Back
PATNA HIGH COURT
Nagendra Rai and M.Y.Eqbal JJ.
Chandrakant C.Adesara
Versus
State Of Bihar
Civil Writ Jurisdiction Case No. 3484 of 1996 ;
Decided On : MARCH 21, 1997
STAMP ACT - RULE 6 OF BIHAR STAMP (PREVENTION OF UNDER-VALUATION OF INSTRUMENTS) RULES, 1995 - CONSTITUTIONALITY - ARTICLE 14 OF THE CONSTITUTION OF INDIA - VALIDITY - PROCEDURE FOR DETERMINATION OF MARKET VALUE OF PROPERTY - LIMITATION FOR COLLECTOR'S ACTION UNDER SECTION 47-A(3) OF THE ACT.
Fact of the Case:
Petitioner challenged Rule 6 of the Bihar Stamp (Prevention of Under-valuation of Instruments) Rules, 1995 as ultra vires the provisions of Indian Stamp Act, 1899 and also ultra vires Article 14 of the Constitution of India. Petitioner also sought to quash the order dated 5-10-1996 issued by the District Sub-Registrar, Jamshedpur whereby the petitioner was directed to pay stamp fee amounting to Rs.1,86,538.00 and Registration fee Rs. 46,734 / - in respect of the sale deed executed on 22-6-1993 in favour of the petitioners.
Finding of the Court:
1. Rule 6 of the Bihar Stamp (Prevention of Under-valuation of Instruments) Rules, 1995 is not ultra vires the provisions of Indian Stamp Act, 1899 and Article 14 of the Constitution of India. 2. The procedure for determination of market value of property under Section 47-A of the Act and the Rules framed thereunder is valid and constitutional. 3. The limitation of two years prescribed in Sub-sec. (3) of Sec. 47-A of the Act applies only in a case where the Collector takes action either suo motu or on receipt of reference from the Inspector General of Registration or the Registrar of the District appointed under the Registration Act, 1908 (Central Act 16 of 1908) in whose jurisdiction the property or any portion thereof, which is the subject-matter of the instrument, is situated.
Issues: 1. Whether Rule 6 of the Bihar Stamp (Prevention of Under-valuation of Instruments) Rules, 1995 is ultra vires the provisions of Indian Stamp Act, 1899 and Article 14 of the Constitution of India? 2. Whether the procedure for determination of market value of property under Section 47-A of the Act and the Rules framed thereunder is valid and constitutional? 3. Whether the limitation of two years prescribed in Sub-sec. (3) of Sec. 47-A of the Act applies to the case where a reference was made by the Registering Authority, namely the primary authority under Sub-sec. (1) of Sec. 47A?
Ratio Decidendi: 1. Rule 6 of the Bihar Stamp (Prevention of Under-valuation of Instruments) Rules, 1995 is not ultra vires the provisions of Indian Stamp Act, 1899 and Article 14 of the Constitution of India because: a) The rule provides a complete safeguard against arbitrariness and unreasonableness. b) The Collector, while exercising power under Rule 12 before determining the market value, shall not only take into consideration various documents and evidence but also give full opportunity of hearing to the objectors or the parties aggrieved. c) Rules 13 to 16 provide a remedy of appeal against the order of the Collector and the procedure for disposal of appeal. 2. The procedure for determination of market value of property under Section 47-A of the Act and the Rules framed thereunder is valid and constitutional because: a) The provisions of Section 47-A of the Act are constitutionally valid and not ultra vires Article 14 of the Constitution of India. b) The Rules provide a proper and reasonable procedure for the determination of market value of property. 3. The limitation of two years prescribed in Sub-sec. (3) of Sec. 47-A of the Act applies only in a case where the Collector takes action either suo motu or on receipt of reference from the Inspector General of Registration or the Registrar of the District appointed under the Registration Act, 1908 (Central Act 16 of 1908) in whose jurisdiction the property or any portion thereof, which is the subject-matter of the instrument, is situated.
