REGISTRAR OF ASSURANCES & ANR Versus ASL VYAPAR PRIVATE LTD. & ANR

REGISTRAR OF ASSURANCES & ANR  Versus ASL VYAPAR PRIVATE LTD. & ANR

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले



REPORTABLE
 IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.8281 of 2022
[ARISING OUT OF S.L.P.(C) NO 21405 OF 2010]
REGISTRAR OF ASSURANCES & ANR. …APPELLANTS
Versus
ASL VYAPAR PRIVATE LTD. & ANR. …RESPONDENTS
 WITH
CIVIL APPEAL NO.8282 OF 2022
Arising out of SLP(C) No. 22197 of 2010
J U D G M E N T
SANJAY KISHAN KAUL, J.
Leave granted.
Background:
1. The impugned judgment dated 13.05.2010 in W.P. No. 1295/2009
passed by the High Court of Calcutta decided a reference arising from the
following two matters –
1
(i) State of West Bengal & Anr. v. Sati Enclave Pvt. Ltd. &
Ors., a Letters Patent Appeal being APOT No. 196 of 2008 from a
partition and administration suit (“the Partition matter”) and,
(ii) ASL Vyapar Pvt. Ltd. v. The Registrar of Assurances & Ors.,
a Writ Petition being Writ Petition No. 1295 of 2009 (“the
Company matter”).
The facts:
2. In Re the Partition Matter: In a Partition Suit being Extraordinary
Suit No. 32 of 1987, Ld. Single Judge passed an order dated 15.09.1987
for the sale of Premises No. 20 to 20/14 (except 20/10) Chetla Flat Road,
Kolkata- 700027 (“the land”), measuring 41 cottahs and 21 chittacks, i.e.
approximately 2800 square metres. On 08.03.2006, the Joint Receivers
appointed by the Court issued an advertisement in The Telegraph, a
leading daily newspaper for sale of the land. At the auction, several
parties participated, and the offer made by one Priya Dutta at the rate of
Rs.1,88,500 per cottah was the highest. However, she did not pay the
entire earnest money which was stipulated at the rate of 10% of the bid
amount. Sati Pvt. Ltd. (R1 in S.L.P.(C) 22197 of 2010) also offered to
match the bid amount Rs.1,88,500 and to pay the entire earnest money
within 3 days. The court directed default clauses in case of failure to pay
2
the earnest money or consideration amount, such as, if Sati Pvt. Ltd. did
not pay the earnest money within 3 days, the joint receivers could
proceed to convey the property to the next highest bidder whose bid was
for Rs.1,88,000 per cottah.
3. Vide order dated 04.12.2006, Ld. Single Judge accepted the offer
of Sati Pvt. Ltd. and confirmed the sale in its favour. It was further
directed that the aforesaid consideration being the actual consideration
for the property would be treated as value of the property for the purpose
of registration and stamp duty. The Joint Receivers executed the
conveyance in favour of Sati Pvt. Ltd. and presented the same for
registration on 16.05.2007 for sale consideration of Rs.78,69,875. Stamp
duty of Rs. 5,48,810 and Registration Fee of Rs. 86,650 were also paid.
4. However, on 14.12.2007, the Registrar of Assurances issued a
notice under section 47A (2) of the Indian Stamp Act, 1899 (“the Act”)
intimating that the market value of the land was assessed by the
Registering Officer at Rs. 7,76,69,838 on which deficit Stamp Duty of
Rs.48,85,888 and deficit Registration Fee of Rs. 7,67,800 were required
to be paid. Sati Pvt. Ltd. filed a Contempt Application against the
Registrar for allegedly committing breach of the order dated 04.12.2006
3
of the Ld. Single Judge. The Registrar filed an application seeking
recalling of order dated 04.12.2006, but the same was rejected.
Aggrieved, the Registrar filed an appeal before the Division Bench who
referred the question for decision by a larger bench.
5. In Re the Company matter: By an order dated 21.07.2004 of the
Ld. Single Judge, M/s. Kayan Udyog Ltd. was ordered to be wound up
and the Official Liquidator was directed to take the necessary steps. The
Official Liquidator published an advertisement on 12.05.2006 in daily
newspapers inviting offers for purchase of assets and properties of the
company on “as is where is and whatever there is basis” with a Reserve
Price of Rs.1.20 crores and the highest offer received was Rs.75,00,000.
