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Judgment
S. Manikumar, J.—Challenge in these appeals is whether the Chief Controlling Revenue Authority-cum-Inspector General of Registration,
Chennai, can suo-motu enhance the market value, on the appeals preferred by the vendors u/s 47-A(5) of the Indian Stamp Act and Rules 11-A
and 12 of the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968, with a consequential direction to pay the stamp duty.
As facts and submissions are similar, all the appeals are disposed of by a common order. In C.M.A. No. 583 of 2009, the appellant has
purchased 42 Cents of lands, comprised in Ayan Punjai R.S. No. 126/5 and 27 Cents of lands, comprised in Ayan Punjai R.S. No. 126/6 of
Kandiyangkuppam Village, for the value of Rs. 69,000/- (at Rs. 1,000/- per Cent), under a Sale Deed, registered as Document No. 1895 of
2005, on the file of the Joint-Sub Registrar, Virudhachalam and accordingly, stamp duty has been paid. A reference has been made u/s 47-A(1) of
the Indian Stamp Act, 1899 (hereinafter referred to as ""the Act"") to the Special Deputy Collector (Stamps), Cuddalore, second respondent herein,
stating that the property has been undervalued. The second respondent, by an order, dated 30.11.2005, fixed the value of the property at Rs.
5,400/- per Cent. Aggrieved by the same, the appellant has preferred an appeal u/s 47-A(5) to the Chief Controlling Revenue Authority-cum-
Inspector General of Registration, Chennai, first respondent herein, who by his order, dated 21.11.2008, has enhanced the stamp duty from Rs.
5,400/- to Rs. 6,500/- per cent.
In C.M.A. No. 1306 of 2009, the appellant has purchased 2643 Sq. Ft., of lands, comprised in New Town S. No. 4/5 and Town S. No. 2/4,
situated at Ward B, Block 2 in Namakkal Puttur Main Road, for Rs. 58,146/-under a Sale Deed, registered as Document No. 1034 of 2005, on
the file of the Joint-Sub Registrar, Namakkal District and accordingly, stamp duty has been paid. A reference has been made u/s 47-A(1) of the
Act to the Special Deputy Collector (Stamps), Cuddalore, second respondent herein, stating that the property has been undervalued. The second
respondent, by an order, dated 15.05.2006, fixed the value of the property at Rs. 84/- per Sq. ft. Aggrieved by the same, the appellant has
preferred an appeal u/s 47-A(5) to the Chief Controlling Revenue Authority-cum- Inspector General of Registration, Chennai, first respondent
herein, who by his order, dated 23.03.2009, has enhanced the stamp duty from Rs. 84/- to Rs. 100/-per Sq. ft.
In C.M.A. No. 1483 of 2009, the appellant has purchased 14, 780 Sq. Ft., comprised in R.S. No. 324/1 of Aluvalakavazthalampattu Village,
for Rs. 1,47,000/- (at Rs. 10/- per Sq. Ft), under a Sale Deed, registered as Document No. 777 of 2003, on the file of the Joint-Sub Registrar,
Cuddalore District and accordingly, stamp duty has been paid. A reference has been made u/s 47-A(1) of the Indian Stamp Act, 1899 (hereinafter
referred to as ""the Act"") to the Special Deputy Collector (Stamps), Cuddalore, second respondent herein, stating that the property has been
undervalued. The second respondent, by an order, dated 14.10.2005, fixed the value of the property at Rs. 110/- per Sq. Ft. Aggrieved by the
same, the appellant has preferred an appeal u/s 47-A(5) to the Chief Controlling Revenue Authority-cum- Inspector General of Registration,
Chennai, first respondent herein, who by his order, dated 30.12.2008, has enhanced the stamp duty from Rs. 110/- to Rs. 125/- per cent.
In C.M.A. No. 1484 of 2009, the appellant has purchased 14, 105 Sq. Ft., comprised in R.S. No. 324/1 of Aluvalakavazthalampattu Village,
for Rs. 1,41,000/- (at Rs. 10/- per Sq. Ft), under a Sale Deed, registered as Document No. 776 of 2003, on the file of the Joint-Sub Registrar,
Cuddalore District and accordingly, stamp duty has been paid. A reference has been made u/s 47-A(1) of the Indian Stamp Act, 1899 (hereinafter
referred to as ""the Act"") to the Special Deputy Collector (Stamps), Cuddalore, second respondent herein, stating that the property has been
undervalued. The second respondent, by an order, dated 14.10.2005, fixed the value of the property at Rs. 110/- per Sq. Ft. Aggrieved by the
same, the appellant has preferred an appeal u/s 47-A(5) to the Chief Controlling Revenue Authority-cum- Inspector General of Registration,
Chennai, first respondent herein, who by his order, dated 30.12.2008, has enhanced the stamp duty from Rs. 110/- to Rs. 125/-per cent.
