High Court · 2025

Judgment

1. Heard Ms. Swati Agrawal Srivastava, learned counsel for the petitioner and learned Standing Counsel for the State – respondents.

2. The instant writ petition has been filed against the impugned order dated 11.07.2017 passed by the Board of Revenue in Stamp Appeal No. 277/2016 as well as the impugned order dated

18.12.2018 passed on restoration application no. REC/2165 of 2018 and the impugned order dated 29.10.2016 passed by the Additional District Magistrate (Finance & Revenue).

Learned counsel for the petitioner submits that one M/s Parsadi Lal Tussi Ram Sheet Grah Private Limited took financial facility from Bank of Baroda, i.e., term loan, overdrafts, cash credit, etc., but the original borrower defaulted in making payment of the loan. Therefore, the property, i.e., the cold storage, was attached. In spite of several opportunities for repayment, the Company failed to cleared its dues and therefore, the properties, which were mortgaged with the Bank, were taken over on 30.08.2010. The property was put to auction after wide circulation.

4. After the petitioner having declared the highest bidder, a sale certificate was issued on 13.02.2013 and thereafter, the Bank executed a registered sale deed on 13.02.2013 in favour of the petitioner; wherein, the petitioner paid requisite stamp duty. She further submits that on 02.03.2013, the Sub Registrar, Hathras 2 submitted a report to the Collector stating therein the deficiency of stamp duty in the instrument in question, pursuant to the which a case was registered and the proceedings under section 47-A of the Indian Stamp Act were initiated against the petitioner, to which the petitioner submitted objection. Thereafter, on the basis of the report of the valuer, the Additional District Magistrate (Finance & Revenue) vide impugned order dated 29.10.2016 imposed the deficiency of stamp duty, together with penalty and interest. Aggrieved by the said order, the petitioner preferred an appeal before the Board of Revenue, which was dismissed vide order dated 11.07.2017, against which the petitioner filed a restoration application, which has been dismissed vide impugned order dated 18.12.2018. Hence, this writ petition.

5. Learned counsel for the petitioner further submits that the petitioner purchased the property in question in open auction and the instrument in question has been executed on the market value, but the court below has failed to considered this aspect of the matter. She further submits that the petitioner being the highest bidder, the property in question was purchased, which had fetched best market value in auction, and therefore, the proceedings under section 47-A of the Stamp Act cannot be said to be justified. In support of her submission, she has placed reliance on the judgement of this Court M/S Kurele Paper Mills Pvt. Ltd. Vs. State of U.P. [Writ C No. 1470 of 2007, decided on 27.01.2025] as well as the judgement of the Apex Court in Registrar of Assurances and another Vs. ASL Vyapar Private Ltd and another [2022 Live Law (SC) 942].

6. Per contra, learned Standing Counsel supports the impugned orders and submits that the property in question was undervalued and therefore, the proceedings have rightly been initiated against the petitioner as the sale deed does not reflect the true and correct market value. In support of his submission, he has placed reliance 3 on the judgement Vishwa Nath Agrawal Vs. Sate of UP and others [2004 (4) AWC 3604].

7. After hearing learned counsel for the parties, the Court has perused the record.

8. It is not in dispute that the property in question was purchased by the petitioner in pursuance of the auction held by the Bank. The petitioner being the highest and successful bidder in respect of the property in question has got the sale deed executed in his favour. The record further shows that the proceedings were initiated only on the basis of presumption that the true and correct market value of the property in question was not disclosed.

9. The issue in hand has already been decided by the Apex Court in the case of Registrar of Assurances and another (supra), relevant paragraphs of which are quoted hereunder:-

21. It was pleaded that the reliance placed on Kayjay Industries13 case was improper as it had been observed in para 9 that “court sales and market prices are distant neighbours.” The ratio of Pawan Kumar Verma14 case would have no application as it is not an issue of suit valuation. Moreover, the observations of the Supreme Court that the Registering Authority will have an opportunity to make back reference to the concerned court, and such court will freshly determine the suit (supra) (supra) (supra) valuation, is not proper procedure as the court stands on a higher footing, has the sanctity of law and cannot be altered by the Registering Authority on the pretext of generating higher revenues. Conclusion:

22. 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.

