BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 12/12/2007 CORAM THE HONOURABLE MR.JUSTICE F.M.IBRAHIM KALIFULLA AND THE HONOURABLE MR.JUSTICE S.PALANIVELU WRIT APPEAL No.307 OF 2005, WRIT APPEAL No.336 OF 2005 1.The Inspector General of Registration, Santhome, Chennai-28. 2.The Sub-Registrar, Srirangam, Trichy District. ... Appellants in both appeals vs 1.M.Gandhimathi 2.M.Gayathri 3.Varadharajan 4.V.Poomathi 5.Rathinam 6.Parameswari ... Respondents in both appeals. Appeals under Clause 15 of the Letters Patent. !For appellants ... Mr.R.Janakiramulu, Spl.Govt.Pleader. ^For respondents ... Mr.K.S.Vamsidhar :JUDGMENT
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.
2. 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, under
Section 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 under Section 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.
3. Much was said about the responsibility of the Registering Authority
under Section 47-A (1) of the Act. In order to have a thorough discussion in
this matter, it is appropriate to extract the provisions under Section 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.”
4. 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.
5. 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.
6. 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.
7. 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
others v. The District Collector, Erode District, and two others, 1998 (III)
CTC 366, 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, under Section 47-A (1), besides sending a communication to the
person, who is liable to pay stamp duty on the instrument in question.
8. 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 others 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-sec.(1) of Sec.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 Sec.47-A (1) does not operate as an engine of oppression
on the plea of under-valuation.”
9. 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 under Section 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 ?
10. 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 :
“38. 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.”
11. 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.
12. 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.
13. 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.
14. 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 under Section
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.
15. 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.
16. 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 under Section 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 under Section 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.
17. 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.
18. 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 under Section 47-A (2).
Also, the second appellant is directed to furnish a copy of this order to the
Special Deputy Collector (Stamps), for compliance.
19. 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.
dixit