Purushottam Agarwal And Another vs State Of U.P.And Others
2023 Latest Caselaw 2986 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R
 
Court No. - 72
 

 
Case :- WRIT - C No. - 20121 of 2000
 

 
Petitioner :- Purushottam Agarwal And Another
 
Respondent :- State Of U.P.And Others
 
Counsel for Petitioner :- Madhav Jain
 
Counsel for Respondent :- C.S.C.
 

 
Hon'ble Umesh Chandra Sharma, J.

Heard Sri Madhav Jain, learned counsel for the petitioners and Sri Jitendra Narayan Singh, learned Additional Chief Standing Counsel for the State respondents.

This writ petition has been filed to quash the order dated 19.06.1999 passed by Additional District Magistrate (Finance & Revenue), Agra and order dated 11.01.2000 passed by the Commissioner, Agra Division, Agra, whereby both the authorities in relation to assignment dated 17th April, 1993, regarding unexpired lessee rights in the land with constructed con-structure assigned in favour of the petitioners for a sum of Rs.1,43,005/- concluded the deficiency of stamp duty.

In brief the facts of the case are that the Society known as Alok Sahkari Grah Nirman Samiti Ltd., Agra, has acquired lease hold rights for a period of eighty years from the Agra Development Authority, Agra in land of Block No. 34 at Sanjay Place, Agra, by means of registered lease deed dated 16.06.1980 and executed an agreement deed of lease on 17.04.1993 (Annexure No.1). The Sub Registrar, Agra exercised power under Section 33, 47-A (A) & (4) of the Stamp Act for realization of Stamp Duty by means of reference (Annexure No.2), which is patiently illegal and without jurisdiction.

In pursuance of the reference, Stamp Case No. 1255 of 1995-96 was registered and the notices were served upon the petitioners, who filed objection (Annexure No. 3) to the writ petition in support of the reference, no reference was laid on behalf of the respondents, however, the respondent no. 3 vide its judgment and order dated 19.06.1999 (Annexure no. 4), imposed Rs.96,540/- towards deficiency of stamp duty.

The petitioners challenged its validity by means of Stamp Revision No. 30 of 1999-2000 on 22.09.1999. In-spite of pendency of revision, the officials of respondent no. 1 recovered the amount under threat of coercive action quite illegally without affording opportunity to obtain interim orders. Respondent no. 1 is bound to return to the petitioner's such amount with interest @ 18 per cent per annum. The revisional court vide its order dated 11th January, 2000 (Annexure-05) to this writ petition, the revision is not maintainable.

Both the authorities below have failed to exercise its mined and have failed to consider the legality of the proceedings as the assignment-deed is not chargeable with stamp duty on it's market value under Section 47-A of the Stamp Act. The respondent nos. 2 and 3 failed to consider that land underneath the construction was possessed by the Society under a lease agreement from the Agra Development Authority, Agra and the Society assigned unexpired lease right in respect of the land together with constructions after charging the lease area premium and costs of constructions, under this circumstances the respondent nos. 2 and 3 ought to have drop the proceeding, but instead of doing so acted illegally while imposing deficiency of Stamp Duty against the petitioners. The determining the deficiency of Stamp Duty is absolutely uncalled for and is applicable as it is not supported by any evidence to establish that the rate of rent assumed by them.

The respondents have failed to consider that the petitioner's acquired limited rights to enjoy its usufruct and also failed to consider that the property in question fetch rent @ 2,500/- per month. The respondent no. 2 committed error apparent on the face of record while dismissing the revision on the ground of its being not maintainable. The respondents have acted illegally while treating the transaction as the transaction of sale of the building without considering that the Society from which the petitioners have got it's right assigned, was not having any saleable interest in the land and in so far as the value of construction is concerned there was no dispute raised from the side of the respondents. The petitioners having no other alternative remedy, have filed this writ petition. The aforesaid annexures have been annexed with the writ petition.

The respondents have filed counter affidavit on 13th January, 2004 and have denied the allegations of the writ petition and have admitted that the said land was acquired for lease for eighty years. The action was initiated as per the provisions of Stamp Act. The respondents have imposed deficit stamp duty with penalty as the petitioners had intentionally evaded the duty. The R.C is served upon the petitioners as per the procedure laid down in the Stamp Act. The market value of the property in question is assessed as per the procedure of Stamp Act. The property was for the use as commercial purposes . The land and shops are also in the lease-deed. Only the land was given on lease not the shops constructed for the purposes of commercial use, hence the market value can be assessed as present basis.

Article 226 of the Constitution of India shall not apply to this case, hence the present writ petition is dismissed.

