Full Text
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.2540 OF 2023
Crystal Construction Company & Anr. ...Petitioner
….
Mr. Chetan Kapadia, Senior Advocate a/w. Mr. Shadab Jan, Mr. Levi
Rubens, Mr. Yohaan Rubens, Ms. Christine Rewrie, Ms. Tinaz Kapadia
& Ms. Unnati Bane i/b. L. R. & Associates, for Petitioner.
Mr. Himanshu B. Takke, AGP a/w. Mr. Manish Upadhye, AGP for
Respondent-State.
….
JUDGMENT
1. Rule. Rule is made returnable forthwith. With the consent of learned counsel appearing for the parties, petition is taken up for final hearing and disposal.
2. Petitioner has filed this petition taking an exception to the Order dated 16 September 2021 passed by Collector of Stamps, Andheri adjudicating the stamp duty leviable on Deed of Conveyance executed in Petitioner’s favour at Rs. 1,97,95,100/- by fixing the market value of the property at Rs. 41,69,02,000/-. Earlier, the Collector had passed order dated 16 March 2017 fixing the market value of the land at Rs. 30,55,88,000/- and had demanded stamp duty of Rs. 1,52,77,900/-. Petitioner filed Writ Petition No.714 of 2018 challenging order dated 16 March 2017. The issue before this Court in that Petition was about applicability of Proviso to sub-Rule 6 of Rule 4 of the Maharashtra Stamp (Determination of True Market Value of Property) Rules 1995 (Maharashtra Stamp Rules, 1995) under which, predetermined value in a sale conducted by the Government or Semi Government body or Government Undertakings or a Local Authority is required to be treated as true market value of the property for levy of stamp duty. This Court held that sale conducted by the Charity Commissioner is covered under the first Proviso of Rule 4(6). This Court accordingly remanded the proceedings before the Collector of Stamps for adjudication of stamp duty payable by taking into consideration the first Proviso to Rule 4(6) and Circular dated 13 October 2006. In remanded proceedings, Respondent No.2 conducted inquiry into the manner of sale held by the Charity Commissioner and the price at which it is sold vis-à-vis the market value as per the Annual Statement of Rates (ASR) and has held that the market value as per ASR will have to be considered for levy of stamp duty. Respondent NO. 2 has however applied ASR for the year 2021 and increased the market value to Rs. 41,69,02,000/- which was earlier fixed at Rs.30,55,88,000/- in previous order and has called upon Petitioner to pay Rs. 1,97,95,100/- as stamp duty.
3. A brief factual narration as a prologue to the Judgment would be necessary. Property bearing Survey No.8, Hissa No.1 (part) corresponding CTS No.201 admeasuring 3531.30 sq. mtrs. at village Marol, Mumbai (the land) was owned by A. H. Wadia Trust, which is public trust registered under the provisions of Maharashtra Public Trusts Act, 1950 (the Trust Act). The trust land was apparently affected by large scale encroachments. Due to its inability to clear the encroachments, the Trust decided to alienate the land and published a Notice in newspapers for sale thereof. The Trust obtained valuation report in respect of the Trust property from M/s. C. D. Vaidya & Co., a Government Architect and Valuer, who valued the Trust property at Rs.1.28 Crores. Petitioner submitted an offer for purchase of the land, which was lower than valuation given by the highest bidder. The Trust decided to accept the valuation of highest bidder of Rs.1.60 Crores and filed an application under Section 36(1)(a) of the Trust Act before the Charity Commissioner seeking his approval. Some individuals intervened in the proceedings before Charity Commissioner, who directed to conduct fresh auction to get the best value in respect of the land. In the fresh auction so conducted, Petitioner offered to purchase the land at Rs. 2.10 Crores and by Order dated 26 April 2016, the Charity Commissioner accorded sanction for sale of the land to Petitioner on ‘as is where is basis’ and ‘as it is where it is basis’ for consideration of Rs. 2.10 Crores.
4. Petitioner submitted unexecuted Conveyance for adjudication to the Collector of Stamps, Andheri, who called for a report from Deputy Director of Town Planning regarding value of the land, who assessed the same at Rs. 30,55,58,000/-. The Collector of Stamps passed Order dated 16 March 2017 determining market value of the Trust property at Rs.30,55,88,000/and adjudicated the stamp duty payable of Rs.1,52,77,900/-. Petitioner’s appeal filed before the Additional Collector of Stamps under Section 32(B) of the Maharashtra Stamp Act, 1958 (the Stamp Act) was rejected holding that the Charity Commissioner did not fall within Proviso to Sub-Rule 6 of Rule 4 of Maharashtra Stamp Rules, 1995.
5. Aggrieved by the decisions of Additional Collector of Stamps and Collector of Stamps, Petitioner preferred Writ Petition No.714 of 2018 before this Court. This Court passed Judgment and Order dated 22 May 2020 holding that the Charity Commissioner would be covered by the Proviso to Rule 4(6) of Maharashtra Stamp Rules, 1995. This Court held that Petitioner’s case was required to be considered in the light of Circular dated 13 October 2006. This Court accordingly set aside the Order dated 16 March 2017 passed by the Collector of Stamps, Andheri and 29 May 2017 passed by the Additional Collector of Stamps, Mumbai and remanded matter to the Collector of Stamps, Andheri for fresh adjudication after providing an opportunity of hearing to the Petitioner in the light of the observations made by the Court.
6. Since the Order was not complied for a considerable period of time, Petitioner filed Contempt Petition (L) No.6815 of 2021. During pendency of the Contempt Petition, Respondent No.2 passed Order dated 16 September 2021 fixing the market value of the property at Rs.41,69,02,000/and adjudicating stamp duty at Rs.1,97,95,100/-. Petitioner filed Interim Application (L) No.3573 of 2021 in the Contempt Petition seeking to agitate his grievance with regard to passing of the impugned Order dated 16 September 2021. By Order dated 13 December 2022, this Court disposed of Interim Application and Contempt Petition granting liberty to Petitioner to file substantive petition for challenging the Order dated 16 September 2021. Accordingly, Petitioner has filed the present petition.
7. Mr. Kapadia, the learned senior advocate appearing for Petitioner would submit that the Respondent No.2 has overreached the Order passed by this Court on 22 May 2020 in Writ Petition No.714 of 2018. That this Court had remanded proceedings before Respondent No.2 for recording a finding that Charity Commissioner had followed the procedure under Circular dated 13 October 2006 to fetch the best value and that Respondent No. 2 was expected to consider the case in the light of the Circular dated 13 October 2006 and not on the basis of valuation given by the Deputy Director of Town Planning. That despite the specific remark made by this Court, the Respondent No.2 overstepped its authority and has sought to reopen the point, which was already decided by this Court. He would submit that the Authority could not have reopened points, which have been determined by the remanding Court. In support of his contentions, he would rely upon Judgment of this Court in Deokabai Ganpatsingh Solanke and others Vs. Miraj Hiraman Ingle and Others, (2001) 1 Mh.L.J. 600 and of Calcutta High Court in Smt. Bidya Devi Vs. Commissioner of Income Tax, Allahabad and Others, AIR 2004 Cal 63.
8. Mr. Kapadia would submit that the Respondent No.2 has overstepped the scope of remand and has redetermined issue of valuation. He would rely upon operative part of the Order to demonstrate as to how the Respondent No.2 has recorded finding contrary to the observations made by this Court in Order dated 22 May 2020.
9. Mr. Kapadia would further submit that the impugned Order of the Respondent No.2 is in violation of legal mandate under Proviso to Rule 4(6) of the Maharashtra Stamp Rules, 1995, which carves out an exception to the procedure of determination of market value as per ASR and creates a legal fiction to treat the predetermined value as market value for the purpose of levy of stamp duty.
