Bhopendra Singh And Others v. Awas Vikas Parishad And Others

Hon'ble RC. Verma, J. :--

This ap­peal, preferred under Section 54 of Land Acquisition Act, 1894, is directed against the judgment/award dated 19-8-2002 passed by the learned Additional District Judge/First Fast Track Court, Nainital, whereby the market value of the land in question has been assessed at Rs. 17,400/- and 30% solatium thereon and 12% interest has also been directed Jo paid.

2. Brief facts of the case are that 16.38 acres of land was acquired in Vil-lage-Ujjain, Tehsil-Kashipur for U.P. Housing and Development Board. For that purpose notification under Section 28 of U.P. Housing and Development Board Act was issued on 11-1-1975. The follow up notification under Sec­tion 32 of the said Act was issued on 3-4-1976 |and possession was taken of the land on 15-5-1976. The appellants were not given any amount of compen­sation by the Special Land Acquisition Officer probably on the ground that they are not owners of land, though their land in plot no. 126-C measuring .30 acre and that of plot no. 127-C measuring .30 acre was also included in the aforesaid acquired land. It ap­pears that initially the present appel­lants filed a petition before the Allahabad High Court which was dis­posed of on 09.-02-1987 and against the said order the appellants knocked to the doors of the Apex Court. From where it was directed that since the aforesaid land has been acquired as such if they make an application before the Collector the same shall be referred under Section 18 of the Land Acquisi­tion Act, 1894, to the District Judge, Nainital. Accordingly, on the request of the appellants the collector made the reference, which was registered as Land Acquisition Reference Case No. 3 of 1997. After recording the evidence of the parties and hearing them the im­pugned judgment/award was given by the learned Additional District Judge against which this first appeal has been preferred. The claim of the appellant was contested before the reference court by the respondents on the ground that land total measuring 60 acres of plot no. 126-C and 127-C in fact be­longed to Gaon Samaj, and appellants were only recorded as occupants under class-3. As such the learned reference court was required not only to give its finding on the market value of the land in question but also as to the rights of the appellants over the said land. In view of the observations and directions of the Apex Court and the High Court passed in the writ petition no. 1001 of 1995, after recording the evidence of witnesses produced on behalf of the parties and perusing form-45 prepared under U.P. Consolidation of Holdings Act, the reference court held that the appellants were occupants as 'asaamee' in the plot no. 126-C and 127-C total measuring .60 acres. The said court after considering the claim of the par­ties as to the market value of the land .assessed it at Rs. 6/- per square feet and directed that amount of compen­sation be paid to the tune of Rs. 17,4007- for area measuring .6 acre (i.e. 2900 sq. yard) with 30% solatium and 12% interest there on from 15-5-1976. Aggrieved by which this appeal has been filed by the claimants for en­hancement of amount of compensa­tion. (It appears that learned reference court committed clerical error in multi­plying unit of 'Sq. feet' with 'Sq- yard').

