1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 19.12.2011 CORAM THE HONOURABLE MR.JUSTICE V.RAMASUBRAMANIAN W.P(MD)No.13638 of 2011 and M.P(MD)No.2 of 2011 1. K.Thangavel 2. P.V.Magudapathi ... Petitioners Versus 1. The Inspector General (Registrarion)/ The Chief Controlling Revenue Authority, Department of Registration, No.120, Sathome High Road, Chennai – 600 028. 2. The Special Deputy Collector (Stamps), Trichy. 3. The Sub-Registrar, Aravakurichi Sub-Registrar Office, Aravakurichi, Karur. 4. The City Union Bank, Represented through its Authorised Officer, 149, T.S.K.Big Street, Kumbakonam – 612 001. ... Respondents PRAYER: Writ petition is filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, to call for the records Na.Ka.No.60/2011 dated 18.04.2011 issued by the second respondent as illegal and void and to quash the same and directing the third respondent to release the document No.3328/2010 dated 05.10.2010 to the petitioners without demanding any additional stamp duty. For Petitioner : Mr.Babu Rajendran For RR 1 to 3 : Mr.K.P.Krishnadoss Government Advocate For R – 4 : Mr.R.Pandivel O R D E R The petitioners have come with the above Writ petition, challenging the communication sent by the third respondent herein informing the petitioner that the document filed by him has been referred under Section 47-A of the Indian Stamp Act, 1899. 2. Heard Mr.Babu Rajendran, learned Counsel for the petitioner, Mr.K.P.Krishnadoss, learned Government Advocate for the respondents 1 to 3 and Mr.R.Pandivel, learned Counsel for the fourth respondent. https://hcservices.ecourts.gov.in/hcservices/ 2 3. The fourth respondent herein, which is a Bank, initiated proceedings under the SARFAESI Act 2002, against its borrowers. The properties were brought to sale in an auction conducted on 15.04.2009. The petitioners became the highest bidders. Their bid was accepted and a sale certificate was issued by the fourth respondent on 02.08.2010. The fourth respondent also executed a sale deed and the same was presented for registration on 05.10.2010. The document was registered as Document No.3328/2010. The highest offer made by the petitioners, which was accepted by the Bank was Rs.18,36,000/-. Therefore, the stamp duty paid by the petitioners was Rs.1,47,000/-. 4. However a letter was sent subsequently by the third respondent on 20.12.2010, informing the petitioners that since the loan amount for the recovery of which the property was brought to sale, was Rs.49,63,434/-, the petitioners should pay stamp duty accordingly and that if the petitioners did not pay, the document will be referred under Section 47-A of the Indian Stamp Act. The petitioners lodged their protest, pointing out that the sale was by a Bank under the SARFAESI Act and that there is no question of undervaluation. 5. But the third respondent issued the impugned communication referring the document under Section 47-A. Therefore, the petitioners are before this Court. 6. The only basis on which the third respondent has referred the document for adjudication under Section 47-A is that the loan amount for the realization of which the fourth respondent-Bank initiated the proceedings under the SARFAESI Act, was Rs.49,63,434/-. But the third respondent is clearly under a misconception. Every property of a borrower, need not necessarily fetch an amount equal to the amount outstanding to the Bank. The amount outstanding to a Bank may be secured by several properties. If the stand taken by the third respondent is accepted then every property mortgaged to the Bank, should be of a value equivalent to the amount outstanding. Therefore, there is a fundamental flaw in the reasoning given by the third respondent. 7. The third respondent has filed a counter affidavit. In the counter affidavit, the third respondent has improved his case. Apart from stating that the loan amount for which the property was brought to sale was Rs.49,63,434/-, the third respondent has also mentioned, as a passing reference that the properties are more valuable. The stand that the properties are more valuable, is a very vague statement. The third respondent has not even stated the guideline value of the property. I can understand if the third respondent has quoted the guideline value and come to the conclusion that the value indicated in the sale certificate is less than the guideline value. In the absence of any such reference to the guideline value, it is clear that the third respondent has been guided pre- dominantly by the loan amount and nothing else. 8. Even if there is a dispute with regard to the guideline value, I doubt whether the third respondent can refer such a document, executed in an auction sale conducted under the SARFAESI Act to adjudication under Section 47-A. In V.N.Devadoss Vs. Chief Revenue Control Officer, 