Madras High Court
The Inspector General Of ... vs N.Periyannan on 20 July, 2021
W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 20.07.2021
CORAM
THE HONOURABLE MR.JUSTICE T.RAJA
and
THE HONOURABLE MR.JUSTICE V.SIVAGNANAM
W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
1.The Inspector General of Registration,
Inspector General Office,
No.120, Santhome High Road,
Chennai 600 026.
2.The Special Deputy Collector (Stamps),
III Floor, Collectorate (District Collector's Office),
Salem 636 001.
3.The SpecialTahsildar (Stamps),
Taluk Office,
Trichy Main Road,
Namakkal.
4.The Sub Registrar,
Joint II Sub Registrar Office,
Taluk Office Campus,
Mohanur Road, Namakkal. ... Appellants in both W.As
-vs-
N.Periyannan ... Respondent in both W.As
Prayer in both appeals: Writ Appeals filed under Clause 15 of the Letters
Patent against the order of the Hon'ble Mr.Justice R.Subbiah dated
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W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
11.03.2016 made in W.P. Nos.6549 and 6550 of 2016 on the file of this
Court.
For Appellants in both appeals : Mr.T.Arunkumar,
Government Advocate
For Respondent in both appeals : Mr.Ragul Adithya
COMMON JUDGMENT
(Judgment of the Court was delivered by T.RAJA, J.)
The Inspector General of Registration and three others have brought
these appeals questioning the correctness of the order dated 11.03.2016
passed by the learned Single Judge in W.P. Nos.6549 and 6550 of 2016
directing the Registering Authority to affix a seal while releasing the
original deed or conveyance or any other documents indicating that a
reference is pending under Section 47-A with respect to undervaluation and
assessment of stamp duty payable and as and when the proceedings reached
finality, the same should be intimated to the person, who is liable to pay
stamp duty, demanding payment of deficit stamp duty payable on the
instrument.
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W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
2.Mr.T.Arunkumar, learned Government Advocate appearing for the
appellants, assailing the impugned order, argued that the sole issue raised in
these appeals is whether the fourth appellant, the Sub Registrar, Joint II Sub
Registrar Office, after registering the sale deed, while referring the same
under Section 47-A(1) of the Stamp Act to the Special Deputy Collector
(Stamps), the second respondent herein for determining the deficit stamp
duty, shall return the instrument or not? Placing on record a judgment of
this Court in the case of the Special Deputy Collector (Stamps) and another
vs. M.Alfred and others in a batch of writ appeals in W.A. (MD) Nos.1176
to 1179 of 2017 etc. dated 09.10.2017, learned Government Advocate
appearing for the appellants submitted that the said issue is no longer res
integra in as much as the said judgment has categorically held that the
registering authority, while entertaining the document or instrument or
conveyance, doubting under valuation of the instrument, shall refer the same
to the Special Deputy Collector (Stamps) under Section 47-A of the Stamp
Act for further adjudication. Therefore, the question of releasing or
returning the instrument to the owner of the instrument has been ruled out.
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W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
3.Learned Government Advocate appearing for the appellants further
submitted that after registering the sale deeds under Section 47-A(1) of the
Stamp Act, the Sub Registrar, the fourth appellant herein has referred the
instrument to the second appellant, who has passed final order, after giving
reasonable opportunity to the respondent. Thereafter, the respondent took
up the matter by way of Appeal to the first appellant, the Inspector General
of Registration and the same is pending for consideration. Since the legal
issue is very clear holding that after making endorsement and getting the
certification ready, the registration of the document shall be deemed to be
completed and thereafter, the document shall then be returned to the person,
who presented the same for registration, in the present case, when the fourth
appellant has made an endorsement by quantifying the stamp duty payable
by the respondent, as per sub clauses 3 and 4 of Rule 47(7) of the Indian
Stamp Act, the registering authority and the Collector are mandated to
perform their respective roles and the payment of duty determined being
mandatory, the same has to be followed by the certification of the Collector
by way of an endorsement on the instrument. Unless these two requirements
are satisfied, there is absolutely no question of releasing the instrument in
the absence of any right accrued through the provisions.
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W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
4.In support of his submission, placing reliance on the above
judgment, learned Government Advocate appearing for the appellants
submitted that 47-A(4) of the Indian Stamp Act speaks about the charge and
such a charge is on the property mentioned in the instrument and that charge
is not on the instrument, but on the property. Therefore, when the law has
been settled, the question of releasing the instrument does not arise unless
the deficit stamp duty indicated by the registering authority has been paid by
the respondent. In view of the above, the impugned order passed by the
learned Single Judge directing the appellants to release or return the
instrument pending adjudication before the first respondent is un-justified.
