M/S Residents Welfare Association, Noida vs State of U.P. & Ors.

cooperative societies are sub-lessees and the

present appellants are the assignees.

4. The appellant is the Resident Welfare

Association, Noida, (hereinafter called the

"Association"). The members of the association

executed various agreements for transfer of

leasehold rights with the co-operative societies and

its members from 1988 onwards. Each of the

agreements for transfer of leasehold rights entered

into by the members of the association with the

lessees and the sub-lessees were registered with the

Office of the Sub-Registrar, Noida. It may be kept

on record that from 1984 to June 1997, Noida

3 authorities were injuncted by the Civil Court from

issuing transfer memorandums for grant of

permission for transfer of leasehold rights. The

order of injunction was operative from 1988 and

continued almost throughout the State of UP till

July 1997. It may also be kept on record that the

agreements for transfer of leasehold rights were

denoted as agreements of sale. The various

transactions entered into by the members of the

association may be categorized in three different

heads:

1) By the agreements of transfer entered into and

possession taken over on payment of most or all

of the consideration due and such agreements

being duly registered with the Office of the Sub-

Registrar, Noida on payment of stamp duty

charges at half of the stamp duty payable on a

conveyance for the consideration set forth in the

agreement in accordance with Article 5 (b)(1) of

Schedule 1-B to the UP Stamp Act,

4

2) By the agreements entered into and possession

not taken under the agreements, but later the

said agreements were duly registered with the

Sub-Registrar, Noida,

3) In both the above mentioned categories, the

agreements for transfer were either for a plot of

land on which construction was made thereafter

by the assignees (members of the association) of

the leasehold property out of their own funds or

the agreements for a plot of land along with the

building constructed thereon. Thus in some

cases, as noted hereinabove, the plots were

purchased along with small construction which

was later demolished and the assignees

constructed new building after obtaining new

sanction plans using their own funds.

5. On 1st of July, 1997, a public notice was

issued advertising that Noida authorities shall issue

transfer memorandums with respect to the transfer

5 of plots in question upon terms and conditions

including payment of transfer premium. Upon

issuance of the said notice, various members of the

association applied for and obtained transfer

memorandums from Noida authorities after

complying with the conditions thereof and making

payments of the prescribed premium. One of the

conditions, namely condition no. 4 of the transfer

memorandum issued by the Noida authorities

required the lessees of the demised premises to

execute a regular deeds of transfer with the

assignees and to get the same registered with the

Sub-Registrar, Noida. A copy of the same was

required to be filed with the Noida authorities

within a period of 60 days failing which, the Noida

authorities would be entitled to cancel such transfer

and impose a penalty for revalidation of the transfer

memorandum. It is at this stage appropriate that

condition no. 4 of the transfer memorandum may

be produced for the proper understanding of the

6 dispute in this case:

"The transferee will submit a certified copy of transfer deed to be duly registered with Office of the Sub-Registrar, Noida within 60 days from the date of issue of this memorandum. This transfer deed is required to be signed by the person who has signed the transfer application. The transferee of the transfer deed executed by power of attorney holder of the transferor after 30th September 1997 shall be liable to pay additional transfer charges as per policy of the Authority. If the transferor/transferee fails to execute and register the transfer deed within 60 days from the date of this memorandum then this transfer memorandum shall be required to be revalidated subject to payment of penalty at transferring rate applicable from time to time (present penalty for delay in executing transfer deed is Rs. 10/- per day for actual period of delay over and above the given period of 60 days)"

6. In compliance with the above stated condition

of the transfer memorandum, some of the members

of the association executed the relevant transfer

deeds with the lessees. It appears that these

transfer deeds were in essence and in reality deeds

for transfer of the lease by way of assignments by

7 the original lessees in favour of the members of the

association. Prior to submitting the documents for

registration, enquiries were made as to the stamp

duty payable on which the officials of the

respondent no. 3 informed that the stamp duty to

be fixed on the documents should be as applicable

to conveyance under Article 23 of the Schedule 1-B

of the Stamp Act, on the basis of the current market

value of the plot along with the constructed portion

thereon and for which reference to the present

notified rates for Noida would be taken, as

indicative of the market value.

