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2004 DIGILAW 939 (PNJ)

Naresh Kumar v. State of Haryana

2004-08-23

G.S.SINGHVI, MEHTAB S.GILL

body2004
JUDGMENT In this petition, the petitioners have prayed for quashing notice dated 7.2.2001 (Annexure P-1) issued by District Revenue Officer-cum-Collector, Yamuna Nagar (respondent No. 2) under Rule 5(1) of the Haryana Stamp (Prevention of Undervaluation of Instruments) Rules, 1978 (for short, the Rules) and orders dated 4.9.2002 (Annexure P-3) and 25.2.2003 (Annexure P-5) passed by respondent No. 2 and Commissioner, Ambala Division, Ambala (hereinafter described as the Commissioner), respectively under Section 47-A of the Indian Stamp Act, 1899 (for short, the Act). 2. The petitioners purchased five acres of agricultural land situated within the revenue estate of village Radaur, Sub-tehsil Raduar, District Yamuna Nagar vide sale deed No. 57 dated 9.4.1999 for a consideration of Rs. 4,00,000/- (Rs. 80,000/- per acre). They presented the sale deed for registration before Sub Registrar, Yamuna Nagar and paid stamp duty of Rs. 50,000/-. The officer concerned registered the document on that very day without raising any objection, but after a gap of about two years, respondent No. 2 issued notice Annexure P-1 to the petitioners and asked them to produce evidence in regard to value of the property. They filed reply to contest the notice by asserting that respondent No. 2 did not have the jurisdiction to re-assess the value of the property and that the price specified in the sale deed was based on the actual market value. Thereafter, respondent No. 2 passed order Annexure P-3 vide which he determined the value of the property at the rate of Rs. 2,50,000/- per acre and directed the petitioners to deposit additional stamp duty of Rs. 1,06,250/-. The appeal filed by the petitioners under Section 47- A(4) of the Act was dismissed by the Commissioner vide order Annexure P-5. 3. The petitioners have challenged the impugned notice and the orders mainly on the ground of violation of the provisions contained in Section 47-A(2) of the Act and Rule 4 of the Rules. They have averred that no evidence was produced before respondent No. 2 on the issue of market value of the land and he arbitrarily determined the same to be Rs. 2,50,000/- per acre as against Rs. 80,000/- per acre specified in the sale deed. They have averred that no evidence was produced before respondent No. 2 on the issue of market value of the land and he arbitrarily determined the same to be Rs. 2,50,000/- per acre as against Rs. 80,000/- per acre specified in the sale deed. They have further averred that order Annexure P-5 passed by the Commissioner is vitiated due to violation of one of the facets of the rules of natural justice which enjoins every quasi judicial authority to pass a speaking order. 4. In the written statement filed on behalf of respondent Nos. 1 and 2, it has been averred that the determination of the value made by respondent No. 2 is correct and the petitioners do not have the right to challenge the rate fixed by him for the purpose of levy of stamp duty. 5. We have heard learned counsel for the parties. For the purpose of determining the legality of the impugned orders, it will be useful to refer to Section 47-A(1) to (4) of the Act and Rule 4 of the Rules. The same read as under :- "Section 47-A(1) to (4) of the Act 47-A. Instruments under-valued how to be dealt with. - (1) If the Registering Officer appointed under the Registration Act, 1908, while registering any instrument transferring any property, has reason to believe that the value of the property or the consideration, as the case may be, 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 value or consideration, as the case may be, and the proper duty payable thereon. (2) On receipt of 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 value or consideration and the duty as aforesaid and the deficient amount of duty, if any, shall be payable by the person liable to pay the duty. (3) The Collector may suo motu, or on receipt of reference from the Inspector-General of Registration or the Registrar of a district in whose jurisdiction the property or any portion thereof which is the subject-matter of the instrument is situate, appointed under the Registration Act, 1908, shall, within three years from the date of registration of any 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 its value or consideration, as the case may be, and the duty payable thereon and if after such examination, he has reasons to believe that the value or consideration has not been truly set forth in the instrument, he may determine the value or consideration 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 : Provided that the Collector shall, within a period of two years from the date of the commencement of the Indian Stamp (Haryana Amendment) Act, 1973, also be competent to act as aforesaid in respect of the instruments registered on or after the first day of November, 1966 and before the first day of October, 1970. (4) Any person aggrieved by an order of the Collector under sub-section (2) or sub-section (3) may, within thirty days from the date of the order, prefer an appeal before the Commissioner of Division and all such appeals shall be