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ALLAHABAD HIGH COURT
Sabhajeet Yadav, Bala Krishna Narayana, JJ.
Jai Singh -Appellant
Versus
State of U.P. and others -Respondent
C.M.W.P. No. (PIL) 35248 of 2010
Decided On : 16-07-2010
The Court held that the provisions of Section 47-A of the Indian Stamp Act, 1899 (the Act) conferring power to fix minimum value of land for the purpose of charging stamp duty on the instrument chargeable with such duty to the rule making authority, without fixing any guidelines or without formulating any policy for such fixation, suffer from vice of excessive delegation of legislative power to the rule making authority and to that extent the aforesaid piece of legislation can be held to be void as unconstitutional, consequently Rule 4 of 1997 rules can also be held to be beyond the scope of authority under law.
Fact of the Case:
The petitioner challenged the validity of the provisions of Uttar Pradesh Stamp (Valuation of Property) Rules, 1997 on the ground that under Rule 4 (1) and (2) of the said rules, the Collector of the District has been given unguided, uncanalised and uncontrolled power to determine minimum value (circle rate) of land, (circle rates) of immoveable property within the territorial limit of the District for charging Stamp Duty upon the instrument containing the transactions of conveyance and said rate of valuation of land can be revised by him within a period of two years from the date of fixation of earlier minimum rate suo motu or an application made to him within two years without any standard or principles, as such, Rule 4 (1) and (2) of said rules suffers from vice of excessive delegation.
Finding of the Court:
The Court held that the provisions of Section 47-A of the Indian Stamp Act, 1899 (the Act) conferring power to fix minimum value of land for the purpose of charging stamp duty on the instrument chargeable with such duty to the rule making authority, without fixing any guidelines or without formulating any policy for such fixation, suffer from vice of excessive delegation of legislative power to the rule making authority and to that extent the aforesaid piece of legislation can be held to be void as unconstitutional, consequently Rule 4 of 1997 rules can also be held to be beyond the scope of authority under law.
Issues: Whether the provisions of Section 47-A of the Indian Stamp Act, 1899 (the Act) conferring power to fix minimum value of land for the purpose of charging stamp duty on the instrument chargeable with such duty to the rule making authority, without fixing any guidelines or without formulating any policy for such fixation, suffer from vice of excessive delegation of legislative power to the rule making authority and to that extent the aforesaid piece of legislation can be held to be void as unconstitutional, consequently Rule 4 of 1997 rules can also be held to be beyond the scope of authority under law?
Ratio Decidendi: The Court held that the provisions of Section 47-A of the Indian Stamp Act, 1899 (the Act) conferring power to fix minimum value of land for the purpose of charging stamp duty on the instrument chargeable with such duty to the rule making authority, without fixing any guidelines or without formulating any policy for such fixation, suffer from vice of excessive delegation of legislative power to the rule making authority and to that extent the aforesaid piece of legislation can be held to be void as unconstitutional, consequently Rule 4 of 1997 rules can also be held to be beyond the scope of authority under law.
Final Decision: The Court held that the provisions of Section 47-A of the Indian Stamp Act, 1899 (the Act) conferring power to fix minimum value of land for the purpose of charging stamp duty on the instrument chargeable with such duty to the rule making authority, without fixing any guidelines or without formulating any policy for such fixation, suffer from vice of excessive delegation of legislative power to the rule making authority and to that extent the aforesaid piece of legislation can be held to be void as unconstitutional, consequently Rule 4 of 1997 rules can also be held to be beyond the scope of authority under law.
