Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2015 Supreme(Del) 3108

IN THE HIGH COURT OF DELHI
G. ROHINI, RAJIV SAHAI ENDLAW, JJ.
MANU NARANG & ANR - Petitioners
Versus
THE LT. GOVERNOR, GOVERNMENT NATIONAL CAPITAL TERRITORY OF DELHI AND ORS - Respondents
W.P.(C) No.5975/2013, W.P.(C) No.3591/2014, CM No.7330/2014, CM No.16198/2014 (both for interim relief), CM No.6076/2015 (u/O-1 R-10 CPC) & CM No.6094/2015 (u/S 151 CPC), W.P.(C) No.10328/2015 & CM No.25753/2015 (for stay).
Decided on : 23.12.2015

Advocates:
Advocate Appeared:
For the Petitioner: Mr. Manav Gupta along with Ms. Esha Dutta, Advs. in W.P.(C) No.5975/2013.
Mr. Kumar Dushyant Singh, Adv. in W.P.(C) No.10328/2015.
Mr. Arvind Datar, Sr. Adv. with Mr. Anirudh Wadhwa along with Mr. Vipul Kumar, Advs. in W.P.(C) No.3951/2014.
For the Respondents: Mr. Sanjay Poddar, Sr. Adv. with Mr. Sanjoy Ghosh, ASC Mr. Rakesh Mittal, Adv. for DDA.
Mr. Rahul Chaudhary, Adv. for R-5.
Ms. Mini Pushkarna with Ms. Yoothika Pallavi, Adv. for SDMC.
Ms.Uttara Babbar with Mr. Vinod Kapoor, Advs. in CM No.2385/2015 in W.P.(C) No.3591/2014 Mr. Anshuman Sood, Adv. for Intervener.
Mr. Akshay Makhija, Standing Counsel with Mr. Vikas Bhadauria and Ms. Mahima Behl, Advs. for UOI.
Mr. Rajeev Kumar Yadav, Adv. for Mr. Gaurang Kanth, Adv for SDMC in W.P.(C) No.3591/2014.

The central legal point established in the judgment is the interpretation and application of Section 47-A of the Indian Stamp Act, 1899 in the context of stamp duty evaluation for residential properties.

Headnote:
Stamp Duty - Residential Properties - Indian Stamp Act, 1899, Delhi Stamp (Prevention of Under Valuation of Instruments) Rules, 2007, Notification dated 4th December, 2012 - Summary of Acts and Sections: The court discussed the applicability of the Indian Stamp Act, 1899, the Delhi Stamp (Prevention of Under Valuation of Instruments) Rules, 2007, and the Notification dated 4th December, 2012 in the context of evaluating stamp duty for basements of residential properties. The key legal provision discussed was Section 47-A of the Stamp Act, which outlines the procedure for determination of property value and stamp duty. The court's decision was influenced by the interpretation of Section 47-A and its application to the valuation of properties for stamp duty purposes.
Fact of the Case:

The petitions were filed to challenge the policy/practice of evaluating stamp duty for basements of residential properties, the circle rate notifications, and the frequency of revision of circle rates in Delhi. The court heard arguments and found that the impugned orders/circulars by the respondent GNCTD were contrary to Section 47-A of the Stamp Act.
Finding of the Court:

The court directed the Registrar/Sub Registrar to follow a specific procedure when the consideration mentioned in the instrument is less than the valuation as per the circle rates. It also clarified the procedure for registration of basements of residential properties for stamp duty purposes.
Issues: The issues involved the evaluation of stamp duty for basements of residential properties, the validity of circle rate notifications, and the procedure for determination of property value and stamp duty.
Ratio Decidendi: The court's decision was based on the interpretation of Section 47-A of the Stamp Act, which requires the Registrar/Sub Registrar to follow a specific procedure when the consideration mentioned in the instrument is less than the valuation as per the circle rates.
Final Decision: The petitions were disposed of by directing the Registrar/Sub Registrar to follow a specific procedure for stamp duty evaluation and registration of basements of residential properties. The court also clarified the procedure for determination of property value and stamp duty in accordance with Section 47-A of the Stamp Act.

