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2020 DIGILAW 434 (ALL)

Ganga Ram v. State of U. P.

2020-02-07

SANGEETA CHANDRA

body2020
JUDGMENT : Sangeeta Chandra, J. 1. This petition has been filed by the petitioner challenging the order dated 5.2.2010 passed by the Appellate Authority, rejecting the appeal of the petitioner against the order passed by the Collector, Lakhimpur Kheri dated 26.2.2008 and also the order dated 26.2.2008. 2. Brief facts of the case, as have been stated in the writ petition, are to the effect that the petitioner purchased 1/4th portion of Plot no. 381 ad-measuring 0.271 hectare of agricultural land through a registered Sale Deed dated 16.6.2007. The said Sale Deed was registered as Sale Deed no. 5008 of 2007 before the Sub Registrar, Mohammdi, Lakhimpur Kheri after paying the requisite fee of registration and stamp duty etc. as per Circle Rate fixed by the District Magistrate, Lakhimpur Kheri. 3. It has been submitted by the learned counsel for the petitioner that the Sub Registrar, Mohammdi, Lakhimpur Kheri filed a wrong report, annexing an incomplete map of the area, where the land in question was situated on 30.8.2007 and recommended to the Collector and the Assistant Commissioner (Stamp) for action to be initiated under Section 33 of the Indian Stamp Act (for short 'the Act') read with Section 47-A of the Act, indicating a deficiency of Rs. 25,070/- as deficiency of stamp duty (Rs. 4460/- as registration fees). A notice was issued to the petitioner on 5.11.2007 by the Assistant Commissioner (Stamp) and the petitioner submitted his written objection, stating that the land in question is agricultural in nature and his crops are standing thereon and it was not used for any residential purposes and that a spot inspection may be carried out by the Tehsildar concerned. The objection of the petitioner was ignored and the recommendation report of the Sub Registrar, Mohammdi, Lakhimpur Kheri was confirmed by the Collector, Lakhimpur Kheri by his order dated 26.2.2008, also imposing penalty of Rs. 25,070/- and Rs. 3,760/- as interest. 4. The petitioner being aggrieved, filed an appeal before respondent no. 2, namely Appeal no. 129/466/2008-09 under Section 56 of the Act and also deposited Rs. 19,454/- i.e. 1/3rd of the amount of fine and stamp duty in the Treasury. On 2.12.2008, the Appellate Authority stayed the implementation of the order dated 26.2.2008. Later, however, the appeal was rejected and the order of respondent no. 4 was affirmed by the Appellate Authority. 5. 129/466/2008-09 under Section 56 of the Act and also deposited Rs. 19,454/- i.e. 1/3rd of the amount of fine and stamp duty in the Treasury. On 2.12.2008, the Appellate Authority stayed the implementation of the order dated 26.2.2008. Later, however, the appeal was rejected and the order of respondent no. 4 was affirmed by the Appellate Authority. 5. It has been argued by the learned counsel for the petitioner that at the time of purchase, execution and registration of Sale Deed, the land in question was recorded as agricultural land in the revenue records. Till date, no notification under Section 143 of the U.P.Z.A. and L.R. Act has been issued by the competent authority, declaring it as land used for non agricultural purposes. It has been submitted that there are several judgments of this Court, which hold that stamp duty is to be charged on the property in accordance with its present status and not its future potential. The valuation cannot be determined on a presumption that the land is situated in close proximity of Abadi area or on the presumption that the land is intended to be used for the purpose other than agricultural. 6. Learned counsel for the petitioner has submitted that the khasra of the land in question i.e. the field book of village Kunwarpur shows that crops of sugarcane, potato, and onion was being sown on the land in question. 7. Learned Standing Counsel, on the basis of counter affidavit filed on behalf of the respondents has submitted that within two months of the date of purchase of the property in question, the site was inspected by the Sub Registrar, Mohammdi, Lakhimpur Kheri on 30.8.2007 and he submitted his report, finding that the Sale Deed had been executed and the stamp duty paid, showing the property in question to be used for agricultural purposes, whereas the purchaser had bought the property in question for residential purposes. It was found that no crop was sown in the property in question. Instead, it was being used for drying cow-dung cakes to be used as fuel. Moreover, the boundaries shown in the Sale Deed were also misrepresented. It was found on inspection that on the eastern side of the plot in question, there was the field