29. We find hardly any rational in adopting the submissions on behalf of the appellant. The provisions are not dissimilar 4 in the different enactments in its fundamentals; the “reason to believe” of a Registering Officer has to be based on ground realities 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.

10. In the aforesaid judgement the Apex Court has held that the provisions of Section 47-A of the Indian Stamp Act will have no application in the cases of public auction being carried out through court process/receiver. It has been further held that auction is the most transparent manner to obtain the correct market value of the property.

11. In the present case, the property in question was purchased by the petitioner through auction proceeding being carried out by the Bank of Baroda, in which the petitioner being the highest and successful bidder in the respect of the property in question has got the sale deed executed in his favour. Once the property in question has been purchased through auction proceeding, it cannot be said that the same is under valued.

12. So far as the judgement relied upon by learned Standing Counsel appearing for the Sate in the case of Visha Nath Agrawal (supra) is concerned, the same is of no aid to him in view of the judgement passed by Apex Court in the case of Registrar of Assurances and another (supra).

13. In view of the aforesaid discussions and looking to the facts and circumstances of the case, the law laid down by the Apex Court as well as this Court in M/s Kurele Paper Mills Private Limited 5 (supra) as referred herein above, the impugned order dated

11.07.2017 passed by the Board of Revenue in Stamp Appeal No. 277/2016 as well as the impugned order dated 18.12.2018 passed on restoration application no. REC/2165 of 2018 and the impugned order dated 29.10.2016 passed by the Additional District Magistrate (Finance & Revenue) cannot be sustained in the eyes of law and same are hereby quashed.

14. The writ petition succeeds and is allowed.

15. The authority concerned is directed to refund any amount deposited by the petitioner along with interest @ 4% per annum from the date of its deposit till the date of refund, within a period of two months from the date of production of a certified copy of this order. Order Date :-10/02/2025 Amit Mishra AMIT KUMAR MISHRA High Court of Judicature at Allahabad

Learned counsel for the petitioner submits that one M/s Parsadi Lal Tussi Ram Sheet Grah Private Limited took financial facility from Bank of Baroda, i.e., term loan, overdrafts, cash credit, etc., but the original borrower defaulted in making payment of the loan. Therefore, the property, i.e., the cold storage, was attached. In spite of several opportunities for repayment, the Company failed to cleared its dues and therefore, the properties, which were mortgaged with the Bank, were taken over on 30.08.2010. The property was put to auction after wide circulation.

4. After the petitioner having declared the highest bidder, a sale certificate was issued on 13.02.2013 and thereafter, the Bank executed a registered sale deed on 13.02.2013 in favour of the petitioner; wherein, the petitioner paid requisite stamp duty. She further submits that on 02.03.2013, the Sub Registrar, Hathras 2 submitted a report to the Collector stating therein the deficiency of stamp duty in the instrument in question, pursuant to the which a case was registered and the proceedings under section 47-A of the Indian Stamp Act were initiated against the petitioner, to which the petitioner submitted objection. Thereafter, on the basis of the report of the valuer, the Additional District Magistrate (Finance & Revenue) vide impugned order dated 29.10.2016 imposed the deficiency of stamp duty, together with penalty and interest. Aggrieved by the said order, the petitioner preferred an appeal before the Board of Revenue, which was dismissed vide order dated 11.07.2017, against which the petitioner filed a restoration application, which has been dismissed vide impugned order dated 18.12.2018. Hence, this writ petition.

