Stamp duty is chargeable only on the basis of the consideration set forth in the instrument to be stamped, and the collector has no jurisdiction to inquire into the market value of the property assigned by the document.

ORDER :

1. The Delhi Development Authority (DDA) by a deed dated April 16, 1990 leased a piece of land measuring about 3,650 acres to the second respondent Parwana Co-Operative Group Housing Society. The society constructed flats for its members with the funds contributed by the members. Flat No. A-37 was allotted by the society to a member by name, Prashant Kumar Roy to be jointly held with Pranab Roy (hereinafter referred to as the allottees'). On February 1995 the allottees entered into an agreement with the first respondent by which the allottees agreed to sell their rights in the flat to the first respondent for a consideration of Rs. 5,51,000/- which was paid by the first respondent to the allottees. Possession of the flat was given to the first respondent. The allottees appointed and constituted Mr. Ramesh Chandra husband of the first respondent as their lawful general power of attorney holder authorising him to execute on their behalf a conveyance deed in favour of the first respondent. On February 20 1995 the said person acting as attorney, applied to the DDA for converting the leasehold tenure of the land under the flat into freehold. By the letter dated September 11, 1995 the DDA informed the said attorney that his request was accepted and that he was required to get an unsigned and unexecuted conveyance deed valued and stamped from the office of the collector of stamps. When the attorney acting on behalf of the first respondent submitted an application under Section 31 of Indian Stamp Act 1899 for adjudication of the proper stamp, the collector by the communication dated January 29 1996 informed the first respondent that sum of Rs. 44,884/- would have to be paid towards the stamp duty, transferred duty and copy charges. Although the draft conveyance deed recited that the consideration payable for conversion of the leased hold rights into free hold rights was Rs. 10,000/- the collector took the view that Sub-section (3) of Section 28 of the Indian Stamp Act read with Article 23 of Schedule 1A would apply and that the amount of Rs. 5.51,000/- which was the total consideration paid by the first respondent to the allottees, must be taken to be the true consideration of the conveyance notwithstanding the amount of Rs. 10,000/- set forth therein as the consideration.

2. The first respondent challenged this decision of the collector by writ petition before the High Court. The learned single judge allowed the writ petition by taking the view that the jurisdiction of the authority under Section 31 of the Act was to adjudicate the proper stamp fee leviable only on the basis of the consideration declared in the deed. The learned single judge also emphasised that under Article 31 of Schedule 1A with reference to conveyance the stamp duty payable is on the amount of value of consideration as set forth therein. He also took notice of the statement made by the learned counsel for the first respondent that the first respondent would pay the duty chargeable on the sale deed as and when the sale deed was executed by the original allottees conveying all their subsisting rights to the first respondent. In this view of the matter, the learned single judge allowed the writ petition and directed the collector to reassess the duty only on the basis of the consideration set forth in the draft conveyance deed.

3. Aggrieved by the said order the appellant appealed by a letters patent appeal. The Division Bench agreed with the learned single judge that a perusal of the conveyance deed indicates that what was conveyed thereunder was only the reversionary interest in the land held by DDA to the first respondent for the declared consideration of Rs. 10.000/-Whatever might have been the terms of the agreement between the allottees and the first respondent they were not incorporated in the draft conveyance deed. Hence the stamp duty chargeable could only be calculated on the basis of the consideration set forth in the conveyance deed. In this view