M/S Msd Real Estate Llp vs Collector Of Stamps

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.3194 OF 2020 (ARISING OUT OF SLP(C) NO.7990 OF 2020)

M/S. MSD REAL ESTATE LLP ...APPELLANT(S)

VERSUS

THE COLLECTOR OF STAMPS & ANR. ...RESPONDENT(S)

J U D G M E N T

ASHOK BHUSHAN,J.

Leave granted.

2. This appeal has been filed against the judgment of

the High Court of Madhya Pradesh at Indore dated

10.06.2020 by which the writ petition filed by the

appellant challenging the notice dated 04.06.2020

issued by Additional Tehsildar (Recovery), District Signature Not Verified Digitally signed by MEENAKSHI KOHLI Date: 2020.09.17 15:31:31 IST Reason: Indore as well as notice dated 04.06.2020 issued by 2

Building Officer, Zone No.09, Municipal Corporation

Indore has been dismissed.

3. Brief facts giving rise to this appeal are:

The property in question in this appeal is Lantern

Hotel having Municipal No.28, Yeshwant Niwas Road,

Indore with regard to which a Deed of Assent was

executed on 21.04.2005 by the Trustees of Private

Trust, namely, H.C. Dhanda Trust. H.C. Dhanda executed

Will dated 26.10.2002. The Collector of Stamps issued

notice stating that there is deficiency in the stamp

duty on deed dated 21.04.2005 and passed an order dated

22.09.2008 holding the deed to be a Gift Deed and

determined a deficiency of stamp duty to the extent of

Rs.1,28,09,700/- and imposed penalty of ten times to

the tune of Rs.12,80,97,000/-. H.C. Dhanda Trust filed

writ petition in the High Court challenging order dated

22.09.2008 which was dismissed on 30.03.2017. An SLP(C)

Diary No.30539 of 2017 was filed by the Trustees of

H.C. Dhanda Trust against the judgment of the Madhya 3

Pradesh High Court dated 30.03.2017 in which this Court

passed following interim order dated 10.11.2017:

“Issue notice, returnable in six weeks, limited to the quantum of penalty that has been imposed by the Collector (Stamps). Subject to the condition that stamp duty is paid within a period of one month, there shall be stay of the order qua the penalty.”

4. The Trustees of H.C. Dhanda Trust could not deposit

the stamp duty, this Court made it clear by order dated

22.04.2019 in SLP(C) Diary No.30539 of 2017 that no

interim order is operating as on date. An amount of

Rs.1,28,09,700/- was deposited through a Treasury

Challan dated 07.11.2019 which was the amount of stamp

duty on behalf of Jogesh Dhanda son of late Shri H.C.

Dhanda.

5. The appellant, M/s. MSD Real Estate LLP by a

Registered Sale Deed dated 27.11.2019, purchased the

property in question, Lantern Hotel from the Trustees

of the Trust of Jogesh Dhanda and Ishan Dhanda. The

appellant applied for development permission and vide 4

letter dated 18.11.2019 the appellant was granted

permission for construction. Application for mutation

was filed by the appellant in the Municipal

Corporation. The appellant also deposited

Rs.2,92,20,794/- property tax under protest, mutation

in the name of the appellant was also made against the

property in question.

6. On 20.11.2019 the appellant along with Jogesh

Dhanda submitted an application to Collector of Stamps

regarding stamp duty and penalty imposed upon Lantern

Hotel, Indore situate at Municipal No.28, Yeshwant

Niwas Road, Indore. Along with letter the appellant

submitted six post dated cheques totaling

Rs.12,80,97,025/-. A notice dated 04.06.2020 was issued

by Addl. Tehsildar (Recovery) for depositing an amount

of Rs.8,80,97,095/-, outstanding amount towards the

penalty. On 04.06.2020 itself another letter was issued

by the Office of Municipal Corporation, Indore

regarding application received from the appellant for

permission of building construction. The application 5

for building permission was rejected by notice dated

04.06.2020. Aggrieved by the aforesaid two notices

dated 04.06.2020 Writ Petition No.8145 of 2020 was

filed by the appellant. In the writ petition the

appellant has challenged notice dated 04.06.2020 issued

by the Addl. Tehsildar(Recovery) as well as order dated

04.06.2020 of the Office of Municipal Corporation,

Indore. The appellant also prayed for direction to

restraint the respondents from giving effect to their

impugned orders and from taking any coercive/penal

action against the appellant.