3. We heard learned counsel for the parties and perused the record.

4. Learned reference court has as­sessed the market value of similar land @ of Rs. 6/- per square feet on the ground that other land of the same area which was acquired with land in ques­tion was also valued at the said rate by the Special Land Acquisition Officer. However, learned counsel for the ap­pellants argued that the land in ques­tion is adjoining to the main road un­like the land which was taken in to con­sideration by the reference court. It is further argued that the land in question should not have been valued less than Rs. 50/- Square feet. On perusal of the oral evidence adduced by the parties we found that PW.-l Smt. Raj Dulafi has stated that in the year 1976 value of land in question was Rs. 507- per square feet. P.W.-2 Arvind Singh, P.W.-3 Ranvir Singh and RW.-4 Harpal Singh have also made the similar state­ments. But in the matters of Land Acquisition best way to assess the market value is to examine the value in the light of price paid by the purchaser of similar land in the neighbourhood of the land in question. Such Transaction if nearer the date of notification of ac­quisition, facilitates the court to assess the more accurate market value of the land. However in the present case none of the above witnesses have adduced any evidence as t6 the exemplar sale deed pertaining to the near by similar land. In absence of such sale deeds we are compelled to see the valuation of the surrounding land made by the Collector Nainital under Rule 340-A of the U.P. Stamp (first amendment) Rules, 1976. Paper no. 44-C/l is copy of the Circle rate showing market value as­sessed by the Collector for the purposes of registration of instrument of sale. The said documents shows that the circle rate of the land in question for impos­ing the stamp duty over the documents is Rs. 95/- to Rs. 1357- per sq. meter as market value of the land adjoining to road, and Rs. 677- to Rs. 807- per sq. meter for the land away from the road. From the evidence on record it is clear that the land in question was near the main road. As such the market value as per the circle rate was treated for the purpose of realising stamp duty not less than Rs. 957- per sq. meter. It would be injustice to the owner of land if for re­alising the stamp duty we apply the cir­cle rate and deny at-least the said rate in making payment of compensation on acquisition of his land. The total area of the land in question is 2900 sq. yard. The learned reference court has erred in law by multiplying the rate men­tioned per sq. feet with area in terms of sq. yard. That h why due to miscal­culation the amount has been stuck at meager Rs. 17,4007-. Area measuring 0.6 acre is equal to 2900 Sq. yard which is equal to 2397 sq. meter. If we assess the market value relying on the circle rate it would be Rs. 957- per sq. meter, the market value of the land in the year 1976 comes out to be Rs. 957 - x 2397.80 sq. meters = 2,27,7917-.

5. Learned counsel for the re­spondents contended that the circle rate cannot be made basis for assessing the market value of the land in question. We do agree that circle rate is not al­ways the correct market value of the land and parties are at liberty to show by means of exemplar sale deed with the market value higher to what has been shown in the circle rate, but simul­taneously it is true that government on one hand can not charge stamp duty treating particular market value at cir­cle rates and deny the same for mak­ing the payment of compensation on acquisition of the land. Rule 340-A of U.P. Stamp (first amendment) Rules 1976 requires the Collector to assess bi-annually showing the classification of the land, circle rate of average price of the land situated in district by adopting criteria given in Rule 341-1 and publish the same so that the stamp duty may be charged treating the market value of the land at such rate for the purpose of realizing the stamp duty. As per the procedure these circle rates are fixed by Collector for public notice in­viting objections and considering the same. Therefore, market rates shown in the form of circle rate cannot be dis­carded while assessing the market value of the land for the purposes of calcu­lating the compensation of the land acquired.

6. Charging Section 3 under the Stamp Act of 1899 as applicable in State of U.P. with its proviso, reads as under :

Section 3. Instrument charged with duty:- Subject to provision of this Act and the exemptions maintained in Schedule I, the following instruments shall be chargeable with duty of the amount indicated in that Schedule as the proper duty therefor, respectively, that is to say-

a) every instrument mentioned in that Schedule which, not having been previously executed by any person, is executed in India on or after the first day of July 1899.

b) every bill of exchange payable otherwise than on other hand, or promissory note drawn, or made out of India, on, or after that day, and accepted or paid or presented for acceptance or pay­ment, or endorsed, transferred, or otherwise negotiated in India, and

c) every instrument (other than a bill of exchange, or promissory note) mentioned in that Sched­ule, which, not having been previously executed by any person, is executed out of India on or af­ter that day, relates to any prop­erty situate, or to any matter or thing done or to be done, in In­dia and is received in India.

Provided that, except as otherwise expressly provided in this Act, and notwithstanding anything contained in Clauses (a) (b) & (c) of this Sec­tion, or in Schedule I or I-A, the fol­lowing instruments shall, subject to the exemptions contained in Sched­ule I-A or 1-B, be chargeable with duty of the amount indicated in Schedule I-A or I-B or as the prop­erty duty.

