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Madhya Pradesh High Court · body

2010 DIGILAW 964 (MP)

Ashok Kumawat v. State of M. P.

2010-09-22

S.C.SHARMA

body2010
ORDER 1. The petitioner before this Court has filed this present petition being aggrieved by the action on the part of the District Registrar (Registration) in nor registering the document in respect of title submitted by the petitioner. 2. The petitioner's contention is that he has purchased the property in question in a public auction conducted by State Bank of Indore under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the Act of 2002') by paying a consideration of Rs. 6,05,000/- and accordingly the documents were presented before the District Registrar (Registration). The grievance of the petitioner is that the District Registrar has not registered the documents in question and on the contrary, proceedings have been initiated under section 47-A of the Indian Stamp Act, 1899 by the Collector of Stamps. The petitioner has relied upon a judgment delivered in the case of V.N. Devadoss v. Chief Revenue Control Officer-Cum-Inspector and others reported in (2009) 7 SCC 438 and his contention is that the market value of the property is, in fact, the value on which the property has been purchased by the purchaser and, therefore, the question of paying more stamp duty does not arise. 3. A reply has been filed in the matter and it has been stated that the matter is pending before the Collector of Stamps under the provisions of Article 47-A of the Indian Stamp Act, 1899 and the Collector is yet to pass a final order in the matter. Respondent/State has further stated that the Collector shall look into the various judgments in case they are brought to the notice of the Collector of Stamps while passing a final order in the matter. 4. Heard learned counsel for the parties at length and perused the record. 5. In the present case, the petitioner before this Court in response to a notice published in Dainik Bhaskar on 12.11.2009 by the State Bank of Indore under the provisions of the Act of 2002 has submitted a tender and in public auction he has offered a sum of Rs. 6,05,000/- and the bid of the petitioner being the highest bid was accepted by the State Bank of Indore and thereafter the sale certificate was issued as contained in annexure P/2 dated 29.12.2009. 6,05,000/- and the bid of the petitioner being the highest bid was accepted by the State Bank of Indore and thereafter the sale certificate was issued as contained in annexure P/2 dated 29.12.2009. The petitioner keeping in view the provisions of the Indian Stamp Act, 1899 has deposited stamp duty to the tune of Rs. 57,475/- and has submitted the documents for registration before the District Registrar (Registration) at Indore on 5.1.2010. In the present case, the reply of the State Government reveals that the Collector of Stamps has initiated proceedings are still pending. Learned counsel for the petitioner has relied upon the judgment delivered by the apex Court in the case of V.N. Devadoss (supra) and paragraphs 13, 14, 15, 16& 18 of the said judgment reads as under:- 13. Sub sections (1) and (3) of section 47-A clearly reveal the intention of the legislature that there must be a reason to believe that the market value of the property which is the subject matter of the conveyance has not been truly set out in the instrument. It is not a routine procedure to be followed in respect of each and every document of conveyance presented for registration without any evidence to show lack of bonafides of the parties to the document by attempting fraudulently to undervalue the subject of conveyance with a view to evade payment of proper stamp duty and thereby cause loss to the revenue. Therefore, the basis for exercise of power under section 47-A of the Act is wilful undervaluation of the subject of transfer with fraudulent intention to evade payment of proper stamp duty. 14. In the instant case, the factual scenario shows that the vendors of the appellant i.e. M/s. Dunlop India Ltd. became a sick industry and was declared so under the provisions of the 1985 Act. Consequent upon such declaration, surplus properties and assets belong to the said Company were disposed of on the basis of orders passed by BIFR and AAIFR by forming an Assets Sales Committee. The appellant submitted that his tender along with others and his offer of Rs. 24.34 crores approximately was the highest, and the same was accepted by the Assets Sales Committee and also by the statutory authorities. The Company was granted permission to execute the sale deed in favour of the appellant. 15. The appellant submitted that his tender along with others and his offer of Rs. 24.34 crores approximately was the highest, and the same was accepted by the Assets Sales Committee and also by the statutory authorities. The Company was granted permission to execute the sale deed in favour of the appellant. 15. The stand of the State is that what has been disclosed is clearly a sale value and the same cannot be termed as market value. There is fallacy in this argument. 16. Market value is a changing concept. The Explanation to sub-rule (5) makes the position clear that (sic market) value would be such as would have fetched or would fetch if sold in the open market on the date of execution of the instrument of conveyance. Here, the property was offered for sale in the open market and bids were invited. That being so, there is no question of any intention to defraud the revenue or non-disclosure of the correct price. The factual scenario as indicated above goes to show that the properties were disposed of by the orders of BIFR and AAIFR and that too on the basis of value fixed by Assets Sales Committee. The view was expressed by the Assets Sales Committee which consisted of members such as representatives of IDBI, debenture-holders, Government of West Bengal and Special Director of BIFR. That being so, there is no possibility of any undervaluation and therefore, section 47-A of the Act has no application. It is not correct as observed by the High Court that BIFR was only a mediator. 18. On the facts of the case it cannot be said that section 47-A has any application because there is no scope for entertaining a doubt that there was any undervaluation. That being so, the High Court's order is clearly unsustainable and is set aside. The registration shall be done at the price disclosed in the document of conveyance. There is no scope for exercising power under section 47-A of the Act as there is no basis for even entertaining a belief that the market value of the property which is the subject matter of conveyance has not been truly set forth with a view to fraudulently evade payment of proper stamp duty. 6. There is no scope for exercising power under section 47-A of the Act as there is no basis for even entertaining a belief that the market value of the property which is the subject matter of conveyance has not been truly set forth with a view to fraudulently evade payment of proper stamp duty. 6. From a bare perusal of the aforesaid judgment, it is evident that for exercise of power under section 47-A of the Stamp Act willful undervaluation of property with fraudulent intention to evade payment of proper stamp duty is a prerequisite. In the present case, there is no such willful undervaluation of property nor there is any fraudulent intention to evade payment of proper stamp duty. Not only this, keeping in view the aforesaid judgment as the property was sold in open market by interested persons, the price on which the property has been sold has to be treated as market value of the property and, therefore, there appears to be no justification on the part of the District Registrar (Registration) in not registering the documents in question. Resultantly, the writ petition is allowed. The proceedings initiated under section 47-A of the Indian Stamp Act, 1899 are hereby quashed. The District Registrar (Registration) is directed to register the document in question in respect of subject of transfer within a period of thirty days from the date of receipt of certified copy of this order.