7. Learned Single Judge by its order dated 10.06.2020

dismissed the writ petition. Learned Single Judge held

that the appellant being subsequent purchaser is liable

to pay the penalty amount. Learned Single Judge noticed

that there being no interim order in SLP(C) Diary No.

30539 of 2017 pending in this Court he was liable to

pay the penalty amount. The High Court also took the

view that payment of penalty by post dated cheques

cannot be approved by the High Court. Insofar as notice 6

dated 04.06.2020 issued by the Municipal Corporation,

the High Court took the view that at that time no

interference was called for and after payment of

penalty amount in toto, the appellant would be free to

apply afresh for building permission again whereafter

the Municipal authorities are directed to reconsider

the application for building permission. With the above

discussion, the writ petition was dismissed. Aggrieved

by the judgment of the High Court, the appellant has

filed this appeal.

8. This appeal arising out of SLP(C)No.7990 of 2020

was filed on 24.06.2020.

9. During the pendency of this appeal order dated

26.07.2020 has been issued by the Municipal

Corporation, Indore as well as order dated 25.07.2020

and 28.07.2020 has been issued by the Municipal

Corporation, Indore. The Municipal Corporation also

issued letter dated 27.07.2020 to the Sub-Divisional

Officer, Revenue, Indore requesting him to remove all

encroachment on Municipal property and to handover 7

possession of the land in question to the Municipal

Corporation. The appellant by means of I.A.No.72517 of

2020 has prayed for stay the aforesaid orders and

notices and has prayed for other reliefs consequent to

the notices and orders issued as referred to in

aforesaid IA. Counter-affidavit has also been filed by

the Municipal Corporation, Indore to which Rejoinder-

affidavit has also been filed. On 07.07.2020 while

issuing notice this Court passed the following order:

“Issue notice.

List along with Diary No.30539/2017. Learned counsel for the petitioner submits that towards the penalty amount Rs.6.8 crores have already been encashed/paid and for rest of the penalty amount post-dated cheques have already been given. The petitioner undertakes to ensure that all post-dated cheques are cleared so that entire amount of penalty is paid which 1 shall, however, be subject to the order of this Court in the pending petition i.e. Diary No.30539/2017.

In the meantime, impugned orders including the auction proceeding shall remain stayed.”

10. We have heard Shri Kapil Sibal, learned senior

counsel appearing for the appellant. Shri Tushar Mehta, 8

learned Solicitor General has appeared on behalf of the

State. Shri Purushaindra Kaurav, learned Advocate

General, has appeared for Municipal Corporation,

Indore.

11. Shri Kapil Sibal submits that the action of the

Addl. Tehsildar (Recovery) asking for recovery of

amount of Rs.8,80,9725/- was unjustified. It is

submitted that the appellant after purchasing of the

property has deposited the amount of deficit stamp duty

as well as post dated cheques covering the entire

amount of penalty of Rs.12,80,97,025/- by letter dated

20.11.2019 which was accepted by the Collector Stamps

and letter dated 23.11.2019 was issued by the Collector

of Stamps that cheques of total amount has been

received and no stamp duty is outstanding. It is

submitted that by 04.06.2020 on which date notice was

issued by Addl. Tehsildar (Recovery) out of the

abovesaid cheques, two cheques of Rs.2 crores each have

already been encashed by the State Government. Shri

Sibal submits that subsequently he has also deposited 9

further amount and he has undertaken before this Court

to ensure that all cheques given by him towards penalty

amount shall be cleared.

