JUDGMENT

1. This revision arises out of proceedings under the Indian Stamp Act, 1899, for undervaluation of an instrument of conveyance for purposes of stamp duty. The conveyance was executed under an instrument, dt. 24th September, 1976. The vendor is a public limited company by name Nonsuch Tea Estates Ltd, Conoor (hereinafter called ‘Non-such’). The purchaser is a private limited company, by name, Mahavir Plantations Pte Ltd. (hereinafter called ‘Mahavir’). The subject matter of the conveyance comprised three tea estates by name Prospect Estate, Liddledale Estate and Seaforth Estate. Although the transaction covered the entire plantations in ail the three estates, as going concerns, the document was executed only in respect of the lands as such and other items of immovable property. The lands conveyed under the instrument were of the total extent of 6029.76#fr1/2> acres. Of this extent, Prospect and Liddledale Estates covered 3508.83#fr1/2> acres; the Seaforth Estate covered 2520.93 acres. The total consideration set forth in the instrument, and that was also claimed to be the market value for the three estates of the aggregate extent of 6029.76#fr1/2> acres was Rs. 1,05,47,955. A stamp duty of Rs. 10,10,407.30 was duly paid on the instrument. The conveyance was registered by the Joint Sub-Registrar, Coimbatore as document No. 2561/76, dt. 25th September, 1976. After registration, the Joint Sub-Registrar, however, sent the document to the Collector of Nilgiris for determination of the market value of the properties conveyed and the proper duty payable thereon, apparently in the view that the market value on which stamp duty was paid had not been truly set forth in the instrument. On receipt of the reference, the Collector initiated an inquiry. The Collector first drew up a provisional determination of market value and, after giving an opportunity to the claimant, Mahavir, the Collector passed a final order. Under this order, the Collector determined the market value at Rs. 5,64,11,500, and determined the Stamp duty at Rs. 57,21,795.31. The determination of the deficit stamp duty thus came to Rs. 47,03,307.60. The Collector directed that the amount should be paid within 10 days of his order. The claimants, Mahavir, there upon appealed from the Collector's order to the Appellate Authority, namely, the Subordinate Judge, Nilgiris. The Appellate Authority allowed the appeal on grounds which 1 shall presently state. This revision has been brought before this Court by the Collector of Nilgiris against the order of the Appellate Authority.

2. Before proceeding to consider the points involved in the present revision, I think, I may refer briefly to the relevant statutory provisions having a bearing on the discussion. The Indian Stamp Act, 1899 is a fiscal enactment charging stamp duty on instrument of various kinds. The dutiable instruments are classified under schedule I to the Act and for each class of instrument the schedule prescribes appropriate rate or rates of stamp duty payable thereon. The schedule has been the subject of amendments by different States and also modifications in rates of duty from time to time, Originally, the stamp duty on a conveyance of immovable property was levied ad valorem on the value as set forth in the instrument. However, from 1968 onwards there has been a different basis of charge in this State on conveyance of immovable property. Under the present system, stamp duty is payable on the market value of the property which is the subject matter of the conveyance. Stamp duty on deeds of exchange and deeds of gift of immovable property is also now levied on an ad valorem basis at a rate pertaining to the market value of the property. Given this basis of charge and for ensuring that correct stamp duty is paid on the correct market value of the property, Rules have been prescribed by the State Government in the interests of the Revenue. Under R. 3 of the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968, the party executing the document has to attach to the instrument a separate statement furnishing information about various particulars having a bearing on market value and his own assessment of the market value of the property conveyed. The Collector, however, has jurisdiction under S. 47-A of the Act, to go into the truth or correctness of the market value set forth in the instruments, for the purpose of ensuring that proper stamp duty has been paid on the instrument. He has also jurisdiction to re-assess the market value and redetermine the stamp duty payable on the basis of such re-assessment. However, this process of re-assessment cannot be taken up as a matter of coarse in any and every case. The Collector can assume jurisdiction in this regard only under two given situations, that is to say, either on a reference from the concerned registering authority which has registered the document in question or by acting sua motu on his own study of the records. In either case, there must be a reasonable basis for the proceedings to be initiated. In the one case, the registering authority himself must have reason to believe that the market value has not been truly set forth in the instrument. In the other case, the Collector must on a study of the instrument in question, believe, and must have reasons for believing, that the market value set forth in the instrument has not been truly so set forth. If this precondition of a reasonable belief in the undervaluation of the instrument is satisfied, then, the Collector can proceed to reassess the market value of the property in question and redetermine the stamp duty payable on the instrument. The Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968, provide for a detailed procedure to be observed by the Collector in his proceedings for redetermination of the market value. The procedure, inter alia, includes the issue of notices calling for the objections of the executant and the claimant to the document, the making of a provisional determination and the passing of a final order after giving opportunity to the parties concerned to put forward the objections to thr revision in valuation.

