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Judgment
T.S. Sivagnanam, J.—The amended prayer in the writ petition is for issuance of a writ of certiorari to quash the order passed by the second
respondent dated 8.4.2002, as confirmed by the first respondent by order dated 9.1.2003. The matter arises under the Indian Stamp Act (Act)
and the Tamil Nadu Stamp (Prevention of Under Valuation of Instruments) Rules, 1968. The first petitioner is the mother of the third petitioner and
the second petitioner is her son in law. The petitioners purchased ''Punja'' cultivable lands in survey No. 1474/3, Konneri Kuppam Village,
Kancheepuram Taluk, by three registered sale deeds dated 6.4.1997, registered as document Nos. 526/97, 1041/97 and 1042 of 1997, on the
file of the Sub-Registrar, Joint-I, Kancheepuram, the third respondent. Though the sale deeds were registered for more than 5 = years, the third
respondent refused to return the documents, stating that the property purchased under the said documents ought to have been valued on square
foot basis by adopting the guideline value for urban properties maintained in the Office of the third respondent. The total valuation of all the three
sale deeds at Rs. 1,19,28,960/- was fixed as against the valuation mentioned in the documents at Rs. 1,23,120/-.
It is stated that the first respondent without conducting any enquiry u/s 47(A) of the Act, returned the documents to the third respondent, by
proceedings dated 22.3.2000. According to the first respondent, in the meeting held in the office of the second respondent on 19.1.2000, he was
advised that the sale deeds referred the lands as ''nanja thottakal'' lands and therefore, the documents should be sent back to the third respondent
for determining the market value of the property. On receipt of the documents, the third respondent placed the same before the District Registrar,
Kancheepuram District, who conducted an inspection of the land and was satisfied that during the relevant period, cultivation was done in the said
lands. Accordingly, the District Registrar, determined the value of one acre of punja land during 1997 as Rs. 26,16,000/- and submitted a report
to the second respondent. Based on such report, the second respondent by proceedings dated 8.4.2002, determined the market value at Rs.
26,16,000/- per acre which was 1/3rd of the urban land value. Pursuant thereto by proceedings dated 8.4.2002, the second respondent
demanded stamp duty on the enhanced amount. The petitioners'' case is that from the date of registration of the sale deeds i.e. on 6.4.1997, till the
filing of the writ petition no enquiry was conducted u/s 47(A) of the Act, to determine the market value of the land and the proceedings of the
second respondent is wholly without jurisdiction. In this regard, reliance has been placed on the decision of this Court in Park View Enterprises
Vs. State Government of Tamil Nadu, . It is further submitted that no enquiry u/s 47(A) of the Act can be conducted after about twelve years after
the date of the registration of the three sale deeds, dated 6.4.1997. As the documents were not released, the petitioners filed a writ petition in
W.P. No. 12080 of 2005, and this Court by order dated 12.4.2005, after taking note of the earlier orders passed by this Court, directed the first
respondent to release the documents, subject to the usual conditions. The petitioners were directed to file an affidavit of undertaking that they will
not alienate the property in question and also produce the documents as and when required. The documents were directed to be released with an
endorsement that the documents are subject to the proceedings under the Indian Stamp Act. Based on the direction issued, the petitioners filed the
undertaking and the documents have been returned.
The petitioners by relying upon the decision of this Court in M. Krishnan and 44 others Vs. The District Collector, Erode District, Erode and
two others, , submitted that the sale deeds were registered on 6.4.1997, and the period of limitation to exercise the power u/s 47(A) of the Act,
should have been done within a period of two years i.e. on or before 6.4.1999 and beyond such date, the third respondent cannot resort to the
power u/s 47(A) of the Act. Further, it is contended that even as per the suo motu power of the Collector, which was fixed as five years by virtue
of the amendment to the Stamp Act, amending sub-section 3 of section 47(A) of the Act, the power cannot be exercised after 10.2.2000 and the
time limit for exercising suo motu power, which was increased to five years from two years by Tamil Nadu Amendment Act 1 of 2000, cannot be
applied to the petitioners case as the documents were registered much prior to the amendment i.e. on 6.4.1997. Further, it is submitted that
without following the procedure u/s 47(A) of the Act, the market value cannot be fixed based on the recommendations of the second respondent
and more than 14 years have elapsed and there is no justification to demand enhanced stamp duty. Reliance was placed on the decision of the
Hon''ble Division Bench of this Court in District Collector, Erode District, Erode v. M. Ponnusamy 2001 (2) CTC 449.
