flat / apartment in the building, and which would fall under Art. 5(i).
4. In respect of such of those instruments which fall under Art. 23; Art. 5(i) cannot be applied, as it covers a different kind of transaction.
5. It is only when the parties to an agreement to construct a flat apartment in a building or the whole building as covered by Art. 5(i) chooses to present it for registration, the stamp duty as prescribed thereunder could be demanded, and not otherwise. Art. 47 A procedure cannot be followed. Only Art. 27 read with S. 64 are applicable.
6. It is entirely for the parties either to get an instrument which falls under Art. 5(i) to stamp it as prescribed or to have it registered as required under S. 17(1)(f) of the Act. It is open to them to take the risk of the legal consequences, in not following the provisions of these two enactments.
7. When a sale deed conveying only a share in the land is produced; and if the Registering authority has reason to believe that it's market value furnished is not correct, he has no jurisdiction or authority to hold an enquiry and decide as to what is the stamp duty payable thereon. R. 3(3) only enables him to arrive at a 'prima facie' assessment, whether the market value furnished in the sale deed could be relied upon to proceed with the registration. If he opines that the market value is not correct; the statutory duty cast upon him is to register and send it to Collector to follow the procedure under S. 47A.
8. Except the Collector, no Authority of the Registration Department in any other capacity, could fix the market value and decide upon the proper stamp duty payable in respect of any instrument covered by S. 47A.
9. The impugned circular of the second respondent dated 9-12-1988 is declared as illegal and invalid.
10. Levy of Registration fee at 1% is valid.
11. Article 5(i) could be applied only in respect of an agreement to construct a building or part of building is entered into between a vendor of the land who had already sold a portion or a share of his interest in the land or the entire land to the other party to the agreement, and thereafter the vendor of the land agrees to be the building contractor for the vendee for a portion or for entirety oi a building. Futher on the construction so put up as agreed to. the vendor of land further agrees to deliver the land and that portion of the building or the entire building, as the case may be, to the vendee of the sale deed, relating to land already sold to him. Unless all these ingredients are found in such an instrument, which comes into existence after the sale of land or share in land; Art. 5(i), cannot be invoked. Any instrument which does not contain all these ingredients, would be outside the scope of Art. 5(i).
12. An agreement under Art. 5(i) does not result in transfer of interest in immovable property, be it land or building or together. It is confined only to "an agreement to construct a building", and in essence, it is only a works contract.
13. Unless an instrument under Art. 5(i) is properly stamped and registered, it cannot be produced in evidence in a Court as per S. 35 of Stamp Act or legal rights thereunder cannot be enforced, as between the parties.
14. If parties to an agreement under Art. 5(i) get it stamped and registered; and later on if they enter into a conveyance of an interest in building or part of building to the extent as agreed to between the parties; stamp duty will be payable under Art. 23 on the value of concerned superstructure, and that document will have to be duly registered under S. 17(1) of the Registration Act.
15. When a conveyance under Art, 23 is entered into between two parties in respect of a share in the land, its registration cannot be refused on the ground that an agreement which would come under Art.5(i) exists as between them, and that it had not been duly stamped or registered.
16. On reading of the objects and reasons for passing of the Amendment Act 38 of 1987, the impression gained is that, the amendments effected are far short of the loopholes which require to be plugged, and a more rigorous comprehensive legislation than enacted in Delhi and Maharashtra is required to be enacted expeditiously, without any power of exemption in the Government to relax any of those provisions under any circumstance.
