THE HIGH COURT OF JUDICATURE AT MADRAS Dated:4.07.2014 Coram THE HONOURABLE Mr.JUSTICE M.JAICHANDREN AND THE HONOURABLE Mr.JUSTICE M.VENUGOPAL W.A.Nos.1436 & 1437 of 2013 and M.P.Nos.1, 1 & 2 of 2013 and W.A.Nos.1770 to 1773 of 2013 and M.P.Nos.1,1,1,1, 1,1,1, 1,1,1, 2, 2 & 2 of 2013 and W.A.Nos.1921 & 1922 of 2013 and M.P.Nos.1 & 2 of 2013 and W.A.No.2026 of 2013 and M.P.No.1 and 2013 & M.P.No.1 of 2014 *** 1.The Inspector General of Registration, Registration Department, No.120, Santhome High Road, Chennai 600 028.
2.The Sub Registrar, Mettur, Salem District.
3.The Special Deputy Collector (Stamps) 3rd Floor, O/o.District Collectorate, Salem 636 001..Appellants in W.A.Nos.1436, 1437, 1770 to 1773 and 2026 of 2013 The Sub Registrar, Mettur, Salem District..Appellant in WA.No.1921 & 1922 of 2013 V.
K.P.Kadar Hussain ..Respondent in WA.No.1436/2013 M/s.V.S.Enterprises, No.14/1-134, V.S.Arcade, Puthusampalli, Meturdam 3 Salem District, Represented by its Managing Partner Mr.V.Gunasekaran ..Respondent in WA.No.1437/2013 M/s.Jayalakshmi Pressings PVT.Ltd., rep.
By its Managing Director, Mr.C.Subramanian, Plot No.6, Venkateshwara Nagar, Opp: DSP Bungalow, Hosur 639 126 Krishnagiri District..Respondent in WA.No.1770/2013 S.Mani ..Respondent in WA.No.1771/2013 M/s.Sun Bright Industries PVT.Ltd., Rep.
By its Managing Director, Mr.R.Shanmugavelu, Off: At 6, Sidco Readymade Garment Complex Industrial Estate, Guindy, Chennai 600 032..Respondent in WA.No.1772/2013 M/s.Ganapathi Associates rep.
By its Partner, Mr.V.R.Mani, Off: At No.62, G.R.Nagar, Seelanaickanpatti Pot, Salem 636 201..Respondent in WA.No.1773/2013 V.Madhuraj ..Respondent in WA.Nos.1921 & 1922/2013 K.P.Syed Firoze ..Respondent in WA.No.2026/2013 Prayer in WA.Nos.1436 & 1437/2013: Appeal filed under Clause 15 of the Letter Patents as against the common order dated 08.01.2013 in W.P.Nos.29638 & 29799 of 2012 passed by the Learned Single Judge.
Prayer in WA.Nos.1770 to 1773/2013: Appeal filed under Clause 15 of the Letter Patents as against the common order dated 23.04.2013 in W.P.Nos.9258 to 9261 of 2013 passed by the Learned Single Judge.
Prayer in WA.Nos.1921 & 1922/2013: Appeal filed under Clause 15 of the Letter Patents as against the order dated 27.03.2013 in W.P.Nos.3756 & 3757 of 2013 passed by the Learned Single Judge.
Prayer in W.A.No.2026/2013: Appeal filed under Clause 15 of the Letter Patents as against the order dated 21.03.2013 in W.P.No.5264 of 2013 passed by the Learned Single Judge.
For Appellants : Mr.AL.Somayaji Advocate General Asst.
by Mrs.A.Sr.Jayanthi Special Government Pleader For Respondents : Mr.R.Gandhi (in WA.Nos.1436, 1437, Senior Counsel 1770 to 1773 & 2026/2013) for Mr.M.R.Jothimanian For Respondent : Mr.K.Selvaraj (In WA.Nos.1921 & 1922) COMMON
JUDGMENT(Judgment of the Court was delivered by M.VENUGOPAL, J.) The Appellants/Respondents have preferred the instant W.A.Nos.1436 & 1437 of 2013 as against the common order, dated 08.01.2013, in W.P.Nos.29638 & 29799 of 2012 passed by the Learned Single Judge, in allowing the Writ Petitions.
2.The Appellants/Respondents have filed the present W.A.Nos.1770 to 1773 of 2013, as against the common order dated 23.04.2013, in W.P.Nos.9258 to 9261 of 2013, passed by the Learned Single Judge, in allowing the Writ Petitions.
3.The Appellant has focussed the W.A.Nos.1921 & 1922 of 2013, as against the common order, dated 27.03.2013, in W.P.Nos.3756 & 3757 of 2013, passed by the Learned Single Judge, in directing the Respondent therein to consider the representations of the Petitioners dated 17.09.2012 and 04.10.2012 for refund of excess stamp duty and registration charges etc.4.The Appellants have projected the present W.A.No.2026 of 2013, as against the order, dated 21.03.2013, in W.P.No.5264 of 2013, passed by the Learned Single Judge, in directing the Respondent therein to return the document in question.
