Har Devi Asnani vs State Of Rajasthan & Ors

Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 8325 OF 2011

(Arising out of SLP (C) NO. 20964 OF 2010)

Smt. Har Devi Asnani ...... Appellant

Versus

State of Rajasthan & Others ...... Respondents

WITH

CIVIL APPEAL No. 8326 OF 2011

(Arising out of SLP (C) NO. 17233 OF 2010)

J U D G M E N T

A. K. PATNAIK, J.

Leave granted.

2. The appellant purchased Plot No. A-7 situated in the

Housing Scheme No.12, Ajmer Road, Jaipur, of

Krishna Grah Nirman Sahakari Samiti Limited by a

registered Sale Deed dated 16.05.2007 for a

consideration of Rs.18 lacs. The Sale Deed was

executed on a stamp duty of Rs.1,17,000/-. The Sub-

Registrar, SR IV, Jaipur, did not accept the valuation

1.

made in the Sale Deed and appointed an Inspection

Officer to inspect the plot purchased by the appellant

and determined the value of the land at

Rs.2,58,44,260/-. The Additional Collector (Stamps),

Jaipur, served a notice under the Rajasthan Stamp

Act, 1998 (fo short `the Act') to the appellant on

07.07.2008 to appear before him on 19.09.2008 and to

show-cause why prosecution against the appellant

should not be initiated for concealing or

misrepresenting facts relating to the valuation

mentioned in the Sale Deed resulting in evasion of

stamp duty. The appellant filed a reply stating therein

that the plot of land purchased by her under the Sale

Deed was allotted to her for residential purposes and

was not meant for commercial use and that the sale

price was paid entirely by a cheque. The appellant

also stated in her reply that adjacent to the plot

purchased by her, Plot Nos.A-3 near Scheme No.12,

Roop Sagar, had been sold by a registered Sale Deed

on 16.12.2006 and another Plot No.A-38, near Scheme

1.

No.12, Roop Sagar, at a price less than the price in the

Sale Deed dated 16.05.2007 under which she had

purchased Plot No.A-7 in Housing Scheme No.12.

Along with the reply, the appellant had also furnished

copies of the two Sale Deeds of the adjacent Plot

Nos.A-3 and A-38 in Scheme No.12. In the reply, the

appellant requested the Additional Collector (Stamps)

to drop the recovery proceedings. The Additional

Collector (Stamps) heard the appellant and in his order

dated 20.07.2009 held after considering the Site

Inspection Report that the determination made by the

Sub-Registrar at Rs. 2,58,44,260/- was correct and

that the appellant was liable to pay deficit stamp duty

of Rs.15,62,880/-, deficit registration charges of

Rs.7,000/- and penalty of Rs.120/- totalling to a sum

of Rs.15,70,000/- and accordingly made the demand

on the appellant and directed recovery of the same.

3. Aggrieved, the appellant filed SB Civil Writ Petition

No.12422 of 2009 before the Rajasthan High Court

challenging the order dated 20.07.2009 of the

1.

Additional Collector (Stamps), Jaipur. A learned Single

Judge of the High Court, however, dismissed the Writ

Petition by order dated 21.10.2009 holding that the

appellant had a remedy against the order of the

Additional Director by way of a revision before the

Board of Revenue and as there was an alternative and

efficacious remedy available to the appellant, there was

no just reason for the appellant to invoke the extra-

ordinary jurisdiction of the High Court under Articles

226 and 227 of the Constitution of India. The

appellant then filed D.B. Civil Appeal (Writ) No.1261 of

2009 before the Division Bench of the High Court, but

by order dated 22.03.2010 the Division Bench of the

High Court held that there was no error or illegality

apparent on the face of the record in the order dated

21.10.2009 passed by the learned Single Judge and

that the appeal was devoid of any merit and

accordingly dismissed the appeal. Aggrieved, the

appellant has filed Civil Appeal arising out of S.L.P. (C)

No.17233 of 2010.

1. 4. In the meanwhile, the appellant filed a separate Writ

Petition D.B. Civil Writ Petition No.14220 of 2009 in

the Rajasthan High Court challenging the

constitutional validity of the proviso to Section 65(1) of

the Rajasthan Stamp Act, 1998 (for short `the Act'),

which provided that no revision application shall be

entertained unless it is accompanied by a satisfactory

proof of the payment of fifty percent of the recoverable

amount. The ground taken by the appellant in the writ

petition before the High Court was that unless the

appellant deposited fifty percent of the total amount of

Rs.15,70,000/- towards deficit stamp duty,

registration charges and penalty, the revision petition

of the appellant would not be entertained and the

appellant was not in a position to deposit such a huge

amount as a condition for filing the revision. The

appellant accordingly contended before the High Court

that the pre-condition of payment of fifty percent of the

recoverable amount for entertaining a revision petition

was arbitrary, unreasonable and unconstitutional.