Therefore, the same be set aside by allowing these appeals.
5.Opposing the above prayer, learned counsel appearing for the
respondent submitted that when the respondent, having purchased the lands
covered under S.F. Nos.524/4 and 524/5 Nos.520/1A, 520/1B, 520/3B,
520/1D, 521/1 and 521/2 respectively situated at Lathuvadi Village,
Namakkal Taluk and District to the extent of 2.96 and 6.73 acres under Sale
Deed dated 05.04.2013 bearing Document Nos.1792/2013 and 1793/2013
respectively for the total sale consideration of Rs.40,00,000/- and
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W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
Rs.1,60,00,000/- by paying stamp duty of Rs.2,80,000/- and Rs.11,20,000/-
respectively for running poultry shed, approached the fourth appellant for
registration of the above sale deeds, the fourth appellant, after registering
the same, doubting the deficit stamp affixed on the instrument, referred the
same under Section 47-A(1) of the Stamp Act. No doubt, the fourth
appellant is having authority under Section 32-A of the Act to refer the
instrument to the Collector of such District in which either the whole or any
part of the property is situated for determining of the true market value of
such property and the proper duty payable on the instrument, if he has
reason to believe that the consideration set forth therein does not
approximate to the market value of the property which is the subject matter
of such instrument. Referring to suo motu power under Section 47-A(3) of
the Indian Stamp Act, learned counsel for the respondent submitted that the
Collector vested with suo motu power, within a period of four years from
the date of registration of any instrument on which duty is chargeble on the
market value of the property, not already referred to him under sub-section
(1), can also call for and examine the instrument for the purpose of
satisfying himself as to the correctness of the market value of the property
which is the subject of such instrument and the duty payable thereon and if
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W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
after such examination he has reason to believe that the market value of
such property has not been truly set forth in such instrument, he may
determine the market value of such property and the duty payable thereon,
but, the same cannot be deprived of the benefit of getting the document for
five long years which has been mandated by the impugned judgment that
the appellant registering authority shall, after registration of the instrument
return or release the document to the owner of the conveyance. Therefore,
no fault can be found to interfere with the impugned order. In support of his
submission, the learned counsel for the respondent placed reliance on two
judgments of this Court in the case of the District Registrar and others vs.
R.Chidambara Raja Ratinam and others in W.A. (MD) No.1099 of 2016 and
the Inspector General of Registration and others vs. Aswin Exim India Pvt.
Limited in W.A. No.1346 of 2016 for a proposition that the registering
authority, after registering the document, shall return the instrument to the
owner of the instrument of conveyance, even if he referred the instrument/
sale deed/gift to the Collector for determination of the market value of such
property. Therefore, the learned Single Judge has rightly held that the
registering authority cannot refuse to return or release the document while
referring the matter for appeal before the appropriate forum.
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W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
6.But we are not able to find any justification on the submission made
by the learned counsel appearing for the respondent. The reason being that
Section 47-A speaks clearly that if the registering authority, while
registering any instrument of conveyance, namely, exchange, gift, release of
benami right or settlement) has reason to believe that the market value of
the property of which is the subject matter of conveyance, has not been truly
set forth in the instrument, he may, after registering such instrument, refer
the same to the Collector for determination of the market value of such
property and the proper duty payable thereon and on receipt of a reference
under sub-section (1), the Collector shall, after giving the parties a
reasonable opportunity of being heard and after holding an enquiry in such
manner as may be prescribed by rules made under this Act, determine the
market value of the property which is the subject matter of conveyance and
the duty as aforesaid and the difference, if any, in the amount of duty, shall
be payable by the person liable to pay the duty. The issue involved in the
present case has already been considered by the Gujarat High Court in the
case of Champaklal vs. State of Gujarat and others reported in AIR 1988
Gujarat 29 (1). While referring to Sections 60 and 61 of the Registration
Act, the Gujarat High Court has held that Sections 60 and 61 cannot be so
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W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
interpreted as to impose an absolute obligation on the registering officer to
return the document immediately after registration even though it becomes
necessary for him either to retain the same or to deal with it in a similar
manner if some other law requires that to be done. It is pertinent to extract
the above judgment as under:
'Sections 60 and 61 cannot be so interpreted as to impose an
absolute obligation on the registering officer to return the
document immediately after registration even though it
becomes necessary for him either to retain the same or to deal
with it in a similar manner if some other law requires that to
be done.'