5.According to the Learned Advocate General for the Appellants, the orders of the Learned Single Judges are contrary to law and facts of the case.
6.The Learned Advocate General for the Appellants submits that the sale price was fixed based on the 'Sealed Tenders', but this was not appreciated by the Learned Single Judges at the time of passing the impugned ordeRs.7.The Learned Advocate General for the Appellants forcefully contends that as per Explanation appended to Section 47-A of the Indian Stamp Act, 1899, only the price that would have fetched if the property was sold in open market to be termed as its Market Value.
8.Advancing his arguments, the Learned Advocate General for the Appellants proceeds to submit that as per settled norm and principle, sale price arrived at on the basis of Open Public auction cannot be equated with the one fixed as a result of sealed tender and as such, the decision of the Hon'ble Supreme Court, in V.N.Devadoss V.
Chief Revenue Control Officer-cum-Ins.
and otheRs.2009 (3) LW236 is not applicable to the facts of the present cases.
9.Expatiating his contention, the Learned Advocate General for the Appellants strenuously contends that the dictum laid down by the Hon'ble Supreme Court in the decision V.N.Devadoss V.
Chief Revenue Control Officer-cum-Inspector General of Registration and otheRs.reported in 2009 (3) LW236cannot be applied to the sale deed pertaining to these cases, because of the reason that the sale was made in pursuance of the order of BIFR based on the valuation made by the Assets Committee.
However, in these cases, the sales were made by the Official Liquidator to the individuals based on Sealed Tender Auction.
10.That apart, the Learned Advocate General submits that the dictum laid by the Division Bench Judgment of this Court, in Government of Tamil Nadu V.
S.Jayalakshmi, (2009) 5 MLJ391cannot be applied to the sale deeds related in the instant cases on hand, since in the case dealt with by the Hon'ble Division Bench, the sale deed was executed by the Police Housing Corporation in favour of the employees on the basis of the value fixed by Public Authority in Public Auction.
However, in the present cases, the sales were made by the Official Liquidator to the individuals and on the basis of sealed tender auction.
11.The Learned Advocate General for the Appellants contends that the role of an Official Liquidator is that he is authorised to sell an immovable and movable property and auctionable claims of the company by public auction or private contract with power to transfer the whole thereof to any person or body corporate or to sell the same in parcels, in terms of Section 457 of the Companies Act, 1956.
Also that, he is to appoint a valuer, chartered surveyers or chartered accountant to assess the value of the company's assets within 15 days after taking into custody of the property.
Moreover, he is to give an advertisement, inviting bids for sale of the assets of the company, within 15 days from the date of receiving valuation report from the valuer/chartered surveyor or chartered accountants etc.12.The prime contention of the Learned Advocate General for the Appellants is that the services rendered by a private valuer to be engaged by the Official Liquidator cannot be equated to the Collector appointed by the Government as contemplated under Section 47-A of the Indian Stamp Act, 1899.
Added further, the 'Collector' appointed by the Government is to scrupulously follow the guidelines enunciated under Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968.
In fact, the value fixed by the 'Collector' appointed by the State Government is susceptible for departmental audit and Audit conducted by the Accountant General.
13.The Learned Advocate General for the Appellants vehemently contends that when the fixation of market value made by the 'Collector' appointed by the State Government is detrimental to the interests of revenue it is always open for the Chief Controlling Revenue Authority to revise or modify such order and to pass appropriate orders in terms of sub-Section (6) of Section 47-A of the Indian Stamp Act, 1899.
Further, it is contended on behalf of the Appellants that in the event of an Official Liquidator accepting the value determined by the private valuer, as the correct one, no recouRs.is possible to the CCRA and the ingredients of sub-Section (6) of Section 47-A would automatically become inoperative.
14.The Learned Advocate General for the Appellants submits that in C.A.No.3013 of 2007, in Company Petition No.125 of 1988, on the file of the Learned Single Judge, the Secretary, Revenue Department, Government of Tamil Nadu, Chennai was shown as the 2nd Respondent and in fact, the Registration Department was not arrayed as a party.
15.The Learned Advocate General for the Appellants cites the decision of the Hon'ble Supreme Court in State of Rajasthan and others V.
Khandaka Jain JewelleRs.2007 14 Supreme Court Cases 339 at special page 347, wherein, in paragraph 22, it is observed as follows: 22.
In this background, if we construe Section 17 read with Section 2(12) then there is no manner of doubt that at the time of registration, the Registering Authority is under an obligation to ascertain the correct market value at that time, and should not go by the value mentioned in the instrument. 16.He also relies on the Division Bench Judgment of this Court, in Hindustan Petroleum Corporation Ltd., Thalamuthu Natarajan Building, 8, Gandhi Irwin Road, Egmore, Chennai 600 008 V.
