Whether Rule 7 of the Rules prescribing 3 months’ time for the Collector to pass an order determining the market value of the properties and duty payable on the instrument from the first notice, is directory or mandatory?Whether the appellate authority has power under Section 47A of the Act to enhance the market value of the property while deciding the appeal filed by the registrants?

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The Inspector General of Registration, Tamil Nadu & Ors. vs. K. Baskaran
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.2586 OF 2020
(Arising out of Special Leave Petition (Civil) No.15790 of 2019)
THE INSPECTOR GENERAL OF REGISTRATION,
TAMIL NADU AND ORS. …Appellants
Versus
K. BASKARAN …Respondent
WITH
CIVIL APPEAL NO.2587 OF 2020
(Arising out of Special Leave Petition (Civil) No.2609 of 2019)
WITH
CIVIL APPEAL NO.2588 OF 2020
(Arising out of Special Leave Petition (Civil) No.17103 of 2019)
WITH
CIVIL APPEAL Nos.2589-2592 OF 2020
(Arising out of Special Leave Petition (Civil) Nos.6011-6014 of 2019)
WITH
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The Inspector General of Registration, Tamil Nadu & Ors. vs. K. Baskaran
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CIVIL APPEAL Nos.2593-2597 OF 2020
(Arising out of Special Leave Petition (Civil) Nos.31633-31637 of 2018)
WITH
CIVIL APPEAL NO.2598 OF 2020
(Arising out of Special Leave Petition (Civil) No.31632 of 2018)
WITH
CIVIL APPEAL NO.2599 OF 2020
(Arising out of Special Leave Petition (Civil) No.15616 of 2019)
WITH
CIVIL APPEAL NO.2600 OF 2020
(Arising out of Special Leave Petition (Civil) No.7722 of 2020)
(Arising out of Special Leave Petition (Civil) D.No.45876 of 2018)
J U D G M E N T
Uday Umesh Lalit, J.
1. Leave granted.
2. These eight appeals raise common questions touching upon the
interpretation of Section 47A1
 of the Indian Stamp Act, 1899 (‘the Act’, for
short) and the Tamil Nadu Stamp (Prevention of Undervaluation of
Instruments) Rules, 1968 (‘the Rules’, for short) as amended from time to
time. Said Section 47-A of the Act now stands:-
1 As inserted by the Tamil Nadu Act 24 of 1967. Later, by the Tamil Nadu Act 1 of 2000, SubSections (4) to (10) in Section 47-A were substituted for Sub-Sections (4) and (5)
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“Section 47-A. Instrument of conveyance etc.,
undervalued how to be dealt with.- (1) If the
Registering Officer appointed under the Indian
Registration Act, 1908 (Central Act XVI of 1908),
while registering any Instrument of conveyance,
[exchange, gift, release of benami right or settlement]
has reason to believe that the market value of the
property of which is the subject matter of conveyance,
exchange, gift, release of benami right or settlement,
has not been truly set forth in the instrument, he may,
after registering such 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 reference under sub-section (1), the
Collector shall, after giving the parties 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 matter of
conveyance, exchange, gift, release of benami right or
settlement, and the duty as aforesaid. The difference,
if any, in the amount of duty, shall be payable by the
person liable to pay the duty.
(3) The Collector may, suo motu, or otherwise, within
five years from the date of registration of any
instrument of conveyance, exchange, gift, release of
benami right or settlement, 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 matter of conveyance, exchange,
gift, release of benami right or settlement, and the
duty payable thereon and if after such examination, he
has reason to believe that the market value of the
property has not been truly set forth in the instrument,
he may determine the market value of such property
and the duty as aforesaid in accordance with the
procedure provided for in sub-section (2). The
difference, if any, in the amount of duty, shall be
payable by the persons liable to pay the duty;
Provided that nothing in this sub-section shall apply
to any instrument registered before the date of
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commencement of the Indian Stamp (Tamil Nadu
Amendment) Act, 1967.
(4) Every person liable to pay the difference in the
amount of duty under sub-section (2) or sub-section
(3) shall, payable such duty within such period as may
be prescribed. In default of such payment, such
amount of duty outstanding on the date of default
shall be a charge on the property affected in such
instrument. On any amount remaining unpaid after
the date specified for its payment, the person liable to
pay the duty shall pay, in addition to the amount due,
interest at one per cent per month on such amount for
the entire period of default.
… … …
(5) Any person aggrieved by an order of the Collector
under sub-section (2) or sub-section (3), may appeal
to such Authority as may be prescribed in this behalf.
All such appeals shall be preferred within such time,
and shall be heard and disposed of in such manner, as
may be prescribed by rules made under this Act.
… … …
(6) The Chief Controlling Revenue Authority may,
suo motu, call for and examine an order passed under
sub-section (2) or sub-section (3) and if such order is
prejudicial to the interests of revenue, he may make
such inquiry or cause such inquiry to be made and,
subject to the provisions of this Act, may initiate
proceedings to revise, modify or set aside such order
and may pass such order thereon as he thinks fit.
(7) The Chief Controlling Revenue Authority shall
not initiate proceedings against any order passed
under sub-section (2) or sub-section (3) if, -
(a) the time for appeal against that order has
not expired; or
(b) more than five years have expired after the
passing of such order.
(8) No order under sub-section (6) adversely
affecting a person shall be passed unless that person
has had a reasonable opportunity of being heard.
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(9) In computing the period referred to in clause (b)
of sub-section (7), the time during which the
proceedings before the Chief Controlling Revenue
Authority remained stayed under the order of Court
shall be excluded.
(10) Any person aggrieved by an order of the
Authority prescribed under sub-section (5) of the
Chief Controlling Revenue Authority under subsection (6) may, within such time and in such manner,
as may be prescribed by rules made under this Act,
appeal to the High Court.
Explanation.- For the purpose of this Act, market
value of any property shall be estimated to be price
which, in the opinion of the Controller or the Chief
Controlling Revenue Authority or the High Court, as
the case may be, such property would have fetched or
would fetch, if sold in the open market on the date of
execution of the instrument of conveyance, exchange,
gift, release or benami right or settlement.”
3. The appeal arising out of Special Leave Petition (Civil) No.15790
of 2019 is taken as the lead matter and facts pertaining to said appeal are
set out in detail for facility. The facts involved in other appeals are almost
identical except for details such as the case numbers, dates of orders and
the details of properties in question.
4. The appeal from Special Leave Petition (Civil) No.15790 of 2019
arises out of the final judgment and order dated 02.02.2018 passed by the
High Court2
 in CMA No. 2666 of 2012 in following circumstances: -
2 The High Court of Judicature at Madras
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A. The Respondent purchased two properties comprised in
R.S. No.372/2A – Sidharavuthanpalayam Village, Tiruppur Taluk, Erode
District, (i) admeasuring about 46216 sq.ft. through Sale Deed dated
21.02.2000 registered as Doct. No.2647 of 2000 of Book 1 valued at
Rs.4,78,000/- and (ii) admeasuring about 47960 sq. ft through Sale Deed
dated 18.02.2000 registered as Doct. No.2648 of 2000 of Book 1 valued at
Rs.4,96,000/- (i.e. Rs.10.34 per sq.ft.).
B. As the value in said Sale Deeds was less than the Guideline
Value of Rs.58.30 per sq.ft., the Sub-Registrar, Dharapuram, Appellant
No.5 herein, referred the matter to the Special Deputy Collector (Stamps),
Coimbatore i.e. Appellant No.2 herein, under Section 47-A of the Act.
C. On 13.9.2000 Appellant No. 2 issued Form No. 1 notices in
Mu.Pa. (S.R.) No.3667 of 2000 D and Mu.Pa. (S.R.) No. 3668/2000 D
seeking explanation from the Respondent why the deficit stamp duty of
Rs.2,66,088/- and Rs.2,76,132/- respectively should not be collected.
Thereafter, Appellant No. 2 issued Form No. II notices on 04.02.2003 to
the Respondent, whereby the provisional value of the property was
determined at the rate of Rs.58.30/- per sq.ft. as against the value of
Rs.10.34/- per sq.ft. set forth in the Sale Deeds in question.
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D. Appellant No.2 issued Final Orders on 30.04.2003 in
Mu.Pa. (S.R.) Nos. 3667 and 3668 of 2000 D. In Mu.Pa. (S.R.) No.3667
of 2000 D, it was observed: -
“With reference to the Form I notice no
representations received from the registrant and he
never turned for hearing in spite of several reminders
and notices issued and no objections filed.
Hence, provisional order in Form II was issued.
Neither the objections received from the purchaser
nor appeared for the hearing. It is learnt that the
registrant has no objection regarding the valuation of
the document. It is hereby ordered confirming the
provisionally determined value as noted in the Form
II cited in the reference 3.
It is hereby ordered that the open market value is
finally determined at Rs.26,95,400/- purchased
through the document as per details noted in the pre
page.
With reference to the above value the stamp duty
leviable at Rs.3,23,448/- excluding the stamp duty
already paid Rs.57,360/- the deficit stamp duty to be
paid Rs.2,66,088/- (Rupees Two Lakhs Sixty Six
Thousand Eighty Eight Only).
The registrant is requested to remit the deficit stamp
duty Rs.2,66,088/- under the head of account 0030
stamps Registration 030G Fee deficit stamp duty
ABAA0202 in the State Bank of India or in the Sub
Treasury office and the original Challan shall be sent
to this office within 2 weeks from the date of this
order.”
In Mu.Pa. (S.R.) No.3668 of 2000 D, the market value was
assessed at Rs.27,97,100/- and similar consequential directions were
passed.