Initially, the petitioners sought for issuance of a writ of mandamus to direct the respondents to remove the endorsement in the documents stating
that proceedings u/s 47(A) of the Act is pending as the proceedings has become time barred and for a consequential direction to the third
respondent to return the document without such endorsement. Subsequently, the prayer in the writ petition was amended to quash the order of the
second respondent dated 8.4.2002 and the order of the first respondent dated 9.1.2003, which prayer was allowed by this Court by order dated
15.3.2013 in M.P. No. 1 of 2013.
In the counter affidavit filed by the third respondent, it is admitted that the documents were registered and the documents were admitted for
registration as they were mentioned as agricultural lands. Based on the inspection done by the District Registrar, it was found that the lands were in
a developed area and the petitioners have shown a lesser value than the guideline value and therefore, the District Registrar fixed the value at Rs.
26,16,000/- per acre and after examining the report of the District Registrar, the Deputy Inspector General of Registration recommended the said
value to be adopted which was accepted by the second respondent and accordingly, the proceedings dated 8.4.2002 was issued by the second
respondent, fixing the value of the land at Rs. 26,16,000/-. It is further stated that on 2.9.2002, the first petitioner submitted a representation
stating that they have paid the stamp duty in accordance with the guideline value fixed during 1997, as the lands have been classified as agricultural
land and the determination of guideline value after 5 = years is arbitrary and without jurisdiction and requested for return of the documents. On
receipt of the representation, the petitioners case was referred to the first respondent u/s 47(A)(1)(b) of the Act, for determination of the stamp
duty and a notice under Form II was issued to the petitioners. After such notice, the District Revenue Officer (Stamps) by order dated 9.1.2003,
directed the petitioners to pay deficit stamp duty, failing which stated that interest at the rate of 2% will be levied for belated payment. The
petitioners without complying with the direction, given in the order dated 9.1.2003, filed writ petition in W.P. No. 12080 of 2005, and based on
the direction issued in the writ petition, the documents were returned to the petitioners immediately. The third respondent would further state that
the petitioners without waiting for the finalisation of the proceedings u/s 47(A) of the Act, have filed this writ petition stating that the enquiry u/s
47(A) of the Act, is time barred. As regards the delay, it is stated that the respondents have taken all possible steps to finalise the issue and the
papers are pending before the higher authorities for passing final orders and if any order is passed in the writ petition it would result in revenue loss.
Heard Mr. V. Raghavachari, learned counsel appearing for the petitioners and Mr. K. Karthikeyan, learned Government Advocate for the
respondents.
After hearing the learned counsels appearing for the parties and perusing the materials placed on record, two issues fall for consideration in this
Writ Petition. Firstly, as to whether the authorities rightly exercised the power available u/s 47(A) of the Act, based on any material with the
registering authority to form an opinion that the market value of the property has not been truly set forth in the instruments. Secondly, if the
authorities where in possession of any prima facie material to come to a conclusion that the market value of the property has not been truly set forth
in the instruments, whether such power was exercised within the period stipulated under the Act.
In terms of sub section (1) of section 47(A), if a registering officer while registering an Instrument of sale, has reason to believe that the market
value of the property, which is subject matter of sale deed has not been truly set forth in the instrument, he may after registering the instrument,
refer the same to the Collector for determination of the market value of such properties and the proper duty payable thereon. In terms of sub
section (2), the Collector after giving the parties, reasonable opportunity of being heard and after holding an enquiry in the manner prescribed by
the Rules, determine the value of the property and the duty payable. Subsection (3) of section 47(A) of the Act, deals with the suo motu power of
the Collector to determine the value of the property.