of Ganga Ram. It was found that no crop was sown in the property in question. Instead, it was being used for drying cow-dung cakes to be used as fuel. Moreover, the boundaries shown in the Sale Deed were also misrepresented. It was found on inspection that on the eastern side of the plot in question, there was the field of Ganga Ram. On the west, there was a eight feet wide road and thereafter, the residence of Saligram and also the Sahan of Saligram on the northern side of the plot and on the southern side, there was a vacant land. Since the land in question was situated in the midst of Abadi of the village, it was rightly inferred by the Sub Registrar, Mohammdi, Lakhimpur Kheri that the same had been purchased for residential purposes. 8. It has also been submitted that the procedure prescribed under the Rules was followed and proper opportunity of hearing was given to the petitioner by issuing a notice to him on 5.11.2007 and then the order impugned was passed. The Collector had found that at the time when the Sale Deed was executed, the Circle Rate determined by the District Magistrate for village Abadi was Rs. 500/- per square meter. The property in question being 1/4th area of Plot no. 381 ad-measuring 678.94 square meters, on the basis of the Circle Rate determined by the District Magistrate, its value was Rs. 33,40,000/-, and on such value Rs. 27,200 was payable as stamp duty and Rs. 5020/- as registration fees. The petitioner, on the other hand, had paid only Rs. 2170/- as stamp duty and Rs. 540/- as registration fee, therefore, deficiency in stamp duty, deficiency in registration fee and penalty was imposed and as per Rules, the same was payable with 1.5% interest per month to be charged from the date of execution of Sale Deed till the date of actual payment. 9. With regard to the submissions made by the learned counsel for the petitioner that the field book showed that sugarcane crop, potato crop and onion crop were being sown on the plot in question, it has been stated in the counter affidavit that the entries in the filed book cannot be treated to be final in such a case. 9. With regard to the submissions made by the learned counsel for the petitioner that the field book showed that sugarcane crop, potato crop and onion crop were being sown on the plot in question, it has been stated in the counter affidavit that the entries in the filed book cannot be treated to be final in such a case. Moreover, Collector had rightly found from a perusal of the map of the village submitted by the petitioner along with his reply to the show cause notice that the plot in question was situated in the middle of village Abadi and there was a valid presumption drawn that it can be used for residential purposes. 10. With regard to the contention raised in the writ petition that no declaration/notification under Section 143 of the U.P.Z.A. and L.R. Act had been made by the competent authority, it has been stated in the counter affidavit that the petitioner cannot derive any benefit out of his own wrong. The petitioner was supposed to get declaration under Section 143 of the U.P.Z.A. and L.R. Act issued from the appropriate authority. 11. Learned counsel for the petitioner while arguing the case, has placed reliance upon several decisions of the coordinate Benches of this Court, namely, (i) Smt. Neelam Gupta Vs. Commissioner, Kanpur Division, reported in (2007) (25) LCD 36; (ii) Naresh Kumar Sonkar Vs. State of U.P. and Others, reported in [2008 (26) LCD 1590]; (iii) Surendra Singh and Another Vs. State of U.P. and Others, reported in [2009 (27) LCD 442]; (iv) Ashish Kumar Singh and Others Vs. State of U.P. and Others, reported in [2010 (28) LCD 945];(v) Bansal Global Finance Limited Vs. Chief Controlling Revenue Authority and Others, reported in [2010 (28) LCD 1574]; (vi) Varun Goyal Vs. State of U.P. and Others, reported in: (2015) 2 ADJ 311 ; (vii) Smt. Kaushilya Dwivedi and Another Vs. Commissioner, Lucknow Division and Others, writ petition decided by a Co-ordinate Bench of this Court on 19.05.2010, and a judgment of the Division Bench in Sumati Nath Jain vs. State of U.P. and another, reported in 2016 (2) ADJ 533 , and a Full Bench decision of this Court in Smt. Pushpa Sareen vs. State of U.P., reported in 2015 (3) ADJ 136 . 12. 12. Learned counsel for the petitioner has also placed reliance upon two judgments of the Supreme Court in the cases of Smt. Prakashwati vs. Chief Controlling Revenue Authority, Board of Revenue, U.P. at Allahabad and others, (1996) 4 SCC 657 and State of U.P. and other vs. Ambrish Tandon and another, (2012) 5 SCC 566 . 