Final Decision: 1. Rule 6 of the Bihar Stamp (Prevention of Under-valuation of Instruments) Rules, 1995 is not ultra vires the provisions of Indian Stamp Act, 1899 and Article 14 of the Constitution of India. 2. The procedure for determination of market value of property under Section 47-A of the Act and the Rules framed thereunder is valid and constitutional. 3. The limitation of two years prescribed in Sub-sec. (3) of Sec. 47-A of the Act applies only in a case where the Collector takes action either suo motu or on receipt of reference from the Inspector General of Registration or the Registrar of the District appointed under the Registration Act, 1908 (Central Act 16 of 1908) in whose jurisdiction the property or any portion thereof, which is the subject-matter of the instrument, is situated. 4. The writ application is partly allowed. Annexures-6 and 9 are quashed. The Collector is directed to pass fresh order in the proceeding after giving notice and full opportunity of hearing to the petitioner.
M.Y.EQBAL, J.
1. In the instant writ application the petitioners have challenged Rule 6 of the Bihar Stamp (Prevention of Under-valuation of Instruments) Rules, 1995 as ultravires the provisions of Indian Stamp Act, 1899 and also ultra vires Article 14 of the Constitution of India. A further prayer has been made by the petitioner for quashing the order dated 5-10-1996 issued by the District Sub-Registrar, Jamshedpur whereby the petitioner was directed to pay stamp fee amounting to Rs.1,86,538.00 and Registration fee Rs. 46,734 / - in respect of the sale deed executed on 22-6-1993 in favour of the petitioners.
2. The brief facts of the case which gave rise to filing of this writ application are as follows :One M/s. Mithila Motors (Pvt.) Ltd. through its Director, Dinesh B. Parikh had purchased a building being Holding No. 20 at Contractors Area, Bistupur, Jamshedpur by sale deed dated 23-3-1975 for a consideration of Rs. 90,000.00 . It is submitted that M/s. Mithila Motors (Pvt.) Ltd. got the valuation of the said structure from a registered valuer, the Managing Director of M/s. Mithila Motors applied for no objection certificate from the office of the Income-tax Department, Jamshedpur for selling the property. Income-tax Department gave no objection certificate on 3-6-1993 under S. 239(A)( 1) of the Income-tax Act, 1961 and thereafter the said M/s. Mithila Motors in their meeting dated 29-5-1993 resolved to sell the said building to increase the capital of the petitioner. Accordingly a sale deed was executed on 22-6-1993 in favour of the petitioner in respect of the said holding for a consideration of Rs. 9,42,000. A copy of the sale deed is annexed as Annexure-4 to the writ application. The petitioners further case is that one Shri Nagin B. Parikh, Managing Director of Mithila Motors and elder brother of Shri Bipin B. Parikh by their letter dated 22-3-1994 said that valuation given in the sale deed dated 22-6-1993 is far below the prevailing market price and he is ready to purchase it at a price of 18 lakhs. According to the petitioner in respect of the same building, there was serious dispute between Bipin B. Parikh and Nagin B. Parikh and a proceeding under S. 107, Cr. P.C. was initiated at the instance of Nagin B. Parikh. It appears that on receipt of the said information a notice/ letter was issued by District Sub-Registrar on 23-8-1996 asking Bipin B. Parikh to deposit stamp fee amounting to Rs. 3,06,000 /- and registration fee Rs. 75,600 /-. On receipt of the said letter, Bipin B. Parikh informed the District SubRegistrar that the building in question was constructed in the year 1938 and the market valuation of the building cannot and shall not be Rs. 1,80,000.00 . The petitioners further case was that on receipt of the aforesaid letter, all of a sudden the petitioner received a letter from the office of the District Sub-Registrar, Jamshedpur vide letter dt. 23-9-1996 whereby the petitioners advocate was informed to remain present along with relevant documents on 24-9-1996. The petitioners contention is that no inquiry was ever made either by the Deputy Commissioner or by the Registrar inquestion of valuation of the building but a notice dated 5-10-1996 was served upon the petitioner directing him to deposit stamp fee amounting to Rs. 1,86,538 / - and registration fee amounting to Rs. 46,734 /- otherwise legal action would be taken against them. A copy of the said impugned notice is Annexure-9 to the writ application.
3. It appears that after filing of the writ petition, a notice dated 26-12-1996 was served on the petitioner by the Collector-cum-Deputy Commissioner intimating the petitioner that the document has been impounded under Sec. 33 of the Indian Stamp Act and he has been asked to file show cause as to why the valuation of the property should not be determined in exercise of power under Sec. 40 of the said Act. The petitioner has challenged this notice which is Annexure-10 to the writ petition.
4. A coun
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