12. Shri Sibal further submits that building permission

was granted to the appellant after being satisfied with

all necessary requirements which could not have been

cancelled by order dated 04.06.2020 by the Municipal

Corporation, Indore. He submits that the appellant was

committed to pay the entire amount of the penalty

which commitment was accepted by the Collector of

Stamps by letter dated 23.11.2019 and the action taken

for cancelling the building permission was unjustified.

Shri Sibal further submitted that in spite of the

interim order passed by this Court on 07.07.2020 by

which this Court has stayed the impugned orders and

auction proceedings by the Municipal Corporation, the

Municipal Corporation has issued several orders which

are malafide and illegal. The order dated 25.07.2020

passed by the Municipal Corporation of Indore

cancelling the mutation of the appellant on the ground 10

that proceeding is pending in this Court and by the

Collector regarding title of the property was wholly

unauthorized and illegal. The appellant having

purchased the property by registered sale deed, got

mutation of title in his name. He further submitted

that no proceeding is pending regarding title of

property as mentioned in the letter dated 25.07.2020.

He further submits that another order issued on

28.07.2020 by the Office-Commissioner Municipal

Corporation which mentions that Indore Municipal

Corporation has already sent letter to Sub-Divisional

Officer Revenue for putting up the application before

the competent officer for taking action under Section

4/5 of Madhya Pradesh Public Premises Eviction Act,

1974 for eviction is wholly illegal and unauthorised.

He submits that the house property No.28, Yashwant

Niwas Road, Indore was in the ownership of late Shri

H.C. Dhanda which was gifted by his Highness Maharaja

by order dated 22.04.1948 as free gift to late Shri

H.C. Dhanda being Minister in the Cabinet of his 11

Highness and right from 1948 late Shri H.C. Dhanda was

the owner in possession with regard to which

subsequently he created a Trust by his Will. He

submitted that property had been purchased by the

appellant by registered sale deed dated 23.11.2019 and

there is no question of Corporation or anyone else

claiming any title in the property, no determination of

title is pending in any Court of law and the

observation made by the Corporation in its letter that

determination of title is pending with the office of

District Collector is wholly malafide and unjustified.

He submits that subsequent letters and action taken by

the Corporation as well as by the State authorities are

only with the intent to harass the appellant and all

are actions are beyond their jurisdiction and deserve

to be set aside by accepting the IAs filed by the

appellant.

13. Shri Tushar Mehta, learned Solicitor General

appearing on behalf of the State submits that no error

was committed by the Addl. Tehsildar (Recovery) in 12

issuing recovery notice dated 04.06.2020 since the

interim order being not operating in SLP(C) Diary

No.30539 of 2017 the amount of penalty was outstanding.

He submits that there is no procedure or provision for

accepting the amount of penalty by post dated cheques

as it claimed by the appellant. Shri Mehta further

submits that amount of penalty being outstanding

against the property, mutation in the name of the

appellant against the property as well as building

permission has rightly been rejected. Shri Mehta

further submits that subsequent actions including the

notices and orders brought by the appellant by IA

No.72517 of 2020 are all actions which are subsequent

actions and has no relation to issues which have been

raised in this appeal. He submits that neither

subsequent actions, letters were part of the writ

petition nor they can be considered in this appeal. He

submits if so advised it is always open to take

appropriate proceeding if he is aggrieved by any action 13

subsequently taken after the decision of the writ

petition.

14. Shri Purushaindra Kaurav, learned Advocate General

appearing for the Corporation fairly submitted that it

is the appellant who are in possession of the property

in question. He submitted that notices and actions

taken by the Corporation and other authorities

subsequent to the decision of the writ petition cannot

be made subject matter of challenge in this appeal,

remedy of the appellant if any is elsewhere. He

supports the order of the Municipal Corporation by

which building permission earlier granted has been

cancelled.

15. We have considered the submission of the parties

and perused the record.

