C.R. No.1081 of 1998 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH C.R. No.1081 of 1998 Date of Decision:02.02.2010 Yogesh Kumar son of Shri Bhagat Ram, Resident of A/175, Railway Road, Karnal ....Petitioner Versus Haryana State through Collector, Karnal and another ....Respondents Present: Mr. C.B. Goel, Advocate for Mr. T.L. Garg, Advocate for the petitioner. Mr. Ravi Dutt Sharma, DAG, Haryana. CORAM:HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? Yes 2. To be referred to the Reporters or not ? Yes 3. Whether the judgment should be reported in the Digest? Yes -.- K. KANNAN J.(ORAL) 1. The revision challenges an order passed by the District Judge in appeal under Section 47-A of the Indian Stamp Act as amended by the Haryana Amendment Act, 1973. 2. A land which was purchased at a compromise in Court on 07.02.1994 @ Rs.40,000/- per acre was assessed by the Collector as not reflecting a proper market value and that it had been undervalued for the purpose of stamp duty. The purchaser was actually purchasing a property in litigation when there had been a decree for specific performance granted in relation to the very same property, when one Chander Bhan had been a decree-holder in relation to half of the property through a decree for specific C.R. No.1081 of 1998 -2- performance. By virtue of the compromise, the decree-holder forfeited his claim under the decree on receipt of some cash compensation and the sale deed had been executed in respect of 161 kanals and 3 marlas of land for a consideration of Rs.8,05,750/-. 3. It appears that there were, even apart from encumbrance through a decree, other claimants in relation to the whole property as tenants of the property with rights to retain the property in possession. The purchasers had entered into an independent transaction with such tenants and after their purchase on 07.02.1994 executed a sale in favour of the tenants for 32 kanals out of the entire property on 18.02.1994, transferring the property @Rs.20,000/- per acre. It is an admitted case that the sale in favour of the tenants, which took place subsequent to the impugned transaction, were also challenged by the Collector as not reflecting the correct market value. Both of these orders were the subject of challenge before the District Court, who set aside the order of the Collector insofar as it related to the valuation as set out in the sale to the tenants and rejected the appeal filed by the purchasers only in respect of the property purchased by them pursuant to the compromise referred to above. 4. Learned counsel appearing for the petitioner would submit that the learned District Judge was in error in applying two different yardsticks in upholding the valuation of the Collector for his purchase but rejecting the valuation given by the Collector for the sale to the tenants and accepting the appeal filed by the C.R. No.1081 of 1998 -3- tenant. A challenge to valuation made in a document when an adjudication is undertaken by a Collector places the initial onus on the Collector to show that the valuation as given in the document does not reflect the market value. The power, which the Collector exercises, while reviewing the stamp duty payable is a quasi- judicial function and he shall initially show materials to a purchaser that the sale deed does not reflect the correct value and it is deliberately undervalued. A Collector's valuation or the circle value as it is called in some places, is merely a guideline and if resistance is made by a purchaser trying to uphold the valuation given in the document, there must be some materials before the Collector to reject the valuation in the document. A purchaser under a document would also be at liberty to always point out that the valuation given in the document reflects truly the bargain between the parties of what a willing buyer was willing to pay and what a willing seller was prepared to sell. The Collector's valuation cannot at all times reflect the correct valuation for it is taken on the principle of averages in normal conditions. There could be peculiar circumstances when a particular purchase in relation to a particular property cannot reflect the normal market value. It could be either higher or lower than the usual value. The relative high value could be on account of its proximity to certain important landmark positions in the town or village or it could be a small parcel of land fetching higher price and a Collector shall in an enquiry be competent to look at the actual valuation. On the other hand, a particular property could be also lesser than the prevailing C.R. No.1081 of 1998 -4- market value on account of special reasons relating to particular property such as when there is a difficulty in access to the property or when there are litigations in relation to the property. In this case if the property had been purchased for Rs.40,000/- per acre and sold a week later for even a lesser price, it was obvious the very same property was not fetching the very same price for different class of persons. This is not to mean that each one of the sales is suspect in any way and the market valuations are deliberately manipulated. The variance in prices have a definite relation to how a seller or a buyer perceives the worth of the property. If the property had been purchased at Rs.40,000/- unless the Collector's valuation was shown to be substantiated through any particular instance of sale for a higher price in the immediate vicinity, there ought not to be a basis for rejection of such valuation. If stamp valuation shall only be guided by Collector's valuation, there would not even be an occasion for an adjudication under Section 47-A of the Stamp Act and such a line of approach would render meaningless the entire exercise of an adjudication. The duty of a Collector or a Court exercising powers under Section 47-A of the Stamp Act and the appeal provisions will have to be done on a case to case basis. An earnest effort must be made to ascertain from the factual considerations whether there has been a deliberate undervaluation of the property. If there was a scope for coming to a conclusion that there was an undervaluation, it ought to be on an objective basis. Such basis shall be through contemporaneous documents sold in relation to a similar extent of C.R. No.1081 of 1998 -5- property in the vicinity. With no other evidence available for higher valuation than how it was produced by the petitioner, the demand for payment of higher duty and characterising the transaction as undervalued would not be justified. 5. The order of the District Judge affirming the decision of Collector is set aside and the valuation as done by the purchaser and as found reflected in the sale deed dated 07.02.1994 shall stay. The revision petition is allowed. There shall be, however, no direction as to costs. (K. KANNAN) JUDGE February 02, 2010 Pankaj*