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E. The Respondent filed statutory appeal which was rejected
by the Inspector General of Registration i.e. Appellant No. 1 vide order
dated 05.08.2005. At the appellate stage, a report was called for from
District Registrar, Erode, which was referred to in the order dated
05.08.2005 as under:-
“…This Appeal was admitted and the Deputy
Inspector General Kovai appointed as the enquiry
officer and to inspect the document property premises
and to recommend determination of the true market
value of the document property as per enquiry. The
original file was also required from the District
Revenue Officer (Stamps). On perusal of the original
file of the District Revenue Officer (Stamps) office
and it was found that, since the appellant not turned
for enquiry and considered that there are no
objections, the guideline value was confirmed.
In the report of the District Registrar Erode enclosed
with the letter received from the Deputy Inspector
General Kovai he has recommended that while
conducting the spot Inspection of the Survey field the
properties lying in the village on the date of
registration on 21.02.2002 were not incorporated with
the municipality and it was incorporated with the
municipality only on 01.04.2003, since the document
properties were incorporated in the Municipality area
at present value is fixed at Rs.200/- per sq.ft. and it is
apt to determine the value at Rs.58.30/- per sq.ft., on
the date of registration.”
F. The Respondent, being aggrieved, filed CMA No. 2666 of
2012 in the High Court challenging the said order dated 05.08.2005 which
was allowed by the High Court by its judgment and order dated
02.02.2018. The High Court observed that Appellant No.1 had delegated
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his duty to the Deputy Inspector General of Registration, which was
against the decision of the High Court in the case of S. Santhi vs. Chief
Revenue Controlling Authority (CMA No. 2820 of 2012) decided on
05.06.2015. It was also observed that Rule 6 was not followed. The High
Court thus concluded:-
“8. Therefore, the first Respondent is not empowered
to delegate the powers conferred on him. Similarly,
the procedure contemplated under Rule 6 of the Rules
is also not followed by the authorities while
determining the market value of the property. As
such, the entire proceedings are vitiated, in view of
violation of Rules 6 and 11-A of the Rules.
Accordingly, the impugned order passed by the first
Respondent is not sustainable in law and the same is
set aside. The authorities are directed to release the
document to the Appellant.”
It was, however, not stated how the procedure contemplated by
Rule 6 was not followed.
G. The decision in S. Santhi (supra) which was relied upon,
had observed as under:-
“17. The Authority conferred with certain functions
under a statute has to carry out the same on its own
such function and cannot delegate the same to another
in the absence any contemplation for such delegation
under the Act. In the present case, under rule 4(3)(c)
and rule 11-A of the rules, 2nd respondent-Collector
and the 1st respondent-Inspector General of
Registration respectively, have to inspect the property
and there is no enabling provision under the rules or
under the Act to delegate such power. Therefore,
inspections by other officers at the behest of the
respondents vitiate the entire proceedings.
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18. The failure on the part of the 2nd respondent to
pass a final order within 3 months from the date of
Form-I notice as mandated under rule 7 of the rules
vitiates the entire proceedings. Form-I notice was
issued on 17.05.2005 and the final order was passed
on 05.12.2006, after 11/2 years, i.e., after 3 months
and hence the entire proceedings are vitiated.
19. The impugned order has been passed by the 1st
respondent purely based on inspection reports of the
District registrar /Deputy Thasildar, who are not
authorised under the Act and hence the said inspection
reports are not materials collected by the authorities,
entitled under the Act. Hence the proceedings of the
2nd respondent and 1st respondent are vitiated.”
5. Similar orders were passed by the High Court in other matters
which orders are presently under appeal in companion matters. Since the
matters arise in the backdrop of provisions contained in the Rules, Rules 4
to 7 and 11A of the Rules are quoted hereunder: -
“4. Procedure on receipt of reference under
Section 47-A. (1) On receipt of a reference under
sub-Section (1) of Section 47-A, from a registering
officer, the Collector shall issue a notice in Form I.
(a) to every person by whom, and
(b) to every person in whose favour the
instrument has been executed.
Informing him of the receipt of the reference and
asking him to submit to him his representations, if
any, in writing to show that the market value of the
property has been truly set forth in the instrument, and
also to produce all evidence that he has in support of
his representation, within 21 days from the date of
service of the notice.
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(2) The Collector may, if he thinks fit, record a
statement from any person to whom a notice under
sub-rule (1) has been issued.
(3) The Collector may for the purpose of his enquiry
–
(a) call for any information or record from
any public office, officer or authority under
the government or any local authority;
(b) examine and record statements from
any member of the public, officer or
authority under the Government or the local
authority; and
(c) inspect the property after due notice to
the parties concerned.
(4) After considering the representations, if any,
received from the person to whom notice under subrule (1) has been issued, and after examining the
records and evidence before him, the Collector shall
pass an order in writing provisionally determining the
market value of the properties and the duty payable.
The basis on which the provisional market value was
arrived at shall be clearly indicated in the order.
5. Principles for determination of market value.-
The Collector shall, as far as possible, have also
regard to the following points in arriving, at the
provisional market value,
(a) In the case of lands –
(i) classification of the land as dry, manavari,
wet and the like;
(ii) classification under various tarams in the
settlement register and accounts;
(iii) the rate of revenue assessment for each
classification;
(iv) other factors which influence the valuation
of the land in question;
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(v) points if any, mentioned by the parties to
the Instrument or any other person which
requires special consideration.;
(vi) value of adjacent lands or lands in the
vicinity;
(vii) average yield from the land, nearness to
road and market, distance from village site,
level of land, transport facilities, facilities
available for irrigation such as tank, wells
and pumpsets.
(viii) The nature of crops raised on the land; and
(ix) The use of land, domestic, commercial,
industrial or agricultural purposes and also
the appreciation in value when an
agricultural land in being converted to a
residential, commercial or an industrial
land.
(b) In the case of house sites –
(i) the general value of house sites in the
locality;
(ii) nearness to roads, railway station, bus
route;
(iii) nearness to market, shops and the like;
(iv) amenities available in the place like public
offices, hospitals and educational
institutions;
(v) development activities, industrial
improvements in the vicinity;
(vi) land tax valuation of sites with reference to
taxation records of the local authorities
concerned;
(vii) any other features having a special bearing
on the valuation of the site; and
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(viii) any special feature of the case represented
by the parties.
(c) In the case of buildings –
(i) type and structure;
(ii) locality in which constructed;
(iii) plinth area;
(iv) year of construction;
(v) kind of materials used;
(vi) rate of depreciation;
(vii) fluctuation in rates;
(viii) any other features that have bearing on the
value;
(ix) property tax with reference to taxation
records of local authority concerned;
(x) the purpose for which the building is being
used and the income if any, by way of rent
per annum secured on the building; and
(xi) any special feature of the case represented
by the parties.
(d) Properties other than lands, house sites and
buildings –
(i) The nature and condition of the property;
(ii) Purpose for which the property is being put
to use; and
(iii) Any other special features having a bearing
on the valuation of the property.
6. Procedure after arriving at provisional
market value.- The Collector shall communicate
a copy of his order provisionally determining the
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market value of the properties and the duty
payable, to all the persons who are liable to pay
the duty along with the notice in Form II and call
upon the parties to lodge their objections, if any, to
such determination of the market value within the
time specified in the notice. The Collector shall
also hear the parties on the date specified in the
notice or on such other day as may be fixed by
him.
7. Final Order determining the market value.-
(1) The Collector shall, after considering the
representations received in writing and those urged
at the time of hearing or in the absence of any
representation from the parties concerned or their
failure to appear in person at the time of hearing in
any case after careful consideration of all the
relevant factors and evidence available with him
pass an order within three months from the date of
first notice determining the market value of the
properties and the duty payable on the instrument,
and communicate the order so passed to the parties
and take steps to collect the difference in the
amount of stamp duty, if any.
(2) A copy of the order shall be communicated to
the registering officer concerned for his record.
(3) The difference in the amount of duty
determined by the Collector shall be paid within
two months from the date of final order passed
under sub-Section (2) or sub-Section(3) of Section
47-A
(4) The Collector shall, after collecting the
difference in amount of stamp duty and interest, if
any, under Section 47-A, give a certificate in Form
III by endorsement on the instrument.
… … …
11-A. Decision of the appellate authority. The
appellate authority may, for the purpose of deciding
an appeal, -
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(a) call for any information or record from
any public office, officer or authority
under the government or any local
authority;
(b) examine and record statements from
any member of the public officer of
authority under the government or the
local authority3
; and
(c) inspect the property after due notice to
the parties concerned.”
6. We heard Mr. Jayanth Muth Raj, learned Additional Advocate
General for the Appellants in all the appeals and M/s. T. Sundar
Ramanathan, M.A. Venkata Subramanian, K.V. Mohan, Raghav Shankar,
P.J. George and Pulkit Tare, learned Advocates for the concerned
Respondents. Following questions arise for our consideration: -
1. Whether the directions issued by the appellate authority
namely Chief Controlling Revenue Authority (Inspector
General of Registration) in asking the Deputy Inspector
General of Registration, or any other officer, to conduct the
site inspection, amounted to delegation of his functions
and violated Rule 11-A of the Rules and thereby vitiated
the entire proceedings?
This question arises in all the appeals.
3 The text is as per the Gazette published on 09.03.2001. The language is, however, not
similar to that of Rule 4(3)(b).
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2. Whether Rule 7 of the Rules prescribing 3 months’ time
for the Collector to pass an order determining the market
value of the properties and duty payable on the instrument
from the first notice, is directory or mandatory?
This issue arises in all the appeals, except the one
arising out of Special Leave Petition (Civil)No. 17103 of
2019.
3. Whether the appellate authority has power under Section
47A of the Act to enhance the market value of the property
while deciding the appeal filed by the registrants?
The issue arises only in the appeal from Special Leave Petition
(Civil) Nos. 31633-31637 of 2018.
