2019 (3) TMI 2060 - HC - Indian Laws

Assessment of stamp duty - determination of the market value for the purposes of computing the stamp payable - HELD THAT - If there is no fair market valuation obtained by the Court, or no authenticated copy of a valuation is submitted along with the sale certificate, then the adjudicating authority must resort to the usual provisions mentioned in the Rules and in the Act. At a practical level it will thus be necessary for the Deputy Sheriff to ensure that on each occasion when a sale certificate is lodged for adjudication as to stamps, it is accompanied by an authenticated copy of the applicable valuation. That authentication will be done by the Prothonotary and Senior Master of the High Court at the time of issuance of confirmation of sale certificate and it is the sale certificate as accompanied by the valuation that will be taken up. Every sale certificate lodged for registration will be accompanied by a copy of the applicable valuation (or, if there are multiple valuations, all such valuations most recent in time) authenticated by the Prothonotary Senior Master - In the present case, the valuation obtained was roughly in the region of more than Rs. 30 crores. A copy of that valuation report authenticated by the Prothonotary and Senior Master will be forwarded to the authority within one week. The Prothonotary Senior Master will issue an authenticated copy of the valuation within two weeks. The Deputy Sheriff will, within one week, furnish a copy of that valuation to the Prothonotary Senior Master along with the original so the Prothonotary Senior Master s authentication. Application disposed off.

Summary

Issues Involved:
1. How should the Collector of Stamps assess the 'market value' of the property sold by public auction in execution of a decree or award?
2. Should the Collector accept the auction bid value stated in the court-issued sale certificate?
3. Is the Collector required to conduct an independent enquiry or rely on the court's material?
4. Distinction between sales by government bodies and court sales.

Summary:

1. Assessment of Market Value by Collector of Stamps:
The core issue is how the Collector of Stamps should assess the 'market value' of the property sold by public auction in execution of a decree or award. The property in question was auctioned by the Court, and the sale certificate issued must be stamped and registered. The Collector of Stamps initially valued the property at Rs. 155 crores, which was contested by the auction purchaser.

2. Acceptance of Auction Bid Value:
The judgment explores whether the Collector is required to accept the auction bid value stated in the court-issued sale certificate or conduct an independent enquiry. The court clarified that the Collector is not bound to accept the value stated in the instrument if he believes it is incorrect. He must determine the true market value as per the Maharashtra Stamp Act and related rules.

3. Independent Enquiry by Collector:
The court discussed the necessity of an independent enquiry by the Collector. It emphasized that where the sale is by public auction through a Court, preceded by a court-obtained valuation, the adjudicating authority should accept the valuation or the final bid amount, whichever is higher, as the market value. This ensures consistency and avoids questioning the court's valuation process.

4. Distinction Between Government and Court Sales:
The judgment highlighted the distinction between sales by government bodies at a predetermined price and court-supervised sales. The first proviso to sub-rule 6 of Rule 4 of the Maharashtra Stamp (Determination of True Market Value of the Property) Rules 1995 mandates that the value determined by government bodies must be accepted as the true market value without further enquiry. However, this does not explicitly apply to court sales. The court argued that sales through public auction by the Court should be treated similarly to maintain consistency and efficiency.

Practical Implementation:
The court outlined practical steps for future cases:
- Sale certificates should be accompanied by an authenticated copy of the applicable valuation.
- If the sale price is at or below the valuation, the valuation serves as the market value.
- If the sale price is higher, the final bid amount is taken as the market value.
- Multiple valuations should consider the highest and most recent valuation.

Conclusion:
The court concluded that the Collector should not question the court's valuation if it was obtained and accepted by the court. This approach maintains the sanctity of judicial orders and ensures the adjudicating authority focuses solely on determining the market value for stamp duty purposes based on the court's valuation or the final bid amount.