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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3194OF 2020
(ARISING OUT OF SLP(C) NO.7990 OF 2020)
M/S. MSD REAL ESTATE LLP ...APPELLANT(S)
VERSUS
THE COLLECTOR OF STAMPS & ANR. ...RESPONDENT(S)
J U D G M E N T
ASHOK BHUSHAN,J.
Leave granted.
2. This appeal has been filed against the judgment of
the High Court of Madhya Pradesh at Indore dated
10.06.2020 by which the writ petition filed by the
appellant challenging the notice dated 04.06.2020
issued by Additional Tehsildar (Recovery), District
Indore as well as notice dated 04.06.2020 issued by
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Building Officer, Zone No.09, Municipal Corporation
Indore has been dismissed.
3. Brief facts giving rise to this appeal are:
The property in question in this appeal is Lantern
Hotel having Municipal No.28, Yeshwant Niwas Road,
Indore with regard to which a Deed of Assent was
executed on 21.04.2005 by the Trustees of Private
Trust, namely, H.C. Dhanda Trust. H.C. Dhanda executed
Will dated 26.10.2002. The Collector of Stamps issued
notice stating that there is deficiency in the stamp
duty on deed dated 21.04.2005 and passed an order dated
22.09.2008 holding the deed to be a Gift Deed and
determined a deficiency of stamp duty to the extent of
Rs.1,28,09,700/- and imposed penalty of ten times to
the tune of Rs.12,80,97,000/-. H.C. Dhanda Trust filed
writ petition in the High Court challenging order dated
22.09.2008 which was dismissed on 30.03.2017. An SLP(C)
Diary No.30539 of 2017 was filed by the Trustees of
H.C. Dhanda Trust against the judgment of the Madhya
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Pradesh High Court dated 30.03.2017 in which this Court
passed following interim order dated 10.11.2017:
“Issue notice, returnable in six weeks,
limited to the quantum of penalty that has been
imposed by the Collector (Stamps).
Subject to the condition that stamp duty
is paid within a period of one month, there
shall be stay of the order qua the penalty.”
4. The Trustees of H.C. Dhanda Trust could not deposit
the stamp duty, this Court made it clear by order dated
22.04.2019 in SLP(C) Diary No.30539 of 2017 that no
interim order is operating as on date. An amount of
Rs.1,28,09,700/- was deposited through a Treasury
Challan dated 07.11.2019 which was the amount of stamp
duty on behalf of Jogesh Dhanda son of late Shri H.C.
Dhanda.
5. The appellant, M/s. MSD Real Estate LLP by a
Registered Sale Deed dated 27.11.2019, purchased the
property in question, Lantern Hotel from the Trustees
of the Trust of Jogesh Dhanda and Ishan Dhanda. The
appellant applied for development permission and vide
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letter dated 18.11.2019 the appellant was granted
permission for construction. Application for mutation
was filed by the appellant in the Municipal
Corporation. The appellant also deposited
Rs.2,92,20,794/- property tax under protest, mutation
in the name of the appellant was also made against the
property in question.
6. On 20.11.2019 the appellant along with Jogesh
Dhanda submitted an application to Collector of Stamps
regarding stamp duty and penalty imposed upon Lantern
Hotel, Indore situate at Municipal No.28, Yeshwant
Niwas Road, Indore. Along with letter the appellant
submitted six post dated cheques totaling
Rs.12,80,97,025/-. A notice dated 04.06.2020 was issued
by Addl. Tehsildar (Recovery) for depositing an amount
of Rs.8,80,97,095/-, outstanding amount towards the
penalty. On 04.06.2020 itself another letter was issued
by the Office of Municipal Corporation, Indore
regarding application received from the appellant for
permission of building construction. The application
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for building permission was rejected by notice dated
04.06.2020. Aggrieved by the aforesaid two notices
dated 04.06.2020 Writ Petition No.8145 of 2020 was
filed by the appellant. In the writ petition the
appellant has challenged notice dated 04.06.2020 issued
by the Addl. Tehsildar(Recovery) as well as order dated
04.06.2020 of the Office of Municipal Corporation,
Indore. The appellant also prayed for direction to
restraint the respondents from giving effect to their
impugned orders and from taking any coercive/penal
action against the appellant.