The Inspector General of Registration, Santhome High Road, Chennai 600 028 and 2 otheRs.2008 (6) CTC759 at special page 767 & 768, wherein, in paragraph 18, it is, inter alia, observed as under: When, for this purpose, the document was referred under Section 47-A of the Stamps Act by the Registering Authority, it was challenged by the appellant/petitioner on the ground that the value was arrived at by a Court of law, in a proceeding initiated by them under Section 9 of the Chennai City Tenants Protection Act.
The market value was arrived at by the Court in the said proceeding on 17.2.1994, whereas the document was executed and presented for registration on 29.12.1996.
In such a factual situation and when there is increase in the market value of the property, it cannot be said that the Registering Authority is at fault in insisting the appellant/purchaser to pay the difference of amount. 17.The Learned Advocate General, in the aforesaid Judgment, refers to the Hon'ble Supreme Court Judgment in State of Rajesthan and others V.
Khandaka Jain Jewellers (cited supra).whereby and whereunder, it is, among other things, observed as follows: The learned single Judge as well as the Division Bench in the present case had taken into consideration that the agreement to sell was entered into but it was not executed.
Therefore, the incumbent had to file a Suit for seeking a decree for execution of the agreement and that took a long time.
Therefore, the Courts below concluded that the valuation which was in the instrument should be taken into account.
In our opinion this is not a correct approach.
Even the valuation at the time of the decree is also not relevant.
What is relevant in fact is the actual valuation of the property at the time of the sale.
The crucial expression used in Section 17 is at the time of execution.
Therefore, the market value of the instrument has to be seen at the time of the execution of the sale deed, and not at the time when agreement to sale was entered into.
An agreement to sell is not a sale.
An agreement to sell becomes a sale after both the parties signed the sale deed.
A taxing statute is not contingent on the inconvenience of the parties.
It is needless to emphasize that a taxing statute has to be construed strictly and considerations of hardship or equity have no role to play in its construction .....
18.Apart from the above decisions, the Learned Advocate General has referred to the following decisions: (a) In the Division Bench Judgment of this Court in V.Sivakumar and Others V.
Inspector General of Registration, Mylapore, Chennai 600 004 and another, (2011) 5 MLJ30 at page 31, it is held as follows: The stamp duty has to be paid as per the prevailing guideline value as on the date of registration and the stamp duty is liable to be paid as on the date of registration of the instrument. (b)In the decision of the Hon'ble Supreme Court in Duncans Industries Ltd.V.State of U.P.and otheRs.reported in MANU (SC) 0757/1999, it is, among other things, observed as follows: .
.
The main objection of the appellant in regard to the valuation arrived at by the authorities is that the Collector originally constituted an Enquiry Committee consisting of the Assistant Inspector General (Registration).General Manager, District Industries Centre, Sub-Registrar and the Tehsildar.
After the report was submitted by the Sub-Committee for the reasons of its own, the Collector reconstituted the said Enquiry Committee by substituting Additional City Magistrate in place of Sub-Registrar.
This substitution of the Enquiry Committee, according to the appellant, is without authority of law.
We are unable to accept this contention.
Constitution of an Enquiry Committee by the Collector is for the purpose of finding out the true market value of the property conveyed under the Deed.
In this process, the Collector has every authority in law to take assistance from such source as is available, even if it amounts to constituting or reconstituting more than one Committee.
That apart, the appellant has not been able to establish any prejudice that is caused to it by reconstitution of the Expert/Enquiry Committee.
We have perused that part of the report of the Collector in which he has discussed in extenso the various materials that were available before the Committee and also the report of the valuers appointed for the purpose of finding out the value of the plant and machinery.
These valuers are technical persons who have while valuing the plant and machinery taken into consideration all aspects of valuation including the life of the plant and machinery.
The valuations made both by the Enquiry Committee as well as the valuers are mostly based on the documents produced by the appellant itself.
Hence, we cannot accept the argument that the valuation accepted by the Collector and confirmed by the revisional authority is either not based on any material or a finding arrived at arbitrarily.
Once we are convinced that the method adopted by the authorities for the purpose of valuation is based on relevant materials then this Court will not interfere with such a finding of fact.
That apart, as observed above, even the counsel for the appellant before the High Court did not seriously challenge the valuation and as emphasised by the High Court, rightly so.
Therefore, we do not find any force in the last contention of the appellant also. (c)In the decision of the Division Bench Judgment of this Court in O.S.A.Nos.370 to 372 of 2009, dated 12.01.2010 (between T.Narayanan V.
The Official Liquidator, High Court, Madras and 8 others).wherein, in paragraph 12, it is observed as follows: .
.
In Radhy Shyam v.