In C.M.A. No. 2466 of 2009, the appellant has purchased 1.55.0 Acre 0.36 Cents of lands (15696 Sq. Ft), comprised in R.S. No. 324/1 of
Vazthalampattu Village, for Rs. 1,57,000/- (at Rs. 10/- per Sq. Ft), under a Sale Deed, registered as Document No. 778 of 2003, on the file of
the Joint-Sub Registrar, Cuddalore and accordingly, stamp duty has been paid. A reference has been made u/s 47-A(1) of the Indian Stamp Act,
1899 (hereinafter referred to as ""the Act"") to the Special Deputy Collector (Stamps), Cuddalore, stating that the property has been undervalued.
The second respondent, by an order, dated 14.10.2005, fixed the value of the property at Rs. 110/- per Sq. Ft. Aggrieved by the same, the
appellant has preferred an appeal u/s 47-A(5) to the Chief Controlling Revenue Authority-cum-Inspector General of Registration, Chennai, first
respondent herein, who by his order, dated 20.07.2009, has enhanced the stamp duty from Rs. 110/- to Rs. 125/- per cent.
In C.M.A. No. 165 of 2010, the appellant has purchased 0.40.5 Acres (1 Acre) of land, comprised in R.S. No. 126/9 of Kandiyangkuppam
Village, for Rs. 1,00,000/-(at Rs. 1,000/- per Cent) under a Sale Deed, registered as Document No. 1243 of 2004, on the file of the Joint-Sub
Registrar, Virudhachalam and accordingly, stamp duty has been paid. A reference has been made u/s 47-A(1) of the Indian Stamp Act, 1899
(hereinafter referred to as ""the Act"") to the Special Deputy Collector (Stamps), Cuddalore, second respondent herein, stating that the property has
been undervalued. The second respondent, by an order, dated 17.09.2006, fixed the value of the property at Rs. 5,400/- per Cent. Aggrieved by
the same, the appellant has preferred an appeal u/s 47-A(5) before the Inspector General of Registration, Chennai, first respondent herein, who by
his order, dated 16.11.2009, has enhanced the stamp duty from Rs. 5,400/- to Rs. 6,500/- per Cent.
In C.M.A. No. 335 of 2010, the appellant has purchased 1.22 Acre of lands, comprised in R.S. No. 4266/4 Ooty City, for Rs. 41,41,700/-,
under a Sale Deed, registered as Document No. 867 of 2000, on the file of the Joint-Sub Registrar, Uthagamandalam, Nilgiris and accordingly,
stamp duty has been paid. A reference has been made u/s 47-A(1) of the Indian Stamp Act, 1899 (hereinafter referred to as ""the Act"") to the
Special Deputy Collector (Stamps), Coimbatore, stating that the property has been undervalued. The second respondent, by an order, dated
15.09.2005, fixed the value of the property at Rs. 125/- per Sq. Ft. Aggrieved by the same, the appellant has preferred an appeal u/s 47-A(5) to
the Chief Controlling Revenue Authority-cum-Inspector General of Registration, Chennai, first respondent herein, who by his order, dated
13.11.2009, has enhanced the stamp duty from Rs. 125/- to Rs. 141/- per cent.
In C.M.A. No. 700 of 2010, the appellant has purchased 3475 Sq. Ft, of lands, comprised in R.S. Nos. 1, 2, 3 Part, 124/1 Part, 125/2 Part,
Town S. No. 262 Ward C, Block 17, Ward No. 18 of Puthupallipalayam Road, for Rs. 3,40,700/-, under a Sale Deed, registered as Document
No. 3436 of 2004, on the file of the Sub Registrar, Komarapalayam, Namakkal District and accordingly, stamp duty has been paid. A reference
has been made u/s 47-A(1) of the Indian Stamp Act, 1899 (hereinafter referred to as ""the Act"") to the Special Deputy Collector (Stamps), Salem,
stating that the property has been undervalued. The Special Deputy Collector (Stamps), by an order, dated 14.06.2006, fixed the value of the
property at Rs. 218/- per Sq. Ft. Aggrieved by the same, the appellant has preferred an appeal u/s 47-A(5) to the Chief Controlling Revenue
Authority-cum- Inspector General of Registration, Chennai, who by his order, dated 23.03.2009, has enhanced the stamp duty from Rs. 218/- to
Rs. 250/- per cent.
In C.M.A. No. 741 of 2010, the appellant has purchased 1 Acre and 19 Cents of lands, comprised in Ayan Punjai of R.S. No. 126/7 of
Kandiyangkuppam Village, for Rs. 1,19,000/-(at Rs. 1,000/- per Cent) under a Sale Deed, registered as Document No. 1241 of 2004, on the file
of the Joint-Sub Registrar, Virudhachalam and accordingly, stamp duty has been paid. A reference has been made u/s 47-A(1) of the Indian
Stamp Act, 1899 (hereinafter referred to as ""the Act"") to the Special Deputy Collector (Stamps), Cuddalore, second respondent herein, stating
that the property has been undervalued. The second respondent, by an order, dated 16.09.2008, fixed the value of the property at Rs. 5,400/- per
Cent. Aggrieved by the same, the appellant has preferred an appeal u/s 47-A(5) to the Chief Controlling Revenue Authority-cum-Inspector
General of Registration, Chennai, first respondent herein, who by his order, dated 21.11.2008, has enhanced the stamp duty from Rs. 5,400/- to
Rs. 6,500/- per Cent.