1. The Division Bench of the High Court, however, held in

its order dated 16.11.2009 that the constitutional

validity of the proviso to Section 65 (1) of the Act had

been examined by another Division Bench of the High

Court in M/s Choksi Heraeus Pvt. Ltd., Udaipur v.

State & Ors. [AIR 2008 Rajasthan 61] and the proviso

to Section 65 (1) of the Act had been held to be

constitutionally valid. The Division Bench relying on

the aforesaid decision in M/s Choksi Heraeus Pvt. Ltd.,

Udaipur v. State & Ors. (supra) dismissed the Writ

Petition by order dated 16.11.2009. The appellant has

filed the Civil Appeal arising out of S.L.P. (C) No.20964

of 2010 against the order dated 16.11.2009 of the

Division Bench in D.B. Civil Writ Petition No.14220 of

2009.

5. For appreciating the contentions of the learned counsel

for the parties, we must refer to Section 65 of the Act.

Section 65 of the Act is quoted hereinbelow:

"65. Revision by the Chief Controlling

Revenue Authority

1.

(1) Any person aggrieved by an order made

by the Collector under Chapter IV and V

and under clause (a) of the first proviso to

section 29 and under section 35 of the Act,

may within 90 days from the date of order,

apply to the Chief Controlling Revenue

Authority for revision of such order:

Provided that no revision application shall

be entertained unless it is accompanied by a

satisfactory proof of the payment of fifty

percent of the recoverable amount.

(2) The Chief Controlling Revenue Authority

may suo moto or on information received

from the registering officer or otherwise call

for and examine the record of any case

decided in proceeding held by the Collector

for the purpose of satisfying himself as to

the legality or propriety of the order passed

and as to the regularity of the proceedings

and pass such order with respect

thereto as it may think fit:

Provided that no such order shall be made

except after giving the person affected a

reasonable opportunity of being heard in the

matter."

6. Learned counsel for the appellant submitted that

although sub-section (1) of Section 65 of the Act confers a

right on a person to file a revision against the order of the

Collector, the proviso to Section 65(1) of the Act renders this

right illusory by insisting that the revision application shall

not be entertained unless it is accompanied by a

1.

satisfactory proof of the payment of fifty percent of the

recoverable amount. He submitted that the proviso to

Section 65(1) of the Act is therefore unreasonable and

arbitrary and violative of Article 14 of the Constitution and

should be declared constitutionally invalid. He cited the

decision of this Court in Mardia Chemical Ltd. and Others

vs. Union of India and Others [(2004) 4 SCC 311] in which

the provision requiring pre-deposit of 75% of the demand

made by the bank or the financial institution in Section 17

of the Securitisation and Reconstruction of Financial Assets

and Enforcement of Security Interest Act, 2002 has been

held to be onerous and oppressive rendering the remedy

illusory and nugatory and constitutionally invalid.

7. Learned counsel for the appellant submitted that

assuming that the proviso to Section 65(1) of the Act is

constitutionally valid where the valuation adopted by the

Additional Collector or Collector and the consequent

demand of additional stamp duty are unreasonable and

exorbitant, the alternative remedy of revision after deposit of

50% of the exorbitant demand is not efficacious, and

1.

affected party should be able to move the High Court under

Article 226 of the Constitution. In support of this

submission, he cited the decision of this Court in

Government of Andhra Pradesh and Others vs. P. Laxmi Devi

[(2008) 4 SCC 720]

8. Learned counsel for the respondents, on the other

hand, submitted that a revision or an appeal is a right

conferred by the statute and the legislature while conferring

this statutory right can lay down conditions subject to

which the appeal or revision can be entertained and that

there is nothing unreasonable or arbitrary in the proviso to

Section 65(1) of the Act requiring deposit of 50% of the

recoverable amount before the revision application is

entertained. He argued that the proviso to Section 65(1) of

the Act is in no way illusory and is only a provision to

ensure that the stamp duty demanded is recovered in time

and is not held up because of the pendency of the revision.

In support of his submission, learned counsel for the

respondent relied on the decisions of this Court in The

Anant Mills Co. Ltd. vs. State of Gujarat and others [(1975) 2

1.

SCC 175]; Seth Nand Lal and Another vs. State of Haryana

and Others [1980 (supp) SCC 575]; Vijay Prakash D. Mehta

and Another vs. Collector of Customs (Preventive), Bombay

[(1988) 4 SCC 402] and Gujarat Agro Industries Co. Ltd. vs.