Sub section 3 of section 47(A) of the Act, as it originally stood, empowered the Collector to exercise suo motu or other action within two years
from the date of registration of the instrument, not already referred to him under sub section 1 of section 47(A) of the Act, for the purpose of
satisfying himself as to the correctness of the market value of the property which is subject matter of sale and the duty payable thereon and if after
such examination, the Collector has reason to believe that the market value has not been truly set forth, he may determine the market value of such
property in accordance with the procedure provided for in sub section (2) of section 47(A) of the Act. In terms of the proviso to sub section (3)
this power of suo motu determination within two years shall not apply to any instrument registered before the commencement of the Indian Stamp
(Tamil Nadu Amendment) Act, 1967. By Tamil Nadu Amendment Act 1 of 2000, the time limit stipulated for exercising such suo motu power was
made as five years instead of two years with effect from 6.3.2000.
In the instant case the documents were registered by the third respondent on 6.4.1997. Admittedly, the registering authority did not entertain
any doubt regarding the market value of the property as set forth in the sale deeds. This is evident from the counter affidavit filed by the third
respondent. Therefore, no reference was made by the third respondent u/s 47(A)(1) of the Act. It is stated in the counter affidavit that the property
was inspected by the District Registrar who opined that the lands are situated in a developed area and he submitted a report to the second
respondent, who is the Inspector General of Registration, recommending that the value of the property should be fixed at Rs. 26,16,000/- per
acre. This report dated 22.3.2002, appears to have been sent to the second respondent and there was no opportunity given to the petitioners in
this regard. Based on such report, the second respondent unilaterally, re-determined the land value at Rs. 26,16,000/- and issued the proceedings
dated 8.4.2002.
From a perusal of the said proceedings it is seen that there was no independent adjudication done by the second respondent, but the second
respondent proceeded solely based on the report of the Deputy Inspector General of Registration dated 22.3.2002. In this regard, there is a
reference in the order dated 8.4.2002, wherein it appears that the Deputy Inspector General of Registration opined that the lands purchased by the
petitioners are capable of being converted into house sites. Thus, it is clear that there is no categorical finding by the Deputy Inspector General that
the lands purchased by the petitioners in 1997, were not agricultural lands. In such circumstances, the action of the Deputy Inspector General to
adopt higher land value based on speculation is wholly without jurisdiction and does not have sanction of law.
In the counter affidavit it is stated that the petitioners submitted a representation on 2.9.2002, requesting for return of the documents on the
ground that for 5 = years, the documents have not been returned and retained by the third respondent, though the registration formalities were
completed on 11.4.1997 and all the three documents were assigned document numbers. From the counter affidavit, it is further seen that it is only
after the representation dated 2.9.2002, the first respondent appears to have referred the case u/s 47(A)(1) of the Act. The counter affidavit does
not specifically state as to on what date the order of reference was made. It is further stated in the counter affidavit that Notice in Form II was
issued to the petitioners dated 9.1.2003, calling upon them to remit the deficit stamp duty. In the said notice, there is a reference to Form I dated
16.5.2002, however, no document has been placed by the respondents to show that such Form-I notice was served on the petitioners. Even
assuming such Form-I notice was served and the counter affidavit is also silent on this aspect. It is necessary that an enquiry ought to have been
conducted before the determination of the value of the property. This procedure was not followed in the petitioners'' case.
As noticed above, the third respondent, the Registering Authority at the time of presentation of the document for registration on 11.4.1997, did
not entertain any doubt as regards the value of the property as set forth in the instrument. Therefore, this is not a case where the registering
authority invoked the power u/s 47(A)(1) of the Act. The entire matter has been trigged by a report submitted by the Deputy Inspector General of
Registration dated 22.3.2002, who is said to have inspected the land. The procedure adopted does not have the sanction of law, and it is alien to
the procedure prescribed under the Act and Rules. That apart, no notice was served on the petitions prior to the alleged inspection.