7. Before we deal with these questions, an issue regarding alleged
violation of Rule 6 may be addressed first. In the petition of appeal in the
lead matter, the following grounds are taken: -
“L. Because the Hon’ble High Court failed to
appreciate that Form II provisional notices were
issued by the 2nd Petitioner determining the
provisional market value of the subject properties in
consonance with Rule 6 of the Rules. The Hon’ble
High Court erred in passing an order in the favour of
the Respondent without appreciating the facts of the
instant matter wherein no violation of Rule 6 occurred
and the procedure laid down under Rule 6 was duly
followed.
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M. Because the Hon’ble High Court failed to
appreciate that as no objections were received from
the Respondent against the notices issued in Form I or
Form II, the 2nd Petitioner accordingly proceeded with
passing the final orders. The procedure for arriving at
the final market value was suitably followed in
accordance to the Rules.”
The order of the appellate authority does not disclose any ground
of such violation being raised. We, therefore, find that there was no
violation of the procedure prescribed under Rule 6. Similar situation
obtains in appeals arising of Special Leave Petition (Civil) Nos.17103 of
2019 and 31633-31637 of 2018.
8. With regard to question no.1, it is submitted on behalf of the
Appellants that under Rule 11-A the appellate authority can call for any
information from any officer or authority, and can direct any officer or
authority under the government, or any public authority, to inspect the
property, collect information and send the report; and that causing such
inspection of the property or collection of evidence and calling for a
report, does not amount to delegation of his core function. It is
emphasized that causing personal inspection of properties in every appeal
would be humanly impossible. In response, it is submitted on behalf of
the Respondents: -
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a) Powers that can be delegated are specifically provided under
Section 76-A of the Act, and the power under Section 47-A is not
one such power; and
b) Unless the power to sub-delegate is conferred expressly or
impliedly under a statute, the power cannot be sub-delegated
(Reliance is placed on the decision of this Court in Sahni Silk
Mills (P) Ltd. and another vs. Employees’ State Insurance
Corporation4
in support of the proposition).
9. In Pradyat Kumar Bose vs. The Hon’ble the Chief Justice of
Calcutta High Court5
, a Judge of the High Court was deputed by the
Chief Justice of the High Court to make an enquiry into the charges
against the Registrar of the High Court and submit a report. After
considering the report and grant of hearing, the Registrar was dismissed
from service. While dealing with the submission that the Chief Justice
could not have delegated the enquiry into the charges to another Judge,
the Constitution Bench of this Court stated the principles as under:-
“… …It is well-recognised that a statutory
functionary exercising such a power cannot be said to
have delegated his functions merely by deputing a
responsible and competent official to enquire and
report. That is the ordinary mode of exercise of any
administrative power. What cannot be delegated
4 (1994) 5 SCC 346
5 (1955) 2 SCR 1331
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except where the law specifically so provides — is the
ultimate responsibility for the exercise of such power.
As pointed out by the House of Lords in Board of
Education v. Rice6
, a functionary who has to decide an
administrative matter, of the nature involved in this
case, can obtain the material on which he is to act in
such manner as may be feasible and convenient,
provided only the affected party “has a fair
opportunity to correct or contradict any relevant and
prejudicial material”. The following passage from the
speech of Lord Chancellor in Local Government
Board v. Arlidge7
 is apposite and instructive:
“My Lords, I concur in this view of the
position of an administrative body to which
the decision of a question in dispute between
parties has been entrusted. The result of its
inquiry must, as I have said, be taken, in the
absence of directions in the statute to the
contrary, to be intended to be reached by its
ordinary procedure. In the case of the Local
Government Board it is not doubtful what this
procedure is. The Minister at the head of the
Board is directly responsible to Parliament
like other Ministers. He is responsible not
only for what he himself does but for all that
is done in his department. The volume of
work entrusted to him is very great and he
cannot do the great bulk of it himself. He is
expected to obtain his materials vicariously
through his officials, and he has discharged
his duty if he sees that they obtain these
materials for him properly. To try to extend
his duty beyond this and to insist that he and
other members of the Board should do
everything personally would be to impair his
efficiency. Unlike a Judge in a Court he is not
only at liberty but is compelled to rely on the
assistance of his staff.”
6 [1911] A.C. 179, 182
7 [1915] A.C. 120, 133
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10. In Union of India and anr. vs. P.K. Roy and ors.8
, another
Constitution Bench of this Court ruled as under: -
“… …In other words, if a statutory authority
empowers a delegate to undertake preparatory work
and to take an initial decision in matters entrusted to it
but retains in its own hands the power to approve or
disapprove the decision after it has been taken, the
decision will be held to have been validly made if the
degree of control maintained by the authority is close
enough for the decision to be regarded as the
authority’s own. In the context of the facts found in
the present case we are of opinion that the High Court
was in error in holding that there has been an
improper delegation of its statutory powers and duties
by the Central Government and that the final
gradation list dated April 6, 1962 was therefore ultra
vires and illegal. Even on the assumption that the task
of integration was exclusively entrusted to the Central
Government, we are of the opinion that the steps
taken by the Central Government in the present case
in the matter of integration did not amount to any
delegation of its essential statutory functions. There is
nothing in Sections 115 or 117 of the said Act which
prohibits the Central Government in any way from
taking the aid and assistance of the State Government
in the matter of effecting the integration of the
services. So long as the act of ultimate integration is
done with the sanction and approval of the Central
Government and so long as the Central Government
exercises general control over the activities of the
State Government in the matter it cannot be held that
there has been any violation of the principle
“delegatus non potest delegare”. For instance, it was
observed by this Court in Pradvat Kumar Bose v.
Hon’ble the Chief Justice of Calcutta High Court5
:”
11. In State of Bombay (Maharashtra) vs. Shivbalak
Gourishanker Dube and others9
, the decision of the High Court holding
8 (1968) 2 SCR 186
9 (1965) 1 SCR 211
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that the State Government could not have delegated its duty to make an
enquiry under Section 65(1) of the Bombay Tenancy and Agricultural
Lands Act, 1948, was under challenge. While setting aside said decision
of the High Court, it was observed: -
“Realising the infirmity in the view taken by the High
Court, Mr Pathak attempted to support the decision of
the High Court on another ground. He argued that
since the enquiry was made by the Talathi and the
Mamlatdar under Section 65 and not by the Deputy
Collector, the declaration made by the Deputy
Collector was invalid. In other words, the argument is
that the State Government may have validly delegated
its powers under Section 65(1) to the Deputy
Collector, but the Deputy Collector who is a delegate
of the State Government cannot, in turn, delegate a
part of his power or authority to a subordinate of his
own, and that is what he has done in the present case.
This argument proceeds on the basis that in exercising
his powers under Section 65(1), the Deputy Collector
must himself hold the enquiry and cannot delegate the
function of holding such an enquiry to any other
subordinate re venue officer. There is no doubt that a
delegate who has received the authority from the
principal cannot, in turn, delegate his own authority to
a delegate of his own, but there is hardly any question
of delegation by a delegate in the present case. All
that Section 65(1) requires is that the State
Government and therefore its delegate may after
making such enquiry as it thinks fit, declare that the
management of the land shall be resumed. In other
words, in what form the enquiry should be held is a
matter left entirely in the discretion of the State
Government or its delegate. All that the Deputy
Collector has done in the present case is to direct his
subordinate officers to collect material relevant to the
purpose of the enquiry. The Talathi went on the spot
and ascertained as to whether the respondent's lands
were lying fallow for the requisite period. He
submitted his report to the Mamlatdar. The Mamlatdar
in turn made his report to the Deputy Collector. In
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other words, all that the Deputy Collector has done is
to collect the relevant material, so that he can enquire
into the question as to whether the lands are lying
fallow or not. This procedure does not, in our opinion,
involve the question of any delegation at all. The form
of the enquiry and its mode are entirely in the
discretion of the Deputy Collector. Section 65(1) does
not require that the Deputy Collector must himself go
to the agricultural fields and enquire on the spot
whether they are lying fallow. He may, if he so
desires, record evidence himself, or the recording of
the evidence and the actual inspection on the spot can
be left to some subordinate officer. The report of such
local inspection and the record of the evidence
collected in that behalf would be forwarded to the
Deputy Collector, and that would be the material on
which he would hold the enquiry himself. The enquiry
is thus held by the Deputy Collector, though the
mechanical work of collecting material has been
entrusted to a subordinate revenue officer. In such a
case, we do not see how the principle that a delegate
cannot delegate comes into operation.”
12. In Sahni Silk Mills4
case, the issue was whether an officer or
authority as a delegate of certain powers by the Corporation, could further
sub-delegate said powers. It was observed by this Court:-
“5. The courts are normally rigorous in requiring the
power to be exercised by the persons or the bodies
authorised by the statutes. It is essential that the
delegated power should be exercised by the authority
upon whom it is conferred and by no one else. At the
same time, in the present administrative set-up
extreme judicial aversion to delegation cannot be
carried to an extreme. A public authority is at liberty
to employ agents to exercise its powers. That is why
in many statutes, delegation is authorised either
expressly or impliedly. Due to the enormous rise in
the nature of the activities to be handled by statutory
authorities, the maxim delegatus non potest delegare
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is not being applied specially when there is question
of exercise of administrative discretionary power.
6. By now it is almost settled that the legislature can
permit any statutory authority to delegate its power to
any other authority, of course, after the policy has
been indicated in the statute itself within the
framework of which such delegatee is to exercise the
power. The real problem or the controversy arises
when there is a sub-delegation. It is said that when
Parliament has specifically appointed authority to
discharge a function, it cannot be readily presumed
that it had intended that its delegate should be free to
empower another person or body to act in its place. In
Barium Chemicals Ltd. v. Company Law Board10, this
Court said in respect of sub-delegation:
“Bearing in mind that the maxim delegatus
non potest delegare sets out what is merely
a rule of construction, sub-delegation can be
sustained if permitted by express provision
or by necessary implication.”