10. Mr. Kapadia would rely upon Judgment of the Apex Court in Another, 2022 SCC OnLine 1554 holding that price fixed by Court for sale of property would be binding on the stamp and registration authorities and that no further inquiry is permissible. Relying on Judgment of this Court in Bharat Bijlee Ltd. Vs. State of Maharashtra & Ors., 2002 SCC OnLine Bom 1315, he would submit that the Respondent No. 2 cannot disagree with the determination of value made by the Charity Commissioner and that such an action would be in excess of jurisdiction.
11. Mr. Kapadia would further submit that the ASR guidelines are inapplicable in case of Court Sale which has attained finality. That ASR guidelines are applicable only in cases covered by Sub-Rule 1 to 6 of Rule (4) and not to cases covered by Proviso to Rule 4(6), which carves out an exception to the general procedure under Sub Rules (1) to (6) of Rule 4. That applying ASR guidelines to cases covered by Proviso to Rule 4(6) would render the Proviso otiose. That such interpretation would amount to reading into plain and unambiguous language of the statute. In support of his contention, he would rely upon Judgment of the Apex Court in Kaviraj Pandit Durga Dutta Sharma Vs. Navaratna Pharmaceutical Laboratories, AIR 1965 SC 980. Further relying on Judgment of the Apex Court in R. Sai Bharathi Vs. J. Jayalalitha and Others. (2004) 2 SCC 9 and this Court in Prasadnagar Co-operative Housing Society Ltd., Nagpur Vs. State of Maharashtra and Others., 2005 (2) Mh.L.J. 310, Mr. Kapadia would submit that ASR guidelines are not final and its nature can always be subjected to provisions of Section 31(3) of the Stamp Act.
12. Lastly Mr. Kapadia would submit that Petitioners are suffering on account of repeated erroneous Orders passed by the Respondent No. 2 and that this Court may set aside the Order dated 16 September 2021 instead of relegating Petitioner to alternate remedy of filing Appeal under Section 32B of the Stamp Act before the Additional Collector of Stamps. That mere availability of alternate remedy cannot be a ground for not entertaining the present petition in view of jurisdictional error committed by the Respondent No.2. He would rely on Judgment of this Court in Hindustan Unilever Ltd. Vs. State of Maharashtra and Another, 2020 (5) Mh.L.J. 47, and Judgments of Apex Court in Commissioner of Income Tax and Others Vs. Chhabil Dass Agarwal, (2014) 1 SCC 603 and M/s. Godrej Sara Lee Ltd. Vs. The Excise and Taxation Officer-cum-Assessing Authority & Ors. in Civil Appeal No.5393 of 2010 decided on 01 February 2023. He would submit that despite the sale transaction effected in pursuance of permission issued by Charity Commissioner on 26 April 2016 and despite payment of full amount of consideration to the Trust on 28 May 2016, Petitioners are still awaiting registration of the Deed of Conveyance. He would therefore pray for setting aside the impugned Order dated 16 September 2021 with a direction to Respondent No.2 to accept the valuation of Rs. 2.10 Crores arrived at by Charity Commissioner for registration of the Deed of Conveyance.
13. Per contra, Mr. Takke the learned AGP appearing for State would oppose the petition. He would submit that Petitioner has an alternate and equally efficacious remedy of filing Appeal before Additional Collector under Section 32B of the Stamp Act. That in previous round of litigation, Petitioner had approached this Court after availing alternate remedy of filing Appeal under Section 32B. That therefore in the present round of litigation, Petitioner cannot challenge the Order passed by the Collector of Stamps directly before this Court. In support of his contention of impermissibility to entertain the Writ Petition in the light of availability of alternate remedy, Mr. Takke would rely upon Judgments of the Apex Court in The State of Maharashtra and Others. Vs. Greatship (India) Limited, (2022) 4 S.C.R. 844 and The Assistant Commissioner of State Tax and Others. Vs. M/s. Commercial Steel Limited, (2021) 7 S.C.R. 660. Mr. Takke would therefore pray for dismissal of the petition on account of availability of alternate remedy.
14. Mr. Takke would then draw my attention to the Judgment of this Court in M/s. Shree Krishna Realtors & Ors. Vs. The Chief Controlling Revenue Authority & Ors., Writ Petition No.2453 of 2021 decided on 01 August 2022. He would submit that in identical circumstances, this Court has upheld the Order of determination of market value of properties sold by same Trust to another entity based on ASR. That the Judgment in Shree Krishna Realtors (supra) has been delivered after taking into consideration the Judgment of this Court in previous round of litigation instituted by Petitioner. That therefore ratio of the Judgment in Shree Krishna Realtors would prevail over the Judgment and Order dated 22 May 2020.
15. Mr. Takke would also take me through affidavit in reply filed on behalf of Respondent No. 2 to demonstrate misrepresentation and gross undervaluation of market value of the property by the Trust before Charity Commissioner and that Trust has committed fraud on the Charity Commissioner by grossly undervaluing the property. That the valuation of the property for the purpose of sale and the one for the purpose of stamp duty are two different concepts. That the valuation report prepared without referring to or taking guidance from ASR cannot be treated as valid valuation. That the report dated 18 June 2015 prepared at the behest of the Trust is in ignorance with ASR rates for the relevant year. That the valuation report was prepared without visiting the Trust property. That the valuation report of M/s. Vaidya and Associates is defective. That the impugned Order has been passed by duly considering the observations made by this Court in the Order. He would pray for dismissal of the petition.
16. Mr. Takke would further submit that estoppel operates against Petitioner, who participated in the process of adjudication, and that he cannot now be permitted to raise objection to the process thereof. That the valuation has been done by the Deputy Director of Town Planning, who is senior expert officer of State instrumentality, as per ASR guidelines. He would pray for dismissal of the Petition.
17. Rival contentions of the parties now fall for my consideration.
18. The issue that has attracted attention of this Court in this second round of litigation is about the value on which the instrument of conveyance is to be charged with stamp duty – whether it should be the value at which the land is purchased through auction conducted by Charity Commissioner? or whether it should be the market value as per the ASR? In previous round of litigation, the Collector of Stamps had raised a defence that Charity Commissioner is not covered by the Proviso to Subrule (6) of Rule 4. That defence was repelled by this Court and the proceedings were remanded before the Collector of Stamps for fresh adjudication of stamp duty leviable on the instrument of Conveyance. Petitioner is alleging breach on the part of Collector of Stamps of Order passed by this Court on 22 May 2020 passed in Writ Petition No. 714 of 2018. Before I go into the findings recorded by this Court and the allegation of breach of the Order, it would be necessary to have a quick overview of the statutory framework.