7. Learned Single Judge by its order dated 10.06.2020
dismissed the writ petition. Learned Single Judge held
that the appellant being subsequent purchaser is liable
to pay the penalty amount. Learned Single Judge noticed
that there being no interim order in SLP(C) Diary No.
30539 of 2017 pending in this Court he was liable to
pay the penalty amount. The High Court also took the
view that payment of penalty by post dated cheques
cannot be approved by the High Court. Insofar as notice
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dated 04.06.2020 issued by the Municipal Corporation,
the High Court took the view that at that time no
interference was called for and after payment of
penalty amount in toto, the appellant would be free to
apply afresh for building permission again whereafter
the Municipal authorities are directed to reconsider
the application for building permission. With the above
discussion, the writ petition was dismissed. Aggrieved
by the judgment of the High Court, the appellant has
filed this appeal.
8. This appeal arising out of SLP(C)No.7990 of 2020
was filed on 24.06.2020.
9. During the pendency of this appeal order dated
26.07.2020 has been issued by the Municipal
Corporation, Indore as well as order dated 25.07.2020
and 28.07.2020 has been issued by the Municipal
Corporation, Indore. The Municipal Corporation also
issued letter dated 27.07.2020 to the Sub-Divisional
Officer, Revenue, Indore requesting him to remove all
encroachment on Municipal property and to handover
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possession of the land in question to the Municipal
Corporation. The appellant by means of I.A.No.72517 of
2020 has prayed for stay the aforesaid orders and
notices and has prayed for other reliefs consequent to
the notices and orders issued as referred to in
aforesaid IA. Counter-affidavit has also been filed by
the Municipal Corporation, Indore to which Rejoinderaffidavit has also been filed. On 07.07.2020 while
issuing notice this Court passed the following order:
“Issue notice.
List along with Diary No.30539/2017.
Learned counsel for the petitioner submits
that towards the penalty amount Rs.6.8 crores
have already been encashed/paid and for rest of
the penalty amount post-dated cheques have
already been given. The petitioner undertakes
to ensure that all post-dated cheques are
cleared so that entire amount of penalty is
paid which 1 shall, however, be subject to the
order of this Court in the pending petition
i.e. Diary No.30539/2017.
In the meantime, impugned orders including
the auction proceeding shall remain stayed.”
10. We have heard Shri Kapil Sibal, learned senior
counsel appearing for the appellant. Shri Tushar Mehta,
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learned Solicitor General has appeared on behalf of the
State. Shri Purushaindra Kaurav, learned Advocate
General, has appeared for Municipal Corporation,
Indore.
11. Shri Kapil Sibal submits that the action of the
Addl. Tehsildar (Recovery) asking for recovery of
amount of Rs.8,80,9725/- was unjustified. It is
submitted that the appellant after purchasing of the
property has deposited the amount of deficit stamp duty
as well as post dated cheques covering the entire
amount of penalty of Rs.12,80,97,025/- by letter dated
20.11.2019 which was accepted by the Collector Stamps
and letter dated 23.11.2019 was issued by the Collector
of Stamps that cheques of total amount has been
received and no stamp duty is outstanding. It is
submitted that by 04.06.2020 on which date notice was
issued by Addl. Tehsildar (Recovery) out of the
abovesaid cheques, two cheques of Rs.2 crores each have
already been encashed by the State Government. Shri
Sibal submits that subsequently he has also deposited
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further amount and he has undertaken before this Court
to ensure that all cheques given by him towards penalty
amount shall be cleared.