7. Again in Mangulal Chunilal v. Manilal Maganlal11
,
while considering the scope of Section 481(1)(a) of
the Bombay Provincial Municipal Corporation Act
(59 of 1949) this Court said that Commissioner of the
Ahmedabad Municipal Corporation had delegated his
power and function under the aforesaid section to a
Municipal Officer to launch proceedings against a
person charged with offences under the Act or the
rules and that officer to whom such functions were
delegated could not further delegate the same to
another.
8. In Halsbury’s Laws of England, 4th Edn., Vol. I, in
respect of sub-delegation of powers it has been said:
“In accordance with the maxim delegatus
non potest delegare, a statutory power must
be exercised only by the body or officer in
whom it has been confided, (H. Lavender &
10 AIR 1967 SC 295 : 1966 Supp SCR 311
11 AIR 1968 SC 822 : (1968) 2 SCR 401
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Son Ltd. v. Minister of Housing and Local
Government12) unless sub-delegation of the
power is authorised by express words or
necessary implication (Customs and Excise
Comrs. v. Cure and Deeley Ltd.13 and
Mungoni v. Attorney General of Northern
Rhodesia14). There is a strong presumption
against construing a grant of legislative,
judicial, or disciplinary power as impliedly
authorising sub-delegation; and the same
may be said of any power to the exercise of
which the designated body should address
its own mind. Allam & Co. v. Europa
Poster Services Ltd.15 …”
9. In the case of Harishankar Bagla v. State of M.P.16
,
while examining the scope of Section 4 of the
Essential Supplies (Temporary Powers) Act, 1946 it
was said:
“Section 4 of the Act was attacked on the
ground that it empowers the Central
Government to delegate its own power to
make orders under Section 3 to any officer
or authority subordinate to it or the
Provincial Government or to any officer or
authority subordinate to the Provincial
Government as specified in the direction
given by the Central Government. In other
words, the delegate has been authorized to
further delegate its power in respect of the
exercise of the powers of Section 3. Mr
Umrigar contended that it was for the
Legislature itself to specify the particular
authorities or officers who could exercise
power under Section 3 and it was not open
to the Legislature to empower the Central
Government to say what officer or authority
could exercise the power.
12 (1970) 3 All ER 871 : (1970) 1 WLR 1231
13 (1962) 1 QB 340 : (1961) 3 All ER 641 : (1961) 3 WLR 798
14 (1960) 1 All ER 446 : (1960) 2 WLR 389 : 1960 AC 336, PC
15 (1968) 1 All ER 826 : (1968) 1 WLR 638
16 AIR 1954 SC 465, 468 ; (1955) 1 SCR 380
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Reference in this connection was made to
two decisions of the Supreme Court of the
United States of America — Panama
Refining Co. v. Ryan17 and Schechter v.
United States18. In both these cases it was
held that so long as the policy is laid down
and a standard established by a statute, no
unconstitutional delegation of legislative
power is involved in leaving to selected
instrumentalities the making of subordinate
rules within prescribed limits and the
determination of facts to which the policy as
declared by the legislature is to apply. These
decisions in our judgment do not help the
contention of Mr Umrigar as we think that
Section 4 enumerates the classes of persons
to whom the power could be delegated or
sub-delegated by the Central Government
and it is not correct to say that the
instrumentalities have not been selected by
the Legislature itself.”
In the aforesaid case, the sub-delegation was
upheld because Section 4 itself enumerated the
classes of persons to whom the power could be
delegated or sub-delegated by the Central
Government.
10. So far as the present Section 94-A is
concerned, it says that the Corporation subject to
any regulation made by the Corporation in that
behalf, may direct that particular or any of the
powers and functions which may be exercised or
performed by the Corporation, may, in relation
to such matters and subject to such conditions, if
any, as may be specified “be also exercisable by
any officer or authority subordinate to the
Corporation”. Section 94-A does not specifically
provide that any officer or authority subordinate
to the Corporation to whom the power has been
delegated by the Corporation, may in his turn
17 (1934) 293 US 388 : 79 L Ed 446
18 (1934) 295 US 495 : 79 L Ed 1570
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authorise any other officer to exercise or
perform that power or function. But by the
resolution dated 28-2-1976 the Corporation has
not only delegated its power under Section 85-
B(1) of the Act to the Director General, but has
also empowered the Director General to
authorise any other officer to exercise the said
power. Unless it is held that Section 94-A of the
Act, enables the Corporation to delegate any of
its powers and functions to any officer or
authority subordinate to the Corporation, and he
in his turn can sub-delegate the exercise of the
said power to any other officer, the last part of
the resolution dated 28-2-1976 cannot be held to
be within the framework of Section 94-A.
According to us, Parliament while introducing
Section 94-A in the Act, only conceived direct
delegation by the Corporation to different
officers or authorities, subordinate to the
Corporation, and there is no scope for such
delegate to sub-delegate that power, by
authorising any other officer to exercise or
perform the power so delegated.”
13. In Sidhartha Sarawgi vs. Board of Trustees for the Port of
Kolkata and others19, the matter was dealt with by this Court as under:-
“5. Regarding delegation of non-legislative/
administrative powers on a person or a body to do
certain things, whether the delegate himself is to
perform such functions or whether after taking decision
as per the terms of the delegation, the said agency can
authorise the implementation of the same on somebody
else, is the question to be considered. Once the power
is conferred, after exercising the said power, how to
implement the decision taken in the process, is a matter
of procedure. The legislature may, after laying down
the legislative policy, confer discretion on an
administrative agency as to the execution of the policy
and leave it to the agency to work out the details within
the framework of that policy20. So long as the essential
19 (2014) 16 SCC 248
20 Khambhalia Municipality vs. State of Gujarat, AIR 1967 SC 1048 at p. 1051, para 7
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function of decision making is performed by the
delegate, the burden of performing the ancillary and
clerical task need not be shouldered by the primary
delegate. It is not necessary that the primary delegate
himself should perform the ministerial acts as well. In
furtherance of the implementation of the decision
already taken by the primary delegate as per the
delegation, ministerial or clerical tasks may be
performed by authorised officers. The complexity of
modern day administration and the expansion of
functions of the State to the economic and social
spheres have made it necessary that the legislature
gives wide powers to various authorities when the
situation requires it. Today’s governmental functions
are a lot more complex and the need for delegation of
powers has become more compelling. It cannot be
expected that the head of the administrative body
performs each and every task himself.
… … …
7. Practical necessities or exigencies of administration
require that the decision-making authority who has
been conferred with statutory power, be able to
delegate tasks when the situation so requires. Thus, the
maxim delegatus non potest delegare, gives way in the
performance of administrative or ministerial tasks by
subordinate authorities in furtherance of the exercise of
the delegated power by an authority.”
14. The following principles can thus be culled out from the decisions
of this Court: (i) A statutory functionary exercising a power cannot be
said to have delegated his functions merely by deputing a responsible and
competent official to enquire and report, as that is the ordinary mode of
exercise of any administrative power; (ii) If a statutory authority
empowers a delegate to undertake preparatory work, and to take an initial
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decision in matters entrusted to it, but retains in its own hands the power
to approve or disapprove the decision after it has been taken, the decision
will be held to have been validly made if the degree of control maintained
by the authority is close enough for the decision to be regarded as the
authority’s own; (iii) Even in cases of sub-delegation, so long as the
essential function of decision making is performed by the delegate, the
burden of performing the ancillary and clerical task need not be
shouldered by the primary delegate and it is not necessary that the primary
delegate himself should perform the ministerial acts as well; and (iv)
Practical necessities or exigencies of administration require that the
decision-making authority who has been conferred with statutory power,
be able to delegate tasks when the situation so requires.
15. Rule 11A of the Rules empowers the appellate authority to call for
any information or record from any public office, officer or authority or to
examine and record statements from any member of the public office or
authority. In line with the principles laid down by this Court, it can
therefore be said that in exercise of such power, if the appellate authority
calls for any information or calls for any record or any inputs, that by
itself, will not amount to delegation of essential functions. If, in terms of
such power, the appellate authority deputes a responsible official to enquire
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into certain facets and calls for a report, that would be an ordinary mode of
exercise of the power vested in the appellate authority. Practical
necessities and exigencies of administration demand that the appellate
authority must be able to delegate certain tasks such as collecting
information after causing inspection. So long as the essential function, that
is to say of considering all the necessary factors and inputs and thereafter
arriving at an informed decision is done by the appellate authority, the
burden of performing ancillary tasks need not be shouldered by the
appellate authority.
16. The submission based on Section 76-A of the Act is completely
misplaced and does not deserve acceptance. Section 76-A is quoted
hereunder for facility:
“76-A. Delegation of certain powers- The State
Government may, by notification in the Official
Gazette delegate-
(a) all or any of the powers conferred on it by
sections 2(9), 33(3)(b), 70(1), 74 and 78 to the
Chief Controlling Revenue Authority; and
(b) all or any of the powers conferred on the
Chief Controlling Revenue-Authority by sections
45(1), (2), 56(1) and 70(2) to such subordinate
Revenue Authority as may be specified in the
notification.”
Section 76-A was inserted in the Principal Act vide the
Decentralization Act, 1914 (Act No. IV of 1914). The legislative head in
Entry 44, namely “Stamp duties other than duties on or fees collected by
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means of judicial stamps, but not including rates of stamps” is in the
Concurrent List of Schedule VII to the Constitution. Section 47-A was
inserted in the Principal Act by the State Legislature by enacting the
Tamil Nadu Act No.24 of 1967 which received the assent of the President
on 29th March, 1968. The Rules including Rule 11-A were framed to
effectuate the letter and spirit of Section 47-A.