19. The Maharashtra Stamp Rules have been framed in exercise of powers under Section 69(1) and Section 69 (2) (d) read with Proviso to Section 69(3), Section 31(3) and Section 32-A(4) of the Stamp Act. Maharashtra Stamp Rules provide for determination of true market value of the property for levy of stamp duty under the provisions of the Stamp Act. Rule 4 of the Maharashtra Stamp Rules reads thus:
4. Annual statement of rates of immoveable property (1) The Joint Director of Town Planning and Valuation, Maharashtra State, shall prepare annual statement of rates showing average rates of lands and buildings situated in every Tahsil, Municipal Corporation or local body area with the help of such other officers as may be appointed by the Government from time to time and submit the other for approval to the Chief Controlling Revenue Authority, latest by last day of February of each year. (2) The data in respect of average rates of lands and buildings in every Tahsil, Municipal Corporation or local body area shall be arranged in the annual statement of rates as far as possible in ward-wise/zone-wise manner respect of urban properties and in respect of rural properties, taluka-wise, village-wise as the case may be. For the purpose of average annual rates, properties may be divided in group, sub-groups or classes after taking into account the type of the land, types of construction, location and situational advantages or disadvantages of property. While working out the average rates of land and buildings the concerned officers shall take into account the established principals of the valuation [Valuation Guidelines, if any] and any other details that they may deem necessary. (3) The Chief Controlling Revenue Authority shall by an order issue annual statement of rates showing average rates of land and buildings situated in every Tahsil, Municipal Corporations and local body area (hereinafter called "annual statement of rates") [along with valuation Guidelines;] as soon as they are made for the first time, and thereafter, every year on the 1st day of April), taking into account the average rates of lands and buildings prepared and submitted to him by the Joint Director of Town Planning and Valuation, Maharashtra State. (4) If the Chief Controlling Revenue Authority is not in a position to issue annual statement of rate as mentioned in sub-rule (3) above, on [1st day of April] in any year due to any administrative difficulties, the rates mentioned in the annual statement of rates for the year immediately preceding may be [revised] by the Chief Controlling Revenue Authority, in consultation with the Joint Director of Town Planning and Valuation, keeping in view the [increase or decrease, as the case may be] in market rates of immoveable properties. (5) The Chief Controlling Revenue Authority shall annually supply to the Sub- Registrar a copy of the above statement showing the average rates of lands and buildings situated within his jurisdiction [along with Valuation Guidelines isssued from time to time therefor]. Every registering officer shall cause a copy of the above statement to be affixed outside the Registration Office. (6) Every registering officer shall, when the instrument is produced before him for registration, verify in each case the market value of land and buildings, etc., as the case may be, determined in accordance with the above statement and Valuation Guidelines issued from time to time and if he finds the market value as stated in the instrument, less than the market value, determined as above, he shall refer the same to the Collector of the District for determination of the true market value of the property which is the subject matter of the instrument and the proper duty payable thereon: Provided that, if a property is sold or allotted by Government or Semi Government body or a Government Undertaking or a Local Authority on the basis the predetermined price, then value determined by said bodies, shall be the true market value of the subject matter property. Provided further that, where the property is purchased or acquired or taken over by the Government, Semi-Government Body or a Government Undertaking or Local Authority, then the actual value determined as consideration by the said bodies as mentioned in the deed, shall be considered to be the true market value of the subject matter property. Provided also that] where the market value has been stated in accordance with or more than that prescribed in the statement issued by the Chief Controlling Revenue Authority, but the Registering Officer has reason to believe that the true valuation of the immoveable property cannot be arrived at without having recourse to local enquiry or extraneous evidence he may, before registering such instrument, refer the same to the Collector of the District for determination of true market value of property and the proper duty payable thereon. (7) All the Registering Officers shall send to the Town Planning and Valuation Officers appointed to assist the Joint Directors of Town Planning and Valuation for preparation of annual statement of rates, the extract of the register in respect of the instruments presented for registration in which consideration for the subject property is stated to be more than the annual statement of rates by 30th day of the following month. (8) All the Special Land Acquisition Officers appointed under the Land Acquisition Act, 1894, or any other Act for the time being in force in respect of acquisition of lands and properties for public purpose shall, whenever the amount of compensation awarded by them is higher than the one payable on the basis of annual statement of rates issued by the Chief Controlling Revenue Authority under sub-rule (3) and (4) above, send a copy of such award to the Town Planning and Valuation Officers appointed to assist the Joint Director of Town Planning and Valuation for preparation of annual statement of rates, referred to in sub-rule (7) above, within 30 days from the date of payment of compensation. (9) Notwithstanding anything contained in this rule, the Government may, either suo-motu or otherwise, issue such directions to the Chief Controlling Revenue Authority with regard to the preparation of annual statement of rates as it may deem appropriate, by giving reasons in writing and such directions shall be binding on the Chief Controlling Revenue Authority.
20. Thus, under Rule 4, the Joint Director of Town Planning and Valuation is required to prepare ASR showing average rates of lands and buildings and submit the same for approval to the Chief Controlling Revenue Authority (CCRA), who issues the ASR alongwith further guidelines every year on first day of April. The CCRA is also required to supply to the Subis required to verify the market value of land and buildings in respect of the instrument produced before him for registration determined in accordance with ASR and other guidelines. Thus the broad scheme of Sub-Rules 1 to 6 of Rule 4 is that if the Registering Officer finds market value declared in the instrument to be less than the value reflected in ASR, he is required to refer the instrument to the Collector for determination of true market value of the property. Thus, the Scheme of Rule 4 is such that CCRA publishes ASR on first day of April every year on the basis of the rates submitted to him by the Joint Director of Town Planning and Valuation. The Registering Officer, who receives copy of ASR from CCRA, is required to ensure that valuation of instrument presented before him for registration reflects market value in accordance with the one published in the ASR. Thus, instrument in respect of immovable property, value of which is less than ASR can be referred by the Registering Officer to the Collector. The exception to this general rule is carved out in the first and second Proviso of Sub-Rule 6 of Rule 4 under which the predetermined price of property sold by Government or Semi- Government body or Government Undertaking or Local Authority is required to be treated as true market value of the property, even if the same is less than the ASR. Second Proviso applies to purchase or acquisition of property by State Government or its instrumentality, where again the actual value determined as consideration is required to be taken as true market value. Broad framework of Rule 4 is such that the first Proviso to Subrule (6) is attracted in case of immovable property sold by Government or Semi- Government or its instrumentalities and the valuation cannot, rather need not, be done as per the ASR.
21. While I could have delved deeper into the statutory framework of Rule 4, exercise need not be repeated on account of detailed Judgment delivered by this Court in first round of litigation on 22 May 2020. Mr. Justice N. J. Jamadar, while deciding Writ Petition No.714 of 2018, faced an objection raised by the State Government that the sale effected by Charity Commissioner under Section 36 of the Trust Act is not covered by the first Proviso to Sub-Rule 6 of Rule 4. This Court repelled the objection after taking into consideration the provisions of the Maharashtra Stamp Rules as well as decisions of this Court in Shailesh Developers and others vs. Joint Charity Commissioner, Maharashtra and others, reported in 2007 (4) of MR 100 and Pinak Bharat and Company vs. Bina V. Adani vs. Anil Ramrao Naik Commercial Execution Application No.22 of 2016 decided on 27 March 2019 and held in paragraph Nos. 21 to 27 as under:
21. The aforesaid pronouncements indicates as to how a sale through Court stands even on a higher pedestal than the sale by the authorities envisaged by the first proviso to sub-rule (6), namely, sale or allotment by the Government or Semi-government Body or a Government undertaking or a local authority on the basis of the predetermined price, when the method of auction sale is resorted to, which in itself provides for an open competitive bidding. In the event the process of sale through auction is preceded by obtaining a valuation certificate from an approved valuer and thereafter the open competitive bids are invited then the said process has all the trappings of a process which ensures the objective of fetching of a true market value of the property. The aforesaid pronouncement governs the sale of the trust property by the Charity Commissioner under section 36 of the Trust Act, 1950, provided the elements of prior valuation of the trust property and the sale of the trust property through auction process are adhered to.
22. There is another factor which has a significant bearing on the determination of the market value of the property sold through the aegis of the Charity Commissioner. The authorities were not justified in totally eschewing from consideration the factum of the sale of the trust property by the Charity Commissioner by opining that the said sale by the Charity Commissioner does not fall within the categories of the sale exempted by the proviso to sub-rule (6) of Rule 4 of the Rules, 1995. The circular dated 13th October, 2006, issued by the Controller of Stamps, State of Maharashtra, indicates that while determining the market value of the property sold by the orders of the Charity Commissioner, the adjudicating authorities shall call for certain information, namely, whether there was a public notice of auction, whether the value at which the property was sold was obtained in a public auction conducted by the Charity Commissioner. In case, the transaction is otherwise than by public auction it shall be ascertained as to how the Charity Commissioner arrived at the value of the trust property while according sanction for its sale. In the event no documents were forthcoming on the aforesaid points then the competent authorities shall determine the market value in accordance with the provisions contained in Sections 31, 32A and 33 of the Stamp Act, 1958.
23. The aforesaid circular thus equates the sale of the trust property by the orders of the Charity Commissioner with the sale and/or allotment of the property by the authorities enumerated in the first proviso to sub-rule (6) of Rule 4. The circular further envisages the procedure to be followed where the competent authorities entertain a genuine doubt about the correctness of the value of the property which is sold under the orders of the Charity Commissioner. The authorities in the instant case were thus not within their rights in totally discarding the determination of the value of the trust property by the learned Charity Commissioner on the premise that the said 'authority' is not enumerated in the proviso to sub-rule (6) of Rule 4.
