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2000 DIGILAW 526 (CAL)

Swastik Projects (P) Ltd. v. State of West Bengal

2000-09-29

ASOK KUMAR GANGULY

body2000
JUDGMENT A. K. Ganguly, J. The subject matter of challenge in this writ petition is an order dated 17th May, 1999 passed by the Commissioner, Presidency Division as an appellate authority under section 47A(5) of the Indian Stamp (West Bengal Amendment) Act, 1990. By the said order, the authority had made a determination of market value of the premises No. 40, Shakespeare Sarani, Calcutta-17 (hereinafter called the said property). 2. The short facts of the case are that vide conveyance dated 30th December, 1995 the petitioner and the proforma respondents No.5, 6 and 7 jointly purchased the said property for a consideration of Rs. one crore which according to the petitioner was the correct market value of the said property. Accordingly, the petitioner paid the stamp duty. The value mentioned in instrument was also paid being the consideration mentioned in the said conveyance. 3. On 30th December, 1995, the said conveyance was presented before the Additional Registrar of Assurances-II, Calcutta for registration in the prescribed form and after obtaining no objection certificate. The registering officer, however, was of the view that the true market value of the said property has not been mentioned in the deed of conveyance and called upon the petitioner to make payment of the deficit stamp duty. On reassessment, the market value of the premises was determined by the Registrar at Rs. 2,95,39,250/-. 4. As the petitioner refused to pay the stamp duty on the determined market value by the Additional Registrar of Assurances-II, Calcutta, the said Registering Officer invoked the provisions of section 47 A of the Indian Stamp Act, and the provisions of West Bengal (Prevention of Under Valuation of Instruments) Rules, 1994 (hereinafter referred to as P.U.V.I. Rules, 1994). 5. The deed was then provisionally registered and was forwarded to the 3rd respondent for determination of market value of the said property under section 47 A (2) of Stamp Act, (hereinafter referred to as the said Act). 6. By an order dated 22nd January, 1998 the 3rd respondent determined the market value of the said property at Rs. 2,57,40,000/-. 7. Challenging the order dated 22nd January, 1998 the petitioner preferred an appeal under section 47A(4) of the said Act before the 2nd respondent. 8. 6. By an order dated 22nd January, 1998 the 3rd respondent determined the market value of the said property at Rs. 2,57,40,000/-. 7. Challenging the order dated 22nd January, 1998 the petitioner preferred an appeal under section 47A(4) of the said Act before the 2nd respondent. 8. By an order dated 12th June, 1998, the 2nd respondent set aside the order dated 22nd January, 1998 passed by the 3rd respondent and remanded the matter to the 3rd respondent for fresh determination of the market value of the said property. 9. By an order dated 23rd July, 1998 the 3rd respondent again determined the market value of the said property at Rs. 2,40,79,000/- afresh. The said order was again challenged by the petitioner by filing another appeal. 10. Even though the petitioners are aggrieved by the order dated 23rd July, 1997, the petitioner and the respondent Nos. 5,6 and 7 paid the deficit stamp duty, allegedly under protest. 11. The appeal was filed before the 2nd respondent. Then came the order dated 17th May, 1999 passed by the 2nd respondent rejecting the appeal filed by the petitioner and upholding the order dated 23rd July, 1998 passed by the 3rd respondent. Learned counsel appearing for the petitioners challenged the said appellate order on various grounds. 12. It was of course, made clear by the reamed counsel that he was not challenging the vires of the provisions of law under which the impugned appellate order has been passed. 13. The learned counsel also made it clear that he is not urging that the appellate authority had no jurisdiction to hear the appeal. It is not also his case that the appellate authority, while exercising the jurisdiction acted in breach of the principles of natural justice. But the primary challenge to the impugned order is that the appellate authority, while acting in exercise of his statutory power, has acted disregarding the statutory provisions and has, therefore, acted unreasonably and in that sense acted without jurisdiction. 14. The learned counsel elaborated this submission by saying that when a statutory authority, being set-up under a particular statute, acts in a manner which is demonstrably against the statutory provision, such action of the statutory authority is 'per se' unreasonable and can also be categorised as being passed without jurisdiction. Such an action ought to be interefered with by this Hon'ble Court in exercising its jurisdiction under certiorari. Such an action ought to be interefered with by this Hon'ble Court in exercising its jurisdiction under certiorari. 