Charging Section 3 of the Stamp Act in its proviso as applicable in State of Andhra Pradesh reads as under :

(1) After clause (c), insert the follow­ing Proviso, namely :

"Provided that, except as otherwise expressly provided in this Act, and notwithstanding anything contained in clause (a) or (c) of this section or in Schedule I, the amount indicated in Schedule I-A shall, subject to the exceptions contained in that Sched­ule, be the duty chargeable."

Charging Section 3 of the Stamp Act in its proviso as applicable in State of Tamil Nadu as under :

(i) for the first proviso inserted by Madras Act 6 of 1922, substitute the following proviso, namely :

"Provided that any increase in the amount of duty chargeable under the Madras Stamp (Amendment) Act, 1922, of the Madras Stamp (In­crease of Duties) Act, 1943, shall not have the effect of increasing the duty payable in respect of instruments specified in clause (c) of this section and executed before the first day of April, 1922."

From the comparative reading of the proviso of the charging Sections of Section 3 of the States of Andhra Pradesh, Tamil Nadu & Uttar Pradesh, it is only in State of U.P where the pro­viso of Section 3 includes in it Sched­ule I-B prepared under Section 3 of the Act, which contains in it Article 23 stipulating for fixation of the minimum market value in a deed of conveyance. In the absence of there being Schedule I-B, in proviso of State of Tamil Nadu and Andhra Pradesh the same not be applicable in State of U.P

Thus it is apparently clear that for the purposes of calculation of stamp duty assessing the market value the proviso of Section 3 as applicable in State of U.P. has had to be read har­moniously with schedule I-B of the Act. In the light of the judgment, since in the State of U.P. the charging section 3 has to be read with Schedule I-B as the same' has been prepared under Section 3, it will have as statutory and binding effect, but as far as the charging section as compared to the Andhra Pradesh and Tamil Nadu is concerned, their charging section does not refer Sched­ule 1-B, as such the ratio of the Jawajee's case will not be attracted in the present set of circumstances for the reasons further being discussed as un­der.

7. The learned counsel for the re­spondents strongly placed reliance on the judgment reported in Jawajee Nagnatham Vs. Revenue Divisional Of­ficer Aidalabad Andhra Pradesh, 1994 Vol. 4 S.C.C. Page 595 as well as the judgment reported in Krishi Utpadnn Mandi Samiti Sehsawan Bacfayuri Vs. Vipin Kumar and another, S.C.C. 2004 Vol II Page 283. They have further placed reliance on a judgment rendered by Allahabad High Court reported in Hajari Lal Sahu Vs. State of U.P., 2004 (96) R.D. 368. In the two judgments while interpreting Section 3 reliance has been placed on the judgment rendered by Hon'ble Apex Court in "Jawajee Nagnatham Vs. Revenue Divisional Of­ficer Aidalabad Andhra Pradesh". In the said judgment the Hon'ble Apex Court has interpreted Section 47-A as applicable in Andhra Pradesh as to be the charging Section and has not taken into consideration the proviso of Sec­tion 3 of the Act, and has proceeded on the basis that since the "Basic Valu­ation Register" having no statutory sanction cannot be read in evidence for enhancement of market value. The Apex Court observed that the Basic Valuation Register was prepared in the official capacity by the Revenue De­partment or its Registering Officer of Andhra Pradesh hence it cannot be de­termined as to be an evidence for cal­culation of the compensation under Section 23 of the Land Acquisition Act. As remarked in Para 5 of said judgment it seems that it was not brought to the knowledge/ notice of the Apex Court that Section 47-A as applicable in Andhra .Pradesh is not the same in State of U.P Apart from it the proviso of Section 3 was also not considered because the fact that Section 47-A as applicable in Andhra Pradesh excludes Schedule I-B of the Act which includes Article 23 for the conveyancing pre­pared under Section 3 of the Act, hence the ratio propounded by the said judgment would not be applicable here in this case.