24. The situation is further accentuated by the fact that in the case at hand the Charity Commissioner had followed the requisite process to fetch the best value. The trust itself had issued public advertisements. The trust had professed to sell the trust property to the highest bidder. The entire transaction was backed by a valuation certificate issued by the approved valuer, which the learned Charity Commissioner took into account. The Charity Commissioner, in turn, conducted a fresh auction to obtain the best price. Furthermore, the challenge to the order of the Charity Commissioner was repelled by this Court by order dated 18th October, 2016, in Writ Petition No.5987 of 2016.
25. The upshot of aforesaid consideration is that the Collector of Stamps committed a manifest error in not at all adverting to the fact that the learned Charity Commissioner had determined the value of the trust property by following requisite process to ensure the best value, and determining the market value of the trust property on the sole premise that there was vast difference in the value determined by the Deputy Director, Town Planning and the value at which the learned Charity Commissioner accorded sanction for sale. The appellate authority also fell in error in opining that the sale by the order of the Charity Commissioner did not fall within the ambit of the first proviso to sub-rule (6) of Rule 4. The authorities have singularly missed to take into account the fact that there were 36 unauthorised occupants over the trust property and they were stated to be in occupation of the trust property since 1980, and, thereby the value of the trust property was considerably diminished. It is trite that the property occupied by the encroachers / hutment dwellers does not get the expected price. Indubitably, the fact that the property is under encroachment since decades affects its price considerably. There is no consideration at all on these aspects of the matter as well.
26. The upshot of aforesaid consideration is that the impugned orders deserve to be quashed and set aside since the authorities have not considered the very instructions issued by the Controller of Stamps in the circular dated 13th October, 2006, and have proceeded to determine the market value solely on the basis of the valuation report of the Deputy Director, Town Planning. It would be in the fitness of things to direct the Collector of Stamps, Andheri, Mumbai - respondent no.2 to adjudicate the stamp-duty on the instrument in question after providing an effective opportunity of hearing to the petitioner and in the light of the aforesaid observations.
27. Hence, the writ petition stands allowed in the following terms:
(i) The order dated 16th March, 2017 passed by respondent no.2 determining the market value of the trust property and the order dated 29th May, 2017, passed by respondent no.1, on appeal, are hereby quashed and set aside.
(ii) The matter stands remitted back to respondent no.2 for a fresh adjudication after providing an opportunity of hearing to the petitioner and in the light of the observations made by this Court.
(iii) The petitioner shall appear before respondent no.2 on 6th July
2020.
(iv) Respondent no.2 shall make an endeavour to adjudicate the stamp-duty within a period of two months from the date of the first appearance of the petitioner before respondent no.2.
22. However, when the proceedings were remanded to Respondent No.2 for fresh adjudication in accordance with observations made by this Court, Respondent No.2 proceeded to redetermine the market value of the property. The operative portion of the Collector’s Order reads thus: परंतू सदरील ckch वि चारात ?ks ऊन मूल्यांकन करण्याची पध्दत gh वि कसन कराराP;k (Development Agreement) दस्ताचे मूल्यांकन करतांuk ापरा याची प/nr असल्याचे नमूद क#u o प्रकरणाधीन दस्त gk (Deed of Conveyance) खरेदीखत असत्याus सदरील प्रकरणी C.D. Vaidya & Co Architect and Valuers यांनी विनf'pr क े लेले मूल्य xzkg~; धरता येणार नाही. त्यामुळे या काया#लयाने पूर्वि ewY;kadu करतांना विनश्चि&त क े लेले मूल्य रु 30,55,58,000/- हेच योग्य असल्याचे uewn करून पुढील योग्य ती काय# ाgh करा ी असे या dk;kZy;kl कळवि लेले होते. तसेच प्रकरणी मा. धम#दाय आयुक्त यांच्या पर ानगीने जाfgj प्रकटन देऊन प्रकरणाधीन दस्तामधील मालमतेचा लिलला क े ला असला तरीदेखील लिलला प्रक्रीयेसाठी आ श्यक असणारी आधारभूत मूल्य (offset price) विनश्चि&त करतांना वि श्वस्त संस्थेने नेमलेल्या खाजगी मूल्यधारक C.D. Vaidya & Co. Architect and Valuers यांनी मालमतेचे मूल्य विनश्चि&त करतांना cktkjewY; दरपत्रकातील मूल्यविनधा#रणाकरीrk ek. नोंदणी egkfujh{kd मुद्रांक विनयंत्रक, यांनी बाजारमुल्य दरपत्रकामध्ये विदलेल्या माग#दर्श#क सूचनांचे अंमलबजा णी क े ल्याचे विदसून येत नाही, कारण प्रकरणाधीन nLr gk खरेदीखत / अभिभहस्तांतरण (Deed of Conveyance) pk दस्त असून सदर बाब पक्षकारांनी सुध्दा दस्ताचे भिर्शर्ष#क Deed of Conveyance असे घोर्षीत क े लेले आहे. सदरील प्रकारच्या nLrkps मूल्य fuf’pr करतांना cktkjeqY; दरपत्रक 2016-17 मधील सूचना क्रमांक 1,[2] 3 वि चारात घेऊन मूल्य विनश्चि&ती करणे आ श्यक होते. परंतू खाजगी मूल्यधारक C.D. Vaidya & Co. Architect and Valuers यांनी मूल्य विनश्चि&त करतांना दस्ताचे स् रूप gs वि कसनकरारनामा (Development Agreement) असे वि चारात घेऊन वि कास विनयंत्रण विनयमा ली 1991 वि चारात येऊन आभिण बाजारमूल्य दरपत्रकातील माग#दर्श#क lwpuk dzekad 21, 23, 24, 25 यापैकी सूचना वि चारात ?ksoqu मूल्यांकन क े ल्याचे विदसून येत आहे. तसेच दस्तामधील नमूn मालमत्तेचे आधारभूत मूल्य (offset price) fuf’pr करतांना वि कासकाला सदर ekyeRrse/kwu होणाऱ्या नफ्यास (return of the investment) मालमत्तेचे मूल्य (purchase price) म्हणून वि चारात घेतलेले विदसून येते. आभिण त्यास मा. धम#दाय आयुक्त यांनी मान्यता विदल्याचे विदसून येते. okLrfodr% सदर प्रकरणी होणारा व्य हार हा खरेदीखत / अभिभहस्तांतरण (Deed of Conveyance) असून सदरील व्य हारानंतर मालमत्तेमधील स # gDd (मालकी gDdklg) खरेदीदारास प्राप्त होणार आहेत. त्यामुळे खाजगी मूल्यधारक C.D. Vaidya & Co. Architect and Valuers यांनी दस्ताचे वि कसन djkjukek म्हणून विनश्चि&त क े लेले मूल्य xzkg~; धरणे योग्य होणार नाgh- प्रकरणातील आत्तापयKतची उपरोक्त स्तूस्थिस्थती वि चारात ?ksrk आभिण प्रकरणी विद. 23/04/2021 रोजी मा. धम#दाय आयुक्त काया#लयाकडून प्राप्त झालेला C.D. Vaidya & Co. Architect and Valuers यांच्या मूल्यांकन vgokykps अ लोकन करुन मा. उपसंचालक नगररचना यांनी विदलेल्या vgokykuwlkj सदरील nLrkps मूल्यांकन करतांना सदरील जागेसाठी अनुज्ञेय असणारा चटई विनदRर्शांक तसेच अनुज्ञेय T.D.R., Fungible F.S.I., Staircase premium, alternative accommodation साठी होणारा खच# तसेत इतर बाबीसाठी gks.kk&;k खचा#ची जा ट देऊल #. 1,23,00,000/-,o<s मूल्य fuf’pr क े लेले मूल्यांकन gs वि कसन करारनाम्याचा दस्त असल्याचे वि चारात घेऊन क े ले असल्याने आभिण प्रकरणाधीन दस्त हा Deed of Conveyance चा असल्याने तसेच दोन्ही प्रकारच्या दस्ताचे ewY;kadu dj.;kP;k i/nrh;k osxosxG~;k vlY;kus mijksDr izek.ks uewn dsysys ewY; xzkg~; /kjrk;s.kkj ukgh vls Li”V;k dk;kZy;kl dGfoys vkgs-
23. Perusal of the Order passed by the Collector of Stamps after remand by this Court would indicate that the Respondent No. 2 has taken note of the Circular dated 13 October 2006 to examine whether the Charity Commissioner had issued public notice for conduct of sale and whether he predetermined the price for sale and what was the basis for accepting the sale price. It appears that the Collector of Stamps requisitioned the information from the office of Charity Commissioner, which supplied copy of valuation report to the Respondent No.2 by letter dated 04 November 2020. The said valuation report was sent by Respondent No.2 to the Deputy Director of Town Planning (DDTP) for verification as to whether same was in accordance with ASR. The DDTP submitted report to Respondent No.2 criticizing the report of the Valuer (C. D. Vaidya and Associates) stating that the valuer had treated the transaction as Development Agreement when in fact same is Conveyance. The DDTP therefore opined that the valuation earlier done of Rs. 30,55,58,000/- was proper.