Section 76-A of the Principal Act enables the State Government to
delegate some of the statutory powers conferred upon it by the Principal
Act to the Chief Controlling Revenue Authority. Such empowerment has
nothing to do with the legislative power exercised by the State in terms of
which Section 47-A was inserted, or with the Rules promulgated to
effectuate Section 47-A. For interpreting and considering the context of
said Section 47-A or the Rules, the fact that certain other statutory powers
in favour of the State Government are delegable, has absolutely no
relation. Section 47-A was inserted by the State in its legislative power
and the Rules framed thereunder have to be considered on their own and
without being influenced by Section 76-A.
17. Therefore, in observing that the inspection ought to have been
carried out by the Inspector General of Registration himself, and such
function could not have been delegated, the High Court failed to
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appreciate the principles laid down by this Court. Any report that was
called for was essentially in the nature of rendering assistance to the
appellate authority in discharge of its functions. The final order passed by
the appellate authority, after considering all the necessary material, must
be taken to be one rendered by the appellate authority on its own, and
there was no delegation of any essential functions vitiating exercise of
power. We do not, therefore, find any impropriety or invalidity touching
upon the exercise of power by the appellate authority. We, thus, accept the
contentions raised by the learned counsel for the Appellants, and set aside
the view taken by the High Court in that behalf.
18. The ground with respect to delegation of power under Rule 11-A
was taken in all these matters, on the basis of which the High Court set
aside the determination made by the appellate authority. The conclusions
of the High Court in that behalf being erroneous, we set aside said
conclusions in each of the matters, and restore the findings arrived at by
the appellate authority on the basis of the report called for in exercise of
power under Rule 11-A in all the matters.
19. We now turn to question no. 2, in respect of which the High Court
in six of these appeals, had concluded that the stipulation of period of
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three months in Rule 7 being mandatory, the orders passed after the expiry
of said period would be invalid.
19.1 It is submitted on behalf of the Appellants that sub-sections (1)
and (2) of Section 47-A do not prescribe any time limit and the stipulation
in Rule 7 ought to be seen in the context and setting of various stages in
the proceedings. It is submitted: -
“…Rules 4-7 of Rules 1968 require the
collector/authority to perform various tasks namely
issuance of Form I notice by granting 21 days time to
the parties to represent his case with evidence,
consider the representations sent by the parties, verify
the records, call for information or record from the
public office, officer or authority, inspect the property
after due notice and recording statements of the
parties etc. Thereafter, the collector is required to
provisionally determine the market value by taking
into consideration of various factors mentioned in
Rules and the same has to be communicated to the
parties with Form II notice calling upon them to lodge
their objections if any. Thereafter he has to consider
the representations and points urged at the time of
hearing and pass an order determining the market
value of the properties and the duty payable on the
instrument and communicate the said order. The
entire exercise is time consuming and the same cannot
be completed within 3 months time.”
19.2 In response, it is submitted by the Respondents :-
“Rule 7 of the Rules also mandates that the Collector
shall after considering the representations and after
careful consideration of all relevant factors and
evidence available with him pass an order within 3
months from the date of first notice. Rule 7 also has
to be read in the light of Rule 4 (1) of the Rules which
provides for a timeline of 21 days from the date of
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service of the notice for parties to provide their
representations on whether the market value has been
truthfully set forth. Therefore, Rule 7 read in the light
of Rules 4 and Section 47-A (2) provides for a
mandatory requirement to complete the inquiry and
pass an order within the timelines set forth. It would
also be pertinent to note that the timeline to pass an
order within 3 months was introduced vide an
amendment indicating the intention to have a
mandatory timeline to pass orders.
… … …
Rule 7 as originally enacted did not prescribe a time
period for the Collector to pass an order determining
the market value of the properties. Rule 7 was
amended vide G.O.Ms.No. 69 dated 26.02.1997 on
suggestion of the Inspector General of Registration
(the “1997 Amendment) to introduce a month time
period.”
20. Under sub-section (1) of Section 47-A of the Act, if there is reason
to believe that the market value has not been truly set forth in the
Instrument tendered for registration, a reference can be made to the
Collector, who (i) after giving the parties reasonable opportunity of being
heard; and (ii) after holding an enquiry in such manner as may be
prescribed by Rules, has to determine the correct value of the concerned
property. The Section by itself does not lay down any period within
which the entire process is to be completed by the Collector. It simply
states that the enquiry be held in “such manner” as may be prescribed by
Rules. In this backdrop the manner in which the enquiry must be held as
set out in the Rules, is required to be considered.
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According to the Rules, following steps are required to be
undertaken:
A) On receipt of reference as stated above, the Collector must
issue notice in Form I to the persons by whom and in whose
favour the Instrument is executed, informing such persons to
produce all evidence to show that the market value has been truly
set forth in said instrument. The notice must give such persons
time of twenty one days from the receipt of notice to represent or
respond. [Rule 4(1)]
B) The Collector may record statement of any such noticee.
[Rule 4(2)].
C) For the purposes of the enquiry, the Collector may call for
information from any public office or examine and record
statements or inspect the property after due notice as stated in
detail in Rule 4(3).
D) After considering the representations, if any, and the record
and evidence, a provisional order determining the market value
must be passed indicating the basis for such conclusion. [Rule
4(4)]. For arriving at the provisional market value, regard must be
had to the principles set out in Rule 5.
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E) The provisional order must be communicated in Form II to
all the concerned persons who must be given some time to prefer
objections, if they so wish; and they must be heard on the day
fixed in the notice or on such other day as may be fixed. [Rule 6]
F) After considering the representations in writing and those
urged at the time of hearing as well as all the relevant factors and
evidence, the Collector must pass an order determining the market
value of the concerned property and assess the element of duty
payable on the instrument of transfer. Such order is required to be
passed “within three months from the date of first notice”. [Rule 7]
21. The expression “within three months from the date of first notice”
is crucial. Is the description “first notice” referable to notice in Form I
issued in terms of Rule 4(1)? The answer would obviously be in the
negative. Form I notice itself must give twenty-one days to the concerned
persons to respond. Depending upon their response, their statements
would be recorded and/or certain information may be required to be called
for, whereafter the Order in Form II is to be issued provisionally
determining the market value. The concerned persons are entitled to raise
objections in writing and must be afforded hearing. After fulfilling these
requirements, the order in terms of Rule 7 can be passed. All these stages
may not be completed in three months.
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 Further, the reference in Rule 7 is to the “first notice” and not to
“notice in Form I”. Considering the context and various stages preceding
the stage of passing of the Order under Rule 7, the reference has to be to
the first “notice in Form II”. There could possibly be more than one
notices in Form II, specially when the hearing is to take place on an
adjourned date and that is why the period must be reckoned from the first
notice in Form II. The expression immediately following “first notice” in
Rule 7 is “determining the market value of the properties….” That is also
indicative that the reference to the notice is one in Form II in the
immediately preceding Rule 6.
22. We now deal with the question whether the stipulation of period of
three months in Rule 7 is mandatory or directory.
23. Some of the decisions of this Court dealing with question as to in
what circumstances and context a statutory provision can be considered to
be mandatory or directory may first be noted.
A) In State of Mysore and others v. V.K. Kangan and others21
a bench of three Judges of this Court observed: -
“10. In determining the question whether a provision is
mandatory or directory, one must look into the subjectmatter and consider the importance of the provision
21 (1976) 2 SCC 895
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disregarded and the relation of that provision to the
general object intended to be secured. No doubt, all
laws are mandatory in the sense they impose the duty
to obey on those who come within its purview. But it
does not follow that every departure from it shall taint
the proceedings with a fatal blemish. The determination
of the question whether a provision is mandatory or
directory would, in the ultimate analysis, depend upon
the intent of the law-maker. And that has to be gathered
not only from the phraseology of the provision but also
by considering its nature, its design and the
consequences which would follow from construing it in
one way or the other. … …”
B) In T.V. Usman vs. Food Inspector, Tellicherry
Municipality, Tellicherry22
, this Court was called upon to consider
whether stipulation of period in Rule 7(3) of the Prevention of Food
Adulteration Rules, 1955 within which time the report of the analysis
of the sample must be delivered, would be mandatory or directory.
This Court quoted the following passage from the decision of the
Constitution Bench of this Court:-
“10. In Dattatraya Moreshwar v. State of Bombay23 it
was held as under:
“[G]enerally speaking the provisions of a
statute creating public duties are directory
and those conferring private rights are
imperative. When the provisions of a
statute relate to the performance of a public
duty and the case is such that to hold null
and void acts done in neglect of this duty
would work serious general inconvenience
or injustice to persons who have no control
22 (1994) 1 SCC 754
23 AIR 1952 SC 181
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38
over those entrusted with the duty and at
the same time would not promote the main
object of the legislature, it has been the
practice of the Courts to hold such
provisions to be directory only, the neglect
of them not affecting the validity of the
acts done.”
B.1) Thereafter, this Court considered the effect of stipulation in
Rule 7(3):
“11. In Rule 7(3) no doubt the expression “shall” is
used but it must be borne in mind that the rule deals
with stages prior to launching the prosecution and it is
also clear that by the date of receipt of the report of
the Public Analyst the case is not yet instituted in the
court and it is only on the basis of this report of the
Public Analyst that the authority concerned has to
take a decision whether to institute a prosecution or
not. There is no time-limit prescribed within which
the prosecution has to be instituted and when there is
no such limit prescribed then there is no valid reason
for holding the period of 45 days as mandatory. Of
course that does not mean that the Public Analyst can
ignore the time-limit prescribed under the rules. He
must in all cases try to comply with the time-limit.
