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Andhra Pradesh High Court
Judges : D.REDDAPPA REDDY, LINGARAJA RATH
Mohd.Abbas Shaft - Appellant
Versus
Sub-Registrar, Khairatabad, Hyderabad - Respondent
Decided On : 03-25-96
INDIAN STAMP ACT, 1899 - SECTION 47-A(1) - ANDHRA PRADESH STAMP (PREVENTION OF UNDER-VALUATION OF INSTRUMENTS) RULES, 1975 - RULES 3(3) AND 3(4) - REGISTRATION OF DOCUMENTS - UNDER-VALUATION - OPINION FORMATION PROCESS - PARTICIPATION OF PRESENTING PARTIES - REFERENCE TO COLLECTOR - FORM-1 - REQUIREMENTS - DEVIATIONS - QUASHING OF PROCEEDINGS.
Fact of the Case:
The appellant purchased a property for Rs. 5,00,000/- but paid stamp duty on a valuation of Rs. 11,41,500/- as determined by the Sub-Registrar. The Sub-Registrar initiated proceedings under Section 47-A(1) of the Indian Stamp Act, 1899, as amended by A.P. Act 22 of 1971, and referred the matter to the Collector for determination of market value. The appellant challenged the proceedings, arguing that the Sub-Registrar had no materials to reasonably conclude that the property was undervalued.
Finding of the Court:
The Court held that the Sub-Registrar must have reason to believe that the market value of the property has not been truly set forth in the instrument presented for registration in order to initiate action under Section 47-A(1). The Court further held that Rule 3(3) of the Andhra Pradesh Stamp (Prevention of Under-valuation of Instruments) Rules, 1975, provides the mechanism for collection of materials for this purpose, and that the enquiry made by the Sub-Registrar must be based on relevant facts and within the limits of the statute.
Issues: 1. Whether the Sub-Registrar had materials to reasonably conclude that the property was undervalued. 2. Whether the Sub-Registrar complied with the requirements of Rule 3(3) of the Andhra Pradesh Stamp (Prevention of Under-valuation of Instruments) Rules, 1975.
Ratio Decidendi: 1. The Court held that the Sub-Registrar did not have materials to reasonably conclude that the property was undervalued. The Court found that the Sub-Registrar had relied solely on the Basic Value Register, which was not conclusive and binding on him. The Court also found that the Sub-Registrar had not conducted any other enquiry to collect materials to support his conclusion. 2. The Court held that the Sub-Registrar did not comply with the requirements of Rule 3(3) of the Andhra Pradesh Stamp (Prevention of Under-valuation of Instruments) Rules, 1975. The Court found that the Sub-Registrar had not made any enquiry to collect materials to support his conclusion that the property was undervalued.
Final Decision: The Court allowed the appeal, quashed the impugned order in the writ petition, and quashed the Section 47-A(1) proceedings initiated by the Sub-Registrar.
( 1 ) THE appellant who came before this Court in W. P. No. 718 of 1991 seeking relief of direction to release the original registered sale deed bearing receipt no. 275 (P. 1253/90) dated 14-9-1990 executed in his favour having been rejected has preferred this appeal.
( 2 ) THE appellant purchased the property in question through the executed deed for consideration of Rs. 5,00,000/- but at the time of the registration the sub-Registrar, Khairtabad, Hyderabad, respondent herein (having) entertained the opinion of the property to be of much higher value initiated proceedings under Section 47-A (1) of the Indian Stamp Act, 1899 as amended by A. P. Act 22 of 1971. In his view, the property was to have been valued at Rs. 11,41,500/- and stamp duty was paid thereon. As the stamp duty had been short-paid he referred the matter to the Collector.
( 3 ) THE proceeding initiated by the respondent was assailed before this Court mainly upon the ground that there were no material before the respondent to reasonably reach the conclusion of the property to have been under-valued. It is the submission that the exercise under Section 47-A (1) is neither arbitrary nor whimsical and must be relatable to materials on record.
( 4 ) CONTESTING the appeal, the Government Pleader for Revenue submits that the registering Officer had materials before him to reach the conclusion of the document having been not valued inasmuch as he conducted a spot inspection, and fixed valuation of the property as Rs. 11,41,500 /- and the deficit stamp-duty and registration fees as being Rs. 86,605/ -. Since the appellant refused to make good the deficit stamp-duty and registration fees, the document was referred under Section 47-A (1) of the Indian Stamp Act, 1899 to the Collector for determination of the market value.
( 5 ) SECTION 47-A (l) of the Act runs as follows:"47-A. Instruments of conveyance, etc. . under-valued how to be dealt with:- (1) Where the registering officer appointed under the Registration act, 1908, while registering any instrument of conveyance, exchange, gift, partition "settlement or release" has reason to believe that the market value of the property which is the subject matter of such instrument has not been truly set forth in the instrument "he may keep pending such instrument and refer the matter to the Collector for determination of market value of such property and proper duty payable thereon". Bereft of details the substance of the provision is that the registering Officer, so as to enable him to initiate action must have reason to believe that the market value of the property has not been set forth in the instrument presented for registration truly. In pursuance of the provision read with Section 75 of the indian Stamp Act, 1899, the Andhra Pradesh Stamp (Prevention of Under- valuation of Instruments) Rules, 1975 were framed in G. O. Ms. No. 1031, revenue (U-2) dated 31st July, 1975, hereinafter referred as the Rules) in which rules 3 (3) and 3 (4) which are relevant for the purpose of the present case are as follows:"3. Furnishing of statement of market value: (3) The Registering Officer may, for the purpose of satisfying himself whether the market value or the consideration has been correctly furnished in the instrument or not, make such enquiries, as he may deem fit. He may elicit from the parties concerned, any information having a bearing on the subject and call for and examine any records kept with any public officer or authority. (4) If the Registering Officer is of the opinion that the market value of the property affected by the instrument is not correctly furnished, he shall keep the document pending and with out delay refer the matter to the collector with details of his assessment of the Market Value arrived at by him in the Form-1. No copy of such document shall be granted notwithstanding anything contained in any of the provisions of any other act or Rules. "the requirement under Rule 3 supplements the su
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