24. Respondent No.2 thereafter held that the instrument presented by the Petitioner was of sale and since it was not registered, the market value as per ASR of 2021 was required to be applied and once again called for valuation from DDTP, which was received by the Respondent No.2 on 15 September 2021. The DDTP determined market value of the property as Rs.41,69,02,000/- by applying ASR 2021. The Respondent No.2 proceeded to accept it and held that the market value of the property would be Rs.41,69,02,000/- and adjudicated stamp duty payable at Rs.1,97,95,100/- on market value of the property and demanded higher amount of stamp duty than the one levied previously on 16 March 2017.
25. Petitioner alleges breach of Order dated 22 May 2020 passed by this Court in Writ Petition No. 714 of 2018. It is Petitioner’s contention that this Court had remanded the proceedings only for the purpose of computation of stamp duty payable after applying the provisions of first Proviso to Rule 4(6) of the Maharashtra Stamp Rules, 1995. I am unable to agree. The issue before this Court in Writ Petition No. 714 of 2018 was about sale conducted through the Charity Commissioner being covered under Proviso to Rule 4(6). This is the only issue that is decided by this Court by Judgment and Order dated 22 May 2020. This Court has held that the auction conducted by the Charity Commissioner would be covered by first Proviso to Rule 4(6). However, this Court also took note of Circular dated 13 October 2006 and held that the case of the Petitioner was required to be adjudicated by taking into consideration the Circular dated 13 October 2006. It would be necessary to reproduce the said Circular dated 13 October 2006, English translation of which is produced by Petitioner, which provides thus:
1) Revised directions were given regarding the implementation of orders concerned with above subjected matters given in market rate table is being given vide above referred circular. Priviso have been given in Rule 4(6) of The Bombay Stamp (Determination of True Market Value of Property) Rules, 1995. Inspite as per said proviso the amendment will be done as given hereinbelow. Provided that, if a property is sold or allotted by Government or Semi Government Body Government Undertaking or a local Authority on the basis of predetermined price, then value determined by said bodies, shall be the true market value of the subject matter property. Thus above revised proviso shall be read instead proviso given referred circular.
2) The objection regarding old cases were the value given vide no objection certificate by authority is assumed for assessment of stamp duty under the provisions of rules as given hereinabove was vide objection report of Auditor General therefore the discussion regarding the same done 10 Public Accounts Committee. Then Hon'ble Auditor General stated that, "there is a large amount of difference in the general market value and the value approved by the all the authority therefore it is legible to do investigation that how to determine the value by all the authorities." The said statement was considered and to facilitate the implementation of notice given vide referred circular, hereinafter. The Clarificat clarification is being given A) If it was found that if the value given auction certificate or Sale Certificate by Charity Commissioner is less than market value then notice shall be given for submission of documental evidence that auction was done by giving general notice and accordingly submitted documental evidence shall be considered then in present case confirmation shall be done that, the value which is determined in general notice is the amount received through open auction and said documental evidence shall be distributed.
1) If above trust had completed the transactions through general auction as mentioned in (a) then as given hereinabove in (a) the confirmation shall be done that, the auction have been done by giving general notice and,
2) If transaction have been done by any other means then, Charity Commissioner at the time of giving approval to above compensation shall ask for the information that how the value have been determined then thereafter shall confirm that value have been determined properly. If documental evidence is not received until confirmation done is any of the above case then Registrar/Stamp collector out of section 31, 32-A Or 33 of the Act whichever is applicable accordingly shall take actions then proper chance for submitting their statement shall be given to both the parties then value shall be determined under the procedure given in The Bombay Stamp (Determination of True Market Value) Rule, 1995.
26. Thus, the Circular dated 13 October 2006 issued by the Inspector General of Registration and Stamp Duty, Maharashtra State, Pune proceeds on a footing that auction conducted by the Charity Commissioner is also covered by first Proviso to Rule 4(6). However, the Circular takes note of the fact that in every case, the Charity Commissioner does not himself conducts the auction. Therefore, the Circular envisages that the concerned authorities should first verify whether the Charity Commissioner had conducted auction by issuance of general notice, especially in cases where there is variance in the market value and the price at which the property is sold. However, in the event it is found that the sale transaction is effected by other means than auction by the Charity Commissioner, the Collector of Stamps is empowered to inquire from the Charity Commissioner as to how the price of the property was fixed at the time of conduct of sale. Copy of Circular produced by the Petitioner at page-176 of the petition is in Marathi language and the translation provided does not appear to be accurate. However, the Collector of Stamps in her impugned Order has reproduced the relevant portion of the Circular in Marathi is as under: 1½ tj mDr fo’oLr laLFksus ojhy ¼v½ e/;s uewn dsY;kizek.ks tkfgj fyykokn~okjs lnj O;ogkj dsyk vlsy rj ojhy ¼v½ e/;s lwfpr dsY;kizek.ks izdVu nsmu fyyko dj.;kr vkyk vlY;kckcrhph [kkrjtek djkoh vkf.k] 2½ tj vU; izdkjs O;ogkj >kyk vls rj] mDr ekscnY;kl eatwjh nsrkuk d’;k fjrhus ewY; fu/kkZj.k dsysys vkgs;kph ekfgrh ekxowu;ksX; fjrhus ewY; fu/kkZj.k dj.;kr vkys vkgs;kph [kkrjtek djkoh-
27. Thus what this Court expected, by Judgment and Order dated 22 May 2020, was to decide the case as per the Circular dated 13 October 2006. It therefore cannot be contended that the proceedings were remanded by this Court only for the purpose of computation of stamp duty by accepting the purchase price as the market value under the first Proviso to Rule 4(6).