3. In the present case, as earlier mentioned, the Collector took proceedings under S. 47-A of the Act on a reference from the registering authority. The Collector's orders shows that he had assumed jurisdiction to re-determine the market value since he was satisfied that the market value as said forth in the instrument was grossly understated, in order to evade payment of proper stamp duty on the instrument. Having gained jurisdiction under S. 47-A with this finding, the Collector proceeded to set down what, in his judgment was the correct market value of the properties which were the subject-matter of the instrument.

4. In the appeal, the Appellate Authority rejected both the findings of the Collector. The Appellate Authority differed from the Collector and held, in the first place that there was no understatement of the market value by the incumbent with a view to evade stamp duty. The Appellate Authority next found that the market value as set forth in the instrument reflected the correct market value and the Collector's determination was incorrect.

5. For coming to diametrically opposite conclusion on these two matters in issue, the Collector, on the one hand, and the Appellate Authority, on the other, had relied on the selfsame materials on record, which comprised both documentary and oral evidence. The Appellate Authority in its order dealt with various aspects of the evidence to show that there could not be any evasion of stamp duty by means of understatement of the market value of the properties. In the course of the discussion of the evidence, the Appellate Authority referred to the fact that both the vendor and the purchaser were corporate bodies responsible to their share-holders for a transaction of this magnitude. He also referred to the resolution of the general body of the vendor, Nonsuch, under which the company had resolved upon the sale of the tea estates to Mahavir, the purchaser. It was found that the decision was taken in an extraordinary general body meeting called for that very purpose, with due notice to the shareholders. The Appellate Authority further referred to and accepted the evidence of one of the directors of Mahavir, the purchaser, and the evidence of the Secretary of Nonsuch, the vendor, that nothing more actually passed by way of consideration over and above what was recited in the document, as the price of the immovables, namely, Rs. 1,05,47,955. The Appellate Authority observed that it was difficult to believe that the purchase price could have been understated to the extent of nearly four crores of rupees by the two companies in the given situation. The Appellate Authority accordingly recorded a finding that there was no collusion between the vender and the purchaser to defraud stamp duty and there was no evidence of deliberate understatement of market value.

6. The same conclusion the Appellate Authority arrived at from a consideration of another aspect of the evidence. The record showed that the original owner of all the three estates in question, namely, Seaforth Tea Estates, Prospect and Liddlesdale Estates was a sterling company by name Estates and Agency Co. Ltd., Coonoor. This Sterling company also owned another tea estate called High Forest Tea Estate, which comprised an extent of 708 acres. As early as in 1972, the Sterling Company wanted to dispose of all these estates and clear out. Since, however, the payment of consideration involved foreign exchange, the Sterling company as the vendor, asked for permission of the Reserve Bank of India for disposing of the four estates. The permission was asked for to sell the estates for Rs. 1,33,00,000. The Reserve Bank of India, however, referred the matter of valuation of the tea estates to the Tea Board for a proper assessment. The Tea Board went into the question and made a report. On the basis of the Tea Board's report on valuation, the Reserve Bank granted permission to the Sterling company to sell all the four estates at £7,00,000, equivalent to Rs. 1,12,40,000. This sanctioned consideration appertained both to movables and immovables comprising the four tea estates. In the document of conveyance executed by the Sterling company on 28th June, 1974, in favour of Nonsuch the market value of the immovables was set out at Rs. 98,83.720. Subsequently, Nonsuch sold away one out of the four estates which it purchased from the Sterling company, namely, the High Forest Tea Estate for Rs. 18,68,518. There was no dispute at all that this consideration of Rs. 18,68,518, represented the then market value of 708 acres comprising the High Forest Tea estate. With the figures pertaining to these earlier dealings of the estates, before it, the Appellate Authority considered that the consideration of Rs. 1,05,47,955, which passed between Mahavir amd Nonsuch in 1976 under the present document could by no means be regarded as an undervalue. The Appellate Authority observed that whereas the sale by the Sterling Company in 1974 worked out to Rs. 1357.47 per acre as sale price, the consideration under the present conveyance actually worked out to a higher figure, namely Rs. 1,667 per acre. Even on the footing that the Tea Boards valuation of the Sterling Company's four estates at Rs. 1,12,40,000, was an undervaluation, and the market value of those four estates in 1974 must be pinned down to Rs. 1,33,00,000 which was the figure for which the Sterling Company had asked for the Reserve Bank's sanction, the Appellate Authority was satisfied that there could be no undervaluation in the present case. The Appellate Authority took note of the subsequent sale of one of the four estates by Nonsuch for a price, and worked out the market value of the remaining three estates at Rs. 1,01,00,000, pointing out that what was actually realised was much more under the present document, namely, Rs. 1,05,47,955. The Appellate Authority accordingly found no indication whatever in the evidence to ‘hold that the parties to the pending document have resorted to understatement of value for evading proper stamp duty.