2009 (3) LW 236, the Supreme Court was concerned with a case where the properties of Dunlop India Limited, which became a sick industry and was declared so https://hcservices.ecourts.gov.in/hcservices/ 3 under the provisions of the Sick Industrial Companies (Special Provisions) Act 1985, were sold in a public auction. When the sale deed was presented for registration to the Sub-Registrar, Ambattur, he referred the document to the District Revenue Officer under Section 47-A of the Indian Stamp Act, 1899, who in turn issued a notice in Form No.1 of Rule 4 of the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968. The petitioner before the Supreme Court submitted his objections to Form No.1. But the District Revenue Officer passed an order directing payment of additional stamp duty. After exhausting the remedy of appeal, the petitioner came up to the High Court. The High Court took a view that it was not a case of sale by a Government or a transaction between the Government organisations. Therefore, the matter was remanded back to the original authority. Challenging the same, the petitioner went before the Supreme Court. 9. After taking note of the provisions of Section 47-A, the Supreme Court rejected the stand taken by the State Government, that what was disclosed in the sale deed was only a sale value and not a market value. Paragraph Nos.9 to 12 to the said judgment read as follows:- “9. Stand of the State is that what has been disclosed is clearly a sale value and the same cannot be termed as market value. There is fallacy in this argument. 10. Market Value is a changing concept. The explanation to sub-Rule (5) makes the position clear that value would be such as would have fetched or would fetch if sold in the open market on the date of execution of the instrument of conveyance. Here, the property was offered for sale in the open market and bids were invited. That being so, there is no question of any intention to defraud the revenue or non disclosure of the correct price. The factual scenario as indicated above goes to show that the properties were disposed of by the orders of BIFR and AIFR and that too on the basis of value fixed by ASG. The view expressed by the Assets Sales Committee which consisted of members such as representatives of IDBI, Debenture Holders, Government of West Bengal and Special Director of BIFR. That being so, there is no possibility of any under valuation and, therefore, Section 47-A of the Act has no application. It is not correct as observed by the High Court that BIFR was only a mediator. 11. Sale has been defined under Section 54 of the Transfer of Property Act, 1882 (in short the 'TP Act'). Although the Act has not included the definition of sale, Section 2(10) of the Act defines conveyance as including a conveyance on sale, every instrument and every decree or final order of any civil Court by which property whether immovable or moveable or any estate or interest in any property is transferred to, or vested in or declared to be of any other person, inter vivos, and which is not otherwise specifically provided for by Schedule I or Schedule 1- A, as the case may be. 12. On the facts of the case it cannot be said that Section 47-A has any application because there is no scope for entertaining a doubt that there was any under valuation. That https://hcservices.ecourts.gov.in/hcservices/ 4 being so, the High Court's order is clearly unsustainable and is set aside. The registration shall be done at the price disclosed in the document of conveyance. There is no scope for exercising power under Section 47-A of the Act as there is no basis for even entertaining a belief 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 proper stamp duty.” 10. The ratio laid down in the above decision applies squarely to the facts of the present case. Therefore, the Writ Petition is allowed and the respondents are directed to release the document within a period of four weeks, after verifying whether the adequate stamp duty and registration charges have been paid on the basis of the amount for which the sale deed was executed by the Bank. No costs. Consequently, connected Miscellaneous Petition is closed. Sd/- Assistant Registrar (RTI) /True copy/ Sub Assistant Registrar(C.S) To 1. The Inspector General (Registrarion)/ The Chief Controlling Revenue Authority, Department of Registration, No.120, Sathome High Road, Chennai – 600 028. 2. The Special Deputy Collector (Stamps), Trichy. 3. The Sub-Registrar, Aravakurichi Sub-Registrar Office, Aravakurichi, Karur. 4. The City Union Bank, Represented through its Authorised Officer, 149, T.S.K.Big Street, Kumbakonam – 612 001. +1. CC to Mr.Basu Rajendran, Advocate, SR.No. 44375 ps W.P(MD)No.13638 of 2011 19.12.2011 TR : 27.12.2011: 4p/6c https://hcservices.ecourts.gov.in/hcservices/