7. Challenging this decision of the Sub-Registrar,

a Writ Petition was filed before the Allahabad High

Court. In the Writ application, the appellant raised

the following issues:

1) Whether the relevant date for determination of the market value of property would be the date of agreement to sell, when the consideration was frozen, or the date of

8 presentation of the documents of transfer for registration?

2) Whether the stamp duty could be levied on the buildings that have been constructed after getting possession of the lands and whose cost has been borne entirely by the members of the association?

8. The Division Bench of the High Court decided

the aforesaid two questions and it was held inter-

alia, as follows:

1) As far as the leasehold land is concerned, it can only be the subject matter of assignment and not absolute sale by the very nature of the land and therefore both Articles 23 and 63 of the Schedule of the Indian Stamp Act would be applicable.

2) Whether the association or its members constructed the buildings was a question of fact, which the High Court in the exercise of its jurisdiction under Article 226 of the Constitution was not in a position to determine.

3) If the Constructions were made after the possession was delivered to the members of the association, stamp duty could not be levied on the buildings so constructed, as they were not the subject matter of transfer between the sub-lessees and assignees.

4) Market value of the lands could not be calculated on the date of agreement to

9 sell but the same can be calculated on the date of execution of the conveyance deed.

9. Based on the aforesaid findings, the Division

Bench of the High Court rejected the Writ

application of the appellant.

10. Feeling aggrieved by the judgment of the

Division Bench of the High Court, the association

had filed this special leave petition, which on grant

of leave was heard in the presence of the learned

counsel for the parties.

11. We have heard the learned counsel appearing

for the parties and have carefully examined the

materials on record. Having done that the pivotal

questions that need to be decided in this appeal, as

were decided by the High Court are as follows:

1) Whether the condition precedent to pass an order under section 47 A of the Stamp Act, as amended by the State of

10 Uttar Pradesh (in short U.P.), was present in the instant case?

2) Whether the said documents were deeds of assignment falling under Article 63 of the Schedule 1-B of the Stamp Act, as applicable to the State of UP or they were deeds of conveyance, as defined in section 2(10) of the Stamp Act to which Article 23 would be applicable?

3) Whether the document dated 22nd of November, 1997, is a deed of assignment or it is a conveyance to which Article 23 applies and if so, whether the order dated 22nd of November, 1997, passed by the Sub-

Registrar purporting to make a reference under Section 47 A of the Stamp Act, as applicable to the State of UP is not legal and without jurisdiction?

4) Whether the relevant date for determining the consideration entered in the document would be the market value of the property on the day of entering into the agreement for sale and not the date of presentation of the documents for registration?

12. We shall now proceed to deal with the

questions framed by us in this appeal. Let us first

consider the scope of Section 47 A of the Stamp Act

as amended by the State of UP, and the condition

precedent for invocation of Section 47 A of the Act

11 which would be necessary for passing an order

under the said Section of the Stamp Act as

applicable to the State of UP. Section 47 A was

substituted by UP Act 38 of 2001 with effect from

20th of May, 2002, whereby a provision has been

made to charge duty as per the market value of the

property valued in case of evasion of the stamp

duty. Section 47 A reads as under:

"47-A. Instruments of conveyance etc., if undervalued, how to be dealt with:- (1)(a) If the market value of any property which is the subject of any instrument on which duty is chargeable on the market value of the property as set forth in such instrument is less than even the minimum value determined in accordance with any rules made under the Act, the registering officer appointed under Indian Registration Act, 1908, shall, notwithstanding anything contained in the said Act, immediately after presentation of such instruments and before accepting it for registration and taking any action under section 52 of the said Act, require the person liable to pay the deficit stamp duty as computed on the basis of the minimum value determined in accordance with the said rules and return the instrument for presenting again in accordance with section 23 of the Registration Act, 1908.

12 (b) When the deficit stamp duty required to be paid under clause (a), is paid in respect of any instrument and the instrument is presented again for registration, the registering officer shall certify by endorsement thereon, that the deficit stamp duty has been paid in respect thereon and the name and the residence of the person paying them and register the same.

(c) Notwithstanding anything contained in any provision of the Act, the deficit stamp duty may be paid under clause (a) in form of impressed stamp containing such declarations as may be prescribed.