In C.M.A. No. 2513 of 2011, the appellant has purchased 0.48 Cents of lands, comprised in S. No. 13/1 and an extent of 0.52 Cents
comprised in S. No. 13/5 of Kandiyangkuppam Village, for Rs. 1,00,000/- (at Rs. 1,000/- per Cent) under a Sale Deed registered as Document
No. 3104 of 2006, on the file of the Joint-Sub Registrar, Virudhachalam and accordingly, stamp duty has been paid. A reference has been made
u/s 47-A(1) of the Indian Stamp Act, 1899 (hereinafter referred to as ""the Act"") to the Special Deputy Collector (Stamps), Cuddalore, second
respondent herein, stating that the property has been undervalued. The second respondent, by an order, dated 28.05.2008, fixed the value of the
property at Rs. 21,000/- per Cent. Aggrieved by the same, the appellant has preferred an appeal u/s 47-A(5) before the Chief Controlling
Revenue Authority-cum-Inspector General of Registration, Chennai, first respondent herein, who by his order, dated 26.02.2011, has enhanced
the stamp duty from Rs. 21,000/- per Cent to Rs. 49/- per Sq. Ft.
In all the appeals, the common submissions advanced by the learned counsel appearing for the appellants are that Section 47-A of the Indian
Stamp Act (hereinafter referred to as ""the Act"") is a self contained registering the instruments, so as to protect the revenue of the State. An appeal
provision is provided u/s 47-A(5) of the Act, to the Chief Controlling Revenue Authority-cum-Inspector General of Registration, Chennai, first
respondent herein, against the order of the Collector, passed u/s 47-A(2) and (3) of the Act, prescribing the manner, in which, the appeals shall be
heard and disposed. But Section 47(A)(5) does not confer any special powers on the appellate authority to suo-motu enhance the market value
fixed by the Collector, in such appeals, preferred by them. According to them, statute contemplates the appellate authority to decide only the
correctness of the decision of the Collector u/s 47-A(2) and (3) and nothing more. In this regard, attention of this Court was also invited to Rules
11-A and 12 of the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968, (hereinafter referred to as ""the rules"").
According to the learned counsel, as per Rule 12 of the Rules, though the rule may indicate that in the event of the appellate authority comes to
the conclusion that the decision of the Collector is not correct, he shall determine the correct market value and require appropriate stamp duty
therefore, no specific power has been given to the appellate authority to enhance the market value of the property, suo-motu, adversely affecting
the interests of the appellants, who had already suffered an order u/s 47-A(2) and (3) of the Act, as the case may be. In all these appeals, the
orders challenged before the Chief Controlling Revenue Authority-cum-Inspector General of Registration, Chennai, first respondent herein, were
u/s 47-A(2) of the Act.
Per contra, it is the submission of the learned Advocate General that the appeal is a continuation of original proceedings and the appellate
authority shall have all the powers of the original authority and therefore, he could determine the correct market value on his own, as provided
under Rule 12 of the Rules and that is why, Rule 11-A has been engrafted, enabling the appellate authority to call for information from any source.
According to him, at best, the appellant can demand only a notice before such enhancement of the market value, by the appellate authority and
nothing more.
By way of reply, learned counsel for the appellants contended that though the Legislature has used the expression ""suo motu"" u/s 47-A(3) and
47-A(6), Rule 11-A does not contain such expression and therefore, it should be construed that there is a conspicuous omission by the framers
and in such circumstances, Rule 11-A should be construed, only as a provision enabling the appellate authority, to call for records or inspect the
property, while considering the appeals preferred by the parties, with reference to the particulars of the property and its value and not on his own.
They also submitted that if the arguments of the learned Advocate General are to be accepted that the market value can be determined and
enhanced, after giving notice to the parties aggrieved, there should be an enabling provision to give an opportunity to the appellants, who have
preferred the appeals, under rule 47-A(5) of the Act, but Rule 12 of the Rules does not contemplate issuance of any such notice and in such
circumstances, the apparent omission in Rule 12, supports the submission of the appellants that the rule does not contemplate enhancement of the
market value, on the appeals preferred by the aggrieved parties.
Heard the learned counsel for the parties and perused the materials available on record.
Though in all the appeals, the appellants have assailed the impugned orders of the Chief Revenue Controlling Authority and the Inspector
General of Registration, as well as, on the merits of each case, it has been agreed upon by both parties, to take up only the preliminary issue, as to
whether the said authority, in exercise of his powers, as an appellate authority, u/s 47-A(5) of the Indian Stamp Act, 1899, can suo-motu,
determine and enhance the market value of the property, subject matter, in all the appeals and therefore, the arguments were advanced only to the
limited extent and hence, the decision in these appeals are confined only to the same.
