SCA/5039/2007 1/13 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 5039 of 2007 With SPECIAL CIVIL APPLICATION No. 5040 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE MD SHAH ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= ARCHIT L BHATT & 1 - Petitioner(s) Versus STATE OF GUJARAT THRO.SECRETARY & 3 - Respondent(s) ========================================================= Appearance : MR NACHIKET A DAVE for Petitioner(s) : 1 - 2. MR KAMAL TRIVEDI, ADVOCATE GENERAL with MS. SANGEET VISHEN AGP for Respondent(s) : 1 - 4. ========================================================= CORAM : HONOURABLE MR.JUSTICE MD SHAH Date : 13/02/2008 ORAL JUDGMENT 1.0 The petitioners have purchased agricultural land situated at Kalol by executing SCA/5039/2007 2/13 JUDGMENT a Sale Deed dated 30th June, 2006. The required stamp of Rs.22,500/- has been impressed upon the Sale Deed as per the provisions of Section 10 of the Bombay Stamp Act, 1958. The said Stamp Duty has been paid in ICICI Bank and the Manager of the ICICI Bank had made impression of franking machine and signed on the impressed stamp of the ICICI Bank. The necessary license of the Government of Gujarat has been granted to the ICICI Bank for accepting Stamp Duty on behalf of State of Gujarat. The said Sale Deed was presented before the sub-Registrar, Kalol for its registration. But, the sub-Registrar Kalol has refused to register the said Sale Deed on the ground that the Circular dated 19th May, 2006 has been issued by the Superintendent of Stamps, giving direction to register Deeds if only Stamp Duty has been paid by the 'Challan'. As the sub- Registrar, Kalol impounded the Sale Deed, to avoid further complication and to get the said Sale Deed registered in favour of the petitioners, the petitioners executed another SCA/5039/2007 3/13 JUDGMENT Sale Deed dated 21st December, 2006 and paid Stamp Duty by way of 'Challan' to State of Gujarat and then the second Sale Deed was registered. 2.0 The petitioners have approached this Court with following prayers, “... (B) Be pleased to direct the respondents by writ of mandamus or any other appropriate writ order or direction to forthwith register the first sale deed dated 30-06-2006 executed in favour of the petitioners and presented for registration before Registrar, Kalol on 01-07-2006 at Serial No.3522. (C) Quash and set-aside circular dated 19-05-2006(Ann A) issued by Resp. no.4. (D) Direct the respondents to refund the Stamp duty of Rs.22,500/- and Registration Fees of Rs.5950/-(Totally Rs.28,450/-)on the Second Sale deed dated 21-12-2006 registered at Serial No.6819 by Sub Registrar of Kalol for the same land and between same parties (Vendor & Purchaser) showing same price of the land. (E) Grant such further and any other relief as are deemed fit in the facts and circumstances of the case and might require in the interests of justice.” SCA/5039/2007 4/13 JUDGMENT 3.0 In this matter on 19th October, 2007 this Court (Coram: D.H. Waghela,J.) passed following order, “1. Learned Advocate General, appearing for the State, sought time for filing additional affidavit-in-reply. It was stated by him that in the meantime, the petitioner shall be permitted to have first sale seed dated 30.06.2006 registered and, Stamp Duty of Rs.22,500/- and registration fee of Rs.5,950/- alleged to have been paid on second sale deed dated 21.12.2006, which was registered at Serial No.6819 by Sub-Registrar of Kalol, shall be refunded to the petitioner. The statement is stated to have been made in view of the peculiar facts and circumstances of this case without prejudice to the rights and contentions of the respondents and it shall not be a precedent for any other case. 2. As for the prayers contained in paragraph No.17(C) and (E) of the petition, the petition was agreed to be heard and finally disposed on the next date of hearing which is fixed, by consent, on 12.12.2007.” 4.0 Heard, Mr. Dave, learned Advocate for the petitioners and Mr. Kamal Trivedi, Advocate General for the respondents. SCA/5039/2007 5/13 JUDGMENT 5.0 It is argued by learned Advocate Mr. Dave that the circular dated 19th May, 2006 issued by the Superintendent of Stamps-Respondent No.4 and produced at 'Annexure-A' with the petition, is contrary to the provisions of Section 10 of the Bombay Stamp Act, 1958. It is argued by Mr. Dave that as per Section 10(ii) of the Bombay Stamp Act if the Collector, in relation to any area in the district under his charge, is satisfied that on account of temporary shortage of stamps in any area, payment of duty cannot be made, the Collector, may, by notification in the Official Gazette, direct that the duty may be paid in cash to any Government Agent on production of 'Challan'. Mr. Dave emphasized more particularly on the words “...that on account of temporary shortage of stamps in any area only in the event of shortage of stamps, the Government can issue notification for accepting the Stamp Duty through 'Challan' or by any other mode otherwise Government has no powers to issue such circulars. He argued that in view of the above, the circular SCA/5039/2007 6/13 JUDGMENT dated 19th May, 2006 issued by respondent No.4 is unjust, illegal and arbitrary and is contrary to provisions of Section 10 of the Bombay Stamp Act. It is also argued by Mr. Dave that the Circular dated 19th May, 2006 issued by respondent No.4 is meant for Gandhinagar District only in the State of Gujarat and hence it is also discriminatory and require to be quashed and set aside. 