(d) If any person does not make the payment of deficit stamp duty after receiving the order referred to in clause (a) and present the instrument again for registration, the registering officer shall, before registering the instrument, refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon.

(2) On receipt of a reference under sub section (1) the Collector shall, after giving the parties a reasonable opportunity of being heard and after holding an enquiry in such manner as may be prescribed by rules made under this Act, determine the market value of the property which is the subject of the instrument and proper duty payable thereon.

(3) The Collector may suo moto,or on a reference from any court or from the Commissioner of Stamps or an Additional Commissioner of Stamps or a Deputy Commissioner of Stamps or an Assistant Commissioner of Stamps or any Officer authorized by the Board of Revenue in

13 that regard, within four years from the date of registration of any instrument on which duty is chargeable on the market value of the property, not already referred to him under sub section (1), call for and examine the instrument for the purpose of satisfying himself as to the correctness of the market value of the property which is the subject of such instrument and the duty payable thereon, and if after such examination he has reason to believe that the market value of such property has not been truly set forth in the instrument, he may determine the market value of such property and the duty payable thereon.

Provided that, with the prior permission of the State Government, an action under this sub section may be taken after the period of four years but before the period of eight years from the date of the registration of the instrument on which the duty is chargeable on the market value of the property.

Explanation- The payment of deficit stamp duty by any person by any order of the registering officer under sub section (1) shall not prevent the Collector from initiating proceedings on any instrument under sub section (3).

(4) If on enquiry under sub section (2) and examination under sub section (3) the Collector finds the market value of the property-

a) truly set forth and the document duly stamped, he shall certify by endorsement that it is duly stamped and return it to the person who made the reference

b) not truly set forth and not truly stamped, he shall require the payment

14 of the proper duty or the amount required to make up the deficiency in the same together with a penalty of an amount not exceeding four times the amount of proper duty or the deficit portion thereof.

(4A) The Collector shall also require along with the deficit stamp duty or penalty required to be paid under clause (ii) of sub section (4), the payment of a simple interest as a rate of one and a half per mensum on the amount of deficit stamp duty calculated from the date of execution of the instrument till the date of actual payment.

(4B) The amount of interest payable under sub section (4A) shall be added to the amount due and also deemed for all purposes for the amount required to be paid.

(4C) Where the realization of the deficit stamp duty remains stayed by any order of any court or any authority and such order is subsequently vacated, the interest referred to in sub section (4A) shall be payable also for the period during which the order or stay remained in operation. (4D) Any amount paid or deposited by, or recovered from, or refundable to, a person under the provision of this Act, shall first be adjusted towards the deficit stamp duty or penalty outstanding against him, and the excess, if any shall then be adjusted towards the interest, if any, due from him (5) The instrument produced before the Collector under sub section (2) or sub section (3) shall be deemed to have come before him in performance of his function (6) In case the instrument is not produced within the period specified by the

15 Collector, he may require payment of deficit stamp duty, if any, together with penalty on the copy of instrument in accordance with the procedure laid down in sub section (2) and (4)."

13. Before the introduction of Section 47 A in the

Stamp Act, there was no provision under the said

Act empowering the revenue authorities to make an

enquiry regarding the valuation of the property

conveyed for the purpose of determining the duty

chargeable, if, the registering authorities were of the

view that the valuation shown in the document was

undervalued. This was reflected through the

decision in Himalaya House Company vs. Chief

Controlling Authority & another, AIR 1972 SC

898, whereby this court held that the stamp duty

was chargeable as conveyance under Article 23 and

the Collector (Stamps) was not entitled to charge

stamp duty on a document presented for

registration except on the consideration set forth in

the document. Pursuant to this judgment, several

16 States amended the Stamp Act. The State of UP also

introduced an amendment by way of Section 47 A,

which has been quoted herein above. Thus, the

object underlying Section 47 A of the Indian Stamp

Act is to neutralize the effect of under valuation of

immovable property under registered instrument of

sale or exchange or gift or partition or settlement.