Few provisions in the Indian Stamp Act, 1899 and the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968, require
reproduction. Section 47-A of the Indian Stamp Act, 1899 reads as follows:
(1) If the Registering Officer appointed under the Indian Registration Act, 1908 (Central Act No. 16 of 1908), while registering any instrument of
conveyance, exchange, gift, release of benami right or settlement, has the reason to believe that the market value of the property of which is the
subject matter of conveyance, exchange, gift, release of benami right or settlement, 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.
(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 in such manner as may be prescribed by rules made under this Act, determine the market value of the property which is the
subject matter of conveyance, exchange, gift, release of benami right or settlement, and the duty as aforesaid. The difference, if any, in the amount
of duty, shall be payable by the person liable to pay the duty.
(3) The Collector, may suo motu or otherwise, within five years from the date of registration of any instrument of conveyance, exchange, gift,
release of benami right or settlement, 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 the market value of the property which is the subject matter of conveyance, exchange, gift, release of
benami right or settlement, and the duty payable thereon and if after such examination, he has reason to believe that the market value of the
property has not been truly set forth in the instrument, he may determine the market value of such property and the duty as aforesaid in accordance
with the procedure provided for in sub-Section (2). The difference, if any, in the amount of duty, shall be payable by the persons liable to pay the
duty:
Provided that nothing in this sub-section shall apply to any instrument registered before the date of commencement of the Indian Stamp (Madras
Amendment) Act, 1967.
(4)....
(5) Any person aggrieved by an order of the Collector under sub-Section (2) or sub-section (3), may appeal to such authority, as may be
prescribed in this behalf. All such appeals shall be preferred within such time, and shall be heard and disposed of in such manner, as may be
prescribed by rules made under this Act.
(6) The Chief Controlling Revenue Authority may, suo motu, call for and examine the order passed under sub-Section (2) or sub-Section (3) and if
such order is prejudicial to the interests of revenue, he may make such inquiry or cause such inquiry to be made and, subject to the provisions of
this Act, may initiate proceedings to revise, modify or set aside such order and may pass such order thereon as he thinks fit.
(7) The Chief Controlling Revenue Authority shall not initiate proceedings against any order passed under sub-section (2) or sub-Section (3), if-
(a) the time for appeal against that order has not expired; or
(b) more than five years have expired after the passing of such order.
First of all, reading of the sub-Section (3) of Section 47-A makes it clear that the Collector may suo-motu or otherwise, within five years from
the date of registration of any instrument of conveyance, exchange, gift, release of benami right or settlement, 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 the market value of the property
and if after such examination, he has reason to believe that the market value of the such property has not been truly set forth in the instrument, he
may determine the market value of such property and the duty, as aforesaid, in accordance with the procedure provided for in sub-Section (2) of
the abovesaid Section.
Similarly, the next appellate authority in the hierarchy, viz., the Chief Controlling Revenue Authority-cum-Inspector General of Registration,
Chennai, may, suo motu, call for and examine the order passed under sub-Section (2) or sub-Section (3), either on reference to the Collector or
suo-moto exercise of power by the Collector and if such order is prejudicial to the interests of revenue, he may make such inquiry or cause such
inquiry to be made and, subject to the provisions of the Act, may initiate proceedings to revise, modify or set aside such order and may pass such
order thereon as he thinks fit.
Here again, the limitation to initiate proceedings against any order passed under sub-Sections (2) and (3) of the Act, is within five years from
the date of passing of the order, under sub-Sections (2) and (3), as the case may be and as per sub-Section (8) of Section 47-A, no order under
sub-Section (6), i.e., suo-motu exercise of power initiated by the Chief Controlling Revenue Authority-cum-Inspector General of Registration,
Chennai, shall be passed, adversely affecting a person, unless that person has had a reasonable opportunity of being heard.
Therefore, it is clear from the reading of the provisions that before exercising the suo-motu power, the Chief Controlling Revenue Authority-
cum-Inspector General of Registration, Chennai, should (1) call for and examine the order passed under sub-Sections (2) and (3); (2) form a
subjective satisfaction, after examination of the order passed under sub-Sections (2) and (3), along with the records, as to whether, it is prejudicial
to the interests of revenue; and (3) thereafter, he may make such inquiry or cause such inquiry to be made and, subject to the provisions of this Act
and may initiate proceedings to revise, modify or set aside such order and may pass such order thereon, as he thinks fit.
The section contemplates a subjective satisfaction with a clear objective that the order passed by the Collector u/s 47-A(2) or (3) is prejudicial
to the interests of the Revenue. Useful reference can be made to few decisions of the Apex Court,
In Suman Gupta and Others Vs. State of Jammu & Kashmir and Others, , the Supreme Court while explaining as to how administrative
discretion should be exercised, at paragraph No. 6, held as follows:
We do not doubt that in the realm of administrative power the element of discretion may properly find place, where the statute or the nature of the
power intends so. But there is a well recognised distinction between an administrative power to be exercised within defined limits in the reasonable
discretion of designated authority and the vesting of an absolute and uncontrolled power in such authority. One is power controlled by law
countenanced by the Constitution, the other falls outside the Constitution altogether.