13. Learned Standing Counsel, on the other hand, has placed reliance upon two judgments rendered by this Court in Writ Petition No. 1494 (MS) of 2009: Shakeel Ahmad vs. Additional Commissioner, Judicial, Faizabad, decided on 16.5.2019, and Writ Petition No. 3126 (MS) of 2009: Hridya Narayan Mishra vs. Commissioner, Allahabad Division and another, decided on 21.2.2019. 14. Having heard the learned counsel for the parties, this Court has perused the impugned order passed by respondent no. 4 dated 26.2.2008. From a perusal thereof, it appears that the proceedings under Section 33/47-A of the Act were initiated on a report submitted by the Sub Registrar, Mohammdi, Lakhimpur Kheri dated 30.8.2007 regarding deficiency in stamp duty and registration fee with regard to the property in question. The petitioner was issued a notice and he filed his reply. The respondent no. 4 found that the plot Inspection report stated that the property in question had been wrongly shown to be used for agricultural purposes and its boundaries had also been wrongly shown. No crop was found to be sown on the property in question and it being surrounded on the western side by eight feet wide road and on the other three sides by residential houses and properties and being situated in the middle of the village Abadi, was liable to be charged at the Circle Rate determined by the Collector @ Rs. 500/- per square meter for residential purpose. Not only the boundaries were wrongly shown of the plot in question, but no crop was found to be sown in the property and it was being used for drawing cow-dung cakes for fuel. The respondent no. 4, therefore, found deficiency in stamp duty and imposed penalty, amounting to total of Rs. 54,600/- and also directed payment of interest @ 1.5% per month from the date of execution of Sale Deed till the date of actual payment. 15. The respondent no. 4, therefore, found deficiency in stamp duty and imposed penalty, amounting to total of Rs. 54,600/- and also directed payment of interest @ 1.5% per month from the date of execution of Sale Deed till the date of actual payment. 15. In the order passed by the Appellate Authority also, the same facts that were mentioned by the Collector in the impugned order, have been reiterated and the order of the respondent no. 4 has been affirmed by the respondent no. 2. 16. In the judgments, that have been relied upon by the learned counsel for the petitioner, passed by various coordinate Benches of this Court, few main points have been reiterated that relate to non declaration of the property to be used for non agricultural purposes under Section 143 of the U.P.Z.A. and L.R. Act, and also that future or intended use of the property in question would not determine the stamp duty payable in respect of agricultural land. 17. The coordinate Benches have also referred to the judgments of this Court and of the Supreme Court that situation of the land in a semi urban area or near a residential colony cannot lead to a presumption that the land in question shall be used for residential purposes. 18. A Full Bench of this Court in Smt. Pushpa Sareen (supra) has taken care of such judgments of Hon'ble Single Judges and Division Benches in Paras 21 and 23 of the said report. Paras 21 and 23 are being quoted hereinbelow: "21. The attention of the Court has been drawn to certain judgments of the learned Single Judges of this Court which had taken the view that the market value of the land could not be determined with reference to the use of the land to which the buyer intends to put it in future. 23. In certain judgments of the learned Single Judges of this Court, a view had been taken that the authorities are required to determine the value of the land on the date on which the sale was made and cannot consider the potential value of the land to which it could be put to use in future. Smt. Kusum Lata Jaiswal vs. State of U.P. and others, 2010 (2) ADJ 274 . Smt. Kusum Lata Jaiswal vs. State of U.P. and others, 2010 (2) ADJ 274 . Similarly in Dinesh Tiwari vs. Commissioner, Gorakhpur and others, 2012 (3) AWC 2343 : 2011 (10) ADJ 1 (NOC), it was held that the Collector had no power to assess the market value of the property on the basis of a future value which the property may acquire." 19. The Full Bench thereafter considered the question whether the Collector has power to fix the valuation of a plot on the assumption that it is likely to be used for commercial purposes/residential purposes and whether the presumed future prospective use of the land can be a criterion for valuation by the Collector. 