IMPORTANT POINT
Price or value of a property obtained through open tender or auction is its market value. Such value obtained by ASC constituted by BIFR cannot be doubted as undervalued.

Headnote:(a) Sick Industrial Companies (Special Provisions) Act, 1985 – Section 47-A r/w Rule 4, Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968 – Willful undervaluation with fraudulent intention to evade payment of proper stamp duty is the ingredient – Instantly there being no question of willful under valuation with fraudulent intention to evade payment of proper stamp duty, section 47-A does not apply. (Para 7, 10, 12)
       (b) Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968 – Rule 4(5), Explanation – Market value – Changing concept – Means value fetched in open market – Instantly, value decided by ASC, a statutory body through open market bids – No question of any intention to defraud the revenue or non disclosure of the correct price – Sale deed registered at this value – Sale value is the market value – Transfer of Property Act, 1882 – Section 54 and 2(10). (Para 10)
       Facts of the case:
       An extent of 60.86 acres of land was previously owned by Dunlop India Limited, a Public Limited Company. The said Company became a sick industry and was declared so. Consequent to such declaration, for the purpose of rehabilitation, surplus properties and assets belonging to the said company were sought to be disposed of by the statutory authorities such as Board For Industrial and Financial Reconstruction (BIFR) and Appellate Authority for Industrial and Financial Reconstruction (AIFR) by forming an Asset Sales Committee (ASC) consisting of members such as representatives of IDBI, Debenture Holders, Government of West Bengal and Special Director of BIFR.
       The ASC invited tenders in sealed covers from interested persons. The appellant submitted his tender along with others and his offer of Rs.24,34,40,000/-, at the rate of Rs.40 lakh per acre, was the highest. Accordingly, his tender was accepted by the ASC as well as by the statutory authorities. The company was granted permission to execute the sale deed in favour of the appellant.
       A reference was made by the Sub Registrar, Ambattur, to the second respondent District Revenue Officer (DRO) in respect of the sale transaction, based on which, the second respondent initiated proceedings under Section 47-A of the Act resulting in issuance of notice dated 18.08.2004 calling upon the appellant to state his objections with regard to fixation of the market value of the property at Rs.154,69,88,168/- as against the sum of Rs.24,34,40 000/- for which sum, the property was purchased; and to show cause as to why he should not be called upon to pay the balance stamp duty of a sum of Rs.10,42,83,856/-.
       Without affording personal hearing, the second respondent confirmed the market value of the land as Rs.465/-per sq. ft. and called upon him to pay the additional stamp duty. Aggrieved by the order of the second respondent, the appellant preferred an appeal before the first respondent which was rejected.
       The High Court held that there was no scope for a different view to be taken regarding the market value and for this limited purpose the matter was remanded to the original authority for passing an appropriate order.
       Finding of the Court:
       Impugned judgment is not sustainable.
       Result:
       Appeal allowed.

Judgment :

Dr. Arijit Pasayat, J.

1. Leave granted.

2. Challenge in this appeal is to the order passed by a Division Bench of the Madras High Court in appeal filed under Section 47-A of the Indian Stamp Act, 1899 (in short the `Act). The appeal was filed against the order passed by Chief Revenue Control Officer-cum-Inspector General of Registration, Chennai in proceedings Pa.Mu.No.22947/NI/2005 dated 8.2.2006 confirming the order of the District Revenue Officer (Stamps), Office of the District Collector, Chennai in proceedings Na. K.C. Pa.244/2004/A4 dated 11.4.2005.

3. The controversy lies within a very narrow compass.

According to the appellant, an extent of 60.86 acres of land comprised in S. Nos. 330, 338, 473, 552 etc. situate at Ambattur Taluk, Tiruvallur District, which was previously owned by Dunlop India Limited, a Public Limited Company. The said Company became a sick industry and was declared so under the Provisions of Sick Industrial Companies (Special Provisions) Act, 1985 (in short `1985 Act) Consequent to such declaration, for the purpose of rehabilitation, surplus properties and assets belonging to the said company were sought to be disposed of by the statutory authorities under the said Act such as Board For Industrial and Financial Reconstruction (BIFR) and Appellate Authority for industrial and

Financial Reconstruction (AIFR) by forming an Asset Sales Committee (ASC) consisting of members such as representatives of IDBI, Debenture Holders, Government of West Bengal and Special Director of BIFR. In compliance with the guidelines issued by the statutory authorities (BIFR & AIFR), the ASC made publications in Newspapers about its proposal to sell the above mentioned 60.86 acres of lands and invited tenders in sealed covers from interested persons. The appellant submitted his tender along with others and his offer of Rs.24,34,40,000/-, at the rate of Rs.40 lakh per acre, was the highest. Accordingly, his tender was accepted by the ASC as well as by the statutory authorities. The company was granted permission to execute the sale deed in favour of the appellant.

It is the further case of the appellant that on receipt of the entire sale consideration of Rs.24,34,40,000/- from him, the said company executed a sale deed dated 17.06.2004, registered as Document. No.6939/2004 on the file of the Sub Registrar, Ambattur. The sale is not in between two private individuals, on the other hand, it is a sale in consonance with the conditions laid down under the 1985 Act. In such circumstances, one could visualize that there could be no question of any possibility of under valuation of the property warranting the proceedings under Section 47-A of the Act. Further, the sale was found to be valid in WP No.25962 of 2004 filed by the Dunlop Factory Employees Union.

A reference was made by the Sub Registrar, Ambattur, to the second respondent District Revenue Officer (DRO) in respect of the sale transaction, based on which, the second respondent initiated proceedings under Section 47-A of the Act resulting in issuance of notice dated 18.08.2004 in Form No.1 of Rule 4 of the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968 (in short `Rules), calling upon the appellant to state his objections with regard to fixation of the market value of the property at Rs.154,69,88,168/- as against the sum of Rs.24,34,40 000/- for which sum, the property was purchased; and to show cause as to why he should not be called upon to pay the balance stamp duty of a sum of Rs.10,42,83,856/-.

Apart from explaining and setting out the circumstances under which he purchased the property, the appellant also questioned the jurisdiction of the authorities to invoke Section 47-A of the Act. It is the specific case of the appellant that without affording personal hearing, the second respondent by order dated 11.04.2005, confirmed the market value of the land as Rs.465/-per sq. ft. and called upon him to pay the additional stamp duty. Agg

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2009 Supreme(SC) 1046

IMPORTANT POINTPrice or value of a property obtained through open tender or auction is its market value. Such value obtained by ASC constituted by BIFR cannot be doubted as undervalued.

IMPORTANT POINT
Price or value of a property obtained through open tender or auction is its market value. Such value obtained by ASC constituted by BIFR cannot be doubted as undervalued.