Andhra Pradesh High Court - Amravati

Suryadevara Leela Rani vs The State Of Andhra Pradesh on 14 August, 2023

      IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI

            THE HON'BLE SRI JUSTICE NINALA JAYASURYA

                     WRIT PETITION No.15826 of 2023

Between:-

Suryadevara Leela Rani                                   ....          Petitioner
                                         And

The State of Andhra Pradesh,
Stamps & Registration Department,
represented by its Principal Secretary
& 4 others                                               ....        Respondents

Counsel for the Petitioner         : Mr.P.Badrinath

Counsel for the respondents        : Learned Government Pleader
                                     for Stamps & Registration
                                     Mr.Sreedhar Valiveti
ORDER:

The present Writ Petition is filed seeking to declare the action of the

respondent No.3 in not receiving and registering the Sale Certificate dated

16.6.2023 in respect of the land admeasuring an extent of 1000 Sq. Yards

situated in D.No.77/1, nearest D.No.19-16-16/10, Patta No.1053,

R Agraharam within the limits of Guntur Municipal Corporation, Guntur

Sub-District, Guntur District, by insisting payment of stamp duty calculated

on the basis of the present Market Value instead of calculating the duty on

the basis of sale consideration mentioned in the Sale Certificate, as illegal

and arbitrary etc., and for a consequential direction to the

3rd respondent to receive and register the said Sale Certificate and to pass

such other orders.

2. The facts of the case, as per the averments made in the Writ Petition

in brief, may be stated thus:

The petitioner herein is emerged as highest bidder, pursuant to a

public auction conducted by the 5th respondent Bank under the provisions of

Securitisation and Reconstruction of Financial Assets and Enforcement of

Security Interest Act, 2002 (for short "SARFAESI Act") in respect of the land

belonging to M/s Lakshmi Narayana Syndicate, which committed default in

repayment of loan. The petitioner participated in the public auction and was

declared as highest bidder for a total sale consideration of Rs.40,25,000/-

for the land admeasuring 1000 Sq. Yards situated at D.No.77/1 nearest Door

No.19-16-16/10, Patta No.1053, R Agraharam within the limits of Guntur

Municipal Corporation, Guntur Sub-District, Guntur District. The sale

consideration was calculated according to the Market Value existing at the

time of the auction. The petitioner initially paid 25% of the amount and

obtained Sale Confirmation Letter dated 2.6.2023 and further conducted title

check. Thereafter, the petitioner paid entire amount and the Bank issued

Sale Certificate dated 16.6.2023. Subsequently, the petitioner had taken

possession of the subject matter property and when the petitioner sought to

present the Sale Certificate before the 3rd respondent for registration, the

same was not received on the premise that Stamp

Duty has to be paid on the Market Value of the subject matter property and

not on the basis of the sale consideration mentioned in the certificate.

The petitioner made representations to the respondent authorities and tried

to persuade the 3rd respondent that the approach adopted by him is

incorrect and contrary to Section 47-A of the Indian Stamp Act and further

that in respect of Sale Certificates issued by the Banking institutions, Stamp

Duty has to be calculated on the sale consideration mentioned in the

Certificate and not on the present day Market Value. However, the attempts

of the petitioner yielded no positive response. As the action of the

3rd respondent in refusing to receive and register the Sale Certificate and

demanding pay amount of higher amounts under the guise of deficit Stamp

Duty is not sustainable in law and contrary to the provisions of Indian Stamp

Act, the petitioner filed the present writ petition seeking appropriate relief.

3. Heard Mr.P.Badrinath, Learned Counsel appearing for the petitioner.

Also heard Assistant Learned Government Pleader for Stamps & Registration

appearing for the respondent Nos.1 to 4 and Mr.Sridhar Valiveti, Learned

Standing Counsel representing the 5th respondent-Bank.

4. The Learned Counsel for the petitioner submits that the insistence on

the part of the registration authorities for payment of Stamp Duty on the

subject matter property based on their records/Market Value, instead of

value mentioned in the Sale Certificate is not sustainable in Law. He submits

that the issue in this regard is no longer „res integra‟ and contends that

when a property is purchased in a public auction under the provisions of the

SARFAESI Act, the Stamp Duty payable for registration has to be determined

by taking the valuation mentioned in the Sale Certificate into account, but

not on the basis of the Market Value/as per the records of the revenue

authorities. Referring to the decisions in W.P.No.32791 of 2013 & batch

dated 24.01.2014 and I.A.No.1 of 2022 in/and W.A.No.17 of 2022 &

W.A.No.22 of 2022 (State of A.P. v. Marvel Financial Services Limited)

dated 18.10.2022, the Learned Counsel would submit that the matter is

squarely covered by the said decisions and the Writ Petition deserves to be

allowed, as prayed for.