15. The learned counsel further submitted that in this case, the appellate authority does not have unlimited discretion in the matter of deciding an appeal. His discretion is a guided one in view of the provisions under the relevant rules. Those guidelines under the rules must be strictly adhered to. The learned counsel also submitted that in exercising his discretion the appellate authority can not function in such a way as to render a part of the statutory provision otiose. 16. The learned counsel submitted that the appellate authority while exercising its discretion must confine himself within the parameters of Rule 3 sub-rule( 1) of the said rules. 17. For better appreciation of the arguments of the learned counsel, Rule 3 sub-rule(l) of P.U.V.I Rules is set out here: "Rule 3. Manner of determination of market value and furnishing of particulars relating to any property.- (1) The market value within the meaning of clause (16B) of section 2 in relation to any land or any land with building shall, after taking into consideration the particulars referred to in sub-rule (2) be determined on the basis of the highest price for which sale of any land, or any land with building, of similar nature and area, in a comparable locality, has been negotiated and settled during the five consecutive years immediately preceding the date of execution of any instrument setting forth such market value, or on the basis of any court decision, information, report or record that may be available from any court or any officer or authority of the Central Government or the State Government or any local authority or local body, or on the basis of consideration stated in such instrument for the sale of such land or land with building, whichever is greater." 18. Drawing the attention of this Court to the said rules, the learned counsel assaled that portion of the impugned order whereby the appellate authority approved the order of the Collector. In passing the original order, the Collector took into consideration the valuation of two premises for the purpose of assessing the valuation of the said property. Those two premises are at 8/3, U.N. Brahamachari Sarani and the other is at 6A, A.J.C. Bose Road. 19. In passing the original order, the Collector took into consideration the valuation of two premises for the purpose of assessing the valuation of the said property. Those two premises are at 8/3, U.N. Brahamachari Sarani and the other is at 6A, A.J.C. Bose Road. 19. The learned counsel further submitted that the valuation in respect of the premises' at 6A, A.J.C. Bose Road cannot be taken into consideration inasmuch as the valuation is determined in 1997-98 which is of years later than the year of transaction of the said property. Admittedly the transaction in respect of the said property took place in December 1995 and under the PUVI Rules, annual valuation of property in a comparable locality within five consecutive years immediately preceding the date of execution can be taken into account. Therefore, the value of the property at 6A, A.J.C. Bose Road must go out of consideration in view of provision under the statutory rules. In so far as, property at 8/3, U.N. Brahamachari is concerned, the objection of the learned counsel is that the valuation of the said property which has been considered by both the original and appellate authority is an adjudicated value and not either the settled or the negotiated value. Under the provision of PUVI Rules, the authorities can only take into consideration the settled or negotiated value and not the adjudicated value. Therefore, the submission is that mandate of the rules has been ignored here also. The learned counsel urged that the order of appellate authority having been passed ignoring the mandate of the law, it must be quashed in the certiorari jurisdiction of this Court. The learned counsel repeatedly urged that taking into account adjudicated value of the said property falls outside the parameters of statutory guidelines given under Rule 3(1) of the PU VI Rules. 20. The learned counsel of course, has not urged that of the property at U.N. Brahamachari Sa rani is not a property in a comparable locality. Nor has he urged that the transaction in respect of the said property at U.N. Brahamachari Sarani was of a year which does not come within the parameters of five consecutive years immediately before proceeding the date of execution of the instrument in question. Nor has he urged that the transaction in respect of the said property at U.N. Brahamachari Sarani was of a year which does not come within the parameters of five consecutive years immediately before proceeding the date of execution of the instrument in question. But his sole attack was against accepting adjudicated value of the property at U.N. Brahamachari Sarani as a guidance for determination of the value of the said property which is in question. 