IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TWELFTH DAY OF JUNE TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION No: 23171 of 2007 BETWEEN: Nihar K.Mody, S/o.Kiran C.Mody, R/o.H.No.1-8-156/160, Prenderghast Road, Secunderabad. ... PETITIONER AND 1 The District Registrar & Collector, Ranga Reddy Dist, at Moosapet, Hyderabad 2 The Sub Registrar, Shameerpet, Sharmeerpet, Ranga Reddy. ...RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue a writ, order or direction more particularly one in the nature of writ of Mandamus to declare the action of the 1st respondent in determining the market value of the lands in Sy.No.274 admeasuring Ac.1.20 gts. in Document P.No.44/2007 and land admeasuring Ac.1.03 gts. in document P.No.45/2007 situated at Rampally (V), Keesara (M), Ranga Reddy Dist on square yard basis with a direction that the petitioner pay the deficit stamp duty on such determination vide the impugned proceedings No.8652 and 47-A/2007, dt.4-10-2007 as illegal, arbitrary and ultra vires the Indian Stamp Act,1899 and issue a consequential direction to the respondents not to enforce and insist on payment of the deficit Stamp duty in pursuance of the impugned proceedings No.8652 and 8653/47-A/2007, dt.4- 10-2007 and pass such other order or orders. Counsel for the Petitioner: MR.S.SRI RAM Counsel for the Respondents: GP FOR REVENUE IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TWELFTH DAY OF JUNE TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION No: 23172 of 2007 BETWEEN: Nihar K. Mody, S/o. Kiran C. Mody, R/o. H.No. 1-8-156/160, Prenderghast Road, Secunderabad. ... PETITIONER AND 1 The District Registrar & Collector, Ranga Reddy District, at Moosapet, Hyderabad. 2 The Sub Registrar, Shameerpet, Shameerpet, Ranga Reddy District. ...RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a writ, order or direction more particularly one in the nature of Writ of Mandamus to declare the action of the 1st respodnent in determining the market value of the lands in Sy.No. 274, admeasuring Ac. 1.20gts. situated at Rampalli Village, Keesara Mandal, Ranga Reddy District in Document P.No. 43/2007 on square yard basis with a direction that the petitioner pay the deficit stamp duty on such determination vide the impugned proceedings No. 8409/47-A/2007, dated 4-10-2007 and pass such other and pass such other order or orders as this Hon'ble Court may deem fit and proper in the circumstances of the case. Counsel for the Petitioner: MR.S.SRI RAM Counsel for the Respondents: GP FOR REVENUE The Court made the following: COMMON ORDER: These writ petitions are filed questioning the impugned proceedings of the District Registrar and Collector – first respondent under the Indian Stamp Act, 1899 (for short ‘the Act’) dated 04.10.2007 wherein final orders were passed against the petitioner under Section 47-A of the Act. 2. The facts, in brief, are as under: The petitioner purchased an extent of Ac.1.20 guntas vide Document P.No.43/2007 dated 04.04.2007 forming part of Sy.No.274 situated at Rampalli Village, Keesara Mandal, Ranga Reddy District. Similarly, the petitioner also purchased an extent of Ac.1.20 guntas vide Document P.No.44/2007 and another extent of Ac.1.03 guntas vide Document P.No.45/2007, both dated 04.04.2007 from the same survey number as aforesaid and from the same vendors. The petitioner contends that he has paid the requisite stamp duty in conformity with the consideration shown in the document and in accordance with the basic value register. However, the registering authority kept the documents pending and gave the pending numbers as mentioned above. Later, the first respondent issued a notice in Form–II dated 02.07.2007 proposing to revise and determine the stamp duty by exercise of power under Section 47-A of the Act. Petitioner contends that he has given a detailed reply dated 13.07.2007 pointing out that the aforesaid claim of the first respondent is not in conformity with Section 47-A of the Act. However, the impugned proceedings passed against the petitioner by the first respondent dated 04.10.2007 determining the market value of the subject land on square yard basis @ Rs.500/- per square yard as against the actual value reflected in the sale deed. Further, the value was determined on the basis of applying rate per square yard and deficit stamp duty is demanded against each of the document. With regard to document P.No.43/2007 though petitioner paid the stamp duty of Rs.2,61,000/-, further deficit stamp duty of Rs.2,61,720/- was demanded whereas for document P.No.44/2007 as against Rs.2,61,000/- paid by the petitioner a deficit stamp duty of Rs.65,700/- was demanded; similarly for document P.No.45/2007 as against Rs.1,98,000/- paid by the petitioner a further deficit stamp duty of Rs.36,135/- was demanded. Challenging the jurisdiction of the first respondent to pass the aforesaid impugned proceedings, present writ petitions are filed. 3. The respondents filed a counter reiterating and supporting the self- same grounds as contained in the impugned order. However, an additional fact is mentioned in the said counter in Para 2 that the parties have agreed to refer the documents of District Registrar under Section 47-A of the Act for determination of market value. 