State Of Gujarat vs Jayant Shantilal Sanghvi
2021 Latest Caselaw 6771 Guj

      C/LPA/1436/2019                                    ORDER DATED: 23/06/2021




            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

               R/LETTERS PATENT APPEAL NO. 1436 of 2019

           In R/SPECIAL CIVIL APPLICATION NO. 12015 of 2016
                                  With
              CIVIL APPLICATION (FOR STAY) NO. 1 of 2019
             In R/LETTERS PATENT APPEAL NO. 1436 of 2019
=============================================
                                  STATE OF GUJARAT
                                       Versus
                              JAYANT SHANTILAL SANGHVI
=============================================
Appearance:
MR MEET THAKKER, AGP for the Appellant(s) No. 1,2,3
MR DIPEN C SHAH(3374) for the Respondent(s) No. 1,2,3
=============================================

 CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA
       and
       HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI

                                  Date : 23/06/2021

                                       ORAL ORDER

(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)

1. This appeal under clause 15 of the Letters Patent is at the instance of the State of Gujarat and others (original- respondents) and is directed against the judgment and order passed by a learned Single Judge of this Court dated 12.12.2018 in the Special Civil Application No.12015 of 2016 by which the learned single judge allowed the writ application filed by the respondents herein (original writ applicants).

2. The facts giving rise to this appeal may be summarized as under:

2.1 The original writ applicants (respondents herein) preferred the Special Civil Application No.12015 of 2016 seeking to challenge the order passed by the Deputy Collector,

C/LPA/1436/2019 ORDER DATED: 23/06/2021

Stamp Valuation dated 04.02.2015. It appears that the original writ applicants were declared as the highest bidders in an open auction conducted by the Operating Agency on the strength of the approval granted by the BIFR. The writ applicants offered their bid price of Rs.15,21,00,000/- and were declared as the highest bidders.

2.2 Pursuant to the permission granted by the BIFR, the Operating Agency executed a registered sale deed dated 04.05.2006. It appears that the proceedings were initiated before the Deputy Collector, Stamp Duty (for determining the correct market value of the property-in-question). The stance of the appellants herein is that the property purchased by the original writ applicants in the auction proceedings is under valued and there is a short levy of stamp duty of Rs.1,85,04,510/-.

2.3 The learned Single Judge adjudicated the legality and validity of the impugned order dated 04.02.2015 passed by the appellant no.2 herein and ultimately quashed and set aside the impugned order passed by the appellant no.2 herein and allowed the writ application observing the following in paragraph 24 of the impugned order:

"24. Thus, from the proviso contained in the aforesaid Section, it is clear that the consideration set forth in an instrument executed by the State Government, the Central Government, a local authority, Gujarat Housing Board, Gujarat Slum Clearance Board or Gujarat Industrial Development Corporation, shall be deemed to be the true market value of the property which is the subject matter of such instrument. Thus, when the petitioners have purchased the properties in question in an open auction held before BIFR and when the petitioners were the highest bidders and the sale was approved by the BIFR in favour of the petitioners in pursuant to which sale deed was executed, the consideration set forth in the instrument in question is required to be considered as the true market value of the properties in question."

3. We have heard Mr. Meet Thakker, the learned AGP

C/LPA/1436/2019 ORDER DATED: 23/06/2021

appearing for the appellants and Mr. Dipen Shah, the learned counsel appearing for the respondents (original writ applicants).

4. We are of the view that no error not to speak of any error of law could be said to have been committed by the learned Single Judge in passing the impugned order. The issue decided by the learned Single Judge is squarely covered by a decision of the Supreme Court in the case of V.N. Devadoss vs. Chief Revenue Control Officer-cum-Inspector, reported in (2009) 7SCC 438, wherein the Supreme Court held as under:

"13. 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.

14. 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.

15. The 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.

16. 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 fetch 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

C/LPA/1436/2019 ORDER DATED: 23/06/2021

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.

18. On the facts of the case it cannot be said that Section 47-A has any application because there is no scope for entertaining a doubt that there was any under valuation. That being so, the High Court's order is clearly unsustainable and is set aside. The registration shall be done at the price disclosed in the document of conveyance. There is no scope for exercising power under Section 47-A of the Act as there is no basis for even entertaining a belief that the market value of the property which is the subject matter of conveyance has not been truly set forth with a view to fraudulently evade payment of proper stamp duty."

5. In view of the aforesaid, we see no good reason to disturb the order passed by the learned Single Judge taking the view that when any party purchases any property in an open auction conducted by the BIFR and when such party is the highest bidder and the sale is approved by the BIFR in favour of such party and later sale deed is executed then, the sale consideration set for in the instrument-in-question should be considered as the true market value of the property-in- question. This proposition of law is subject to one rider i.e. fraud. If a solid case of fraud is made out between the auction purchasers and the statutory authorities then it is all together a different matter. However, such case has to be pleaded and proved in accordance with law.

6. In view of the aforesaid, this appeal fails and is hereby dismissed. The civil application also stands disposed of accordingly.

(J. B. PARDIWALA, J)

(VAIBHAVI D. NANAVATI,J) NEHA