8. The judgment in 1994 in "Jawajee Nagnatham Vs. Revenue Di­visional Officer Aidalabad Andhra Pradesh Case" shows that it was pro­ceeded on a premise that no other statutory provisions of "Rules" having statutory force is brought to the notice of the court in support thereof. Thus the judgment rendered by the Hon'ble Apex Court in 1994 would not be ap­plicable in present set of circumstances as far as it relates to the State of U.P where the Rules are framed under the Act. The judgment delivered in 2004 by the Hon'ble Apex Court in "Jawajee Nagnatham Vs. Revenue Divisional Of­ficer Aidalabad Andhra Pradesh Case" proviso of Section 3 of the Act as ap­plicable to different States as well as Section 47-A as applicable to the State of U.P, Andhra Pradesh & Tamil Nadu have not been compared, hence the spirit of the judgment can not be said to be applicable in the State of U.P On reading para 5 of the judgment ren­dered in "Jawajee Nagnatham Vs. Rev­enue Divisional Officer Aidalabad Andhra Pradesh Case" the question which the Apex Court was ceased was whether the basic valuation register is an evidence to determine the market value while considering this aspect the Hon'ble Apex Court declined to take the basic valuation register as to be binding.

As far as it relates to the State of U.P. the aforesaid judgment of Apex Court is not applicable in the present case for the following reasons :

a. In the State of Andhra Pradesh the contents of basic valuation register were based upon the wisdom of the Registering Of­ficer and as such since it was not having a statutory force or origi­nating from the provisions of the Act of the Rules it was not bind­ing.

b. Another reason for not accepting the basic valuation register as to be the basis for the reasons be­fore the Apex Court no other provisions or Rules having statu­tory force has been brought to the notice of the court.

c. The basic valuation register was declined to be accepted as it was a unilateral decision of the Reg­istering Officer of fixing the valu­ation of the land, hence it was not binding.

d. As before the Apex Court in the judgment, it was not placed as to what was the source of power granted to the authorities for the preparation of the Basic Valua­tion Register.

Thus the ratio laid down in the judgment propounding that the valua­tion fixed under the Stamp Act by a valuing authority competent to do so could not be taken into consideration for the computation of the market value while considering the amount payable under Section 23 of the Land Acquisi­tion Act rather the same was declined to be admitted in evidence as it was not framed under the Rules.

9. The respondents strongly placed reliance on a judgment reported in R. Sai Bharati Vs. Jai Lalita, 2003 A.I.R. S.C.W. 6349 but since the said judg­ment was within the four corner of Sec­tion 47-A as applicable to the State of Tamil Nadu without the inclusion of Schedule I-B and without taking into consideration the proviso of charging Section 3 of the Act the same would not be applicable in State of U.P The learned Single Judge of Allahabad High Court in judgment reported in Hazari Lal Sahu Vs. State of U.P., 2004 (96) R.D. Page 368 is based upon the U.P Stamp of Valuation of Property Rules 1997 which in the present case would not be applicable in view of Rule 11 in its first proviso makes the Rule of 1997 not effective on the previous op­eration of the Rules hence the repeal­ing the same by Rule 11 safe guards the previous operations, hence the ra­tio will not apply. Also the said judg­ment is based on the law laid down by Apex Court in Jawajee's Case which for the reason given above will not be applicable in U.P. Thus as far as State of U.P. is concerned for the purposes of reading the charging Section the pro­viso of Section 3 as applicable in State of U.P. is not to be read in isolation but harmoniously with Schedule I-B, which is not applicable in Andhra Pradesh or Tamil Nadu thus the ratio propounded therein would not be attracted in the present set of circumstances.