From a bare perusal of sub-section (1) of Section 47

A of the Act, it is clear that if the market value of

any property, which is the subject matter of an

instrument on which stamp duty is chargeable, as

set forth in the instrument, is less than even the

minimum value determined in accordance with the

rules made under this Act, the registering officer

shall request the person to pay the deficit stamp

duty and present the instrument again for

registration. At the same time, it should be kept in

mind that it is not enough for the authorities for the

purpose of invoking Section 47 A that the

consideration amount stated in the instrument of

17 sale is less than the prevailing market value but

they must be satisfied that there is an attempt of

under valuation. It is pertinent to mention that if

the registering authority finds that the market value

of the property presented for registration is higher

than the one shown in the document, in that case,

the registering authority after presentation of such

instrument and before accepting the document for

registration would ask the person liable to pay the

required stamp duty, to pay the deficit amount as

computed on the basis of the minimum value

determined in accordance with the rules and return

the instrument for presenting the document again

in accordance with Section 23 of the Registration

Act. Again a close look at Sub-Section (2) of Section

47 A reveals that in case such an officer has reason

to believe that the market value of the property has

been under valued, he shall refer the same to the

Collector but only after registering the same.

Even for the sake of argument, if we assume that

18 Section 47 A is applicable in the present case, then

also it is apparent that in the current scenario, the

registering authority could not register the said

instrument before referring it to the Collector which

has been mandated under the Act. For the further

illustration of this point, we may refer to the

decision of this Court in State of Punjab vs.

Mahavir Singh, (1996) 1 SCC 609, where this

Court has categorically held that whenever a

document is presented for registration, the Sub-

Registrar is required first to register the document

and then make a reference under Section 47 A if he

deems fit and proper.

14. Before we proceed further to ascertain whether

Section 47 A would at all be applicable in the

present case at our disposal, we have to first

establish whether the alleged documents were

deeds of assignment falling under Article 63 of the

Schedule 1-B of the Stamp Act as applicable to the

19 State of UP, or they were deeds of conveyance, as

defined in Section 2(10) of the Stamp Act to which

Article 23 would be applicable. It is only after this

question is properly answered, that we can proceed

to answer whether Section 47 A would be applicable

in the present case.

15. The learned counsel for the appellant

contended that since Article 63, Schedule 1-B of the

Act is a specific provision that deals with transfer of

lease by way of an assignment; it should be

excluded from general provisions. This Article is the

charging provision for such transfers. It provides for

the duty to be charged which is equal to

conveyances as provided in Article 23 of the said

Schedule, the only distinguishing factor being that

in the former, the rate of duty would be according to

the consideration mentioned in the deed, while the

later states the exact duty chargeable. The learned

counsel also contended that for application of

20 Article 23, it is necessary that there is a

conveyance. It was also contended by him that the

main condition for registration of an instrument is

that it must be chargeable to duty on the market

value and the same is possible in case of an out

right sale. In case of lease, only partial rights are

transferred and the right of reversion remains with

the lessor whereas in case of sale, there is an

absolute transfer of ownership. Therefore, we have

to establish whether the documents presented for

registration were, in fact, an out right sale or a deed

of lease. The learned counsel appearing on behalf of

the respondent no 4. (i.e. being the Noida

authorities) contended that the deed was a

composite deed of assignment and sale owing to

which both Articles 23 and 63 would be applicable.

The Division Bench of the High Court in its

impugned judgment also agreed to this contention.

Thus, considering this, it becomes essential for us

to determine the nature of the deed.

21

16. "Sale" has been defined under section 54 of

the Transfer of Property Act. Although the Indian

Stamp Act 1899 has not included the definition of

"sale", Section 2, sub-section (10) of the Act defines

"conveyance" as including a conveyance on sale and

every instrument by which property, whether

movable or immovable, is transferred intervivos and

which is not otherwise specifically provided for by

Schedule 1-A or Schedule 1-B, as the case may be.

"Lease" has been defined under section 105 of the

Transfer of Property Act and also in section 2 sub

section (16) of the Indian Stamp Act 1899.

According to section 2 sub section (16) of the Indian

Stamp Act, "Lease" means a lease of immovable

property and includes a Patta, a kabuliyat or any

instrument by which tolls of any description are let,

any writing on an application for lease intended to

signify that the application is granted and finally

any instrument by which mining lease is granted in

respect of minor minerals as defined in clause (e) of

22 section 3 of the Mines and Minerals (Regulation and

Development) Act, 1957.