heard and disposed of in such manner as may be prescribed by rules made under this Act. Rule 4 of the Rules Rule 4 - Assessment of Duty. - (1) On receipt of reference under sub-section (1) of Section 47-A, the Collector shall serve on the person or persons concerned a notice in form 1, requiring him on a date and at a place to be specified therein either to attend in person or through an authorised agent to produce or to cause to be produced any evidence on which such person or persons may reply (rely ?) in his support. (2) The Collector, after taking such evidence as the person or persons may produce and after making such enquiry as he may deem proper, shall determine the value of property or consideration as the case may be and assess the amount of deficient duty recoverable from the person concerned. (3) If the person or persons fails or fail to attend in response to the notice served under sub-rule (1), the Collector shall proceed ex parte and assess the deficient amount of duty, if any, to the best of his judgment." An analysis of the provisions reproduced above shows that while sub-section (1) of Section 47-A does not envisage holding of enquiry or giving of opportunity of hearing at the stage of reference, sub-section (2) thereof imposes a mandatory duty on the Collector to hold an enquiry in the manner prescribed by the rules and also give reasonable opportunity of hearing to the parties before making a determination of the correct value of the land or property. This necessarily means that the Collector can determine the value of the property only after giving reasonable opportunity of hearing to the parties and after holding appropriate enquiry. The expression "reasonable opportunity of hearing" has not been defined in the Act or the Rules but, broadly speaking, it means that the party concerned should be given notice of the proposed action and also of the circumstances and evidence available/collected against it and called upon to submit its defence qua the proposed action and/or rebut the evidence sought to be relied upon by the competent authority. In a given case, the party can also ask for an opportunity to adduce evidence to rebut the evidence collected by the competent authority. To put it differently, before passing an order under sub-section (2) of Section 47-A, the Collector is under a duty to hold an enquiry and also give an opportunity to the vendee and the Sub Registrar to project their respective cases on the issue of determination of the value of the land or property which is subject-matter of the deed. He is also required to disclose the evidence collected during the course of enquiry or otherwise and give opportunity to both the parties to support or controvert such evidence. 6. He is also required to disclose the evidence collected during the course of enquiry or otherwise and give opportunity to both the parties to support or controvert such evidence. 6. In the light of the above, we shall now consider whether order Annexure P-3 has been passed after complying with the mandate of Section 47-A(2) of the Act read with Rule 4 of the Rules. A reading of that order shows that after making reference to notice Annexure P-1, reply filed by the petitioners and the evidence produced by the parties on the issue of nature of the land, respondent No. 2 concluded that the land purchased by the petitioners was chahi. This is borne out from the following extracts of order Annexure P-3:- "After hearing the counsel for the vendees in detail and after going through the case file carefully, I have reached to the conclusion that the contention of the vendees is wrong that the land is water logged, because the land is Chahi at the spot and crop has been sown therein. In the Jamabandi for the year 1995-96 this land has been shown as Chahi and a tubewell has also been drafted/registered on the basis of Jamabandi for year 1991-92, whereas on the date when this sale deed was registered, the Jamabandi for the year 1995-96 had already been made and the land was shown as Chahi in the same. Apart from this, in this sale deed the tubewell has also been shown to be sold along with the land. Therefore, it is clear from all these facts that the land is not water-logged but Chahi." After recording the above-mentioned conclusion, respondent No. 2 straight-away held that the sale deed should have been registered at the rate fixed by the Collector i.e. Rs. 2,50,000/- per acre and ordained the petitioner to deposit an additional stamp duty of Rs. 1,06,250/-. 7. In our opinion, the determination of the value of the property made by respondent No. 2 is vitiated by an error of law apparent on the face of the record because instead of adverting to the evidence produced by the parties, respondent No. 2 solely relied on the Collectors rate. 1,06,250/-. 