28. For understanding the exact impact of the Judgment and Order dated 22 May 2020 passed in Writ Petition No. 714 of 2018, some aid can also be taken from the Judgment delivered by a single Judge of this Court (Bharati Dangre J.) in Shree Krishna Realtors Vs. Chief Controlling Revenue Authority & Ors, Writ Petition No. 2453 of 2021, decided on 1 August 2022 where this Court has considered exactly identical issue relating to sale of property by the same Trust-A.H. Wadia Trust to another entity. This Court has taken note of the findings recorded by this Court in Judgment and Order dated 22 May 2020 and has thereafter held as under:
25 The finding recorded by the respondent No. l to the effect that the Charity Commissioner, Mumbai cannot be termed as a competent authority for the purpose of proviso below Rule 4(6), for the reason that neither the authority has sold out or purchased the property cannot be sustained as, if the procedure adopted by the Charity Commissioner is carefully perused, it can be seen that the property of the Trust, is sought to be sold by public auction conducted under the aegis of the Charity Commissioner and since the property belong to the Trust, it contemplated the followance of procedure u/s 36(1)(a) of the Trust Act, 1950. In the past, when another property of A.H. Wadia Trust, located in village Marol was alienated, as there were encroachments over the property and the Trust was not in a position to remove the encroachment, and it had invited offers for the sale of the property. One M/s. Crystal Construction Co. was found to be the successful bidder and the Charity Commissioner was persuaded to accord sanction to the Trust to sell the property on 'AS IS WHERE IS' and 'AS IS WHAT IS BASIS', to the company for consideration of Rs. Two Crores Ten Lakhs. The Trust had obtained valuation report from a Government Approved Architect and valuer, who had estimated the price of the trust property at Rs.One Crore 28 lakhs. The document of conveyance being submitted for adjudication, the Collector of Stamps assessed the market value of the Trust Property at Rs.30,55,58,000/- and adjudicated the stamp duty at Rs.1,52,77,900/- M/s Crystal Construction Company preferred an Appeal and the Appellate Authority held that the determination of value of the property by the Charity Commissioner did not fall within the proviso to sub-rule (6) of Rule 4 of the Rules of 1995 and the learned Single Judge of this Court extensively dealt with the said objection in Writ Petition No.714/2018. After exhaustively referring to the procedure that was followed by the Charity Commissioner, in exercise of its power u/ s.36 of the Trust Act, it was held that the inquiry before the Charity Commissioner is unquestionably a quasi-judicial inquiry, and the Commissioner shall ensure that the property is alienated at a price or value which is in the best interest of the Trust. Referring to a full bench decision of this Court in case of Shailesh developers & Anr. Vs Joint Charity Commissioner, Maharashtra & Ors. reported in 2007(3) Mh. L.J. 717, the power in the Charity Commissioner was recognized as not a mere administrative action, but it was held that the power is to be exercised after adhering to the principles of inviting an open offer, permitting competitive bidding and ensuring that the best value is fetched. Relying upon another decision of the Single Judge of this Court in case of Pinak Bharat & Co. & Bina V. Adani, which was dealing with a sale through a Court, where it was held that a sale through a Court stands on a higher pedestal than the sale by authorities envisaged by first proviso to subrule 6, the learned Single Judge (Justice. N. J. Jamadar) held as under:- -- --
27 The aforesaid decision, in case of M/s. Crystal Construction Co, therefore, make it clear that the sale by the Charity Commissioner would be covered within the purview of first proviso to sub-rule (6) of Rule 4, and since I am in agreement with the view expressed in M/s.Crystal Construction Co, I need not deliberate on the said point further.
29. After accepting the view taken by N.J. Jamadar, J. in Judgment and Order dated 22 May 2020 that the sale conducted by the Charity Commissioner is covered by first Proviso to Rule 4(6), Her Ladyship thereafter went into the next issue as to whether the Charity Commissioner had fixed the pre-determined price for auction of the property and whether it was justified in relying upon valuation of the property as projected by the Trust, when the Revenue Authorities contended that the Charity Commissioner had not considered ASR for fixing the offset price. Justice Dangre thereafter went into the manner in which the auction sale was conducted. She also considered the Scheme of Section 36(1)(a) of the Trust Act. This Court held in paras-41,42, 43, 44 and 45 as under:
41. The Price accepted for the property is even less than its market value & hence it fail to consider the paramount factor of according sanction, in exercise of the statutory duty cast on the Charity Commissioner under section 36(1) of the Trust Act, by securing the interest of the Trust. Not only this, by estimating the lesser value of the property which is proposed to be developed under a Slum Rehabilitation Scheme, the gout is also deprived of Courts revenue, by undervaluation of the property. By applying the current ASR of year 2017-18, when the property is to be sold, the Collector has valued the property at Rs.55,00,55,000/-. In any case, the Charity Commissioner has received a Valuation Report of the market price and has accepted the offer of the petitioners as the highest bid. The valuation which was taken as a lease for inviting the offer itself, is premised on an incorrect report, as the valuer did not consider ASR 26, which would give the true market value as in 2017-18. The Collector and the two authorities have rightly held in favour of the Revenue by applying the correct Guideline No.26 which provide for the factor, on the basis of which market value for relying stamp duty, shall be considered.
42. The Hon'ble Apex Court recently on 31/1 / 2022 while dealing with a Special Leave Petition filed by the land owners, who had received the compensation of land acquired, had an opportunity to deal with the factors that have to be looked into while determining the market value of the land by the Reference Court and recorded as under:-
43. Dealing with the power of the Charity Commissioner 13 u/s.36 of the Public Trust Act, the Hon'ble Apex court in case of Shri Ambadevi Sanstha and Ors Vs. Joint Charity Commissioner & Ors, (Civil Appeal No.9936/2018, Special Leave Petition (C) No.35049/2013), has once again reiterated the duty imposed on the Charity Commissioner u/s.36 of the Act. It reiterated that the interest, benefit and protection of the Trust are the three classic requirements to be considered by the Charity Commissioner, and the power extends to inviting offers from members of public and directing the trustees to sell or transfer the property to a person whose bid or quotation is best. The observation made by Their Lordship in para 10 are of utmost importance and I deem it appropriate to reproduce.
10 We cannot conclude without observing that property of such institutions or endowments must be jealously protected. It must be protected, for. a large segment of the community has beneficial interest in it (that is the raison d'etre of the Act itself). The authorities exercising the powers under the Act must not only be most alert and vigilant in such matters but also show awareness of the ways of the present day world as also the ugly realities of the world of today. They cannot afford to take things at their face value or make a less than the closest-and-best attention approach to guard against all pitfalls. The approving authority must be aware that in such matters the trustees, or persons authorized sell by private to negotiations, can, in a given case, enter into secret or invisible underhand deal or a understanding with the purchasers at the cost of the concerned institution. Those who are willing to purchase by private negotiations can also bid at a public auction. Why would they feel shy or be deterred from bidding at a public auction? Why then permit sale by private negotiations which will not be visible to the public eye and may even give rise to public suspicion unless there are special reasons to justify doing so? And care must be taken to fix a reserve price after ascertaining the market value for the sake of safeguarding the interest of the endowment. With these words of caution we close the matter." (emphasis supplied)
44. Apart from this, reliance is also placed upon a decision in case of R. Venugopala Naidu Vs. Venkatarayulu Naidu Charities, 1989 Supp(2) SCC 356, and the observations came to be quoted as under:-
endowments or institutions must be jealously protected because a large segment of the community has beneficial interest therein. Sale by private negotiations which is not visible to the public eye and may even give rise to public suspicion should not, therefore, be permitted unless there are special reasons to justify the same. It has further been held that care must be taken to fix the reserve price after ascertaining the market value for safeguarding the interest of the endowment" The permission issued by the Charity Commissioner was set aside by recording as under:-
Charity Commissioner to permit the sale on the ground of receipt of earnest money in illegal manner. Before permission to sell no such agreement could have been entered into. The same indicated predisposition of Trust to sell it in illegal manner. The valuation report from Talathi was based on ipse dixit indicated the value of the land as Rs.8,000/- per acre. The offer could not have been accepted in view of the available higher offers. The Joint Charity Commissioner has failed to protect the interest of the Trust."
45. For the aforesaid reasons, the impugned order determining the market value of the property purchased by the petitioner is upheld. The petitioner is liable to pay the deficit stamp duty as directed by the Collector of Stamps in it's order dated 31/7 / 2018.
30. Thus, in Shree Krishna Realtors, this Court took into consideration the judgment of Justice Jamadar dated 22 May 2020 and after agreeing with the view taken in that judgment, it proceeded to determine whether the Charity Commissioner had fixed the pre-determined price for auction of the property.
31. This Court, by Judgment and Order dated 22 May 2020, clearly directed the Collector of Stamps to decide the case of the Petitioner in accordance with the Circular dated 13 October 2006. The Circular envisages conduct of enquiry in case of sale of property through Charity Commissioner. The Collector of Stamps is empowered under the Circular to satisfy himself/herself whether the auction was conducted after issuance of general notice and if the sale transaction is by other means, the Collector of Stamps can also enquire in the manner of fixation of price by the Charity Commissioner.
