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2016 Supreme(Cal) 467
IN THE HIGH COURT AT CALCUTTA
BISWANATH SOMADDER, J.
Chandramallika Suppliers Private Limited & Anr. - Petitioners
Versus
The State of West Bengal & Ors.
WP No. 1224 of 2015
Decided On : 05-10-2016
For the Petitioners: Mr. Ashok Kumar Banerjee, Mr. Aniruddha Mitra, Ms. Swati Bhattacharyya, Mr. Aditya Poddar, Mr. Ankit Shroff
For the State : Mr. Jayanta Kumar Mitra, Mr. Ayan Banerjee, Mr. Paritosh Kumar Sinha
The market value of an immovable property includes its potential value, and the West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules, 2001, provide a complete mechanism for the manner of determination of market value when an instrument is registered through the system of Computerization of Registration of Documents (CORD).
Headnote:
STAMP DUTY - Market Value - Proposed Land Use - West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules, 2001 - Whether information obtained by the Registering Officer on the basis of the details provided by the applicant in the appropriate form mentioned in Appendix V of the West Bengal Registration Rules, can mandatorily include such information required to be provided under the column specifically relating to 'Proposed Land Use' or, in other words, whether such information can be mandatorily obtained for the purpose of determination of market value based on the statutory definition of 'market value' as provided under clause 16B of the Indian Stamp Act, 1899 - YES
Fact of the Case:
The petitioners, a company and its director, challenged the legality of determining the 'Market Value' of an immovable property based on 'Proposed Land Use' as per the West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules, 2001. They contended that the registering authorities were illegally and arbitrarily determining the market value of an immovable property based on 'proposed land use' and fixing stamp duty accordingly, which was against the basic structure of Indian laws.
Finding of the Court:
The Court held that the information provided by an applicant under the column 'Proposed Land Use' is mandatorily required by the Registering Officer for the purpose of determination of 'Market Value' as provided under clause 16B of the Indian Stamp Act, 1899. The Court also clarified that there cannot be an indefinite period of time attached to the details as required to be filled-up under the column 'Proposed Land Use' and it is imperative to attach a time frame to the details to be filled-up under the said column. Such time frame should be in sync with the scheme of Rules 3A, 3B, 3C, 3D and 3E and ideally, five years.
Issues: 1. Whether the determination of the market value of an immovable property based on 'Proposed Land Use' is legal? 2. Whether the West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules, 2001 take into consideration the proposed land use while preparing the annual statement of market value of immovable property?
Ratio Decidendi: 1. The market value of an immovable property includes its potential value, which is a capacity or possibility for changing or developing into a state of actuality. 2. The West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules, 2001, as amended in 2010, provide a complete mechanism for the manner of determination of market value when an instrument is registered through the system of Computerization of Registration of Documents (CORD). Rule 3E specifically provides that every Registering Officer shall obtain information in respect of any immovable property from the person in the appropriate form mentioned in Appendix V of the West Bengal Registration Rules.
Final Decision: The Court directed the concerned authority of the State of West Bengal to incorporate a time frame of five years in the column 'Proposed Land Use' within a period of eight weeks, but not later than twelve weeks from the date of communication of the order.
Biswanath Somadder, J.
The writ petitioner no.1 is a company registered under the Companies Act and the writ petitioner no.2 is its Director. The petitioners have approached this Court praying, inter alia, for the following principal reliefs:-
“a. A writ of and/or order and/or directions in the nature of Mandamus do issue declaring that the determination of the “Market Value” of an immovable property based on “Proposed Land Use” is illegal;
b. A writ of and/or order and/or directions in the nature of Mandamus do declaring that the determination of the market value of an immovable property based on “Proposed Land Use” is contrary to The West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules, 2001;
c. A writ of and/or order and/or directions in the nature of Prohibition do issue injuncting the respondent authorities and/or each one of them from determining the “Market Value” of an immovable property based on information with regard to “Proposed Land Use”;
d. A writ of and/or order and/or directions in the nature of Certiorari do issue directing the respondent authorities and/or each one of them to certify and transmit all records pertaining to the instant case so that same may be quashed and conscionable justice be done between the parties;”
2. From the pleadings it appears that the petitioner no.1 is in the business of supplying and trading in various agricultural goods and services and is desirous of setting up farms for vegetables, pulses, grains, dairy, organic food etc., for which the petitioners have already bought and are interested in buying further land in Mouzas Chaketbati, Chakmanik, Chakparan and Pujali, amongst other parts of West Bengal. The writ petitioners have stated that in certain registration offices, if the transferee is an individual, the registering authority does not force him to change the proposed land use either to “Bastu” or “Industrial”, but if the transferee is an entity other than an individual, the registering authority forces him to change the proposed name to these. This change of the “Proposed Use of Land” in the records of Registration Offices has no bearing with the records maintained in the office of the B.L and L.R.O. Separate application is required to be made with the concerned office of the B.L and L.R.O seeking permission for such conversion. Granting of such conversion is based on several rules, regulations and bye-laws which may or may not be granted by the office of the B.L and L.R.O depending on the prevailing circumstances. Moreover, the B.L and L.R.O also charges conversion fees, as applicable. The writ petitioners have further stated that ascertainment of market value and stamp duty payable is being done on anticipation and apprehension of happening of a future event. The same is, therefore, bad in law. Being taxed at a higher rate upon anticipation of a future event is against the basic structure of Indian laws. The respondents are illegally and arbitrarily determining the market value of an immovable property based on “proposed land use” and fixing stamp duty payable accordingly. The West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules, 2001 (hereinafter referred to as the ‘2001 Rules’) do not take into consideration the proposed land use while preparing annual statement of market value of immovable property. Further, at the time of registration, neither the transferor nor the transferee has any obligation to disclose to the registering authority, the purpose for which the land would be used after the transfer and by asking the transferor or the transferee about such purpose, the registering authority has travelled beyond his authority and jurisdiction. The action of the respondents is absolutely in violation of the principles of natural justice. It is also contended by the petitioners that they have been forced to pay exorbitant stamp duty while buying land and their interest are at serious prejudice at the hands of the respondents. The intr