7. The Appellate Authority tested the bona fides of the transaction from yet another angle. The balance sheet and profit and loss account and other particulars of trading filed by the parties showed that in the period 1974 and 1975 during which Nonsuch had been carrying on plantation in their estates, which they had acquired from the Sterling company, Prospect and Liddlesdale estates were running under trading loss, and only High Forest Tea Estate had shown some profit. The Appellate authority quoted facts and figures to show that in the year 1974 and 1975, the average sale price of tea obtained from two of the estates which were sold under the present document, namely Prospect and Liddlesdale estate was Rs, 7.91 per kilogram as against 9.47 per kilogram for tea obtained from High Forest Tea Estates, which had been earlier sold and which did not form part of the present conveyance. The Appellate Authority was, therefore, satisfied that there was every reason for Nonsuch to dispose of the properties as a where at the prive which was offered by Mahavir. For estates running at a loss for two years at a stretch, the Appellate Authority found the sale at the average rate of Rs. 1,667 per acre as quite a good bargain in the year 1976 as against the average sale price of Rs. 1,357.47 per acre in 1974, when the same estates were working at a profit.

8. Having found, in the manner aforesaid, that the parties did not seek to evade stamp duty by undervaluation and that the Collector's finding to the contrary was not justified, the Appellate Authority proceeded to review the Collector's determination of the market value of the three estates in the overall sum of Rs. 5,64,11,500. The Collector, it may be observed, had adopted two different standards in his order, one for the valuation of the Seaforth Estate and quite another for the valuation of the other two estates, Prospect and Liddlesdale. For the Seaforth Tea Estate, the Collector adopted the guideline value furnished by the Tahsildar, as a basis to start with. The guildeline value was Rs. 2,520.93 per acre. But the Collector did not accept it without modification. He added to that figure an extra 9 per cent as a notional increase in value. He did not, however, indicate in his order on what data he fixed 9 per cent, as the basis of increase. As for Prospect and Liddlesdale Tea Estate, the Collector divided the lands therein into two categories—(i) lands with tea gardens, and (ii) other lands which were nurseries, uncultivated lands and fuel lands. For the first category he fixed Rs. 15,000 per acre and for the second Rs. 7,500 per acre, as the market value. These figures were adopted from certain proceedings for award of compensation relating to a small extent of land which had been compulsorily acquired by the Government from a portion of the Prospect Tea Estate.

9. The Appellate Authority rejected both the tests adopted by the Collector for working out the market value. As for guidelines valuation, which the Collector adopted for the Seaforth Estate, the Appellate Authority held that departmental guidelines cannot properly serve as the basis for evaluation of market value under S. 47-A of the Stamp Act. As for the Collector's adoption of the figure of compensation awarded in land acquisition proceedings the Appellate Authority held that the award under the Land Acquisition Act cannot afford a proper basis for determination of market value for purposes of the Stamp Act. The Appellate Authority further pointed out that in the land acquisition proceedings relied on by the Collector the notification under S. 4 (1) of the Land Acquisition Act was made in the year 1971, and the acquisition itself pertained to a very small bit of land of the extent of 27.30 acres, whereas the sale deed of the year 1976 in the present case accounted for more than 6,000 acres. The basis adopted for market value of a small plot of land cannot be applied to determine the market value for land covering a very large extent and the same average rate per unit cannot be applied to both cases. Besides, the Appellate Authority also pointed out that the subject-matter of compulsory acquisition, namely, 27.30 acres, at the time of the notification under S. 4(1) of the Land Acquisition Act had a special variety of green tea plants which the Sterling Company had grown for the express purpose of the export market available in Japan. The properties compulsorily acquired included a factory costing Rs. 10,00,000. There was a high yield of green tea in the tea plants grown in the compulsorily acquired lands. It was in these circumstances that an award of compensation in the sum of Rs. 15,000 for well maintained tea gardens and Rs. 7,500 for the vacant lands was rendered in the land acquisition proceedings. The Appellate Authority pointed out that barring the portion of the estates which were compulsorily acquired, the yield of tea in the rest of the estates was poor, particularly after the estates had been purchased from the Sterling Company by Nonsuch. In these circumstances, the Appellate Authority observed that there can be no comparison with the compensation awarded under the acquisition proceedings of a comparatively small extent of high yielding land in 1971, as a proper measure of market value in 1976 of a large extent of low yielding land comprising nearly 6,000 acres.

