Pawan Kumar Agarwal vs State of U.P. and Others

Abhinava Upadhya, J.—By means of this writ petition the petitioner has challenged the order of the Additional Collector dated 20.8.2003 purported to have been passed in exercise of power conferred upon it u/s 47-A(3) of the Stamp Act (in short the Act) and the order passed by the Commissioner in appeal filed against the order of the Collector u/s 47-A(3) of the Act.

The grievance of the petitioner is that in the capacity of Karta of HUF the petitioner has purchased gata nos. 92/1, 95/2 and 96/2 measuring an area of 1.6910 acre from M/s Rd Rose Commercial Private Limited by means of sale deed executed on 5.2.2001. After registration of the sale deed a notice dated 12.7.2001 was served upon the petitioner by the Collector u/s 47-A(3) of the said Act.

The contention of the learned counsel for the petitioner is that the petitioner never received any notice and the Collector proceeded to determine the market value of the property and passed an order dated 17.5.2002 while determining the deficiency of stamp duty to the tune of Rs. 188640/-.

Against the aforesaid order the petitioner preferred revision u/s 56of the Stamp Act being Revision No.1 of 2002 and the revisional court vide its order dated 17.4.2002 has remanded the matter back to proceed afresh after affording an opportunity to the petitioner of being heard.

The present order impugned is an order passed by the Collector after remand of the matter by the Commissioner.

The contention of the petitioner before the Collector was that the property in question is an agricultural property although it has been purchased from a commercial establishment but since no declaration has been made u/s 143 of the U.P.Z.A.& L.R.Act, the same has to be treated as agricultural property and upon the basis of the circle rate as determined by the Collector, the valuation of the property has truly been set forth and admissible stamp duty has been paid.

The Collector did not accept the explanation of the petitioner and vide order dated 20.8.2003 has held that since the property has been purchased from a Commercial Establishment, therefore, it cannot be said to be an agricultural property and the rate fixed by the Collector for such property in the circle rate published by the Collector wherein Rs. 7,00,000/-(Rs. Seven Lacs) per acre has been determined to be the value of property which has been purchased for industrial purposes.

The petitioner thereafter went in appeal as provided u/s 56 of the Stamp Act and the appellate court affirmed the order of the Collector. Hence, this writ petition.

I have heard Sri Atul Dayal, learned counsel for the petitioner and Sri I.S.Singh, learned Standing Counsel appearing for the State-respondents.

From the orders impugned it is apparent that the Collector has proceeded to determine the market value only on the basis of circle rate prevalent in the area treating the property in question to be an industrial property.

In my view, such determination of market value of the property on the basis of circle rate is not the correct method. The provision for determination of market value has been provided u/s 47-A(3)of the Act. The aforesaid provision does not contemplate for determination of market value either on the basis of circle rate or on the basis of the nature of the land.

While interpreting Section 47-A(3) of the Act, this Court in the case of Ram Khelawan alias Bachcha Vs. State of U.P. and Prashant Shukla, in paragraph nos. 9, 10 and 11 of the said judgment has categorically held that the circle rate fixed by the Collector cannot be the basis for determining the market value of any property. The circle rates are fixed only as guidelines that any property can not be valued less than the circle rate.

In paragraph-11 of the said judgment it was held that the three standard principles for determining the market value as are applicable in the land acquisition cases, should be applicable for the purposes of determination of market value under the Stamp Act also.

For the aforesaid purpose the factor that has been held to be applicable are : (1) comparable sale method, i.e., value of first similar adjoining property sold in the near past (2) Multiplication by a suitable multiplier of monthly or yearly rent, income or yield and adding thereon the cost of construction will depict the true market value of the property.

In the present case, there is no question of construction as the open piece of land was purchased and therefore, the first principle would be applicable for determination of true and correct market value of the property. In the present case, apparently, this procedure has not been adopted and the Collector has merely proceeded to determine the market value on the basis of the circle rate applicable for the industrial property. The Commissioner has also upheld the aforesaid order.

In my view, in view of the judgment rendered in the case of Ram Khelawan alias Bachcha (Supra) the impugned orders cannot be sustained and the orders are liable to be quashed. Accordingly, the orders dated 6.12.2004 and 20.8.2003 are hereby quashed.

But, since the Act itself contemplate payment of stamp duty upon execution of any sale deed, the determination has to be done by the Collector in accordance with law and the procedure prescribed and, therefore, I remand the matter back to the Collector to proceed afresh to determine the market value of the property as provided u/s 47-A(3) of the Act and as enumerated in paragraphs 9, 10 and 11 of the said judgment of this Court in the case of Ram Khelawan alias Bachcha (supra).

With the aforesaid observations, the petition is allowed.