M. Thirumurugan vs Tamil Nadu Registration Department

T. Mathivamin, J.—Impugning the order dated 12.11 2008 and made in the proceedings No 14595/N4/2006 on the file of the 1st Respondent. Chief Revenue Control Officer. Tamil Nadu Registration Department by enhancing the value of the Stamp Duty fixed by the 2nd Respondent, Special Deputy Collector (Stamps) Madurai, dated 16.1.2006 in SR. No.510/2002/NDU IV 19B.

These Appeals have been preferred by the Appellants in the above Three Appeals to set aside the order of the 1st Respondent and consequently, seeking a direction to the Respondents to consider the case of the Appellants as per the documents and other evidences produced before them.

The Appeals in C M. A. No. 630 & 631 of 2011 are relating to an extent of 5005 sq.ft. comprised in Town Survey No. 1951/2, Old Madurai Town Survey Ward No. 4, present Ward No.61 situated at Door No.1, Subramaniapuram. 2nd Main Road, Madurai-625011 whereas the Appeal in C M A No.632 of 2011 is relating to an extent of 5118-3/4 sq.ft. comprising the same Survey number as afore stated Since the above Three Appeals are concerned with the properties comprised in Survey No. 1951/2, Old Madurai Town Survey Ward No 4, present Ward No.61 and the Respondents in all the Appeals are one and the same These Three Appeals have been clubbed together, heard and disposed of in his common judgment.

Heard Mr. V.R. Venkatesan, learned Counsel for the Appellants, and Mi Muthukaruppan, learned Additional Government Pleader for the Respondents.

The Appellants are the owners of the above subject properties. The said land was originally purchased by them from one Mrs. Sugavasam Lakshmi Annual and others through their power agent one Mr. S. Saravanan by a registered Sale Deed dated 19.7.1993 in the Sub-Registrar office at Kulathoor, Kerala State as Document Nos. 2364/1993; 2365/1993; 2366/1993 respectively. The properties were sold to the Appellants for Rs. 63,300/- Rs. 63.300/- & Rs. 63,400/- respectively.

Since the sale price was objected to by the 3rd Respondent Sub-Registrar through his letter No.83/02, 34/02, 36/02 dated 12 12 2002, the matter was referred to 2nd Respondent by the 3rd Respondent under .Section 47-A(1) of the Indian Stamp Act The 2nd Respondent had fixed the market value at Rs. 115/- per sq ft. It is also alleged that the 1st Respondent who is the Chief Revenue Control Officer. Tamil Nadu Registration Department, without inspecting the spot had fixed the Stamp Duty at Rs. 194/- per sq.ft. Therefore, the proceedings of the 1st Respondent has been challenged in these Three Appeals.

Mr. V.R. Venkatesan, learned Counsel for the Appellants has submitted that the said land was situated near the public lavatory and slum area. The value of the land in that locality'' was too low when compared with other lands in that area. Though the subject land was situated far away from the main road and several crucial facts and citations of the Honourable Apex Court as well as this Court were brought to the knowledge of the 1st Respondent, he had without considering all those aspects and without even inspecting the spot, through his subordinates has decided the matter unilaterally and mechanically which resulted in passing of the impugned order on 12.11.2008.

He has maintained further that the 2nd Respondent had inspected the vacant land covered in the document and fixed the guideline value at Rs. 115/- per Sq.Ft. But the Appellate Authority, namely, the 1st Respondent without considering all the relevant factors had enhanced the rate from Rs. 115/- to Rs. 194/- without assigning any reason by ignoring the recommendations of the inspecting officer.

Mr. V.R. Venkatesan, has also emphasised that the impugned order dated 12.11.2008 was an error apparent on the face of records, since the 2nd Respondent has inspected the vacant land covered in the documents and fixed the guideline at Rs. 115/- per sq. ft.., the 1st Respondent being the Appellate Authority without examining the documents produced before him had mechanically come to the conclusion and fixed the value of the land at Rs. 194/- per sq.ft. from 2115 per s q. ft.

