1. Dispute over market value determination of sale deeds under Section 47-A of the Indian Stamp Act, 1899, following reference by the Registering Officer to the Collector. (Para 2 , 3 , 4 , 5 , 6 , 7 , 8 )
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2025 Supreme(SC) 46
SUPREME COURT OF INDIA
J.B. PARDIWALA, R. MAHADEVAN, JJ.
Chief Revenue Controlling Officer Cum Inspector General of Registration, & Ors. – Appellants
Versus
P. Babu – Respondent
Civil Appeal Nos. 75-76 of 2025 (@Petitions for Special Leave to Appeal (C) Nos. 18676-18677 of 2018)
Decided On : 03-01-2025
Important Points
IMPORTANT POINTS
(1) Registration of sale-deed – Under-valuation of sale-deeds – Determination of market value without Notice of hearing to parties is liable to be set aside.
(2) Registration of sale-deed – It is not permissible for Registering Officer to undertake a roving enquiry for the purpose of ascertaining correct market value of property.
(1) Registration of sale-deed – Under-valuation of sale-deeds – Determination of market value without Notice of hearing to parties is liable to be set aside.
(2) Registration of sale-deed – It is not permissible for Registering Officer to undertake a roving enquiry for the purpose of ascertaining correct market value of property.
Subject
Revenue Law - Stamp Duty
Act Referred
Headnote
(A) Indian Stamp Act, 1899 – Sections 17 and 47-A(10) – Registration of sale-deed – Under-valuation of sale-deeds – When Registering Authority finds that value set forth in an instrument was less than minimum value determined in accordance with Rules, in that event, Registering Authority is empowered to refer the instrument to Collector for determination of market value of such property and Stamp Duty payable thereon – Such a reference is not a mechanical act, but Registering Officer should have a basis for coming to prima facie finding of undervaluation of property – Availability of material is foundation or the basis for any authority to arrive at any decision whatsoever – Expression ‘reason to believe’ is not synonymous with subjective satisfaction of officer – Belief must be held in good faith, it cannot be merely a pretence – It is open to Court to examine the question whether reasons for belief must have a rational connection or a relevant bearing to formation of belief and are not irrelevant or extraneous to the purpose of the section – Determination of market value without Notice of hearing to parties is liable to be set aside. (Paras 18, 20 and 21)
(B) Indian Stamp Act, 1899 – Sections 17 and 47-A(10) – Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968 – Rule 7 – Registration of sale-deed – It is not permissible for Registering Officer to undertake a roving enquiry for the purpose of ascertaining correct market value of property – If Registering Officer is bona fide of the view that sale consideration shown in sale deed is not correct and sale is undervalued, then it is obligatory on part of Registering Authority as well as Special Deputy Collector (Stamps) to assign some reason for arriving at such a conclusion – In such circumstances, if document in question is straightway referred to Collector without recording any prima facie reason, same would vitiate entire enquiry and ultimate decision – Collector is obligated to communicate provisional order to parties concerned in respect of fixation of correct value of property and also duty payable in Form II – However, after issue of Form II, parties concerned have to be given opportunity to submit their representation in respect of determining market value of subject property – Thereafter, as contemplated in Rule 7 of Rules 1968, Collector, after considering representation if received in writing and submissions that might have been urged at the time of hearing or even in absence of any representation from parties concerned, proceed to pass final order. (Paras 27 and 31)
Facts of the case:
Present appeals are at instance of Chief Revenue Controlling Officer-cum-Inspector General of Registration and two other Revenue Officers, seeking to challenge judgment and order passed by High Court of Judicature at Madras dated 2-9-2015 in CMA Nos.973/2010 & 2534/2012 respectively by which High Court allowed civil miscellaneous appeals filed by respondent – herein under Section 47-A(10) of Indian Stamp Act, 1899 and thereby quashed and set aside order passed by Chief Revenue Controlling Officer-cum-the- Inspector General of Registration with respect to stamp valuation.
Findings of Court:
No error not to speak of any error of law could be said to have been committed by High Court in passing impugned order.
Result : Appeal dismissed.
Legal Category Hierarchy
Table of Contents
2. Appellants contend that assigning reasons in the Form I notice is not mandatory for referring documents for market value determination. (Para 15 )
3. The court found that the Registering Officer failed to record reasons for undervaluation and the Collector bypassed the mandatory provisional order procedure under the relevant Rules. (Para 12 , 13 , 14 , 18 , 19 , 20 , 21 , 25 , 26 , 27 , 28 , 29 , 30 , 31 )
4. Reference under Section 47-A requires objective reasons for belief of undervaluation; failure to record reasons or follow provisional order procedures vitiates the proceedings. (Para 21 , 27 , 31 )
5. Appeals dismissed; High Court judgment upholding the quashing of the valuation orders is affirmed. (Para 32 , 33 )
6. What is the requirement for a Registering Officer to refer a document for market value determination under Section 47-A?