5. The Learned Assistant Government Pleader for Stamps & Registration

states that the sale will be governed by Section 47-A of the Schedule-1A of

the Indian Stamp Act, 1899 and not Article 16 of the said Schedule and

Stamp Duty and Registration fee should be levied on the Market Value or the

auction value, whichever is higher.

6. In view of the Legal position, this Court is inclined to dispose of the

Writ Petition.

7. Marvel Financial Services Limited, is a case wherein, a Division

Bench of this Court was dealing with two State appeals i.e., Writ Appeal

No.17 of 2022 preferred against an Order of a learned Single Judge in

W.P.No.15400 of 2018 dated 24.01.2020 with a delay of 627 days in filing

the appeal. W.A.No.22 of 2022 was preferred against the Order of the

learned Single Judge in W.P.No.20142 of 2021 dated 14.09.2021 allowing

the said Writ Petition in terms of the order passed in W.P.No.15400 of 2018,

wherein, the writ petitioner i.e., Marvel Financial Services Limited, purchased

a property in an auction conducted by Tata Capital Financial Services Limited

under the provisions of the SARFAESI Act and the Sale Certificate was issued

in its favour and when the same was presented for registration, the

concerned authorities refused to register it inter alia stating that the stamp

duty has to be paid on the market value, but not on the value mentioned in

the Sale Certificate, since the market value was much higher than the value

mentioned in the Sale Certificate. A learned Judge allowed the said Writ

Petition relying on the Common Order dated 24.01.2014 passed in

W.P.No.17600 of 2011 & 32791 of 2013 (Indian Bank, ARM Branch,

Coimbatore v. Sub-Registrar, Nagari Mandal; K.S.Devarajan v. State of A.P.),

holding that the valuation mentioned in the Sale Certificate would be the

criteria to determine the stamp duty payable for registration and that the

writ petitioner is not required to pay the stamp duty on the basis of the

market value fixed by the authorities.

8. In the appeals referred to supra, it was argued on behalf of the

appellants/State that the value shown in the Sale Certificate is different from

the market value and cannot be the criteria to determine the stamp duty.

While making other submissions, it was contended that the orders under

appeal are not sustainable. The Hon‟ble Division Bench while concurring with

the reasoning assigned by the learned Single Judge, was not inclined to

interfere with the order in W.P.No.15400 of 2018, passed in the light of the

opinion expressed in the judgment of Indian Bank referred to supra. It is

apposite to extract the relevant portion of the order which reads

as follows:

"8........In the matter of Indian Bank, the learned Judge discussed the law in extensio to hold that if the sale certificate is issued by the Court or officer authorized by the Court, any further deed of transfer is not required and that while undertaking registration of the document in relation to the property purchased in an open auction conducted by the bank, the valuation mentioned in the sale certificate shall alone be the criteria to determine the stamp duty payable for registration. It was also observed that when auction is conducted in pursuance to the statutory mandate by the Court or State or instrumentality of the State, no intention to manipulate the stamp duty and undervaluing the property can be inferred, more particularly, when the same is confirmed in an open auction. Having relied upon the said order, the learned Single Judge, while deciding W.P.No.15400 of 2018, has rightly opined that when the sale certificate was issued under the authority of Central enactment, i.e., SARFAESI Act, the value set forth in the said document cannot be doubted and it can be taken as market value of the property for the purpose of registration."

9. Further, the Hon‟ble Division Bench dealt with provisions of Indian

Stamps Act i.e., Section 47-A(6) and Rule 8(5) of the Rules, 2002,

extensively and expressed in categorical terms that Rules of 2002 provide

for sufficient guidelines for fixing the valuation of the property put for

auction sale and therefore the value mentioned in the Sale Certificate issued

in favour of the auction purchaser consequent upon auction under the

SARFAESI Act, cannot be presumed to have been fixed at a lesser rate by

under valuing the sale value of the property. The Hon‟ble Division Bench in

the ultimate analysis of the matter and also by referring to the orders dated

23.09.2021 passed in SLP(C) No.13911 of 2021 (The State of A.P., v. Devi

Sea Foods Limited), dismissed the Writ Appeals.

10. In view of the above binding precedent of the Hon‟ble Division Bench,