The Inspector General of Registration and The Sub-Registrar vs M. Gandhimathi and Others

S. Palanivelu, J.—These appeals are filed against the common order, dated 08.12.2004, passed by a learned single Judge in W.P. Nos.

2723 and 2724 of 2004.

The facts, which led to the filing of these appeals, are as follows:

2.1. The properties comprised in T.S. Nos. 12 and 11/2 sprawling to an extent of Ac.4.47.1/2 Cents and Ac.1.49 Cents respectively, situate in

Vellithirumutham Village of Srirangam Taluk originally belonged to one Kasi Ramachari, who bequeathed the same and other properties for

various charities, by means of a registered Will on 06.04.1927. Thereafter, two of his descendants, by name Krishnan and Rangarajan filed C.S.

No. 1544 of 1992 on the Original Side of Principal Bench of this Court at Madras against three other descendants, namely, Ranganayaki,

Jayalakshmi and Rajalakshmi, for the reliefs of interpretation of the Will and for permitting them to sell the said properties, subject to the terms and

conditions, to be imposed by the Court.

2.2. On 04.05.1993, this Court passed an order, permitting the plaintiffs viz., Krishnan and Rangarajan, to sell the properties as per the procedure

set out by the Court and to deposit the sale proceeds. In pursuance of the direction, on the basis of the advertisements made by the plaintiffs,

various persons made offers to purchase the properties. One Sundararaman offered to purchase the properties by himself or by his nominees at a

price of Rs. 18.00 lakhs. The properties were in the possession of a cultivating tenant. The offers obtained were placed before the Court and this

Court on 29.04.2003, accepting the offer made by Sundararaman, permitted the plaintiffs to sell the properties to him or his nominees.

2.3. The present respondents were nominated by the above said Sundararaman, who purchased the properties under two sale deeds, dated

15.09.2003, but, the same were refused to be registered by the Sub-Registrar, Srirangam. Subsequently, though the documents were registered

on 14.04.2004, the sale deeds were retained by the Registering Authority and they were not returned to the purchasers nor were they referred to

the Collector, u/s 47-A(3) of The Indian Stamp Act (in short, ""the Act""). Hence, they filed Writ Petitions before this Court, to complete

registration of the sale deeds and to return them back.

2.4. This Court, by an order, dated 08.12.2004, granted the prayers sought for by the petitioners, directing the authority to complete registration

and to return the same to them, within a period of one month from the date of the order.

2.5 Hence, these appeals.

2.6. When both these appeals had come up for admission before this Court on an earlier occasion on 11.08.2005, this Court disposed of the

same, with a finding that there was no error in the ultimate direction issued by the learned Judge directing return of the originals of the documents

and that the respondents/appellants were certainly entitled to make necessary endorsement on the documents relating to the pendency of the

proceedings u/s 47-A of the Act.

2.7. Since the said order was passed in the absence of appearance of the counsel for the respondents herein, Review Application Nos. 35 and 36

of 2007 came to be filed and, on 26.09.2007, a Division Bench of this Court allowed both the applications, recalling the order passed on

11.08.2005, under an observation that the Writ Appeals were disposed of at the stage of admission, without hearing the review applicants.

2.8. Therefore, the appeals are again before this Court, for consideration.

Much was said about the responsibility of the Registering Authority u/s 47-A(1) of the Act. In order to have a thorough discussion in this matter,

it is appropriate to extract the provisions u/s 47-A(1)(2) and (3) of the Act, which read as under:

47-A. Instruments of conveyance etc., under-valued how to be dealt with. - (1) If the registering officer appointed under the Indian Registration

Act,1908 (Central Act XVI of 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, 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 person liable to pay the

duty.

The above said provisions have been enacted, to put a curb on the practice of undervaluing the property, for the purpose of getting registration.

The rationale behind Section 47-A is to neutralise the effect of under-valuation of the property. If the market value of the property has not been

truly set forth with an intention of fraudulently avoiding payment of stamp duty, the said provisions would come to play a vital role. Though the

market value is a fluctuating factor depending upon a variety of circumstances, yet, the legislature thought it fit to have a control over the stamp duty

evaders, who, under the guise of an agreement, undervalue the property.

Having regard to the object of the Act, normally, the consideration stated as the market value in a given instrument, brought for registration,

should be taken as correct, unless the circumstances exist, which suggest fraudulent evasion. In this connection, the Registering Authority is

expected by law to get satisfied himself with the existing factor that the property is under-valued. If in his opinion the market value furnished is not

correct, a statutory duty is cast on him to register the instrument and send the same to the Collector, for determination of the market value. It is also

to be noted that Section 47-A does not confer any jurisdiction to the Registering Authority to refuse registration, merely because the property is

under-valued. Further, the said provision does not authorise him to require the person concerned to pay additional stamp duty. Registration of a

document is a sine qua non, for referring it to the Collector. The law requires the Registering Authority, to furnish reasons for coming to a

conclusion that the property is under-valued. The provision does not empower the Registering Authority to hold a roving enquiry, for ascertaining

the proper stamp duty, but, it expects him to find out prima facie in his belief, whether the market value of the property is improperly brought

down.

