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IN THE HIGH COURT OF MADHYA PRADESH
K. K. LAHOTI, J.
State of M.P. v. Dilip Kumar Sangni.
W.P. No. 2055 of 2004
Decided on : 22-1-2008.
Stamp Duty - Sale Deed - Indian Stamp Act, 1899 - Section 47-A, Section 27, Schedule 1-A - The court discussed the applicability of stamp duty on the market value of the property at the time of registration of the sale deed, the relevance of the consideration shown in the agreement, and the interpretation of Section 47-A. The court also highlighted the recent pronouncement of the Apex Court in State of Rajasthan v. M/s. Khandaka Jain Jewellers, 2007 AIR SCW 7378 : (AIR 2008 SC 509) and its impact on previous judgments.
Fact of the Case:
The case involved a dispute over the stamp duty payable on a sale deed for a piece of land and a house. The Collector of Stamps determined the market value of the property at Rs. 7,83,000 and directed the respondent to pay deficit stamp duty and registration fee on this valuation. The Board of Revenue set aside the Collector's order, holding that the stamp duty and registration fee paid by the respondent were in accordance with the law.
Finding of the Court:
The court found that the stamp duty was payable on the market value of the property at the time of registration of the sale deed, regardless of the consideration shown in the agreement or the compromise decree. It also emphasized the strict construction of the Indian Stamp Act as a taxing statute and the recent pronouncement of the Apex Court in State of Rajasthan v. M/s. Khandaka Jain Jewellers, 2007 AIR SCW 7378 : (AIR 2008 SC 509) overruling previous judgments.
Issues: The key issue was whether the stamp duty is payable on the market value of the subject-matter on the date of registration of the sale deed or on the consideration fixed by the Court in a compromise decree.
Ratio Decidendi: The court held that the stamp duty is payable on the market value of the property at the time of execution of the sale deed, and not on the consideration shown in the agreement or the compromise decree. It emphasized the strict construction of the Indian Stamp Act as a taxing statute and the recent pronouncement of the Apex Court in State of Rajasthan v. M/s. Khandaka Jain Jewellers, 2007 AIR SCW 7378 : (AIR 2008 SC 509) overruling previous judgments.
Final Decision: The court quashed the order passed by the Board of Revenue and affirmed the order passed by the Collector of Stamps. The petition filed by the State was allowed with costs.
2. The facts of the case are that :-
(a) A sale deed dated 25-3-1996 was presented to the Sub-Registrar (Registration), Jabalpur by which a piece of land admeasuring 16650 square feet along with a house standing on it was transferred by Narendra Agrawal in favour of Smt. Dayalaxmi Sanghi for a consideration of Rs. 8000/-. Aforesaid, valuation was put on the basis of judgment and decree passed by the Civil Court in Case No. 19A/1993 dated 10-12-1993. The suit was decided between the parties by a compromise.
(b) The Registering Authority, Sub-Registrar, Jabalpur was not satisfied with the market value put in the sale deed for the purpose of payment of stamp duty and sent a proposal to the Collector of Stamps on 11-4-1996, proposing value of property at Rs. 8,79,000/-. The Collector of Stamps after satisfying itself with the proposal sent by the Sub-Registrar issued a show cause notice Annexure P/4 to Narendra Agrawal (vendor) and Smt. Dayalaxmi (vendee) under Section 47-A of the Indian Stamp Act, 1899 (hereinafter referred to as the 'Stamp Act').
(c) Though the notice was issued to Smt. Dayalaxmi, but her son respondent Dilip Kumar appeared before the Collector of Stamps and submitted that Smt. Dayalaxmi expired on 22-11-1999 and the respondent being her son and successor filed a reply to the show-cause notice.
(d) In the reply, respondent stated that transaction was a genuine one. His father Damodardas entered into agreement with Narendra Agrawal to purchase land Survey No. 62 area 1.27 acres of village Ranipur, Tehsil and District Jabalpur for a consideration of Rs. 30,000/- on 1-1-1978. The aforesaid agreement though was entered by Damodar but in the name of his wife Smt. Dayalaxmi, mother of the respondent. At the time of the agreement, Rs. 500/- were paid by way of earnest money and possession of land was handed over to the father of respondent. Thereafter, father of respondent constructed his house. Narendra Agrawal had not executed the sale deed as per agreement, so father of the respondent filed a suit on 20-4-1984 against Narendra Agrawal which was registered as Civil Suit No. 19-A of 1984. In the suit, plaintiff was mother of the respondent, because agreement was in her name. The Civil Suit remained pending before 5th Civil Judge, Jabalpur between 1984 and 1993. Ultimately, on 24-11-1993, a compromise was arrived between the parties and as per compromise, mother of the respondent restricted her claim towards 16650 sq. ft. of land leaving her right towards remaining land in favour of Narendra Agrawal. It was agreed that Narendra Agrawal will execute the sale deed of the aforesaid land for a consideration of Rs. 8000/-. The price was fixed in accordance with the terms of agreement. As per compromise, the Civil Court passed a decree. Now, the sale deed has been got executed in compliance of decree, hence provisions of Section 47-A of the Stamp Act are not applicable. The proposed value of the property by the Sub-Registrar was excessive and illegal. Reliance was placed to a judgment of Andhra Pradesh High Court in Sub-Registrar, Kodad Town and Mandal v. Amaranaini China Venkat, AIR 1998 AP 252 and submitted that the aforesaid notice be dropped.
(e) The Collector of Stamps visited the spot and found that the property involved in the sale deed is situated at Veer Sawarkar Ward, old Ranipur House No. 256, Jabalpur. The property is not on main road but it is situated in 8 feet narrow lane and the level of the land was below 2 feet of the earth level. In the rainy season, the land usually submerges and the house standing on the land also submerges by 4 feet. Marks of submergence were found by the Registrar on the walls of the house. The house was
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