20. The Full Bench in Smt. Pushpa Sareen (supra) has referred to object of the Indian Stamp Act as was discussed by the Supreme Court in Ramesh Chand Bansal and others vs. District Magistrate/Collector, Ghaziabad and others, AIR 1999 SC 2126 (Para-5 thereof). It has been submitted that the object of the Indian Stamp Act is to protect the State revenue. The Supreme Court observed in Para-5 as follows: "5. ………...It is matter for common knowledge in order to escape such duty by unfair practice, many a time under valuation of a property or lower consideration is mentioned in a sale deed. The imposition of stamp duty on sale deeds are on the actual market value of such property and not the value described in the instrument. Thus, an obligation is cast on authority to properly ascertain its true value for which he is not bound by the apparent tenor of the instrument. He has to truly decide the real nature of the transaction and value of such property. For this, Act empowers an authority to charge stamp duty on the instrument presented before it for registration. The market value of a property may vary from village to village; from location to location and even may differ from the sizes of area and other relevant factors. This apart there has to be some material before such authority as to what is likely value of such property in that area. In its absence it would be very difficult for such Registering Authority to assess the valuation of such instrument. It is to give such support to the Registering Authority the Rule 340-A is introduced. This apart there has to be some material before such authority as to what is likely value of such property in that area. In its absence it would be very difficult for such Registering Authority to assess the valuation of such instrument. It is to give such support to the Registering Authority the Rule 340-A is introduced. Under this Collector has to satisfy himself based on various factors mentioned therein before recording the circle rate, which would at best be the prima facie rate of that area concerned. This is merely a guideline which helps the Registering Authority to assess the true valuation of a transaction in an instrument. This gives him material to test prima facie whether description of valuation in an instrument is proper or not.... Reading Section 47-A with the aforesaid Rule 340-A it is clear that the circle rate fixed by the Collector is not final but is only a prima facie determination of rate of an area concerned only to give guidance to the Registering Authority to test prima facie whether the instrument has properly described the value of the property. The circle rate under this Rule is neither final for the authority nor to one subjected to pay the stamp duty. So far sub-sections (1) and (2) it is very limited in its application as it only directs the Registering Authority to refer to the Collector for determination in case property is undervalued in such instrument. The circle rate does not take away the right of such person to show that the property in question is correctly valued as he gets an opportunity in case of under valuation to prove it before the Collector after reference is made. This also marks the dividing line for the exercise of power between the Registering Authority and the Collector. In case the valuation in the instrument is same as recorded in the circle rate or is truly described it could be registered by Registering Authority but in case it is undervalued in terms of sub-section (1) or sub-section (2), it has to be referred and decided by the Collector. Thus, the circle rate, as aforesaid, is merely a guideline and is also indicative of division of exercise of power between the Registering Authority and the Collector." 21. Thereafter, the Full Bench in Para-27 of the report held as under: "27. Thus, the circle rate, as aforesaid, is merely a guideline and is also indicative of division of exercise of power between the Registering Authority and the Collector." 21. Thereafter, the Full Bench in Para-27 of the report held as under: "27. Undoubtedly, the Collector is not permitted to launch upon a speculative inquiry about the prospective use to which a land may be put to use at an uncertain future date. The market value of the property has to be determined with reference to the use to which the land is capable reasonably of being put to immediately or in the proximate future. The possibility of the land becoming available in the immediate or near future for better use and enjoyment reflects upon the potentiality of the land. This potential has to be assessed with reference to the date of the execution of the instrument. In other words, the power of the Collector cannot be unduly circumscribed by ruling out the potential to which the land can be advantageously deployed at the time of the execution of the instrument or a period reasonably proximate thereto. Again the use to which land in the area had been put is a material consideration. If the land surrounding the property in question has been put to commercial use, it would be improper to hold that this is a circumstance which should not weigh with the Collector as a factor which influences the market value of the land." (Emphasis Supplied) 22. The Full Bench considered the fact that the land may be put to some other use at a later point of time, but that may not be a relevant criteria for deciding the value for the purpose of stamp duty as held by the Supreme Court in the case of Ambrish Tandon (supra). 