Mr. V.R. Venkatesan has also submitted that after the purchase of the land only, the building was constructed on the Appellant''s land which is the subject matter of the Writ Petition. He has also submitted that the Appellant''s father. grand mother and grand. father were residing in the said land as tenant and subsequently, they constructed the building M. the Patt.a land. He has also added that out of 60 cents, Mr. K.S. Mariappan and his father as well as his family had purchased 30 cents on the western side along with building. Eastern side consists of Samathi, a small cracked shed and the vacant site. Keeping in view these facts, the fixation of the value of the land by the 1st Respondent is absolutely wrong and liable to be set aside. He has also objected that the authorities concerned prior to arriving and fixing the market value of the particular land, they ought to have seen the distance between the concerned land and the main road and other various factors as pointed out by the Appellant. In this connection, he has also maintained that the 1st. Respondent as well as the 3rd Respondent have miserably failed to follow the procedure prior to the enhancement of the land value from Rs. 115.per sq.ft. to Rs. 194/- per sq.ft. He has also submitted that. the conclusion of the 1st Respondent is not'' only in total negotiation of the principles laid down in Section 47-A(1) of the Indian Stamp Act but also against the rudimentary principle of fixation of the land value based on its location and nature.

With regard to the comparison of contemporary Sale Deeds as well as the comparative sales on the market value of the property, he has submitted the two documents were registered in the year 2004 & 2009. The document dated 14.7.2004 was executed in between Ms. R. Tamilarasi and it was registered in the office of Joint No.IV, Sub-Register Office, as document No. 8368/2004 in favour of one Ms. R. Tamilarasi for the market value of Rs. 18,566/- in respect of Rs. 2,100 - per Sq.Ft. This market value appears to have been fixed at. the rate of Rs. 10/- per sq.ft. comprised in T.S. No.1968/1AC2(B) and Survey Ward No.4, situated at Door No. 8-A, Subramaniyapuram, Madurai-11. Another Sale Deed was registered in the said Register Office in respect of T.S. No.1940 bearing Ward No.4, to an extent. of 288 sq.ft. In so far as the land is concerned, the market value was fixed at Rs. 165/- per sq.ft.

On coming to the Appellant''s Sale Deeds, he would submitted that all these documents are belonging to the same area and the Ward Number is also one and the same and the land purchased by the Appellants are located proximity to the above said land. In this regard, he has also added that the document was registered in the year 2004. The market value was fixed below Rs. 10/- But document was registered in the year 1993. The market value of the property was fixed by the 2nd Respondent at Rs. 194/- per Sq.Ft. and this would clearly establish the fact that there is no Application of mind on the part. of the 1st Respondent while passing the order.

Mr. V.R. Venkatesan has also projected another important. point that the Appellant''s Sale Deeds were registered on 19.7.1993. The 3rd Respondent viz., the Joint Registrar-IV, had referred the matter under Section 47-A(1) to the 2nd Respondent on 12.12.2002 i.e., after 9 years of the registration of the Sale Deeds and the enquiry was conducted by the 2nd Respondent in the year 2003 and subsequently, the 2nd Respondent had passed the order on 21.12.2005. Thereafter, the 1st Respondent as an Appellate Authority was built to pass the impugned order only on 12.11.2008. In this connection, Mr. V.R. Venkatesan, the learned. Counsel for the Appellants, in order to substantiate his contention has placed reliance upon the decision reported in O.NS. Hyder Ali v. The Sub Registrar District Registrar Cadre O/o Sub-Registrar of Assurance 11, Davidson Street, Sowcarpet, Madras-1.

In this case, the learned Single Judge of the Court has held as follows:

"A combined reading of the provisions would make the position clear that in the event the Respondent is of the opinion that there was a deficit in collection of either the stamp duty or the Registration Fee, an inquiry could he made within a period of three years. However, admittedly., the Sale Deed in this case was registered on 4.10.1991 and the document has been released on 30.10.1991. The despatch of the said letter, in the absence of specific date in the impugned order, should alone be taken into consideration for the purpose of calculation of the period of limitation for the inquiry to be initiated. That apart, the grievance of the Petitioner is that there was no such enquiry at all initiated and only the impugned order directing the Petitioner to pay the stamp duty and Registration Fee has been made. The said impugned order has been made beyond a period of three years. The Respondent has no authority to initiate either the inquiry or make a demand in respect of the payment of stamp duty as well as Registration Fee beyond a period of three years of the registration. In that view of the matter, I find that the impugned order cannot be sustained in the eye of law. Moreover, there is no inquiry whatsoever conducted before such impugned order was passed. In the absence of inquiry, the order is also opposed to Section 33-A of the Indian Stamp Act. 1899 and Section 80-A of the Registration Act, 1908".

It is pertinent to note that Rule 2 of the Tamil Nadu Registration Rules, 1983 which contemplates that no inquiry under the First Proviso to sub-section (1) of Section 80-A shall be commenced after the expiry of a period of 3 years after the date of registration of the document, or its, the case of collection of Stamp duty under Section 47-A of the Indian Stamp Act, 1899 (Central Act II of 1899) after one year from the date of such collection, whichever is latter.)

