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2019 DIGILAW 1793 (ALL)

Lalta Prasad v. State of U. P.

2019-07-25

SUDHIR AGARWAL

body2019
JUDGMENT : Sudhir Agarwal, J. 1. Order dated 11.7.2019 having been recalled vide order of date, the writ petition is restored to its original number. As requested by Counsel for petitioner, I proceed to decide the matter finally at this stage. 2. Heard Sri Madhur Kant Srivastava, learned Counsel for petitioner, learned Standing Counsel for respondents and perused the record. 3. Writ petition under Article 226 of Constitution came up against order dated 25.10.2004 passed by Deputy Collector Tiloi, Raebareli, in purported exercise of power under section 47-A of Indian Stamp Act, 1899 (hereinafter referred to as "Act, 1899") holding that sale deed dated 31.1.2001 executed between petitioner and vendee shows deficiency of stamp. He has determined deficiency of stamp Rs. 34,480/- and deficiency of registration fee Rs. 4,560/- and has directed petitioner to deposit the same with interest at the rate of 1.5 percent per month. The said order has been confirmed by Commissioner, Lucknow Division, Lucknow by dismissing petitioner's appeal vide order dated 9.5.2006. 4. It is contended that sale deed of agricultural land was executed and thereafter petitioner raised boundary wall. The authorities made inspection after almost two years of the date of execution of sale deed and on the basis of subsequent inspection, impugned orders have been passed. Any subsequent development cannot be basis for determining market value of a building. Market value should be considered on the date of execution of sale deed and future potential also cannot be a ground for such determination. 5. Both the authorities have not mentioned date of inspection though they have referred to inquiry report submitted by Naib Tehsildar. On the record there is inspection report of Naib Tehsildar which is dated 06.12.2003. That be so, report of Naib Tehsildar cannot said to depict the position as was in 2001 and there is no finding that above construction, if any, found on inspection dated 6.12.2003, existed in January, 2001. In absence of such finding, impugned order, in my view, cannot be sustained. 6. Even otherwise, any subsequent construction or change of position of land cannot be a ground for determination of "market value" of land for the purpose of stamp duty. 7. The term "market value" has not been defined under the Act. However there are some precedents laying down certain guidelines as to how and what manner a market value would be determined. 7. The term "market value" has not been defined under the Act. However there are some precedents laying down certain guidelines as to how and what manner a market value would be determined. The consensus opinion is that the market value of any property is the price which the property would fetch or would have fetched if sold in the open market, if sold by a willing seller, unaffected by the special need of a particular purchaser. It is interesting to note that the Act provides first for determination of minimum value of the property and further says that if the market value of the property set forth in the instrument is less than the minimum value determined under the Act, in such case before registering the instrument the registering authority shall refer the instrument to Collector for determination of market value of the property and the proper duty payable thereon and when the Collector determines market value of the property thereafter the parties shall proceed accordingly. Therefore, a market value of the property in all cases cannot be said to be higher than the alleged minimum value determined under the rules by the concerned authority, inasmuch as, it is only a kind of guideline provided to the authorities for the purpose of considering as to whether the proper stamp duty is being paid by setting forth true market value of the property in question in the instrument. The entire object of legislature in the various provisions of the Act is to require the parties concerned to set forth true value of the property at which the transaction has taken place so that appropriate duty in accordance with the Act is paid by them. The various provisions with respect to minimum value etc. are only in aid and assistance of the authorities to find out the true amount of consideration on which the parties have entered into transaction so that the correct duty is collected there from. 8. A Division Bench of this Court, considering the provisions of the Act, in Kaka Singh v. Additional Collector & District Magistrate, (F & R) 1987 (13) ALR 80, held: "We are inclined to think that the object of the Amending Act being to avoid large scale evasion of stamp duty, it is not meant to be applied in a matter of fact fashion and in a haphazard way. Market value itself as we already mentioned, is a changing factor and will depend on various circumstances and matters relevant to the consideration. No exactitude is in the nature of things possible. In working the Act, great caution should be taken in order that it may not work as an engine of oppression. Having regard to the object of the Act, we are inclined to think that normally the consideration stated as the market value in a given instrument brought for registration should be taken to be correct unless circumstances exist which suggest fraudulent evasion." 9. In Kaka Singh (supra) the Court has also held that treating method of calculation of market value given under Rule 341 as conclusive and final is erroneous in law. It has further been held that the purpose of entire exercise under section 47-A as supplemented by the relevant rules is to see as to whether the parties to the conveyance or instrument have deliberately undervalued it for the purpose of deceitful gain. 10. The Apex Court in R.C. Bansal v. District Magistrate, AIR 1999 SC 2126 , has held that circle rates under Rule 340-A is merely a guideline and at best prima facie rate of the area concerned and on the one hand parties to the deed are entitled to say that actual valuation is less than the circle rate and on the other hand Collector is also empowered to decide that actual market value is more than the circle rates. 11. In State of Punjab v. Mahabir Singh, AIR 1996 SC 2994 , which was a case from Punjab it has been held that circle rate is merely a guideline provided by the State which would only serve as prima facie material and that no absolute higher or minimum value can be pre-determined. 12. In R.K. Agarwal v. C.C.R.A., 1997 RD 383, a Single Judge of this Court has held that assumed rental value without any basis cannot form the basis for determining market value and that the proper course is to decide the market value on the basis of some exemplars of other land in the vicinity which had been sold at the relevant time. 13. When questioned, learned Standing Counsel could not support both the aforesaid orders and after some argument stated that reasons given by authorities below in passing aforesaid orders cannot be justified. 13. When questioned, learned Standing Counsel could not support both the aforesaid orders and after some argument stated that reasons given by authorities below in passing aforesaid orders cannot be justified. He failed to point out any justification or relevant consideration prevailed with authorities concerned in passing the impugned orders. 14. In view thereof, writ petition succeeds. Impugned orders dated 25.10.2004 and 09.5.2006 (Annexures 1 and 2 to the writ petition) are hereby set aside. Civil Misc. Application No. 80492 of 2019: 15. This is an application seeking recall of order dated 117.2019 whereby writ petition has been dismissed for want of prosecution. 16. Heard Counsel for applicant. 17. Cause shown for absence is sufficient. Order dated 11.7.2019 is hereby recalled. 18. Application is allowed.