Reassessment of stamp duty and penalty as per stamp act by addl. collector - found wrong=The District Magistrate, Lucknow made a spot inspection of the property in question on 21.07.2003. During inspection, the land has been found having an area of 12,099 sq. ft. with a two storey building having an area of 5,646.3 sq. ft. at ground floor and an area of 5192.3 sq. ft. at the first floor. In the inspection report, the property in question has been valued for Rs. 3,87,74,097/- and the stamp duty on the said property has been calculated by the competent authority as Rs. 38,78,000/-. However, at the time of purchase, respondents herein paid Rs. 15,53,000/- as Stamp duty, 2 =Merely because the property is being used for commercial purpose at the later point of time may not be a relevant criterion for assessing the value for the purpose of stamp duty.

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 735 OF 2012 (Arising out of SLP (C) No. 33851 of 2009 State of U.P. & Ors. .... Appellant (s) Versus Ambrish Tandon & Anr. .... Respondent(s) J U D G M E N T P. Sathasivam, J. 1) Leave granted. 2) This appeal is filed against the final judgment and order dated 25.01.2007 passed by the Division Bench of the High Court of Judicature at Allahabad in Writ Petition No. 732 (M/B) of 2005 whereby the Division Bench while allowing the petition filed by the respondents herein issued a writ in the nature of certiorari quashing the impugned order dated 1 27.09.2004 passed by the Additional Collector (Finance & Revenue), Lucknow and the demand notice dated 20.01.2005. 3) Brief Facts: a) A Sale Deed dated 16.04.2003 was executed between Har Charan Singh and the respondents herein in respect of the property situated at 17/1 Ashok Marg, Lucknow measuring 11,029 sq. ft. and registered as Sale Deed Document No. 5341 of 2003. The total value of the property was computed as Rs. 1,55,28,860/- for the purposes of Stamp Duty and the respondents herein paid Rs. 15,53,000/- as stamp duty. b) The District Magistrate, Lucknow made a spot inspection of the property in question on 21.07.2003. During inspection, the land has been found having an area of 12,099 sq. ft. with a two storey building having an area of 5,646.3 sq. ft. at ground floor and an area of 5192.3 sq. ft. at the first floor. In the inspection report, the property in question has been valued for Rs. 3,87,74,097/- and the stamp duty on the said property has been calculated by the competent authority as Rs. 38,78,000/-. However, at the time of purchase, respondents herein paid Rs. 15,53,000/- as Stamp duty, 2 hence a deficiency of Rs. 23,50,000/- has been pointed out by the authorities. The District Magistrate, vide report dated 26.07.2003, directed to register a case against the respondents herein c) On the basis of the aforesaid report, Case No. 653 Stamp-2003 under Sections 47A/33 of the Indian Stamp Act, 1899 (in short `the Act') was registered. Vide order dated 27.09.2004, the Additional Collector (Finance & Revenue) Lucknow directed the respondents to make good the deficiency in the stamp duty and also imposed a penalty amounting to Rs. 8,46,000/- for such tax evasion. On 20.01.2005, for failure to deposit the aforesaid amount, a demand notice claiming an amount of Rs. 38,30,500/- plus 10% recovery charges was issued and the respondents herein were directed to pay the said amount within a period of seven days. d) Being aggrieved by the order dated 27.09.2004 and demand notice dated 20.01.2005, the respondent filed a writ petition being No. 732 of 2005 before the High Court. By order dated 25.01.2007, the High Court, while allowing the petition filed by the respondents herein issued a writ in the nature of 3 certiorari quashing the impugned order dated 27.09.2004 passed by the Additional Collector (Finance & Revenue), Lucknow and the demand notice dated 20.01.2005. e) Aggrieved by the said decision, the State has preferred this appeal by way of special leave petition before this Court. 4) Heard Mr. Shail Kumar Dwivedi, learned Addl. Advocate General for the appellant-State and Mr. K.V. Viswanathan, learned senior counsel for the respondents. 5) The only question for consideration in this appeal is whether the High Court is justified in interfering with the order dated 27.09.2004 passed by the Additional Collector (Finance and Revenue), Lucknow demanding differential stamp duty with interest and penalty in respect of the sale deed dated 16.04.2003 executed in favour of the respondents herein. According to the respondents, through a registered Sale Deed dated 16.04.2003 they have purchased the house No. 17/1 Ashok Marg, Lucknow for a total sale consideration of Rs.1.5 crores on which required stamp duty of Rs. 15.53 lakhs was paid. When the Additional Collector issued a notice under Section 47A/33 of the Act, the respondents submitted 4 objection dated 29.08.2003 stating that the extent, area and valuation are in accordance with the revenue records and the stamp duty paid by them on the sale deed was proper. It is also stated by the respondents that before passing the order dated 27.09.2004, the Additional Collector (Finance and Revenue) Lucknow has not afforded sufficient opportunity to them and the impugned order was passed in a most arbitrary manner ignoring the objection submitted by them. It is also stated that at the time of sale deed the house was a residential property and in order to avoid unnecessary harassment at the hands of the revenue and for the purpose of stamp duty and registration they had valued the said property at the rate fixed by the Collector, Lucknow treating the land as commercial at the rate of Rs.11,300 per sq. metre. In other words, for the purpose of stamp duty and registration, according to the respondents, they added additional 10% to the value. 6) In support of the contention that they were not given adequate opportunity by the Addl. Collector and order was passed on a public holiday, before the High Court as well as in this Court, the respondents herein have placed the order sheet 5 which contains the various dates and the date on which the ultimate decision was taken by him. It shows that the matter was heard and decided on a public holiday. In all fairness, the High Court instead of keeping the writ petition pending and deciding itself after two years could have remitted the matter to the Addl. Collector for fresh orders. However, it had gone into the details as to the area of the plot, nature of the building i.e. whether it is residential or non-residential and based on the revenue records and after finding that at the time of execution of the sale deed, the house was used for residential purpose upheld the stand taken by the respondents and set aside the order dated 27.09.2004 passed by the Addl. Collector. 7) Learned counsel appearing for the appellant-State submitted that as per the provisions of the Act and the Rules made therein, there is a provision for appeal and instead of resorting the same, the respondents have straightaway approached the High Court by exercising writ jurisdiction under Article 226 which is not permissible. A perusal of the proceedings before the High Court show that the State was not 6 serious in raising this objection relating to alternative remedy and allowed the High Court to pass orders on merits, hence we are not entertaining such objection at this juncture though it is relevant. In fact, on receipt of the notice from the High Court in 2005, the appellants who are respondents before the High Court could have objected the writ petition filed under Article 226 and sought for dismissal of the same for not availing alternative remedy but the fact remains that unfortunately the State or its officers have not resorted to such recourse. 8) We have already held that it is the grievance of the respondents that the orders were passed by the Additional Collector on a public holiday. Regarding the merits though the Collector, Lucknow made a surprise site inspection, there is no record to show that all the details such as measurement, extent, boundaries were noted in the presence of the respondents who purchased the property. It is also explained that the plot in question is not a corner plot as stated in the impugned order as boundaries of the plot mentioned in the freehold deed executed by Nazool Officer and in the sale deed 7 dated 16.04.2003 only on one side there is a road. It is also demonstrated that at the time of execution of the sale deed, the house in question was used for residential purpose and it is asserted that the stamp duty was paid based on the position and user of the building on the date of the purchase. The impugned order of the High Court shows that it was not seriously disputed about the nature and user of the building, namely, residential purpose on the date of the purchase. Merely because the property is being used for commercial purpose at the later point of time may not be a relevant criterion for assessing the value for the purpose of stamp duty. The nature of user is relatable to the date of purchase and it is relevant for the purpose of calculation of stamp duty. Though the matter could have been considered by the Appellate Authority in view of our reasoning that there was no serious objection and in fact the said alternative remedy was not agitated seriously and in view of the factual details based on which the High Court has quashed the order dated 27.09.2004 passed by the Additional District Collector, we are not inclined to interfere at this juncture. 8 9) Under these circumstances, we find no valid ground for interference with the impugned order of the High Court. Consequently, the appeal fails and the same is dismissed with no order as to costs. .................................................J. (P. SATHASIVAM) ................................................J. (J. CHELAMESWAR) NEW DELHI; JANUARY 20, 2012. 9