But if there is some delay, in a given case, there is no
reason to hold that the very report is void and on that
basis to hold that even prosecution cannot be
launched. May be, in a given case, if there is
inordinate delay, the court may not attach any value to
the report but merely because the time-limit is
prescribed, it cannot be said that even a slight delay
would render the report void or inadmissible in law.
In this context it must be noted that Rule 7(3) is only
a procedural provision meant to speed up the process
of investigation on the basis of which the prosecution
has to be launched. No doubt, sub-section (2) of
Section 13 of the Act confers valuable right on the
accused under which provision the accused can make
an application to the court within a period of 10 days
from the receipt of copy of the report of Public
Analyst to get the samples of food analysed in the
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39
Central Food Laboratory and in case the sample is
found by the said Central Food Laboratory unfit for
analysis due to decomposition by passage of time or
for any other reason attributable to the lapses on the
side of prosecution, that valuable right would stand
denied. This would constitute prejudice to the accused
entitling him to acquittal but mere delay as such will
not per se be fatal to the prosecution case even in
cases where the sample continues to remain fit for
analysis in spite of the delay because the accused is in
no way prejudiced on the merits of the case in respect
of such delay. Therefore it must be shown that the
delay has led to the denial of right conferred under
Section 13(2) and that depends on the facts of each
case and violation of the time-limit given in sub-rule
(3) of Rule 7 by itself cannot be a ground for the
prosecution case being thrown out.”
C) In P.T. Rajan vs. T.P.M. Sahir and others24 the principles
were summed up as follows: -
“48. Furthermore, even if the statute specifies a time
for publication of the electoral roll, the same by itself
could not have been held to be mandatory. Such a
provision would be directory in nature. It is a wellsettled principle of law that where a statutory
functionary is asked to perform a statutory duty
within the time prescribed therefor, the same would
be directory and not mandatory. (See Shiveshwar
Prasad Sinha v. District Magistrate of Monghyr25
,
Nomita Chowdhury v. State of W.B.26 and Garbari
Union Coop. Agricultural Credit Society Ltd. v.
Swapan Kumar Jana27.)
49. Furthermore, a provision in a statute which is
procedural in nature although employs the word
“shall” may not be held to be mandatory if thereby no
prejudice is caused. (See Raza Buland Sugar Co. Ltd.
24 (2003) 8 SCC 498
25 AIR 1966 Pat 144 : ILR 45 Pat 436 (FB)
26 (1992) 2 Cal LJ 21
27 (1997) 1 CHN 189
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40
v. Municipal Board, Rampur28
, State Bank of Patiala
v. S.K. Sharma29
, Venkataswamappa v. Special Dy.
Commr. (Revenue)30 and Rai Vimal Krishna v. State of
Bihar31.)”
24. Reliance is, however, placed by the learned Counsel for the
Respondents on the decision of this Court in Mackinnon Mackenzie and
Company Ltd. vs. Machinnon Employees Union32
. One of the issues
that arose for consideration in that case was whether the provisions of
Section 25FFA of the Industrial Disputes Act, 1947 contemplating
issuance of notice of closure are mandatory or directory and the
submission advanced on behalf of the Union of Workmen was noted as
under:
“37. The contention urged by Mr C.U. Singh, the
learned Senior Counsel for the respondent Union is
that if the interpretation of the provision under
Section 25-FFA of the ID Act as contended by the
learned counsel on behalf of the appellant Company is
accepted to be directory and not mandatory as it
would attract the penal provision against the appellant
Company under Section 30-A of the ID Act, then the
purpose and intendment of the amendment in the year
1972 made to Section 25-FFA of the ID Act, will be
defeated and would nullify the Objects and Reasons
for amending the provisions of the ID Act and it
would be contrary to the legislative wisdom of
Parliament. The statutory protection has been given to
the workmen under the provision of Section 25-FFA
of the ID Act, with an avowed object to protect
workmen being retrenched due to closing down of a
28 AIR 1965 SC 895 : (1965) 1 SCR 970
29 (1996) 3 SCC 364 : 1996 SCC (L&S) 717
30 (1997) 9 SCC 128
31 (2003) 6 SCC 401
32 (2015) 4 SCC 544
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department/unit of the undertaking as the livelihood
of such workmen and their family members will be
adversely affected on account of their retrenchment
from their service. To avert such dastardly situation to
be faced by the workmen concerned in the
company/establishment, the statutory obligation is
cast upon the employer to serve at least 60 days’
notice on the State Government before such intended
closure of the department/unit to be served upon the
State Government informing the reasons as to why it
intends to close down its department/unit.”
This Court accepted the afore-stated submission. It relied upon
the decisions of this Court in State of UP v. Babu Ram Upadhyay33
, State
of Mysore v. V.K. Kangan21 and Shrif Uddin v. Abdul Gani Lone34 and
other decisions and held the concerned provisions to be mandatory. It was
observed:
“44. The statutory provisions contained in Section 25-
FFA of the ID Act mandate that the Company should
have issued the intended closure notice to the
appropriate Government should be served notice at
least 60 days before the date on which it intended to
close down the department/unit concerned of the
Company. As could be seen from the pleadings and
the findings recorded by the Industrial Court, there is
a categorical finding of fact recorded that there is no
such mandatory notice served on the State
Government by the appellant Company. The object of
serving of such notice on the State Government is to
see that it can find out whether or not it is feasible for
the company to close down a department/unit of the
company and whether the workmen concerned ought
to be retrenched from their service, made unemployed
and to mitigate the hardship of the workmen and their
family members. Further, the said provision of the ID
33 AIR 1961 C 751
34 (1980) 1 SCC 403
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Act is the statutory protection given to the workmen
concerned which prevents the appellant Company
from retrenching the workmen arbitrarily and
unreasonably and in an unfair manner.
45. The cumulative reading of the Statement of
Reasons, the retrenchment notice served on the
workmen concerned, the pleadings of the appellant
Company and in the absence of evidence on record to
justify the action of retrenchment of workmen
concerned on the alleged closure of the
department/unit of the appellant Company is shown as
bona fide. However, the concurrent finding of fact
recorded by the High Court on this aspect of the case
cannot be held to be bad in law by this Court in
exercise of its appellate jurisdiction in this appeal.”
While concluding so, this Court also relied upon the Objects and
Reasons of the Amending Act 32 of 1972 inserting Section 25FFA in the
Industrial Disputes Act, and the fact that the legislation provided penalty
for closing down any undertaking without serving requisite notice.
25. As noted above, Section 47-A by itself does not prescribe any
timeline. If the stipulation or fixation of period of three months from the
first notice in terms of Rule 6 or from notice in Form II is taken to be
mandatory it would lead to a situation of incongruity. The fact that Form
II notice had been issued, would mean that on a prima facie view of the
record and material, the value stated in the instrument was not the correct
value; which in turn would mean that prima facie the Government Coffers
were being denied the rightful dues. If for any reason the proceedings are
not completed within three months and, therefore, must be held to be
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43
vitiated, the public interest would suffer, and the persons who were prime
facie responsible for suppressing the real value, would stand to gain. The
amendment of Rule 7 incorporating the period of three months was
essentially to guide the public officials to complete the process as early as
possible but was not intended to create a right in favour of those who had
prime facie conducted themselves prejudicing public interest.
 In keeping with the principles laid down in State of Mysore and
others v. V.K. Kangan and others21, if the subject matter of the provision
as well as the inter-relation of the period of three months to the general
object of the provision are considered, the fixation of period has to be
taken to be directory. Otherwise, the very object of sub-serving public
interest and securing public revenue would get defeated. Pertinently, the
concerned provision has not spelt out any consequence for non-adherence
to said period of three months.
26. We, therefore, hold the fixation of timeline of three months in
Rule 7 to be purely directory. In the premises, the conclusion by the High
Court holding the said provision to be mandatory is set aside, and no
benefit on that ground can accrue to the Respondents.
27. We now turn to question No.3, which incidentally arises only in
one appeal viz. one arising from SLP(C) Nos.31633-31637 of 2018. At
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44
this stage, the relevant portions from the order of the appellate authority
may be extracted hereunder:-
“District Registrar has recommended a value of
Rs.480/- per sq.ft., for the documents registered in
2005 and Rs.544/- per sq.ft., for the documents
registered in 2007. He has stated that the lands are
located in WIMCO Nagar opposite to WIMCO Nagar
Railway Station and lies between Thiruvottriyur High
Road and Ennore Express Road. Further he has stated
that as per local enquiry, at the time of registration the
value of the lands ranged between Rs.11.5 to 12
Lakhs per ground for 2005 documents and Rs.13 to
14 Lakhs per ground for the documents registered in
2007.
Perusal of Sales Statistics reveals registration of
documents upto 2006 adopting a value of Rs.204/- per
sq.ft., and referred under 46A and are still pending.
Again, from 25-09-2006 onwards large number of
documents (nearly 40) have been registered adopting
a value of Rs.544/- per sq.ft. However, extents
involved in all these cases ranges from 1 ground to 2
grounds except in few cases were extend involved
in1200 sq.ft. All these are sanctioned layouts. One
Doct. No.10084/2007 has been registered in
S.No.168/7, 9, 9 adopting a value of Rs.625/- per
sq.ft. Further vide Doct. No.10675/07 an extent of
4.957 acres was registered adopting a value of
Rs.485/- per sq.ft. and the same was referred under
47A for which District Revenue Offricer (Stamps)
fixed a value of Rs.920/- per sq.ft. This property is
adjoining the subject property as it shares one of the
boundaries with the subject document properties
similarly, for another Doct. No.10676/07, involving
an extent of 16290/- sq.ft. document value adopted
was Rs.841/- per sq.ft. for which District Revenue
Officer (Stamps) fixed a value of Rs.920/- per sq.ft.
