Ar. Narayanan vs Special Deputy Collector (Stamps) and The Sub Registrar-II

P. Sathasivam, J.—Aggrieved by the order of the Special Deputy Collector (Stamps), Virudhunagar/first respondent herein in T.D. Nos.

401/95, 402/95, 467/95, and 403/95 dated 16-9-2002 and 10-10-2002 determining the market value of the properties in question and claiming

difference in the amount of stamp duty, the petitioner has filed the above writ petitions to quash the same on various grounds. Since similar and

identical order has been passed by the first respondent, they are being disposed of by the following common order.

Heard Mr. AR.L. Sundaresan, learned counsel for the petitioner and Mrs. G. Kavitha, learned Government Advocate for respondents.

The case of the petitioner is briefly stated hereunder:

According to him, his wife-N. Valliyammai Achi had purchased lands of an extent of 31,076 sq.ft. in survey No. 447; 15,328 sq.ft. in survey No.

448/1; 18,540 sq.ft. in survey No. 448/2; and 421 sq.ft in survey No. 449 in all measuring 65,365 sq.ft., in Senjam village in Karaikudi Taluk,

under four different sale deeds bearing Registration No. 1714/95, 1715/95, 1716/95 dated 14-6-1995 and 2034/95 dated 24-7-1995, on the file

of the Sub Registrar-II, Karaikudi, the second respondent herein. The said property was purchased under the aforesaid four sale deeds by way of

1/4th undivided share in each sale deed from the respective vendors. While so, on the ground that the sale deeds were not properly valued, the

second respondent issued notice in Form I under Rule 4 of the Tamil Nadu Stamps (Prevention of Undervaluation of Instruments) Rules, 1968

(hereinafter referred to as ""the Rules"") to the petitioner and his wife on 25-9-95. His wife N. Valliyammai Achi submitted her objections to the

notice on 12-10-95, 13-10-95 and 20-3-96. The first respondent herein, by order dated 17-8-96, fixed the market value in respect of the

property covered under the aforesaid four sale deeds at Rs.25.00 per sq.ft. and called upon her (his wife) to pay a sum of Rs.41,182/- in respect

of each of the four sale deeds. Aggrieved by the fixation of the market value, she had filed appeals in CMA Nos. 2, 3, 4 and 5 of 2000 on the file

of the Subordinate Judge, Devakottai. Pending appeal, his wife died and the petitioner herein-AR. Narayanan, his 2 children, namely N. Kannan

and N. Alamelu were brought on record as legal representatives and they are prosecuting the said appeals. The appeals were allowed by an order

dated 15-2-2002 holding that it was not clear whether the order was provisional or final as required under the Rules and due opportunity as

required under the rules was not given before passing the said order and after setting aside the same, the matter was remitted to the first

respondent for passing fresh orders after giving opportunity. The first respondent issued a notice dated 31-7-2002 in Form 2 stating that the

fixation of market value of the property at Rs.25.00 per sq.ft. had been done by the predecessor in office incorrectly and after stating that on the

date on which inspection was conducted by him, he was satisfied that the market value as on 12-6-95 should be Rs.50.00 per sq.ft., hence fixed

the provisional valuation of the property at Rs.50.00 per sq.ft. and directed the petitioner to pay Rs.90,200/- as the deficit stamp duty in respect of

each of the four sale deeds. The first respondent has also permitted the petitioner and his wife to file their objections, if any, to the said provisional

valuation, and also informed them that an enquiry would be conducted thereon on 26-8-2002. At the request of the petitioner, the enquiry was

fixed on 16-9-2002. As the provisional assessment of market value in Form 2 passed by the second respondent was arbitrary, and illegal, the

petitioner filed W.P. Nos. 35829 to 35832/2002 before this Court. This Court, by order dated 17-9-2002, after holding that a pre-decisional

opportunity as contemplated under the Rules was not given, set aside the impugned proceedings therein, and directed the first respondent to give a

pre-decisional opportunity as well as post-decisional opportunity to the petitioner before taking appropriate decision in the matter within 30 days

from the date of receipt of a copy of the said order. The said order was received by the petitioner only on 30-9-2002. However, in the mean time,

the first respondent herein has passed final orders in No. 401/95 to 403/95 and 467/95 dated 16-9-2002 confirming the provisional assessment

dated 31-7-2002. The said orders were received by the petitioner only on 23-9-2002. Instead of following the direction of this Court dated 17-9-

2002, the first respondent has passed the impugned orders dated 10-10-2002, holding that the observation of this Court dated 17-9-2002 were

taken into consideration, with a direction to the petitioner to prefer an appeal by 15-11-2002 treating the said opportunity as a post-decisional

opportunity before the Inspector General of Registration, failing which the differential stamp duty payable as per the order dated 16-9-2002 would

be collected under the provisions of the Revenue Recovery Act together with 2 per cent interest thereon. Questioning the said order as arbitrary,

illegal, unjust and unsustainable in law, the petitioner has preferred the above writ petitions.