Registration Act, 1908: s.49, proviso - Unregistered sale deed is admissible in evidence in a suit for specific performance of the contract - Evidence Act, 1872 - Specific performance - Transfer of property Act, 1882. The question which arose for consideration in the present appeal was whether the courts below erred in holding that an unregistered sale deed was not admissible in evidence in a suit for specific performance of the contract. =Allowing the appeal, the Court HELD: The Trial Court erred in not admitting the unregistered sale deed in evidence in view of the proviso to Section 49 of the Registration Act, 1908 and the High Court ought to have corrected the said error by setting aside the order of the trial court. The main provision in Section 49 provides that any document which is required to be registered, if not registered, shall not affect any immovable property comprised therein nor such document shall be received as evidence of any transaction affecting such property. Proviso, however, would show that an unregistered document affecting immovable property and required by 1908 Act or the Transfer of Property Act, 1882 to be registered may be received as an evidence to the contract in a suit for specific performance or as evidence of any collateral transaction not required to be effected by registered instrument. By virtue of proviso, therefore, an unregistered sale deed of an immovable property of the value of Rs. 100/- and more could be admitted in evidence as evidence of a contract in a suit for specific performance of the contract. Such an unregistered sale deed can also be admitted in evidence as an evidence of any collateral transaction not required to be effected by registered document. When an unregistered sale deed is tendered in evidence, not as evidence of a completed sale, but as proof of an oral agreement of sale, the deed can be received in evidence making an endorsement that it is received only as evidence of an oral agreement of sale under the proviso to Section 49 of 1908 Act. By admission of an unregistered sale deed in evidence in a suit for specific performance as evidence of contract, none of the provisions of 1908 Act is affected; rather court acts in consonance with proviso appended to Section 49 of 1908 Act. [Paras 8, 11, 16] [519-C-D; 521-A-E; 525-B] K.B. Saha and Sons Private Limited v. Development Consultant Limited (2008) 8 SCC 564, relied on. Kalavakurti Venkata Subbaiah v. Bala Gurappagari Guruvi Reddy (1999) 7 SCC 114, referred to. Case Law Reference: (2008) 8 SCC 564 relied on Para 12 (1999) 7 SCC 114 referred to Para 13 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3192 of 2010. From the Judgment & Order dated 13.11.2008 of the High Court of Judicature at Madras in C.R.P.(PD) No. 261 of 2008. K.V. Vishwanathan, B. Rajunath, Vijay Kumar for the Appellant. T.S.R. Venkatramana, G.S. Mani, R. Satish for the Respondents.

                                                    REPORTABLE






                IN THE SUPREME COURT OF INDIA


                 CIVIL APPELLATE JURISDICTION


                  CIVIL APPEAL NO. 3192 OF 2010
              [Arising out of SLP (C) No. 1451 of 2009]




S. Kaladevi                                         .... Appellant


                                 Vs.


V.R. Somasundaram & Ors.                          ....Respondents








                               JUDGMENT






R.M. LODHA,J.




              Leave granted.


2.            The short question is one of admissibility of an


unregistered sale deed in a suit for specific performance of the


contract.


3.            The appellant and the respondents are plaintiff and


defendant nos. 1, 2 and 3 respectively in the suit presented in the


Court of Subordinate Judge, Gobichettipalayam. The plaintiff in


the suit claimed for the reliefs of directing the    defendants to


                                                                 1
execute a fresh sale deed with regard to the suit property in


pursuance of an agreement for sale dated 27.02.2006 on or before


the date that may be fixed by the court and failing which execution


of the sale deed by the court.        She also prayed for grant of


permanent injunction restraining the defendants from disturbing


with her peaceful possession and enjoyment of the suit property.


4.            According to the plaintiff, 1st defendant for himself, as


the guardian father of 3rd defendant and 2nd defendant jointly


entered into an oral agreement with her on 27.02.2006 to sell the


suit property for a consideration of Rs. 1,83,000/-. It was agreed


that the sale deed, in pursuance of the oral agreement for sale,


would be executed and registered on the same day. The plaintiff


purchased the stamp papers; paid the entire sale consideration to


the defendants; the defendants put the plaintiff in possession of


the suit property and also executed a sale deed in her favour. On


27.02.2006 itself,     the said sale deed was taken to the Sub-


Registrar's office. The Sub-Registrar, however, informed that in


view of an order of attachment of the suit property the sale deed


could not be registered.        The sale deed, thus, could not be


registered.       The defendant nos. 1 and 2 then promised the


plaintiff that they would amicably settle the matter with the


concerned party who had obtained attachment of the suit property


                                                                    2
and get the sale deed registered no sooner the attachment was


raised. The plaintiff averred that she called upon the defendants to


get the sale deed registered, but the defendants avoided the same


by putting forth the reason that attachment in respect of the suit


property was subsisting.      On 04.02.2007 however, the plaintiff


called upon defendant nos. 1 and 2 to cooperate in getting the sale


deed registered, but instead of doing that            the defendants


attempted to interfere with her possession and enjoyment of the


suit property necessitating action by way of suit.


5.          The 1st defendant filed written statement and traversed


plaintiff's case. He denied having entered into an oral agreement


for sale with the plaintiff for himself and as a guardian father of 3rd


defendant and the 2nd defendant jointly on 27.02.2006 as alleged.


He also denied having delivered physical possession of the suit


property to the plaintiff. The 1st defendant set up the defence that


he   had   taken    loan   from   one    Subramaniam      and    when


Subramaniam demanded the repayment thereof, he approached


plaintiff and requested her to lend Rs. 1,75,000/- as loan. Upon


plaintiff's insistence that 1st defendant should execute an


agreement for sale in her favour, he and the 2nd defendant signed


the document believing that to be agreement for sale on


27.02.2006 and went to the office of Sub-Registrar for getting the


                                                                    3
agreement for sale registered. However, when the Sub-Registrar


asked the 1st defendant whether the consideration has been


received and sale deed could be registered, he and the 2nd


defendant learnt that plaintiff had fraudulently obtained the


signatures on sale deed by falsely stating that it was only an


agreement for sale and hence they went away refusing to agree


for the registration of the said document.


6.          On the basis of the pleadings of the parties, the issues


were struck.    It appears that on 05.12.2007 at the time of


examination of PW. 1,          the unregistered sale deed dated


27.02.2006 was tendered for being marked. The counsel for the


defendants objected to the said document being admitted in


evidence being an unregistered sale deed. The trial court by its


order dated 11.12.2007 sustained the objection and refused to


admit the sale deed in evidence.


7.          The plaintiff unsuccessfully challenged the order of the


trial court dated 11.12.2007 by filing revision petition before the


High Court and hence this appeal by special leave.


8.          After having heard Mr. K. V. Vishwanathan, learned


senior counsel for the appellant and Mr. T.S.R. Venkatramana,


learned counsel for the respondents, we are of the opinion that


having regard to the proviso to Section 49 of the Registration Act,


                                                                  4
1908 (for short, `1908 Act'), the trial court erred in not admitting the


unregistered sale deed dated 27.02.2006 in evidence and the High


Court ought to have corrected the said error by setting aside the


order of the trial court.