(ii) 1997 (2) CTC 617 [S.P. Padmavathi vs State Of Tamil Nadu And Others ] wherein the Division Bench of this court held as follows:-
“... Market value itself, as we already mentioned, is a changing factor and will depend on various circumstances and matters relevant to the consideration. No exactitude is, in the nature of things possible. In working the Act great caution should be taken in order that it may not work as an engine of oppression. Having regard to the object of the Act, we are inclined to think that normally the consideration stated as the market value in a given instrument brought for registration should be taken to be correct unless circumstances exist which suggest fraudulent evasion. Even in such a ease, we trust that disputes will not be raised for petty sums. Unless the difference is considerable or sizable and it appears patent that the amount mentioned in the document is a gross undervalue, no disputation as to value is expected to be started. "
.... 12. We accordingly, answer Point No. 1 as follows:--
"Power under Section 47A of the Act can only be exercised when the Registering Officer has reason to believe that the market value of the property, which is the subject of conveyance, has not been truly set forth, with a view to fraudulently evade payment of proper stamp duty. Mere lapse of time between the date of agreement and the execution of the document will not be the determining factor that the document is undervalued and such circumstance by itself is not sufficient to invoke the power under Section 47-A of the Act, unless there is lack of bona fides and fraudulent attempt on the part of the parties to the document to undervalue the subject of transfer with a view to evade payment of proper stamp duty "
(iii) 2009(1) CTC 305 [The Government Of Tamil Nadu vs S.Jayalakshmi And Others] wherein the Division Bench of this court held as follows:-
“11. The learned Judge on consideration of the materials available on record, held that there is no material on record either to suspect or to hold that the conveyance by the Tamil Nadu Police Housing Corporation in favour of the writ petitioners is either attracted by alleged under valuation or fraudulent evasion of stamp duty. On the other hand, since the sale deeds were executed by the Corporation which is the Government of Tamil Nadu Undertaking in favour of the writ petitioners, it can be presumed that it is a bona fide transaction. The learned Judge further held that unless there is any substantial and material evidence and reasons to believe that the market value of the property conveyed has not been truly set forth in the instrument, with an object to commit a fraudulent evasion of stamp duty to cause loss of revenue, it cannot be presumed that the power conferred under Section 47-A of the Indian Stamp Act is a routine one in respect of each and every transaction.
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.
It is essential to point out that before registration, the Registering Authority has to record that he has reasons to believe that the value of the property has not been duly set forth in the instrument. Only after recording such reasons, the Registering Authority has to complete registration of the instrument in question and thereafter alone, he could refer the same to the Collector under Sub-Section (1) of Section 47-A of the Indian Stamp Act. Such is not the case of the respondents herein. To this extent, the function of the Registering Authority is quasi judicial in nature and he has to come to a conclusion that the market value of the property dealt under the document had not been truly set forth and after completion of registration, he could make a reference. At least some reasons should be recorded and immediately after completion of registration or sooner thereafter, a reference has to be made under Sub-Section (1) of Section 47-A of the said Act.
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."
22. In 2001(2) CTC 449 (DB) - The District Collector, Erode District, Erode vs. M.Ponnusamy, the said question once again came up for consideration and a Division Bench of this Court has taken into consideration the decision reported in S.P.Padmavathi vs. The State of Tamil Nadu, [1997(II) CTC 617 (DB)] (cited supra) and held that the documents presented for registration has to be registered if it sets forth market value and registering officer has power to find out whether the market value has been correctly furnished in instrument presented for registration. In the event of the Registering Officer not accepting the valuation, he shall register the document and thereafter, he can refer the same to the Collector for adjudication. In the absence of document or material produced to show that the documents in question have been undervalued, the Registering Officer cannot decide the same and apply provisions under Section 47-A of the Indian Stamp Act without forming an independent decision.
(iv) AIR 1974 Mad 117 [The State Of Tamil Nadu vs T.N. Chandrasekharan] wherein the Division Bench of this Court held as follows:-
“6. Even so, we are inclined to think that the object of the Amending Act being to avoid large scale evasion of stamp duty, it is not meant to be applied in a matter-of-fact fashion and in a haphazard way. Market value itself, as we already mentioned, is a changing factor and will depend or various circumstances and matters relevant to the consideration. No exactitude is, in the nature of things possible. In working the Act, great caution should be taken in order that it may not work as an engine of oppression. Having regard to the object of the Act, we are inclined to think that normally the consideration stated as the market value in a given instrument brought for registration should be taken to be correct unless circumstances exist which suggest fraudulent evasion. Even in such a case, we trust that disputes will not be raised for petty sums. Unless the difference is considerable or sizeable and it appears patent that the amount mentioned in the document is a gross undervalue, no disputation as to value is expected to be started.”