10. That Section 47-A as applica­ble in State of U.P. lays down a proce­dural law and is not the charging Sec­tion as interpreted by the judgment of 1994 given in "Jawajee Nagnatham Vs. Revenue Divisional Officer Aidalabad Andhra Pradesh Case". For the pur­poses of brevity of Section 47-A as ap­plicable to the State of U.P. reads as under :

section 47-a. instruments of con­veyance etc. if undervalued, how to be dealt with : --

(1) If the market value of any prop­erty which is the subject of any instrument of conveyance, ex­change, gift, settlement, award entrjust, as set forth in such in­strument is less that even the minimum value determined in accordance with any rules made under this Act. The registering officer appointed under the In­dian Registration Act, 1908, shall refer the same to the Collector for determination of the market value of such property and the property duty payable thereon.

(2) Whether prejudice to the provi­sions of sub section (1), if such registering officer while register­ing any instrument of convey­ance, exchange, gift, settlement, award or trust, has reason to be­lieve that the market value of the property which is the subject of conveyance, exchange, gift, set­tlement, award or trust, 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.

(3) On receipt of a reference under sub section (1) of sub section (2) 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 of conveyance, exchange, gift, set­tlement, award or trust and the duty as aforesaid. The differ­ence, if any, in the amount of duty shall be payable by the per­son liable to pay the duty."

Section 47-A sub Section (1) stipulates that on presentation of docu­mentation of case if the document is found to be less then the "Minimum Value" determined under the Rules the same would be referred to the Collec­tor for its appropriate valuation prior to its registration. Sub Section 2 of Sec­tion 47-A provides that the Collector on receipt of the reference has to provide an opportunity of hearing prior to de­termine the market value of the prop­erty which is the subject matter of in­strument. That means the authority cre­ated under the Registration Act of 1908 for the purposes of regulating its activi­ties of assessing the true value of the property has to regulate its activities within the Rules framed under Chapter 15 particularly Rule 340-A & 341, meaning thereby the action of the Reg­istering Officer for computation of the minimum value of the property is to place reliance on the Rules, framed under the Act. Once an action contem­plated statutorily under an Act of an authority is regulated by a set of Rules framed under the Act read with Entry 44 List 3 of Schedule 7 it has got a statutory effect, otherwise the same would render the provisions of section 47-a which is a procedural legislation as to be redundant. When on presen­tation the Registering Officer has to assess the face value of the document on the basis of the market value fixed by the Collector, which infers that the basis of exercising of powers under section 47-a (1) are the Rules framed under Chapter 15 of the Rules. In the absence of which no action could be proceeded with under section 47-a (1) & (2), thus the Rules framed under Rule 340, 340-A & 341 guides the ac­tivity of an authority to meet the pur­pose contemplated under the Act, hence the same would be mandatory as it regulates the purpose of the Act. When sub Section 2 of Section 47-A on a reference made by the Collector under Section 47-A provides that prior to computation of the minimum value, the Collector has to provide an opportunity within the ambit of Rules framed under the Act, the same makes it mandatory so that the action of the State of fixing the liability of stamp duty prior to as­sessing the minimum value may not be arbitrary, thus also it renders the Rules to be statutory failing which the spirit and the purpose of Section 47-A is de­feated, because a reference under Sec­tion 47-A to assess the minimum value of the property prior to its registration is regulated by Rules contained in Chapter 15 of the Rules.

11. The Constitution Bench of Five Judges in a judgment reported in State of U.P. and others Vs. Babu Ram Upadhyaya, A.I.R. 1961 S.C. Page 751" while interpreting the Police Regu­lations has laid down as under :

"Rules made under the statute must, be treated for all purposes of con­struction or obligation exactly as if they were in the Act and are to be of the same effect as if contained in the Act, and are to be judicially no­ticed for all purposes of construction or obligation" : (See Maxwell "On the Interpretation of Statutes", 10th edition pp. 50-51). The statutory rules cannot be described as, or equated with, administrative direc­tions. If so, the Police Act and the rules made there under constitute a self-contained code providing for the appointment of police officers and prescribing the procedure for their removal. If follows that where the appropriate authority takes dis­ciplinary action under the Police Act or the rules made there under, it must conform to the provisions of the statute or the rules which have conferred upon it the power to take the said Action. If there is any vio­lation of the said provisions, subject to the question which we will pres­ently consider, whether the rules are directory or mandatory, the public servant would have a right to chal­lenge the decision of that authority."

