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2018 DIGILAW 1480 (ALL)

RAJ KUMAR BHARDWAJ v. STATE OF U. P.

2018-07-05

SALIL KUMAR RAI

body2018
JUDGMENT Hon’ble Salil Kumar Rai, J.—Heard Shri Sumit Daga, learned counsel for the petitioner and learned Standing Counsel representing respondent Nos. 1, 2 and 3. 2. The petitioner purchased Plot Nos. 447/2(M), 448/2, 449, 450, 451(M), 414(M), 508/1, 509/2, 511/2, 512/3, 519/2 and 518/1 (area 0.61330 hectares) through sale-deed dated 20.4.2012. Spot inspection was conducted on 14.5.2012 by the Additional Commissioner (Stamp) and Deputy Registrar, District-Meerut, who submitted a report dated 30.5.2012 stating that the said sale-deed was insufficiently stamped and the deficiency in the stamp duty was reported to be Rs. 3,70,780/-. The aforesaid deficiency was calculated on the basis that the plots purchased through the sale-deed dated 20.4.2012 were situated on a link road and were within 200 meters of abadi area. On the aforesaid report, Case No. 47/V/138/2012-13 was registered before the District Magistrate/Collector, Meerut under Section 47-A of the Indian Stamp Act, 1899 (hereinafter referred to as, ‘Act, 1899’) and a notice was issued to the petitioner, who submitted his reply stating that the report was incorrect and also denied that the plots referred in the sale-deed dated 20.4.2012 were situated on a link road. In the aforesaid case, petitioner also filed an application dated 4.10.2012 praying that the Collector may call a fresh report after getting the property inspected. However, the Collector, Meerut vide his order dated 22.11.2012 disposed of Case No. 47/V/138/2012-13 without deciding the application dated 4.10.2012 filed by the petitioner. In his judgement and order dated 22.11.2012, the Collector, Meerut calculated the deficiency in stamp duty as Rs. 98,840/- and imposed a penalty of Rs. 18,968/- on the petitioner. The order dated 22.11.2012 was passed by the Collector, Meerut relying on the report of the Additional Commissioner (Stamp) and Deputy Registrar, District-Meerut wherein it was reported that the plots were situated on a link road and were within 200 meters of abadi area. Against the order dated 22.11.2012 passed by the Collector, Meerut, petitioner filed an Appeal before the Additional Commissioner, Meerut Region, Meerut, which was numbered as Appeal No. 22/2012-13. The aforesaid appeal was dismissed by the Appellate authority vide its order dated 28.2.2013. The judgements and orders dated 22.11.2012 and 28.2.2013 have been challenged in the present writ petition. 3. Against the order dated 22.11.2012 passed by the Collector, Meerut, petitioner filed an Appeal before the Additional Commissioner, Meerut Region, Meerut, which was numbered as Appeal No. 22/2012-13. The aforesaid appeal was dismissed by the Appellate authority vide its order dated 28.2.2013. The judgements and orders dated 22.11.2012 and 28.2.2013 have been challenged in the present writ petition. 3. It was argued by learned counsel for the petitioner that the correctness of report dated 14.5.2012/30.5.2012 submitted by the Additional Commissioner (Stamp) and Deputy Registrar, District-Meerut, on which Case No 47/V/138/2012-13 was registered under Section 47-A of the Act, 1899 was disputed and contested by the petitioner, and therefore, the petitioner had filed an application dated 4.10.2012 for inspection of the properties and the Collector, Meerut could not have decided Stamp Case No 47/V/138/2012-13 without passing any order on the aforesaid application filed by the petitioner. It was argued by the counsel for the petitioner that the report dated 14.5.2012/30.5.2012 was an ex parte report and the Collector had acted illegally in mechanically relying on the aforesaid report and without himself inspecting the property as mandated by Rule 7(3)(c) of Uttar Pradesh Stamp (Valuation of Property), Rules 1997 (hereinafter referred to as, ‘Rules, 1997’). It has been further contended by the counsel for the petitioner that the ex parte report dated 14.5.2012/30.5.2012 did not correctly depict the location of the plots mentioned in the sale-deed dated 20.4.2012. It was further argued by counsel for the petitioner that the findings recorded by the Collector, Meerut in his order dated 22.11.2012 that the plots purchased by the petitioner were located on a link road and were within 200 meters of abadi are without any evidence. Counsel for the petitioner has further argued that no reasons have been given by the respondents in their orders dated 22.11.2012 and 28.2.2013 for calculating the stamp duty liable to be paid on the sale-deed dated 20.4.2012 by taking the plots referred in the aforesaid sale-deed as a single unit, and the said orders are therefore illegal and contrary to law and liable to be set aside. 4. 4. Rebutting the contention of the counsel for the petitioner, the learned Standing Counsel has argued that Rule 7(3) of the Rules, 1997, was not mandatory but merely directory in nature and, therefore, no illegality was committed by the Collector in not calling for a fresh report after getting the property inspected again under Rule 7(3)(c) of the Rules, 1997. It was also argued by the Standing Counsel that as the petitioner had not been able to produce any evidence to controvert the contents of the report dated 30.5.2012/14.5.2012, therefore, there was no error in the findings recorded by the Collector, Meerut that the plots were situated on a link road and were within 200 meters of abadi and the petitioner was liable to pay stamp duty according to the aforesaid reported location of the property, and hence, orders dated 22.11.2012 and 28.2.2013 are according to law and the present writ petition is liable to be dismissed. 