Shyam Behari Singh, AIR1971SC2337 this court considering the scope of Order 21, rule 90 of the Civil Procedure Code, 1908, held that in order to set aside an auction sale what has to be established is that there was not only inadequacy of the price but that inadequacy was caused by reason of the material irregularity or fraud.
The purpose of an open auction is to get the most remunerative price and it is the duty of the court to keep openness of the auction so that the intending bidders would be free to participate and offer higher value.
If that path is cut down or closed the possibility of fraud or to secure inadequate price or underbidding would loom large.
The court would, therefore, have to exercise its discretion wisely and with circumspection and keeping in view the facts and circumstances in each case.".
19.Per contra, the Learned Senior Counsel for the Respondents submits that the Respondents purchased the property viz., land and building bearing Block No.67, T.S.No.1, Ward No.36, now known as Block No.8, T.S.No.1, Ward No.D an extent of 13.68 acres and Block No.68, T.S.No.1/1 Ward No.36 now known as Block No.13, T.S.No.1/2, an extent of 14.70 acres of Mettur Municipal Town and P.N.Patti Village, Mettur Taluk, Salem District, under Company Court auction, the said property was owned by M/s.Mettur Textile Limited (now company is under liquidation).20.Further, the Learned Senior Counsel for the Respondents brings it to the notice of this Court that the property was purchased pursuant to the Court Auction made in Company Application No.3031 of 2007 dated 08.03.2012 by this Court, wherein on behalf of this Court, the Official Liquidator executed a Sale Deed after receiving entire sale consideration of Rs.10.6 crores.
21.The Learned Senior Counsel for the Respondents submits that the Respondents purchased the property from the Court Auction, which was held by this Court, after paper publication on 08.03.2012.
The said sale was confirmed by this Court and this Court directed the Official Liquidator to execute a sale deed in favour of the Respondents after receiving entire sale consideration.
In fact, the Respondents paid the entire sale consideration and the same was acknowledged by the Official Liquidator.
22.The Learned Senior Counsel for the Respondents contends that it is not open to the Appellants to take a stand that since the guideline value of the properties were increased only in the month of April 2012 and therefore, the Respondents are liable to pay the amount.
23.The Learned Senior Counsel for the Respondents vehemently submits that the law is a well settled in regard to the purchase of property in a Court Auction and the authorities cannot refer the document demanding higher stamp duty unless a fraudulent attempt on the part of parties to document to evade payment of stamp duty is manifest etc.24.The Learned Counsel for the Respondents refers to the decision of this Court in A.J.Mapillai Mohadeen V.
The Sub-Registrar, Registration Department, Sub-Registrar Office, Arakandanallur and 2 otheRs.2008(5) CTC239 wherein it is, inter alia, held as follows: Property sold in auction in terms of statutory power and where terms of bargain are open and clear such fraudulent attempt cannot be presumed and order demanding higher stamp duty is liable to be set aside. 25.He also cites the decision of this Court, in Devi Narayanan Housing Development PVT.Ltd., rep.
By its Managing Director, N.Nandakumar and another V.
The Inspector General of Registration, Department of Registration, Government of Tamil Nadu, Santhome High Road, Chennai 4 and 2 otheRs.2007 (5) CTC60 wherein it is held that 'Amount fixed in Court auction sale shall be market value of property as it is arrived at after offer is given and the same is accepted by the Court.' Further, it is also observed that 'The Registering Authority is bound by such valuation and demanding stamp duty on higher value than that is contrary to law'.
26.The Learned Senior Counsel for the Respondents cites the decision of the Hon'ble Supreme Court, in V.N.Devadoss V.
Chief Revenue Control Officer-cum-Ins.
and otheRs.2009-3-L.W.-236 at special page 240 & 241, whereby and whereunder, in paragraph Nos.7 to 10, it is observed as follows: 7.
A bare perusal of the rules make the position clear that sub-Rule (4) enumerates procedure on receipt of reference under Section 47-A.
Rule 5 speaks about the principles for determination of market value.
Sub-clause (a) refers to lands; (b) house sites; (c) buildings and (d) properties other than lands, house sites and buildings.
Sub-Sections (1) and (3) of Section 47-A clearly reveal the intention of the Legislature that there must be a reason to believe that the market value of the property which is the subject matter of the conveyance has not been truly set out in the instrument.
It is not a routine procedure to be followed in respect of each and every document of conveyance presented for registration without any evidence to show lack of bona fides of the parties to the document by attempting fraudulently to under value the subject of conveyance with a view to evade payment of proper stamp duty and thereby cause loss to the revenue.
Therefore, the basis for exercise of power under Section 47-A of the Act is willful under valuation of the subject of transfer with fraudulent intention to evade payment of proper stamp duty.
8.
In the instant case the factual scenario shows that the vendors of the appellant i.e.M/s Dunlop India Limited became a sick industry and was declared so under the provisions of 1985 Act.