4. The aforesaid additional contention is not found either in the notice or in the impugned orders, as such the averment in the counter affidavit is necessarily to be ignored, as the authorities themselves in the impugned order have not mentioned any such aspect. Even otherwise the exercise of power under Section 47-A of the Act being statutory, the consent of the parties is immaterial and even if there is consent, the respondents have to justify their action in terms of Section 47-A of the Act. 5. These writ petitions were listed on 30.04.2009 when I had heard the learned counsel for the petitioner and since there was no representation by the learned Government Pleader for Revenue, it was adjourned to 01.05.2009. On 01.05.2009 also there was no representation on behalf of the learned Government Pleader and hence, by a detailed order the writ petitions were admitted and posted to 05.06.2009 under the caption ‘For Orders’. Today, I have heard the learned counsel for the petitioner again in the forenoon and awaiting the learned Government Pleader, the matter was passed over. Since there was no representation by the learned Government Pleader in the afternoon, both the writ petitions are being disposed of. 6. Section 47-A of the Act, which is relevant and necessary, is extracted hereunder: 47-A. Instruments of Conveyance, etc., under-valued how to be dealt with: - [(1) Where the registering officer appointed under the Registration Act, 1908, (Central Act 16 of 1908), while registering any instrument of conveyance, exchange, gift, partition, settlement, release, agreement relating to construction, development or sale of any immovable property, has reason to believe that the market value of the property which is the subject-matter of such instrument has not been truly set forth in the instrument, or that the value arrived at by him as per the guidelines prepared or caused to be prepared by the government from time to time has not been adopted by the parties, he may keep pending such instrument and refer the matter to the Collector for determination of the market value of the property and the proper duty payable thereon: Provided that no reference shall be made by the registering officer unless an amount equal to fifty percent of the deficit duty arrived at by him is deposited by the party concerned. (2) On receipt of a reference under sub-section (1), the Collector shall, after giving the parties and opportunity of making their representation 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 such instrument and the duty as aforesaid: Provided further that where after the determination of market value by the Collector, if the stamp duty borne by the instrument is found sufficient, the amount deposited shall be returned to the person concerned without interest]; (3) The Collector may suo motu within two years from the date of registration of such instrument, not already referred to him under sub- section (1), call for and examine the instrument for the purpose of satisfying himself as to the correctness of the market value of the property which is the subject-matter of such instrument and the duty payable thereon and if, after such examination, he has reason to believe that market value of such property has not been truly set forth in the instrument, he may determine the market value of such property and the duty as aforesaid in accordance with the procedure provided for in sub-section (2). The difference, if any, in the amount of duty, shall be payable by the person liable to pay the duty: Provided that nothing in this sub-section, shall apply to any instrument registered before the date of commencement of the Indian Stamp (Andhra Pradesh Amendment) Act, 1971. [(3-A)(i) The Inspector General may suo motu, call for and examine the record of any order passed or proceeding recorded by the Collector under sub-section (3), and if such order or proceeding recorded is found leading to loss of legitimate revenue due to disregard of market value by the Collector, based on mistake, omission, or failure to take any factual evidence effecting the market value of the property, may make such enquiry or cause such enquiry and inspection of the property to be made and subject to the provisions of this Act, may initiate proceedings to revise, modify or set aside such order or proceeding and may pass such order in reference thereto as he thinks fit: Provided that the powers conferred under this clause shall be invoked within a period of six months from the date of the order or proceeding issued by the collector under sub-section (3); (ii) the power under clause (i) shall not be exercised by the authority specified therein in respect of any issue or question which is the subject matter of an appeal before, or which was decided on appeal by the appellate authority under sub-section (5); (iii) no order shall be passed under Clause (i) enhancing any duty unless an opportunity has been given to the party to show cause against the proposed revision of market value and deficit stamp duty; (iv) where any action under this sub-section has been deferred on account of any stay order granted by the Court in any case, or by reason of the fact that another proceeding is pending before the Court involving a question of law having a direct bearing on the order or proceeding in question, the period during which the stay order was in force or such proceeding was pending shall be excluded in computing the period of six months specified in the proviso to clause (i) of this section for the purposes of exercising the power under this sub- section.] (4) Any person aggrieved by an order of the collector under sub- section (2) or sub-section (3) may appeal to the appellate authority specified in sub-section (5). All such appeals shall be