C.W.P. No. 6342 of 2007 -1- In the High Court of Punjab and Haryana at Chandigarh C.W.P. No. 6342 of 2007 Date of decision:January 24, 2008 Rajeev Passi ---Petitioner Vs. The Commissioner, Rohtak Division, Rohtak and others ---Respondent Coram: HON'BLE MR. JUSTICE M.M.KUMAR HON'BLE MR. JUSTICE T.P.S.MANN Present: Mr.Ashish Aggarwal, Advocate, for the petitioner. Mr. Ashish Kapoor, Addl. A.G., Haryana. *** M.M.KUMAR. J. The petitioner has approached this Court invoking Article 226 of the Constitution with a prayer for quashing order dated 29.12.2006 (P- 10) passed by the Commissioner, Rohtak Division, Rohtak upholding the order dated 19.6.2006 (P-8) passed by the Sub Divisional Officer (Civil)- cum-Collector, Karnal. A further prayer for quashing notice dated 19.12.2005 (P-5) has also been made referring the case by the Sub- Registrar, Karnal to the sub-Divisional Officer(Civil)-cum-Collector, Karnal. By virtue of the order passed by the various authorities, the sale deed dated 24.11.2005 has been found to be under valued and the petitioner has been directed to deposit the deficient stamp duty of Rs. 4,75, 960/-. There is a house bearing No. E-IV-C/191 measuring 248 Sq. yards situated between Committee Chowk, Kalandari Gate near Gobind Nagar , Old City, Karnal. This house was allotted to one Hans Raj Passi, C.W.P. No. 6342 of 2007 -2- who was grand father of the petitioner, was displaced person having migrated from Pakistan. The house was allotted to him as an evacuee property by the Rehabilitation Department in the year 1959 (P-1). There was some dispute raised by the Wakf Board regarding the title of the above house and Conveyance Deed was not issued in favour of aforesaid Hans Raj Passi. The matter remained pending with the authorities. Eventually, Hans Raj Passi expired and his son Om Parkash, father of the petitioner, deposited the balance amount along with interest in lieu of the allotment of house on 25.8.2005 as per orders passed by the Financial Commissioner and Principal Secretary to Government Haryana (P-2). Accordingly, the Conveyance deed was executed on 5.10.2005 (P-3) by the Rehabilitation Department in favour of Om Parkash Passi, the father of the petitioner, by Tehsildar (Sales), Karnal. On 24.11.2005, Om Parkash Passi, the father of the petitioner, in order to avoid any dispute between his sons and in furtherance to family arrangement-cum-settlement executed a sale deed dated 24.11.2005 in favour of his sons, the present petitioner for a consideration of Rs. 6,00,000/- which was claimed to be at the Collector's rate prevalent in the area. The requisite stamp duty of Rs. 48,000/- was also affixed on it, which was registered by Sub-Registrar, Karnal. On 19.12.2005, after the registration of the sale deed, the petitioner was issued a copy of the reference order/show cause notice alleging that the sale deed had been registered at a far less price whereas the prevailing rate of the property in the area was at the rate of Rs. 26,000/- per square yard and consequently, the petitioner was asked to pay the deficit sum of Rs. 4,75,960/- by way of stamp duty. The Sub-Registrar also referred the matter to Sub Divisional Officer (Civil)-cum-Collector C.W.P. No. 6342 of 2007 -3- invoking Section 47A of the Indian Stamp Act, 1899 (for brevity 'the Stamp Act') for determining the correct value. The petitioner was also asked to appear before the Collector-respondent No. 2 in that regard. The petitioner filed his reply (P-6), on 10.2.2006 giving all the aforementioned facts and claimed that the property in dispute was in residential area. He had also filed an affidavit dated 5.5.2006. After hearing the petitioner, the Collector- respondent No. 2 opined that the market value of the house in question was Rs. 26,000/- per square yard and directed the petitioner to affix the deficit stamp duty of Rs. 4,75,960/- (P-8). The operative para of the order passed by the Collector-respondent No. 2 reads as under:- I have perused the written statement filed by the vendee and the evidence led by both the parties. In addition to this, I myself inspected the spot of the disputed property on 17.6.2006. In the Sale Deed, the vendor/vendee have got the registration of a house and the covered area has been shown as 290 square feet, whereas, at the spot there is a show-room constructed and over here business of cement etc. is carried out. On the ground floor, the covered area is about 2200 square feet and on the first floor of 1500 square feet. The vendee has got this deed registered for a sum of Rs. 6 lacs @ Rs. 2000/- per square yard for residential premises, whereas, this area is a commercial area and on the old G.T.Road, in the centre of the