IMPORTANT POINT
Stamp duty payable on a conveyance will be in accordance with market value of subject property on date of conveyance unless consideration shown therein is more than prevailing market value.

JUDGMENT :

Abhay S. Oka, J.

FACTUAL ASPECTS

1. The dispute involved in this appeal is about the determination of the market value of a property at Allahabad purchased by the appellants under a registered sale deed dated 29th November 2010 (the sale deed) from Hari Mohan Das Tandon (the vendor). The property has been described in the Schedule to the sale deed which reads thus:

“SCHEDULE OF THE PROPERTY”

Part Portion of Free Hold Site No. 49 Civil Station, Allahabad of which Nagar Nigam No. is 19 Old, 77/29 New, and 19A Old 79/31 New, Lal Bahadur Shastri Marg (Elgin Road), Allahabad measuring 7818.00 sq.mts. land alongwith construction and super structure standing thereon shown in Red Colour in the annexed map and bounded as under:-

BOUNDARIES

East : Part Portion of Freehold Site No. 49 Civil Station, Allahabad, facing Strachey Road which has been released in the favour of the Sellers1st Party as per the compromise.

West : Site No. 50 Civil Station, Allahabad

North : Elgin Road (Lal Bahadur Shastri Marg)

South : Site No. 30 Civil Station, Allahabad”

This property is hereinafter referred to as the sale deed property.

2. According to the case of the appellants, Bungalow No.19 and Cottage No.19A existed on the larger property. According to their case, in the year 1939, Bungalow No.19, together with appurtenant land and outhouse as well as cottage no.19A, was taken on rent by the first appellant’s father. The appellants claimed to be protected tenants under the United Provinces (Temporary) Control of Rent and Eviction Act, 1947 and subsequently under the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act 1972. According to the case made out by the appellants, by two letters dated 2nd September 1966 and 10th September 1966, the vendor agreed to sell the sale deed property to the first appellant’s father for a total sale consideration of Rs. 1 lakh. A sum of Rs.5000/- was paid to the vendor as earnest money. The land was a leasehold land. It was converted into a freehold land on 8th June 2000 by virtue of a freehold deed executed in favour of the vendor. The first appellant filed a suit for specific performance in the same year.

3. On 29th September 2010, a compromise was arrived at between the vendor and the appellants under which the appellants agreed to give up approximately 1/3rd of the land which was a part of the original agreement for sale covered by the aforesaid two letters, and agreed to take land measuring 7818 sq. meters along with existing structures for the same consideration which was fixed in the year 1966. An application to record compromise was made in the pending suit on 5th October 2010. On the basis of the said compromise, on 12th October 2010, an agreement for sale was executed by and between the parties. A compromise decree was passed by the Civil Court on 16th November 2010.

4. Prior to the execution of a fresh agreement for sale, on 29th September 2010, the appellants filed an application under Section 31 r/w 32 of the Indian Stamp Act, 1899 (for short ‘the Stamp Act’) for adjudication of the stamp duty payable on the sale deed by forwarding a copy of the proposed sale deed. However, no adjudication was made. On 29th November 2010, the sale deed was executed by the vendor in favour of the appellants.

5. Two notices were issued to the appellants on 8th February 2011 and 15th April 2011 by the Assistant Stamp Commissioner in the exercise of powers under Section 47A of the Stamp Act, informing the appellants that the Assistant Stamp Collector was considering the question of payment of appropriate stamp duty on the sale deed.

6. We may note here that by using the rent capitalisation method, the appellants calculated Rs.6,67,200/- as the market value of the sale deed property and paid the stamp duty on the said market value quantified at Rs.46,700/-. In the notice dated 15th April 2011, it was alleged that t