Consequent upon such declaration, surplus properties and assets belonging to the said company were disposed of on the basis of orders passed by BIFR and AIFR by forming an Assets Sales Committee.
The appellant submitted that his tender alongwith others and his offer of Rs.24.34 crores approximately was the highest, and the same was accepted by the Assets Sales Committee and also by the statutory authorities.
The company was granted permission to execute the sale deed in favour of the appellant.
9.
Stand of the State is that what has been disclosed is clearly a sale value and the same cannot be termed as market value.
There is fallacy in this argument.
10.
Market value is a changing concept.
The explanation to sub-Rule (5) makes the position clear that value would be such as would have fetched or would fetc.if sold in the open market on the date of execution of the instrument of conveyance.
Here, the property was offered for sale in the open market and bids were invited.
That being so, there is no question of any intention to defraud the revenue or non disclosure of the correct price.
The factual scenario as indicated above goes to show that the properties were disposed of by the orders of BIFR and AIFR and that too on the basis of value fixed by ASG.
The view expressed by the Assets Sales Committee which consisted of members such as representatives of IDBI, Debenture HoldeRs.Government of West Bengal and Special Director of BIFR.
That being so, there is no possibility of any under valuation and, therefore, Section 47-A of the Act has no application.
It is not correct as observed by the High Court that BIFR was only a mediator. 27.He also seeks in aid of the Division Bench Judgment of this Court, in The Government of Tamil Nadu rep.
By Special Secretary to Government, Commercial Taxes (J.Department).Secretariat, Chennai 600 009 and 2 others V.
S.Jayalakshmi and otheRs.2009-1-L.W.-811 at special page 821, wherein, in paragraph 30, wherein it is observed and held as follows: 30.This Court taking into consideration that the allotment of plots were made in the year 1985, and that the sale deeds have been registered in the year 1999, 2000 and 2001, and no reason has been stated by the authority with regard to the fraudulent evasion of stamp duty payable on instruments, and in the light of the principles laid down in the above said decisions, is of the view, there is no illegality or error apparent on the face of the record in the impugned orders allowing the writ petitions. 28.The Learned Senior Counsel for the Respondents invites the attention of this Court to the Full Bench decision of the Calcutta High Court, dated 13.05.2010, in C.A.No.1660 of 2008 (between State of West Bengal V.
Sati Enclave Private Limited and others).wherein, in paragraph 27, it is, inter alia, observed as follows: 27.Is Court Sale an Open Market Sale?.
27.1.
Coming to the next question as to whether the court sale as contemplated by the question referred by the learned Division Bench as well as the learned single Judge can be considered as open market sale, we are of the view that where an advertisement has been published in a daily newspaper having wide circulation in the concerned city/town where the property is situate, the same is to be considered as an open market sale.
27.2.
We may add that the Court may be well advised to get the valuation of the property made by a registered valuer for the purpose of fixing the reserve price before issuing advertisement in the newspapeRs.But this cannot be insisted upon as a prerequisite or condition precedent, as the facts of the sale by the Company Court in the second reference indicate that it is not always possible to get bids above reserve price or even matching the reserve price.
27.3.
We also wish to add that the whole basis of holding that a court sale after newspaper advertisement is an open market sale is the sanctity with which the proceedings of the sale are conducted by the court and its officeRs.Therefore, if the purchaser of the property is related to or associated with the authority/officer conducting the sale, it may not only invalidate the sale itself under the appropriate Rules, but it could also undermine the sanctity of court sale as an open market sale.
27.4.
In case the registering authority has any material to doubt the sanctity of the open market sale held by the Court, it is open to the registering officer to move the court with a proper application pointing out such materials for reviewing the order regarding determination of the price. Also, in the aforesaid Judgment, in paragraph 28, it is held as follows: 28.
We may also note the apprehension of the learned counsel for the State that if the registering officer is bound to accept the price fetched at a court sale as the market value, it will adversely affect the State Exchequer in respect of other properties in the area, as others will quote the price fetched at the court auction as the market value of the properties in the same or adjoining areas.
This apprehension is sought to be supported by the following observations of the Apex Court made in M/s Kayjay Industries PVT.LTD.Versus M/S.Asnew Drums (P) LTD.and otheRs.(1974) 2 SCC213(para 7)..
.
.
.
A court sale is a forced sale and, notwithstanding the competitive element of a public auction, the best price is not often forthcoming.
The judge must make a certain margin for this factor.
A valuer's report, good as a basis, is not as good as an actual offer and variations within limits between such an estimates, however, careful, and real bids by seasoned businessmen before the auctioneer are quire on the cards.
More so, when the subject matter is a specialized industrial plant, which has been out of commission for a few yeaRs.as in this case, buyers for cash are bound to be limited.