9.           Mr. T.S.R. Venkatramana, learned counsel for the


respondents, however, strenuously urged that 1908 Act is a


complete code by itself and is a special law and, therefore, any


dispute regarding the registration, including the refusal to register


by any party, is covered by the provisions of that Act and the


remedy can be worked out under it only.       He referred to Sections


71 to 77 of the 1908 Act and submitted that refusal to register a


document by a party is exhaustively dealt with by the said


provisions and the provisions of the Specific Relief Act, 1963 (for


short, `1963 Act') cannot be and should not be invoked in a case of


failure to register a document which is complete in other respects,


except for want of registration.          Learned counsel for the


respondents submitted that the defendants           refused to admit


execution of the said document before the concerned Sub-


Registrar because of the fraud played by the appellant (plaintiff)


inasmuch as instead of writing an agreement to sell, she got


executed a full fledged sale deed contrary to the agreement and


understanding.     The defendants accordingly walked out of the


                                                                     5
office of Sub-Registrar without admitting the execution of the sale


deed and under these circumstances the only remedy available to


the appellant was to get an endorsement "registration refused" and


then file an application before the Registrar under Section 73 of


the 1908 Act.      He also referred to Section 3 of 1963 Act and


submitted that the provisions of 1963 Act would not override the


provisions of 1908 Act.


10.         Section 17 of 1908 Act is a disabling section.           The


documents defined in clauses (a) to (e) therein require registration


compulsorily.     Accordingly, sale of immovable property of the


value of Rs. 100/- and more requires compulsory registration. Part


X of the 1908 Act deals with the effects of registration and non-


registration.   Section 49 gives teeth to Section 17 by providing


effect of non-registration of documents required to be registered.


Section 49 reads thus:






            "S.49.- Effect of non-registration of documents
            required to be registered.- No document required
            by section 17 or by any provision of the Transfer of
            Property Act, 1882 (4 of 1882), to be registered shall
            -


            (a)      affect any immovable property comprised
                     therein, or


            (b)      confer any power to adopt, or








                                                                      6
          (c)      be received as evidence of any transaction
                    affecting such property or conferring such
                    power,




           unless it has been registered:


                  Provided that an unregistered document
           affecting immovable property and required by this
           Act or the Transfer of Property Act, 1882 (4 of 1882),
           to be registered may be received as evidence of a
           contract in a suit for specific performance under
           Chapter II of the Specific Relief Act, 1877 (3 of
           1877), or as evidence of any collateral transaction
           not required to be effected by registered instrument."






11.        The main provision in Section 49 provides that any


document which is required to be registered, if not registered, shall


not affect any immovable property comprised therein nor such


document shall be received as evidence of any transaction


affecting such property. Proviso, however, would show that an


unregistered document affecting immovable property and required


by 1908 Act or the Transfer of Property Act, 1882 to be registered


may be received as an evidence to the contract in a suit for


specific performance or as evidence of any collateral transaction


not required to be effected by registered instrument. By virtue of


proviso, therefore, an unregistered sale deed of an immovable


property of the value of Rs. 100/- and more could be admitted in


evidence as evidence of a contract in a suit for specific


performance of the contract. Such an unregistered sale deed can
                                                                    7
also be admitted in evidence as an evidence of any collateral


transaction not required to be effected by registered document.


When an unregistered sale deed is tendered in evidence, not as


evidence of a completed sale, but as proof of an oral agreement of


sale, the deed can be received in evidence making an


endorsement that it is received only as evidence of an oral


agreement of sale under the proviso to Section 49 of 1908 Act.






12.               Recently in the case of K.B. Saha and Sons Private


Limited v. Development Consultant Limited1, this Court noticed the


following statement of Mulla in his Indian Registration Act, 7th


Edition, at page 189:-








                  "......The     High Courts of Calcutta, Bombay,
                  Allahabad, Madras, Patna, Lahore, Assam, Nagpur,
                  Pepsu, Rajasthan, Orissa, Rangoon and Jammu &
                  Kashmir; the former Chief Court of Oudh; the Judicial
                  Commissioner's Court at Peshawar, Ajmer and
                  Himachal Pradesh and the Supreme Court have held
                  that a document which requires registration under
                  Section 17 and which is not admissible for want of
                  registration to prove a gift or mortgage or sale or
                  lease is nevertheless admissible to prove the
                  character of the possession of the person who holds
                  under it......"








1
    (2008) 8 SCC 564
                                                                          8
This Court then culled out the following principles:-




                  "1.   A document required to be registered, if
                        unregistered is not admissible into evidence
                        under Section 49 of the Registration Act.


                  2.    Such unregistered document can however be
                        used as an evidence of collateral purpose as
                        provided in the proviso to Section 49 of the
                        Registration Act.


                  3.    A collateral transaction must be independent
                        of, or divisible from, the transaction to effect
                        which the law required registration.


                  4.    A collateral transaction must be a transaction
                        not itself required to be effected by a
                        registered document, that is, a transaction
                        creating, etc. any right, title or interest in
                        immovable property of the value of one
                        hundred rupees and upwards.


                  5. If a document is inadmissible in evidence for want
                     of registration, none of its terms can be admitted
                     in evidence and that to use a document for the
                     purpose of proving an important clause would not
                     be using it as a collateral purpose."






To the aforesaid principles, one more principle may be added,


namely, that a document required to be registered, if unregistered,


can be admitted in evidence as evidence of a contract in a suit for


specific performance.






13.               In Kalavakurti Venkata Subbaiah v. Bala Gurappagari


Guruvi Reddy2, the question presented before this Court was


2
    (1999) 7 SCC 114
                                                                           9
whether a decree to enforce the registration of sale deed could be


granted. That was a case where respondent therein filed a suit for


specific performance seeking a direction to register the sale deed.


The contention of the appellant, however, was that decree for


specific performance based on unregistered sale deed could not


be granted. This Court noticed the provisions contained in Part XII


of 1908 Act, particularly Section 77, and difference          of opinion


between the various High Courts on the aspect and observed:-


             "The difference of opinion amongst the various
             High Courts on this aspect of the matter is that
             Section 77 of the Act is a complete code in itself
             providing for the enforcement of a right to get a
             document registered by filing a civil suit which but
             for the special provision of that section could not be
             maintainable. Several difficulties have been
             considered in these decisions, such as, when the
             time has expired since the date of the execution of
             the document whether there could be a decree to
             direct the Sub-Registrar to register the document.
             On the other hand, it has also been noticed that an
             agreement for transfer of property implies a
             contract not only to execute the deed of transfer
             but also to appear before the registering officer and
             to admit execution thereby facilitating the
             registration of the document wherever it is
             compulsory. The provisions of the Specific Relief
             Act and the Registration Act may to a certain extent
             cover the same field but so that one will not
             supersede the other. Where the stage indicated in
             Section 77 of the Act has reached and no other
             relief except a direction for registration of the
             document is really asked for, Section 77 of the Act
             may be an exclusive remedy. However, in other
             cases it has no application, inasmuch as a suit for
             specific performance is of a wider amplitude and is
             primarily one for enforcement of a contract and
             other consequential or further relief. If a party is
             seeking not merely the registration of a sale deed,
                                                                      10
            but also recovery of possession and mesne profits
             or damages, a suit under Section 77 of the Act is
             not an adequate remedy."