The Company Court directed revision of the Reserve Price and to issue a
fresh advertisement. In the second advertisement dated 15.09.2006, the
Reserve Price was fixed at Rs. 1 crore and the highest offer received was
Rs.86,00,000 which was subsequently enhanced to Rs. 87,00,000 when
the auction was held in the Company Court.
6. Vide order dated 08.09.2006, the Company Court confirmed the
sale in favour of ASL Pvt. Ltd. at Rs.87,00,000 subject to certain
conditions of payment within stipulated time periods. On payment of the
4
entire consideration, the Official Liquidator executed the Conveyance
Deed on 07.05.2008 and presented the same before the Registrar of
Assurance, Calcutta for registration. On 06.08.2008, the Additional
Registrar of Assurance-II issued a Demand Notice to ASL Pvt. Ltd.
informing that the market value of the property was assessed at Rs.1.70
crores and ASL Pvt. Ltd. had to pay the deficit Stamp Duty of
Rs.5,86,000 as well as deficit Registration Fee of Rs.92,125. Aggrieved,
ASL Pvt. Ltd. filed the writ petition challenging the notice. Ld. Single
Judge referred the question to a larger bench.
Proceedings before the Full Bench of the Calcutta High Court:
7. In order to appreciate the controversy, it would be appropriate to
first reproduce the relevant provision in exercise of which power the
higher stamp duty was sought. Section 47A was inserted by the Indian
Stamp (West Bengal Amendment) Act, 1990 (hereinafter referred to as
the ‘Act’) reads as under:
“47A. – Instruments of conveyance etc. undervalued how to be
dealt with – (1) Where the registering officer appointed under the
Registration Act, 1908 (16 of 1908), has while registering any
instrument of conveyance, exchange, gift, partition or settlement,
reason to believe that the market value of the property which is the
subject matter of such instrument has not been truly set forth in the
instrument, he may, notwithstanding the contrary provisions in
Section 35 insofar as it relates to registration, register such
instrument provisionally, subject to determination of the market
5
value under sub-section (2), and, after registering such instrument,
refer the matter to such authority as may be prescribed for
determination of the market value of such property and the proper
duty payable thereon.”
Section 47A was further amended by the Indian Stamp (West
Bengal Amendment) Act, 1998 with effect from 15.03.2021, and reads as
under:
“47A. Instruments of conveyance, etc. undervalued, how to be
dealt with (1) Where the registering officer appointed under the
Registration Act, 1908 (16 of 1908) has, while registering any
instrument of
a) agreement or memorandum of an agreement relating to a
sale or lease-cum sale of immovable property,
b) conveyance, (c) to (h) .......
reason to believe that the market value of the property which
is the subject matter of any such instrument has not been
truly set forth in the instrument ·presented for registration,
he may, after receiving such instrument, ascertain the market
value of the property which is the subject matter of such
instrument in the manner prescribed and compute the proper
stamp duty chargeable · on the market value so · ascertained
and thereafter he shall, notwithstanding anything to the
contrary contained in the Registration Act, 1908, in so far as
it relates to registration, keep registration of such instrument
in abeyance till property which is the subject matter of
conveyance, exchange, gift, release of benami right or
settlement, 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.”
6
8. The successful purchasers (respondents herein) sought to rely upon
the two judicial views of this Court in support of their contention that the
transacted value alone should be taken into consideration for affixation of
stamp duty.
1. Govt. of Andhra Pradesh & Ors .v. P. Laxmi Devi1
, which
arose under Section 47A as applicable to Andhra Pradesh, wherein
the Court opined that there was large scale undervaluation of the
real value of property in sale deed so as to defraud the government
proper revenue. There was no provision in the original Stamp Act
to empower the Revenue Authorities to make an inquiry about the
value of the conveyed property. Hence, amendments were made to
the Indian Stamp Act from time to time in several states to
determine the correct stamp duty.
