IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 20.01.2007
Coram
The Honourable Mr. JUSTICE K.MOHAN RAM
Civil Miscellaneous Appeal No.1337 of 2006
and C.M.P.No.5799 of 2006
N.S.Murugan .... Appellant
-Vs.-
1. The Chief Controlling Revenue
Authority-cum-Inspector
General of Registration, Registration Act, Chennai.
2. The Special Deputy Collector (Stamps)
Room No.9, III Floor, District Collectorate,
Korampallam, Tuticorin
3. The Joint Sub Registrar-II
Tuticorin .... Respondents
Civil Miscellaneous Appeal under Section 47-A(10) of Indian
Stamps Act against Proceedings No.7232/U1/2005, dated
20.01.2006 on the file of the Chief Controlling Revenue
Authority and Inspector General of Registration, Madras and
against the Proceedings No.1940 of 2000 dated 29.10.2001 on
the file of the Deputy Collector (Stamps), Tuticorin.
For Appellant : Mr. K.R.Thamizhmani
For Respondents : Mr. M.Rangarajulu, Government
Advocate.
J U D G M E N T
The above appeal has been filed against the order dated
20.01.2006 passed by the first respondent in exercise of his
suo motu power of revision under Section 47-A(6) of the
Indian Stamp Act 1899 (hereinafter referred to as “the Act”)
fixing the market value at the rate of Rs.160/- per square
feet for an extent of 1 acre and 15.126 cents purchased and
registered by the appellant vide Document No.691/2000 dated
07.07.2000 and demanding stamp duty payable on the said
value.
2. The brief facts of the case are set out below:-
The appellant purchased an extent of 1 acre and 15.126
cents of land comprised in T.S.Nos.4137/P, 4136/1A(P),
4136/5A-1 part and 4138/1 of Polanaickenpettai, Tuticorin
for a total sale consideration of Rs.2,50,000/- under a sale
deed dated 07.07.2000 and presented the sale deed for
registration before the third respondent herein. The third
respondent referred the sale deed under Section 47-A(1) of
the Act to the second respondent. The second respondent
issued notices in Form-I and Form-II dated 16.10.2000 and
22.11.2000 calling upon the appellant to appear for enquiry
and site inspection on 27.11.2000 and to produce evidence if
any in support of his claim. The appellant by his
representations dated 07.02.2001 and 16.07.2001 sent to the
first and second respondents respectively claimed that the
market value paid at Rs.295/- per square feet of land dealt
with under Document No.548/2000 should not be adopted as the
basis for fixing the market value of the document in
question. The second respondent after notice to the
appellant inspected the suit property on 29.10.2001 and
after proper enquiry by his order dated 15.11.2001 fixed the
market value of the property at Rs.31.50 per square feet.
The said value fixed by the second respondent was accepted
by the appellant and deficient stamp duty was paid and
pursuant to that the document was released.
3. The first respondent on receipt of intimation from
the District Registrar, Tuticorin on 29.11.2002 about the
payment of deficiency of stamp duty and releasing of the
documents invoked his suo motu power of revision under
Section 47-A(6) of the Act, as he felt that the valuation at
Rs.31.50 per square feet by the second respondent would
result in loss of Revenue to the Government. A show cause
notice dated 19.11.2003 calling upon the appellant to show
cause as to why the value of the land purchased under the
document in question should not be fixed at Rs.295/- per
square feet and the deficient stamp duty collected from the
appellant. In the show cause notice it was brought to the
notice of the appellant that as on 01.04.1999, as per the
guideline register, the guideline value for
Polanaickenpettai District, where the land in question is
situated was Rs.143/- per square feet and as per document
No.560/1999 the value per square feet was Rs.293.29, as on
01.04.2000 the guideline value per square feet was Rs.293.30
and as per document No.548/2000 the market value was Rs.295/-
per square feet. The appellant sent his reply dated
16.07.2001 stating that he purchased the land at Rs.6.27 per
square feet and the land covered by document No.548/2000 is
located in the main road and the said land is a house site
wherein a house is located and the said property is
surrounded by residential houses and the purchaser under the
document has boosted the value of the property to get loan
from Life Insurance Corporation and hence the value
mentioned in the said document cannot be taken as the basis
for fixing the value for the land covered by the document in
question. The appellant further stated that the site and
the building bearing Door No.111 J/1 situated in Town Survey
No.4137/1-A 3A-B has been sold at Rs.22.44 per square feet,
the land purchased by the appellant is provided with 20 feet
wide pathway only and it is located in an interior place
surrounded by an oil mill and a grave yard and as such the
land is not suitable to be used for residential purposes but
the same can be used only as an industrial site.