23. The Full Bench, nevertheless in Para-28 observed thus: "28. …….Where, however, the potential of the land can be assessed on the date of the execution of the instrument itself, that is clearly a circumstance which is relevant and germane to the determination of the true market value. At the same time, the exercise before the Collector has to be based on adequate material and cannot be a matter of hypothesis or surmise. At the same time, the exercise before the Collector has to be based on adequate material and cannot be a matter of hypothesis or surmise. The Collector must have material on the record to the effect that there has been a change of use or other contemporaneous sale deeds in respect of the adjacent areas that would have a bearing on the market value of the property which is under consideration." (Emphasis Supplied) 24. In view of the observations made by the Full Bench of this Court, the Collector, no doubt was entitled to issue notice on the basis of Spot Inspection Report submitted by the Sub Registrar, Mohammdi, Lakhimpur Kheri, but the procedure thereafter prescribed under the Rules was not followed. 25. Under the U.P. Stamp Valuation of Property Rules, 1997, Rule-7 provides the procedure on receipt of a Reference or when suo motu action is proposed under Section 47-A of the Act. Rule 7(2) (c) provides that the Collector may inspect the property after due notice to parties to the instrument. 26. The complete reading of the aforesaid Rule clearly indicates that while deciding the proceedings under Section 47-A of the Act, the Collector or any other officer authorized to determine stamp duty, is required to make an inspection after due notice to the parties to the instrument. The proceedings under Section 47-A of the Act shall not be decided merely placing reliance on the ex-parte report of the Sub Registrar or the Tehsildar for that purpose. 27. In the case at hand, the petitioner has stated in the writ petition that the Sub Registrar, Mohammdi, Lakhimpur Kheri inspected the property in question on 30.8.2007 without notice to the petitioner and an ex-parte report was submitted. The petitioner disputed the report by annexing copies of the field book and all the land records i.e. khasra and khatauni, showing that the land was not only recorded as land for agricultural purposes in the khatauni, but was actually being used for agricultural purposes in khasra. A dispute having been raised, an inspection ought to have been carried out by respondent no. 4. He took a shortcut instead. A dispute having been raised, an inspection ought to have been carried out by respondent no. 4. He took a shortcut instead. He examined the map of the village concerned and as mentioned in the order impugned that the land in question was surrounded by Abadi land of the village, therefore, a presumption was drawn that the land in question would be used for residential purposes. 28. This Court has carefully examined the village map, a copy of which, has been filed as Annexure-9 to the petition. Plot no. 381, 1/4th part of which had been bought by the petitioner through the Sale Deed executed on 16.6.2007, has been shown as Domat-1 in the village map. Domat-1 is a category of soil, on the basis of which, land revenue or 'lagaan' is determined for agricultural land, but the village map does not show the property in question to be situated in the middle of village Abadi. 29. This Court fails to understand as to when power was given to respondent no. 4 to make an on the spot inspection of the property in question, then why the same was not exercised and on the spot inspection was not carried out and the ex-parte report of the Sub Registrar, Mohammdi, Lakhimpur Kheri alone was relied upon in passing the orders impugned. 30. The orders impugned dated 26.02.2008 and 05.02.2010 are set aside. 31. The petitioner has already deposited Rs. 19,454/- before the Appellate Authority in the nature of a pre-deposit for filing of appeal and has also deposited Rs. 15,000/- in pursuance of the conditional interim order granted by this Court on 24.2.2010. The same shall be returned to the petitioner on appropriate application being made by the petitioner to the competent authority. 32. The writ petition stands allowed.