2. V.N. Devadoss v. Chief Revenue Control Office-cumInspector & Ors.2
, which arose under Section 47A as applicable to
Tamil Nadu, wherein it was held that it is not a routine procedure
to be followed in respect of each and every document of
conveyance presented for registration without any evidence to
show lack of bona fide of the parties. Therefore, the basis for the
1 2008(4) SCC 720
2
(2009) 7 SCC 438
7
exercise of power under section 47A of the Act is the wilful
undervaluation of the subject of transfer with fraudulent intention
to evade payment of proper stamp duty. The Registering Officer
cannot have any reason to believe that the market value of the
property was not truly set forth in an instrument of transfer
executed pursuant to the order of a court, when the property was
sold at a public auction after the publication of the advertisement
in newspapers.
9. The respondents then relied upon the judgment in Birendra Nath
Manna & Anr. v. State of West Bengal & Ors.3
, which upheld the
constitutional validity of Section 47A as applicable to West Bengal. The
Respondents also submitted that the Statement of Objects and Reasons
for enactment of the Indian Stamp Act (West Bengal Amendment) 1990
contained the explanation for insertion of Section 47A. It was stated that
West Bengal is no exception to the general phenomenon of under
valuation of properties and the revenue from stamp duty has increased
sharply for states where the basis of charging duty was changed from the
declared price or value of properties to the market value.
3 2000 (1) CHN 173
8
10. In the aforesaid context it was pleaded that the best possible prices
were obtainable through a transparent method and that is what was the
price of the transactions. In the partition matter, there were 98 tenants on
the land and the total monthly rent was Rs.8,000 for the entire land and
80 vendors were occupying the land for hawking business during daytime
and, thus, the consideration of Rs.78,69,000 was the best possible price.
Similarly, in the company matter, the endeavour was made more than
once but even the reserve price was not obtainable and, thus, the best
possible price was obtained at an auction. The market value of the
property would not be a hypothetical figure, which the bidder must match
rather it is the value, which is obtainable through the process of the
highest bidder willing to pay under the prevailing circumstances.
11. On the other hand, the State (appellant before us) submitted that
the provisions brought about by the amendment mentioned aforesaid was
different from the one in Tamil Nadu and, thus, the pronouncement in
V.N. Devadoss4
 case will not apply. In addition, it was urged that the Ld.
Single Judge vide order dated 04.12.2006 lacked the jurisdiction to give
pre-emptive direction that the consideration being the actual
4
(supra)
9
consideration for the property would be treated as value of the property
for registration and stamp duty as Section 47 of the Act provides that the
order passed by the Chief Controlling Revenue Authority shall be final
and shall not be called into question in any civil court or before any
authority.
12. The three Judges Bench held on the conspectus of the aforesaid
arguments that Section 47A of the Act as applicable to West Bengal read
with Rule 3 of the West Bengal Stamp (Prevention of Undervaluation of
Instruments) Rules, 2001 (hereinafter referred to as the ‘Rules’) is not
applicable to an instrument executed by a Receiver pursuant to an order
of sale passed by a civil court, after publication in newspapers. The sale
conducted by the court through its officers qualifies to be an open market
sale subject to the following conditions:
a) there must be wide publicity of the proposed sale and
particularly there shall be publication of advertisement in at least
one newspaper having wide circulation in the concerned city/town/
district.
b) The purchaser of the property must not be connected with
or related to the authority/ officer conducting the sale.
10
13. In the discussion over the objective and purport of Section 47A of
the Act as applicable to the State of West Bengal, Tamil Nadu and Andhra
Pradesh, it was observed that they were in pari materia insofar as they
confer power on the Registering Officer not to register an instrument
when the Registering Officer has reason to believe that the market value
of the property has not been truly set forth in the instrument. The
difference in language of the Section was not significant. When a
property is sold in a private sale, the registering officer has the power to
determine the actual value of the property. As legal fictions are limited
for the purpose for which they are created and cannot be widened by
Rules made under the Act and no such fiction is required to be provided
for determining the price of the property when it is sold in the open
market. Thus, the definition of “Market Value” as under Section 2(16B)
of the Act would not apply to the property if actually sold in the open
market.
“2(16B) – ‘Market Value’ means, in relation to any property which
is the subject matter of an instrument, the price which such
property would have fetched or would fetch if sold in open market
on the date of execution of such instrument as determined in such
manner and by such authority as may be prescribed by rules made
under this Act of the consideration stated in the instrument,
whichever is higher.”