Both the values were accepted by the registrants and
they paid the deficit Stamp Duty. The Guideline
value of those properties was Rs.1200/- per sq. ft.
with effect from 01.08.2000.
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45
The present Guideline value of the subject properties
with effect from 01.04.2012 is Rs.3500/- per sq.ft.
The sale deed in Doc. Nos.10675/2007 and
10676/2007 involve large extent of industrial land
and, hence, are similar to the lands involved in subject
documents. Therefore, for the 5 documents registered
in 2005, it is proposed to adopt the value of Rs.544/-
per sq.ft since, there seems no reason to believe that
the guideline values are abnormal in light of
registration adopting a value of Rs.920/- per sq.ft. in
2007. Similarly, for the three documents registered in
2007, it is proposed to fix a value of Rs.920/- per
sq.ft. aking to the value fixed and accepted by the
registrants in Doct.Nos.10675/2007 and 10676/2007.
Hence issue shows cause Notice to the Petitioner
accordingly for all the 8 cases. Hence a new show
cause notice was issued in continuation of the
personal enquiry to the Appellant and to his Advocate
with reference to the 9 cited why the value at Rs.544/-
per sq.ft. for the 5 document properties registered
during 2005 and at Rs.920/- per sq.ft in respect of 3
document registered in 2007 and to furnish fresh
objections if any within 10 days in continuation of
this with reference to the 10th cited the Advocate
requested to furnish on which basis the provisional
value was determined and the sales statistics of
documents and to send the copies of document
Nos.10675, 10676/2007 and whether there is any
ways and means to give show cause notice under
Section 47A5 of the Indian Stamps Act and to give
details of the documentary basis in continuation of
that with reference to the 11 cited the details
requested by the Petitioner the report of spot
Inspection of the District Revenue Officer and the
copies of Document Nos.10675, 10676/2007 where
despatched.”
Thus, while proposing to enhance the market value higher than
what was determined by the Collector, the appellate authority had put the
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46
appellant-registrant to sufficient notice and had called for response with
regard to the proposed enhancement. It was only thereafter that the
exercise was undertaken to determine the true market value at Rs.544/-
per sq.ft. and Rs.920/- per sq.ft for documents registered in the year 2005
and 2007 respectively.
28. In the challenge arising therefrom, the High Court vide its order
dated 19.03.2018 in CMA Nos.2449 to 2453 of 2014 observed:-
“13. It is seen that the first respondent, while
deciding the appeal, had enhanced the market value
determined by the second respondent and fixed a
higher value. As per Section 47-A(5) of the Indian
Stamp Act, the first respondent shall only scrutinize
the correctness of the order passed by the second
respondent, as an appeal has been preferred by the
presentant concerned. In the appeal preferred by the
presentant, the Inspector General of Registration, has
no power to enhance the market value.
14. This Court, in its judgment in Rajendran v. The
Inspector General of Registration and others35 has
held that while deciding the appeal preferred by the
presentant, unlike the suo motu revision under Section
47-A(6) of the Indian Stamp Act, the appellate
authority is not empowered to enhance the market
value of the property and he can only decide on the
correctness of the order passed by the District
Collector or District Revenue Officer. Therefore, it is
clearly seen that the order passed by the first
respondent is in total violation of Rules 6, 7 and 11-A
of the above said rules and in excess of powers
conferred under Section 47-A(5) of the Indian Stamp
Act. In such circumstances, I have no hesitation to set
aside the impugned order passed by the first
respondent.”
35 2012(3) CTC 589
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29. In Rajendran v. The Inspector General of Registration, Tamil
Nadu and others (supra) the High Court had observed: -
“33. Perusal of the impugned orders in all these
appeals does not indicate that the Chief Controlling
Revenue Authority cum Inspector General of
Registration, Chennai, has arrived at the subjective
satisfaction that the order passed under sub-section 2
of Section 47, by the Collector of Stamps, is
prejudicial to the interest of the revenue and that the
abovesaid appellate authority has not made any
inquiry or cause such inquiry to be conducted, before
enhancing the market value of the property in each of
these appeals. Reading of the Section 47-A(6) of the
Act makes it clear that the primary object behind,
engrafting suo-motu exercise of power is that the
order passed under sub-Sections (2) and (3) of Section
47 of the Act, should be first examined and found that
it is prejudicial to the interests of revenue. There
should be a categorical finding to that effect.
Therefore, when a provision in the statute, enjoins a
duty on the authority, to arrive at a conclusion, form a
subjective satisfaction, with a specific objective to
protect the revenue, if the orders passed under Section
47-A(2) and/or 47-A(3) is prejudicial to the revenue,
then the order of the Chief Controlling Revenue
Authority-cum-Inspector General of Registration,
Chennai, should advert to the said objective on the
facts and circumstances of each case and arrive at a
satisfaction, before proceeding further, under the
provisions of the Act.
34. Further, even assuming that the Chief Controlling
Revenue Authority cum Inspector General of
Registration, Chennai, arrives at a provisional
conclusion that an order passed by the Collector
(Stamps) is prejudicial to the interest of the revenue,
no order under sub-section 6 of section 47-A of the
Act can be passed adversely, without a reasonable
opportunity of being heard. First of all, in the cases on
hand, as stated supra, no such exercise as
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48
contemplated under sub-section 6 of Section 47-A of
the Act, has been done by the Chief Controlling
Revenue Authority cum Inspector General of
Registration, Chennai. Therefore, this Court is of the
view that the impugned orders in all these appeals do
not fall within the ambit of sub-section (6) of Section
47 of the Act.
35. The jurisdiction of the Chief Controlling Revenue
Authority in exercise of his suo motu power has its
own limitations, as provided for, in sub-sections (6)
and (7) of section 47-A and from the language
employed in the section. It could be construed that it
is only supervisory, as he has all the authority to call
for and examine any order passed under sub-section 2
or sub-section 3 suo motu, if such an order is
prejudicial to the interests of the revenue. Before
passing an order under Section 47(6) of the Act, after
making an inquiry or causing any such enquiry to be
made, the materials collected, the report if any, should
be provided to the person against whom proceedings
are initiated, to satisfy the requirements of the
principles of natural justice, otherwise, the parties
would be deprived of their right to offer their
explanation, if any.
36. Enhancement of market value of the property on
the appeals preferred by the land owners under
Section 47(5) is not contemplated under the scheme
of the Act, without recourse to sub-section 6 of
section 47, wherein the statute has contemplated a
procedure of conducting an inquiry and reasonable
opportunity. No doubt, the statute empowers the Chief
Controlling Revenue Authority-cum-Inspector
General of Registration, Chennai, to exercise suomotu powers under Section 47(6) of the Act, within
five years, from the date of passing of an order, under
Section 47(2) and (3) of the Act, as the case may be,
but the Statute mandates, consideration of the records,
in terms of the objective, specifically incorporated in
the Section and that he should arrive at a subjective
satisfaction, as to whether, the order passed under
sub-Sections (2) and (3) of Section 47-A of the Act, is
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prejudicial to the interests of Revenue. He must
record reasons for arriving at the satisfaction.”
30. Sub-section (6) of Section 47-A of the Act empowers the Chief
Controlling Revenue Authority, in exercise of suo motu power, to call for
and examine the correctness of an order passed under sub-section (2) or
sub-section (3) of Section 47-A; and if the order is prejudicial to the
interest of Revenue, the Chief Controlling Authority may make such
enquiry or cause such enquiry to be made and either revise, modify or set
aside such order and pass any order that it deems appropriate. There are
some limitations on the exercise of said power, since no proceedings can
be initiated against an order passed under sub-section (2) or sub-section
(3), if the time for preferring an appeal against that order has not expired,
or if more than five years have expired after passing of the order. The
intent is clear that if there be sufficient time to prefer a regular appeal
challenging that order, the remedy of filing an appeal ought to be taken
resort to. Further, if the period of five years has expired, no suo motu
power can be exercised. Another limitation is prescribed by sub-section
(8), in terms of which no order in exercise of suo motu exercise of power
can be passed which may adversely impact a person, unless that person has
had reasonable opportunity of being heard. Apart from these limitations,
the statutory provisions do not impose any other restriction, and the power
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is conferred principally to ensure that no order passed under sub-sections
(2) or (3) of Section 47-A is prejudicial to the interest of the revenue.
The limitation in sub-section (8) of Section 47-A, was high-lighted
in paragraphs 33 to 36 of the judgment of the High Court in Rajendran v.
The Inspector General of Registration, Tamil Nadu and others (supra).
In the present case, adequate notice was issued to the concerned persons
and, therefore, there was no infirmity on that count. It is nobody’s case
that as on the date when the proceedings were initiated in exercise of the
power under sub-section (6) of Section 47-A, the period for preferring the
appeal had not expired, or that more than five years had expired after the
passing of the order under sub-section (2) or sub-section (3). In the
circumstances, none of the limitations which the statute has imposed upon
the exercise of power were present.
31. The observations of the High Court in the instant case indicate that
while dealing with an appeal preferred by the registrant against an order
passed under Section 47-A(2), no suo motu exercise of power could be
initiated. It is the correctness of that view which is now in issue.
32. While considering the nature of power conferred by Section 20(3)
of the Bengal Finance (Sales Tax) Act, 1941 where the Commissioner
“upon application or of his own motion” could revise any assessment or
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order, this Court in M/s Ram Kanai Jamini Ranjan Pal Pvt. Ltd. v.