12. Shri Sibal further submits that building permission
was granted to the appellant after being satisfied with
all necessary requirements which could not have been
cancelled by order dated 04.06.2020 by the Municipal
Corporation, Indore. He submits that the appellant was
committed to pay the entire amount of the penalty
which commitment was accepted by the Collector of
Stamps by letter dated 23.11.2019 and the action taken
for cancelling the building permission was unjustified.
Shri Sibal further submitted that in spite of the
interim order passed by this Court on 07.07.2020 by
which this Court has stayed the impugned orders and
auction proceedings by the Municipal Corporation, the
Municipal Corporation has issued several orders which
are malafide and illegal. The order dated 25.07.2020
passed by the Municipal Corporation of Indore
cancelling the mutation of the appellant on the ground
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that proceeding is pending in this Court and by the
Collector regarding title of the property was wholly
unauthorized and illegal. The appellant having
purchased the property by registered sale deed, got
mutation of title in his name. He further submitted
that no proceeding is pending regarding title of
property as mentioned in the letter dated 25.07.2020.
He further submits that another order issued on
28.07.2020 by the Office-Commissioner Municipal
Corporation which mentions that Indore Municipal
Corporation has already sent letter to Sub-Divisional
Officer Revenue for putting up the application before
the competent officer for taking action under Section
4/5 of Madhya Pradesh Public Premises Eviction Act,
1974 for eviction is wholly illegal and unauthorised.
He submits that the house property No.28, Yashwant
Niwas Road, Indore was in the ownership of late Shri
H.C. Dhanda which was gifted by his Highness Maharaja
by order dated 22.04.1948 as free gift to late Shri
H.C. Dhanda being Minister in the Cabinet of his
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Highness and right from 1948 late Shri H.C. Dhanda was
the owner in possession with regard to which
subsequently he created a Trust by his Will. He
submitted that property had been purchased by the
appellant by registered sale deed dated 23.11.2019 and
there is no question of Corporation or anyone else
claiming any title in the property, no determination of
title is pending in any Court of law and the
observation made by the Corporation in its letter that
determination of title is pending with the office of
District Collector is wholly malafide and unjustified.
He submits that subsequent letters and action taken by
the Corporation as well as by the State authorities are
only with the intent to harass the appellant and all
are actions are beyond their jurisdiction and deserve
to be set aside by accepting the IAs filed by the
appellant.
13. Shri Tushar Mehta, learned Solicitor General
appearing on behalf of the State submits that no error
was committed by the Addl. Tehsildar (Recovery) in
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issuing recovery notice dated 04.06.2020 since the
interim order being not operating in SLP(C) Diary
No.30539 of 2017 the amount of penalty was outstanding.
He submits that there is no procedure or provision for
accepting the amount of penalty by post dated cheques
as it claimed by the appellant. Shri Mehta further
submits that amount of penalty being outstanding
against the property, mutation in the name of the
appellant against the property as well as building
permission has rightly been rejected. Shri Mehta
further submits that subsequent actions including the
notices and orders brought by the appellant by IA
No.72517 of 2020 are all actions which are subsequent
actions and has no relation to issues which have been
raised in this appeal. He submits that neither
subsequent actions, letters were part of the writ
petition nor they can be considered in this appeal. He
submits if so advised it is always open to take
appropriate proceeding if he is aggrieved by any action
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subsequently taken after the decision of the writ
petition.
14. Shri Purushaindra Kaurav, learned Advocate General
appearing for the Corporation fairly submitted that it
is the appellant who are in possession of the property
in question. He submitted that notices and actions
taken by the Corporation and other authorities
subsequent to the decision of the writ petition cannot
be made subject matter of challenge in this appeal,
remedy of the appellant if any is elsewhere. He
supports the order of the Municipal Corporation by
which building permission earlier granted has been
cancelled.
15. We have considered the submission of the parties
and perused the record.