14.         This Court then held that the first appellate court rightly


took the view that under Section 49 of the 1908 Act, unregistered


sale deed could be received in evidence to prove the agreement


between the parties though it may not itself constitute a contract to


transfer the property. It was held:






            "......The document has not been presented by the
            respondent to the Sub-Registrar at all for registration
            although the sale deed is stated to have been
            executed by the appellant as he refuses to cooperate
            with him in that regard. Therefore, various stages
            contemplated under Section 77 of the Act have not
            arisen in the present case at all. We do not think, in
            such a case when the vendor declines to appear
            before the Sub-Registrar, the situation contemplated
            under Section 77 of the Act would arise. It is only on
            presentation of a document the other circumstances
            would arise. The first appellate court rightly took the
            view that under Section 49 of the Act the sale deed
            could be received in evidence to prove the
            agreement between the parties though it may not
            itself constitute a contract to transfer the property.....
            ".






15.          The issue before us is only with regard to the


admissibility of unregistered sale deed dated 27.2.2006 in


evidence and, therefore, it is neither appropriate nor necessary for


us to consider the contention raised by learned counsel for the




                                                                         11
respondents about the maintainability of suit as framed by the


plaintiff or the circumstances in which the sale deed was executed.


If any issue in that regard has been struck by the trial court,


obviously, such issue would be decided in accordance with law.


Suffice, however, to say that looking to the nature of the suit, which


happens to be a suit for specific performance, the trial court was


not justified in refusing to admit the unregistered sale deed dated


27.2.2006 tendered by the plaintiff in evidence.


16.         The argument of learned counsel for the respondents


with regard to Section 3(b) of 1963 Act is noted to be rejected.


We fail to understand how the said provision helps the


respondents as the said provision provides that nothing in 1963


Act shall be deemed to affect the operation of 1908 Act, on


documents.     By admission of an unregistered sale deed in


evidence in a suit for specific performance as evidence of contract,


none of the provisions of 1908 Act is affected; rather court acts in


consonance with proviso appended to Section 49 of 1908 Act.


17.         The result is that appeal is allowed, the order of the


High Court dated 13.11.2008 and that of the trial court dated


11.12.2007 are set aside.         The trial court shall mark the


unregistered sale deed dated 27.2.2006 tendered by the plaintiff in








                                                                    12
her evidence and proceed with the suit accordingly.        The parties


shall bear their own costs.






                                     ....................................J.
                                        [R.V. RAVEENDRAN]








                                     ....................................J.
                                              [R.M. LODHA]




NEW DELHI
APRIL 12, 2010.








                                                                        13

Stamp Act, 1899-ss. 2(14), 33, 35, 37 and 48B-Impounding of document-In a suit photocopy of a document accepted in secondary evidence-On the ground that original was lost-Original document bearing the stamp of sufficient amount, but of improper description-Order of admission of the document in secondary evidence set aside-Order for impounding the document-Correctness of-Held : Impounding of a document can be done only when the document is an instrument within meaning of s. 2(14) i.e. original document-Photocopy of a document cannot be impounded-It also cannot be accepted as secondary evidence-Madhya Pradesh Stamp Rules, 1942-r. 19-Evidence Act, 1872-s. 63. Agreement was entered into by the parties herein. Such agreement was required to be affixed a stamp of Re. 1/- under Schedule I, Item 42 of Stamp Act, 1899. The document was affixed with a notorial stamp of Rs. 4/- instead under the statutory provision. In the suit between the parties, appellant filed an application for acceptance of the photocopy of the agreement as a secondary evidence, on the ground that original thereof was stolen. Trial Court admitted the same as secondary evidence. In a Writ Petition, against the order, High Court setting aside the order of trial court, remitted the matter to decide the question as to whether a photocopy of an improperly stamped original document could be received as secondary evidence. Trial Court ordered for impounding of the document, it being insufficiently stamped. Document was sent to the Collector of Stamps for affixing appropriate stamp duty. Challenge to this order was dismissed by trial court in Review Petition. In Writ Petition, thereagainst, High Court held that such document could not be admitted in evidence, neither could it be impounded nor accepted in secondary evidence. Hence the present appeal. The question for consideration was : Whether the Court could impound the photocopy of the instrument (document) of improper description exercising its power under the provisions of the Indian Stamp Act , 1899 ?

CASE NO.:
Appeal (civil)  4696 of 2007


PETITIONER:
Hariom Agrawal


RESPONDENT:
Prakash Chand Malviya


DATE OF JUDGMENT: 08/10/2007


BENCH:
B.N. AGRAWAL,P.P. NAOLEKAR & P. SATHASIVAM


JUDGMENT:
J U D G M E N T 
(arising out of Special Leave Petition (Civil)No.12573 of 2006)






P.P. NAOLEKAR, J.:




1. Leave granted.
     
2. The facts necessary for deciding the question 
involved in the case are that one Maganlal Jain was the 
original tenant of Prakash Chand Malviya, the respondent-
landlord.  Maganlal Jain had given the shop to the appellant 
for carrying out the business.  On a dispute being arisen 
between the respondent-landlord, the original tenant Maganlal 
Jain and the appellant herein,  an agreement was executed on 
28.3.1988 by the respondent (landlord) and the appellant 
(subsequent tenant),  whereby the landlord tenanted the shop 
to the appellant on payment of an advance amount of 
Rs.4,75,000/- which was received by the landlord in cash in 
front of the witnesses.  The agreement further provided that in 
case the landlord requires eviction of the tenant from the shop 
he will have to give notice of 6 months to the tenant and will 
also refund the payment of Rs.4,75,000/- to the tenant.  On 
the other hand, if the tenant wants to vacate the shop he will 
have to give prior notice of 6 months to the landlord and the 
landlord will pay back Rs.4,75,000/- to the tenant.  This 
document was affixed with a notarial stamp of Rs.4/-.  Under 
the Indian Stamp Act, 1899 (for short the Act), agreement of 
this nature requires affixture of a stamp of Re.1/- under 
Schedule I, Item 42 of the said Act. 
3. On 12.5.2003 a suit for eviction was filed by the 
respondent-landlord before the Civil Judge, Bhopal under 
Section 12(1)(f) of the Madhya Pradesh Accommodation 
Control Act, stating the bonafide need for the use of the 
accommodation by his elder son.  It was the case of the 
appellant-tenant that the original copy of the agreement which 
was with him was stolen and thus he was unable to produce 
the original document dated 28.3.1988, but was in possession 
of a photostat copy of the agreement and made a prayer for 
receipt of the photocopy of the agreement as secondary 
evidence under Section 63 of the Indian Evidence Act, 1872.  
The trial court allowed the application for admission of the 
photocopy of the document and admitted it as secondary 
evidence under Section 63 of the Evidence Act.
4. On being aggrieved by the order of the trial court, 
the respondent-landlord filed a writ petition before the High 
Court. The High Court set aside the order of the trial court and 
remitted the matter back to decide the question as to whether 
a photocopy of an improperly stamped original document can 
be received in secondary evidence.  After hearing the parties, 
the trial court by its order dated 9.8.2005 ordered that the 
document be impounded, it being insufficiently stamped; the 
document was sent to the Collector of Stamps for affixing 
appropriate stamp duty and thereafter for sending the 
document back to the court.  This order was challenged by the 
respondent in a review petition which was dismissed by the 
trial court.   Thereafter, a writ petition was filed before the 
High Court.  The High Court by its judgment dated 3.5.2006 
held that the impugned document which is a photocopy of the 
agreement, original of which is lost, cannot be admitted in 
evidence; and that such a document can neither be 
impounded nor can be accepted in secondary evidence.  
5. It is an admitted fact that the photostat copy which 
is sought to be produced as secondary evidence does not show 
that on the original agreement proper stamp duty was paid.  
The photostat copy of the agreement shows that the original 
agreement carried only a notarial stamp of Rs.4/-.  Thus the 
original instrument bears the stamp of sufficient amount but 
of improper description.  From the facts of the case, the issue 
which requires consideration is: Whether the court can 
impound the photocopy of the instrument (document) of 
improper description exercising its power under the provisions 
of the Indian Stamp Act, 1899?.  For answering this question, 
Sections 33 and 35 of the Act might render some help.  
Relevant extracts of the Sections are :
     
     33.  Examination and impounding of 
instruments  (1)  Every person by law or consent 
of parties, authority to receive evidence, and every 
person in charge of a public office, except an officer 
of police, before whom any instrument, chargeable, 
in his opinion, with duty, is produced or comes in 
the performance of his functions, shall, if it appears 
to him that such instrument is not duly stamped, 
impound the same.
         