17. From a plain reading of Section 54 and Section

105 of the Transfer of Property Act, there cannot be

any doubt in our mind that in case of a lease, there

is a partial transfer and the right of reversion

remains with the lessor. Whereas in case of a sale,

there must be an absolute transfer of ownership

and not some rights only as in the case of a lease.

Therefore, it is to be considered whether the

document in question, which was presented for

registration, was a partial transfer and accordingly,

it was a lease, or whether it involved any outright

sale therein. As noted herein earlier, a lease deed

was executed by the lessor in favour of the co-

operative societies and its members. It is an

admitted position that the lessor namely Noida

Authorities had entered into the lease agreement

with the co-operative societies and their members,

23 being lessees and the sub-lessees respectively, and

the sub-lessees further entered into the agreements

with the assignees (members of the appellant

association). Such being the position, it is amply

clear to us that the document in question presented

for registration before the registration officer was, in

fact, a lease and the transfer to the members of the

association was an assignment of the leasehold

rights. It cannot be doubted that the demised land

was merely an enjoyment of the land and not

transfer of the ownership.

18. In order to appreciate whether a document is a

sale or a lease, reference can be made to the case of

Byramjee Jeejeebhoy (P) Ltd. vs State of

Maharashtra (AIR 1965 SC 590), where this

Court formulated the following principles for

determination of the aforesaid question:

"Such a grant cannot be regarded as a lease, for a lease contemplates any right for a transfer of a right in a consideration

24 price paid or promised or service or other things of value to be rendered periodically or on specified again to the transferor. The grant does not purport to demise a right of enjoyment of land. It confers right of ownership in then land. There is gain no contractual right reserved. It is specifically or by implication to determine the right. The reservation and reversion remained and remains yearly and runs, years and profits of all lands determine and property in the premise is of nature of a restriction upon the said transfer and does not restrict the equality of the said. The rent to be demanded was again not stipulated as consideration for the grnat of the right to enjoy the land but expressly in consideration of grnating freedom from liability to pay assessment."

[Emphasis supplied]

19. The High Court in the present case decided

that the document given for registration contained a

composite deed of lease as well as a deed of sale.

Therefore, both Article 63 as well as Article 23 of

the said Act would apply. We cannot agree with

these observations of the Division Bench of the High

Court. As mentioned earlier, the said document

consists of a single deed of assignment of lease. The

25 Division Bench construed the transfer of the land

as an assignment of lease whereas the transfer of

the building appurtenant thereto to be through a

deed of sale. It appears to us that the High Court

has clearly not interpreted the true essence of the

lease deed executed between the lessor and the

lessees. The learned counsel appearing on behalf of

the appellant has brought to our notice that the

said lease deeds categorically provided that not only

the land but the appurtenants attached thereto are

also governed by its covenants as per para "k" of the

said deed which states that every transfer,

assignment, relinquishment, mortgage or sublet of

the property shall be bound by the covenants of the

deed along with the assignee being answerable to

the Noida authorities in all respects. The appellant

has also brought to our notice that para "g" of the

said deed states that the lessee/ sub lessee would

only be allowed to make any alterations in the

building with the prior permission of the authority

26 and would also be liable if any deviations from the

permission obtained is brought to light. Moreover,

the concerned lease deed specifically provides for a

lease of 99 years of the land along with its

appurtenances thereto with the right of reversion.

So it is clear from the above-mentioned provision

that the land along with its appurtenants would be

reversed back to the lessor after the stipulated

period. The alleged document is therefore a transfer

of the assignment of lease and not an outright sale

of its appurtenants. The learned counsel appearing

on behalf of the respondent No.4 (being the Noida

Authorities) had contended that the lessee or the

sub lessee have absolute rights over the buildings

constructed by them and hence the lessor has no

right over them. Therefore, the lessee or the sub-

lessee can transfer such buildings by way of an

outright sale and the same cannot be the subject

matter of an assignment of lease. We are in a

position to accept this submission of the Noida

27 Authorities. It is clear from para (b) of section III of

the lease deed executed between Noida and the

sub-lessees that:

"At the time of re-entry the demised premises shall not have been occupied any building constructed by the sub-lessee therein the sub lessee shall within a period of three months from the date of re-entry, removes from the demised premises all erections or buildings, fixtures and things which at any time and during the said terms shall be affixed or set up within or upon the said premises and leave the said premises in as good a condition as it was on the date of demise, in default whereof the same shall become the property of the lessor without payment of any compensation to the lessee/ sub lessee for the land and the building fixtures and things thereon, but upon the sub lessee removing the erection buildings, fixtures and things within the period hereinbefore specified, the demised premises shall be re-allotted and the lessee/ sub lessee may be paid such amounts as may works out in accordance......."

20. Therefore, the only question which comes to

our mind is that if the lessee or the sub lessee has

an absolute right over the constructions

constructed by him and he can transfer it by an out

28 right sale and not through an assignment of lease

as contended by the Noida Authorities, the lease

deed would not have provided for such a clause

wherein the Noida authorities have a right over the

buildings and the appurtenants on the land in case

of any failure of the sub-lessee to remove such

constructions at the time of re-entry. Thus the said

lease deed specifically provides for a right of

reversion to the land and appurtenances thereto

including buildings, on the termination or expiry of

the lease. It is thus clear that the buildings and all

other appurtenants attached to the land become a

part of the assigned transfer through lease and not

a separate sale.

21. Moreover section 3 of the Transfer of Property

Act states that when an immovable property such

as land is transferred by way of assignment of lease,

all appurtenances thereto attached to the earth

29 such as buildings and fixtures thereto would also

stand assigned.

22. Accordingly, on a plain reading of the deed of

assignment, we are of the view that the assignees

became liable to the lessor, namely Noida on the

covenants running with the land. In conclusion, we

are, therefore of the view that the deed presented

for registration was a deed of assignment.

23. Before we part with this aspect of the matter,

that is to say, whether the document/instrument

was in fact a deed of assignment or an outright sale,

we must also keep in mind that the nomenclature

to the document of assignment cannot be said to be

determining factor in deciding whether a particular

deed or document was a lease or a deed of

assignment. In Madras Refinery Ltd. vs. C.S. [AIR

1977 SC 500], it was held that in order to decide

whether a particular document is a lease or a deed

of assignment, one has to look at the substance of

30 the deed of assignment to the document and not

the nomenclature. Therefore, it must be held that

no importance can be given to the nomenclature to

the document. Although some of the members of

the association had termed the document as a deed

of sale or transfer cum sale deed instead of as a

deed of assignment, it remains as a deed of

assignment as has been noted above by us.

24. Keeping the above position in mind, we,

therefore, would deal with the question as to

whether Article 63 of Schedule 1B of the Stamp Act,

as applicable to the State of UP will apply to the

document in question, or whether Article 23 of the

Stamp Act will be applicable in the present case.

Article 63 deals with transfer of lease by way of

assignment and provides that in such a case, the

duty that would be payable is the same duty that

would be payable in case of conveyance (Article No.

23) for a consideration equal to the amount of

31 consideration for the transfer. A plain reading of

Article 63 of the Schedule 1-B to the Stamp Act

would, however, show that the stamp duty

chargeable to a document is not on the market

value of the property but on consideration indicated

in the same. It is only the rate of duty, which is to

be taken from Article 23. Therefore, if Article 63 of

the Stamp Act is to be applied, duty shall be paid

on the consideration of the amount of consideration

shown in the deed itself and not on the market

value of the land or the construction thereon.

Therefore, it is clear from a reading of Article 63

that it would apply in case of a transfer of lease by

way of an assignment and Article 23 applies in case

of a conveyance by way of sale. Article 63 in clear

terms mentions that in case of an assignment, the

duty that would be payable is the same duty as

conveyance for a consideration equal to the

amount of the consideration for the transfer.