5. I have considered the rival submissions of learned counsel for the parties and perused the record. 6. In the light of the pleadings of the parties and arguments of the counsel for the parties, the question before this Court is, whether the order dated 22.11.2012 passed by the Collector and the order dated 28.2.2013 passed by the Additional Commissioner affirming the order of the Collector are vitiated due to the failure of the Collector to exercise his powers under Rule 7(3)? 7. Before proceeding further, it would be appropriate to refer to certain judgements of this Court which are relevant for a decision of the present case. It has been held by this Court in Kashi Nath Upadhyay v. Commissioner, Varanasi and others, 2015(4) ADJ 24 , that “burden to prove that the market value was more than the minimum prescribed by the Collector under the rules, was upon the Collector and the report of the sub-Registrar or Tehsildar was not sufficient to discharge that burden.” (Paragraph No. 31) 8. Further, this Court in Ram Khelawan @ Bachcha v. State of U.P. through Collector, Hamirpur and another, 2005 (98) RD 511, held in paragraph 25 as under : “25. It has been found in several cases like the present one that the entire basis of determination of market value for the purpose of stamp duty is ex parte report of Tehsildar or other officer. It has been found in several cases like the present one that the entire basis of determination of market value for the purpose of stamp duty is ex parte report of Tehsildar or other officer. Ex parte inspection report may be relevant for initiating the proceedings under Section 47-A of Stamp Act. However, for deciding the case no reliance can be placed upon the said report. After initiation of the case inspection is to be made by the Collector or authority hearing the case after due notice to the parties to the instrument as provided under Rule-7(3) (c) of the Rules of 1997. Moreover in the inspection report distance of the property from other residential or commercial properties and road must be shown and wherever possible sketch map must also be annexed alongwith the report so that correct valuation may be ascertained with reasonable certainity.” (Emphasis added) 9. In view of the judgement of this Court in Ram Khelawan (Supra), the inspection report dated 30.5.2012 of Additional Commissioner (Stamp) and Deputy Registrar, District-Meerut was relevant only for making a reference to the Collector, Meerut under Section 47-A of the Act, 1899. After the receipt of the aforesaid report, the Collector, Meerut had to proceed in accordance with the procedure prescribed under Section 47-A(2) of the Act, 1899. Section 47-A(2) of the Act, 1899 provides that the Collector shall determine the market value of the property which was the subject of any instrument and the proper duty payable thereon after giving the parties a reasonable opportunity of hearing and after holding an inquiry in such a manner as may be prescribed by Rules made under the Act. The procedure for inquiry has been prescribed under Rule 7 of the Rules, 1997. Rule 7 of the Rules, 1997 is reproduced below : “Rule 7. Procedure on receipt of a reference or when suo motu action is proposed under Section 47-A.—(1) On receipt of a reference or where action is proposed to be taken suo motu under Section 47-A, the Collector shall issue notice to parties to the instrument to show-cause within thirty days of the receipt of such notice as to why the market value of the property set forth in the instrument and the duty payable thereon be not determined by him. (2) The Collector may admit oral or documentary evidence, if any, produced by the parties to the instrument and call for and examine the original instrument to satisfy himself as to the correctness of the market value of the subject-matter of the instrument and for determining the duty payable thereon. (3) The Collector may: (a) Call for any information or record from any public office, officer or authority under the Government or local authority; (b) Examine and record the statement of any public officer or authority under the Government or local authority; (c) Inspect the property after due notice to the parties to the instrument. (4) After considering the representation of the parties, if any, and examining the records and other evidence, the Collector shall determine the market value of the subject-matter of the instrument and the duty payable thereon. (5) If, as a result of such inquiry, the market value is found to be fully and truly set forth and the instrument duly stamped according to such value, it shall be returned to the person who made the reference with a certificate to that effect. A copy of such certificate shall also be sent to the Registering officer concerned. (6) If, as a result of such inquiry, the market value is found to be undervalued and not duly stamped, necessary action shall be taken in respect