(2) For that purpose every such person shall 
examine every instrument so chargeable and so 
produced or coming before him, in order to 
ascertain whether it is stamped with a stamp of the 
value and description required by the law in force 
in(India) when such instrument was executed or 
first executed:


  




     35.    Instruments not duly stamped 
inadmissible in evidence, etc.  -  No instrument 
chargeable with duty shall be admitted in evidence 
for any person having by law or consent of parties to 
receive evidence, or shall be acted upon, registered 
or authenticated by any such person or by any 
public officer, unless such instrument is duly 
stamped:


  
     
     
6. Section 33 gives power to the authority to check 
whether the instrument has been duly stamped and in case it 
is not duly stamped, to take steps to impound the same by 
proper stamp duty on the said document.  This power can be 
exercised in regard to an `instrument.  Section 2(14) of the  
Act defines `instrument  as:


 Instrument includes every document by 
which any right or liability is, or purports to 
be, created, transferred, limited, extended, 
extinguished or record.
          
          
7. The instrument as per definition under Section 
2(14) has a reference to the original instrument.  In State of 
Bihar   v.  M/s. Karam Chand Thapar & Brothers Ltd., AIR 
1962 SC 110, this Court in  paragraph  6  of the judgment 
held as under :-


6. It is next contended that as the copy of 
the award in court was unstamped, no decree 
could have been passed thereon.  The facts are 
that the arbitrator sent to each of the parties a 
copy of the award signed by him and a third 
copy also signed by him was sent to the court.  
The copy of the award which was sent to the 
Government would appear to have been 
insufficiently stamped.  If that had been 
produced in court, it could have been validated 
on payment of the deficiency and penalty 
under S.35 of the Indian Stamp Act, 1899.  
But the Government has failed to produce the 
same.  The copy of the award which was sent 
to the respondents is said to have been seized 
by the police along with other papers and is 
not now available.  When the third copy was 
received in court, the respondents paid the 
requisite stamp duty under S.35 of the Stamp 
Act and had it validated.  Now the contention 
of the appellant is that the instrument actually 
before the court is, what it purports to be, a 
certified copy, and that under S.35 of the 
Stamp Act there can be validation only of the 
original, when it is unstamped or insufficiently 
stamped, that the document in court which is 
a copy cannot be validated and acted upon 
and that in consequence no decree could be 
passed thereon.  The law is no doubt well-
settled that the copy of an instrument cannot 
be validated.  That was held in Rajah of Bobbili  
v.  Inuganti China Sitaramasami Garu, 26 Ind 
App 262, where it was observed :


The provisions of this section 
(section 35) which allow a document 
to be admitted in evidence on 
payment of penalty, have no 
application when the original 
document, which was unstamped or 
was insufficiently stamped, has not 
been produced; and, accordingly, 
secondary evidence of its contents 
cannot be given.  To hold otherwise 
would be to add to the Act a provision 
which it does not contain.  Payment 
of penalty will not render secondary 
evidence admissible, for under the 
stamp law penalty is leviable only on 
an unstamped or insufficiently 
stamped document actually produced 
in Court and that law does not 
provide for the levy of any penalty on 
lost documents


 . 




This Court had an occasion again to consider the scope and 
ambit of Sections 33(1), 35 and 36 of the Act and Section 63 of 
the Indian Evidence Act in Jupudi Kesava Rao  v.  
Pulavarthi Venkata Subbarao and  others  AIR 1971 SC 
1070 and held that :-


13. The first limb of Section 35 clearly shuts 
out from evidence any instrument chargeable 
with duty unless it is duly stamped.  The 
second limb of it which relates to acting upon 
the instrument will obviously shut out any 
secondary evidence of such instrument, for 
allowing such evidence to be let in when the 
original admittedly chargeable with duty was 
not stamped or insufficiently stamped, would 
be tantamount to the document being acted 
upon by the person having by law or authority 
to receive evidence.  Proviso (a) is only 
applicable when the original instrument is 
actually before the Court of law and the 
deficiency in stamp with penalty is paid by the 
party seeking to rely upon the document.  
Clearly secondary evidence either by way of 
oral evidence of the contents of the unstamped 
document or the copy of it covered by Section 
63 of the Indian Evidence Act would not fulfil 
the requirements of the proviso which enjoins 
upon the authority to receive nothing in 
evidence except the instrument itself.  Section 
35 is not concerned with any copy of an 
instrument and a party can only be allowed to 
rely on a document which is an instrument for 
the purpose of Section 35.  `Instrument is 
defined in Section 2(14) as including every 
document by which any right or liability is, or 
purports to be created, transferred, limited, 
extended, extinguished or recorded.  There is 
no scope for inclusion of a copy of a document 
as an instrument for the purpose of the Stamp 
Act.


14. If Section 35 only deals with original 
instruments and not copies Section 36 cannot 
be so interpreted as to allow secondary 
evidence of an instrument to have its benefit.  
The words an instrument in Section 36 must 
have the same meaning as that in Section 35.  
The legislature only relented from the strict 
provisions of Section 35 in cases where the 
original instrument was admitted in evidence 
without objection at the initial stage of a suit 
or proceeding.  In other words, although the 
objection is based on the insufficiency of the 
stamp affixed to the document, a party who 
has a right to object to the reception of it must 
do so when the document is first tendered.  
Once  the time for raising objection to the 
admission of the documentary evidence is 
passed, no objection based on the same 
ground can be raised at a later stage.  But this 
in no way extends the applicability of Sec.36 to 
secondary evidence adduced or sought to be 
adduced in proof of the contents of a 
document which is unstamped or  
insufficiently stamped.  




8. It is clear from the decisions of this Court and a 
plain reading of Sections 33, 35 and 2(14) of the Act that an 
instrument which is not duly stamped can be impounded and 
when the required fee and penalty has been paid for such 
instrument it can be taken in evidence under Section 35 of the 
Stamp Act.  Sections 33 or 35 are not concerned with any copy 
of the instrument and party can only be allowed to rely on the 
document which is an instrument within the meaning of 
Section 2(14).  There is no scope for the inclusion of the copy 
of the document for the purposes of the Indian Stamp Act.   
Law is now no doubt well settled that copy of the instrument 
cannot be validated by impounding and this cannot be 
admitted as secondary evidence under the Indian Stamp Act, 
1899.  
9. The learned counsel for the appellant submitted 
that the High Court was guided by the decisions rendered by 
this Court while deciding the question involved in the case 
whether original document was unstamped or not properly 
stamped and not in regard to a document which was although 
stamped but was improperly stamped.  As per the learned 
counsel, the case in hand shall be governed by Section 37 of 
the Act and not by Section 33 read with Section 35 of the Act.  
The learned counsel further urged that the High Court has 
committed an error in overlooking Section 48-B inserted by 
Indian Stamp (Madhya Pradesh Amendment) Act, 1990 (No. 24 
of 1990], which received assent of the President and was 
published in the Madhya Pradesh Gazette (Extraordinary) 
dated 27.11.1990, applicable in the State of Madhya Pradesh 
whereby the Collector is authorized even to impound copy of 
the instrument.
10. Section 33 refers to the power of the authority to 
impound the instrument not duly stamped, and by virtue of 
Section 35 any document which is not duly stamped shall not 
be admitted in evidence.    
11. Section 37 of the Act reads as under:
     37.    Admission of improperly stamped 
instruments.-  The State Government may make 
rules providing that, where an instrument bears a 
stamp of sufficient amount but of improper 
description, it may, on payment of the duty with 
which the same is chargeable be certified to be duly 
stamped, and any instrument so certified shall then 
be deemed to have been duly stamped as from the 
date of its execution. 
     