9. Countering the submissions made by the learned Senior Counsel appearing for the petitioner, Mr.V.S.Sethuraman, learned Additional Advocate General appearing for the respondents submitted that in order to recommend the value to the Collector, the preliminary value is required to be fixed by the 1st respondent so as to enable to determine the true market value under section 47-A(1) of the Indian Stamp Act and that the value that is accessed by the 1st respondent cannot be construed as final one and the petitioner can represent before the Collector to determine the true market value when the value fixed by the 1st respondent is not in consonance with the open market value. Further, the learned Additional Advocate General submitted that the procedure has been followed by the 1st respondent in pursuance of the circular of the Chief Controlling Revenue Authority and Inspector General of Registration, dated 27.01.2014. Further, the learned Additional Advocate General submitted that the 1st respondent assessed the value after the personal inspection and also collected prevailing rate around the subject lands. If the petitioner company does not accept the value fixed by the 1st respondent it can represent before the 1st respondent under section 47-A(1) of the Indian Stamp Act, who is the quasi-judicial authority to determine the true market value of the property in question The learned Additional Advocate General also submitted that the reduction of guideline value by 33% came into force only from 09.06.2017 whereas, the sale deed in question was executed as early as on 10.04.2017. Even though the same is kept pending for registration for fixation of the market value by the 1st respondent, the petitioner cannot seek reduction of stamp duty with retrospective effect of the Government Order reducing the guideline value by 33% with effect form 09.06.2017.
10. On a careful consideration of the materials available on record and the submissions made by the learned Counsel on either side, it could be seen that M/s,Hindustan Motors Limited executed a sale deed dated 10.04.2017 in favour of the petitioner in respect of an extent of 133.82 acres falling within the jurisdiction of the 2nd respondent for the market value of Rs.66,36,74,000/- and also paid the stamp duty of Rs.4,64,57,180/-. On the same day, Hindustan Motors Limited executed another sale deed in favour of the petitioner in respect of an extent of 1.50 acre for the market value of Rs.52,50,000/- and has paid the stamp duty of Rs.3,67,500/-. By the impugned order dated Nil..07.2017, the 1st respondent fixed the market value at Rs.500/- per sq.ft. finding that the subject land can be construed only as an industrial land and it cannot be cosntured as an agricultural land. The 1st respondent relied upon a circular issued by the Inspector General of Registration in Circular No.01/2014, dated 27.01.2014 and valued the property conveyed under the sale deeds dated 10.04.2015 at Rs.500/- per sq.ft. stating that the lands are Industrial Type II lands. As per Circular No.01/2014, issued by the Inspector General of Registration, the District Registrar was given power to fix the market value of the lands after making personal inspection. The respondents contended that in the event of the petitioner not being satisfied with the value fixed by the 1st respondent, the District Registrar, the matter can be referred to the Collector under section 47-A of the Act for fixing the market value of the land.
11. As per section 47-A (1) of the Act, (i) If the Registering Officer appointed under the Indian Registration Act, 1908 while registering any instrument of conveyance, (exchange, gift, release of benami right or settlement), has reason to believe that the market value of the property which is the subject matter of conveyance, gift, release of benami right or settlement) has not been truly set forth in the instrument he may, after registering such instrument, refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon. (2) On receipt of a reference under sub-sec. (1), the Collector shall, after giving the parties a reasonable opportunity of being heard and after holding an enquiry in such manner as may be prescribed by rules made under this Act, determine the market value of the property which is the subject matter of conveyance, (exchange, gift, release of benami right or settlement) and the duty as aforesaid, The difference, if any, in the amount of duty, shall be payable by the person liable to pay the duty. As per sub-sec.
(4) of section 47 A of the Act, every person liable to pay the difference, if any, in the amount of duty. Under sub-sec. (2) or sub-sec.