Thus it is clear that the duty is not calculated on

32 the market value but on the amount of

consideration mentioned in the deed itself. It is

expedient to have a look at the Stamp Acts as

applicable to the State of Tamil Nadu and Union

Territory of Pondicherry for elaborating our point

made above. From the Stamp Act of Tamil Nadu

and Pondicherry, we find that Article 63 as

applicable to the same provides that in case of

assignment by way of lease, the duty that would be

payable is the duty as a conveyance for a market

value equal to the amount of the consideration

for the transfer. Therefore, it is clear that in these

areas, a clear intention has been expressed that

duty should be payable for a market value equal to

the amount of the consideration for the transfer

whereas if we refer Article 63 as applicable to the

State of UP, it mentions that duty would be payable

for a consideration equal to the amount of the

consideration for the transfer. The legislature

expressly has specified therefore that the stamp

33 duty payable in case of an assignment would not be

calculated on the market value of the property but

on the consideration set forth in the deed itself.

25. In view of the above observation, we may note

that it was not open to the registering officer to

embark upon an enquiry into the market value of

the land or the building in view of the fact that it is

only the leasehold rights which are only transferred

by way of assignment by the document/instrument

presented for registration.

26. Section 47 A would be applicable only when

Article 23 is applicable. In case Article 63 applies,

the registration officer does not have any

jurisdiction to enquire into the market value of a

property under Section 47 A of the said Act. It is to

be noted that the power under Section 47 A of the

Act can be exercised in respect of an instrument

presented for registration on which duty must be

34 charged on its market value. Thus Section 47 A

applies in case of an outright sale. Since in this

case, the instrument in question is not an out right

sale but a lease hold right, therefore, the question

arises whether the condition precedent mentioned

in the Act has been fulfilled and, if not, the

reference under Section 47 A was invalid. Moreover,

even if we assume that Section 47 A applies in this

case; we have to enquire whether the appellant

intentionally tried to undervalue the property in the

alleged document. At this juncture, it is necessary

to again consider Section 47 A. Section 47 A clearly

provides that when the valuation shown in the

agreement presented for registration is, according to

the authorities, under valued, in that case, the

registering authorities are conferred with the

discretion to hold an enquiry to find out if the duty

chargeable on the market value of the property is

less than even the minimum value determined in

accordance with the rules made under the Act. As is

35 evident from the records placed before us, the

appellant could not execute the sale deed because

of the failure of the respondent No.4, i.e. Noida

Authorities, to execute transfer memorandum due

to the orders of injunction passed in pending

litigations before the different courts. Therefore the

appellant cannot be faulted for not executing the

same. We have observed that the consideration

mentioned on the agreement to sell was absolutely

adequate with regard to the market value of the

property at that time and the same was registered

before the registering authority. Moreover, we find

that there are no allegations on record against the

appellant of under-valuation at the time of entering

into the agreement for transfer of the property.

Therefore we do not see any fraudulent intentions

on the part of the appellant to under value the

property in order to evade stamp duty paid thereon.

Since the stamp duty is to be charged on the

consideration mentioned in the document under

36 Article 63 of Schedule 1-B of the Act in case of an

assignment of lease, the consideration mentioned

on the document was adequate in respect of the

time when the agreement of the transfer by way of

lease was registered. It would be a different

question that when the said deed is to be executed,

the value of the said property has increased with

the passage of time. The execution of the deed had

not been delayed due to any fault on the part of the

appellant and therefore he cannot be held liable for

intentionally suppressing the value of the property.

Moreover as we have noticed, the appellant did not

make any undue delay in executing the deed after

the Noida Authorities issued the transfer

memorandums. Therefore, considering the above

circumstances, it would be unwise to say that the

appellant had any intention to evade the stamp

duty as specified under the Act. Thus even if

Section 47 A of the Act would have applied, the

registering officer would have no jurisdiction to refer

37 it to the Collector since there was never any

intention on the part of the appellant to undervalue

the property.