6.0 Mr. Kamal Trivedi, learned Advocate General submitted that the Circular dated 19th May, 2006 issued by respondent No.4 is legal and proper, as in the year 2001, a fake stamp scam was unearthed by the C.B.I. which was to the tune of crores of rupees and many cases were registered against the offenders in the State of Gujarat and in other states of India. Therefore, with a view to wipe out any further loss of revenue to the State because of fake stamps and taking into consideration the interset of public at large, the aforesaid Circular was issued by the State Government and hence the Circular SCA/5039/2007 7/13 JUDGMENT issued by the State Government is legal and proper. The petition, therefore, deserves to be dismissed. It is also argued by Mr. Kamal Trivedi that this is a policy decision of the Government and so the petitioners are not entitled to claim any relief except if it is found by Court that the aforesaid Circular was issued only with a mala fide exercise of powers or if policy is found to be arbitrary, capricious and unreasonable then and then only, the petitioners are entitled to get relief under Article 226 of the Constitution of India. It is further submitted by Mr. Kamal Trivedi that there is nothing on record to show that mala fide exercise of power is carried out by the State Government by issuing Circular dated 19th May, 2006 or that it is against the provisions of Section 10 of the Bombay Stamp Act. It is also submitted by him that the Circular dated 19th May, 2006 is merely supplementary and of directive nature which cannot be said to have intended to curtail the provisions of Bombay Stamp Act and SCA/5039/2007 8/13 JUDGMENT more particularly the provisions contained in Section 2(K)defined in the term 'Stamp' read with Section 12, and hence, the petition deserves to be dismissed. He has further submitted that as per the amendment in Section 2(K)of the Bombay Stamp Act in clause-K after entry (iii) following entry shall be added which came into force from 1st April, 2007, “Receipted chalan or the certificated issued under e-stamping or any other system as may be prescribed by rules.” 6.1 Mr. Kamal Trivedi, has further submitted that even otherwise in view of the order passed by this Court(Coram: D.H. Waghela, J.)dated 19.10.2007 directing respondents to register the first Sale Deed dated 30.06.2006 and to refund the amount of Rs.22,500/- and Rs.5,950/- paid by the petitioners toward Stamp Duty and Registration Fees, respectively, no grievance raised by the petitioners survive now. Hence, the present petition deserves to be dismissed. In SCA/5039/2007 9/13 JUDGMENT support of the same, Mr. Kamal Trivedi has placed reliance on following decisions of the Hon'ble Apex Court, (i) “Union of India and Ors. Vs. A.M. Overseas and Anr” reported in (2006)6 SCC 19, (ii) “K.N. Guruswamy Vs. The State of Mysore and Ors.” reported in AIR SC 592 (Vol. 41, C.N. 137). 7.0 It is not disputed fact that there was scam of stamp and to stop it, it is requiring to take appropriate steps by the Government, and hence, Circular dated 19th May, 2006 was issued by the Government as a policy decision. Scam of stamp itself indicates that there is shortage of stamps. If we go through the affidavit-in-reply filed by the Additional Superintendent (Stamp), Gandhinagar then it is specifically stated in Para 4 as under, SCA/5039/2007 10/13 JUDGMENT “4. I say and submit that in the year 2000-2001, the fake Stamp Scam was caught by the CBI, which is to the tune of crores in the State of Gujarat and 14 cases were registered against the Stamp vendors and Stamp scam was also found in other State of India. I say and submit that looking to the facts and circumstances of the case that by floating fake Stamp in the market the Revenue of State was put to a loss by the persons who were engaged in the fake Stamp scam, and therefore, with a view to wipe out any further loss of Revenue because of fake Stamps and the people at large may not be into difficulty because of using the fake Stamps, which they purchased from the Stamp vendors.” 8.0 The aforesaid fact is not challenged by the petitioner and it is well within the knowledge of all that fake stamp scam to the tune of crores of rupees was detected and so in view of the above the decision was taken by the Government in the larger interest of the public and taking into consideration the interest of State as huge loss of revenue is concerned. So in the opinion of this Court by no stretch of imagination it can be said that the Circular dated 19th May, 2006 issued by the Government is SCA/5039/2007 11/13 JUDGMENT illegal or against the provisions of Section 10 of the Bombay Stamp Act. In above view of the matter here it would be relevant to refer to a decision of the Hon'ble Apex Court in the case of “M/s. Dhampur Sugar (Kashipur) Ltd. Vs. State of Uttranchal & Ors.” reported in 2007 AIR SCW 6169 wherein at para-61, the Hon'ble Apex Court has observed as under, “61. The State and its instrumentality has also power to change policy. The executive power is not limited to frame a particular policy. It has untrammelled power to change, re-change, adjust and re- adjust the policy taking into account the relevant and germane considerations. It is entirely in the discretion of the Government how a policy should be shaped. It should not, however, be arbitrary, capricious or unreasonable.” 9.0 As discussed above, in the case on hand also taking in to consideration the interest of all concerned parties, the policy decision is taken by the Government and the Circular dated 19th May, 2006 was issued which is just and proper. SCA/5039/2007 12/13 JUDGMENT 10.0 It is also argued by Mr. Dave that the Circular dated 19th May, 2006 issued by the Superintendent of Stamps-Respondent No.4 was for the Gandhinagar District only and not for the other districts, and hence, the same is discriminatory. There is no substance in the said argument advanced by Mr. Dave since in Para 13.I of the affidavit in reply filed by respondent No.4 it is specifically stated that the Circular dated 19th May, 2006 issued by respondent No.4 only for Gandhinagar District at the initial stage as a pilot project and if the said project will be successful, then the Government intended to introduce the same in other parts of the State of Gujarat. Therefore, there is no discrimination in introducing the said project first only in the Gandhinagar District. 11.0 In the result, both the petitions stand dismissed. Rule is discharged, in each petition. SCA/5039/2007 13/13 JUDGMENT (M.D. Shah,J.) Umesh/