In Bangalore Medical Trust Vs. B.S. Muddappa and others, held that ""discretion is an effective tool in administration. It provides an option to
the authority concerned to adopt one or the other alternative. But a better, proper and legal exercise of discretion is one where the authority
examines the fact, is aware of law and then decides objectively and rationally what serves the interest better. When a statute either provides
guidance or rules or regulations are framed for exercise of discretion then the action should be in accordance with it...Public interest or general
good or social betterment have no doubt priority over private or individual interest but it must not be a pretext to justify the arbitrary or illegal
exercise of power. It must withstand scrutiny of the legislative standard provided by the statute itself. The authority exercising discretion must not
appear to be impervious to legislative directions. The action or decision must not only be reached reasonably and intelligibly but it must be related
to the purpose for which power is exercised. No one howsoever high can arrogate to himself or assume without any authorisation express or
implied in law a discretion to ignore the rules and deviate from rationality by adopting a strained or distorted interpretation as it renders the action
ultra virus and bad in law.
Lord Greene in Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn. (KB at p.229 : All ER pp.682 H-683 A), observed as
follows:
It is true that discretion must be exercised reasonably. Now what does that mean-Lawyers familiar with the phraseology used in relation to
exercise of statutory discretions often use the word ''unreasonable'' in a rather comprehensive sense. It has frequently been used and is frequently
used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct
himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration
matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting
''unreasonably''.
In Ganesan v. District S.P., Virudhunagar District reported in 2010 CIJ 627 IPJ, held as follows:
The power conferred on the authority without any guidelines may likely to be abused or arbitrarily exercised and in such circumstances, the
guidance and the control of exercise of such power has to be gathered from the object of conferment of power. Non-consideration or non-
application of mind to relevant factors renders exercise of discretion manifestly erroneous and it cause for judicial interference.
The stage and the time limit for initiating proceedings under sub-Section (6) of Section 47-A, are that (a) time for appeal against an order, i.e.,
order passed under sub-Sections (2) and (3) of the Section 47-A of the Act, has not expired; (2) initiation of the proceedings should be within five
years from the date of passing of the order under sub-Sections (2) and (3) of Section 47-A, as the case may be.
By exercise of powers conferred by Sections 47-A and 75 of the Indian Stamp Act, 1899 (Central Act II of 1899), the Tamil nadu Stamp
(Prevention of Undervaluation of Instruments) Rules, 1968 have been framed. Rule 7 of the Rules deals with the final order determining the market
value. Rule 10 of the abovesaid Rules, deals with the procedure for disposal of the appeals and the said Rule is extracted hereunder:
(1) If the appellate authority admits the appeal, a date shall be fixed for hearing the appellant. The appellate authority shall issue a notice to the
appellant informing him of the date on which and the time and place at which the appeal shall be heard. Such notice shall also state that if the
appellant does not appear on the day so fixed or any other day to which the hearing may be adjourned, the appeal shall be liable to be dismissed
for default or disposed of on merits ex parte.
(2) The appellate authority shall send a copy of the notice to the Collector together with a copy of the appeal and call for and obtain the records of
the case from the Collector.
Rule 11 deals with hearing of appeals and it is extracted hereunder:
Hearing of appeal:-On the date fixed or on any other date to which the case may be adjourned, the appellate authority shall hear the appellant
and receive any evidence adduced on his behalf. It shall also hear the person, if any, appearing on behalf of the Collector and receive the evidence,
if any adduced in support of the Collector''s order.
For the purpose of testing an appeal, as per Section 11-A of the abovesaid Rules, the appellate authority may,
(a) call for any, information or record from any public office, officer or authority under the Government or any local authority;
(b) examine and record statements from any member of the public officer of authority under the Government or the local authority; and
(c) inspect the property after due notice to the parties concerned.
As per Rule 12, after considering all the evidence adduced and representations made on behalf of the appellant and the Collector, on
examining the records of the case and any other facts considered under rule 11-A, the appellate authority shall decide whether or not the market
value of the properties as determined in the order of the Collector under sub-section (2) or sub-section (3) of section 47-A is correct. In case, the
appellate authority does not accept the valuation of the properties made by the Collector, it shall determine the correct market value of the
properties, and the duty payable on the instrument. The appellate authority shall embody its decision and the reasons thereof in an order and
communicate it to the appellant, the Collector and the registering officer concerned.
A combined reading of Section 47-A(6) of the Act and the Rule 12 of the abovesaid Rules, makes it clear that while exercising the suo-motu
power, the Chief Controlling Revenue Authority-cum-Inspector General of Registration, Chennai, has to call for and examine the order passed
under sub-Sections (2) and (3) of the said Section and if such order is prejudicial to the interests of revenue, he may make such inquiry or cause
such inquiry to be made and, subject to the provisions of this Act, may initiate proceedings to revise, modify or set aside such order and may pass
such order thereon, as he thinks fit.