Hence the Rules framed under the Act which are consistent with the pro­visions of the Act and not in deroga­tion to it assisting the procedural deci­sion making process which provides for the authorities not to make a departure from the radical principles of the con­struction of the Rules made under the statute, must be treated as to be statu­tory.

12. The market value determined for the circle, is the minimum statutory market value, in accordance with the statutory rules framed under the Stamp Act, as amended by the U.P. Act, on the basis of which, stamp duty is paid as per schedule appended to Section 3 and sale deed is to be entertained only after the payment of the stamp duty paid on the said minimum market value and if in the opinion of the Reg­istering Authority the value of the prop­erty is more than the minimum value determined as per the rules, he may refer the matter to the Authority who may further proceed to require the vendee to pay more stamp duty. And if not paid they may impound the sale deed. Thus the basis of exercise of power, is the minimum market value determined according to rule. If for the augmentation of the revenue, govern­ment fixes the market value of the property in a circle why that not be taken as minimum market value of the property for the purpose of Land Ac­quisition Act. The procedure of determination of market value provided un­der Section 23 of Land Acquisition Act is paramateria to the rules framed un­der the Stamp Act. Therefore, we hold that while avoiding compensation for land .acquired under the Land Acquisi­tion Act, the compensation cannot be paid at a lesser, rate than that of mar­ket value determined for the purpose of payment of stamp duty under the Stamp Act.

13. This Court in First Appeal No. 175 of 2001 (Old No. 504 of 1990), M/ s Singh & Company versus Collector, Nainital, decided on 8th July, 2005; 2005(2) U.P., 192. held that the circle rates are merely guide lines relying on the case of Krishi Utpadan Mandi Samiti Sahaswan (supra). In case of Ramesh Chand Bansal (Supra) as well as State of Punjab (Supra), Jawajee Nagnatham (supra) and Krishi Utpadan Mandi Samiti Sahaswan (supra) the Court has dealt the guide lines as to be the parameters to determine either preparation or circulation, alteration or enhancement is an indicative price for registration of an instrument. In the aforesaid judgments the price were fixed under the guide lines whereas the rules read with Section 47-A as appli­cable in U.P. itself regulates the very basis for the registration of an instru­ment presented for registration, which provides to determine the true value as per the rules framed under the Act by the State Government under Sec. 75 of Stamp Act. It is because of this reason that when the registering authority finds the stamp paid on an instrument has to compare the value under Rules framed under the Stamp Act. Since the rules itself govern the exercise of powers for registration under Sec. 47-A, empower­ing the power of refusal to register a document presented for registration under Sec. 52 of Registration Act renders the rules framed by State of U.P. under Section 75 of Stamp Act as to be mandatory, in the absence of rules the purpose of Sec. 47-A itself is defeated and is rendered a nonest pro­vision, thus these rules framed under the Stamp Act are mandatory. This could be visualized on a comparative reading of Sec. 47-A as applicable in different States, to which the aforesaid judgments pertain, the rules have not played the pivotal role for the exercise of powers under Section 47-A.

14. This Court in the case of M/s. Singh & Company versus Collector, Nainital, decided on 8th July, 2995 (supra) did not examine the nature of the determination of market value in accordance with the rules framed under the Stamp Act and decided the case re­lying on Krishi Utpadan Mandi Samiti Sahaswan's case (supra) in which the Apex Court has held that determined circle rates are guide lines only. Since we have examined the matter in detail and in our opinion, the market value determined under statutory rule should be made basis for awarding the com­pensation under the Land Acquisition Act.

15. In the above circumstances the appeal is allowed and enhanced the amount of compensation shall be paid to the appellants as Rs. 957- per sq. meter with 30% solatium and 12% in­terests from the date of delivery of pos­session.

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