16. In pursuance of the order of the Collector dated

22.09.2008, Trustees of H.C. Dhanda Trust were liable

to deposit stamp duty as well as penalty. In SLP(C)

Diary No.30539 of 2017 the interim order granted by 14

this Court on 10.11.2017 having not been complied with

there was no interim order operating and the Trustees

of H.C. Dhanda Trust were liable to deposit the stamp

duty and penalty. Although deficiency of stamp duty was

deposited through the Treasury Challan dated 01.11.2019

but the penalty was not deposited and only post dated

cheques between dates 25.02.2020 to 25.05.2020 were

submitted on behalf of the appellant and Jogesh Dhanda.

The High Court has rightly observed that facility to

deposit the penalty by post dated cheques cannot be

approved and the appellant being subsequent purchaser

was liable to deposit the amount of penalty which was

outstanding against the property and which was subject

matter of the gift deed dated 21.04.2005. The High

Court has rightly not interfered with the order dated

04.06.2020 issued by the Addl. Tehsildar(Recovery)

demanding an amount of Rs.8,80,97,025/- which was

outstanding on the above date.

15

17. We by our order of the date passed in

C.A.Nos……………………of 2020 (arising out of SLP(C)Nos.10972-

10973 of 2020) allowing the appeals partly, held:

“In result the appeals are allowed the order of the Collector of Stamps dated 22.09.2008 is modified to the extent that penalty imposed of ten times of Rs.12,80,97,000/- is modified into five times penalty i.e. Rs.6,40,48,500/-. The appeals are partly allowed to the above extent. “

18. The order of Collector dated 22.09.2008 having been

modified and the amount of penalty having been reduced

to the extent of half of the ten times penalty,

respondents are to take steps in compliance to the said

order. Shri Sibal has submitted that total deposit as

on date by the appellant towards the penalty is about

RS.8.8 crores. The issue of penalty as imposed by the

order of the Collector of Stamps dated 22.09.2008

having already been decided by order of even date in

C.A.Nos……………………of 2020 (arising out of SLP(C)Nos.10972-

10973 of 2020) all the parties are to act in accordance

with the said judgment.

16

19. Now, we come to order dated 04.06.2020 which was

under challenge in the writ petition before the High

Court by which the Municipal Corporation, Indore has

cancelled the building permission granted earlier was

rejected. The High Court while considering the

aforesaid by its judgment in paragraph 8 has held:

“8. So far as order dated 4.6.2020 issued by the Building Officer of Indore Municipal Corporation is concerned, at this stage, no interference is called for as the petitioner has failed to deposit the penalty amount and this fact was suppressed in the application submitted for building permission. After the deposit of the stamp duty and the penalty, the Municipal authorities are directed to reconsider the application for building permission.”

20. The above observation of the High Court amply

protects the rights of the appellant. In view of the

deposit made by the appellant towards the penalty, the

appellant is free to apply for building permission

which is to be considered by the Municipal Corporation

as observed by the High Court in its judgment and order 17

dated 10.06.2020. Nothing more is required to be said

about the order dated 04.06.2020 issued by the Office

of the Municipal Corporation.

21. Now, we come to the submission of Shri Sibal with

regard to orders and notices issued by the Municipal

Corporation and other State Authorities subsequent to

filing of this appeal. The orders and notices issued by

the Municipal Corporation and other State Authorities

which have been brought on record by the IA No.

72517/2020 are all subsequent actions which were not

subject matter of the writ petition before the High

Court and cannot be taken into consideration in this

appeal.

22. With regard to subsequent notices, actions and

orders, as noticed above, brought on record by IA noted

above the said issues cannot be entertained in this

appeal. We give liberty to the parties to seek such

remedy with regard to subsequent actions and orders as 18

permissible in law. The appeal is disposed of

accordingly.

.....................J. ( ASHOK BHUSHAN )

......................J. ( R. SUBHASH REDDY )

......................J. ( M.R. SHAH )

NEW DELHI, SEPTEMBER 17, 2020.