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TMI Blog2019 (3) TMI 2060X X X X Extracts X X X X X X X X Extracts X X X X ..... djudication under the Maharashtra Stamp Act, how should the authority, the Collector of Stamps, assess the 'market value' of the property? Is he required to accept the value of the accepted bid, as stated in the court-issued sale certificate? Is he required to spend time and resources on an independent enquiry? Or is some of the available material on the record of this Court, and which underlies the auction sale, sufficient for his purposes? Is there a meaningful distinction to be drawn between sales by the government and government bodies at a predetermined price, which has to be accepted by the adjudicating authority as the market value, and a sale by or through a court? These are the questions that arise in this execution application. 2. A few background facts. The property in question, of about 1,821 sq mtrs, is CS No. 1514 of the Lower Parel Division, Final Plot No. 309 of TPS IV Mahim, at Rao Bahadur SK Bole Road, Dadar, near the Portuguese Church. It has, or had, a structure or structures standing on it. The entire property was the subject matter of three attempts at auction sales. The first two attempts failed. The Decree Holders, Pinak Bharat & Co & Bina V Advani, then of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. In relation to immovable properties, sub-clause (b) is the relevant clause. It provides the rates payable in relation to sales or conveyances of immovable properties. The rates specified are a percentage of the 'market value of the property'. The phrase 'market value of the property' thus appears both in Article 16 and Article 25. 7. Chapter III of the Stamp Act deals with adjudication as to stamp. Section 31, the first Section in that Chapter, relates to adjudication as to proper stamps. For our limited purposes, it is sufficient to note that sub-clause (1) requires the Collector to determine the duty with which the instrument presented to him is chargeable. Sub-section (2) speaks of material and evidence that may be required to be given to the Collector to enable him to arrive at his determination. It also says that he may refuse to process any such application unless that material has been given to him. Then sub-section (3) speaks of a situation where the Collector has reason to believe that the market value of the property that is the subject matter of the instrument has not been truly set forth in the instrument, he must determine 'the true market value of such property' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or extraneous evidence he may, before registering such instrument, refer the same to the Collector of the District for determination of true market value of property and the proper duty payable thereon." (Emphasis added) 9. Now what does this tell us? The first aspect is that once the registering officer has an instrument before him, he is required to verify the market value of the lands and building. In doing this, he is required to refer, in the first instance, to the annual statement of rates covered by sub-rules (1) to (5), as also the valuation guidelines issued periodically. Should he find the market value stated in the instrument to be below the market value so determined, he must then refer the matter to the Collector of the District for determination of the true market value of the property that is the subject matter of the instrument. 10. The three provisos however carve out important exceptions - and, more importantly, fail to carve out one all-important exception. We are not immediately concerned with the second and third provisos, so I will not deal with them any further. 11. The first proviso, however, tells us that where the property is sold or allotted by the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey can set a reserve price to ensure that properties are not sold at an undervaluation and to avoid cartelization and an artificial hammering down of prices. The reserve price is at or close to a true market value. Usually, the price realized approximates the market value. Sometimes the valuation is high and no bids are at all received. The Decree Holders cannot be left totally without recovery at all and it is for this reason that Courts sometimes permit, after maintaining the necessary checks and balances, a sale at a price below the market value even by public auction. There are, equally, times when after a competitive bid-improvement process in open court, the sale is knocked down at a price much higher than even the highest valuation. 16. I have no manner of doubt and I have absolutely no hesitation in saying that if the sale either by the Deputy Sheriff with permission of the Court, or by the Court Receiver with leave of the Court, is by private treaty, then it is for the adjudicating authority to certainly determine the true market value. 17. Very different considerations will, however, arise where there is a sale by public auction through a Court, and this sale is precede ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the sale was allowed to be brought into question by an executive or administrative authority, it would result in the stamp authority calling into question judicial orders of this court. That is impermissible and entirely beyond the remit of the adjudicating authority. In this, the purpose of the Stamp Act must be kept in mind. This is not an Act that validates, permits or regulates sales of property. It only assesses the transactions for payment of a levy to the exchequer. Therefore, it follows that it is not open to the adjudicating authority to suggest, directly or indirectly, that a sale that carries the imprimatur of the court, one that is confirmed by the court, is liable to be set aside or not given effect to. When it confirms a sale, the court never determines the stamp duty payable. It always leaves that to the stamp adjudicating authority, and that is the only thing the stamp adjudicating authority can do, nothing more and nothing less. It cannot, therefore, question the sale in any manner. The only issue before the adjudicating authority is the determination of the market value for the purposes of computing the stamp payable. That basis cannot be different from the one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations most recent in time) authenticated by the Prothonotary & Senior Master. 25. 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. 26. Ms Chavan has one further submission. She says that the town planner's office routinely carries out valuations, and in all public auctions conducted by the Court, this is the valuation that should be used. The discretion of a court cannot be limited like this. A court may use such a valuation, or it may prefer to use the services of one of the valuers on its panel, or may even obtain a valuation from an independent agency. That judicial discretion cannot be circumscribed on account of a Stamp Act requirement. 27. Ms Chavan states on instructions that the preliminary assessment is being revised inter alia on the basis that there were sitting tenants on the land. This has already been taken into account in the valuation that was obtained by the Court and the authority will thus proceed on the basis of the Court's valuation. The Prothonotary & Senior Master will issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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