Key Points: - The validity of provisions under Section 47-A of the Indian Stamp Act, 1899, and Rule 4 of the 1997 Rules was challenged on grounds of excessive delegation (!) . - The Court held that the provisions confer unguided, uncontrolled power to the Collector to fix minimum land values without any policy or guidelines (!) . - The 1997 Rules were found to lack the guidelines and principles that existed in earlier rules, such as the 1942 Rules (!) . - The power to fix minimum values (circle rates) is distinct from the power to determine market value under Section 47-A (!) . - The Court observed that the absence of any standards or norms for fixation of minimum value leads to arbitrary and unconstitutional delegation (!) . - The challenge was framed as whether such delegation violates Article 14 of the Constitution (!) . - The judgment emphasizes that essential legislative functions cannot be delegated without legislative policy guidance (!) . - The Court expressed concern that the enhancements in circle rates from 2000 to 2010 appear whimsical and lack legal or factual basis (!) . - It was noted that the Collector did not provide sufficient sale exemplars or evidence to justify the revised rates (!) . - The interim direction stayed the enhanced circle rates for urban Allahabad until further hearing (!) .
By this petition, petitioner has challenged the validity of the provisions of Uttar Pradesh Stamp (Valuation of Property) Rules, 1997 on the ground that under Rule 4 (1) and (2) of the said rules, the Collector of the District has been given unguided, uncanalised and uncontrolled power to determine minimum value of land, (Circle Rates) of immoveable property within the territorial limit of the District for charging Stamp Duty upon the instrument containing the transactions of conveyance and said rate of valuation of land can be revised by him within a period of two years from the date of fixation of earlier minimum rate suo motu or an application made to him within two years without any standard or principles, as such, Rule 4 (1) and (2) of said rules suffers from vice of excessive delegation. It is stated that 1997 Rules do not provide any guiding principle or standard and/or the materials to be taken into consideration by the Authority, to whom the power has been delegated under Rule 4 of the 1997 Rules, to determine minimum value (Circle Rate) of the immovable property of the area for the purpose of charging Stamp duty. The Government also did not frame separate guidelines fixing the norms and the principles for evaluating the minimum rate/market value of the area to be determined by Authority concerned. Thus, the Authority/Collector of the District having been conferred uncanalised and unfettered power under Rule 4 to revise the Circle Rate of the area as such the rule in question is also altra vires the Parent Act.
2. It is stated that earlier to the aforesaid 1997 Rules, there was another set of rules namely U.P. Stamp Rules, 1942. Chapter XV of the said Rules provided the guidelines for determining the market value of certain instrument. Under Rule 341 (e) of which it was provided that for the purposes of payment of Stamp Duty, the minimum market value of immoveable property forming the subject matter of an instrument referred to under in Clause (c) of 340(1) may be equal to the value worked out on the basis of average price per square metre prevailing in the locality on the date of instrument. Whereas under new rules 1997, no such guidelines or principles are provided for fixation of minimum rate for valuation of land, and since the earlier existing rules have been superseded and repealed by 1997 Rules, therefore, the aforesaid guiding factor existing under earlier rules has no application under the new 1997 Rules and now it is open for the Collector to fix any Circle Rate in whimsical and arbitrary manner as he likes, therefore, merely on this ground alone the provisions of 1997 Rules can be struck down by this Court.
3. It is stated that the Circle Rates revised by the Collector, Allahabad vide impugned order dated 20/28.8.2008 are highly exorbitant and the same are not reflective of the true minimum value of the land of area, inasmuch as the rates have been enhanced 10 to 15 times based on no justifiable material or factors to be taken into consideration for determining the minimum value (Circle Rate) of the land of the area. By this petition the petitioner has also challenged the policy of grant of free hold right over Nazul Lands on various grounds mentioned in the writ petition.
4. While demonstrating arbitrary fixation of the Circle Rates of immovable properties in urban areas of Allahabad City certain other orders containing the list of circle rates, earlier fixed by the Collector Allahabad have also been brought on record by filing supplementary affidavit in the said writ petition. It is stated that on 1.4.2006 an order fixing Circle Rates of urban area of City Allahabad was issued for a period of two years but before expiry of said period another order fixing further enhanced Circle Rates of the same urban area was issued on 11.6.2007 and thereafter on expiry of merely nine months (before expiry of even one year what to say of two years) another order dated 20/28.8
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