city near Kalandari Gate, the prevalent rate is of Rs. 26,000/- per square yard. At the spot, on enquiry from the persons, the market value C.W.P. No. 6342 of 2007 -4- is Rs, 30,000/- - 35,000/- per square yard. Keeping in view these facts and accepting the report of Sub- Registrar, Karnal, I accept the prevalent rate of the above shop as Rs, 26,000/- per square yard and the rate of covered area as Rs. 350/- per square feet and had directed the recovery of the balance stamp duty from the vendee on the amount of Rs. 59,49,500/- as Rs. 4,75,960/-. The vendee is directed to deposit the above balance amount of stamp duty within 30 days in the State Treasury. A copy of this order is sent to the Tehsildar, Karnal with the direction to recover the above deficient stamp duty.” On further appeal by the petitioner under Section 47A (4) of the Stamp Act, the order passed by the collector-respondent No. 2 has been upheld and the demand of the aforementioned amount has been confirmed. The Commissioner in his order dated 29.12.2006 (Annexure P-10) has fortified and supplemented the reasons given by the Collector-respondent No. 2 by observing as under:- “After hearing arguments from both the sides and perusing through the relevant record brought on the file, I do not agree with the contention of the counsel for the appellant that a reference under Section 47 of Indian Stamp Act can only be made immediately after registration of documents or within a period of 8 days. As per provisions of Sub Section 3 Section 47 of Indian Stamp Act under which this case has been dealt with, it C.W.P. No. 6342 of 2007 -5- has been clearly provided that the Collector may suo- motu or on receipt of reference from the Registrar of the District in whose jurisdiction property is situated, shall within three years from the date of instrument not already referred to him under Sub-section 1, call for and examine the instrument for the purpose of satisfying himself about the correctness of its value or consideration amount and the stamp duty payable thereon and he may determine the value or consideration amount or stamp duty in accordance with procedure laid down under Sub-section 2 of Section 47 of the said Act. Accordingly, the appellant was served with notice by the Collector on receipt of reference from the Sub-Registrar on 19.12.2005 and reference from Registrar /Deputy Commissioner dated 21.12.2005 on the basis of a complaint made by one Shri Parmod Kumar, who had addressed the complaint to Sub-Registrar as well as Registrar/D.C. Karnal. Apparently, there is no force in the contention of the counsel for the appellant that the reference sent to the Collector is not within stipulated period and accordingly the citations referred to by the counsel for the appellant in this regard are not relevant in this case since the same relate to Sub-section 1 of Section 47-A of the said Act which is not the case in hand. Regarding details of the property and factual position at site, I agree with the counsel for the State that C.W.P. No. 6342 of 2007 -6- the appellant has concealed intentionally details of the property through the impugned sale-deed in which covered area has been shown much less than the area constructed at site. The present site about which the sale deed has been executed relates to the construction of showroom which is in the shape of commercial establishment and it has little semblance with the conveyance deed executed by the Rehabilitation Department in favour, of the father of the appellant for consideration amount of Rs.9478/- only pertaining to a residential house located on the area of 248 sq. yards. In fact, as per prevailing practice, if and when any conveyance deed is executed by the Rehabilitation Department in favour of any displaced person, the cost is invariably the symbolic cost fixed many years back when the concerned party had actually applied for purchasing the evacuee property but due to prolonged litigation, the sale deed of the same could not be executed immediately in favour of the concerned party. This is exactly similar case in which the conveyance deed has been executed by the Rehabilitation Department, in October, 2005 in favour of the father of the appellant, who wanted to purchase the land long back but due to various reasons including litigation etc. he got the sale deed executed finally on 10.10.2005. The appellant cannot take undue advantage of this benevolent allotment made by the C.W.P. No. 6342 of 2007 -7- Rehabilitation Department to the family due to their displacement from West Pakistan. In fact since the appellant is purchasing the suit property from his father through sale deed, the guiding principle has to be that he has