     
Under this provision, the State Government is authorized to 
make rules providing therein to impound any instrument 
which bears a stamp of sufficient amount but of improper 
description and on payment of chargeable duty to certify it to 
be duly stamped and to treat such document as duly stamped 
as on the date of its execution.  
12. In the State of Madhya Pradesh, Rule 19 of the 
Madhya Pradesh Stamp Rules, 1942 permits payment of duty 
on the instrument which carries stamp of proper amount but 
of improper description.  The said Rule reads as under:
When an instrument bears a stamp of proper 
amount but of improper description, the Collector 
may, on payment of the duty with which the 
instrument is chargeable, certify by endorsement 
that it is duly stamped:


Provided that if application is made within three 
months of the execution of the instrument, and 
Collector is satisfied that the improper description 
of stamp was used solely on account of the difficulty 
of inconvenience of procuring one of the proper 
description, he may remit the further payment of 
duty prescribed in this rule.

13. Section 37 of the Act would be attracted where 
although the instrument bears a stamp of sufficient amount 
but such stamp is of improper description, as in the present 
case where the proper stamp duty of Re.1/- under the Act has 
not been paid but a notarized stamp of Rs.4/- was affixed on 
the document.  The sufficient amount of the stamp duty has 
been paid but the duty paid by means of affixture of notarized 
stamp is of improper description.  By virtue of Rule 19 of the 
Madhya Pradesh Stamp Rules, 1942, the Collector of Stamp is 
authorized to receive the proper stamp duty on an instrument 
which bears a stamp of proper amount but of improper 
description, and on payment of the adequate duty chargeable 
under the Act he would certify by endorsement on the 
instrument that the instrument is duly stamped.  Under the 
proviso to the Rule, the Collector may pardon the further 
payment of duty prescribed in this Rule provided the person 
holding the original instrument moves the Collector within 
three months of the execution of the instrument for 
certification by endorsement and the Collector is satisfied that 
the stamp of improper description was used solely on the 
account of the difficulty or inconvenience of the holder of the 
instrument to procure the adequate stamp duty required to be 
paid on the instrument.  But the  power under Section 37 and 
Rule 19, even after framing the rules by the State Government, 
could only be exercised for a document which is an instrument 
as described under Section 2(14).  By various authorities of 
this Court, an instrument is held to be an original instrument 
and does not include a copy thereof.  Therefore, Section 37 
and Rule 19 would not be applicable where a copy of the 
document is sought to be produced for impounding or for 
admission as evidence in a case.
14. Section 48-B is a provision applicable in the State of 
Madhya Pradesh which was inserted by Indian Stamp (M.P. 
Amendment) Act, 1990 (No. 24 of 1990] in Chapter IV under 
heading Instrument not duly stamped of the Act.  This 
Section reads as under:
48-B.  Original instrument to be produced 
before the Collector in case of deficiency.  
Where the deficiency of stamp duty is noticed from 
a copy of any instrument, the Collector may by 
order require the production of original instrument 
from a person in possession or in custody of the 
original instrument for the purpose of satisfying 
himself as to the adequacy of amount of duty paid 
thereon. If the original instrument is not produced 
before him within the period specified in the order, 
it shall be presumed that the original document is 
not duly stamped and the Collector may proceed in 
the manner provided in this Chapter:


Provided that no action under this section 
shall be taken after a period of five years from the 
date of execution of such instrument. 


15. On a plain reading of Section 48-B, we do not find 
that the submission of the learned counsel for the appellant 
that by virtue of this provision the Collector has been 
authorized to impound even copy of the instrument,  is 
correct.  Under this Section where the deficiency of  stamp 
duty is noticed from the copy of any instrument, the Collector 
may call for the original document for inspection, and on 
failure to produce the original instrument could presume that 
proper stamp duty was not paid on the original instrument 
and, thus, recover the same from the person concerned.  
Section 48-B does not relate to  the instrument, i.e., the 
original document to be presented before any person who is 
authorized to receive the document in evidence to be 
impounded on inadequacy of stamp duty found.  The Section 
uses the phraseology where the deficiency of stamp duty is 
noticed from a copy of any instrument.  Therefore, when the 
deficiency of stamp duty from a copy of the instrument is 
noticed by the Collector, the Collector is authorised to act 
under this Section.  On deficiency of stamp duty being noticed 
from the copy of the instrument, the Collector would order 
production of original instrument from a person in possession 
or in custody of the original instrument.  Production is 
required by the Collector for the purpose of satisfying himself 
whether adequate stamp duty had been paid on the original 
instrument or not.   In the notice given to person in possession 
or in custody of original instrument, the Collector shall provide 
for time within which the original document is required to be 
produced before him.  If, in spite of the notice, the original is 
not produced before the Collector, the Collector would draw a 
presumption that original document is not duly stamped and 
thereafter may proceed in the manner provided in Chapter IV.  
By virtue of proviso, the step for recovery of adequate stamp 
duty on the original instrument on insufficiency of the stamp 
duty paid being noticed from the copy of the instrument, can 
only be taken within five years from the date of execution of 
such instrument.  The words the Collector may proceed in the 
manner provided in this Chapter has reference to Section 48 
of the Act.  Under this Section, all duties, penalties and other 
sums required to be paid under Chapter IV, which includes 
stamp duty, would be recovered by the Collector by distress 
and sale of the movable property of the person who has been 
called upon to pay the adequate stamp duty or he can 
implement the method of recovery of arrears of land revenue 
for the dues of stamp duty.  By  virtue of proviso to Section 
48-B, the Collectors power to adjudicate upon the adequacy of  
stamp duty on the original instrument on the basis of  copy of 
the instrument is restricted to the period of five years from the 
date of execution of the original instrument.  This Section only 
authorizes the Collector to recover the adequate stamp duty 
which has been avoided at the time of execution of the original 
instrument.  This Section does not authorize the Collector to 
impound the copy of the instrument.
16.         For the reasons stated above, the appeal fails and 
is dismissed.
17.             There shall be no order as to costs.