The Registering Officer must have a reason to believe that the property is undervalued. This reference cannot be a mechanical act; the officer must have a basis for a prima facie finding of undervaluation and is obligated to record reasons for such a conclusion. (Para 18 , 21 , 27 )
7. Does the expression reason to believe imply the subjective satisfaction of the officer?
No, reason to believe is not synonymous with subjective satisfaction. The belief must be held in good faith, based on objective material on record, and must have a rational connection to the formation of the belief. (Para 21 )
8. What is the mandatory procedure for the Collector to determine market value under the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968?
The Collector must first pass a written provisional order under Rule 4(4) clearly indicating the basis of valuation, communicate this via Form II under Rule 6, and then pass a final order after considering representations. (Para 29 , 30 , 31 )
ORDER
1. Leave granted.
2. These appeals are at the instance of the Chief Revenue Controlling Officer-cum-the-Inspector General of Registration and two other Revenue Officers, seeking to challenge the judgment and order passed by the High Court of Judicature at Madras dated 2-9-2015 in CMA Nos.973/2010 & 2534/2012 respectively by which the High Court allowed the civil miscellaneous appeals filed by the respondent – herein under Section 47-A(10) of the Indian Stamp Act, 1899 (for short, “the Stamp Act”) and thereby quashed and set aside the order passed by the Chief Revenue Controlling Officer-cum-the- Inspector General of Registration with respect to the stamp valuation.
3. The subject matter of this litigation is the valuation shown in the two Sale Deeds registered as DOC No.487/02 dated 5-9-2002 and 488/02 dated 2-9-2000 respectively.
4. The respondent – herein is the purchaser. He got the two sale deeds executed through the original owner of the property in question. The market value of the entire property covered in both the sale deeds is Rs.1,20,000/- and Rs.1,30,000/- respectively. It appears that the Joint Sub-Registrar, Tindivanam on receipt of the two registered sale deeds declined to release the documents on the premise that the sale consideration shown in the two sale deeds was under-valued.
5. The matter was accordingly referred by the Joint Sub-Registrar to the Special Deputy Collector (Stamps) under Section 47-(A)(10) of the Act for the purpose of determining the correct market value of the property. It also issued notice in Form-I fixing the value of the properties in DOC No.487/2002 at Rs.45,66,660/- and property in DOC No.488/2002 at Rs.12,94,900/- respectively.
6. The Special Deputy Collector (Stamps) on conclusion of the inquiry fixed the market value of the property covered under DOC No.488/2002 at Rs.10,36,937/- and the property covered under DOC No.487/2002 at Rs.51,16,600/-.
7. The respondent – herein being dissatisfied with the order passed by the Special Deputy Collector (Stamps) preferred a statutory appeal before the Inspector General of Registration. The appeal came to be dismissed.
8. In such circumstances, referred to above, the respondent – herein went before the High Court by filing Civil Miscellaneous Appeals under Section 47(A)(10) of the Stamp Act.
9. The High Court allowed both the appeals and thereby quashed and set aside the orders passed by the authorities below.
10. The appellants feeling dissatisfied with the impugned judgment and order passed by the High Court have come up before this Court with the present appeals.
11. We have heard Mr. Sabarish Subramanian, the learned counsel appearing for the appellants and Ms. Rohini Musa, the learned counsel appearing for the respondent.
12. We take notice of the fact that the High Court while allowing the Civil Miscellaneous Appeals has observed in paras 20 and 21 respectively as under:-
“20. That being the legal position, if the contention raised on the side of the learned counsel appearing for the Appellant is appreciated in the legal proposition, as above laid down by the Supreme Court, Full Bench, Division Bench and Single Judges of our High Court, it would compel this court to hold that the proceedings referring the documents for determination of the market value, without recording any reason to say that the document is undervalued, thus without performing the statutory obligation, cast upon the third Respondent Registering Officer, to record such reasons to arrive at a decision that the documents are undervalued and the same are required to be referred to the authority concerned to determine the actual market value of the property is contrary to the procedure laid down under law and is ex facie, illegal. Furthermore, no material is made available to show that the third Respondent/ Registering Officer, on the basis of such material, arrived at the conclusion that the true value is not set forth in the documents. In the absence of one such material, the