11
14. Insofar as the expression “whichever is higher” in the sub-section
aforesaid, it would mean the higher of the two prices, i.e., the price which
such property would have fetched in the open market on the date of
execution of such instrument (i.e., in the immediate past) or the price
which such property would fetch if sold in the open market on the date of
execution of such instrument (i.e., in the immediate future). If the
legislature had intended that Section 2(16B) of the Act was to apply to
open market sales also it would have made a separate or specific
provision regarding the determination of the price of the property being
sold in the open market. The expression “if sold in open market” presupposes that the property was not sold in the open market. The
language of Rule 3 also buttresses the same view where none of the four
methods of determining the value of the property in question refers to
value fetched at an open market sale. A court sale was opined to be an
open sale. Advertisements published in the daily newspapers having
wide circulation in the city or town where the property is situated is an
open market sale. The court may be well advised to get the valuation of
the property made by a registered valuer for the purposes of fixing the
Reserve Price before issuing the advertisement in newspapers. However,
this cannot be a pre-requisite as it is not always possible to get bids above
12
the reserve price or even matching the reserve price, as was seen in the
company matter. The whole basis of holding that a Court sale is an open
market sale is the sanctity with which the proceedings of the sale are
conducted by the court and its officers. In case the registering authority
has any material to doubt such sanctity, it is open for it to move the court
with a proper application pointing out such materials for reviewing the
order regarding the determination of price.
15. We may note that in order to buttress the entitlement for fixation of
stamp duty based on a market value as perceived in the aforesaid subsection, the State relied upon the judicial pronouncement of this Court in
M/s. Kayjay Industries Pvt. Ltd. V. M/s. Asnew Drums (P) Ltd. & Ors.5
It was submitted that a Court sale is a forced sale and notwithstanding the
competitive element of a public auction, the best price is not often
forthcoming, thereby creating an apprehension that it will adversely
affect the State Exchequer in respect of other properties in the area.
However, even if the property at a Court sale does not fetch the highest or
best available price and there are other pieces of evidence of market
value of similar properties available in the area, the Registering Officer
can always consider the other sale instances or any other material
5
(1974) 2 SCC 213
13
reflecting higher value of the property under sections 47A(1)(2) read with
Section 2(16B) of the Act and Rule 3 of the Undervaluation Rules of
2001.
The Occasion for Reference:
16. On consideration of the matter on 6.2.2020, it was opined that the
impugned judgment had traversed certain areas over which the Court had
reservations:
a. the interpretation of Section 2(16B) of the Act as set out in
para 24 of the impugned judgment (referring to the higher price in
the immediate past or immediate future), is contrary to the
wordings of the statute;
b. para 27.4 of the impugned judgment (giving Registering
Officer the liberty to move the court with proper application in
case of doubts on sanctity of the open market sale) sought to give
the Registering Authority a new channel to open up final
transaction having far reaching repercussions; and
c. the conclusion contained in paras 29.1 and 29.2 (holding that
a court sale cannot be the subject matter of exercise of powers by
the Registering Authority, along with conditions to be satisfied for
14
a court sale to be an open market sale) were beyond what was
observed.
17. In the conspectus of the aforesaid it was opined that the Bench
would have proceeded to enunciate the legal position, but the respondent
mentioned a judgment of two Judges Bench of this Court in Additional
Distt. Sub-Registrar, Siliguri v. Pawan Kumar Verma6
 which held that a
Registering Authority cannot be compelled to follow the value fixed by
the court for purposes of suit valuation, which sought to traverse a
different path. It was held that a legal principle should be settled in the
context of Section 47A in West Bengal, after taking into consideration
that similar amendments were made in the states of Tamil Nadu and
Andhra Pradesh though they were not identical. Thus, the matter was
referred to a three-Judges Bench of this Court.
Submissions of the Appellant:
18. The appellant sought to assail the restriction on the power of the
Registering Officer in case of court auction sales by contending:
6
(2013) 7 SCC 537
15
 Section 47A of the Act as applicable to West Bengal is
different from Section 47A of the Act as applicable to Tamil Nadu.