21. In this connection, the learned counsel for the petitioner has drawn the attention of this Court to the definition of market value which is given under section 16(B) of the said Act as amended by the West Bengal Act, XVII of 1990. The said definition is set out below: '(16B) "market value" means, in relation to any property which is the subject-matter of an instrument, the price which such property would have fetched or would fetch if sold in open market on the date of execution of such instrument as determined in such manner and by such I authority as may be prescribed by rules made under this Act or the consideration stated in the instrument, whichever is higher.' 22. Considering the definition of market value this court finds, that the question which should be kept in mind by the authorities for determining the value of the property in question is the price which the property would fetch or would have fetched if sold in the open market on the date of execution of the instrument. Therefore, going by the said definition, the court finds that the authroity should not taken into account the value of the property at A.J.C. Bose Road inasmuch as in respect of the said property the adjudicated value was of 1997-98 which is after the date of execution of instrument in respect of the said property. 23. It also appears from discussion made in the order of the appellate authority that the objection on this ground raised by the writ petitioners before the appellate authority was considered and accepted by the said authority. Therefore, it cannot be said that the appellate authority did not take into account the said argument raised on behalf of the petitioners on that score. But the appellate authority considered this aspect by not accepting the value of the property at A.J.C. Bose Road. Therefore, it cannot be said that the appellate authority did not take into account the said argument raised on behalf of the petitioners on that score. But the appellate authority considered this aspect by not accepting the value of the property at A.J.C. Bose Road. This aspect of the consideration in the impugned order will appear from the following extracts: "The ld. Collector, therefore, in his order dated 23.7.98 had rightly taken up cases where actual transaction of land had taken place in the same ward. For instance, the ld. Collector had picked up two cases in the same Municipal Ward in close proximity to the property involved in this case-one at Dr. U.N. Brahamachari Sarani and another' at Acharya Jagadish Chandra Bose Road in both of which actual transactions did take place. The appellant has contended that the property at Dr. U.N. Brahamachari Sarani related only to a partition deed. But on my personal verification of records I find that it was a conveyance-cum-partition deed and, therefore, transaction of property had actually taken place. With regard to the second property the transaction took place after the transaction of property in this appeal. Thus even if the appellant's contention is accepted with regard to the second case the property located at Dr. U.N. Brahamachari Sarani the value of which was Rs. 13.20 lakhs per cottah. can surely be taken into consideration because actual transaction had taken place in this case." 24. The underlined protions in the order of this 2nd respondent show that the aforesaid consideration was made. The learned counsel appearing for the respondent has, however, supported the valuation made by the 2nd respondent and submitted that the 2nd respondent has acted clearly in terms of the PU VI Rules. 25. The learned counsel further submitted that under the provisions of the said rules, the 2nd respondent can take into consideration the adjudicated value of the property and by taking the adjudicated value no error has been committed by the 2nd respondent. 26. The learned counsel also submitted that the property in respect of which valuation has been taken into account is a property in an adjoining areas. There- fore, the 2nd respondent has acted in proper exercise of his discretion and authroity and there is no reason why this court should interfere. 27. These are the rival contentions of the parties. 26. The learned counsel also submitted that the property in respect of which valuation has been taken into account is a property in an adjoining areas. There- fore, the 2nd respondent has acted in proper exercise of his discretion and authroity and there is no reason why this court should interfere. 27. These are the rival contentions of the parties. It is obvious that in deciding disputes about valuation, the court was to keep in mind the particular purpose of the statute which requires determination of valuation and the nature of the property whose value has to be determined. In such a situation the qualitative and quantitative principles of valuation may differ from statute to statute. It is obvious that the approach would differ according to the nature of the statute namely whether it is a fiscal statute or a non-fiscal statute. There cannot be any straitjacket approach in such a matters. 