27. Having decided the aforesaid questions raised

in this case, we now proceed to deal with the

question as to the date of determination of the

consideration mentioned in the document. The

respondents contended that the consideration

mentioned should be the market value of the

property on the date of execution of the deed and

not on the date when the agreement to sell the land

was executed. The appellants on the contrary

argued that the relevant date in order to calculate

the consideration would be the market value on the

date when the agreement to transfer the land was

entered and registered. We have heard the

argument of the parties and referred to various

cases dealing with this matter. In this regard, we

would like to observe that there cannot be a

38 straightjacket formula devised for determining the

same. It would depend on the various facts and

circumstances of a particular case. In situations

where the delay is caused on the part of a party

intentionally while executing a deed after entering

into an agreement of sale or lease as the case may

be, the market value should be determined on the

date when the deed is executed and not when an

agreement to sale the property or lease the property

had been registered. But in cases where a person is

not at fault and the delay is caused due to the

lessor as in this case, the market value should be

determined on the date when the agreement to

lease the property was entered. The lessee or the

sub lessee should not suffer due to the inability of

the lessor in handing over transfer memorandums

as is required under the lease. For this, a reference

can be made to the case of S.P. Padmavati vs.

State of Tamil Nadu & Others. [AIR 1997 Mad

296], which is similar to the present case and to

39 which we are in respectful agreement where the

property could not be registered due to no fault of

the transferee and where the consideration was

frozen earlier, as in the current case. The Madras

High Court held that the relevant date for

calculation of market value and the stamp duty is

the date on which the consideration was frozen.

28. Since in view of our discussions made herein

above that this was the case of assignment of a

lease which has to be dealt with in accordance with

the provisions under Article 63 of the Schedule 1-B

of the Act which says that the duty shall be charged

as per Article 23 on the consideration mentioned in

the deed and not on the market value. So the

question of determination of the market value does

not arise at all in case of an assignment of lease

which is to be charged as per Article 63 of the Act.

An enquiry under Section 47 A is also not

contemplated under the Act in case of an

40 assignment by way of lease unlike Article 23 of

Schedule 1-B of the Act which deals with Stamp

Duty to be levied on deed of sale. It is further

observed by us that Article 63 of Schedule 1-B,

being a specific Article, will have overriding effects

on all the general clauses of the Act. As has already

been mentioned, market value can be truly

determined in case of an outright sale. The present

case does not deal with such a situation.

29. Going by the aforesaid discussions, we are of

the view that the consideration to be mentioned in

the assignment of transfer by way of a lease would

be the market value of the property on the date of

agreement for sale when the property could not be

registered earlier due to no fault of the members of

the associations and when their consideration was

frozen earlier. Concerns can be raised that since

Article 63 of the Act deals with stamp duty to be

levied on the consideration set forth in an

41 assignment by way of transfer of lease, and not on

the market value of the property to be transferred, it

can be misused and remedy would not be available

under Section 47 A to determine the market value

of the property. This has to be taken care of by the

concerned Legislature and incorporate suitable

safeguards to prevent such misuse. For this

purpose, reference can again be made to the Stamp

Acts of the State of Tamil Nadu and Union Territory

of Pondicherry as applicable to these areas where it

has been specifically mentioned in Article 63 that in

case of an assignment by way of transfer of a lease,

the duty which would be payable is the same duty

as a conveyance for a market value equal to the

amount of the consideration for the transfer.

Thus it is clear that there is an express intention on

the part of the legislature in these areas to charge

the stamp duty on lease deeds according to the

prevalent market value unlike the Stamp Act as

applicable to the State of U.P. Therefore we cannot

42 go beyond that which has been provided under the

statute and decide otherwise. Thus we reiterate that

in the present circumstances, the consideration

would be that which has been mentioned in the

lease deed at the date of the agreement to enter into

the same and there is no scope for looking into the

market value of the property under the provisions of

the Act in case of an assignment by way of a

transfer of lease under Article 63 of the Schedule 1-

B of the Act.

30. Thus accordingly, setting aside the judgment

of the High court we hold that in the instant case

Article 63 of Schedule 1-B of the Stamp Act, as

applicable to the State of U.P., which deals with

transfer of lease by way of assignment will apply to

the documents in question. We also hold that the

consideration to be mentioned in the document

would be the market value of the property on the

date when the agreement was entered into and not

43 when it was presented for registration, considering

the peculiar facts of this case.

31. In view of our discussions made herein above,

the appeal is thus disposed of. There will be no

order as to costs.

..............................J. [ARIJIT PASAYAT]

New Delhi; ........................... ....J. April 15, 2009. [TARUN CHATTERJEE]

44