Municipal Corporation of the City of Ahmedabad and Others

[(1999) 4 SCC 468].

9. Learned counsel for the respondents submitted that

the decision of this Court in Mardia Chemical Ltd. and

Others vs. Union of India and Others (supra) declaring the

provision of Section 17 of the Securitisation and

Reconstruction of Financial Assets and Enforcement of

Security Interest Act, 2002, requiring deposit of 75% of the

demand as constitutionally invalid does not apply to the

facts of the present case. He submitted that in Mardia

Chemical Ltd. and Others (supra) this Court clearly held that

the amount of deposit of 75% of the demand is at the initial

proceedings itself when the bank or the financial institution

makes its demand on the borrower and the requirement of

deposit of such a heavy amount on the basis of one-sided

claim of the bank or the financial institution at this stage,

1.

before the start of the adjudication of the dispute, cannot be

said to be a reasonable condition. He submitted that in the

instant case, the first adjudicatory authority is the Collector

and only after the Collector determines the amount of stamp

duty payable on the documents, the affected party has a

right of revision under Section 65(1) of the Act. He further

submitted that the requirement of 50% of the amount

determined by the Collector at the stage of filing of the

revision is therefore not a requirement at the initial stage

but a requirement at the revisional stage and the decision of

this Court in Mardia Chemical Ltd. and Others vs. Union of

India and Others (supra) is distinguishable from the facts of

the present case.

10. We need not refer to all the decisions cited by the

learned counsel for the parties because we find that in

Government of Andhra Pradesh and Others vs. P. Laxmi Devi

(supra) this Court has examined a similar provision of

Section 47-A of the Stamp Act, 1899, introduced by the

Indian Stamp Act (A.P. Amendment Act 8 of 1998). Sub-

section (1) of Section 47-A, introduced by Andhra Pradesh

1.

Act 8 of 1998 in the Indian Stamp Act, is extracted

hereinbelow:

"47-A. Instruments of conveyance, etc. how to

be dealt with-(1) Where the registering officer

appointed under the Registration Act, 1908,

while registering any instrument of

conveyance, exchange, gift, partition,

settlement, release, agreement relating to

construction, development or sale of any

immovable property or power of attorney

given for sale, development of immovable

property, has reason to believe that the

market value of the property which is the

subject-matter of such instrument has not

been truly set forth in the instrument, or that

the value arrived at by him as per the

guidelines prepared or caused to be prepared

by the Government from time to time has not

been adopted by the parties, he may keep

pending such instrument and refer the

matter to the Collector for determination of

the market value of the property and the

proper duty payable thereon.

Provided that no reference shall be made by

the registering officer unless an amount

equal to fifty per cent of the deficit duty

arrived at by him is deposited by the party

concerned."

Under sub-section (1) of Section 47-A quoted above, a

reference can be made to the Collector for determination of

the market value of property and the proper duty payable

thereon where the registering officer has reason to believe

1.

that the market value of the property which is the subject-

matter of the instrument has not been truly set forth in the

instrument, or that the value arrived at by him as per the

guidelines prepared or caused to be prepared by the

Government from time to time has not been adopted by the

parties. The proviso of sub-section (1) of Section 47-A,

however, states that no such reference shall be made by the

registering officer unless an amount equal to fifty per cent of

the deficit duty arrived at by him is deposited by the party

concerned. This proviso of sub-section (1) of Section 47-A

was challenged before the Andhra Pradesh High Court by P.

Laxmi Devi and the Andhra Pradesh High Court held that

this proviso was arbitrary and violative of Article 14 of the

Constitution and was unconstitutional. The Government of

Andhra Pradesh, however, filed an appeal by special leave

before this Court against the judgment of the Andhra

Pradesh High Court and this Court held in para 18 at page

735 of [(2008) 4 SCC 720] that there was no violation of

Articles 14, 19 or any other provision of the Constitution by

the enactment of Section 47-A as amended by the Andhra

1.

Pradesh Amendment Act 8 of 1998 and that the amendment

was only for plugging the loopholes and for quick realisation

of the stamp duty and was within the power of the State

Legislature vide Entry 63 of List-II read with Entry 44 of

List-III of the Seventh Schedule to the Constitution. While

coming to the aforesaid conclusions, this Court has relied

on The Anant Mills Co. Ltd. vs. State of Gujarat and others

(supra), Vijay Prakash D. Mehta and Another vs. Collector of

Customs (Preventive), Bombay (supra) and Gujarat Agro

Industries Co. Ltd. vs. Municipal Corporation of the City of

Ahmedabad and Others (supra) in which this Court has

taken a consistent view that the right of appeal or right of

revision is not an absolute right and it is a statutory right

which can be circumscribed by the conditions in the grant

made by the statute. Following this consistent view of this

Court, we hold that the proviso to Section 65(1) of the Act,

requiring deposit of 50% of the demand before a revision is

entertained against the demand is only a condition for the

grant of the right of revision and the proviso does not render

1.

the right of revision illusory and is within the legislative

power of the State legislature.