Under the Indian Stamp Act (Tamil Nadu Amendment) Act, 1967,
the matter would be referred to the Collector for the determination
of market value, whereas under the Indian Stamp Act (West Bengal
Amendment) Act, 1990, the matter has to be referred to such
authority as may be prescribed in the Rules for the same. The
“reasonable belief” under Section 47A of the Act is an objective
assessment based on the facts and information disclosed, and it is
incorrect to read the intention of the parties to the sale.
 The impugned judgment incorrectly drew a similarity
between Section 2(16B) of the Act as amended in West Bengal and
the Explanation appended to Section 47A of the Act applicable in
Tamil Nadu. The former contemplates that the market value must
be determined in the manner prescribed in the W.B. Stamp Rules
and aims to determine an amount “whichever is higher”, whereas
the latter leaves it to the discretion of the authorities specified
therein.
16
 There could be diverse reasons for the Registering Officer to
have ‘reason to believe’ that the market value is incorrect,
including in a court sale or liquidation proceedings, the
advertisement was not made properly to elicit buyers; the sale of
the property was frequently postponed; or cartelization among
buyers. As per Kayjay Industries7
 case, it was held that in a court
auction sale, there is more likelihood of a distress sale at a lower
value. The Registering Officer has the requisite experience in this
behalf, namely their knowledge of market values of different areas
and circle areas based on sales in the immediately preceding 5
years, and the discrepancy between the market value and value
disclosed in the instrument.
 Rule 3 of the W.B. Stamp Rules enlists the different ways in
which the market value of a property can be determined. The term
“or” as used in Rule 3 denotes that the ways mentioned therein are
disjunctive with the primary objective being to devise a
mechanism that brings the “highest price” or “whichever is
greater”. Therefore, the Registering Officer is not bound by only
what is specified in the deed or determined by the court and can
7
(supra)
17
determine a value that is greater amongst the ways stipulated
therein. The impugned judgment eliminates the independent
“determination” by the Registering Officer for every court sale,
which is against the plain reading of the statute and the objective
lying underneath, viz. to determine the “highest price” of the
property.
 The expression “shall” makes it obligatory for the
Registering Authority to “determine” the market value of the
property based on the “highest price”. The impugned judgment has
erred in interpreting Section 47A of the Act and Rule 3 of the W.B.
Stamp Rules in a manner which is against the very objective of the
Act, the purpose of which is to levy the stamp duty itself, i.e.
maximize the revenue of the State. The impugned judgment has
held that if a sale is concluded by the court process, or during
liquidation proceedings, or open sales, the Registering Authority
shall have to take the value of the property as gospel truth, and not
carry out its mandatory statutory obligation for the “determination”
based on the ways under Rule 3(1) of the W.B. Stamp Rules.
 It is settled law that an interpretation that limits or curtails
the discretion of the authority, when such discretionary powers and
18
limits are laid down in the statute itself, is impermissible. When
the legislature has not created a distinction between specific
classes (distress sale and other forms of sale), the Court cannot, by
a judicial decision, create or carve out a new class which was not
contemplated by the statute.
 The Stamp Act being a fiscal statute, should be interpreted
strictly and literally. The impugned judgment inserted a ‘nonobstante clause’ which would make Rule 3 of the W.B. Stamp
Rules and Sections 47A, 47B, and 47C of the Act as applicable in
West Bengal, inapplicable to any court sale/auction sale. The
impugned judgment cannot create an ‘exemption’ clause in the
fiscal statute when none is provided under the statute. Section 47A
as amended in West Bengal is similar to Section 47A as amended
by the State of Andhra Pradesh, which has been upheld in P.
Laxmi Devi8
 case, wherein it was held that where wordings of a
taxation statute are so plain and unambiguous that it admits no
exceptions, the relying on the object and purpose of the
amendment would be committing an error.
8
(supra)
19
 The decision of V.N. Devadoss9
 case is per incuriam in view
of paragraph 7 of Kayjay Industries10 case which held that a court
sale is a forced sale notwithstanding the competitive element of a
public auction, and the best price is often not forthcoming.
