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TMI Blog2024 (10) TMI 1456X X X X Extracts X X X X X X X X Extracts X X X X ..... Spectrum Constructions also the Petitioner was a successful bidder for purchase of certain immovable property for an amount of Rs. 1,66,57,920/-. This property was purchased by Spectrum Constructions pursuant to a sale conducted by a Committee constituted by the Hon ble Supreme Court under the Chairmanship of the Hon ble Mr. Justice R. M. Lodha (former Chief Justice of India), to oversee the disposal of lands held by a company called PACL Ltd. The reserve price fixed for the property was Rs. 83,28,960/- and the bid of the Petitioner was higher than that. The Petitioner also paid full stamp duty on the consideration paid for purchasing the property in question. Thereafter, the Petitioner (i.e. Spectrum Constructions) received a demand notice from the Stamp Authorities for payment of deficit stamp duty and penalty. As laid down by the Division Bench in Spectrum Constructions, once the bid of the Petitioner was accepted by the Justice Lodha Committee, and the sale was confirmed at a price bid by the Petitioner, and which was above the reserve price, there was no question of the Stamp Authorities determining any other value. That would be taken as the market value. This issue has now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Before we delve into the rival contentions it would only be appropriate to set out very brief facts. By an order dated 10th May 2018 passed in Civil Appeal No.20971 of 2017, the Hon ble Supreme Court inter alia (i) constituted a Sale-cum-Monitoring Committee to deal with and conduct the sale of the assets of one Citrus Check Inn Ltd. ( CCIL ), and Royal Twinkle Star Club Limited ( RTSCL ), and all their associate/sister concerns; (ii) directed the Sale-cum-Monitoring Committee to appoint registered valuers to value the properties unearthed during insolvency process of CCIL and RTCL and all their associate/sister concerns; (iii) directed that the Sale-cum-Monitoring Committee would comprise of the Resolution Professional, one SEBI Representative, one Investor Representative and one Representative of CCIL and RTSCL and their associate/sister concerns; and (iv) directed that all properties of CCIL, RTSCL as well as assets and other properties of their associate/sister concerns were to be attached. Pursuant to this attachment, it was directed that after the valuation of each of the properties was done, the sale of each of these properties would take place under aegis of the Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner No. 1 ultimately received the impugned demand notice dated 7th February 2024, inter alia, demanding stamp duty @ 5% on the alleged market value of the said property, which according to the Stamp Authorities, was Rs. 16,72,11,000/-. In other words, the stamp duty demanded was Rs. 83,60,550/- and a penalty was also imposed in the sum of Rs. 23,41,000/-. It is being aggrieved by this impugned demand notice that the present Petition is filed. 6. We must mention here that the above Writ Petition was urgently moved before us on an earlier occasion, namely, on 7th August 2024. On that date it was pointed out to us that the period for registering the Sale Certificate would expire on 17th August 2024, after which there is no provision in the Registration Act, 1908 for registering the said Sale Certificate. Since there was urgency in the matter, we, on 7th August 2024, without prejudice to the rights and contentions of the parties, directed that the Petitioner shall pay the stamp duty as per the value/consideration mentioned in the Sale Certificate. Once that stamp duty was paid, we had also directed that the Sale Certificate be registered by the concerned authority. We had also record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrect any value or consideration stated in the instrument itself. Should he have reason to believe that it is incorrect, he is to determine the true market value. He is to be guided by the 1995 Rules in doing so, was the submission. Mr. Cama thereafter pointed out that these 1995 Rules provide for various circumstances. Rule 3 requires certain particulars to be stated in the instrument as prescribed in Section 28 of the Stamp Act. Rule 4 deals with Annual Statements of Rates (also colloquially referred to as the Ready Reckoner) of the immovable property. He submitted that in the present case we are not concerned with sub-rules (1) to (5) of Rule 4, but we are concerned with the interpretation of sub-rule (6) and its various provisos. 8. Relying upon Rule 4 (6), and more particularly the first proviso thereto, it was the submission of Mr. Cama that sale conducted under the aegis of the Court are done on the basis of a valuation obtained by it and by following a completely open and transparent process. He submitted that the process that the Court follows is perhaps far more rigorous than the first proviso to sub-rule (6) of Rule 4 contemplates. He submitted that an auction of a prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aharashtra, through Joint District Registrar [2022 SCC Online Bom 3693 ] as well as the judgment of the Hon ble Supreme Court in the case of Registrar of Assurances Another V/S ASL Vyapar Pvt Ltd Another [2022 SCC Online SC 1554]. For all the aforesaid reasons, Mr. Cama submitted that the impugned demand notice dated 7th February 2024 is unsustainable and ought to be quashed and set aside. 10. On the other hand, Mr. Patel, the learned AGP appearing on behalf of the Respondents, submitted that by the present Petition what the Petitioner challenges is the demand notice dated 7th February 2024. This demand notice is issued by Respondent No. 1 in exercise of powers conferred under Section 33 read with Section 32A of the Maharashtra Stamp Act. As per the guidelines issued by the Inspector General of Registration, Maharashtra State, Pune, it is clarified that only if the owner of the property is the government, or semi government undertakings and/or a local authority, and it is these authorities that are selling the property, then first proviso to Rule 4 (6) would apply. If a private property sold in an auction even by the DRT or such other institutions, then the first proviso to Rule 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i, learned Senior Counsel for the Petitioners, that in the facts and circumstances of the case, there is no question of the stamp authorities independently reassessing the market value of the land and building. The issue at law is covered by the decision in Pinak Bharat and Co v. Anil Ramrao Naik delivered by one of us sitting singly (GS Patel, J). This points out that where the land is sold or allotted by the government or a semi-government body, government undertaking or a local authority on the basis of predetermined price, then the value as determined by such body is to be taken as the true market value of the subject matter property. (7) There is no doubt in this case that the market value was the bid of the Petitioner as accepted by the Justice Lodha Committee and that the sale was confirmed at the amount of the Petitioner s bid by SEBI. In this view of the matter, there is no question of the stamp authorities determining any other value. The only value to be accepted is Rs. 1,66,57,920/-. The stamp duty on this is Rs.9,99,475/-. There is no question therefore of allowing the stamp authorities to demand any other amount. There is certainly no question of a penalty. (8) Rule i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity sitting in appeal over the decision of the Court permitting sale at a particular price. Though we are conscious of the fact that in the said decision, the Hon ble Supreme Court was considering the provisions of Section 47A of the Indian Stamp (West Bengal Amendment) Act, 1990, but the ratio laid down therein would, on all fours, also apply here. The relevant portion of the decision of the Hon ble Supreme Court in the case of ASL Vyapar Pvt Ltd (supra) reads thus:- 24. 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. 25. 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue did not suffer. The judgment in V.N. Devadoss [(2009) 7 SCC 438] 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. 28. 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. 29. 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 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 33. 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. (emphasis supplied) 14. In view of the foregoing discussion, the above Writ Petition is allowed in terms of prayer clause (b) which reads thus:- (b) That this Hon ble Court be pleased to issue writ of Certiorari, or a writ in the nature of certiorari, or any other appropriate writ, order or direction under Article 226 227 of the Constitution of India, calling for the entire records and proceeding of the case as pertaining to the impugned demand notice dated 7th February 2024, issued by Respondent No. 1 and after going into the legality validity and propriety of the impugned demand notice dated 7th February 2024, this Hon ble Court be pleased to quash and set aside the same. 15. As far as prayer clause (c) is concerned, the same does not survive in light of our order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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