5. Learned counsel for the petitioner further submits that the petitioner purchased the property in question in open auction and the instrument in question has been executed on the market value, but the court below has failed to considered this aspect of the matter. She further submits that the petitioner being the highest bidder, the property in question was purchased, which had fetched best market value in auction, and therefore, the proceedings under section 47-A of the Stamp Act cannot be said to be justified. In support of her submission, she has placed reliance on the judgement of this Court M/S Kurele Paper Mills Pvt. Ltd. Vs. State of U.P. [Writ C No. 1470 of 2007, decided on 27.01.2025] as well as the judgement of the Apex Court in Registrar of Assurances and another Vs. ASL Vyapar Private Ltd and another [2022 Live Law (SC) 942].

6. Per contra, learned Standing Counsel supports the impugned orders and submits that the property in question was undervalued and therefore, the proceedings have rightly been initiated against the petitioner as the sale deed does not reflect the true and correct market value. In support of his submission, he has placed reliance 3 on the judgement Vishwa Nath Agrawal Vs. Sate of UP and others [2004 (4) AWC 3604].

7. After hearing learned counsel for the parties, the Court has perused the record.

8. It is not in dispute that the property in question was purchased by the petitioner in pursuance of the auction held by the Bank. The petitioner being the highest and successful bidder in respect of the property in question has got the sale deed executed in his favour. The record further shows that the proceedings were initiated only on the basis of presumption that the true and correct market value of the property in question was not disclosed.

9. The issue in hand has already been decided by the Apex Court in the case of Registrar of Assurances and another (supra), relevant paragraphs of which are quoted hereunder:-

21. It was pleaded that the reliance placed on Kayjay Industries13 case was improper as it had been observed in para 9 that “court sales and market prices are distant neighbours.” The ratio of Pawan Kumar Verma14 case would have no application as it is not an issue of suit valuation. Moreover, the observations of the Supreme Court that the Registering Authority will have an opportunity to make back reference to the concerned court, and such court will freshly determine the suit (supra) (supra) (supra) valuation, is not proper procedure as the court stands on a higher footing, has the sanctity of law and cannot be altered by the Registering Authority on the pretext of generating higher revenues. Conclusion:

22. 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.

29. We find hardly any rational in adopting the submissions on behalf of the appellant. The provisions are not dissimilar 4 in the different enactments in its fundamentals; the “reason to believe” of a Registering Officer has to be based on ground realities 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.

10. In the aforesaid judgement the Apex Court has held that the provisions of Section 47-A of the Indian Stamp Act will have no application in the cases of public auction being carried out through court process/receiver. It has been further held that auction is the most transparent manner to obtain the correct market value of the property.

11. In the present case, the property in question was purchased by the petitioner through auction proceeding being carried out by the Bank of Baroda, in which the petitioner being the highest and successful bidder in the respect of the property in question has got the sale deed executed in his favour. Once the property in question has been purchased through auction proceeding, it cannot be said that the same is under valued.

12. So far as the judgement relied upon by learned Standing Counsel appearing for the Sate in the case of Visha Nath Agrawal (supra) is concerned, the same is of no aid to him in view of the judgement passed by Apex Court in the case of Registrar of Assurances and another (supra).

13. In view of the aforesaid discussions and looking to the facts and circumstances of the case, the law laid down by the Apex Court as well as this Court in M/s Kurele Paper Mills Private Limited 5 (supra) as referred herein above, the impugned order dated

11.07.2017 passed by the Board of Revenue in Stamp Appeal No. 277/2016 as well as the impugned order dated 18.12.2018 passed on restoration application no. REC/2165 of 2018 and the impugned order dated 29.10.2016 passed by the Additional District Magistrate (Finance & Revenue) cannot be sustained in the eyes of law and same are hereby quashed.

14. The writ petition succeeds and is allowed.

15. The authority concerned is directed to refund any amount deposited by the petitioner along with interest @ 4% per annum from the date of its deposit till the date of refund, within a period of two months from the date of production of a certified copy of this order. Order Date :-10/02/2025 Amit Mishra AMIT KUMAR MISHRA High Court of Judicature at Allahabad