 The impugned judgment relies on the doctrine of deemed
fiction to conclude that the object of the Act is to prevent
fraudulent undervaluation. Unlike the authorities relied upon in the
impugned judgment, the application of the doctrine of deemed
fiction is misplaced.
Submission of the Respondents:
19. Learned counsel for the respondents sought to support the view of
the High Court by relying upon the judgment of this Court in The
Inspector General of Registration v. K.P. Kadar Hussain11 to the effect
that sale deeds executed by the court auctioned sales are allowed to be
questioned by a party on some pretext, the sanctity, finality, and
credibility of such court auctioned sales and execution of the sale deeds
will come under cloud and the same should not be permitted.
9
(supra)
10 (supra)
11 2014 SCCOnline Mad 3503
20
20. In the Company matter, emphasis was placed on the intention of
the State Legislature, i.e., to accept ‘market value’ as set forth in an
instrument by which the immovable property was transferred or acquired
by the Central or the State Government or any other authority under the
Central or State Government, etc. without any reference of Section
2(16B) and 47A of the Act, as can be seen from Rule 3C(9) of the West
Bengal Stamp Rules. It was contended that there was, thus, no question
of intention of any defraud or not disclose the correct price in a court sale
and as per the observations in V.N. Devadoss12 case the Registering
Authority cannot be permitted to sit over appeal over the decision of the
court, especially a Constitutional Court and doubt the consideration
determined in a court authorised sale.
21. It was pleaded that the reliance placed on Kayjay Industries13 case
was improper as it had been observed in para 9 that “court sales and
market prices are distant neighbours.” The ratio of Pawan Kumar
Verma14 case would have no application as it is not an issue of suit
valuation. Moreover, the observations of the Supreme Court that the
Registering Authority will have an opportunity to make back reference to
the concerned court, and such court will freshly determine the suit
12 (supra)
13 (supra)
14 (supra)
21
valuation, is not proper procedure as the court stands on a higher footing,
has the sanctity of law and cannot be altered by the Registering Authority
on the pretext of generating higher revenues.
Conclusion:
22. On the conspectus of the matter, we have not the slightest
hesitation in upholding the view that the provision of Section 47A of the
Act cannot be said to have any application to a public auction carried out
through court process/receiver as that is the most transparent manner of
obtaining the correct market value of the property.
23. It is no doubt true that in a court auction, the price obtainable may
be slightly less as any bidder has to take care of a scenario where the
auction may be challenged which could result in passage of time in
obtaining perfection of title, with also the possibility of it being
overturned. But then that is a price obtainable as a result of the process
by which the property has to be disposed of. We cannot lose sight of the
very objective of the introduction of the Section whether under the West
Bengal Amendment Act or in any other State, i.e., that in case of under
valuation of property, an aspect not uncommon in our country, where
consideration may be passing through two modes – one the declared
22
price and the other undeclared component, the State should not be
deprived of the revenue. Such transactions do not reflect the correct
price in the document as something more has been paid through a
different method. The objective is to take care of such a scenario so that
the State revenue is not affected and the price actually obtainable in a free
market should be capable of being stamped. If one may say, it is, in fact,
a reflection on the manner in which the transfer of an immovable
property takes place as the price obtainable in a transparent manner
would be different. An auction of a property is possibly one of the most
transparent methods by which the property can be sold. Thus, to say that
even in a court monitored auction, the Registering Authority would have
a say on what is the market price, would amount to the Registering
Authority sitting in appeal over the decision of the Court permitting sale
at a particular price.
24. It is not as if a public auction is carried out just like that. The
necessary pre-requisites require fixation of a minimum price and other
aspects to be taken care of so that the bidding process is transparent.
Even after the bidding process is completed the court has a right to cancel
the bid and such bids are subject to confirmation by the court. Once the
court is satisfied that the bid price is the appropriate price on the basis of
23
the material before it and gives its imprimatur to it, any interference by
the Registering Authority on the aspect of price of transaction would be
wholly unjustified.
25. We may only note that this Court in P. Laxmi Devi15 case has
opined the purpose behind bringing into force Section 47A in the Andhra
Pradesh State, i.e., in case of large scale under-valuation of the real value
of property in the sale deed, the Government is defrauded of a proper
revenue. It was to take care of the absence of any provision in the
original Stamp Act empowering revenue authority to make an inquiry
about the value of the conveyed property, that the Amendment was
brought forth so that the revenue did not suffer. The judgment in V.N.