7.It may be mentioned herein that in one of the judgments referred by
the counsel for the respondent in the case of the District Registrar and
others vs. R.Chidambara Raja Ratinam, it has been held that in 1998 (III)
CTC 366 (M.Krishnan and 44 others vs. the District Collector, Erode
District and two others), 2002 (3) CTC 544 (B.Rajappa and another vs. The
Special Deputy Collector (Stamps)] and 2003 (4) LW 193
[S.R.Sengotavelu, Servampatti vs. The District Collector, Namakkal and 4
others], it has been held that when an instrument is presented for
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W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
registration, the Sub Registrar must prima facie come to a conclusion as to
whether the property is properly valued or not. If the Sub Registrar prima
facie satisfies that the property is undervalued, he must record the reasons
and refer to the Collector under Section 47-A of the Indian Stamp Act. Even
though no time limit is fixed, the Sub Registrar must refer the matter within
a reasonable time. When a Sub Registrar registered the document, he has
power to retain the same after registration. It is relevant to extract the above
portion as under:
'.....when an instrument is presented for registration, the Sub
Registrar must prima facie come to a conclusion as to whether
the property is properly valued or not. If the Sub Registrar
prima facie satisfies that the property is undervalued, he must
record the reasons and refer to the Collector under Section
47-A of the Indian Stamp Act. Even though no time limit is
fixed, the Sub Registrar must refer the matter within a
reasonable time. When a Sub Registrar registered the
document, he has power to retain the same after registration.
If the instrument is referred to the Collector under Section 47-
A of the Indian Stamp Act, the Sub Registrar can make an
endorsement in the instrument that proceedings under Section
47-A of the Indian Stamp Act is pending and release the
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W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
document to the party. This will safeguard the interest of
revenue.'
8.A perusal of the above observation shows that if the instrument is
referred to the Collector under Section 47-A of the Indian Stamp Act, the
Sub Registrar can make an endorsement in the instrument that proceedings
under Section 47-A of the Indian Stamp Act is pending and release the
document to the party and this will safeguard the interest of revenue. But
the above judgment says that the registering authority can make an
endorsement and release the document, which does not mean that he shall
return or release the conveyance. This position has been further clarified by
the Gujarat High Court in the earlier judgment, which we have already
referred above.
9.A Division Bench of Madurai Bench of Madras High Court in a
batch of Writ Appeal (MD) Nos.1176 to 1179 of 2017 etc. by order dated
09.10.2017 has held that there is no question of return of the instrument by
the registering authority, if a reference is made along with the instrument. It
is pertinent to extract relevant portion as under:
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W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
'26.The learned Special Government Pleader appearing for
the appellants in the Writ Appeals and the respondents in the
Writ Petitions would submit that neither the registering
authority nor the Collector is duty bound to return the
instrument. As on today, about Rs.12,000 crores are to be
collected by way of duty. The provisions of the Indian Stamp
Act will have to be interpreted strictly. Even on a combined
reading of the provisions under the Indian Stamp Act and the
Registration Act, the documents both during and after
adjudication are not liable to be given back. The learned
Special Government Pleader had fairly produced number of
judgments both in his favour and against him.
27.The learned counsel appearing for the respondents in Writ
Appeals and the petitioners in the Writ Petitions would submit
that in the absence of provision to withhold the documents
they are to be returned. The registering authority cannot
withhold the document. The same applies to the Collector as
well. Section 47-A(4) of the Indian Stamp Act provides for a
charge. Therefore, there is no need for withholding the
document. Reference is with respect to the dispute and not the
instrument. Thus, the writ petitions will have to be allowed
and the writ appeals will have to be dismissed.
28.As discussed above, there is no question of return of the
instrument by the registering authority, if a reference is made
along with the instrument. In the absence of any provisions
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W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
enabling the return of the instruments, the same cannot be
given back. The provision for creating charge cannot be
construed for an automatic release of the document. Even if
we apply the principle of purposive and reasonable
interpretation, the instrument cannot be released until and
unless the duty determined is set aside or found to be wrong.
In the light of discussions made above, we are of the view that
the contentions raised by the learned counsel for the writ
petitioners cannot be accepted.'
10.In the light of the above judgments referred supra, we are unable
to support the reasoning given by the learned Single Judge. Therefore, it is
made clear that the registering authority, while referring the matter before
the Special Deputy Collector (Stamps), second appellant herein under
Section 47-A(1) need not release or return the instrument to the owner of
the instrument. In view of the above, the impugned order is set aside and the
writ appeals stand allowed. Consequently connected M.Ps are closed. No
costs.
(T.R.J.) (V.S.G.J.)
20.07.2021
vga
Index: Yes/No
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W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
T.RAJA, J.
and
V.SIVAGNANAM, J.
vga
W.A.Nos.780 & 781 of 2017 and C.M.P.Nos.10817 to 10819 of 2017
20.07.2021
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