(3) shall pay the said duty within such time as may be, prescribed.
In default of such payment, such amount of duty outstanding on the date of default shall have a charge on the property affected in such instrument. On any amount remaining unpaid after the date of satisfying the instrument, the person liable to pay the duty in addition to the amount due, interest at 1% per month on such amount for the entire period of default.
12. On a reading of Section 47-A of the Act, it is clear that if the Registering Officer has reason to believe that the market value of the property which is the subject matter of conveyance, has not been truly set forth in the instrument he may, after registering such instrument, refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon.
13. In the case on hand, the Registering Officer i.e., the 2nd respondent has referred the matter to the 1st respondent, the District Collector, for fixing the market value as per Circular No.01/2014, dated 27.01.2014 issued by the Inspector General of Registration. After reference by the 2nd respondent, the 1st respondent had fixed the market value of the subject lands at Rs.500/- per sq.ft. stating that it should be construed only as a industrial lands and not as agricultural lands. The 1st respondent has not given any reason fox fixing the market value at Rs.500/- per sq.ft. in one land. The 1st respondent has stated that the value of the land is 500/- per sq.ft. The market value cannot be fixed by any authority arbitrarily. The 1st respondent should have given acceptable reasons for fixing the market value at rS.500/- per sq.ft. The value cannot be fixed arbitrarily without assigning any reason whatsoever. The 1st respondent in one line has stated that he is fixing the value at Rs.500/- per sq.ft. The Circular issued by the Inspector General of Registration in Circular No.01/2014, dated 27.01.2014 cannot over-write the provisions of Indian Stamp Act, 1899.
14. Under Section 47-A of the Act, firstly, the 2nd respondent should have registered the document and thereafter, should have sent it to the Collector for fixing the market value of the lands.
15. In the case on hand, it is brought to the notice of this court that the 2nd respondent has not registered the document yet. However, he has referred the matter to the 1st respondent, the District Registrar for fixing the market value. That apart, when the provisions of Section 47-A says that unless the 2nd respondent has has reason to believe that there is an attempt to deliberately under value the subject of transfer to effect the payment of proper stamp duty, he cannot refer the matter to the Collector for fixing the market value. The 2nd respondent cannot refer the matter mechanically without following the provisions of Section 47-A. The 2nd respondent has not given any reasons for referring the matter to the 1st respondent. Even in the counter, the respondents have not stated the reason for referring the matter to the 1st respondent for fixing the market value as contemplated under Section 47-A. The 2nd respondent should have registered the document and thereafter should have referred the matter to the Collector following the provisions of section 47-A of the Act.
16. The ratio laid down in the judgements relied upon by the learned Senior Counsel appearing for the petitioner squarely applies to the facts and circumstances of the present case.
17. Following the judgments of the Division Bench of this Court, I am of the considered view that the impugned orders passed by the 1st respondent are liable to be set side.
18. For the reasons stated above, the impugned orders passed by the 1st respondent are set aside. The 2nd respondent is directed to register the documents and thereafter refer the documents if he has reason to believe that there is attempt to deliberately under value the subject of transfer to effect payment of proper stamp duty to the Collector under Section 47 A of the Stamp Act, for fixing the value of the subject property, within a period of three weeks from the date of receipt of a copy of this order. It is needless to say that as per section 47-A(4) if the petitioner is found to pay a higher stamp duty, under sub-section(2) and in default of such payment, the said amount of duty outstanding on the date of default, there shall be a charge on the subject property.
With these observations, the writ petitions are allowed. No costs.
Consequently, connected miscellaneous petitions are closed.
03.10.2017 Index: Yes/No Note Issue the copy of the order today itself Rj To
1. The District Registrar Kancheepuam District
2. Sub-Registrar Office of the Sub-Registrar Manavallanallur M.DURAISWAMY, J., Rj Order in W.P.Nos.18768, 19296 & 20788 of 2017 W.M.P. Nos. 20289, 20290 & 20800 of 2017 03.10.2017