7. In our opinion, the determination of the value of the property made by respondent No. 2 is vitiated by an error of law apparent on the face of the record because instead of adverting to the evidence produced by the parties, respondent No. 2 solely relied on the Collectors rate. In State of Punjab v. Mahabir Singh, 1996(1) Recent Revenue Reports 588 (SC), the Supreme Court interpreted Section 47-A of the Act, as applicable to the State of Punjab and held as under :- "Sub-section (1) of Section 47-A empowers the Registering Officer, while registering any instrument relating to the transfer of any property, if he has reasons to believe that the value of the property or consideration, as the case may be, has not been truly set forth in the instrument, after registering such instrument, to refer the same to the Collector for determination of the value of the property or the consideration, as the case may be, and the proper duty payable thereon. It would, therefore, be clear that the Registering Authority has to satisfy himself that value of the property or the consideration for it has not been truly set forth in the instrument. He may make a reference to the Collector in accordance with the provisions of sub- sections (2) of Section 47-A. Before making reference, he is required to register the document and he is not empowered to withhold the registration. Such a registration, of course, will be subject to the determination of the true market value prevailing in the locality though the value mentioned in the instrument for such registration under sub-section (1) of Section 47-A was not conclusive. The guidelines provided by the State would only serve as prima facie material available before the Registering Authority to alert him regarding the value. It is common knowledge that the value of the property varies from place to place or even from locality to locality in the same place. No absolute higher or minimum value can be pre-determined. It would (be) dependent on prevailing prices in the locality in which the land covered by the instrument is situated. It will be only an objective satisfaction that the Authority has to reach a reasonable belief that the instrument relating to the transfer of property has not been truly set forth or value or consideration mentioned when it is presented for registration. It will be only an objective satisfaction that the Authority has to reach a reasonable belief that the instrument relating to the transfer of property has not been truly set forth or value or consideration mentioned when it is presented for registration. The ultimate decision would be with the Collector subject to the decision on an appeal before the District Court as provided under sub-section (4) of Section 47-A. It would, thus, be seen that the aforesaid guidelines would inhibit the Registering Authority to exercise his quasi judicial satisfaction of the true value of the property or consideration reflected in the instrument presented before him for registration. The statutory language clearly indicates that as and when such an instrument is presented for registration, the Sub-Registrar is required to satisfy himself before registering the document, whether true price is reflected in the instrument as it prevails in the locality, if he is so satisfied, he registers the document. If he is not satisfied that the market value or the consideration has been truly set forth in the instrument, subject to his making reference under sub-section (1) of Section 47-A, he registers the documents. Thereafter, he should make a reference to the Collector for action under sub-sections (2) and (3) of Section 47-A. Accordingly, we hold that the offending instructions are not consistent with sub-section (1) of Section 47-A. It would, therefore, be open to the State Government to revise its guidelines and issue proper directions consistent with law." (Underlining is ours). 8. In Mulakh Raj v. The State of Haryana and others, 2001(1) PLR 377, a Division Bench of this Court of which one of us (G.S. Singhvi, J.) was a member, referred to the provisions of Section 47-A, as applicable to the State of Punjab and Haryana and the judgments of this Court in Chamkaur Singh v. State of Punjab, 1991 PLJ 249 and the Supreme Court in Mahabir Singhs case (supra) and observed as under :- "A perusal of Section 47-A, as inserted by the amendments made by the Legislatures of two States, shows that sub-sections (1) and (2) and first part of sub-section (3) thereof are identical. However, proviso appearing below sub-section (3) of Section 47-A, as applicable to the State of Haryana, is not incorporated in the Punjab amendment and Explanation appearing below sub- section (4) of Section 47-A (as applicable to the State of Punjab) is not embodied in the provision applicable to the State of Haryana and as the decision of the Division Bench in Chamkaur Singhs case (supra) is based on the interpretation of the Explanation appearing below sub-section (1) of Section 47-A (as applicable to the State of Punjab), the same cannot be relied upon for granting a declaration that any reference to or reliance upon the market value determined by the Collector would ipso facto invalidate the order of reference made by the Sub-Registrar under Section 47-A(1) of the 1899 Act (as applicable to the State of Haryana). We are further of the view that in the absence of a provision like the one contained in the Explanation appended to Section 47-A(4) (as applicable to the State of Punjab), the guide-lines issued by the District Collector for determination of the market value of the properties situated in the concerned district in the State of Haryana cannot be regarded as per se violative of the main section. Moreover, in view of the observations made by the Supreme Court in Mahabir Singhs case (supra) that the guide-lines provided by the State Government could serve as prima facie material available before the Registering Authority to alert him regarding the value of the land are sufficient to negate the argument that a mere mention of the market value determined by the Collector would invalidate the order of reference." 