28. In such a situation what the court has to see is whether the authorities in exercise of its discretion in deciding the valuation has acted reasonably and within the four corners of the statute. 29. "Valuation", it has been said long ago, by Viscount Simon in the case of Gold Coast Selection Trust Ltd. vs. Humprey (Inspector of Taxes), reported in 1948 Appeal Case, page 459 at page 478, "is an art, not an exact science. Mathematical certainty is not demanded, nor indeed it is possible." 30. The learned counsel also did not urge that valuation must be made with mathematical precision. So this broad principle in matters of valuation has been accepted by the learned counsel. 31. Now construing Rule 3(1) of P.V.V.I. Rules, this court finds that adjudicated value of a property in a comparable locality can be the basis of valuation by an authority who is exercising his power under the said rule. 32. So this broad principle in matters of valuation has been accepted by the learned counsel. 31. Now construing Rule 3(1) of P.V.V.I. Rules, this court finds that adjudicated value of a property in a comparable locality can be the basis of valuation by an authority who is exercising his power under the said rule. 32. The said rule provides that market value of a property as defined under clause (16B) of section 2 of Indian Stamp Act can be determined either (i) on the basis of the highest price for which any property of similar nature and area in a comparable locality has been negotiated or settled during the five consecutive years immediately before the date of execution of any instrument setting forth the market value or (ii) on the basis of any court decision/information/ report/that may be available from any court/officer/authority of the Central Government/State Government etc. or (iii) on the basis of consideration stated in such instrument for the sale of such property and whichever is greater. 33. Therefore, on a careful reading of the aforesaid provision it is clear that the authority can adopt anyone of the guidelines for the purpose of valuation which shows and adopt the one greater value of the property. 34. Therefore, this court cannot hold if the authority adopts the adjudicated value of a property in a comparable locality within the time limit prescribed under the said provisions as a guidance for termination of the valuation of the said property that the authority has acted unreasonably. Nor can the court hold that acceptance of the adjudicated value of the property amounts to acting beyond the statutory parameters. Therefore, this submission of the learned counsel for the petitioner that the authority acted in violation of the statutory mandate is not acceptable to this court. 35. The learned counsel for the petitioners has referred to two decisions in order to contend that if the authority proceeds to value the property on the basis of adjudicated value of a property in a comparable area, in that case the other limb of the provision, namely, the direction to accept negotiated or settled value, becomes otiose. The learned counsel submitted that no statute should be so read as to render a part of its otiose or a surplusadge. 36. The first decision on which learned counsel relied in the case of Rajendra Prasad Yadav and Ors. The learned counsel submitted that no statute should be so read as to render a part of its otiose or a surplusadge. 36. The first decision on which learned counsel relied in the case of Rajendra Prasad Yadav and Ors. vs. State of Madhya Pradesh and Anr., reported in 1997 (6) SCC page 678. That was a case relating to the election of the co-operative society. In that context Justice Ramaswamy (as His Lordship then was) held that the Act and rules and by-laws of the society constitute an integral scheme for the purpose of management of the society and they must be read as a whole and harmoniously and no part thereof should be rendered otiose or a surplusadge. There can be no dispute with this proposition. But in the instant case when the rule clearly authorises the authority to adopt either of the method of valuation as pointed out above and the authority chooses one of the indicated methods, it cannot be said that other methods indicated in the rule have become otiose. Therefore, the ratio in the case of Rajendra Prasad (supra) is of no assistance to the points urged by the learned counsel for the petitioners. The second case cited was in the case of Davis vs. Sebastian, reported in 1999 (6) SCC page 604. The same was a case relating to rent control and eviction under Kerala Buildings (Lease and Rent Control) Act. In the said decision two expressions namely "additional accommodation" and "Personal use" came up for consideration. While construing those two expressions the learned Judges held that words in a statute must be given their natural and ordinary meaning. Nothing should be added to them, nor should they be treated as otiose. This court respectfully agrees with these observations which are unexceptionable. But unfortunately those observations have no relevance to the facts of this case. 37. Now the last question remains whether by approving the value of land at Rs. 13.50 lakhs at Sheakespeare Sarani, a very prime locality in the city of Calcutta, the appellate authority has acted unreasonably. It may be that even while acting within four corners of the statute an authority may arrive at a conclusion which is wholly unreasonable and in such a situation, the writ court can interfere. 13.50 lakhs at Sheakespeare Sarani, a very prime locality in the city of Calcutta, the appellate authority has acted unreasonably. It may be that even while acting within four corners of the statute an authority may arrive at a conclusion which is wholly unreasonable and in such a situation, the writ court can interfere. This is in accordance with the common law doctrine that an authority exercising discretion under a statute must act reasonably. 38. There is a plethora of precedents on the question what can be termed as an unreasonable decision of a statutory authority. It may be possible that within the well known legal frontiers there may be two radically different opinions and both of which may be reasonable. This may be so because the concept of unreasonableness covers a wide field of legal doctrine-the law of tort, the law of contract and presently the ever widening field of administrative law. But the standards of reasonableness in the filed of tort and that of administrative law is different. Professor Wade (Administrative Law, 6th Edition, page 407) has put it thus: "This is not therefore the standard of 'the man on the Clapham omnibus'. It is the standard indicated by a true construction of the Act which distinguishes between what the statutory authority mayor may not be authorised to do so. It distinguishes between proper use and improper abuse of power. It is often expressed by saying that the decision is unlawful if it is one to which no reasonable authority could have come. This is the essence of what is now commonly called 'Wednesbury unreasonableness', after the now famous case in which Lord Greene MR expounded it." 39. This has been approved by the Supreme Court in G. B. Mahajan vs. Jalgaon Municipal Council, reported in AIR 1991 Supreme Court page 1153 at page 1164. 40. Standards of unreasonableness is pitched very high in the field of administrative law. It must be "so absurd that no sensible person could ever dream that it lay within the powers of the authority". This is the dictum which has been formulated by Lord Greene in his celebrated decision in Associated Provincial Picture House Ltd. vs. Wednesbury Corporation, reported in 1948(1) Kings Bench page 223 at page 229. This known in administrative law as Wednesbury reasonableness. There are other famous formulations also. This is the dictum which has been formulated by Lord Greene in his celebrated decision in Associated Provincial Picture House Ltd. vs. Wednesbury Corporation, reported in 1948(1) Kings Bench page 223 at page 229. This known in administrative law as Wednesbury reasonableness. There are other famous formulations also. In the Tameside case (Secretary of State for Education and Science vs. Tameside Metropolitan Borough Council, reported in 1977 Appeal Cases 1014 at page 102526, Lord Denning elaborated it thus: "No one can properly be labelled as being unreasonable unless he is not only wrong but unreasonably wrong, so wrong that no reasonable person could sensibly take that view." 41. In the decision of the Council of Civil Services Unions vs. Minister for the Civil Services, reported in 1985 Appeal Cases 374 at 410, Lord Diplock had phrased it as "So outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it". Lord Scarman in Nottinghumshire Country Council and the Secretary of State for Environment, reported in 1986 Appeal Cases page 240 at page 247, pointed out that on grounds of unreasonableness court can interfere in a situation which shows that the conclusions are so absurd as to suggest that authorities "must have taken leave of his senses". 42. Going by these well established norms, this court does not find that the exercise of discretion by the authority in the instant case can be termed unreasonable. 43. Bad faith or mala fide has not been even alleged in this case against the authorities. So, the reasons stated above, this court finds that no permissible ground for interference in its certiorari jurisdiction has been made out. 44. This writ petition is therefore, dismissed and there will be no order as to costs. Writ petition dismissed.