Thereafter, the first respondent issued various notices
fixing the various dates for personal hearings. The
appellant sent his representations containing the very same
contentions as stated in his reply to the show cause notice.
The appellant appeared for the personal hearing and
reiterated the same contentions put forth in his various
representations. The first respondent by his order dated
20.01.2006 taking into consideration the submissions made by
the appellant, the report submitted by the DIG Registration
and considering the fact that the land in question is
located about 300 feet north and 600 feet east from the new
bus stand on the Tuticorin-Ettayapuram Road, the market
value of the land covered by Document No.372/2000 had been
fixed at Rs.205.50 per square feet, under a reference made
under Section 47-A of the Act and also taking into
consideration that the land in question is situated in an
industrial area and by accepting the recommendation of the
DIG Registration fixed the market value at Rs.160/- per
square feet. Being aggrieved by that, the above appeal has
been filed.
4. Heard Mr. K.R.Thamizhmani learned counsel for the
appellant and Mr.M.Rangarajulu learned Government Advocate
for the respondents.
5. The learned counsel for the appellant made the
following submissions:-
(a) The respondents have not followed the principles
specified under Rule 5 of the Tamil Nadu Stamp (Prevention
of Undervaluation of Instrument) Rules 1968 (hereinafter
referred to as “the Rules”) in determining the market value
of the land in question.
(b) The first respondent ought not to have taken into
consideration the report of the District Registrar,
Tuticorin, dated 12.08.2003 without furnishing the copy
thereof to the appellant.
(c) The first respondent ought to have relied upon the
Inspection Report of the Deputy Inspector General of
Registration as the inspection by DIG Registration was
conducted without notice to the appellant and the copy of
the report was also not furnished to the appellant.
(d) The order of the first respondent does not disclose
the basis on which the Deputy Inspector General of
Registration has fixed the value at Rs.160/- per square
feet.
While elaborating his submissions the learned counsel for
the appellant submitted that in the notices dated 12.07.2005
and 24.08.2005 issued by the first respondent for fixing the
date of personal hearings, the first respondent has not
referred to the report of the DIG Registration dated
12.04.2005. The learned counsel for the appellant further
submitted that the first respondent has not classified the
usage of the land as contemplated in Rule 5(a)(ix) of the
Rules. The learned counsel further submitted that only the
potential value of the land namely as a house site can be
taken into account and even if it is taken so, 1/3rd area
should be deducted for providing roads and 10% should be
deducted towards public purpose but the first respondent has
not done so. According to the learned counsel, under Rule
11-A(c) of the Rules the Deputy Inspector General of
Registration ought to have issued a notice to the appellant
before inspecting the property but since admittedly no
notice was issued, this report should not have been relied
upon by the first respondent and in support of his
contentions the learned counsel relied upon a decision
reported in 1999 (1) M.L.J. 286 (R.Nagarajan Vs. The Revenue
Divisional Officer, Sivakasi, Kamarajar District).