9. In the present case, respondent No. 2 determined the value of the property as per the rate fixed by the Collector without giving notice to the petitioners that he proposes to take into consideration the said rate and without considering the evidence produced by them. To put it differently, respondent No. 2 abdicated his discretion, which he was expected to exercise judiciously, to the rate fixed by the Collector and made determination without applying mind to the requirement of Section 47-A(2) of the Act read with Rule 4 of the Rules. In view of the above, we hold that order Annexure P-3 is violative of Section 47-A(2) of the Act and is also vitiated by an error of law apparent on the face of the record. In view of the above, we hold that order Annexure P-3 is violative of Section 47-A(2) of the Act and is also vitiated by an error of law apparent on the face of the record. 10. Coming to the appellate order (Annexure P-5), we find that after making a brief reference to the dispute relating to the value of the property and the contents of the memo of appeal, the Commissioner recorded a bald conclusion that the order passed by respondent No. 3 does not suffer from any infirmity. He did not deal with any of the points raised in the memo of appeal and mechanically endorsed the determination made by respondent No. 3. In our view, such an order is liable to be castigated as a non-speaking order. 11. The requirement of recording of reasons by quasi judicial authorities and communication thereof to the effected person has been treated as an integral part of the concept of fair procedure which even the administrative authorities are required to follow while adjudicating upon the rights of the individuals. The necessity of giving reasons flows from the concept of rule of law which constitutes one of the corner-stones of our constitutional set up. The administrative authorities charged with the duty to act judicially cannot decide the matters on considerations of policy or expediency. The requirement of recording of reasons by such authorities is an important safeguard to ensure observance of the rule of law. It introduces clarity, checks the introduction of extraneous or irrelevant considerations and minimises arbitrariness in the decision making process. Another reason which makes it imperative for the quasi judicial authorities to give reasons is that their orders are not only subject to the right of the aggrieved persons to challenge the same by filing statutory appeal and revision but also by filing writ petition under Article 226 of the Constitution. Such decisions can also be challenged by way of appeal under Articles 136 of the Constitution of India. The High Courts have the power to issue writ of certiorari to quash the orders passed by a quasi judicial authority/Tribunal. Likewise, in appeal the Supreme Court can nullify such order/decision. Such decisions can also be challenged by way of appeal under Articles 136 of the Constitution of India. The High Courts have the power to issue writ of certiorari to quash the orders passed by a quasi judicial authority/Tribunal. Likewise, in appeal the Supreme Court can nullify such order/decision. The power of judicial review can be effectively exercised by the superior Courts only if the order under challenge contains reasons and we cannot countenance a situation in which the administrative authorities vested with the power to decide the rights of the parties may stultify the power of judicial review vested in the Court simply by not recording reasons in support of their decisions or by refraining from communicating such reasons to the affected person. This is the reason why the Courts have insisted on rigorous compliance of the requirement of recording of reasons and communication thereof by every quasi judicial authority - Harinagar Sugar Mills Limited v. Shyam Sunder Jhunhjunwala, AIR 1961 SC 1669; Bhagat Raja v. Union of India and others, AIR 1967 SC 1606; Travancor Rayon Ltd. v. Union of India, AIR 1971 SC 862; Mahabir Prasad Santosh Kumar v. State of U.P., AIR 1970 SC 1302; Woolcombers of India Limited v. Woolcombers Workers Union, AIR 1973 SC 2758; M/s Ajantha Industries and others v. Central Board of Direct Taxes, New Delhi and others, AIR 1976 SC 437; Siemens Engineering and Manufacturing Company of India Limited v. Union of India, AIR 1976 SC 1785; S.N. Mukherjee v. Union of India, AIR 1990 SC 1984; Shanti Prasad Agarwalla v. Union of India, AIR 1991 SC 814; Krishna Swami v. Union of India, AIR 1993 SC 1407 and M.L. Jaggi v. Mahanagar Telephones Nigam Ltd., AIR 1996 SC 2476. In the result, the writ petition is allowed. Orders Annexures P-3 and P-5 are quashed. However, liberty is given to respondent No. 2 to pass fresh order after holding proper enquiry in terms of Section 47-A(2) of the Act read with Rule 4 of the Rules and giving reasonable opportunity of hearing to the parties. Petition allowed.