Perusal of the impugned orders in all these appeals does not indicate that the Chief Controlling Revenue Authority cum Inspector General of
Registration, Chennai, has arrived at the subjective satisfaction that the order passed under sub section 2 of Section 47, by the Collector of
Stamps, is prejudicial to the interest of the revenue and that the abovesaid appellate authority has not made any inquiry or cause such inquiry to be
conducted, before enhancing the market value of the property in each of these appeals. Reading of the Section 47-A(6) of the Act makes it clear
that the primary object behind, engrafting suo-motu exercise of power is that the order passed under sub-Sections (2) and (3) of Section 47 of the
Act, should be first examined and found that it is prejudicial to the interests of revenue. There should be a categorical finding to that effect.
Therefore, when a provision in the statute, enjoins a duty on the authority, to arrive at a conclusion, form a subjective satisfaction, with a specific
objective to protect the revenue, if the orders passed u/s 47-A(2) and/or 47-A(3) is prejudicial to the revenue, then the order of the Chief
Controlling Revenue Authority-cum-Inspector General of Registration, Chennai, should advert to the said objective on the facts and circumstances
of each case and arrive at a satisfaction, before proceeding further, under the provisions of the Act.
Further, even assuming that the Chief Controlling Revenue Authority cum Inspector General of Registration, Chennai, arrives at a provisional
conclusion that an order passed by the Collector (Stamps) is prejudicial to the interest of the revenue, no order under sub section 6 of section 47-
A of the Act can be passed adversely, without a reasonable opportunity of being heard. First of all, in the cases on hand, as stated supra, no such
exercise as contemplated under sub section 6 of Section 47-A of the Act, has been done by the Chief Controlling Revenue Authority cum
Inspector General of Registration, Chennai. Therefore, this Court is of the view that the impugned orders in all these appeals do not fall within the
ambit of sub-section (6) of Section 47 of the Act.
The jurisdiction of the Chief Controlling Revenue Authority in exercise of his suo motu power has its own limitations, as provided for, in sub
sections (6) and (7) of section 47-A and from the language employed in the section. It could be construed that it is only supervisory, as he has all
the authority to call for and examine any order passed under sub section 2 or sub section 3 suo motu, if such an order is prejudicial to the interests
of the revenue. Before passing an order u/s 47(6) of the Act, after making an inquiry or causing any such enquiry to be made, the materials
collected, the report if any, should be provided to the person against whom proceedings are initiated, to satisfy the requirements of the principles of
natural justice, otherwise, the parties would be deprived of their right to offer their explanation, if any.
Enhancement of market value of the property on the appeals preferred by the land owners u/s 47(5) is not contemplated under the scheme of
the Act, without recourse to sub section 6 of section 47, wherein the statute has contemplated a procedure of conducting an inquiry and
reasonable opportunity. No doubt, the statute empowers the Chief Controlling Revenue Authority-cum-Inspector General of Registration,
Chennai, to exercise suo-motu powers u/s 47(6) of the Act, within five years, from the date of passing of an order, u/s 47(2) and (3) of the Act, as
the case may be, but the Statute mandates, consideration of the records, in terms of the objective, specifically incorporated in the Section and that
he should arrive at a subjective satisfaction, as to whether, the order passed under sub-Sections (2) and (3) of Section 47-A of the Act, is
prejudicial to the interests of Revenue. He must record reasons for arriving at the satisfaction.
In M/s. Steel Authority of India Ltd., v. STO, Rourkela-I Circle & Ors. reported in 2008 (5) Supreme 281, the Supreme Court testing the
correctness of an order passed by the Assistant Commissioner of Sales Tax against the assessment, at Paragraph 10, held as follows:
Reason is the heartbeat of every conclusion. It introduces clarity in an order and without the same it becomes lifeless.
It is worthwhile to reproduce the views of Lord Denning in M.R. in Breen v. Amalgamated Engg. Union [(1971) 1 All. ER 1148] and
Alexander Machinery (Dudley) Ltd., v. Crabtree [1974 ICR 120 (NIRC) J, found at Paragraph 11 of the above reported judgment.
Even in respect of administrative orders Lord Denning, M.R. in Breen v. Amalgamated Engg. Union, (1971) 1 All ER 1148, observed: ""The giving
of reasons is one of the fundamentals of good administration."" In Alexander Machinery (Dudley) Ltd., v. Crabtree [1974 ICR 120 (NIRC)], it was
observed: ""Failure to give reasons amounts to denial of justice."" ""Reasons are live links between the mind of the decision-taker to the controversy
in question and the decision or conclusion arrived at."" Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if
the decision reveals the ""inscrutable face of the sphinx"", it can, by its silence, render it virtually impossible for the courts to perform their appellate
function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial
system; reasons at least sufficient to indicate an application of mind to the matter before the Court. Another rationale is that the affected party can
known why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made; in
other words, a speaking-out. The ""inscrutable face of the sphinx"" is ordinarily incongruous with a judicial or quasi-judicial performance.