of it according to relevant provisions of the Act.” (Emphasis added) 10. A perusal of Rule 7(3) of the Rules, 1997 shows that the Collector may either himself inspect the property after due notice to the parties to the instrument or call for any information or record from any public office, officer or authority under the Government or local authority or examine and record the statement of any public officer or authority under the Government or local authority. It is evident that the power of the Collector to inspect the property or to call for any information or record from any public office or to examine and record the statement of any public officer as prescribed under Rule 7(3) of the Rules, 1997 has to be exercised only after a case has been registered under Section 47-A (2) or (3) of the Act, 1899. Apparently any report prepared previous to the registration of a case under Section 47-A (2) of the Act, 1899 is relevant only for registration of the said case and in case the contents of the aforesaid report are contradicted by the noticee in his reply to the show-cause notice issued to him or otherwise, the Collector may take any of the steps prescribed under Rule 7(3) of the Rules, 1997 to ascertain the correct situation of the property. While deciding any case registered under 47-A (2) of the Act, 1899, the Collector is not expected to mechanically follow and rely on the report of the Deputy Registrar or any authority prepared merely for a reference under Section 47-A of the Act, 1899. 11. The contention of learned Standing Counsel that the provisions of Rule 7(3) of the Rules, 1997 are only directory because the word ‘may’ was used in the provision, and therefore, the order of the Collector cannot be set aside merely because of the failure of the Collector to exercise his powers under Rule 7(3) of Rules, 1997 cannot be accepted. 12. It is true that use of the word ‘may’ in Rule 7(3) signifies that the Rule is an empowering provision. However, the import of Rule 7(3) has to be read in the light of the judgements of this Court in Kashi Nath Upadhyay (Supra) and Ram Khelawan @ Bachcha (Supra). Merely because Rule 7(3) of the Rules 1997 is an empowering provision, it does not lead to the inference that failure on the part of the Collector to exercise the powers vested in him through Rule 7(3) would not vitiate the order passed by the Collector. There may be circumstances in which the failure on the part of the Collector to exercise the powers prescribed in Rule 7(3) of the Rules, 1997 may be fatal and be a reason to set aside the order passed by the Collector. In this regard it would be appropriate to refer to the judgement of the Supreme Court in Official Liquidator v. Dharti Dhan (P) Limited, (1977) 2 SCC 166 . Paragraph Nos. 10 and 11 of the judgement are relevant and are reproduced below : “10. In this regard it would be appropriate to refer to the judgement of the Supreme Court in Official Liquidator v. Dharti Dhan (P) Limited, (1977) 2 SCC 166 . Paragraph Nos. 10 and 11 of the judgement are relevant and are reproduced below : “10. The principle laid down above has been followed consistently by this Court whenever it has been contended that the word “may” carries with it the obligation to exercise a power in a particular manner or direction. In such a case, it is always the purpose of the power which has to be examined in order to determine the scope of the discretion conferred upon the donee of the power. If the conditions in which the power is to be exercised in particular cases are also specified by a statute then, on the fulfilment of those conditions, the power conferred becomes annexed with a duty to exercise it in that manner. This is the principle we deduce from the cases of this Court cited before us: Bhaiya Punjalal Bhagwandin v. Dave Bhagwatprasad Prabhuprasad, State of Uttar Pradesh v. Jogendra Singh, Sardar Govindrao v. State of M.P., Shri A.C. Aggarwal. Sub-Divisional Magistrate, Delhi v. Smt. Ram Kali, Bashira v. State of U.P., and Prakash Chand Agarwal v. Hindustan Steel Ltd. 11. In the statutory provision under consideration now before us the power to stay a proceeding is not annexed with the obligation to necessarily stay on proof of certain conditions although there are conditions prescribed for the making of the application for stay and the period during which the power to stay can be exercised. The question whether it should, on the facts of a particular case, be exercised or not ‘will have to be examined and then decided by the Court to which the application is made. If the applicant can make out, on facts, that the objects of the power conferred by ss. 442 and 446 of the Act, can only be carried out by a stay order, it could perhaps be urged that an obligation to do so has become annexed to it by proof of those facts. If the applicant can make out, on facts, that the objects of the power conferred by ss. 442 and 446 of the Act, can only be carried out by a stay order, it could perhaps be urged that an obligation to do so has become annexed to it by proof of those facts. That would be the position not because the word “may” itself must be equated with “shall” but because judicial power has necessarily to be exercised justly, properly, and reasonably to enforce the principle that rights created must be enforced.” (Emphasis addded) From the above observations of the Supreme Court it follows that the concerned Authority may in certain circumstances be obliged to exercise the powers vested in him despite use of the word ‘may’ in the empowering provision. 