The brooding fear of something out of the imported machinery going out of gear, the vague apprehensions of possible claims by the Dena Bank which had a huge claim and was not a party, and the litigious sequel at the judgment debtor's instance have 'scare' value in inhibiting intending buyers from coming forward with the best offeRs.Businessmen make uncanny calculations before striking a bargain and that circumstance must enter the judicial verdict before deciding whether a better price could be had by a postponement of the sale.
The observations may certainly be relevant in order to show that the price fetched at a public auction conducted by the Court may not be the best available price.
However, when the authorities are considering market value of the property, which is sold at a private sale, sale price of another property or even of the same property fetched at a court auction without hearing the government is not to be taken as one of the materials to be considered by the authority under Ruele 3(1) of the Undervaluation Rules.
Hence, even if the property at a court sale does not fetc.the highest or best available price, if there are other pieces of evidence of market value of similar properties available in the area, while exercising the powers under Section 47A(1)(2) read with Section 2 (16B) of the Act and Rule 3 of the Undervaluation Rules of 2001 in relation to a private sale, the registering officer can always consider the other sale instances or any other material reflecting higher value of the property. Finally, in the aforesaid Judgment, in paragraph Nos.29 to 30, it is observed and laid down as follows: 29.
In view of the above discussion, our conclusions are as under: (1) On a correct interpretation of the provisions of Section 47A read with Section 2(16A) of the Indian Stamp Act, 1899 as applicable to the State of West Bengal and the West Bengal Stamp (Prevention of Undervaluation Instruments) Rules, 2001, the sale conducted by the Court or conducted by the Court through its officers which qualifies to be an open market sale as contemplated in Section 2(16B) of the Act cannot be the subject matter of exercise of powers by the registering authority under sub-sections (1) & (2) of Section 47A of the Act.
(2) For a Court sale to satisfy the requirements of an open market sale, the following conditions shall be satisfied:- (a) There must be wide publicity of the proposed sale and particularly there shall be publication of advertisement in at least one newspaper having wide circulation in the concerned city/town/district.
(b).The purchaser of the property must not be connected with or related gto the authority/officer conducting the sale.
(3) The above conclusions will equally apply to sales conducted by the Company Court after publication of advertisement in a widely circulated newspaper.
30.
The answer to the question referred by the learned Division Bench is in the negative, that is to say, the provisions contained in Section 47A of the Indian Stamp Act, 1899 as applicable to West Bengal read with Rule 3 of the West Bengal Stamp (Prevention of Under-valuation of Instruments) Rules, 2001 are not applicable to an instrument executed by a Receiver pursuant to an order of Sale passed by a Civil Court after publication in the newspapeRs. 29.The Learned Counsel for the Respondent, in W.A.Nos.1921 & 1922 of 2013, informs this Court that he adopts the arguments advanced by the Learned Senior Counsel for the Respondents in W.A.Nos.1436 & 1437 of 2013 & etc.30.In regard to the Respondent in W.A.No.1436 & 1437 of 2013 is concerned, he had purchased the property in Court Auction conducted by Company Court in C.A.No.3031 of 2007 dated 08.03.2012 and being declared as successful bidder, paid the entire sale consideration of Rs.10,60,00,000/- in respect of schedule 'A' (LOT-A).The Official Liquidator executed the sale deed in favour of the Petitioner on 25.06.2012.
The sale deed was presented before the Sub-Registrar, Mettur, Salem District for registration and the same was returned by the Special Deputy Collector (Stamps).Salem.
Also that, Section 47-A of the Indian Stamp Act, proceedings were initiated stating that the document was under valued.
31.Likewise, the Respondent, in W.P.No.29799 of 2012, had purchased the property in Court Auction conducted by the Company Court in C.A.No.3031 of 2007 dated 08.03.2012 and when he was declared the successful bidder and paid the entire sale consideration of 12.50 Crores for the sale of schedule 'A' (LOT-G).The Official Liquidator executed the sale in favour of the Petitioner in respect of 'B' schedule property mentioned in the sale deed on 09.10.2012 for sale consideration of Rs.1,72,95,000/-.
In respect of 'A' schedule property, sale deed was executed in favour of three nominee of the Petitioner as per order of this Court dated 28.09.2012.
When the sale deed was presented before the Sub-Registrar, Mettur on 11.01.2012 the same was registered, but under Section 47-A Indian Stamp Act proceedings were initiated stating that the document was under valued.
32.It is to be pointed out by this Court that in regard to W.A.Nos.1921 & 1922 of 2013 are concerned, the Respondent filed W.P.Nos.3756 & 3757 of 2013 seeking for declaration that the Respondent is entitled to claim the stamp duty only a value recited in the Sale Deeds dated 7.6.2012 registered as document Nos.1353 and 1512 of 2012, executed by the Official Liquidator, High Court, Madras, in his favour, in respect of the lands concerned therein.