6. Per contra the learned Government Advocate for the
respondents submitted as follows:-
In the document in question itself the property has
been described as “kid epyk;” bounded on the east and west
by compound walls. In all his representations the appellant
has submitted that the property can be used only as an
industrial site and not fit for residential purposes and the
said contention of the appellant was found to be correct by
the DIG Registration on his inspection and the first
respondent has accepted the report of the DIG Registration
and has valued the property in question only as an
industrial site. Therefore, the learned Government Advocate
submitted that the contention of the learned counsel for the
appellant that deduction towards provision of Road and
public purpose etc., should have been made by the first
respondent is fallacious as the property has not been
classified as a residential site. The learned Government
Advocate submitted that the failure on the part of the DIG
Registration to issue notice before inspecting the property
has not caused any prejudice to the appellant as already a
notice of inspection was issued by the second respondent
when he inspected the property. Similarly the learned
Government Advocate submitted that the non-furnishing of the
copy of the DIG’s report to the appellant has not caused any
prejudice to him as he has perused the report at the time of
personal hearing. He further submitted that though the
perusal of the report by the appellant has been specifically
mentioned in the counter affidavit filed by the first
respondent, the same has not been controverted by filing any
reply affidavit and it has not been established as to how
the appellant has been prejudiced by the non-issuing of the
notice or by the non-furnishing of the copy of the report.
He further submitted that the contents of the DIG’s report
except the value suggested therein has been accepted by the
appellant in his various representations. He further
submitted that Section 47-A(8) of the Act only contemplates
that a reasonable opportunity should alone be given and in
this case ample opportunity has been given to the appellant
to put forth his case. He further submitted that the first
respondent has considered all the aspects and has actually
accepted the appellant’s classification of the property
namely as an industrial site and therefore the contention of
the learned counsel for the appellant that the first
respondent has not classified the usage of the land under
Rule 5(a)(ix) of the Rules is not sustainable. The learned
Government Advocate further submitted that a perusal of the
original records discloses that the first respondent had
called for the details relating to the value of the lands
sold in the neighbourhood and also the details of various
proceedings relating to the references made under Section 47-
A of the Act and has also taken into consideration the
percentage of increase in the market value spread over a
period of five years prior to 2000. The Learned Government
Advocate relied upon the decision reported in 2000 (1)
C.T.C. 374 (S.C.) (Duncans Industries Limited Vs. State of
Uttar Pradesh and others) and 2001 (3) C.T.C. 176 (S.C.)
(State of Uttar Pradesh Vs. Harendra Arora) in support of
his contention that unless actual prejudice has been caused
to the appellant, the mere non-furnishing of the report of
the DIG Registration cannot be a ground for interfering with
the order of the first respondent.
7. I have carefully considered the submissions made on
either side, the materials on record and the original file
that has been produced by the learned Government Advocate as
directed by this Court.
8. The various provisions contained in Section 47-A of
the Act provided for the procedure to be followed as to how
the instruments of conveyance etc., which are undervalued
have been dealt with. In this case, we are concerned with
Section 47-A (6) of the Act, which reads as follows:-
“47-A (6) :-
The Chief Controlling Revenue Authority may,
suo motu, call for and examine an 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”.
The explanation to Section 47-A is also relevant and which
reads as follows:-
“Explanation. – For the purpose of this Act,
market value of any property shall be
estimated to be the price which, in the
opinion of the Collector or the Chief
Controlling Revenue Authority or the High
Court, as the case may be, such property
would have fetched or would fetch, if sold in
the open market on the date of execution of
the instrument of conveyance, exchange, gift,
release of benami right or settlement.”
While elaborating the scope of explanation to Section 47-A
of the Act, a learned Judge of this Court in the decision
reported in A.I.R. 1982 Madras 138 (Collector of Nilgiris at
Ootacamund Vs. M/s. Mahavir Planations Pvt. Ltd.,) has
observed as follows:-
“13. …. What the conception of open market
in the Explanation to S. 47-A of the Stamp
Act conveys is that the market value should
be determined on the basis of conditions of
equilibrium and not on the basis of
speculative trends, where by reason of
exercise of economic power on the part of
influential interests in real estate which
wield enormous bargaining authority, prices
of individual properties are either rigged up
or depressed, tending to distort the price
structure. Open market is, in my judgement,
an objective standard which lays down that
the market value to be adopted by the
Collector and the market value which the
parties are required to adopt in their
instruments must be a fair market value in
the sense that there are no economic shackles
or inhibitions of any kind which prevent the
price level from finding its level. Thus,
the conception of open market rules out, at
one end, fancy prices and, at the other end,
distress sales. Economic equilibrium is the
hall-mark of open market”.