to pay stamp duty at the prevailing market price of the property. Regarding the point of prior intimation about the site inspection by the Collector, a close look on the zimni orders on the lower court file, reveals that as per zimni order dated 15.6.2006, the counsel for the appellant was present in the court and he was informed that the inspection would be done on 17.6.2006 and thus prior information was given by the Collector to the appellant about the spot inspection. In view of the facts cited and observations made above, I do not find any force in the appeal petition and accordingly the same is dismissed. In reply to the notice to show cause, respondent No. 1 to 3 has reiterated the reasons disclosed in the impugned orders dated 19.6.2006 (P-8) and 29.12.2006 (P-10), it has been submitted that the impugned orders have been passed after holding requisite enquiry envisaged by Section 47A of the Stamp Act and the rules framed thereunder. Mr. Ashish Aggarwal, learned counsel for the petitioner has argued that no enquiry in terms of Haryana Stamp (Prevention of Undervaluation of Instrument)Rules, 1978(for brevity 'the Rules') has been held. According to the learned counsel, the Collector is under a statutory duty to hold enquiry and also grant opportunity of hearing with regard to C.W.P. No. 6342 of 2007 -8- the issue of determination of land or property which is the subject matter of the sale deed registered. He has maintained that the Collector is under obligation to disclose the evidence collected during the course of enquiry and then provide opportunities to the parties. Therefore, learned counsel has contended that the order dated 19.6.2006 (P-8) passed by the Collector suffers from incurable illegality and thus liable to be set aside. He has further argued that the Commissioner has collected evidence by visiting the spot at the back of the petitioner. The conclusion dawn by the Commissioner that the rate of the land in the area is Rs. 26,000/- in any case has no basis to accept the arbitrary opinion formed by the Commissioner on the basis of oral statement of unknown persons. In support of his submission learned has placed reliance on a Division Bench judgment of this Court in Lalita Devi vs. Commissioner, Gurgaon Division, Gurgaon 2001(3) RCR (Civil) 653. Mr.Ashish Aggarwal, then contended that even the order/notice dated 19.12.2005 (P-5) does not comply with the requirements of Section 47A of the Stamp Act. According to the learned counsel, before making reference to the Collector, the Sub-Registrar-respondent No. 3 was required to have material before him to satisfy himself which may constitute the basis of his belief that the property was under valued. Learned counsel has emphasized that the expression 'reasons to believe' used in Section 47A of the Stamp Act, as interpreted by a Division Bench of this Court in Mulakh Raj v. State of Haryana and others 2001(1) PLJ 364 and argued that in the absence of any recorded reasons to believe on the basis of some objective criteria disclosed in the reference order dated 19.12.2005(P-5), the Sub-Registrar-respondent No. 3 was not C.W.P. No. 6342 of 2007 -9- within his jurisdiction to impound the document and making reference. Mr. Ashish kapoor, learned State counsel, on the other hand has submitted that all the requirements of Section 47A of the Stamp Act and the Rules have been complied with. According to the learned State counsel, the petitioner is trying to take undue advantage of his grand father's position being a migrant allottee of evacuee property. He has drawn our attention to para 3 of the preliminary objection in the written statement filed by the respondents and argued that the property in question is a commercial property as on the spot there is a show room which obviously is a commercial property. The property is situated at old G.T. Road in the centre of the city and the petitioner had intentionally affixed deficit stamp duty on the sale deed. Leaned counsel has maintained that the rate of the property has to be assessed on the date of execution of the sale deed and not on the date when the allotment was made to the grand father of the petitioner as sought to be projected by the petitioner. We have thoughtfully considered the arguments advanced by the learned counsel for the parties and find that the writ petition deserve to succeed. The argument raised on behalf of the petitioner that the reference orders passed by Sub-Registrar-respondent No. 3 does not fulfill the requirements of Section 47A of the Stamp Act is meritorious. The aforementioned provision reads thus:- 1. “S. 47-A-Instruments under-valued how to be dealt with (1) if the Registering Officer appointed under the Registration Act, 1908, while registering any instrument transferring any property, has reason to believe that the value of the property or the C.W.P. No. 6342 of 2007 -10- consideration, as the case may be, 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 value or consideration, as the case may be, and the proper duty payable thereof. 