Member, Board of Revenue, West Bengal36 quoted with approval
following passage from the judgment of the High Court of Madras:
13. The following observations made by Ramaswami,
J. in East Asiatic Co. (India) Ltd. v. State of Madras37
are also relevant
“The purposes of this Act are twofold viz. the levy of a
general tax on the sale of goods to supplement the lost
revenues and for promoting the general public good; and
secondly, to see that this is done under the provisions of
the Act and not by carrying out in a capricious or arbitrary
manner. Therefore, a revisional authority has to be created.
What is revision? The essence of revisional jurisdiction
lies in the duty of the superior tribunal or officer entrusted
with such jurisdiction to see that the subordinate tribunals
or officers keep themselves within the bounds prescribed
by law and that they do what their duty requires them to
do and that they do it in a legal manner. This jurisdiction
being one of superintendence and correction in appropriate
cases, it is exercisable even suo motu as is clear from the
numerous statutory provisions relating to revision found in
various Acts and Regulations such as the Civil Procedure
Code, Criminal Procedure Code, Income Tax Act, etc. The
jurisdiction of suo motu revision is not cribbed and
cabined or confined by conditions and qualifications. The
purpose of such an amplitude being given suo motu
revisions appears to be as much to safeguard the interests
of the exchequer as in the interests of the assessee. The
State can never be the appellant and if there is an order
against the State to its prejudice, and naturally the assessee
in whose favour the order is passed does not prefer an
appeal, the State would suffer unless its interests are
safeguarded by the exercise of such supervisory
jurisdiction as the one given to the authorities
abovementioned.”
33. The essence of revisional jurisdiction is thus accepted to be in the
duty of the superior tribunal or officer to ensure that the subordinate
36 (1976) 3 SCC 369
37 (1956) 7 STC 299 (Mad)
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tribunal or officers remain within the bounds prescribed by law and
discharge their functions in accordance with law. The nature of such
power to be exercised “suo motu”, or “on its own motion”, has also been
dealt with in following decisions:
A) While considering Section 38-B of the Orissa Estates Abolition
Act, 1951, which did not impose any restriction akin to those found in subsection (7) of Section 47-A of the Act, this Court in State of Orissa and
others v. Brundaban Sharma and another38 observed:-
“12. ..…. When and under what circumstances the
suo motu inquiry would be initiated and orders passed
is left to the discretion of the Board of Revenue
depending on the facts and circumstances of each
case.”
After considering some of the decisions of this Court, it was
observed:-
“16. It is, therefore, settled law that when the
revisional power was conferred to effectuate a
purpose, it is to be exercised in a reasonable manner
which inheres the concept of its exercise within a
reasonable time. Absence of limitation is an assurance
to exercise the power with caution or circumspection
to effectuate the purpose of the Act, or to prevent
miscarriage of justice or violation of the provisions of
the Act or misuse or abuse of the power by the lower
authorities or fraud or suppression. Length of time
depends on the factual scenario in a given case. Take
a case that patta was obtained fraudulently in
collusion with the officers and it comes to the notice
of the authorities after a long lapse of time. Does it lie
38 (1995) Supp. 3 SCC 249
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in the mouth of the party to the fraud to plead
limitation to get away with the order? Does lapse of
time an excuse to refrain from exercising the
revisional power to unravel fraud and to set it right?
The answers would be no.”
B) In Vijayabai and others V. Shriram Tukaram and others39
this Court expressed caution as under: -
“9. The Tahsildar while exercising his suo motu
power under Section 49-B has to initiate on the basis
of the materials before him not arbitrarily. Every
exercise of suo motu power explicitly or implicitly
reveals to correct an error crept in under a statute,
what ought to have been done was not done or which
escaped the attention of any statutory authority, or
error or deliberate omission or commission by the
subject concerned requires correction, of course,
within the limitation of any such statute. This has to
be based on some relevant material on record, it is not
an omnipower to be exercised on the likes and
dislikes of such an authority. Though such a power is
a wide power but it has to be exercised with
circumspection within the limitations of such statute.
Wider the power, the greater circumspection has to be
exercised.”
34. In Sree Balaji Rice Mill, Bellary v. State of Karnataka40 the basic
facts were stated in the decision rendered by a Bench of three Judges of
this Court as under:-
“3. The Additional Commissioner of Commercial
Taxes, Devangere Zone, Devangere issued notices
dated 16-2-1994 and 21-3-1994 under Section 22-A of
the Act proposing to revise the order of assessment
dated 12-7-1990 passed by the assessing authority on
the ground that the assessment order was erroneous
39 (1999) 1 SCC 693
40 (2005) 4 SCC 21
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and prejudicial to the interest of the Revenue. In the
notices, the revisional authority had made
observations to the effect that the books of accounts
have not been properly maintained. In response to the
notices, the appellant filed reply on 4-4-1994 denying
the observations made by the revisional authority and
had requested the said authority to drop the
proceedings initiated under Section 22-A of the Act.
The revisional authority on 8-4-1994 issued a further
notice under Section 22-A(1) of the Act making the
same proposal as made in the earlier notices and
further proposed to levy penalty under Section 18-A
of the Act. The revisional authority confirmed the
proposals made in the notices issued under Section
22-A of the Act vide order dated 2-6-1994 and
modified the set-off granted by the assessing
authority.”
One of the questions that came up for consideration was set out in
paragraph 11 as under:-
“11. The following questions of law arise for
consideration by this Court:
(a) ……
(b) ……
(c) While purporting to revise an order under Section
12-A which neither expressly nor impliedly refers to
any proceeding under Section 18-A and was thus not
within the contemplation of the assessing authority
while passing the order under Section 12(3), is it open
for the Commissioner, while purporting to act under
Section 22-A in respect of the order under Section
12(3) to pass an order under Section 18-A either as a
part of the order under Section 22-A or separately as
such under Section 18-A?
(d) ……”
The question was considered as under:
“14. Section 18-A of the Act prohibits excess
collection of tax by an assessee. If any person
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55
contravenes Section 18, penalty is provided under
Section 18-A of the Act. The question is when at the
time of assessment, if no penalty is imposed by the
assessing authority, can the revisional authority, by
invoking his suo motu powers under Section 22-A of
the Act impose penalty for the first time on the ground
that the order of assessment is prejudicial to the
interests of the Revenue?
17. It must be noted that there is a difference between
exercise of revisional powers over orders passed by
lower authority and exercise of revisional powers in
the assessment proceeding itself. A revision of an
order may be confined to what the order contains or
dealt with. But when the assessment proceedings
themselves are before the revisional authority it can
go beyond the order of the assessing authority and
pass such orders as the assessing authority could or
should have passed.
22. The argument of the learned counsel for the
appellant that the revising authority or the appellate
authority higher than the assessing authority is not
competent to levy a penalty for the first time when no
penalty has been levied by the assessing authority is
wholly untenable, without statutory basis and
unreasonable from any point of view. The said plea is
liable to be rejected. The necessity for there to be an
order under Section 18-A for the exercise of
revisionary jurisdiction under Section 22-A is once
again fallacious. The non-levy of penalty is itself an
illegality caused by a failure to exercise the
jurisdiction by the assessing authority and therefore,
prejudicial to the interests of the Revenue.”
35. For exercising revisional power “suo motu” or “on its motion”, the
concerned authority must be satisfied that an order has been passed by the
authority or officer subordinate to it. which may be prejudicial to the
interest of the revenue. As indicated in some of the hypothetical instances
noted in the decisions quoted hereinabove, the error may have crept in
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56
unknowingly, or there may be a genuine mistake, or in some cases there
could be a deliberate attempt to prejudice the interest of revenue. If an
infirmity or illegality is brought to the notice or knowledge of the
revisional authority, through normal and regular process of reporting by the
subordinate officer or authority, the power of revision can certainly be
exercised. The requisite knowledge enabling the revisional authority to
exercise the power vested in it, can also be gathered from the appeal
preferred by the registrant himself. That may only be an occasion or a
source which enables the authority to gather information about the possible
infirmity or illegality in the process. Upon being so aware, the revisional
authority would thereafter be exercising power vested in it. Qualitatively,
it makes no difference as to what was the source of the information or
knowledge, so long as the power is exercised within the confines of the
limitations or restrictions imposed by the statute, and is in accordance with
law. Apart from the restrictions imposed by the statute, none can be read
into the exercise of power on the ground as to the nature or source of
information.
While entertaining an appeal, if an obvious illegality is noticed by
the revisional authority, it can certainly exercise suo motu power to undo
the mistake, or rectify an error committed by the subordinate officer or
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57
authority, subject to such restrictions as are imposed on the exercise of the
power by the statute.
36. There is nothing in the scheme of the Act which purports to restrict
the exercise of suo motu power under Section 47-A, and confines it to
cases where knowledge of any illegality or infirmity in the proceedings
undertaken by the subordinate officers must be gathered from sources other
than through a pending appeal. Unless the statute expressly or even by
necessary implication restricts the exercise of power, there would be no
occasion to read into the power, any other limitations. The High Court has
not found the exercise of power to be invalid on any count, nor was any
such submission advanced before the High Court. The High Court had
simply gone on the existence of power rather than on the exercise of
power. It is not as if the assessment made by the appellate authority was
either opposed to principles of natural justice, or was so palpably incorrect,
that it could never be sustained. In our view, the High Court completely
erred in setting aside the exercise of power undertaken by the concerned
authority. The exercise of power was definitely designed to obviate an
obvious illegality and prejudice to the interest of the revenue. The exercise
was, thus, absolutely correct, and there was no occasion to set aside the
orders passed in pursuance thereof. We, therefore, answer question No.3
accordingly.
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37. Having thus considered and answered all the questions which have
arisen for our consideration, all these appeals deserve to be allowed. We
order accordingly, and set aside the decisions of the High Court under
appeal and restore the orders passed by the appellate authority. No costs.
……………………..J
(Uday Umesh Lalit)
…………………….J
(Indu Malhotra)
New Delhi;
June 15, 2020.