16. In pursuance of the order of the Collector dated
22.09.2008, Trustees of H.C. Dhanda Trust were liable
to deposit stamp duty as well as penalty. In SLP(C)
Diary No.30539 of 2017 the interim order granted by
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this Court on 10.11.2017 having not been complied with
there was no interim order operating and the Trustees
of H.C. Dhanda Trust were liable to deposit the stamp
duty and penalty. Although deficiency of stamp duty was
deposited through the Treasury Challan dated 01.11.2019
but the penalty was not deposited and only post dated
cheques between dates 25.02.2020 to 25.05.2020 were
submitted on behalf of the appellant and Jogesh Dhanda.
The High Court has rightly observed that facility to
deposit the penalty by post dated cheques cannot be
approved and the appellant being subsequent purchaser
was liable to deposit the amount of penalty which was
outstanding against the property and which was subject
matter of the gift deed dated 21.04.2005. The High
Court has rightly not interfered with the order dated
04.06.2020 issued by the Addl. Tehsildar(Recovery)
demanding an amount of Rs.8,80,97,025/- which was
outstanding on the above date.
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17. We by our order of the date passed in
C.A.Nos……………………of 2020 (arising out of SLP(C)Nos.10972-
10973 of 2020) allowing the appeals partly, held:
“In result the appeals are allowed the
order of the Collector of Stamps dated
22.09.2008 is modified to the extent that
penalty imposed of ten times of
Rs.12,80,97,000/- is modified into five times
penalty i.e. Rs.6,40,48,500/-. The appeals are
partly allowed to the above extent. “
18. The order of Collector dated 22.09.2008 having been
modified and the amount of penalty having been reduced
to the extent of half of the ten times penalty,
respondents are to take steps in compliance to the said
order. Shri Sibal has submitted that total deposit as
on date by the appellant towards the penalty is about
RS.8.8 crores. The issue of penalty as imposed by the
order of the Collector of Stamps dated 22.09.2008
having already been decided by order of even date in
C.A.Nos……………………of 2020 (arising out of SLP(C)Nos.10972-
10973 of 2020) all the parties are to act in accordance
with the said judgment.
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19. Now, we come to order dated 04.06.2020 which was
under challenge in the writ petition before the High
Court by which the Municipal Corporation, Indore has
cancelled the building permission granted earlier was
rejected. The High Court while considering the
aforesaid by its judgment in paragraph 8 has held:
“8. So far as order dated 4.6.2020 issued by
the Building Officer of Indore Municipal
Corporation is concerned, at this stage, no
interference is called for as the petitioner
has failed to deposit the penalty amount and
this fact was suppressed in the application
submitted for building permission. After the
deposit of the stamp duty and the penalty, the
Municipal authorities are directed to
reconsider the application for building
permission.”
20. The above observation of the High Court amply
protects the rights of the appellant. In view of the
deposit made by the appellant towards the penalty, the
appellant is free to apply for building permission
which is to be considered by the Municipal Corporation
as observed by the High Court in its judgment and order
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dated 10.06.2020. Nothing more is required to be said
about the order dated 04.06.2020 issued by the Office
of the Municipal Corporation.
21. Now, we come to the submission of Shri Sibal with
regard to orders and notices issued by the Municipal
Corporation and other State Authorities subsequent to
filing of this appeal. The orders and notices issued by
the Municipal Corporation and other State Authorities
which have been brought on record by the IA No.
72517/2020 are all subsequent actions which were not
subject matter of the writ petition before the High
Court and cannot be taken into consideration in this
appeal.
22. With regard to subsequent notices, actions and
orders, as noticed above, brought on record by IA noted
above the said issues cannot be entertained in this
appeal. We give liberty to the parties to seek such
remedy with regard to subsequent actions and orders as
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permissible in law. The appeal is disposed of
accordingly.
.....................J.
( ASHOK BHUSHAN )
......................J.
( R. SUBHASH REDDY )
......................J.
( M.R. SHAH )
NEW DELHI,
SEPTEMBER 17, 2020.
