W.P.(C) NO.8690 OF 2009
In the matter of an application under Articles 226 and 227 of the
Constitution of India.
M/s. Harshpriya Construction (P) Ltd. ....... Petitioner.
Versus.
The Inspector General of Registration,
Orissa, Cuttack & Others ........... Opp.parties
For petitioner : M/s. S.S. Das & Sandipani Mishra
For opp. parties : Additional Government Advocate
AND
CONTC NO.963 OF 2009
M/s. Harshpriya Construction (P) Ltd. ....... Petitioner.
Versus.
T.M.S. Suguna, the Inspector General of
Registration, Orissa, Cuttack ........... Opp.party
For petitioner : M/s. S.S. Das & Sandipani Mishra
For opp. parties : Additional Government Advocate
PRESENT
THE HON'BLE SHRI ACTING CHIEF JUSTICE I.M.QUDDUSI
AND
THE HON'BLE SHRI JUSTICE B.K.NAYAK
--------------------------------------------------------------------------------------
Date of hearing : 03.11.2009 : Date of judgment: 23.03.2010
B.K.NAYAK, J. The short question that arises for consideration in this writ
application is whether the Registering Officer under the Indian
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Registration Act can retain possession of the original registered
instrument (sale deed) where it raises a dispute in terms of Section 47-A
of the Indian Stamp (Orissa Amendment) Act with regard to the stamp
duty payable on such instrument.
2. The facts leading to the formulation of the aforesaid question
have been depicted in the writ petition as follows:
The petitioner, a private limited company registered under the
Companies Act, represented through its Director carries on business of
development of land and construction of apartments. For the purpose of
its business, the petitioner purchased a piece of Sarad non-irrigative
variety of land measuring Ac.0.927 dec. pertaining to Sabik Plot No.1807
and Sabik Khata No.507 of Mouza Gadakana under Bhubaneswar
Tahasil of Khurda district corresponding to Mutation Plot No.3803 and
Mutation Khata No.1053/29, which further corresponds to Not Final
Settlement Drat Khatiyan Plot No.1558 under Not Final Settlement Draft
Khatiyan Khata No.3077, from the recorded owner by virtue of sale deed
no.8927 which was registered before the District Sub-Registrar,
Khurda(opposite party no.2) on 06.08.2007. The consideration money for
the land as set forth in sale deed is Rs.30.00 lakhs, which is the prevalent
market value of the land in question, and the petitioner-purchaser paid
the required stamp duties and registration fees on such value of the land.
Even after the registration when the registered sale deed was not
returned, on enquiry the petitioner was informed that the valuation of the
land mentioned in the sale deed as well as the stamp duties and
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registration fees paid thereon are much less and, therefore, the petitioner
was required to pay the deficit stamp duties and the registration fees after
the matter of under valuation was adjudicated by the competent
authority. The petitioner was also informed that only after payment of
deficit stamp duties and registration fees, the original sale deed shall be
returned to the petitioner. It is further stated that the valuation set forth
in the sale deed exceeds Rs.1.00 lakhs and, therefore, as per the
notification dated 31.05.2002 of the State Government in the Revenue
Department, the Inspector General of Registration (opposite party no.1) is
competent to act as the Stamp Collector under Section 47-A of the Stamp
Act and adjudicate the dispute. The petitioner, however, received notice
from opposite party no.2, the District Sub-Registrar, Khurda, a year after
registration of the instrument calling upon the petitioner to appear before
him on 18.7.2008 and to answer the claim of Rs.12,04,747/- payable
towards deficit registration fees and stamp duties on the instrument in
question. Having not received the original registered instrument, the
petitioner is not in a position to carry on his business and also is unable
to avail loans from the Banks. Finding no other way, the petitioner
enquired from the office of opposite party no.1 about the pendency of
undervaluation proceeding and also filed necessary objection along with
some documents as well as an application for release of the original sale
deed, but opposite party no.1, being in charge of a number of posts has
not yet considered the objection and application of the petitioner.
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3. It is contended on behalf of the petitioner that provision of
Sub section (2) of Section 61 of the Registration Act casts a statutory duty
on the Registering Officer to return the original instrument immediately
after completion of registration and that the mere initiation of a
proceeding under Section 47-A of the Stamp Act for the purpose of
adjudication of the payability of any further stamp duty and registration
fees does not entitle the Registering Authority to retain possession of the
original registered instrument.
The petitioner, therefore, seeks a direction to the opposite
parties to return his original sale deed and to quash the notice under
Annexure-1.
4. The opposite parties have filed two counter affidavits
contending inter alia that soon after the registration of the sale deed it
was found that the instrument was prima facie undervalued and,
therefore, the proceeding under Section 47-A of the Stamp Act has been
initiated and the case was referred to the I.G.R. (opposite party no.1) for
adjudication and notice under Annexure-1 has been issued to the
petitioner in accordance with the procedure prescribed under the Orissa
Stamp Rules, 1952. It is also stated that as per Rules 28 and 29 of the
said rules, the instrument, which has been referred to the Stamp
Collector under Section 47-A of the Stamp Act, shall be returned with the
order of the Collector to the Registering Officer. The opposite parties,
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therefore, cannot be said to have withheld or retained the instrument
illegally.
