THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT APPEAL No.275 of 2010 Dated:03.08.2010 Between: Sri Srinivasa Padmavathi Amusements and Resorts Private Ltd. …Appellant and The District Registrar of Assurances, And another. …Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT APPEAL No.275 of 2010 JUDGMENT: (per Hon’ble Sri Justice V.V.S.Rao) A piece of land admeasuring Acs.14.42 cents comprised in survey Nos.816 to 821 of Tookivakam Village of Renigunta forms part of industrial development area of Tirupati. Initially, the same was allotted to M/s.India Tin Industries Limited by the Andhra Pradesh Industrial Infrastructure Corporation (APIIC). The said company became sick. Therefore, the appellant herein stepped into the shoes, and after obtaining necessary permission from APIIC, it purchased the industrial plot for a consideration of Rs.1,10,00,000/-. A conveyance deed dated 19.12.2003 was presented for registration to the second respondent. The matter was referred to the first respondent under Section 47-A(2) of the Indian Stamp Act, 1899 (the Act), who by order dated 11.11.2005 determined the market value for the purpose of stamp duty at Rs.7,46,49,208/-. The same was assailed in the writ petition. The learned single Judge, having regard to the proviso to Section 47-A(2) of the Act, dismissed the writ petition giving liberty to the petitioner to avail the alternative remedy of filing appeal before the appellate authority. This Court heard the Counsel for the appellant and the Government Pleader for Revenue (Andhra Area). Reliance is placed on the judgment of the Supreme Court in Government of Andhra Pradesh v Smt.P.Laxmi Devi[1]. The proviso to Section 47-A(2) of the Act imposes a condition of depositing the difference of amount of duty determined by the District Registrar. The same was assailed in a writ petition and this Court declared the same ultra vires. In appeal, the Supreme Court reversed the High Court upholding the validity of Section 47-A of the Act. In paragraphs 28, 29 and 30, the Supreme Court observed as below. We may, however, consider a hypothetical case. Supposing the correct value of a property is Rs.10 lacs and that is the value stated in the sale deed, but the registering officer erroneously determines it to be, say, Rs.2 crores. In that case while making a reference to the Collector under Section 47A, the registering officer will demand duty on 50% of Rs.2 crores i.e. duty on Rs.1 crore instead of demanding duty on Rs.10 lacs. A party may not be able to pay this exorbitant duty demanded under the proviso to Section 47A by the registering officer in such a case. What can be done in this situation? In our opinion in this situation it is always open to a party to file a writ petition challenging the exorbitant demand made by the registering officer under the proviso to Section 47A alleging that the determination made is arbitrary and/or based on extraneous considerations, and in that case it is always open to the High Court, if it is satisfied that the allegation is correct, to set aside such exorbitant demand under the proviso to Section 47A of the Indian Stamp Act by declaring the demand arbitrary. It is well settled that arbitrariness violates Article 14 of the Constitution vide Maneka Gandhi vs. Union of India, AIR 1978 SC 597. Hence, the party is not remediless in this situation. However, this would not mean that the proviso to Section 47-A becomes unconstitutional. There is always a difference between a statute and the action taken under a statute. The statute may be valid and constitutional, but the action taken under it may not be valid. Hence, merely because it is possible that the order of the registering authority under the proviso to Section 47A is arbitrary and illegal, that does not mean that the proviso to Section 47A is also unconstitutional. We must always keep this in mind when adjudicating on the constitutionality of a statute. Having support from the above observations, the appellant’s Counsel would urge that the requirement of deposit of Rs.70,01,431/- as a condition precedent for availing remedy before the appellate authority is arbitrary, and the same is exorbitant. We find force in the submission. Sale by M/s.India Tin Industries Limited with the permission of APIIC is for Rs.1,10,00,000/-. When the reference was made under Section 47-A(2) of the Act, the first respondent fixed the market value of the property at Rs.7,46,49,208/-, which is at least 800% more than the agreed sale consideration between the vendor and vendee. By all reasonable standards, the demand is certainly exorbitant, and therefore, the ratio in Smt.P.Laxmi Devi is attracted. We, therefore, dispose of the writ appeal in the following manner. The Writ Petition against the order of the first respondent dated 11.11.2005 stands disposed of directing the appellate authority to entertain the appeal of the petitioner on condition of deposit of Rs.20,00,000/- (Rupees twenty lakhs only) within a period of three weeks from the date of receipt of a copy of this order. We may make it clear that any observations made hereinabove regarding the fixation of market value for the purpose of stamp duty are not intended to influence the decision making by the appellate authority, who is required to take independent decision based on the facts and circumstances. The Writ Appeal is disposed of accordingly. There shall be no order as to costs. __________________ (V.V.S.RAO, J) ______________________________ (RAMESH RANGANATHAN, J) 03.08.2010 vs [1] 2008 AIR SCW 1826