On coming to the instant case on hand, it is rightly argued by Mr. V.R. Venkatesan. learned Counsel for the Appellants that there is an inordinate delay in conducting enquiry as well as in passing the order. The same principle has been laid down in S.R. Sengotavelu, Servainpatti v. The District collector, Nantakkal and 4 others, 2003 (4) LW 193 :

The District Collector, Namakkal.

The Tahsildar, Tiruchengode.

The Special Deputy Tahsildar (Stamps), Tiruchengode.

The Sub-Registrar, Rasipuram.

The Special Tahsildar (Stamps), Namakkal.

It is the basic principle in respect of ascertaining the market value of the land. In this Petition, the power to reject the value shown in the deed and to determine the real market value of the land can be invoked by the Registrar, only if circumstances show fraudulent evasion of Stamp Duty. In so far as the instant case on hand and so far, it do not have any reference to show that the Appellants have fraudulently evaded the payment of Stamp Duty. This principle has also been laid clown by the Division Bench of this Court reported in SP. Padmavathi v. State of Tamil Nadu, 1997 (2) CTC 617 (DB) : AIR 1997 Mad. 296, reversing the judgment of this Court in 1991 (1) LW 629 (Mad.). The Division Bench of this Court has held in the above cited case as follows :

"Power under Section 47-A of the Act can only be exercised when the Registering Officer has reason to believe that the market value of the property, which is the subject. of conveyance, has not been truly set forth, with a view to fraudulently evade payment of proper stamp duty. Mere lapse of time between the date of agreement and the execution of the document will not be the determining factor that the document is undervalued and such circumstance by itself is not sufficient to invoke the power under Section 47-A of the Act, unless there is lack of born fides and fraudulent attempt on the part of the parties to the document to undervalue the subject of transfer with a view to evade payment of proper stamp duty."

With regard to Section 47-A(3) of Stamp Act (2 of 1899), the Division Bench of Madhya Pradesh High Court has observed in Balaprasad and another v, The State of Madhya Pradesh and others, AIR 1997 MP 218, is held as follows:

" 14 Section 47-A fills in the lacuna which was found by the Supreme Court in Himalaya House Co. Ltd. v. Chief Controlling Revenue Authority, AIR 1972 SC 899, it empowers the Collector to deal with these cases where the parties by arrangement deliberately undervalue the property with a. view to defraud the Government of the legitimate revenue by way of stamp duty. It is not correct that the Collector is not empowered to determine on a case being referred to him by the Sub-Registrar under Section 47-A(1), that the market value is in fact less than the minimum value to be determined by Rule 341 and to turd on that basis whether the transaction sets forth the market value truly or not. Similarly, the hands and powers of the Collectors are not confined to the minimum value given in Rule 341. It can hold it to be more if it is satisfied on the materials brought before him to that effect. Rule 341 had been framed by the legislature only for the limited purpose of providing a guideline. It is not conclusive. That being so, under sub-section (1) of Section 47-A, if the Registering Officer is satisfied that the market value is less than even the minimum value, he may refer the document to the Collector for determination of the value of such property. This is the only function of Rule 341. It is neither binding on the person who produces the instrument for registration nor on the State Government."

On the other hand, Mr. Muthukaruppan, learned Additional Government Pleader has submitted that the value fixed by the 1st Respondent in his order dated 12.11.2008 is absolutely right based on the contemporary Sale Deeds as well as proximity sales which took place at the time of registration of the Sale Deeds of the Appellants and therefore, the order dated 12.11.2008 does not require any interference and the value fixed by the 1st Respondent. at Rs. 194/- per sq.ft. would be upheld. This Court has held carefully the consideration on the submissions made on behalf of both sides. This Court perused the records and other related materials. Having, been struck on the balance and on meticulous analysis, this Court is of the view that the order of the 1st Respondent dated 12.11.2008 certainly requires interference.

In the result, all the Three Appeals viz., C.M.A. Nos. 630 to 632 of 2011 are allowed. The 1st. Respondent''s proceedings No. 14595, 14596, 14597/N4/2006 dated 12.11.2008 served on the Appellants on 3.12.2008 in respect of the documents Nos. 2364, 2365. 2366 of 1993 dated 19.7.1993 are set aside. The 1st Respondent is directed to consider the case of the Appellants based on the discussion as well as on the basis of documents and other evidences and the Appellant''s documents. No costs.