In the light of the above said observations the instant case
has to be considered and the fair market value of the
property in question should be fixed.
9. As contended by the learned counsel for the
appellant it is no doubt true that no notice was issued to
the appellant by the DIG Registration before inspecting the
property in question. But as rightly contended by the
learned Government Advocate the appellant has not disputed
the contents of the report of the Deputy Inspector General
of Registration except the value suggested by him. Pursuant
to his inspection the DIG Registration has pointed out that
the property in question can be used only as an industrial
site which actually lends support to the contention of the
appellant. It was the consistent case of the appellant that
the property is fit to be used only as an industrial site
and not fit to be used for residential purposes. Therefore,
in the considered view of this Court, the non-issuance of
notice to the appellant has not caused any prejudice to the
appellant. Though this Court, as seen from the decision
reported in 1999 (1) M.L.J. 286 (referred to supra) has held
that the issuance of notice for inspection is mandatory and
on the ground of non-issuance of notice, this Court had set-
aside the impugned order and remanded the matter back to the
Revenue Divisional Officer to exercise his power under
Section 47-A of the Act, this Court is of the view that, as
pointed out above, no prejudice has been caused to the
appellant, it is not necessary to set-aside the order of the
first respondent on this ground.
10. The Apex Court, while considering the fact of non-
furnishing of report of the enquiry officer to a delinquent
employee in the light of the provisions contained in Civil
Services (Classification Control and Appeal) Rules 1930, in
the decision reported in 2001 (3) C.T.C. 176 (referred to
supra) has observed as follows:-
“23. Thus, from a conspectus of the aforesaid
decisions and different provisions of law
noticed, we hold that provision in Rule 55-A
of the rules for furnishing copy of enquiry
report is procedural one and of a mandatory
character, but even then a delinquent has to
show that he has been prejudiced by its non-
observance and consequently the law laid down
by the Constitution Bench in the case of
ECIL, to the effect that an order passed in a
disciplinary proceeding cannot ipso facto be
quashed merely because a copy of the enquiry
report has not been furnished to the
delinquent officer, but he is obliged to show
that by non-furnishing of such a report he
has been prejudiced, would apply even to
cases where there is requirement of
furnishing copy of enquiry report under the
statutory provisions and/or service rules”.
11. In the decision reported in 2000 (1) C.T.C. 374
(referred to supra) while considering the question of
valuation under Section 47-A of the Act the Apex Court has
observed as follows:-
“15. The question of valuation is basically a
question of fact and this court is normally
reluctant to interfere with the finding on
such a question of fact if it is based on
relevant material on record. The main
objection of the appellant is regard to the
valuation arrived at by the authorities is
that the Collector originally constituted an
Enquiry Committee consisting of the Assistant
Inspector General (Registration), General
Manager, District Industries Centre, Sub-
Registrar and the Tahsildar. After the
report was submitted by the Sub-Committee for
the reasons of its own, the Collector
reconstituted the said Enquiry Committee by
substituting Additional City Magistrate in
place of Sub-Registrar. This substitution of
the Enquiry Committee, according to the
appellant, is without authority of law. We
are unable to accept this contention,
Constitution of an Enquiry Committee by the
Collector is for the purpose of finding out
the true market value of the property
conveyed under the Deed. In this process,
the Collector has every authority in law to
take assistance from such source as is
available, even if it is amounts to
constituting or reconstituting more than one
Committee. That apart, the appellant has not
been able to establish any prejudice that is
caused to it by reconstitution of the Expert-
Enquiry Committee”.