Devadoss16 case albeit in respect of Amendment in Tamil Nadu, opined
that it was not a routine procedure to be followed in respect of each and
every document of conveyance presented for registration without any
evidence to show a lack of bona fides of the parties. There has to be a
willful under-valuation of the subject of transfer with fraudulent intention
to evade payment of proper stamp duty.
15 (supra)
16 (supra)
24
26. We do not accept the contention that the mere wordings of these
different provisions in any way take away the fundamental intent with
which the provision was brought into force and specifies so in the same
manner though albeit in a different language. In a court auction
following its own procedure, the Registering Officer cannot have any
reason to believe that the market value of the property was not duly set
forth – a pre-requisite for a Registering Authority to exercise its power
under the said Section.
27. If we see in the factual context of the two scenarios before us in
respect of the two cases, the telling aspect in a partition case was the
existence of 98 tenants on a land at a monthly rent of Rs.8,000 for the
entire land and 80 vendors occupying the land for hawking business
during day time. It is trite to say that the mere existence of tenancy
results in a considerable decline in the market value of the property as
they may have their statutory rights and even otherwise, the purchaser
would be acquiring the property hardly in an ideal scenario and would be
left with the burden to take legal processes for the eviction. In such a
scenario, there is actually a great depression in the market value of the
property as even if a fair transaction without an auction takes place with
full reflection of price, the transacted value would be half or less of a
25
vacant property. The tenancy aspect can hardly be said to be an aspect
which could be ignored in the determination of the price.
28. In the company matter, repeated auctions were held and it is in the
negotiated bid that the higher price was obtained. It was court monitored.
There would be no occasion for the court to accept the bid if it was not
satisfied with the process and the valuation. A correct value of a property
is the one where there is a purchaser and a seller ad idem on the price (the
actual price). The market value is, thus, the value which the highest
bidder is willing to pay in the facts and prevailing circumstances and not
a notional price.
29. We find hardly any rational in adopting the submissions on behalf
of the appellant. The provisions are not dissimilar in the different
enactments in its fundamentals; the “reason to believe” of a Registering
Officer has to be based on ground realities and not some whimsical
determination; the Registering Authority cannot be permitted to doubt the
liquidation proceedings as having some superior knowledge when it is a
court monitored process where the court would take care of aspects such
as cartelization; the Registering Authority can hardly be said to be the
only authority with knowledge of the subject to the exclusion of the
26
court; the independent determination by a Registering Officer would not
apply to a court sale but to a private transaction; the Stamp Act being a
fiscal statute, while being interpreted strictly and literally would not
imply some kind of absolute power.
30. The decision of this Court in V.N. Devadoss17 case can hardly be
said to be per incuriam. No doubt a court monitored auction is a forced
sale, but then it has a competitive element of a public auction to realize
the best possible price. In many court cases, this is the process followed
by the court to get the best obtainable price taking due precaution.
31. We are, thus, of the view that this reference is required to be
answered by opining that in case of a public auction monitored by the
court, the discretion would not be available to the Registering Authority
under Section 47A of the Act.
32. We may further add that while making the reference, the Bench
itself had noted some aspects of the impugned judgment which could not
find favour with it. Thus, we are not giving our imprimatur to some of
the rational adopted in the impugned judgment as already mentioned in
the order of reference. These have been set out, once again, aforesaid as
17 (supra)
27
small paras (a), (b) & (c) while dealing with the aspect of reference and
on these aspects, the impugned judgment cannot be said to be laying
down the correct principles of law.
33. However, no further inquiry in that aspect is necessary in view of
what we have opined herein and, thus, the appeals can stand disposed of
without the requirement of further reference to a two Judges Bench to
deal with the facts and circumstances of the case as those aspects have
also been dealt with by us.
34. The reference is answered accordingly and the appeals stand
dismissed albeit for the reasons set out herein.
………………………J.
[Sanjay Kishan Kaul]
 ....……………………J.
[Abhay S. Oka]
....……………………J.
[Vikram Nath]
New Delhi.
November 10, 2022.
28

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