32. If the facts of the present case are taken into consideration, the auction has been conducted not by the Charity Commissioner but by the Trust itself. The Trust proposed to sell the trust land and issued advertisement calling for offers. The Trust obtained valuation report dated 18 June 2015 from M/s. C.D. Vaidya estimating the value of the property at Rs.1.28 crores. Only three offers were received by the Trust. Huda Farhan Aghadi and Nawaz Farhan Aghadi submitted the highest bid Rs. 1.60 crores. Petitioner offered bid for Rs.71,42,858/-. The Trust filed application seeking approval of the Charity Commissioner under Section 36(1)(a) of the Trust Act for sale of property to Huda Farhan Aghadi and Nawaz Farhan Aghadi for Rs.1.60 crores. At that stage, four individuals intervened in the proceedings before the Charity Commissioner and a request was made by them for holding reauction, which was not objected to by the highest bidder Huda Farhan Aghadi and Nawaz Farhan Aghadi. The Charity Commissioner decided to conduct a reauction, in which Petitioner participated. However no notice was published for conduct of reauction by the Charity Commissioner. It is claimed that on 7 April 2016, the property was re-auctioned subject to the terms and conditions published by the Trust and in such re-auction, Petitioner was declared as the highest bidder for Rs.2.10 crores. The averments made in the petition do not show that the Charity Commissioner, while conducting the so-called reauction, published notice in the newspapers. Perusal of the Order passed by the Charity Commissioner on 26 April 2016 indicates that the so called reauction was conducted amongst the bidders who had bid earlier. Thus, the Charity Commissioner himself did not publish any notice in the newspapers for conduct of re-auction. In the re-auction so conducted, the other bidders, including the highest bidder, withdrew their offers and only Petitioner showed willingness to purchase the land at Rs.2.10 crores. It is thus clear that the Charity Commissioner himself did not issue any public notice. The public notice was issued by the Trust at the time of conduct of first auction. While conducting the re-auction, the Charity Commissioner did not issue any public notice. Therefore, the Collector of Stamps is fully justified in examining the manner in which the Charity Commissioner had fixed the market value of the property.
33. It must be observed here that the exercise of fresh adjudication is carried out by the Collector of Stamps after grant of due opportunity of hearing to the Petitioner. It appears that the Petitioner participated in the adjudication process and has been heard. Since the Charity Commissioner did not conduct auction by publication of notice and nor he predetermine the price, the Collector of Stamps was entitled to go into the correctness of the price accepted by the Charity Commissioner for effecting sale, for the purpose of levy of stamp duty. Therefore, it cannot be stated that any jurisdictional error is committed by the Collector of Stamps in acting in accordance with the Circular dated 13 October 2006, especially in view of the fact that this Court permitted her to do so.
34. Considering the reasons recorded in the impugned order as elaborated in the Affidavit-in-Reply filed on behalf of Collector of Stamps, in my view, no patent error can be traced in the order passed by the Collector of Stamps. The Petitioner may have purchased the trust land at Rs.2.10 crores. However, that price was not pre-determined by the Charity Commissioner nor any auction by publishing public notices was conducted before selling the trust land to Petitioner. The issue involved in the present petition is not about legality of permission granted by the Charity Commissioner under Section 36 of the Trust Act, but about the entitlement of the Collector of Stamps to examine the valuation at which the land is sold for the purpose of levy of stamp duty. The Collector is entitled to do so once it is found that the Charity Commissioner did not issue public notice for conduct of auction. In the present case, it is clear that the property has not been sold by the Charity Commissioner by inviting public offers. He only relied upon the auction conducted by the Trust and allowed the bidders to resubmit their offers.
35. Mr. Kapadia has relied upon Judgment of the Apex Court in ASL Vyapaar Pvt. Ltd. (supra) in which the Apex Court has held that the Registering Authority cannot sit in Appeal over decision of the Court permitting sale at a particular price. Since Mr. Kapadia contends that the judgment in ASL Vyapaar Pvt. Ltd. fully covers the present case, I have gone through the same minutely and I am unable to hold that the judgment applies to the present case. My reasons for this view are as under:
(i) In ASL Vypaar Pvt. Ltd., the Apex Court has dealt with the correctness of the Order passed by the Calcutta High Court in a Reference arising out of two cases.
(ii) The first case related to a partition suit, in which the Single Judge of the High Court passed order for sale of the premises and accordingly joint Receiver appointed by the Court issued advertisement in the newspaper. Several parties participated in the auction sale. The highest bidder could not deposit 10% of the bid amount and therefore the second highest bidder was called upon to match the price of the highest bidder, which is the second highest bidder’s bid. This is how the learned Single Judge of the High Court accepted the offer of the second highest bidder and confirmed the sale in its favour. The Judge further directed that the consideration paid by the bidder would be treated as value of the property for the purpose of registration of the stamp duty. The Registrar of Assurances however assessed the market value of the property higher than the one at which the same was sold and directed payment of deficit sum. A contempt application was filed by the bidder against the Registrar for committing breach of the Order of the Single Judge. The Registrar sought recall of the Order of Single Judge fixing the consideration paid as the market value of the property. The before the Division Bench and the question came to be referred to the larger Bench.
(iii) In second proceedings in ASL Vyapaar Pvt. Ltd. arising out of company case, the Single Judge of the Calcutta High Court passed order winding up the Company and the Official Liquidator was directed to take necessary steps. The Official Liquidator published advertisement in daily newspaper for sale of assets of the Company on “as is, where is and whatever there is basis” by fixing the Reserve Price of Rs.1.20 crores. The highest offer received was Rs.75 lakhs and the Company Court directed revision of the Reserve Price and directed fresh advertisement. In the second advertisement, the Reserve Price was reduced to Rs.[1] crore but the highest offer received was Rs.86,00,000/which was subsequently enhanced to Rs.87,00,000/- when the auction was held in the Company Court. The Company Court confirmed the sale at Rs.87,00,000/-. On payment of entire consideration, the Official Liquidator executed Conveyance Deed and presented the same before the Registrar of Assurances. When the Registrar issued Demand Notice to the purchaser assessing the market value of the property at Rs.1.70 crores and called it upon to pay the deficit stamp duty, the purchaser filed Writ Petition challenging the notice and the issue came to be referred to the larger Bench.
(iv) The Full Bench of the Calcutta High Court in both the References held that Section 47A of the Indian Stamp Act and Rule 3 of the West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules, 2001 are not applicable to instruments executed by the Registrar pursuant to an order of sale passed by the Civil Court. The Full Bench held that the sale conducted by the Court through its Officers qualifies to be open market sale subject to the condition of wide publicity of the proposed sale and purchaser of the property not being connected with or related to the authority/officer conducting the sale. The Order of the Full Bench of the Calcutta High Court came to be challenged by the Pvt. Ltd. in paras-24, 25, 31, 32 and 33 as under:
24. 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.
25. It is no doubt true that in a court auction, the price obtainable may be slightly less as any bidder has to take care of a scenario where the auction may be challenged which could result in passage of time in obtaining perfection of title, with also the possibility of it being overturned. But then that is a price obtainable as a result of the process by which the property has to be disposed of. We cannot lose sight of the very objective of the introduction of the Section whether under the West Bengal Amendment Act or in any other State, i.e., that in case of under valuation of property, an aspect not uncommon in our country, where consideration may be passing through two modes - one the declared price and the other undeclared component, the State should not be deprived of the revenue. Such transactions do not reflect the correct price in the document as something more has been paid through a different method. The objective is to take care of such a scenario so that the State revenue is not affected and the price actually obtainable in a free market should be capable of being stamped. If one may say, it is, in fact, a reflection on the manner in which the transfer of an immovable property takes place as the price obtainable in a transparent manner would be different. An auction of a property is possibly one of the most transparent methods by which the property can be sold. Thus, to say that even in a court monitored auction, the Registering Authority would have a say on what is the market price, would amount to the Registering Authority sitting in appeal over the decision of the Court permitting sale at a particular price.