5. Section 61(2) of the Registration Act, 1908 casts obligation on
the Registering Officer to return the Registered instrument to the person
concerned on completion of registration whereas Section 47-A of the
Stamp (Orissa Amendment) Act speaks about reference of a dispute by
the Registering officer to the Stamp Collector when he has reason to
believe that the market value of the property which is the subject matter
of such instrument has not been truly set forth in the instrument. For
better appreciation, Section 47-A of the Stamp (Orissa Amendment) Act is
quoted hereunder :
“47-A. Instruments under-valued how to be
dealt with-(1) where the registering officer under
the Registration Act,16 of 1908, while registering
any instrument of conveyance, exchange, gift,
partition or settlement has reason to believe that
the market value of the property which is the
subject-matter of such instrument has not been
truly set forth in the instrument, he may, after
registering such instrument, refer the matter 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 an opportunity of making their
representations and after holding an inquiry in
such manner as may be prescribed by rules
made under this Act, determine the market
6value of the property which is the subject matter
of such instrument, and the duty as aforesaid
and the deficient amount, if any, shall be
payable by the person liable to pay the duty.
(2-A) The Collector may suo motu within
two years from the date of registration of such
instrument examine the instrument, 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 such instrument and the duty
payable thereon and if, after such examination
he has reason to believe that the market value of
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), and the deficient amount of
duty, if any, shall be payable by the person
liable to pay the duty.
(3) Any person, aggrieved by an order of the
Collector under Sub-section (2) or Sub-section
(2-A), may, within thirty days from the date of
the order, prefer an appeal before the District
Judge and all such appeals shall be heard, and
disposed of in such manner as may be
prescribed by rules made under this Act.”
6. Similar question came up for consideration before the Kerala
High Court in the case of Periyar Real Estates and etc. v. State of
Kerala and others, etc; AIR 2002 Kerala 248. Relevant provisions of
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Section 45-B of the Kerala Stamp Act, 1959 which are similar to the
provisions of Section 47-A of the Stamp (Orissa Amendment) Act., were
considered vis-à-vis the provisions of Section 61 (2) of the Registration
Act. Analysing the different provisions of both the Acts., the Kerala High
Court held that if there is a dispute as to the stamp duty payable on the
instrument subject to registration, after registration of the instrument,
the registering authority is not entitled to retain possession of the
original document under Section 45-B of the Kerala Stamp Act. By reason
of Section 61(2) of the Registration Act, 1980, it is obliged to return the
document and thereafter take appropriate proceedings under Section 45-
B of the Kerala Stamp Act for adjudication and recovery of the under paid
duty. One of the grounds which found favour with the Kerala High Court
to take the aforesaid view is that the expression ‘reference’ used in
Section 45-B of the Kerala Stamp Act means the sending of the matter for
decision or consideration to some authority, and it does not require
sending of the document itself. It was also reasoned that sending of the
original instrument to the Stamp Collector was not at all necessary for
deciding the claim of undervaluation.
7. Sub Section (1) of Section 47-A of the Stamp (Orissa Amendment)
Act specifically uses the expression “refer the matter” and does not speak
of referring or sending the instrument itself to the Collector. The aforesaid
decision of the Kerala High Court was relied upon by this Court in exactly
a similar matter vide order dated 30.01.2003 passed in O.J.C. No.472 of
2001 and we do not find any reason to differ from the aforesaid view.
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8. Reliance has been placed by the opposite parties on the provisions
of Orissa Stamp Rules, 1952. Chapter-V of the Rules (Rules 23 to 36)
deals with the procedure to be followed in the matter of reference under
Section 47-A of the Stamp (Orissa Amendment) Act. Rule 23 only
reiterates the provision of Sub-section (1) of Section 47-A of the Act using
the expression “refer the same”, and at a later stage states that while
referring the document to the Collector, the facts and circumstances that
prompted the Registering Officer to come to the belief that the property,
has been undervalued, shall be fully and clearly stated. As a corollary to
the second part of the Rule 23, Rule 28 only speaks about how the
instrument which has been referred to the Collector under Section 47-A
shall be dealt with after the Collector adjudicates the question of
undervaluation. Since the provision of the Act, viz. Section 47-A, does not
speak of reference of the instrument itself to the stamp Collector and, on
the other hand, it is obligatory on the part of the Registering Officer, as
per provision of Section 61 (2) of the Registration Act, to return the
registered instrument, the provision of the Rules cannot override the
provision of the Act.
9. On the aforesaid analysis, we hold that neither the Registering
Officer nor the Stamp Collector in exercising jurisdiction under Section
47-A of the Act is legally entitled to retain possession of the instrument
(sale deed) of the petitioner. They are legally obliged to return the same. It
is apparent that interim order was passed in this writ petition on
29.6.2009 directing the opposite parties to return the registered sale deed
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in question to the petitioner subject to further orders to be passed in the
writ petition. We, therefore, direct that the instrument (sale deed) in
question which has not yet been returned to the petitioner in pursuance
to the interim order dated 29.06.2009 be returned within ten days from
the date of communication of this order or production of a certified copy
thereof, which ever is earlier.
10. The notice at Annexure-1 does not appear to be one to
answer the claim under Section 47-A of the Act, as admittedly, it has
been issued by the District Sub-Registrar, Khurda styling himself as the
Stamp Collector and directing the petitioner to appear before him, though
admittedly the proceeding is pending before the Inspector General of
Registration, Orissa (opposite party no.1). Further, the notice is not in
Form No.1, as required by Rule 24(1) of the Rules. We, therefore, quash
the notice under Annexure-1 and direct opposite party no.1, the Stamp
Collector, to issue appropriate notice to the petitioner within 15 days from
the date of communication of this order and thereafter dispose of the
undervaluation proceeding expeditiously.
The writ petition is accordingly allowed in the light of the
aforesaid directions.
11. The CONTC No.963 of 2009 is also disposed of in view of the
order passed in the writ petition. There shall, however, be no order as to
costs.