Also, the Respondent/Petitioner sought for a consequential direction to refund the additional stamp duty of Rs.4,17,783/- and excess Registration charges of Rs.59,684/- aggregating to Rs.4,77,467/-; and to refund the additional stamp duty of Rs.9,33,110/- and excess Registration charges of Rs.1,33,310/- aggregating to Rs.10,66,420/-.
33.It comes to be known that this Court in Company Application No.3013 of 2007 in Company Petition No.125 of 1998, had directed the Official Liquidator to call for tenders through paper publication for sale in public auction of the properties belonging to M/s.Mettur Textiles Industries Limited.
The Respondent in W.A.Nos.1921 & 1922 of 2013, bid Rs.9,30,00,000/- for the Lot 'E' property, which was declared as the highest bid, as against the upset price of Rs.4,88,39,000/-.
The Respondent also bid Rs.8,15,00,000/- for the Lot 'F' property, which was declared as the highest bid, as against the upset price of Rs.2,57,75,000/-.
On 08.03.2012, the confirmation of sale of Lot 'E' and Lot 'F' in favour of the Respondent was made by the Official Liquidator in the aforesaid Company Application.
On 06.09.2012, the sale deed was executed by the Official Liquidator in favour of the Respondent in W.A.Nos.1921 & 1922 of 2013.
In respect of Lot 'F', the sale deed was executed by the Official Liquidator in favour of the Respondent in W.A.No.1922 of 2013 on 03.10.2012.
34.The primordial contention advanced on behalf of the Appellants before this Court is that on 01.04.2012 the guideline value of the properties was revised and since the valuation is a question of fact and moreso, when Section 47-A of the Indian Stamp Act gives power to the authority to ensure that an instrument reflects the accurate market value of the property and continuing further, the value in the sale deeds was arrived after the properties were sold in a distress sale.
Moreover, the auction was not carried out by public auction, but by inviting tenders in sealed covers and as such, such a procedure cannot be equated with a public auction.
35.On behalf of the Appellants, it is also represented before this Court that a private valuer was engaged by the Official Liquidator, who had fixed the upset price and also in the present cases before this Court, there were sufficient materials to show that the order demanding excess stamp duty had a rational basis.
36.At this stage, this Court worth recalls and recollects the decision in Sub-Registrar, Adyar, Chennai V.
Canara Bank, Saidapet Branch, represented by its Principal Officer and Senior Manager and otehRs.(2006) 3 MLJ425 at page 426, wherein, it is observed as follows: The transaction value fixed under the decree of Court ought to be accepted by the Registering authorities and that the guideline value or the present day market value cannot dictate the collection of stamp duty.
In the case of instrument of conveyance executed pursuant to the decree passed by Civil Court, in which there is no allegation of under valuation or lack of bona fides the mere fact that there is a time gap between the agreement of sale and the execution of the document, is not sufficient to the Registering Officer to invoke his power under Section 47-A of the Act, unless there are reasons to believe that there is an attempt on the part of the parties to the instrument to deliberately undervalue the subject of transfer with a view to evade payment of proper stamp duty. 37.This Court aptly points out the decision in Devi Narayanan Housing Development PVT.Ltd., rep.
By its Managing Director, N.Nandakumar, Chennai V.
The Inspector General of Registration, Department of Registration, Government of Tamil Nadu, Santhome High Road, Chennai 4 and otheRs.2007 (5) MLJ1337at page 1338, wherein it is observed as follows: When a property is purchased in Court auction sale, if any value other than the value fixed by the Court, is taken into consideration for the purpose of determining the stamp duty, it tantamounts to exceeding the jurisdiction made under the law.
A harmonious construction and interpretation of the provisions of Section 47-A of the Indian Stamp Act and the rules make it clear that the value of property fixed by the Court cannot be deviated from. 38.It is to be pertinently pointed out by this Court that in the decision of the Hon'ble Supreme Court in U.P.Jal Nigam, Lucknow through its Chairman and another V.
M/s.Kalra Properties (P) LTD.Lucknow and otheRs.AIR1996Supreme Court 1170, it is observed that 'The basic valuation is only for purposes of collecting stamp duty and cannot be foundation to determine market value'.
39.It cannot be forgotten that as per Section 17 of the Indian Stamp Act, 1899, the liability to pay stamp duty arises before law or at the time of execution of an instrument.
Indeed, Section 47-A of the Indian Stamp Act, 1899 speaks of 'under valuation of the instrument'.
40.As far as the present cases are concerned, the Respondents have purchased the concerned properties under Court Auction sale conducted by the Company Court and they were declared as the successful bidders and they paid the full sale consideration.
Furthermore, the sale deeds were executed by the Official Liquidator in their favour.
The bona fides of the Respondents in purchasing the concerned properties under Company Court Auction cannot be doubted.
Further, nothing can be treated against the Respondents that they made an endeavour fraudulently to undervalue the subject of conveyance with a prime view to evade and avoid payment of proper/ requisite stamp duty and thereby cause loss to the revenue.