preferred within such time and shall be heard and disposed of in such manner, as may be prescribed by rules made under this Act]. [(4A) any person aggrieved by the order of the Inspector-General under sub-section (3A) may appeal to the High Court within a period of two months from the date of receipt of such order.] (5) The appellate authority shall be- (i) in the cities of Hyderabad and Secunderabad, the city Civil Court, (ii) elsewhere- (a) the Subordinate Judge or if there are more than one Subordinate Judge, the principal Subordinate Judge, Having Jurisdiction over the area in which the property concerned is situated; or (b) if there is no such subordinate Judge, the District Judge having jurisdiction over the area aforesaid. [(6) For the purposes of this Act, market value of any property shall be estimated to be the price which in the opinion of the Collector or the appellate authority, as the case may be, such property would have fetched or would fetch if sold in the open market on the date of execution of any instrument referred to in sub-section (1): Provided that in respect of instruments executed by or on behalf of the Central Government or the State government or any authority or body incorporate by or under any law for the time being in force and wholly owned by Central/State Government, the market value of any property shall be the value shown in such instrument.] Section 47-A of the Act mandates that the Registrar shall be entitled to make a reference only in the event of being satisfied that the consideration mentioned in the document, presented for registration, does not ‘truly reflect’ the consideration and only thereupon would get jurisdiction to determine the market value and demand appropriate duty thereon in terms of determination. 7. A bare reading of the proviso would show that satisfaction of the Registrar that there are ‘reasons to believe’ that the market value of the immovable property, which is subject matter of the instrument, is not ‘truly’ set forth in the document must be arrived at before any reference can be made under Section 47-A of the Act. In the present case, the notice in both the writ petitions, which preceded the impugned order, is identical and is as follows: WP.No.23171 of 2007: “The actual value against the Sy.No. is Rs.8,00,000/- per acre as per recitals of the document in page No.3 para No. (3&4) it has stated that the vendor sold the sum of the property in the meant of Sy. Yd. Hence in view of the above I am opined that the sq, yard may be applicable in the said property. Hence the sq. yard rate is Rs.500/- hence T.M.V. i.e. Rs.36,30,000/-. WP.No.23172 of 2007: “The actual value against the Sy.No. is Rs.8,00,000/- per acre as per recitals of the document in page No.3 para No. (3&4) it has stated that the vendor sold the sum of the property in the meant of Sy. Yd. Hence in view of the above I am opined that the sq, yard may be applicable in the said property. Hence the sq. yard rate is Rs.800/- hence T.M.V. i.e. Rs.58,08,000/- as the south side boundary is mentioned road Rampally to Cherlapally. 8. In spite of the petitioner filing his objections, the impugned order does not show any consideration of the same and that though the impugned order accepts that the subject land is agricultural land and a nursery is being maintained and no structures are found in the subject land, the respondents appear to be under the impression that the aforesaid land has potential for house sites or for any other non-agricultural purpose. It is based on the said assumption the market value is determined, as if it is non-agricultural land, by applying yardage basis and ultimately deficit stamp duty has been demanded from the petitioner. 9. It would be evident from the above that the only reason for the respondents to pass the impugned order is the assumption with regard to the potentiality of the land for house site purpose, though, in fact, even after spot inspection, the first respondent found that the land is being used for nursery and no structures are found. The potential use for which the property would be put in future cannot be a ground for applying Section 47-A of the Act and revising the valuation and demanding the deficit stamp duty. In fact, this Court in M.NAGASIROMANI v. SUBORDINATE JUDGE, KOVVUR [1] has clearly held that “the potential value based on nature of the land and the future possibilities, is irrelevant.” Further, more importantly none of the ingredients of Section 47-A of the Act are kept in mind by the respondents at the time of issuing show cause notice itself and consequently in the impugned order there is no mention of satisfaction of the Registrar that the value is not truly set forth in the instruments in question. The impugned orders, therefore, are liable to be set aside and the writ petitions deserve to be allowed. 10. It may also be mentioned that according to the petitioner, pending writ petitions, he has paid the deficit stamp duty and registration fee without prejudice to the present claim in the writ petition and accordingly, the documents are said to have been registered and released on 29.04.2008. If that be so, in view of the fact that the writ petitions are allowed, the petitioner shall be entitled to refund of the amount paid by him together with interest at 7.5% per annum from the date of payment till realization. The writ petitions are accordingly allowed. There shall be no order as to costs. _____________________ VILAS V. AFZULPURKAR, J June 12, 2009 DSK [1] 1995 (3) ALD 60