Duty Of Registering Officer To Ensure That S. 47-A(1) Of Indian Stamp Act Doesn’t Work As Engine Of Oppression Nor As A Matter Of Routine: SC
The Supreme Court emphasised that there is a duty of the Registering Officer to ensure that Section 47-A(1) of the Indian Stamp Act, 1899 (ISA) does not work as an engine of oppression nor as a matter of routine.
The Court emphasised thus in Civil Appeals preferred by the Chief Revenue Controlling Officer-cum-the-Inspector General of Registration and two other Revenue Officers, challenging the Judgment of the Madras High Court.
The two-Judge Bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan observed, “It has been rightly held in the case of Mohali Club, Mohali v. State of Punjab, reported in AIR 2011 P&H 23, that the Registering Officer, after registration of the document, can refer the same for adjudication before the Collector, if he has reason to believe that there was deliberate undervaluation of the property. Such a reference is not a mechanical act, but the Registering Officer should have a basis for coming to prima facie finding of undervaluation of the property. Duty is enjoined upon the Registering Officer to ensure that Section 47-A(1) does not work as an engine of oppression nor as a matter of routine, mechanically, without application of mind as to the existence of any material or reason to believe the fraudulent intention to evade payment of proper Stamp Duty.”
The Bench added that the expression ‘reason to believe’ is not synonymous with subjective satisfaction of the officer and the belief must be held in good faith as it cannot be merely a pretence.
AOR Sabarish Subramanian appeared for the Appellants while AOR Rohini Musa appeared for the Respondent.
In this case, the Appellants challenged the Judgment of the High Court by which it allowed the Civil Miscellaneous Appeals of the Respondent under Section 47-A(10) of ISA and quashed the Order of the Chief Revenue Controlling Officer-cum-the-Inspector General of Registration with respect to the stamp valuation. The subject matter of the litigation was the valuation shown in the two Sale Deeds. The Respondent was the purchaser and he got the 2 Sale Deeds executed through the original owner of the property in question.
The market value of the entire property covered in both the Sale Deeds is Rs. 1,20,000/- and Rs. 1,30,000/- respectively. The Respondent being dissatisfied with the Order passed by the Special Deputy Collector (Stamps) preferred a Statutory Appeal before the Inspector General of Registration and the same was dismissed. The Respondent went before the High Court which allowed the Appeals and quashed the Orders of the authorities. Being dissatisfied with this, the Appellants approached the Apex Court.
The Supreme Court in view of the above facts, said, “When both the authorities viz., the Registering Authority and the Collector are vested with the discretion to decide regarding the market value of the property, by the expression ‘reason to believe’, then whether it reflects the subjective satisfaction of the authorities concerned or it reflects the objective determination of the market value of the property? What is meant by ‘reason to believe’ is the issue to be considered.”
The Court further reiterated that, availability of material is the foundation or the basis, for any authority to arrive at any decision whatsoever and the basis of a thing is that on which it stands, and on the failure of which it falls and when a document consisting partly of statements of fact and partly of undertakings for the future is made the basis of a contract of insurance, this must mean that the document is to be the very foundation of the contract, so that if the statements of fact are untrue, or the promissory statements are not carried out, the risk does not attach.
“It is open to the Court to examine the question whether the reasons for the belief must have a rational connection or a relevant bearing to the formation of the belief and are not irrelevant or extraneous to the purpose of the section. The word ‘reason to believe’ means some material on the basis of which the department can re-open the proceedings. However, satisfaction is necessary in terms of material available on record, which should be based on objective satisfaction arrived at reasonably”, it noted.
The Court further observed that, it is not permissible for the Registering Officer to undertake a roving enquiry for the purpose of ascertaining the correct market value of the property and if the Registering Officer is bona fide of the view that the sale consideration shown in the sale deed is not correct and the sale is undervalued, then it is obligatory on the part of the Registering Authority as well as the Special Deputy Collector (Stamps) to assign some reason for arriving at such a conclusion.
“In such circumstances, if the document in question is straightway referred to the Collector without recording any prima facie reason, the same would vitiate the entire enquiry and the ultimate decision. In the case on hand, it is not in dispute that the Form I notices did not contain any reason. It also appears that the Collector (Stamps) in his order also failed to indicate the basis on which the sale consideration shown in the two sale deeds was undervalued”, it also remarked.
The Court said that the Collector is obligated to communicate the provisional order to the parties concerned in respect of fixation of the correct value of the property and also the duty payable.
“We are of the view that no error not to speak of any error of law could be said to have been committed by the High Court in passing the impugned order”, it concluded.
Accordingly, the Apex Court dismissed the Appeals.
Cause Title- Chief Revenue Controlling Officer Cum Inspector General Of Registration & Ors. v. P. Babu (Neutral Citation: 2025 INSC 44)
Appearance:
Appellants: AOR Sabarish Subramanian, Advocates Vishnu Unnikrishnan, and C Kranthi Kumar.
Respondent: AOR Rohini Musa
