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TMI Blog2009 (4) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... peal allowed. Setting aside the judgment of the High court we hold that in the instant case Article 63 of Schedule 1-B of the Stamp Act, as applicable to the State of U.P., which deals with transfer of lease by way of assignment will apply to the documents in question. We also hold that the consideration to be mentioned in the document would be the market value of the property on the date when the agreement was entered into and not when it was presented for registration, considering the peculiar facts of this case. - CIVIL APPEAL NO. 4367 OF 2000 - - - Dated:- 15-4-2009 - ARIJIT PASAYAT AND TARUN CHATTERJEE,JJ. JUDGMENT ARUN CHATTERJEE,J. 1. This appeal by special leave is directed against the judgment and order dated 27th of May, 1999 of the Division Bench of the High Court of Allahabad in Writ Petition No 38748 of 1997 whereby, the Division Bench of the High Court had dismissed the Writ Petition filed by the appellants above named. 2. The relevant facts leading to the filing of this appeal, as emerging from the case made out by the appellant may be summarized as follows:- New Okhla Industrial Development Area (in short "Noida") allotted lands to several C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreements entered into and possession not taken under the agreements, but later the said agreements were duly registered with the Sub-Registrar, Noida, 3) In both the above mentioned categories, the agreements for transfer were either for a plot of land on which construction was made thereafter by the assignees (members of the association) of the leasehold property out of their own funds or the agreements for a plot of land along with the building constructed thereon. Thus in some cases, as noted hereinabove, the plots were purchased along with small construction which was later demolished and the assignees constructed new building after obtaining new sanction plans using their own funds. 5. On 1st of July, 1997, a public notice was issued advertising that Noida authorities shall issue transfer memorandums with respect to the transfer of plots in question upon terms and conditions including payment of transfer premium. Upon issuance of the said notice, various members of the association applied for and obtained transfer memorandums from Noida authorities after complying with the conditions thereof and making payments of the prescribed premium. One of the conditions, na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive of the market value. 7. Challenging this decision of the Sub-Registrar, a Writ Petition was filed before the Allahabad High Court. In the Writ application, the appellant raised the following issues: 1) Whether the relevant date for determination of the market value of property would be the date of agreement to sell, when the consideration was frozen, or the date of presentation of the documents of transfer for registration? 2) Whether the stamp duty could be levied on the buildings that have been constructed after getting possession of the lands and whose cost has been borne entirely by the members of the association? 8. The Division Bench of the High Court decided the aforesaid two questions and it was held inter-alia, as follows: 1) As far as the leasehold land is concerned, it can only be the subject matter of assignment and not absolute sale by the very nature of the land and therefore both Articles 23 and 63 of the Schedule of the Indian Stamp Act would be applicable. 2) Whether the association or its members constructed the buildings was a question of fact, which the High Court in the exercise of its jurisdiction under Article 226 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 47 A of the Act which would be necessary for passing an order under the said Section of the Stamp Act as applicable to the State of UP. Section 47 A was substituted by UP Act 38 of 2001 with effect from 20th of May, 2002, whereby a provision has been made to charge duty as per the market value of the property valued in case of evasion of the stamp duty. Section 47 A reads as under: "47-A. Instruments of conveyance etc., if undervalued, how to be dealt with:- (1)(a) If the market value of any property which is the subject of any instrument on which duty is chargeable on the market value of the property as set forth in such instrument is less than even the minimum value determined in accordance with any rules made under the Act, the registering officer appointed under Indian Registration Act, 1908, shall, notwithstanding anything contained in the said Act, immediately after presentation of such instruments and before accepting it for registration and taking any action under section 52 of the said Act, require the person liable to pay the deficit stamp duty as computed on the basis of the minimum value determined in accordance with the said rules and return the instrument f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f four years but before the period of eight years from the date of the registration of the instrument on which the duty is chargeable on the market value of the property. Explanation- The payment of deficit stamp duty by any person by any order of the registering officer under sub section (1) shall not prevent the Collector from initiating proceedings on any instrument under sub section (3). (4) If on enquiry under sub section (2) and examination under sub section (3) the Collector finds the market value of the property- a) truly set forth and the document duly stamped, he shall certify by endorsement that it is duly stamped and return it to the person who made the reference b) not truly set forth and not truly stamped, he shall require the payment of the proper duty or the amount required to make up the deficiency in the same together with a penalty of an amount not exceeding four times the amount of proper duty or the deficit portion thereof. (4A) The Collector shall also require along with the deficit stamp duty or penalty required to be paid under clause (ii) of sub section (4), the payment of a simple interest as a rate of one and a half per mensum on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstrument of sale or exchange or gift or partition or settlement. From a bare perusal of sub-section (1) of Section 47 A of the Act, it is clear that if the market value of any property, which is the subject matter of an instrument on which stamp duty is chargeable, as set forth in the instrument, is less than even the minimum value determined in accordance with the rules made under this Act, the registering officer shall request the person to pay the deficit stamp duty and present the instrument again for registration. At the same time, it should be kept in mind that it is not enough for the authorities for the purpose of invoking Section 47 A that the consideration amount stated in the instrument of sale is less than the prevailing market value but they must be satisfied that there is an attempt of under valuation. It is pertinent to mention that if the registering authority finds that the market value of the property presented for registration is higher than the one shown in the document, in that case, the registering authority after presentation of such instrument and before accepting the document for registration would ask the person liable to pay the required stamp duty, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there