13. The controversy as to whether Rule 7(3) is mandatory or directory may not be relevant or helpful to decide cases arising under the Act, 1899. A better approach would be to see as to whether the failure of the Collector to exercise the powers vested in him through Rule 7(3) was so serious that it vitiates the order on any of the grounds on which any order of any administrative or quasi judicial authority or Tribunal could be set aside. An empowering provision may encompass an element both of duty and of discretion. Whether in the circumstances of the case, power should have been exercised by the Collector under Rule 7(3) and whether his failure to do so vitiates his order has to be judged according to the principles laid down by this Court in Kashi Nath Upadhyay (Supra) and Ram Khelawan @ Bachcha (Supra). 14. An order passed by the Collector determining the market value of the property and the consequential additional/higher stamp duty payable on the instrument has to be supported by reliable evidence and reasons. In view of the law laid down in Ram Khelawan @ Bachcha (Supra) the reports prepared by any officer, on the basis of which case has been registered under Section 47-A, would not be a relevant evidence to determine the market value of the property or impose additional/higher stamp duty on the instrument. The correctness of such a report itself would be a subject of adjudication by the Collector. The correctness of such a report itself would be a subject of adjudication by the Collector. In case the noticee contests the correctness of the report and consequently of the show-cause notice issued to him, the burden to prove the correctness of the stamp duty demanded through the show-cause notice, is on the Collector. In the aforesaid situation, in case the Collector fails to exercise the powers vested in him by Rule 7(3) and mechanically relies merely on the aforesaid report to determine the market value of the property and the consequential additional/higher stamp duty payable on the instrument, the said order passed by the Collector cannot be held to be supported by any reliable evidence and would be liable to be set aside on the ground that the findings recorded by the Collector in the said order were without any evidence. 15. However, there is a caveat to the observations made above. The aforesaid observations may not be taken to imply that in all cases the order passed by the Collector under Section 47-A of the Act, 1899 would be liable to be set aside merely on the ground that the Collector had not exercised his powers as prescribed under Rule 7(3). There may be circumstances where the exercise of powers vested in the Collector under Rule 7(3) may not serve any purpose and it may be a mere futile exercise. Such circumstances can exist in a case where there is already sufficient evidence on record, apart from the report of the Sub-Registrar or any officer making a reference under Section 47-A of the Act, 1899, to enable the Collector to determine the market value of the property and to discharge the burden on the authorities to justify the market value determined by them. 16. As recorded earlier, contents of the reports dated 14.5.2012/30.5.2012 were controverted and denied by the petitioner in his objections and an application was filed by him praying that either the Collector may himself inspect the plots or he may call for a report regarding the location of the plots purchased through sale-deed dated 20.4.2012. In the circumstance, the failure of the Collector to exercise the powers vested in him by Rule 7(3) vitiates the order dated 22.11.2012 as the only material available before the Collector were the reports dated 14.5.2012/30.5.2012 which were not relevant to determine the market value of the property. In the circumstance, the failure of the Collector to exercise the powers vested in him by Rule 7(3) vitiates the order dated 22.11.2012 as the only material available before the Collector were the reports dated 14.5.2012/30.5.2012 which were not relevant to determine the market value of the property. It is evident from the orders dated 22.11.2012 and 28.2.2013 that while passing the aforesaid orders the Collector and Additional Commissioner have mechanically relied merely on the reports dated 14.5.2012 and 30.5.2012 prepared and submitted by the Additional Commissioner (Stamp) and Deputy Registrar, District-Meerut. 17. Thus, the orders dated 22.11.2012 passed by Collector, Meerut and order dated 28.2.2013 passed by the Additional Commissioner, Meerut Region, Meerut suffer from a clear non-application of mind and are based on findings which are without any evidence and are, therefore, liable to be set aside. 18. For the aforesaid reasons, the order dated 22.11.2012 passed by Collector, Meerut i.e. respondent No. 3 and the order dated 28.2.2013 passed by the Additional Commissioner, Meerut Region, Meerut are hereby set aside. The writ petition is allowed. The matter is remanded back to the Collector, Meerut to pass fresh orders in Stamp Case No. 47/V/138/2012-13 in light of observations made in the judgement.