12. Basing reliance upon the above said observations of
the Apex Court, the Learned Government Advocate submitted
that in the instant case the appellant has not established
that any prejudice has been caused to him by the non-
furnishing of the report of the DIG Registration. He
further contended that though it has been specifically
stated by the first respondent in his counter affidavit that
the appellant had actually perused the report of the DIG
Registration at the time of personal hearing the same has
not been controverted by filing any reply affidavit and
therefore it is established that the appellant had actually
perused the report of the DIG Registration. Therefore, if
really the appellant wanted to raise any objections for the
said report, he could have very well done so before the
first respondent in the course of personal hearing. Having
not raised any objections it is not open to the appellant to
contend that the order of the first respondent is vitiated.
The Learned Government Advocate further submitted that the
learned counsel for the appellant is unable to show even
before this Court as to how the appellant was prejudiced by
the non-furnishing of the report. The said contention of
the learned Government Advocate merits acceptance.
13. As pointed out above, the first respondent has
treated the property covered by the document in question as
an industrial site and thereby has accepted the contention
of the appellant and therefore the contention of the learned
counsel for the appellant that the first respondent has not
classified the usage of the property as contemplated under
Rule 5(a)(ix) of the Rules is liable to be rejected.
14. The only remaining question to be considered is as
to whether the fixation of the market value of the property
at Rs.160/- per square feet is based on acceptable material
and whether it reflects the fair price. A perusal of the
original records produced by the learned Government Advocate
shows that the DIG Registration has furnished statistics
relating to the fixation of value in respect of the
properties situated in the same locality. From the
statistics furnished, it is seen that the Special Deputy
Collector (Stamps) Tuticorin had fixed Rs.94.30 per square
feet for 21 documents registered in the year 1999 and
Rs.205.50 for document No.372 of 2000. Considering the
disadvantages pertaining to the property in question as
evidenced from the report of the DIG Registration the first
respondent had not taken into consideration the value
mentioned in Document No.548/2000 and has also not relied
upon the value of Rs.205.50 per square feet as fixed for the
property covered by Document No.372 of 2000. It is not the
case of the appellant himself that property in question is
an agricultural land and as the property has been described
as “kid” which will mean that the property is a building
site the first respondent on the materials on record came to
the conclusion that the properties is not fit for
residential purpose but it is fit only for industrial
purpose accepted the classification of the property as
industrial site as claimed by the appellant and based on the
sales statistics and the recommendation of the DIG
Registration has arrived at the market value of the property
in question at Rs.160/- per square feet.
15. It is pertinent to point out that though the
learned counsel for the appellant contended that the value
fixed at Rs.160/- per square feet for the land in question
is on the higher side, no efforts whatsoever have been taken
by the appellant to produce any contemporaneous document of
conveyance relating to any land situated near the land in
question and which has got similar advantages /
disadvantages. Even during the course of personal hearing,
the appellant could have produced such documents and
convinced the first respondent to fix lesser value for the
land in question. Even before this Court, no such effort
had been taken. Therefore, this Court is of the considered
view that the first respondent has determined the market
value of the land in question on the basis of conditions of
equilibrium and not on the basis of speculative trends and
the first respondent has also taken into consideration the
sales statistics relating to the neighbouring lands and the
ratio of growth of the value of the lands and therefore no
interference is called for. Therefore, it cannot be said
that the value arrived at by the first respondent is not
based on any acceptable materials. Hence, this Court finds
absolutely no reason to interfere with the value fixed by
the first respondent.
16. For the reasons stated above, the appeal fails and
the same is dismissed. However, there will be no order as
to costs. Consequently, the connected CMP is closed.
srk
To
1. The Chief Controlling Revenue Authority-cum-Inspector
General of Registration, Registration Act, Chennai.
2. The Special Deputy Collector (Stamps)
Room No.9, III Floor, District Collectorate,
Korampallam, Tuticorin
3. The Joint Sub Registrar-II, Tuticorin.