JUDGMENT :

RAJIV SAHAI ENDLAW, J.

1. W.P.(C) No.5975/2013 was filed, (i) for declaration that the policy/practice of construing the basements of residential properties at par with the other floors for the purpose of evaluating the applicable stamp duty, under the (a) Indian Stamp Act, 1899; (b) Delhi Stamp (Prevention of Under Valuation of Instruments) Rules, 2007; and, (c) the Notification dated 4th December, 2012, is violative of Articles 14 & 19 of the Constitution of India; (ii) for a direction to the respondent Government of National Capital Territory of Delhi (GNCTD) to prescribe for equitable stamp duty charges applicable in case of sale/purchase of basements in residential properties which are otherwise purely meant for parking or storage purposes; and, (iii) for a direction to the respondent GNCTD to modify the existing method for calculating the applicable stamp duty in case of sale of a floor of a residential property by taking into consideration the maximum permissible plinth area instead of the existing plinth area.

2. The petition was entertained and notice thereof issued.

3. W.P.(C) No.3591/2014 was filed in public interest for (i) declaration that a) the Delhi Stamp (Prevention of Under-Valuation of Instruments) Rules, 2007; b) the Circle Rate Notifications being Notification bb) No.7.2(12)/Fin.(E.I)/Part File/Vol.1 (ii)/3548 dated 18th July, 2007; bbb) No.F.1 (281)/Regn.Br./HQ/Div.Com./09/45 dated 4th February, 2011; and, bbbb) No. F.1 (152)/Regn.Br./Div.Com./HQ/2011/780 dated 4th December, 2012 are beyond the scope of the Stamp Act as applicable to Delhi; (ii) for declaration of the three Circle Rate Notifications aforesaid as discriminatory, arbitrary, unreasonable and having been framed without proper application of mind; (iii) for declaration that the exercise of valuation of properties in Delhi has not been undertaken with due consultation or application of mind; (iv) for declaration that the frequency of revision of Circle Rates in Delhi is against the mandate of Rule4(2) of the 2007 Rules supra; and, (v) for declaring Rule 4(2)(B) of the 2007 Rules as well as the Notifications as beyond the scope of Section 27(3) of the Stamp Act etc.

4. The said petition was also entertained and notice thereof issued.

5. W.P.(C) No.10328/2015 was filed, (i) impugning the Rule 4 of the 2007 Rules as unconstitutional and violative of Article 14 of the Constitution of India; and, (ii) impugning the Notification bearing no.F.1(953) Regn.Br./Div.Com./HQ/2014/5943 dated 22nd September, 2014 of the respondent GNCTD and seeking a mandamus to the respondents to determine the circle rates on the basis of basic amenities and infrastructure as provided to the areas in various parts of Delhi.

6. Though W.P.(C) No.5975/2013 was pending before a learned Single Judge of this Court but was also called before this Bench finding the questions involved therein to be identical to the questions raised in the W.P.(C) No.3591/2014 filed as a Public Interest Litigation and pending before this Bench.

7. After the completion of pleadings, arguments in the two petitions were commenced together and the senior counsel for the petitioner in W.P.(C) No.3591/2014 was heard from 8th April, 2015 onwards. The arguments on behalf of the petitioners were concluded on 23rd April, 2015 and the matters posted for arguments on behalf of the respondent GNCTD. WP(C) 10328/2015 came up first on 4th November, 2015 and the questions therein being also identical, the counsel for the petitioner therein also joined in the hearing already underway. After several requests for adjournment, the senior counsel for the respondent GNCTD commenced his arguments on 19th November, 2015. However, finding that he was not addressing the contentions of the counsel for the petitioners, we on that date asked the counsel for the petitioners to submit their written submissions with advance copy to the counsel for the respondent GNCTD to enable the counsel for the respondent GNCTD to re

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