10. These findings and conclusions of the Appellate Authority are now sought to be questioned in the present revision. I am, however, satisfied that the order of the Appellate Authority must be upheld not only on the ground that it is in accordance with the law, but also on the ground that there can be no other conclusion on the materials on record than that which the Appellate Authority had reached. In so far as the Appellate Authority rejected the guidelines value as a basis of valuation, there can be no two opinions about the correctness of that decision. What is familiarly known as guideline valuation by the registering officers are figures which are found set out in a register called ‘valuation guidelines register’ prepared in 1968 at the instance of the Board of Revenue, and revised from time to time. These guidelines were avowedly intended merely to assist the Sub Registrars to find out, prima facie, whether the market value set out in the instruments had been set forth correctly. The guidelines were not intended as a substitute for market value or to foreclose the inquiry by the Collector which he is under a duty to make under S. 47A of the Act, when once a reference comes to him from the registering authority. The Collector, under S. 47A, cannot shirk 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 S. 47A and the detailed procedure prescribed in the relevant rules goes to show that the Collector's findings must be verifiable by evidence. The valuation guildelines 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 lands, grouping of lands and the like. This being so, the Collector acting under S. 47A cannot regard the guidelines valuation as the last word on the subject of market value. To do so would be to surrender his statutory obligation to determine market value on the basis of evidence, which is a judicial or a quasi-judicial function which he has to perform. To adopt figures prepared at the instance of the Board of Revenue in the valuation guidelines which are merely a compilation of data by subordinate officials of an administrative authority on the basis of administration action would be dangerous, because they offer no guarantee of truth or correctness of the data, not being susceptible to check or verifica tion by a judical or quasi-judicial process of evaluation of evidence. A similar view has been expressed by V. Ramaswami, J., in Hema v. State of Tamil Nadu, and another . W.P 2526 of 1977., in a judgment, dated 15th November, 1979, as yet unreported in the law reports. The learned Judge observed thus—

“The guidelines may constitute sufficient material for the registering authority to entertain a plea that the true market value had not been set forth in the document. But, it cannot be a substantive evidence against the petitioner.”

Earlier in the judgment, the learned Judge had given the background to the preparation of valuation guidelines register in 1968. In that connection the learned Judge observed—

“Thus, it will be seen that the valuation guidelines have not been prepared after notice to the owners of the land concerned. It has been prepared with reference to the classification of the land as wet, dry or manavari, tharam and sort and those were again further grouped with reference to their situation. In the nature of things, therefore, these guidelines have an evidentiary value. They are only intended to give an information or instruction to the registering authorities so as to enable them to come to a reasonable belief within the meaning of S. 47A (1), that the market value of the property which is the subject-matter of conveyance has or has not been truly set forth in the document. After a reference is made, the Collector has to determine the market value with reference to the Explanation in S. 47A.”

The Explanation referred to is in the following terms—

Explanation:—For the purpose of this Act, market value of any property shall be estimated to be the price which in the opinion of the Collector or the Appellate Authority, as the case may be, such property would have fetched or fetch if sold in the open market on the date of execution of the instrument of conveyance, exchange or gift.”