With regard to the above said guidelines and procedures to be followed by the Registering Authority, while the facts of the present case are

considered, the necessary corollary would be, the Registering Authority viz., the Sub-Registrar, Srirangam, had miserably failed to observe them.

Without assigning any reason, he had been retaining the documents, without registering them and, only after filing of the Writ Petitions, he

proceeded to register the same on 14.04.2004. The lethargic attitude and inaction on the part of the Registering Authority are to be highly

deprecated . Further, the date of registration is found in both the sale deeds, written on the reverse of the third papers of the respective sale deeds.

Below the said endorsement, another note is also found to the effect that a reference to the Deputy Collector (Stamps) for determination of market

value is pending. Underneath the said endorsement, the signature of Sub-Registrar, Srirangam, with date 06.03.2006 is seen. The endorsement

goes to the effect that the Sub-Registrar had already referred the matter to the Collector concerned, for determining the market value.

The main thrust of the learned counsel for the respondents is that though this Court, on earlier occasions, took a consistent view that the

Registering Authority had no power to retain the documents anymore after registration, however, for a period of three weeks, in this case, the Sub-

Registrar retained the documents for so many months, without referring the same to the Collector and, hence, he has violated the procedure.

Learned counsel for the respondents placed reliance upon a decision of this Court in M. Krishnan and 44 others Vs. The District Collector, Erode

District, Erode and two others, , wherein a learned Single Judge of this Court, after holding discussions under the provisions of Section 47-A(1)(2)

and (3), finally concluded that a reference should be made immediately after registration or so sooner the registration is completed and, at any rate,

within three weeks from the date of completion of registration of the document, to refer the instrument to the Collector, u/s 47-A(1), besides

sending a communication to the person, who is liable to pay stamp duty on the instrument in question.

As to the period allowable for retention of the document after registration by the Registering Authority for three weeks, there is no specific

stipulation in the statute. This Court had formed the said opinion, considering the factors and the legal obligations, which ought to be lawfully

observed by the Registering Authority, for regulating the procedures. It is also to be borne in mind that the said view was accepted by a Division

Bench of this Court in The District Collector, Erode District and Ors. v. M. Ponnusamy 2002 (2) M.L.J. 458 in the following terms:

30... Therefore, the direction of the learned single Judge that reference should be made immediately after registration or so sooner the registration

is complete, at any rate, within three weeks from the date of completion of registration of the document and refer the instrument to the Collector

under Sub-section (1) of Section 47-A of the said Act besides sending communication to the person who is liable to pay the stamp duty on the

instrument in question cannot be objected to. In our view, this is a salutary direction to see that Section 47-A(1) does not operate as an engine of

oppression on the plea of under-valuation.

The above said legal position was holding the field hitherto. However, an identical matter was taken up for consideration by another learned

single Judge of this Court on a subsequent occasion and he thought it fit to refer the matter to a Division Bench, to decide the following questions :

(i) Whether the Court, in exercising the power of judicial review, can fix a limitation for the exercise of a statutory duty u/s 47-A(1) of the Act ?

(ii) Even if any guideline is introduced by a judgment, whether that can operate as a valid rule so as to nullify any order made within a reasonable

period by the authorities, on allegations of undervaluation ?

Accordingly, the matter was placed before a Division Bench, which, in turn, referred the same to a Larger Bench. Thereafter, the issue came

up before a Full Bench of this Court. After considering the settled legal principles and also following the authoritative judicial pronouncements on

this gamut, the Full Bench, to which both of us were part of the quorum, by an order, dated 07.12.2007, in W.P. (MD) No. 2732 of 2004 and

other connected matters, formulated a legal principle, overruling the decisions in the cases of M. Krishnan and M. Ponnusamy (cited supra), that

the Court cannot suggest a time frame to a statute and the registering authority is bound to perform his statutory obligations within a reasonable

time. The conclusions of the Full Bench, in this regard, are as follows:

On a conspectus of the facts and circumstances of the matter and following the ratio laid down by the Apex Court, we answer the questions (i)

and (ii) as follows:

(i) The Court cannot fix or suggest a time frame to a statute in the normal course, if the statute is silent with regard to it.

(ii) No guideline, in this regard, shall be introduced by the Court. However, it is mandatory on the part of the statutory authority, namely, registering

officer, to perform his statutory obligations within a reasonable time, which should not be viewed as a one, that has deprived the rights of the

parties to the document, causing injustice.

