N. Ranga Reddy v. Govt. Of A.P.

1. The grievance put forward in this writ partition is of a general nature, ??? it involves a matter of daily occurrence all over the State.

2. Under-valuing the documents relating to Transfer of Property with a view to reduce the incidence of stampduty and registration charges, is a matter of common knowledge in this counter, and more so in the rural areas, Part of the explanation lies in the very high incidence of stamp-duty. The Stamp Act was initially conceived as a Revenue, —raising enactment but, in course of time, other sources of Revenue, far more extensive and yielding for greater revenues than this, have come into being with the result that the income yielded by this source is too insignificant and constitutes a very negligible percentage of the revenues of the State. However, the Government does not appear to have lost interest in this source of revenue. With a view to defeat attempts of the parties to under-value their documents (with a view to avoid stamp-duty and registration charges) the Government and the Inspector-General of Registration & Stamps have been issuing instructions from time to time to the subordinate registering authorities, indicating the value of lands in several areas of the State. These are meant as a guidance to the registering authorities. But, according to the petitioner, what the registering authorities are doing is to refuse to admit a document for registration unless the document states the value of the land as per the value fixed in the Government's instructions. In other words, if for lands in a particular area, the rate is fixed in the Government's instructions at, say Rs. 10/- per Sq. yard the registering authorities are said to be refusing even to admit the document for registration unless the document shows the value of the land at least at Rs. 10/- per sq. yard. This, the petitioner says, is illegal and incompetent, and is said to be causing grave and unwarranted prejudice to the parties.

3. Coming to the facts of the present case, it is stated that the lands which are sought to be sold by the petitioner are situated in village Vattinagulapalli, in Rajendranagar Taluk. Rangareddy District. The value of the land in this village was fixed at Re. 1/- per sq. yard, as per the instructions in vogue prior to 1982. In that year, it was raised to Rs. 3 per sq. yard. Again in the recent instructions issued in 1985, effective from 1-5-1985, it has been raised still further to Rs. 15/- per sq. yard. The petitioner says that the fixation of value at the said rate is totally arbitrary and unrelated to the realities of the situation. The petitioner says that he is prepared to sell all the land, which he is authorised to sell, to the Government at the said rate. Indeed, he has offered that the Government may acquire all the said land at one-fourth of the said rate, viz., at the rate of Rs. 3.75 Ps., per sq. yard. He says, he would be very happy if the Government does so. According to him, the present market value of the said land is only 0-50 Paise per sq. yard. His submission is that, in view of the Government's instructions to the Inspector General of Registration & Stamps to raise the value of lands with a view to raise more income, arbitrary enhancements have been made in values of lands all over the State.

4. I gave notice of this matter to Sri N. Subba Reddy, the learned Government Pleader, and have also heard him. A counter-affidavit has also been filed on behalf of the respondents.

5. Section 29 of the Indian Stamp Act specifies the person who is liable to provide the proper stamp. The said provision, however, is subject to an agreement to the contrary between the parties. Section 29 categorizes the documents into several classes and makes a particular party to the document liable in each case. So far as sale-deed is concerned, it is provided for in clause (c) of Section 29.

6. It reads thus:

“S. 29 Duty by whom payable:

In the absence of an agreement to the contrary the expense of providing the proper stamp shall be borne:

a) xxxxxx

b) xxxxxx

c) in the case of a conveyance (including a re-conveyance of mortgaged property)—by the grantee: in the case of a lease or agreement to lease—by the lessee or intended lessee……”

7. In other words, unless the parties otherwise agree, the liability to pay the stamp duty in the case of a sale-deed attaches to the purchaser.

8. Chapter-III of the Act provides for adjudication as to stamps. Section 31 provides that, where a person is in doubt as to the proper duty payable on a document, he can apply to the Collector in the prescribed manner for determining the proper duty payable, and the Collector is obliged to determine the same and communicate it to the applicant. Chapter IV deals with the procedure to be adopted in the case of instruments not duly stamped. The Chapter provides for impounding of documents and the procedure relevant in that behalf. It is in this Chapter that Section 47-A occurs. This section, which has been introduced by A.P Stamp (Amendment) Act, No. 22/1971, with effect from 16-8-1975, provides for the procedure to be followed in cases where the registering authority is of the opinion that a particular document presented for registration, under-values the subject matter. Sub-section (1) of Section 47-A reads as follows:

“S. 47-A. Instruments of conveyance, etc., under-valued—how to be dealt with:

(1) Where the registering officer appointed under the Registration Act, 1908, while registering any instrument of conveyance, exchange, gift, partition or settlement, has reason to believe that the market value of the property which is the subject-matter of such instrument has not been truly sat forth in the instrument, he may, after registering such instrument, refer the matter to the Collector for determination of the market value of such property and the proper duty payable thereon”