Allowing the appeal, the Court HELD: 1.1. There is a difference between an agreement to sell and a sale. An agreement to sell is not a sale. An agreement to sell becomes a sale after both the parties signed the sale deed. What is relevant in fact is the actual valuation of the property at the time of the sale. The crucial expression used in Section 17 of the Stamp Act, 1899 is "at the time of execution". Therefore, stamp duty on a sale has to be assessed on the market value of the property at the time of execution of sale deed, and not at the time of the prior agreement to sell, nor at the time of filing of the suit. [Para 10] [115-E; 116-D, E] 1.2. The Stamp Act, 1899 is in the nature of a taxing statute, and it has to be construed strictly; and considerations of hardship or equity have no role to play in its construction. It is true that no one should suffer on account of the pendency of the matter in court but this consideration does not affect the principles of interpretation of a taxing statute. A taxing statute has to be construed as it is. The contingencies that the matter was under litigation and the value of the property by that time shot up cannot be taken into account for interpreting the provisions of a taxing statute. [Para 10 and 14] [116-E; 118-D, E] Sub Registrat, Kodad Town and Mandal v. Amaranaini China Venkat Rao and Ors., AIR (1998) Andhra Pradesh 252, disapproved. 1.3. Literal rule of interpretation applies to the taxing statute. Construing section 17 read with section 2(12) of the Stamp Act in this back-ground, there is no manner of doubt that the registering authority is under an obligation to ascertain the correct market value at that time of registration and should not go by the value mentioned in the instrument. It is true that as per Section 3, which is the charging section, the instrument is to be registered on the basis of the valuation disclosed therein. But Section 3 cannot be read in isolation and has to be read along with Section 17 of the Act. From a composite reading of Sections 3, 17 and 27, it becomes abundantly clear that the valuation given in an instrument is not conclusive. If any doubt arises in the mind of the registering authority that the instrument is under-valued then as per Section 47-A as inserted by Rajasthan Act 10 of 1982 in Rajasthan Stamp Law (Adaptation) Act, 1952, the instrument can be sent to the Collector for determination of the correct market value. Under Section 47-A read with Sections 3, 17 and 27, it becomes clear that the registering authority has to ascertain the correct valuation given in the instrument regarding market value of the property at the time of the sale. [Para 11, 12 and 13] [117-E, F, G, H; 118-A, B] A.V. Fernandez v. State of Kerala, AIR (1957) SC 657, relied on. 1.4. The view taken by the single Judge as well as by the Division Bench of the High Court cannot be sustained and the same is set aside. The Collector shall determine the valuation of the property mentioned in the instrument on the basis of its market value on the date when the document was tendered by the respondent for registration, and the respondent shall pay the stamp duty charges and surcharge, if any, as assessed by the Collector as per the provisions of the Act. [Para 16] [119-B, C] V. Madhukar, Sumit Ghosh and Aruneshwar Gupta for the Appellants. Dr. Manish Singhvi and P.V. Yogeswaran for the Respondents.

CASE NO.:
Appeal (civil)  5273 of 2007


PETITIONER:
STATE OF RAJASTHAN & ORS


RESPONDENT:
M/S KHANDAKA JAIN JEWELLERS


DATE OF JUDGMENT: 16/11/2007


BENCH:
A.K. MATHUR & MARKANDEY KATJU


JUDGMENT:
J U D G M E N T 


CIVIL APPEAL NO.  5273         OF 2007
[Arising out of S.L.P.(C) No.19439 of 2006]


A.K. MATHUR, J.


1. Leave granted.

2. This appeal is directed against the judgment dated 23.11.2005 
passed by the  Division Bench of the High Court  of Judicature for 
Rajasthan at Jaipur Bench, Jaipur  in  SBCWP No. 133/1997 and DBCSA 
No. 427/2002 whereby the  division bench has affirmed the order of the 
learned Single Judge.  
3. Brief facts which are necessary for the disposal of this appeal 
are as under:
The S.B. Civil writ petition No. 133/97  was filed by M/s 
Khandaka Jain Jewellers,  petitioner (respondent herein) in the High 
Court of Judicature for Rajasthan, Jaipur Bench, Jaipur  who  prayed  
that a direction may be issued to the respondent Nos. 2&3    to 
register the sale deeds  sent  by the  Court of additional district 
Judge No. 1, Jaipur city in execution  application No. 15/94 and 16/94 
and to  send back the same to the Court immediately after 
registration.   It was also prayed that the respondents may be 
directed to register the sale deeds on the stamps  on  which it is 
executed by the executing court and  not to charge more stamp duty 
from  respondent (herein).  It was  further prayed to quash and set 
aside the  proceedings  taken under Section 47A(2) of the Stamps Act, 
1952 in case No. 442/95 and 443/95 on 4th March, 1997 for determination 
of the valuation of the  sale deed for registration.
The respondent is a registered firm and it entered into two 
agreements  for purchase of properties with Shri Prem Chand Ajmera, 
resident of 2148, Haldiyon Ka Rasta Jaipur by one agreement dated 20th 
October, 1983.  The property was agreed to be purchased for a sum of 
Rs. 1,41,000/- out of which Rs. 20,000/- were paid at the time  of the 
agreement.  As the vendor failed to comply  with the terms of the 
agreement,  the  respondent vendee filed a suit for specific 
performance of the contract in the Court of district Judge, Jaipur 
city which was later on transferred to  the Court of additional 
district Judge No.1, Jaipur city under registration No. 216/86.    The 
suit was decreed by  the Judgment and decree dated 2nd February,1994.   
In pursuance of the said decree, the respondent firm deposited an 
amount of Rs. 1,21,000/- in the Court on 9th May, 1994.   Since  the 
vendor did not execute the sale deed,  therefore, the respondent firm 
filed the execution application No. 16/90 before the Court of 
additional district Judge No. 1, Jaipur city.