It is well accepted principle of law that when the statute contemplates certain things to be done in a particular manner, the same can be done
only in the manner, as provided for, in the statute and not otherwise. Useful reference can be made to certain decisions,
In T. Ramamoorthy v. The Secretary, Sri Ramakrishna Vidyalaya High School, etc. & Others reported in 1998 Writ. LR 641, at Paragraph 6,
held as follows:
This principle that where a power is given to do a certain thing in a certain way, things must be done in that way and not otherwise and that the
other method of performance is necessarily precluded, is not only well settled, but squarely applies to this case also in construing the scope of the
power as also its exercise by the management u/s 22 of the Act.
In Captain Sube Singh and Others Vs. Lt. Governor of Delhi and Others, the Supreme Court, at Paragraph 29, held as follows:
In Anjum M.H. Ghaswala, a Constitution Bench of this Court reaffirmed the general rule that when a statute vests certain power in an authority
to be exercised in a particular manner then the said authority has to exercise it only in the manner provided in the statute itself. (See also in this
connection Dhanajaya Reddy v. State of Karnataka.) The statute in question requires the authority to act in accordance with the rules for variation
of the conditions attached to the permit. In our view, it is not permissible to the State Government to purport to alter these conditions by issuing a
notification u/s 67(1)(d) read with sub-clause (i) thereof.
The Supreme Court in State of Jharkhand v. Ambay Cements reported in 2005 (1) CTC 223, at Paragraph 27, held as follows:
Whenever the statute prescribes that a particular act is to be done in a particular manner and also lays down that failure to comply with the said
requirement leads to severe consequences, such requirement would be mandatory. It is the cardinal rule of the interpretation that where a statute
provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way. It is also settled rule of
interpretation and where a statute is penal in character, it must be strictly construed and followed. Since the requirement, in the instant case of
obtaining prior permission is mandatory, therefore, non-compliance of the same must result in cancelling the concession made in favour of the
grantee-the respondent herein.
In The The Special Deputy Collector (Stamp) Vs. Chemicals and Plastics Ltd., , this Court considered a question as to whether the original
authority under the Stamp Act is an aggrieved person to challenge an order passed by the Special Deputy Collector (Stamps), to the next
hierarchical, appellate authority under the Act. After considering the scope of Section 47 of the Tamil Nadu Stamps (Prevention of Under
Valuation of Instruments) Rules, 1968, this Court, at paragraph No. 27, held that
In terms of the Stamp Under-valuation Rules, when once either initial authority or the appellate authority decides, there is no further provision
either for the registering authority or the Special Deputy Collector (Stamps) to file an appeal or revision by the said authority and such revision or
appeal by the Collector (Stamps) is not maintainable. In the absence of provisions they having exercised quasi-judicial adjudicatory function has
neither the authority or competence to prefer revision or appeal. They are aggrieved parties. The statutory provision enables only the person
affected or who is liable to pay stamp duty to prefer appeal or revision. These revisions are liable to be rejected on this ground as well.
Thus from the above decision, it is clear that if the original registering authority or the first appellate authority namely, The Collector (Stamps),
are not the aggrieved persons, to prefer any appeal or revision to the next authority under the Act, seeking for enhancement of the market value of
the property. While that be so, exercise of suo motu power by the Collector or the Chief Controlling Revenue Authority cum Inspector General of
Registration, in exercise of their powers under sub sections 3 and 6, as the case may be, can be made subject to satisfying as to the correctness of
the market value of the property, as provided for in sub section 3, if the power has to be exercised by the Collector (Stamps), or it should be
prejudicial to the interest of the revenue, if it has to be exercised by the Chief Controlling Revenue Authority-cum-Inspector General of
Registration, Chennai.
In Asmathullah Khan Vs. The Chief Controlling Revenue Authority cum Inspector General of Registration, Chennai, and two others, reported
in 2010 (6) CTC 567, the appellant therein purchased a property for a sale consideration of Rs. 4,20,000/- and got the sale deed registered
before the Joint Sub Registrar-Ill, Krishnagiri. u/s 47(A), a reference has been made to Special Deputy Collector (Stamps), Salem. He re-fixed the
market value at Rs. 525/- per sq. ft. Being aggrieved by the same, the vendor has preferred an appeal to the Chief Controlling Revenue Authority
cum Inspector General of Registration, the first respondent, in the appeal before this Court. The said authority enhanced the value at Rs. 582/- per
sq. ft. One of the contentions raised before this Court by the appellant was that the Chief Controlling Revenue Authority cum Inspector General of
Registration, Chennai, has no power to enhance the market value. Reliance has been placed on the decisions of the Supreme Court in R. Sai
Bharathi Vs. J. Jayalalitha and Others, and a decision of this Court in V.N. Devadoss Vs. Chief Revenue Control Officer-cum-Ins. and Others, .