A brief reference has been made by the second respondent to the report of the Deputy Inspector General dated 22.3.2002, in his proceedings
dated 8.4.2002. From such reference it is seen that the Deputy Inspector General did not render any conclusive finding that the lands on the date
of registration of the sale deeds i.e. on 11.4.1997 were not agricultural lands, rather he would state that the lands are capable of being converted
as house sites in future. The Act and Rules does not permit the authorities functioning under it to act on speculations and at their whims and fancies.
Be that as it may, the second respondent erroneously proceeded on the report of the Deputy Inspector General and fixed the land value without
resorting to any procedure and without affording any opportunity to the petitioners. For the sake of argument, if it is to be taken that the second
respondent or any other authority lower in rank, empowered under the Act, had exercised the suo motu power under subsection 3 of 47(A) of the
Act, then such power could have been exercised within two years from the date of registration of the said instruments, since, there was no
reference made to such authority under subsection 1 of section 47(A) of the Act. Therefore, such power of suo motu revision could have been
exercised on or before 11.4.1999 and not thereafter. Hence, on that score also, the impugned order dated 8.4.2002, is wholly without jurisdiction
and consequently the notices issued in Form No. II also suffer from the vice of lack of jurisdiction.
It is a settled legal principle that the intending use of the land in future cannot be the basis for adopting the value (see) The Special Deputy
Collector (Stamp) Vs. Chemicals and Plastics Ltd., .
In Ezhilarasi and C.T. Kaliaperumal Vs. The Inspector General of Registration, The Special Deputy Collector (Stamps) and Joint Sub
Registrar , this Court held that the onus is on the Department to establish that the market value of the property has not been truly set forth and the
market value as claimed by the Department is contemporaneous to the document tendered for registration and after referring to the decision of the
Hon''ble Supreme and the decisions of this Court, it was held that where there is a doubt, that the market value has not been truly set forth in the
instrument, the guideline value is only a prima facie guide for ascertaining the market value and the department have to go by various parameters set
down in the Rules, for determination of the market value if they have a reasonable belief that the market value of the property has not been truly set
forth in the document.
In the instant case, there was no material to doubt the market value as set forth in the instrument as the third respondent without entertaining
any doubt registered the instrument. Further, the procedure required to be followed while determining the market value has been explained by this
Court in Tata Coffee Limited and K. Manohar Vs. State of Tamil Nadu and Others, . The procedure prescribed has not been followed, which is
also one more reason to hold that the impugned orders are unsustainable in law.
In a recent decision of the Hon''ble Supreme Court in State of U.P. and Others Vs. Ambrish Tandon and Another, , the Hon''ble Supreme
Court held that merely because the property is being used for commercial purpose at a later point of time, may not be a relevant criterion for
assessing the value for the purpose of stamp duty and the nature of user is relatable to the date of purchase and it is relevant for the purpose of
calculation of stamp duty. In the instant case, admittedly on the date of registration i.e. 11.4.1997, the lands were agricultural lands. It after more
than 5 = years after registration of the documents, the Deputy Inspector General opined that the lands are capable of being converted into house
sites and recommended for revision of the land value. The reason assigned by the Deputy Registrar General for proposing higher value is clearly
contrary to the law laid down by the Hon''ble Supreme Court in the decision cited supra. For all the above reasons, it is held that there was no
material available with the authorities to prima facie hold that the value of the property has not been properly set forth in the sale deeds and the
basis for higher fixation of land value is on the ground that the property is capable of being used as house sites. That apart, the procedure required
to be followed under the Act has not been followed and even assuming that the authorities exercised suo motu power under sub section 3 of
Section 47(A) of the Act, the same was clearly beyond the period of limitation prescribed therein and consequently, the impugned orders are
wholly without jurisdiction, illegal and arbitrary and liable to be quashed. In the result, the Writ Petition is allowed and the impugned orders are
quashed and the respondents 1 & 3 are directed to delete the endorsement made in the sale deeds, and return the sale deeds to the petitioners
within a period of 60 days from the date on which the documents are presented by the petitioners before the third respondent for such purpose.
No costs. Consequently, connected miscellaneous petition is closed.