On direction, learned Government Advocate secured instructions from the respondents.

The only point for consideration is whether the orders of the first respondent dated 16-9-2002 and 10-10-2002 are in accordance with the

statutory provisions of the Act and the Rules and the earlier direction of this Court or not?

There is no dispute that if the registering officer appointed under the Indian Registration Act, 1908 while registering any instrument of

conveyance, exchange, gift, release of benami right or settlement, has reason to believe that the market value of the property which is the subject

matter of conveyance, etc., 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 market value of such property and the proper duty payable thereon. This is clear from sub-section (1) of Section 47-A of

The Indian Stamp Act, 1899. As per sub-section (2), on receipt of a reference under sub-section (1), the Collector shall, after giving the parties a

reasonable opportunity of being heard and after holding an enquiry as prescribed by rules made under the Act, determine the market value of the

property which is the subject matter of conveyance etc., and the duty payable thereon. The difference, if any, in the amount of duty, shall be

payable by the person liable to pay the duty. Sub-section (3) gives the Collector to take suo motu action, within 2 years from the date of

registration of any instrument of conveyance, etc., not already referred to him under sub-section (1). Any person, who is aggrieved by the order of

the Collector under sub-section (2) or sub-section (3), is entitled to file an appeal to the appellate authority as specified in sub-section (5) within

such time as prescribed by the Rules.

In exercise of the powers conferred under Sections 47-A and 75 of the Indian Stamp Act, the Government of Tamil Nadu framed Rules called

Tamil Nadu Stamp (Prevention of under-valuation of instruments) Rules, 1968"". Rule 4 of the Rules prescribes procedure to be followed on

receipt of reference u/s 47-A. As per sub-rule (1) of Rule 4, on receipt of a reference under sub-section (1) of section 47-A, from a registering

officer, a duty is cast on the Collector to issue notice in Form 1 to every person by whom, and to every person in whose favour the instrument has

been executed, informing him of the receipt of the reference and asking him to submit to him his representations, if any, in writing to show that the

market value of the property has been truly set forth in the instrument, and also to produce all evidence that he has in support of his representation,

within 21 days from the date of service of the notice. It is open to the Collector to record a statement from the person concerned. It is also open to

the Collector for the purpose of his enquiry, to call for any information or record from any public office, officer or authority under the Government

or any local authority, to inspect the property after due notice to the parties concerned. As per sub-rule (4), after considering the representations, if

any, received from the person to whom notice under sub-rule (1) has been issued, and after examining the records and evidence before him, the

Collector has to pass an order in writing provisionally determining the market value of the properties and the duty payable. He shall also indicate in

the order the basis on which the provisional market value was arrived at. Rule 5 prescribes various principles for determination of market value.

Rule 6 speaks about the procedure to be adopted after arriving at provisional market value. As per the said rule, it is incumbent on the part of the

Collector to communicate a copy of the order provisionally determining the market value of the properties and the duty payable, to all the persons

who are liable to pay the duty along with the notice in Form II and call upon the parties to lodge their objections, if any, within the time specified in

the notice. In addition to this, the Collector can also hear the parties on the dates specified in the notice. Rule 7 speaks about final order

determining the market value. As per the said rule, after considering the representations received in writing and those urged at the time of the

hearing and after a careful consideration of all the relevant factors and evidence, it is the duty of the Collector to consider all the relevant factors

and the evidence placed before him and pass an order determining the market value of the properties and the duty payable on the instrument,

communicate the order to the parties and take steps to collect the difference in the amount of stamp duty, if any. Sub-rule (2) of Rule 7 mandates

the Collector to communicate a copy of the said order to the registering officer concerned for his record. As per sub-rule (3) of Rule 7, the

difference in the amount of duty determined by the Collector shall be paid within two months from the date of final order passed under sub-section

(2) or sub-section (3) of Section 47. Sub-rule (4) mandates the Collector, after collecting the difference in amount of stamp duty and interest, if

any, u/s 47-A, to give a certificate in Form III by endorsement on the instrument.