is a conveyance. It was also contended by him that the main condition for registration of an instrument is that it must be chargeable to duty on the market value and the same is possible in case of an outright sale. In case of lease, only partial rights are transferred and the right of reversion remains with the lessor whereas in case of sale, there is an absolute transfer of ownership. Therefore, we have to establish whether the documents presented for registration were, in fact, an outright sale or a deed of lease. The learned counsel appearing on behalf of the respondent no 4. (i.e. being the Noida authorities) contended that the deed was a composite deed of assignment and sale owing to which both Articles 23 and 63 would be applicable. The Division Bench of the High Court in its impugned judgment also agreed to this contention. Thus, considering this, it becomes essential for us to determine the nature of the deed. 16. "Sale" has been defined under section 54 of the Transfer of Property Act. Although the Indian Stamp Act 1899 has not included the definition of "sale", Section 2, sub-section (10) of the Act defines "conveyance" as including a conveyance on sale and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 590), where this Court formulated the following principles for determination of the aforesaid question: "Such a grant cannot be regarded as a lease, for a lease contemplates any right for a transfer of a right in a considerationised or service or other things of value to be rendered periodically or on specified again to the transferor. The grant does not purport to demise a right of enjoyment of land. It confers right of ownership in then land. There is gain no contractual right reserved. It is specifically or by implication to determine the right. The reservation and reversion remained and remains yearly and runs, years and profits of all lands determine and property in the premise is of nature of a restriction upon the said transfer and does not restrict the equality of the said. The rent to be demanded was again not stipulated as consideration for the grant of the right to enjoy the land but expressly in consideration of granting freedom from liability to pay assessment." [Emphasis supplied] 19. The High Court in the present case decided that the document given for registration contained a composite deed of lease as well as a deed of sale. Therefore, both Article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mised premises shall not have been occupied any building constructed by the sub-lessee therein the sub lessee shall within a period of three months from the date of re-entry, removes from the demised premises all erections or buildings, fixtures and things which at any time and during the said terms shall be affixed or set up within or upon the said premises and leave the said premises in as good a condition as it was on the date of demise, in default whereof the same shall become the property of the lessor without payment of any compensation to the lessee/ sub lessee for the land and the building fixtures and things thereon, but upon the sub lessee removing the erection buildings, fixtures and things within the period hereinbefore specified, the demised premises shall be re-allotted and the lessee/ sub lessee may be paid such amounts as may works out in accordance......." 20. Therefore, the only question which comes to our mind is that if the lessee or the sub lessee has an absolute right over the constructions constructed by him and he can transfer it by an out right sale and not through an assignment of lease as contended by the Noida Authorities, the lease deed would not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment and provides that in such a case, the duty that would be payable is the same duty that would be payable in case of conveyance (Article No. 23) for a consideration equal to the amount of consideration for the transfer. A plain reading of Article 63 of the Schedule 1-B to the Stamp Act would, however, show that the stamp duty chargeable to a document is not on the market value of the property but on consideration indicated in the same. It is only the rate of duty, which is to be taken from Article 23. Therefore, if Article 63 of the Stamp Act is to be applied, duty shall be paid on the consideration of the amount of consideration shown in the deed itself and not on the market value of the land or the construction thereon. Therefore, it is clear from a reading of Article 63 that it would apply in case of a transfer of lease by way of an assignment and Article 23 applies in case of a conveyance by way of sale. Article 63 in clear terms mentions that in case of an assignment, the duty that would be payable is the same duty as conveyance for a consideration equal to the amount of the consideration for the transfer. Thus it is clear that the duty is not calculated on the market va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to again consider Section 47 A. Section 47 A clearly provides that when the valuation shown in the agreement presented for registration is, according to the authorities, undervalued, in that case, the registering authorities are conferred with the discretion to hold an enquiry to find out if the duty chargeable on the market value of the property is less than even the minimum value determined in accordance with the rules made under the Act. As is Moreover as we have noticed, the appellant did not make any undue delay in executing the deed after the Noida Authorities issued the transfer memorandums. Therefore, considering the above circumstances, it would be unwise to say that the appellant had any intention to evade the stamp duty as specified under the Act. Thus even if Section 47 A of the Act would have applied, the registering officer would have no jurisdiction to refer it to the Collector since there was never any intention on the part of the appellant to undervalue the property. 27. Having decided the aforesaid questions raised in this case, we now proceed to deal with the question as to the date of determination of the consideration mentioned in the document. The respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... An enquiry under Section 47 A is also not contemplated under the Act in case of an assignment by way of lease unlike Article 23 of Schedule 1-B of the Act which deals with Stamp Duty to be levied on deed of sale. It is further observed by us that Article 63 of Schedule 1-B, being a specific Article, will have overriding effects on all the general clauses of the Act. As has already been mentioned, market value can be truly determined in case of an outright sale. The present case does not deal with such a situation. 29. Going by the aforesaid discussions, we are of the view that the consideration to be mentioned in the assignment of transfer by way of a lease would be the market value of the property on the date of agreement for sale when the property could not be registered earlier due to no fault of the members of the associations and when their consideration was frozen earlier. Concerns can be raised that since Article 63 of the Act deals with stamp duty to be levied on the consideration set forth in an assignment by way of transfer of lease, and not on the market value of the property to be transferred, it can be misused and remedy would not be available under Section 47 A to d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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