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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 ..... e Hon'ble Supreme Court is Rs. 16,72,11,000/- [as per the valuation of the Stamp Authorities]. According to the Petitioners, the principles on which the market value of the property is determined itself is bad because the sale was conducted by the Sale-cum-Monitoring Committee constituted by the Hon'ble Supreme Court and therefore the true market value of the property has to be the value at which the property was sold to Petitioner No. 1. The property in question is land together with the building thereon comprising of plots collectively admeasuring about 2160 sq.mtrs. bearing Gat No. 107, 108 and 109 having plinth/Plot No.229 in Ambey Valley City, Pune, Maharashtra [for short the "said property"]. This, in effect, is the controversy in the present Petition. 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 con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale Certificate in absence of adjudication and payment of stamp duty on the said Sale Certificate. This was despite the fact that Petitioner No. 1 expressed its willingness to pay 5% stamp duty on the amount reflected in the Sale Certificate which was issued by the Sale-cum-Monitoring Committee appointed by the Hon'ble Supreme Court. 5. In these circumstances, Petitioner No. 1 was constrained to make an Application to the Office of the Joint District Registrar & Collector of Stamps (Rural), Pune, Maharashtra on 28th July 2022 for adjudication of the stamp duty. Since the Petitioners received no response, they addressed two more communications to the concerned authorities on 17th November 2022 and 10th July 2023. After repeated follow ups for about 18 months, Petitioner 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 pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 stipulates that the Collector 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' as laid down in the Bombay [now Maharashtra] Stamp (Determination of True Market Value of the Property) Rules, 1995 (for short the "1995 Rules"). This would indicate that the Collector is not bound to accept as correct 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve price of Rs. 2,50,00,000/-. It is pursuant to this that an e-auction notice was issued on 8th March 2022 wherein the said property was listed at serial No.45 and the reserve price was fixed at Rs. 2,50,00,000/- It is in this e-auction, and which was conducted on 6th April 2022 that Petitioner No. 1 was the successful bidder who purchased the said property for Rs.2,51,00,000/-. Once this is the case, the Stamp Authorities could not embark upon a journey to determine the true market value themselves and come to the conclusion that the property was valued at Rs. 16,72,00,000/-, and levy stamp duty on that basis. In support of his submissions Mr. Cama relied upon a Division Bench decision of this Court in the case of Spectrum Constructions and Developers LLP V/S State of Maharashtra, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. This was challenged before this Court by Spectrum Constructions. It is in these facts that a Division Bench of this Court held as under:- "(6) We are in agreement with Mr. Vashi, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has clearly opined that in a Court auction, often 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 that is the price obtainable as a result of the process by which the property is disposed of and the Stamp Authorities cannot sit in appeal over the decision of the Court permitting sale at a particular price. The logic is that an auction of a property by the Court 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject to confirmation by the court. Once the court is satisfied that the bid price is the appropriate price on the basis of 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. 27. We may only note that this Court in P. Laxmi Devi [(2008) 4 SCC 720] 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. 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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 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. 32. The decision of this Court in V.N. Devadoss [(2009) 7 SCC 438] 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. 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 avail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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