The petitioners have filed rejoinder affidavit alongwith application no. 86990 of 2008 and have denied the averments of counter affidavit and have reiterated the facts already enumerated in the writ petition and have said that on 17.04.1993 at the time of execution of said deed, the area was not developed and even the necessary facilities such as electricity, water, sever etc. were not available at the site of building. No basis for the assumed rental value of the building has been assigned by the Collector, Agra. The market value of the property assessed by the Collector is contrary to the report of the Sub Registrar. Neither the report of the Sub-Registrar recites the market value of the property nor it mentions the rental value either assessed, assumed or actual. No basis has been assigned by the respondents to support the assumed rental value of the property. The assumed rental value on the face of it is highly excessive and does not correspond to the rental value of the property on the date of its purposes. Any change in the nature, value or use of the property subsequent to the date of its purchase is absolute irrelevant but the authorities concerned have influenced its judgment by taking into consideration the development subsequent to purchase of building by the petitioners. Since the predecessor of the petitioners possessed lessee rights in the underneath the construction of the building, the transfer of the said right cannot be valued at the higher rate, so far as the value of the construction of building is concerned. The petitioners have paid the stamp duty on the basis of costs of construction together with unexpired lessee rights. The value of building assessed by the respondents is without any evidence and basis, the impugned judgment and orders are patiently illegal and perverse, contrary to the facts and are liable to be set aside.

Heard and perused the file.

The provision of the Rule 341 provides the method for computation of the market value of a property for the purpose and determination of the stamp duty of an instrument.

Rule 341 is as under:-

For the purposes of payment of stamp duty, the minimum market value of immovable property forming the subject of an instrument of conveyance, exchange, gift, settlement, award or trust, referred to in Section 47-A (1) of the Act, shall be deemed to be not less than that as arrived on the basis of the multiples given below:-

(i) Where the subject is land:-

(a) in case of Bhumidari-800 times the land revenue.

(b) in case of Sirdari land-400 times the land revenue.

(c) where the land is not assessed to revenue but net profits have arisen from it during the three years immediately preceding the date of the instruments 25 times the annual average of such profits.

(d) where the land is not assessed to revenue and no profits have arisen from it during the three years immediately preceding the date of the instrument 400 times the assumed annual rent.

(e) where the land is non-agricultural and is situate within the limits of any local body referred to in clause (c) of sub-rule (i) of rule 340-equal to the value worked out on the basis of the average price per square meter, prevailing in the locality on the date of the instrument.

(ii) where the subject is grove or garden:

(a) If assessed to revenue the value of the land shall be worked out in the manner laid down in rule 341 (i) (a) and the value of the trees standing thereon shall be worked out according to the average price of the trees of the same size, and age prevailing in the locality on the date of the instruments.

(b) If not assessed to revenue or is exempted from it the value there of shall be determined at 20 times the annual rent plus the premium or 20 times of the annual average of income which has arisen during the three years immediately preceding the date of instrument and the value of the trees thereon shall be determined in accordance with rule 341 (ii) (a)

(iii) Where the subject is Building:

(a) Where the building is assessed to house tax and is occupied by the owner or is wholly or partly let out to tenants-25 times the actual or assessed annual rental value, whichever is higher as the case may be.

(b) Where the building is not assessed to house tax and is occupied by the owner or is wholly or partly let out to tenants-25 times the actual or assumed annual rental value, whichever is higher as the case may be.

It is noteworthy that in the year 1997, the U.P. Stamp Rule 1942 were repealed. Since it is a matter of 1993 and the property in question was purchased on 17.04.1993, therefore the stamp duty would be payable in accordance with the provisions of U.P. Stamp Rule, 1942.

It is undisputed that the property in question is a building which has been assessed for the purposes of House Water and other related municipal taxes, therefore, the provisions of Rule 341 (iii) (b) are applicable to the property in question.

The aforesaid provisions provide that if the market value of the property has been assessed by the municipal board, it can only be computed by multiplying 25 times of the assessed or the actual reasonable value. From the extracts of Municipal Board's Register the valuation of the property in question is Rs. 3,600/- (Rs. 900X 12) only.

Therefore, the valuation of the property as per Rules becomes Rs.90,000/- only. The learned court below assuming the rental value Rs.2,500/- per month calculated that there is deficiency in payment of stamp duty and also imposed the penalty though the penalty has been removed by Commissioner, Agra Division Agra / (C.C.R.A). It is clear from the aforesaid discussions that on the basis of accompanying report of Sub Registrar, A.D.M (F&R) accepted the rental value of the room in question Rs.2,500/- per month. For determining the rate of rent to be Rs.2,500/- the learned Sub Registrar did not collect any DATA from the nearby shop or vicinity. If the rental value was wrongly mentioned by the Nagar Palika Parishad, it was the duty of the respondents to raise an objection and to get it corrected, but instead of adopting the reasonable and sound method in legal way, the Sub Registrar imaginarily opined that the rent of the room in question would not be less than Rs.2,500/- per month.