11. The argument of the learned Additional Government Pleader before me was that the definition of market value in the Explanation appended to S. 47A was in no way different from the conception of market value which is the focus of attention in an inquiry for the award of compensation under the Land Acquisition Act. He said that the Land Acquisition Officer shall have to determine the amount of compensation to be awarded for land compulsorily acquired under that Act by taking into consideration first the market value of the land on the date of publication of the notification under S. 4 (i). He accordingly submitted that nothing specially turned on the words of the Explanation to S. 47A of the Indian Stamp Act.

12. I, however, reject this contention as untenable. Although the expression ‘market value’ has now come to assume a definite juridical meaning and is not to be dismissed as a vague term, regard must be paid by a Court of construction to the context in which that expression is employed in the given statute. The learned Additional Government Pleader suggested that the usual test adopted by Courts of law in land acquisition cases of the market value being the price whir-h is paid by a “willing buyer’ and a ‘willing seller’ is the very conception which is to be found in the Explanation to S. 47A, when it refers to the price which the property would fetch or would have fetched if sold in the open market. In a loose sense, the Additional Government Pleader may not be far wrong. But, I must observe that the imagery of a willing buyer and a willing seller has been adopted by Courts of law in land acquisition cases only because the acquisition thereunder is under legal coercion and the property owner to whom compensation is to be given on the basis of market value is almost always an unwilling party. It is only in that context that Courts have uttered the homily that the market value must be determined on the basis of a willing buyer and a willing seller. This they have said notwithstanding the additional provision in S. 23 of the Land Acquisition Act, that over and above the market value solatium at 15 per cent on the market value should also be paid to the person deprived of his property solely for the element of compulsoriness in the acquisition.

13. In my judgment, the conception of open market which the Explanation to S. 47A of the Stamp Act projects cannot be understood in the same way as market value under the Land Acquisition Act is understood. For, exhypothesi the discussion of market value in the Stamp Act is with reference to a transaction, imbedded in an instrument, to which the parties thereto have signified their acceptance voluntarily and willingly. There is no element of compulsion in a sale or a gift or an change, although stamp duty is payable under the statute on the basis of the market value of the subject-matter of the sale, exchange or gift, as the case may be. In this context, therefore, the conception of a willing buyer and a willing seller would be tantalogous and would only tend to obfuscate the obvious elements in market valuation. What the conception of open market in the Explanation to S. 47-A of the Stamp Act conveys is that the market value should be determined on the basis of conditions of equilibrium and not on the basis of speculative trends, where by reason of exercise of economic power on the part of influential interests in real estate which wield enormous bargaining authority, prices of individual properties are either rigged up or depressed, tending to distort the price structure. Open market is, in my judgment an objective standard which lays down that the market value to be adopted by the Collector and the market value which the parties are required to adopt in their instruments must be a fair market value in the sense that there are no economic shackles or inhibitions of any kind which prevent the price level from finding its level. Thus, the conception of open market rules out, at one end, fancy prices and, at the other end, distress sales. Economic equilibrium is the hall-mark of open market.