11. We also find that in the impugned order the High

Court has relied on an earlier Division Bench judgment of

the High Court in M/s Choksi Heraeus Pvt. Ltd., Udaipur v.

State & Ors. (supra) for rejecting the challenge to the proviso

to Section 65(1) of the Act. We have perused the decision of

the Division Bench of the High Court in M/s Choksi

Heraeus Pvt. Ltd., Udaipur v. State & Ors. (supra) and we

find that the Division Bench has rightly taken the view that

the decision of this Court in the case of Mardia Chemical

Ltd. and Others vs. Union of India and Others (supra) is not

applicable to the challenge to the proviso to Section 65(1) of

the Act inasmuch as the provision of sub-section (2) of

Section 17 of the Securitisation and Reconstruction of

Financial Assets and Enforcement of Security Interest Act,

2002, requiring deposit of 75% of the demand related to

deposit at the stage of first adjudication of the demand and

was therefore held to be onerous and oppressive, whereas

the proviso to Section 65(1) of the Act in the present case

1.

requiring deposit of 50% of the demand is at the stage of

revision against the order of first adjudication made by the

Collector and cannot by the same reasoning held to be

onerous and oppressive. In our considered opinion,

therefore, the proviso to Section 65(1) of the Act is

constitutionally valid and we are therefore not inclined to

interfere with the order dated 16.11.2009 in D.B.CWP

No.14220 of 2009. The Civil Appeal arising out of S.L.P. (C)

No.20964 of 2010 is therefore dismissed.

12. We are, however, inclined to interfere with the order

dated 21.10.2009 of the learned Single Judge of the High

Court in SB Civil Writ Petition No.12442 of 2009 as well as

the order dated 22.03.2010 of the Division Bench of the

High Court in D.B. Civil Appeal (Writ) No.1261 of 2009. The

learned Single Judge of the High Court and the Division

Bench of the High Court have taken a view that as the

appellant has a right of revision under Section 65(1) of the

Act, the writ petition of the appellant challenging the

determination of the value of the land at Rs.2,58,44,260/-

and the demand of additional stamp duty and registration

1.

charges and penalty totaling to Rs.15,70,000/- could not be

entertained under Article 226 of the Constitution. The

learned Single Judge of the High Court and the Division

Bench of the High Court have not considered whether the

determination of market value and the demand of deficit

stamp duty were exorbitant so as to make the remedy by

way of revision requiring deposit of 50% of the demand

before the revision is entertained ineffective. In Government

of Andhra Pradesh and Others vs. P. Laxmi Devi (supra) this

Court, while upholding the proviso to sub-section (1) of

Section 47-A of the Indian Stamp Act introduced by Andhra

Pradesh Amendment Act 8 of 1998, observed:

"29. In our opinion in this situation it is

always open to a party to file a writ petition

challenging the exorbitant demand made by

the registering officer under the proviso to

Section 47-A alleging that the determination

made is arbitrary and/or based on

extraneous considerations, and in that case

it is always open to the High Court, if it is

satisfied that the allegation is correct, to set

aside such exorbitant demand under the

proviso to Section 47-A of the Stamp Act by

declaring the demand arbitrary. It is well

settled that arbitrariness violates Articles 14

of the Constitution vide Maneka Gandhi vs.

Union of India [(1978) 1 SCC 248]. Hence,

1.

the party is not remediless in this

situation."

13. In our view, therefore, the learned Single Judge should

have examined the facts of the present case to find out

whether the determination of the value of the property

purchased by the appellant and the demand of additional

stamp duty made by the appellant by the Additional

Collector were exorbitant so as to call for interference under

Article 226 of the Constitution.

14. We, therefore, allow the appeal arising out of S.L.P. (C)

No.17233 of 2010, set aside the order passed by the learned

Single Judge of the High Court in SB Civil Writ Petition

No.12442 of 2009 and the order passed by the Division

Bench of the High Court in D.B. Civil Appeal (Writ) No.1261

of 2009 and remand the writ petition back to the High Court

for fresh consideration in accordance with law. No costs.

.............................J.

(R. V. Raveendran)

.............................J.

(A. K. Patnaik)

New Delhi,

1.

September 27, 2011.

***