While adjudicating the issue as to whether the said authority has powers to enhance or determine the market value of the property and levy
stamp duty, on the appeal preferred by the Vendor, u/s 47-A(5) of the Act, apart from the decisions cited supra, at paragraph 6 of the judgment in
Asmathullah Khan''s case, this Court held as follows:-
In the present case, the Second Respondent has fixed the market value at Rs. 525/- per sq. ft. There is no detail as to how the amount was
arrived at. But to the great surprise, the First Respondent increased the market value from Rs. 525/- to Rs. 582/- per sq. ft by taking into
consideration the guideline value prevailing on the date of the registration. The said value fixed by the First Respondent is only on the basis of the
guideline value that too without giving any opportunity to the Appellant before fixing the enhanced value at Rs. 582/-. The Apex Court in the cases
of R. Sai Bharathi Vs. J. Jayalalitha and Others, has considered the scope of guideline value in paragraphs 22 and 24, which reads as follows:
The guideline value has relevance only in the context of Section 47-A of the Indian Stamp Act (as amended by T.N. Act 24 of 1967) which
provides for dealing with instruments of conveyance which are undervalued. The guideline value is a rate fixed by authorities under the Stamp Act
for purposes of determining the true market value of the property disclosed in an instrument requiring payment of stamp duty. Thus the guideline
value fixed is not final but only a prima facie rate prevailing in an area. It is open to the Registering Authority as well as the person seeking
registration to prove the actual market value of property. The authorities cannot regard the guideline valuation as the last word on the subject of
market value. This position is made clear in the explanation to Rule 3 of the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments)
Rules, 1968. The said Explanation reads as follows:
Explanation.- The ''guidelines register'' supplied to the officers is intended merely to assist them to ascertain prima facie whether the market value
has been truly set forth in the instruments. The entries made therein regarding the value of properties cannot be a substitute for market price. Such
entries will not foreclose the enquiry of the Collector u/s 47-A of the Act or fetter the discretion of the authorities concerned to satisfy themselves
on the reasonableness or otherwise of the value expressed in the documents.
This scheme of the enactment and the Rules contemplate that guideline value will only afford a prima facie basis to ascertain the true or correct
market value, undue emphasis on the guideline value without reference to the setting in which it is to be viewed will obscure the issue for
consideration. It is clear, therefore, that guideline value is not sacrosanct as urged on behalf of the Appellants, but only a factor to be taken note of,
if at all available in respect of an area in which the property transferred lies. In any event, therefore, if for the purpose of the Stamp Act guideline
value alone is not a factor to determine the value of property, its worth will not be any higher in the context of assessing the true market value of
properties in question to ascertain whether the transaction has resulted in any offence so as to give a pecuniary advantage to one party or the other.
and in the case of V.N. Devadoss Vs. Chief Revenue Control Officer-cum-Ins. and Others, the Apex Court has considered the scope of Section
47-A of the Indian Stamp Act, 1899 and this Court, in the case of The District Collector, Erode District, Erode and others v. M. Ponnusamy,
2001 (2) CTC 449 (DB) : 2001 (2) MLJ 458, has considered the scope of Section 47-A of the Act and in paragraphs 15 and 16 it has been held
as follows:
On this subject, the Supreme Court in categorical terms, in State of Punjab and Others Vs. Mohabir Singh etc. etc., , has held that the function
of the Registering Authority is quasi-judicial and he must make up his mind whether true price is reflected and that registration and reference
follows. Considering the scope of the Section similarly worded namely Section 47-A, as amended by the Punjab Stamp Act, 1962, their
Lordships observed as follows:
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 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 (1) of Section 47-A was not conclusive.
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 the 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 the law.
In Park View Enterprises Vs. State Government of Tamil Nadu, a Division Bench of this Court, while considering the scope of Section 47-A
of the Act as well as Sections 27, and 34 of the Registration Act held that the Registering Officer has no jurisdiction or authority to hold enquiry
and decide as to what is the stamp duty that is payable. Rule 3(3), only enables him to arrive at the prima facie assessment whether the market
value furnished in the sale deed could be relied upon to proceed with the registration. If he opines that the market, value is not correct the statutory
duty cast upon him is to register it and send it to the Collector by overlooking the procedure u/s 47-A. Except the Collector, no authority could fix
the market value and decide upon the proper stamp duty payable in respect of any instrument covered u/s 47-A. The Division Bench further held
that the Registering Officer cannot delay the registration of the instrument of the kinds covered by Section 47-A. He has no right to go behind the
terms of the document and any other agreement or any other transaction. The role of the Collector is to find out the market value relating to the
chargeability of the instrument and he has to go by the terms of the document regarding the nature of the transaction.
The principles enunciated in the above judgments were not taken into consideration by the First Respondent before passing the impugned order.
In the light of the above discussion and following the decision in Asmathullah Khan Vs. The Chief Controlling Revenue Authority cum Inspector
General of Registration, Chennai, and two others, reported in 2010 (6) CTC 567, the Civil Miscellaneous Appeals are allowed only to the limited
extent of holding that the Chief Controlling Revenue Authority-cum- Inspector General of Registration, Chennai, has no power to enhance the
market value of the property, while considering the appeals preferred by the vendors, without recourse to Section 47-A(6) of the Act, within the
time provided in the Act. The appellate authority is directed to deal with the appeal in each case, on merits, after following the procedure,
contemplated under the Act and the Rules. No costs. Consequently, Miscellaneous Petitions are closed.