2. On receipt of reference under sub-section (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 value or consideration and the duty as aforesaid and the deficient amount of duty, if any, shall be payable by the persons liable to pay the duty. (3) The Collector may suo-motu, or on receipt of reference from the Inspector General of Registration or the Registrar of a district in whose jurisdiction the property or any portion thereof which is the subject matter of the instrument is situate, appointed under the Registration Act, 1908, shall within three years from the date of registration of any 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 its value or consideration, as the case may be, and the duty payable thereon and if after such examination, he has reason to believe that the value or consideration has C.W.P. No. 6342 of 2007 -11- not been truly set forth in the instrument, he may determine the value or consideration and the duty as aforesaid in accordance with the procedure provided for in sub -section(2); and the deficient amount of duty, if any, shall payable by the person liable to pay the duty. Provided that the Collector shall, within a period of two years from the date of the commencement of the Indian Stamp(Haryana amendment)Act, 1973, also be competent to act as aforesaid in respect of the instruments registered on or after the first day of November, 1966 and before the first day of October, 1970. (4) Any person aggrieved by an order of the Collector under sub-section (2) or sub-section (3) may, within thirty days from the date of the order, prefer an appeal before the Commissioner of Division and all such appeals shall be heard and disposed of in such manner as may be prescribed by rules made under this Act.” The provisions came up for consideration before a Division Bench of this Court in Chamkaur Singh v. State of Punjab 1991 PLJ 249. The Division Bench has held after referring to Sub Sections 1 and 2 of Section 47A of the Stamp Act that the registering officer like respondent No. 3 as well as the Collector have to perform a quasi judicial function for determination or for estimating the price of the property which is subject matter of transaction as if the property is being sold in open market on the C.W.P. No. 6342 of 2007 -12- date of execution of instrument relating to such transfers. It was emphasized that under Sub Section (1), the registering officer while registering the instrument of transfer, has to form independent decision, which is quasi judicial decision because it has to be founded on 'reason to believe' that the property has been under valued or that the extensible consideration is no rule and genuine consideration. According to the Division Bench, it is only after reaching that conclusion, the Sub Registrar can refer the matter to the Collector for determination of the value of the property for a particular transaction 'is higher than the prescribed rate', the Division Bench has concluded that he cannot record any stereo type or mechanical conclusion on the basis of instructions fixing the rate of the land by the Collector because such guidelines would completely run contrary to the plain language and intendment of Sub Sections (1) and (2) of Section 47A of the Stamp Act and explanation. The aforementioned judgment rendered by the Division Bench was challenged before Hon'ble the Supreme court in the titled as State of Punjab vs. Mahabir Singh AIR 1996 SC 2994. The view taken by Hon'ble the Supreme Court has supported the plea raised by the petitioner reads as under:- “Sub-section (1) of Section 47-A empowers the Registering Officer, while registering any instrument relating to the transfer of any property, if he has reasons to believe that the value of the property or consideration, as the case may be, has not been truly set forth in the instrument, after registering such instrument, to refer the same to the Collector for determination of the value of the property or the C.W.P. No. 6342 of 2007 -13- consideration, as the case may be, and the proper duty payable thereon. It would, therefore, be clear that the Registering Authority has to satisfy himself that value of the property or the consideration for it has not been truly set forth in the instrument. He may make a reference to the Collector in accordance with the provisions of sub-section (2) of Section 47-A. Before making reference, he is required to register the document and he is not empowered to withhold the registration. Such a registration, of course, will be subject to the determination of the true market value prevailing in the locality though the value mentioned in the instrument for such registration under sub-section (i) of Section 47-A was not conclusive. The guidelines provided by the State would only serve as prima facie material available before the Registering Authority to alter him regarding the value. It is common knowledge that the value of the property varies from place to place or even from locality to locality in the same place. No absolute higher or minimum value can be pre-determined. It would depend on prevailing prices in the locality in which the land covered by the instrument is situated. It will be only an objective satisfaction that the Authority has to reach a reasonable belief that the instrument relating to the transfer of property has not been truly set forth or C.W.P. No. 6342 of 2007 -14- valued or consideration mentioned when it is presented for registration. The ultimate decision would be with the Collector subject to the decision on an appeal before the District Court as provided under sub-section (4) of Section 47-A. It would, thus, be seen that the aforesaid guidelines would inhibit the Registering Authority to exercise his quasi-judicial satisfaction of the true value of the property or consideration reflected in the instrument presented before him for registration. The statutory language clearly indicates that as and when such an instrument is presented for registration, the Sub-Registrar is required to satisfy himself before registering the document, whether true price is reflected in the instrument as it prevails in the locality. If he is so satisfied, he registers the document. If he is not satisfied that the market value or the consideration has been truly set forth in the instrument, subject to his making reference under sub-section (1) of Section 47- A, he registers the document. Thereafter, he should make a reference to the Collector for action under sub- sections (2) and (3) of Section 47-A. Accordingly, we hold that the offending instructions are not consistent with sub-section (1) of Section 47-A. It would, therefore, be open to the State Government to revise its guidelines and issue proper directions consistent with C.W.P. No. 6342 of 2007 -15- law.” It is further appropriate to mentioned here that another Division Bench of this Court in Mulakh Raj's case (Supra) considered the view expressed in Chamkaur Singh's case (Supra) and Mahabir Singh's case (Supra) in paragraph 12 it was held that the guidelines issued by the District Collector for determination of the market value of the property situated in the concerned district could not be regarded as per se violative of the main section which could serve as a prima facie material available before the registering authority to caution him to record the value of the land. However, the question whether the Registering Authority has abdicated its decision or act under the guidelines issued by the Collector , is to depend on the facts of each case. The Division Bench has held in Mulakh Raj's case (Supra) that no hard and fast rule can be laid down in this regard. Applying this principle to the facts in Mulakh Raj's case (Supra), the Division Bench held that the reference made by the Sub Registrar was vitiated on the ground that he had to act under the dictates of the guidelines issued by respondent No. 2. When we examined order dated 19.12.2005 passed by Sub Registrar -respondent No. 3 which transpires that he has merely mentioned that the prevailing rate of the property is Rs, 26,000/- per square yard without disclosing any material assisting in formation of his opinion about the value of the property. Therefore, we are satisfied that it cannot be concluded that Sub-Registrar-respondent No. 3 has reasons to believe to make a reference of the sale deed to the Collector-respondent No. 2. Therefore, the very basis of the order dated 19.6.2006 (P-8) passed by the Collector-respondent No. 2 and order dated 29.12.2006 (P-10) passed by C.W.P. No. 6342 of 2007 -16- the Commissioner-respondent No. 1 is knocked out. We would have examined the legality of both the orders dated 19.6.2006 (P-8) and 29.12.2006 (P-10) as perfective arguments has been raised by the counsel for the petitioner on the basis of the judgment in Lalita Devi's case (Supra) which has considered the pr0visions of Stamp Act and Rule 4 of the Rules. When the necessity of examining these arguments has to obviate because learned State counsel has submitted