41.Also that, a perusal of the order dated 08.03.2012 in C.A.No.3013 of 2007 clearly shows that the sealed tender forms were opened before this Court and totally 24 tenders were received from the intending purchasers willing to participate in the public auction for purchasing the properties in question and the sale was confirmed in favour of the Respondents.
As such, when the Respondents had purchased the properties in question by way of sale deeds executed by the Official Liquidator for the sale value mentioned in the sale deeds, the said value cannot be questioned by the Appellants at a later point of time merely on the premise that the sale value mentioned in the sale deeds purchased by the Respondents cannot be termed as 'Market Value', in the considered opinion of this Court.
42.Furthermore, the Appellants cannot seek umbrage in regard to the guideline value of the properties being revised on 01.04.2012, as opined by this Court.
43.As a matter of fact, the valuer who submitted the valuation report and fixed the upset price of the land and building of the Company liquidation in C.A.No.3013 of 2007 in Company Petition No.125 of 1988, engaging by the Official Liquidator, cannot be found fault with because of the simple reason that in the said Company Application, the Official Liquidator was directed to execute the sale deeds in favour of the respective successful bidders after following due procedures.
44.In regard to the plea taken on behalf of the Appellants that the valuer engaged by the Official Liquidator was not a Government valuer and only a private valuer, it is to be pointed out that the valuer appointed, in C.A.No.3013 of 2007, by order dated 22.02.2011, was authorised by Authority viz., ITCo. Industrial and Technical Corporation of Tamil Nadu, which is authorised by Government to the Banks and Financial Corporations for valuation of property.
That apart, the Respondents had purchased the properties under Court Auction in Company Court and their sales were confirmed and the Official Liquidator had executed the sale deeds.
As such, the contra plea taken on behalf of the Appellants is not acceded to by this Court.
45.Coming to the plea taken on behalf of the Appellants that the Registration Department was not added as one of the Respondents in C.A.No.3013 of 2007 in Company Petition No.125 of 1988, it is to be pointed out by this Court that the said plea relegates to the background, in view of the fact that the Company Court Auction, sales were confirmed in favour of the Respondents and the sale deeds were executed in their favour by the Official Liquidator.
Also that, the sale deeds executed by the Official Liquidator in pursuance of the Court Auction Sale are allowed to be questioned by a party/litigant on some pretext or other, then, the sanctity and credibility of such Court Auction sales and the execution of sale deeds will come under cloud and such a thing, in the considered view of this Court, ought not to be permitted, in the eye of law.
46.On a careful consideration of respective contentions and this Court, on looking into the entire gamut of the facts and circumstances of the present cases, in an encircling fashion, comes to a resultant conclusion that Section 47-A of the Indian Stamp Act, 1899 has no application whatsoever, in so far as the Respondents are concerned, because of the prime reason that there is no room for entertaining a simmering doubt that there was any under valuation in regard to the Sale Deeds executed by the Official Liquidator.
In this regard, one cannot ignore a vital fact that the Respondents were the successful bidders and in their favour, the Official Liquidator had executed the Sale Deeds in question.
When the Respondents had purchased the properties in question, in Company Court Auction, the Sale Deeds executed, in their favour, by the Official Liquidator, then, the same cannot be impeached by the Appellants, on any count much less by way of initiation of proceedings under Section 47-A of the Indian Stamp Act, 1899 on the ground that the Sale Deeds were under valued.
Consequently, the views taken by the Learned Single Judges, in allowing the Writ Petitions, filed by the Respondents, do not suffer from any material irregularity or patent illegality in the eye of law.
Resultantly, the Writ Appeals fail.
47.In the Result, the Writ Appeals are dismissed, leaving the parties to bear their own costs.
The Orders passed by the Learned Single Judges, in the Writ Petitions, are hereby affirmed by this Court, for the reasons assigned in these Appeals.
The Appellants, in W.A.Nos.1436, 1437, 1770 to 1773 and 2026 of 2013, are directed to return the Sale Deeds to the concerned Respondents/PetitioneRs.within a period of two weeks from the date of receipt of copy of this Judgment.
In so far as W.A.Nos.1921 and 1922 of 2013 are concerned, the Appellant is directed to refund the Additional Stamp Duty and excess Registration Charges to the Respondent, from whom they were collected, within a period of two weeks from the date of receipt of copy of this Judgment.
Consequently, connected Miscellaneous Petitions are closed.
(M.J.J.) (M.V.J.) 04.07.2014 Index :Yes Internet :Yes Sgl M.JAICHANDREN,J.
AND M.VENUGOPAL,J.
Sgl JUDGMTNTS IN W.A.Nos.1436 & 1437 of 2013 & W.A.Nos.1770 to 1773 of 2013 & W.A.Nos.1921 & 1922 of 2013 & W.A.No.2026 of 2013 4.07.2014