9. Sub-Section (2) provides that, on receipt of a reference under sub-section (1), the Collector shall, after nearing the parties and after holding such enquiry as may be prescribed by Rules made under the Act, determine the value of the property and the duty payable thereon, and thereupon the person liable to pay the duty shall pay the same. Sub-sec. (3) confers a suo motu power on the Collector to revise the value of the property mentioned in any document, within a period of two years from the date of registration, and determine the proper duty payable. Sub-section (4) provides for an appeal against the order of the Collector, to the appellate authority. Sub-section (5) specifies the appellate authority. Sub-Section (6) says that ‘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 would fetch if sold in the open market on the date of execution of the instrument of conveyance, exchange, gift, partition or settlement”. Section 48 deals with recovery of duties and penalties. According to this Section, all duties, penalties and other sums payable under Chapter IV can be recovered by the Collector in the same manner as the arrears of land-revenue.

10. It is contended by the learned counsel for the petitioner, and is conceded by the learned Government Pleader, that there is no other provision in the Stamp. Act or the Rules made thereunder, which deals with, or provides for what should be done in the case of documents presented for registration wherein the subject-matter of conveyance is under-valued with a view to avoid the stamp-duty.

11. It is evident from a reading of Sub-section (1) of Section 47-A, and from a perusal of the Act, that the Government has no power in law to fix the values of lands or properties for the purposes of the Stamp Act, and/or to direct the registering authorities not to admit documents for registration unless the value stated in the documents conforms to the value fixed by the Government. This is also conceded in the counter-affidavit. It is contended by the learned Government Pleader that the said instruction, issued after an elaborate enquiry and verification, are Page: 134merely meant as administrative instructions for the guidance of registering authorities and that at no stage, the Government prohibited or restrained the registering authorities from registering the documents which, in their opinion, are under-valued. The learned Government Pleader stated that the only procedure available to the Registrar is the one indicated by Sub-section (1) of Section 47-A of the Act and that, the registering authorities will wherever they think that the property is undervalued, follow the procedure prescribed by the said sub-section. The counter-affidavit states categorically that, none of the registering authorities are refusing to admit any document for registration on the said ground or that none is refusing registration on such a ground. The learned Government Pleader stated before me that the registering authorities will register the documents irrespective of their opinion with respect to the value stated therein and that, if they are of the opinion that the property referred to in the document is under-valued, they will follow the procedure prescribed by Sub-section (1) of Section 47-A. In forming the opinion as to the value of the property, no doubt, the learned Government Pleader states, the registering authorities will take into consideration the instructions of the Government, or for that matter, any other relevant material or information.

12. In my opinion, the statement and the clarifications made in the counter-affidavit, as well as by the learned Government Pleader before me-mentioned in the preceding paragraph-which are recorded herewith, leave no room for grievance on the part of the petitioner. It is evident that all the registering authorities in the State will be bound by the said clarifications and shall act accordingly.

13. However, I must refer to an argument put forward by the learned Government Pleader. He submitted that while acting under Section 47-A it shall be open to the Sub-Registrar/Registrar to retain the document (after registration) with him, if he decides to refer the matter to Collector under the said Section. It is not possible to agree. The Section does dot say so either expressly or by necessary implication. No purpose is going to be served by retaining the document in such a case. The only adjudication under Section 47-A would be about the correct stamp duty payable, which can always be recovered according to law, i.e, as arrears of land-revenue. Moreover, at the stage of reference, it cannot be said that in every case, higher stamp duty will be found payable. The adjudication by Collector and by the appellate authority, in case that remedy is availed of are likely to take some time. There is another reason for this view: no purpose is going to be served by retaining the document after registering it. Even if the original is retained the parties will be entitled to copies of the document, because, in law, the registration is complete.

14. The learned Government Pleader further contended that if such be the position, it would be open to the parties to value property worth one lakh, at one thousand and get the document registered driving the authorities to the elaborate process prescribed by Section 47-A. It is also contended that the proper duty can easily be evaded by the purchaser by transferring the property to another, and so on. These apprehensions cannot be said to be unfounded. But, in the light of the provisions of the Stamp Act, it is not possible to take any other view. One must also take into consideration the possibility of arbitrariness on the part of Government in fixing the values; indeed, this very case is a demonstration in point. The petitioner is daring the Government to acquire or purchase his land for ¼th of the value prescribed, and the Government is obviously not prepared to accept the petitioner's offer-or challenge, as it can be called. While the difficulty in prescribing, separate values for several lands in each locality of the State can easily be appreciated, yet the parties cannot be competed in the present state of law to adopt the ??? values. The only course is one provided by Section 47-A. Page: 135There shall, accordingly, be a direction to the registering authority to register the document or documents presented by the petitioner, in accordance with law, and the directions and clarifications contained herein.

15. The writ petition is disposed of in the above terms. There shall be no order as to costs. Advocate's fee: Rs. 250/-.