31. We find hardly any rational in adopting the submissions on behalf of the appellant. The provisions are not dissimilar 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 cartellization; 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.
32. The decision of this Court in V.N. Devadossi case can hardly be said to be per incuriam. No doubt a court monitored auction is a forced sale, but then it has a competitive element of a public auction to realize the best possible price. In many court cases, this is the process followed by the court to get the best obtainable price taking due precaution.
33. We are, thus, of the view that this reference is required to be answered by opining that in case of a public auction monitored by the court, the discretion would not be available to the Registering Authority under Section 47A of the Act.
(v) In my view, the marked difference between the facts in ASL
Vypaar Pvt. Ltd. and the present case is the conduct of sale through public advertisement. In both the cases before the Apex Court, the sale was conducted by either the Court itself or by the Official Liquidator. In partition case, the sale was conducted by the joint Receiver of the Court by issuing advertisement in the newspapers having wide circulation and the Single Judge of the Calcutta High Court accepted the offer of the bidder and confirmed the sale. In company case, the sale was conducted by the Official Liquidator by issuing public advertisements and the Company Court finally held the auction in the Court and confirmed the sale. In the present case, the Charity Commissioner did not issue advertisement for sale of the trust land. The advertisement was issued by the Trust itself. The Charity Commissioner was not satisfied with the sale price offered by the highest bidder of Rs.1.60 crores, possibly on account of four intervenors raising objection before the Charity Commissioner. They requested for holding re-auction of the Trust land. However, while conducting reauction, it does not appear that the Charity Commissioner issued advertisement in the newspapers for sale of the Trust land. The order of the Charity Commissioner observes that “….accordingly on 7-4- 2016, the property was re-auctioned subject to the terms and conditions already published by the Trust. In accordance with the conditions, all the offerors deposited 35% of the offer as earnest amount by way of Demand Draft/Pay Order. Accordingly, Javed Shaikh has deposited Demand Draft of Rs.60,00,000/- before this authority which has been returned to them vide acknowledgment Exh-20”. The Charity Commissioner however held that “in another process of re-auction, the highest amount was offered by Crystal Construction Company of Rs.2.10 lakhs and all the offerors /intervenors, as referred above have withdrawn themselves.” The Order therefore does not indicate that while conducting the process of reauction, any advertisement was issued by the Charity Commissioner. The Charity Commissioner allowed the highest bidder, intervenor and Petitioner to re-submit their offers. Thus the re-auction was conducted within the parties who were before the Charity Commissioner. The re-auction was not published in the newspapers. In my view, therefore the sale price cannot be treated as true market value for determination of stamp duty in accordance with the Circular dated 13 October 2006. Unlike ASL Vyappar Pvt. Ltd., no advertisement was issued by the Charity Commissioner who did not fix any reserve price or pre-determined price for sale of land.
36. Therefore, judgment in ASL Vyapaar Pvt. Ltd. cannot be applied to the facts of the present case.
37. Coming to the objection of alternate remedy, this Court would have been justified in relegating the Petitioner to alternate remedy of filing Appeal under Section 32B of the Stamp Act before the Additional Collector of Stamps, Mumbai Region against the Order of the Collector of Stamps, Andheri. However, it is Petitioner who insisted that this petition must be entertained on account of breach of the Order by the Collector of Stamps. Because of Petitioner’s insistence, I have undertaken the exercise of examining whether there is indeed any breach committed by the Collector of Stamps. For doing so a deeper scrutiny of the case was required to be done and after doing so, I have arrived at the conclusion that the Collector of Stamps has not committed breach of the Order of this Court passed on 22 May 2020. In the process of examining the allegation of breach of Order passed by this Court, I have considered the merits of findings recorded by the Collector and I am satisfied that the Order passed by the Collector does not suffer from any serious infirmity for this Court to interfere under Article 227 of the Constitution of India. Since the present petition is entertained on merits on account of Petitioner’s insistence, it is not necessary to deal with the Judgment cited by Mr. Kapadia of Apex Court in Chhabil Dass Agarwal, (2014) 1 SCC 603 and M/s. Godrej Sara Lee Ltd. and of this Court in Hindustan Unilever Ltd. Similarly, it is not necessary to deal with judgments cited by Mr. Takke in State of Maharashtra and Assistant Commissioner of Sales Tax.
38. Mr. Kapadia has also relied upon the judgment of this Court in Deokabai Ganpatsingh Solanke and of Calcutta High Court in Smt. Bidya Devi (supra), in support of his contention of limited scope of remand made by the Order of this Court. In my view, the scope of remand ordered by this Court on 22 May 2020 empowered the Collector of Stamps to examine whether the conditions specified in the Circular dated 13 October 2006 were satisfied or not. The Collector has not exceeded the scope of remand made by this Court and has not committed any jurisdictional error for this Court to interfere in her order.
39. Mr. Kapadia has also relied upon judgment of this Court in Bharat Bijlee Ltd. (supra). In that case, the auction was conducted by the Income Tax Department and was clearly covered by the first Proviso to Rule 4(6) of the Maharashtra Stamp Rules. In the present case, the approval for sale of Trust property was issued by the Charity Commissioner and though the Charity Commissioner is covered by the first Proviso to Rule 4(6), the Collector of Stamps is vested with jurisdiction to make enquiry into the manner of conduct of sale as per the Circular dated 13 October 2006. Therefore, the facts in the case of Bharat Bijlee are totally different and the said judgment would have no application to the present case.
40. After considering the overall conspectus of the case, I am of the view that no serious error can be traced in the approach of the Collector of Stamps in instituting an enquiry into the manner of conduct of sale by the Charity Commissioner and in examining whether the property was sold at a pre-determined price as per the ASR.
41. However, there is one correction that needs to be effected in the order of the Collector of Stamps. As observed above, by the earlier order dated 16 March 2017, the Collector of Stamps had fixed the market value of the Trust land at Rs.30,53,88,000/-. This was done apparently by applying the ASR prevalent at that time. On remand, the Collector of Stamps was required to decide as to whether the Charity Commissioner had conducted auction by publishing advertisement in the newspapers as per the Circular dated 13 October 2006. Though the Collector has arrived at a conclusion that the true market value of the property as per applicable ASR would be the basis for levy of stamp duty, the Collector has committed a folly in applying ASR of 2021 for determining the market value and has increased the same from Rs.30,55,88,000/- to Rs.41,69,02,000/-. This is done apparently by holding that the document remained unregistered as on the date of passing of Order dated 16 September 2021. This, in my view, is a clear error on the part of the Collector of Stamps. The Collector was merely required to examine the issue whether the market value as per the ASR could be fixed or not. Mere remand by this Court does not entitle the Collector to apply subsequent ASR for fixing higher market value of the property. The market value as on the date of presentation of the document for adjudication of stamp duty will have to be applied for levy of stamp duty. Accordingly, the Order dated 16 September 2021 is interfered only to the limited extent of application of ASR 2021 and instead it is directed that the market value of the Trust land is required to be retained at Rs.30,55,88,000/- as per the earlier Order dated 16 March 2017. The payable stamp duty on the conveyance deed would thus be Rs.1,42,27,900/- since amount of Rs. 10,50,000/- is already paid by Petitioner.
42. I accordingly proceed to pass the following Order:
(i) The Order dated 16 April 2021 passed by the Collector of
Stamps, Andheri is upheld with a modification that the market value of the Trust land be fixed at Rs. 30,55,88,000/as per the earlier Order dated 16 March 2017. Accordingly, Petitioner is liable to pay the deficit stamp duty of Rs.1,42,27,900/- on the deed of conveyance.
(ii) Upon Petitioner paying the Stamp Duty of
43. The Writ Petition is allowed to the limited extent as indicated above. Rule is made partly absolute. There shall be no order as to costs. (SANDEEP V. MARNE, J.)