This Court is of the opinion that if the property in question would not have been assessed by the Nagar Palika Parishad, there was an option to Sub Registrar and the respondent to apply the provisions of Section 341 (iii) (b).

When the property in question was assessed by the Nagar Palika, which is very much clear from the extract of the concerned Register and the U.P. Stamp Rules, 1942, was into exists, there was no opportunity to the respondents and the Sub Registrar except to act in accordance with the Rule 341 (iii) (a) according to which where the building is assessed to house tax and it is occupied by the owner or is wholly or partly, let out to the tenant, 25 times the actual or assessed annual rental value whichever is higher as the case may be, would be considered for payment of stamp duty.

In this case the Nagar Palika has assessed Rs. 3,600/- annual rental value of the property in question, therefore as per the existing law in the year 1993, the petitioner was under an obligation to pay the stamp duty in accordance with Rule 341 (iii) (a). If we multiply Rs.3,600/- into 25 times, the value of the property becomes Rs. 90,000/-. The petitioner has purchased the property for Rs. 1,43,005/- and on this amount, he has paid the stamp duty accordingly, which is more than the market value computed in accordance with the Rule 341 (iii) (a).

Since the rules of U.P. Stamp Rules, 1997 had not come into force and the Sub Registrar had not given any DATA regarding rent of the property in question, the respondents had to act upon in accordance with the provisions of U.P. Stamp Rules, 1942.

In Vijay Kumar and Surendra Kumar Both sons of Shri Daulat Ram Vs. Commissioner, Meerut Division and Additional District Magistrate (Finance and Revenue) MANU/0682/2008 decided on 27.03.2008, it is held that the burden to prove that the market value more than the minimum as prescribed by Collector under Rule is on Collector. Report of Sub-Registrar or Tehsildar, itself is not sufficient to discharge that burden.

In Mahabir Prasad Vs. Collector, Cuttack [1987] 2 SCR 289, it is held that the ''market value' of land means a price at which both buyers and sellers are willing to do business; the market or current price.

In Ram Khelawan allias Bachchan Vs. State of U.P. through Collector, Hairpur and Anr. 2005 (98) RD 511, it has been held that report of Tahsildar may be a relevant factor for initiation of proceedings under Section 47-A of the Act but it cannot be relied upon to pass an order under the aforesaid section. In other words the said report cannot form itself basis of the order passed under Section 47-A of the Act.

In Prakashwati Vs. Chief Controlling Revenue Authority Board of Revenue, Allahabad 1996 (87) R.D 419 "Hon'ble the Apex Court has held that situation of a property in an area close to a decent colony not by it self would make it part thereof and should not be a factor for approach of the authority in determining the market value.

In Collector of Nilgiris at Ootacamund Vs. Mahavir Plantations Pvt. Ltd. MANU/TN/0285/1982, the Madras High Court while dealing with the valuation guidelines has held that the Collector under Section 47-A can not shrink his responsibility of determining the market value by adopting the guidelines nor can he fix the market value without proper materials and evidence to support it. The very idea of an inquiry contemplated by Section 47-A and the detailed procedure prescribed in the relevant rules goes to show that the Collector's finding must be verifiable by evidence. The valuation guidelines prepared by the Revenue officials at the instance of the Board of Revenue were not prepared on the basis of any open hearing of the parties concerned, or of any documents with a view to eliciting the market value of the properties concerned. They were based on data gathered broadly with reference to classification of land, grouping of land and the like. This being so, the Collector acting under Section 47-A cannot regard the guidelines valuation as the last word on the subject of market value.

From the aforesaid discussions, it is very much clear that respondents has flouted the provisions of U.P. Stamp Rules, 1942, which was prevalent at the time of execution of the sale-deed.

On the basis of aforesaid discussions, this Court is of the opinion that the respondents have not acted properly and in accordance with the existing U.P. Stamp Rules, 1942 and have passed the impugned orders in arbitrary and illegal manner, therefore the writ petition is liable to be allowed.

O R D E R

The writ petition is allowed and the impugned judgement and orders dated 19.06.1996, Annexure No. 4 and the order dated 11.01.2000 Annexure No. 5 to this writ petition are hereby quashed.

In this case Rs.96,500/- has been recovered from the petitioners for which they were not entitled as per this decision. The petitioners have prayed to return the said amount alongwith eighteen percent (18%) annual interest.

In the opinion of this Court, the respondents are liable to refund the recovered amount of Rs.96,500/- to the petitioners alongwith the interest arising therefrom at the rate of six percent per annum . Therefore, it is also ordered that the respondents shall pay the above amount of Rs. 96,500/- to the petitioners alongwith six percent (6%) simple interest from the date of realisation till the date of refund of the said amount to the petitioners, failing which the petitioners would be entitled to recover the same from the respondents as per the Rules.

Order Date :- 30.1.2023.

Vinod.