14. There is yet another cardinal objection to the market value determination in the land acquisition proceedings being adopted either as the basis or even as one of the pieces of evidence for the purpose of determining the market value under S. 47-A of the Act. This is because what the award of compensation determines as the market value cannot in itself be treated as evidence in the sense that it is proof of a fact. For, an award of a land acquisition Collector merely represents the end-product of a decision-making by a quasi-judicial authority. It is true that the Land Acquisition Collector must base his award of market value on materials such as registered sale deeds and the like. The date taken note of by the Land Acquisition Collector would constitute evidence of facts, but what the Land Acquisition Collector awards as market value is only his decision and it can by no means be regarded as a piece of evidence in itself. The only evidence of fact in relation to a decision of that kind is that the decision has in fact been made by such and such authority on such and such a date. It is true that the law has regarded certain decisions in legal proceedings, especially, by a court of law, as conclusive in so far as subsequent proceedings between the same parties on the same disputed issues are concerned, on the principle of res judicata or estoppel by record. But, where the law does not regard any previous decision as final and binding between the parties in subsequent proceedings and where no estoppel is laid down by the law, any decision of a court or tribunal cannot by itself be regarded as a piece of evidence in subsequent proceedings, let alone as conclusive evidence. At any rate, there is nothing in S. 47-A of the Stamp Act, or in any other provisions of that Act which accord to an award in land acquisition proceedings the status of evidence, conclusive or otherwise. It would be a different thing altogether if the Collector in the present proceedings had relied on the basic facts which the Land Acquisition Collector had before him while awarding compensation. But, what the Collector in this case had done was merely to adopt the market value given in the acquisition proceedings as itself amounting to evidence. This in my judgment, he cannot do. In this view, it would be unnecessary even to go into the question whether the particular award which had been relied on against the parties to the present document can be a proper basis on the facts and circumstances of the case. For, I am satisfied that on principle, an award in land acquisition proceedings cannot be taken as evidence of the market value of the lands for which the award has been made. Even otherwise, the compensation award relied on by the Collector in the present case was an award made with reference to a parcel of land notified under S. 4(1) of the Land Acquisition Act nearly six years earlier and it was with refeence to a comparatively small extent of land covering 28 acres. A perusal of the award of the learned Subordinate Judge who granted a higher compensation on a reference shows that there really was no evidence whatever of prices of adjacent lands or other comparable data from which he had ultimately determined the compensation at the rate of Rs. 15,000, per acre for tea gardens and Rs. 7,500 per acre for other lands. The learned Subordinate Judges award shows that the one and only basis of calculating market value in that case was by the method capitalising the income of the current rate of return of capital on then ‘year's purchase’ method. This method of ascertaining market value will depend on two factors fi) the size of the income from the land and (ii) the current rate of interest on investments. Both these are variable quantities and they may have little or no relation to actualities although they might in the absence of other evidence, serve as a satisfactory measure of estimation. The order of the learned Subordinate Judge showed that the acquisition in 1971 was of a strip of land which cut right across in the middle of a big tea estate and comprised tea gardens of special richness and growth, producing export quality tea saleable at a high price in foreign market. These were special features which had gone into capitalisation procedure adopted by the land acquisition authorities for the purpose of arriving at the market value in that case. It is patent that these data cannot be adopted at all in the present case where the subject-matter of the conveyance comprises as many as 6,000 acres and includes different gradation of estates all of which are not uniformly productive of tea and other income-yielding products. I am therefore, satisfied that the award of the learned Subordinate Judge in previous proceedings for land acquisition does not afford a proper criterion on the basis of which the market value set out in the instrument of conveyance in the present case can be challenged as to its truth or correctness.

15. At the end of the discussion I may observe that the rationale behind S. 47-A of Indian Stamp Act is only to neutralise the effect of under-valuation of property with a view to evading stamp duty. This object behind the section has been been very well brought out in a Division Bench ruling of this Court in State of Tamil Nadu v. Chandrasekharan. The following observations in that case are pertinent to the present discusion—

“… We are inclined to think that the object of the Amending Act being to avoid large scale evasion of stamp duty, it is not meant to be applied in a matter of fact fashion and in a haphazard way. Market value itself, as we already mentioned, is a changing factor and will depend on various circumstances and matters relevant to the consideration. No exactitude is, in the nature of things possible. In working the Act, great caution should be taken in order that it may not work as an engine of oppression. Having regard to the object of the Act, we are inclined to think that normally the consideration stated as the market value in a given instrument brought for registration should be taken to be correct, unless circumstances exists which suggest fraudulent evasion.”

It was not the case of the Collector that he had before him, for purpose of comparison any contemporaneous sales of other estates in the vicinity during the material time. As observed by the Appellate Authority, the one and only sales which could bear some comparison were the sales of the very same estates in 1974, by the Sterling Company to Nonsuch who was the vendor under the present instrument. The Appellate Authority,’ accordingly expressed the view that the earlier sale by the Sterling company cannot be ignored while verifying whether the consideration stated in the present instrument reflected the correct or true market value of the subject-matter of the conveyance. It was in this view that the Appellate Authority had proceeded to analyse the sale consideration under the conveyance effected by Sterling Company in 1974, and compare it with the sale consideration set out in the conveyance under discussion.

16. I am satisfied the Appellate Authority has laid down for itself the proper tests for the purpose of verification of the market value of the property in the instrument under inquiry. I do not agree with the view expressed by the Collector in one part of his order to the effect that in the absence of any other sales in the vicinity during the material time the guidelines valuation must be adopted without question, as the one and only basis for determination of the market value. I hold that in the present case, the consideration paid by Nonsuch estate to the Sterling Company in 1974 is a more concrete and a more dependable piece of evidence, and it cannot be excluded as irrelevant. On the contrary in the absence of comparable sales at the material time, it must be taken as the proper basis to test the correctness of the market value which the parties had set out in the present instrument.