It is clear that an elaborate procedure has been prescribed for determining the proper market value of the property registered, procedure to be

followed, opportunity to the person concerned, conclusion of pre-decisional and post-decisional opportunity to the person concerned before

taking an appropriate decision, etc.

I have already referred to the order of the learned Subordinate Judge, Devakottai in C.M.A. Nos. 2, 3, 4 and 5/2000 remitting the matter to the

first respondent for passing fresh orders after giving due opportunity as required under the Rules. Pursuant to the said remand, the first respondent

issued a notice dated 31-7-2002 informing the petitioner that the fixation of market value of the property at Rs.25/- per sq.ft. had been done

incorrectly and informed him that why the market value as on 12-6-95 should not be fixed at Rs.50/- per sq.ft. The said order was challenged by

the petitioner in Writ Petition Nos. 35829 to 35832/2002 before this Court. The learned Judge (P.D. Dinakaran, J.), by order dated 17-9-2002,

after holding that the impugned proceedings dated 31-7-2002 did not reflect that a pre-decisional opportunity has been given to the petitioner, set

aside the said proceedings and directed the first respondent to give a pre-decisional opportunity as well as post-decisional opportunity to the

petitioner before taking appropriate decision in the matter within 30 days from the date of receipt of a copy of the said order. The learned Judge

has permitted the petitioner to raise all the contentions raised in those writ petitions as and when opportunity is provided by the first respondent.

Mr. AR.L. Sundaresan, learned counsel for the petitioner, after taking me through the impugned order of the first respondent dated 10-10-2002,

would contend that in spite of the direction of the Subordinate Judge, Devakottai, as well as the order of this Court in W.P. Nos. 35829 to

35832/2002 dated 17-9-2002, the first respondent has not fully complied with the procedure prescribed under Rules 4 to 7 of the Rules. I have

exhaustively referred to the relevant rules, procedure to be followed, opportunity to be given to the petitioner or the person concerned, etc. It leads

to a conclusion that the petitioner or person concerned is entitled to pre-decisional opportunity as well as post-decisional opportunity. In other

words, on the basis of the representation of the petitioner or person concerned, with regard to the market value of the property set-forth in the

instrument, and after considering all evidence produced in support of the said representation within the time prescribed and after recording a

statement, the Collector has to pass an order in writing provisionally determining the market value of the properties and duty payable. The first

opportunity to the petitioner/person concerned is pre-decisional opportunity. After determining the market value in terms of principles stated in

Rule 5, Rule 6 enables the Collector to communicate the order provisionally determining the market value of the property and duty payable to the

person concerned in Form II and call upon him to lodge his objection, if any, to such determination of the market value within the time specified in

the notice. The said rule mandates the Collector to hear the person on the date specified in the notice. The said opportunity is called post-

decisional opportunity. After fulfilling the above conditions, the Collector has to pass a final order under Rule 7 and communicate the said order to

the person concerned and takes steps to collect the difference in amount of the stamp duty, if any. When such is the position, in the impugned

order, the first respondent, though has afforded pre-decisional opportunity to the petitioner, failed to adhere to the procedure for post-decisional

opportunity as prescribed in Rule 6. However, the first respondent on the wrong assumption that against the order determining the market value

and the duty payable, the petitioner has remedy by way of an appeal to the Inspector General of Registration and permitted him to avail the same,

if he is so aggrieved. The said conclusion/observation is contrary to the Rules as well as the earlier order of this Court. It is to be noted that

provision for appeal to the Inspector General of Registration against the order of the Special Deputy Collector, (Stamps) is a separate aspect and

the said provision cannot be construed as post-decisional opportunity, as observed by the first respondent in the impugned order. The first

respondent has committed an error in holding so and treating the provision for appeal as post-decisional opportunity. The wrong interpretation

given by the first respondent cannot be sustained. Learned Government Advocate has also not disputed the wrong assumption and erroneous

assumption of the first respondent. The conclusion of the first respondent that the provisional order dated 31-7-2002 issued prior to the order

dated 16-9-2002 amounts to a pre-decisional opportunity and the right to file an appeal against the same amounts to a post-decisional opportunity

is perverse and liable to be set aside. The first respondent has lost sight of the rule, purpose and meaning prescribed in Rules 4 and 6.

Under these circumstances, the impugned proceedings of the first respondent dated 16-9-2002 and 10-10-2002 made in T.D. No. 401/95,

402/95, 467/95 and 403/95 are quashed and the matters are remitted to the first respondent for passing fresh orders, after affording adequate

opportunity to the petitioner as discussed above. The Writ Petitions are allowed. No costs. Consequently, connected W.P.M.Ps., are closed.