The Full Bench was of the definite view that no statutory silence with regard to prescription of time frame to perform a legal obligation shall be

substituted by an idea or a suggestion of the Court.

The Sub-Registrar, without any valid ground, was retaining the documents in his office for quite a long time, unmindful of violating the

procedure adumbrated under Sub-section (1) of Section 47-A of the Act. A statutory duty is cast on him to refer the document to the Collector

within a reasonable time, for ascertaining the exact market value.

In the memorandum of appeal, the grounds would show that when the documents were presented for registration on 16.09.2003, the second

appellant required certain documents viz., Patta Pass Book and Court Order and, upon their production by the respondents on 14.04.2004, the

documents were registered, during the pendency of the writ petitions.

The second appellant, ignoring the procedure laid down under Sub-section (1) of Section 47-A, referred the matter to the District Registrar on

07.05.2004, for clarification, as to whether the judgment referred value could be taken into consideration as the market value. In fact, he is not at

all competent to get any clarification, after registration. Moreover, after registration, he has no power at all, to deal with the document in any

manner. Instead, he has to simply refer the same to the Collector, for the purpose of ascertaining correct market value. Even, the District Registrar

had not advised the second appellant in a proper direction in this regard, who also, referred the matter to the first appellant, namely, Inspector

General of Registration, on 07.06.2004. On such reference, the first appellant is stated to have directed the second appellant to register the

documents and refer the same u/s 47-A(1). But, both the second appellant and the District Registrar have not followed the procedures laid down

in Sub-section (1) of Section 47-A, which paved the way for an unreasonable delay in referring the matter to the Collector, which leads to a

conclusion that period of retention or the interregnum period between the date of registration and the date of referring the documents to the

Collector is not a reasonable one.

Whatever may be the procedures adopted by the appellants and the District Collector wrongly prior to referring the documents to the

Collector, presently, the matter is pending before the Collector for ascertaining correct market value of the property. Therefore, the next course of

action, to be taken up by the Collector, has to be gone into.

It is seen from the endorsement of the Sub-Registrar that the reference for ascertaining the market value is pending with the Special Deputy

Collector (Stamps), which shows the Sub-Registrar has already referred the matter to the prescribed authority. The sale deeds do not bear any

particulars as to the date of reference to the Collector. The powers of the Collector in this regard are incorporated in Section 47-A(3),

aforementioned. It authorises the Collector to determine the market value of the property and to ascertain the stamp duty thereon within five years

from the date of registration of any instrument etc. He may exercise this power either suo motu or otherwise. However, there is no scope for taking

suo motu action in this matter. But, under the term ""otherwise"", either this Court can very well direct the Collector to complete the procedure

contemplated u/s 47-A(3) after observing the procedure narrated thereon or the Collector can give a quietus to the reference made to him by the

Registering Authority. As adverted to supra, in this case, a reference has already been made to him. A time limit of five years has been prescribed

to enable the Collector to determine the market value of the property, by following the procedure u/s 47-A(2). The sale deeds have been

registered on 14.04.2004 and, hence, the Collector has got five years'' period from the said date, to complete his statutory obligation, as per Sub-

section (3) of Section 47-A.

Before passing an order under Sub-section (2) of Section 47-A, the Collector is under a statutory duty to hold an enquiry in the manner

prescribed and also give an opportunity to the parties and the Sub-Registrar, to project their respective representations, on the issues of

determination of market value of the property and the stamp duty, payable thereon. The Collector is also required to disclose the evidence during

the course of enquiry or otherwise and give an opportunity to both the parties, to support or controvert such evidence. The Collector, while

exercising the quasi-judicial powers to determine the proper market value of the subject matter of the documents, may either go against the

decision of the Registering Authority or the party presenting the document.

In the Writ Petitions, the respondents have prayed for a direction to the registering authority to complete the registration of the sale deeds and

return the same to them. As far as the first part of the prayer is concerned, registration of the documents is already over. As regards the other part

of the prayer, the matter is pending before the Deputy Collector (Stamps) and it is for him to come out with a conclusion as to the correct market

value of the properties. Therefore, the Writ Petitions with regard to the first part of the prayer have become infructuous. As for the second part,

namely, a direction to return the documents, the following order is passed:

The Special Deputy Collector (Stamps), to whom the Sub-Registrar, Srirangam, has made a reference on 06.03.2006 with reference to the

document Nos. 779 and 780 of 2004 on his file, is directed to determine the market value of the properties and ascertain the correct stamp duty,

payable on them, within the statutory period of five years from the date of registration viz., 14.04.2004, after adopting the procedure contemplated

u/s 47-A(2). Also, the second appellant is directed to furnish a copy of this order to the Special Deputy Collector (Stamps), for compliance.

With the above directions, these Writ Appeals are disposed of. No costs. Consequently, the connected W.A.M.P. Nos. 400 and 448 of

2005 are closed.