17. There is more than are reason why the consideration set forth in the earlier document can be adopted as a safe basis for valuation in the present case. In the first place, as earlier mentioned, the price of Rs. 1,12,45,977, was a figure adopted by the parties to that document, not so much as a matter of individual bargaining on the basis of a mutual agreement between themselves, but as a matter of objective assessment and evaluation by two public bodies who were quite disinterested in the subjectr matter of the bargain and had no axe to grind for undervaluing the estates. The Reserve Bank of India and the Tea Board must be depended upon for their objective approach to the whole question, the one looking at the matter from the point of view of the foreign exchange involved, and the other making an assessment on the basis of its special expertise as to the condition and value of tea estates all over the country. In these circumstances, the price resolved under the earlier sale deed must, in my judgment, be taken as an objective and impartial valuation which can be safely regarded as a reasonable standard on the basis of which the market value found in the subsequent sale deed can be tested.

18. The Collector in the course of his order had remarked that the price of Rs. 1,12,45,977 was fixed under the earlier sale in favour of Nonsuch only because the price had to be paid in terms sterling and the Reserve Bank had considered that figure as adequate in the exigencies of foreign exchange Regulations. The suggestion was that the market value might have been depressed out of considerations of availability of foreign exchange. I do not however agree with this reasoning of the Collector. While the approach of the Reserve Bank might be taken to be orientated from the point of view of foreign exchange requirements, it cannot be gainsaid that the Reserve Bank had referred the matter of valuation to the Tea Board, for an objective assessment. In so far as the Tea Board's approach to the problem was concerned, that authority surely was not inhibited by any considerations of foreign exchange. The Collector has not even suggested that the Tea Board, as the statutory authority managing the production, distribution and export of tea in the country, had not the expertise, to render an objective determination of market value, having regard to the date and information available to that authority.

19. The consideration of Rs. 1,12,45,977, under the earlier document of 1974 must be regarded as reasonable on the basis of yet another consideration. It is seen from the record that even that sale deed was the subject of a reference by the registering authority to the Collector under S. 47-A of the Stamp Act in the matter of market value of the property. The Collector pursued the reference proceedings, but ultimately held that the value of Rs. 1,12,45,977, which was set forth in that instrument did not involve any understatement, but reflected the correct and true market value of the four tea estates covering the said conveyance. It may be observed that the Collector, in rendering that finding, was influenced, and, quite rightly so, by the fact that the said consideration was settled so much by the parties to the document, in a willy nilly fashion, but at a figure suggested by the Reserve Bank and the Tea Board.

20. Having regard to all the aforesaid considerations, I am ‘satisfied that the Appellate Authority in the present case was quite justified in test checking the correctness of the market value of the property set forth in the present instrument, mainly, if not wholly on the basis of the earlier sale deed dt. 28th June, 1974, between the Sterling Company and Nonsuch.

21. Apart from all the above considerations, there is yet another indication in the record to show that the market value as set out in the present instrument had not been understated. It appears from the orders of the Collector and the Appellate Authority that immediately following the present conveyance by Nonsuch in favour of Mahavir the income-tax department initiated proceedings under Chapter XX-A of the Income-tax Act, 1961. It is stated that the Assistant Commissioner of Income-tax, who was the competent authority for the purpose of that Chapter, commenced proceedings against the parties to the document, on a prima facie view that the consideration set out in the deed of conveyance was less than the fair market value of the property on the relevant date. Fair market value, for the purposes of the said proceedings means the price which the property in question would ordinarily fetch on sale in the open market on the date of execution of the instrument. The record shows that these proceedings, however, were subsequently dropped on the Assistant Commissioner being modified that the consideration shown in the document was not less than the fair market value as defined in Chapter XXA of me Income-tax Act. While the dropping of the proceedings by the Assistant Commissioner of Income-tax under a different statute cannot be of any binding force or validity in so far as proceedings under S. 47-A of the Stamp Act are concerned, the fact that the Income-tax department dropped the proceedings can be regarded as an indication to show that a taxing department which had gone into the subject had not found anything untoward in the determination of the market value in the document as on the date of the transaction. It would have been seen that the conception of fair market value, as defined in the Income-tax Act, is more or less the same as found in the definition of market value in the Explanation to S. 47-A of the Act.

22. For all the above reasons, the order passed by the Appellate Authority in this case has got to be sustained. The result is this Civil Revision Petition fails. It is accordingly dismissed with costs.

VCS