In another agreement  dated 20TH October, 1983 the  vendor 
Premchand agreed to sell a portion of property  for a sum of Rs. 
50,000/- out of which Rs. 10,000/- was paid  at the time of agreement.  
The respondent firm purchased the stamp papers and got  the sale deed 
typed.  In this case also the vendor failed to fulfill the condition 
of  agreement and  to execute the sale deed.  Consequently,  the 
respondent firm filed another suit for specific performance of the 
contract in the Court of district Judge, Jaipur city. It was also 
transferred to the court of additional district Judge No. 1, Jaipur 
city  under registration No. 151/91.   The suit was decreed vide 
judgment and decree dated 2nd February, 1994  and the respondent firm 
was directed to  deposit the remaining amount of Rs. 40,000/-  and  
the judgment debtor would execute the  sale deed.  If the  judgment 
debtor fails  to comply with the decree,  the decree holder would be 
entitled to get the sale deed registered and to get the possession. In 
compliance of the judgment and decree passed by the Court,  the 
respondent firm deposited an amount of Rs. 40,000/- in the court but 
the judgment debtor   did not execute the sale deed.   The execution 
application No. 15/94 was filed before   the Court of additional 
district Judge No. 1, Jaipur city.     Both these applications No. 
15/94 and 16/94 were taken up by the  executing court and the 
respondent firm was directed to submit the stamp papers for the 
execution of  the two sale deeds.   The stamp papers for a sum of 
Rs.14,100/- and Rs. 5,000/-   for execution of the sale deeds in 
respect of  properties purchased for  a sum of Rs. 1,41,000/- and   
Rs. 50,000/- respectively, were  submitted by the respondent firm. 
The learned executing court executed the  sale deeds and sent the 
same  on 17th March, 1995   for registration before  the Sub- 
registrar, Registration Department, Collectorate Bani Park, Jaipur.   
The Sub-Registrar exercising its powers under Section 47A(1) of the 
Stamp Act sent these two sale deeds to  Collector (Stamps) Jaipur for  
determining the market value and  to assess the charge of the stamp 
duty.      The Collector (stamps)   registered  these two cases No. 
442/95 and 443/95 of the respondent firm  and passed the  order dated 
5th March, 1997.   In case No. 442/95  he assessed value of the 
property as Rs. 5,60,000/-   and deficient stamp duty was raised to 
the extent of  Rs. 41,900/- and deficient registration fees as Rs 
1500/- and  he also levied the penalty  of Rs. 1000/-.  Thus, the 
total amount against the respondent firm  raised was Rs. 44,400/-. In 
the  second  case No. 443/95  he  assessed value of the  property as 
Rs. 3,87,580/-  and deficient  stamp duty to the extent of Rs. 
33,758/- and  deficient registration fees as Rs. 1500/- and the 
penalty of Rs. 1000/-. Thus the total amount directed to be recovered  
from the respondent firm was Rs. 36,258/-.   The respondent firm  
filed  writ petition  challenging  both these orders and the 
contention of the respondent firm was that the  valuation of the 
property should be taken when  the agreement of sale deed was 
executed, and not at the time of the registration of the sale deed.  
The learned  Single Judge relying on the judgment in the case of Sub 
Registrat, Kodad Town and Mandal v. Amaranaini China Venkat Rao and 
Others   reported in AIR 1998 Andhra Pradesh 252 allowed the writ 
petition and observed that  since the vendor backed out  and did not 
execute the sale deed of the property in pursuance of the  agreement 
on 20th October, 1983 therefore, the respondent firm  filed  a  suit 
for specific performance of contract in 1986  and the suit was 
decreed.  The respondent firm was ready and willing to pay the amount, 
and therefore, it was not his fault. The same was the position 
regarding the second suit  which was filed in 1991.  The learned Judge 
after considering the  matter directed to set aside both the orders 
and held that for the purpose  of charging   stamp duty, etc, the  
relevant date for assessment of the market value shall be the date on 
which the suit for specific performance of the agreement to sale was 
filed. Consequently the order dated 4th March, 1997  (Annexure 5 & 6)  
was quashed and the authorities  were directed to  pass a fresh order 
regarding the market value of the property in question for the purpose 
of levy of the stamp duty as on the date of filing of the suit and 
also directed to undertake this exercise keeping in view the 
observation of the judgment within a period of one month from the date 
of receipt of the certified copy of the order after notice to 
respondent firm.
4. Aggrieved against this order, an  appeal was preferred before the 
Division Bench of the Rajasthan High Court at Jaipur Bench and the 
Division Bench affirmed the order of the  learned single Judge.  
Aggrieved against the order of the Division  Bench, the present appeal 
was  preferred by  the State of Rajasthan & Ors., appellants herein.
5. We have heard learned counsel for the parties and perused the  
records.
6. The question is whether the valuation should be assessed on the 
market rate prevailing at the time of registration of the sale deed or  
when the parties entered into  agreement  to sell. 
7. Learned counsel for the State has submitted that the Stamp Act is 
a taxing statute and a taxing statute has to be  construed  strictly. 
Whatsoever may have been the consideration  for the vendor not to get 
the sale deed executed   is a matter  between both  the parties, but 
when the matter is before the  registering Authority the registering 
Authority has to  see the valuation of the property at the market rate 
at the time of  the registration as per Section 17 of the Act.  
Therefore,  a notice under Section  47A of the (Rajasthan Amendment) 
Stamp Duty Act was given and proper valuation was determined for 
registration.  As against  this, the  learned counsel for the 
respondent submitted that  Section 3  of the Act  is a charging 
section.   The registering authority has to see the instrument and the 
consideration mentioned therein for payment of duty as per Section 27 
of the Act.  If he finds it undervalued then  he can hold an inquiry 
with regard to market  value which was  prevailing at the time of 
agreement to sell.
8. In order to appreciate the  controversy involved in the matter, 
it is necessary to reproduce the relevant provisions of the Stamp Act 
which are as under:
Section 2(12) of the Act reads as under:
"(12) "Executed", and "execution", used with reference 
to instruments, mean "signed" and "signature"."


Section 3 of the Act reads as under:
"3. Instruments chargeable with duty -  Subject to the 
provisions of this Act and the  exemptions contained 
in Schedule I, the following instruments shall be 
chargeable with duty of the amount indicated in that 
Schedule as the proper duty therefore, respectively, 
that is to say 
(a) every instrument mentioned in that Schedule which, 
not having been previously executed by any person, 
is executed in (India) on or after the first day of 
July, 1899;
(b) every bill of exchange payable  otherwise than on 
demand  or promissory note drawn or made out of 
India on or after that  day and accepted or paid, 
or presented for acceptance or payment, or 
endorsed, transferred or otherwise negotiated, in 
India; and
(c) every instrument (other than a bill exchange or 
promissory note) mentioned in that Schedule, which, 
not having been previously executed by any person, 
is executed out of India  on or after that day 
relates to any property  situate, or to any matter 
or thing done or to be done, in India and is 
received in India:


Provided that no duty shall be chargeable in respect 
of-
(1) any instrument executed by, or on behalf of, or in 
favour of, the Government in cases where, but for 
this exemption, the Government would be liable to 
pay the duty chargeable in respect of such 
instrument;
(2) any instrument for the sale, transfer or other 
disposition, either absolutely or by way of 
mortgage or otherwise, of any ship or vessel, or 
any part, interest, share or property of or in any 
ship or vessel, registered under the Merchant 
Shipping Act, 1894, or under Act 19 of 1938,  or 
the  Indian Registration of Ships Act, 1841 (10 of 
1841) as amended by subsequent Acts.
(3) Any instrument executed, by or on behalf of, or in 
favour of the Developer, or Unit or in connection 
with the carrying out of purposes of the Special 
Economic Zone.

"


Section 17 of the Act reads as under:


"17. Instruments executed in India  All instrument 
chargeable with duty and executed by any person in 
India shall be stamped before or at the time of 
execution."


Section 27 of the Act reads as under:


"27.Facts affecting duty to be set forth in 
instrument.-  The consideration (if any) and all 
other facts and circumstances affecting the 
chargeability of any instrument with duty,  or  the 
amount of the duty with which it is chargeable, 
shall be fully and truly set forth therein."


    Section 47-A inserted by  Rajasthan(Amendment)  
State Stamp Act reads as under:


"S.47-A Instruments under-valued, how to be valued 
 (1) Notwithstanding anything contained in the 
Registration Act, 1908 (Central Act XVI of 1908) 
and the rules made thereunder as in force in 
Rajasthan where in the case of any instrument 
relating to an immovable property chargeable with 
an ad valorem duty on the market value of the 
property as set forth in the instrument, the  
registering officer has, while registering the 
instruments, reason to believe that the market 
value of the property has not been truly set forth 
in the instrument, he may either before or after 
registering the instrument, send it in original to 
the Collector for determination of the market-value 
and  to assess and charge the duty in conformity 
with such determination together with a penalty not 
exceeding ten-times the deficient stamp duty 
chargeable and surcharge, if any, payable on such 
instrument.


(2) On receipt of the instrument  under sub-
section(1), the Collector shall, after giving the 
parties a reasonable opportunity of being heard and 
after holding an enquiry in the prescribed manner 
determine the market-value and the duty including 
penalty and surcharge, if any, payable thereon; and  
if the amount of duty  including penalty and 
surcharge, if any, already paid, is deficient, the 
deficient amount shall be payable by the person 
liable to pay the duty including penalty and 
surcharge, if any.


(2-A) Where it appears to a person having by law or 
consent of parties authority to receive evidence or 
a person in charge of a public office, during the 
course of inspection or otherwise, except an 
officer of a police, that an instrument is 
undervalued, such person shall forthwith make a 
reference to the Collector in that matter.


(3)The Collector may, suo motu, or on a reference 
made under sub-section (2-A) call for and examine 
any instrument not referred to him under sub-
section (1), from any person referred to in sub-
section (2-A)  or the executant or any other person 
for the purpose of satisfying himself as to the 
correctness of the market-value of such property 
has not been truly set forth in the instrument, he 
may determine in accordance with the procedure 
provided in sub-section(2), the market-value and 
the amount of stamp duty together with a penalty 
not exceeding ten times the deficient stamp duty 
chargeable on it, which shall be payable by the 
person liable to pay the stamp duty and penalty.


(4)Where for any reason the original document 
called for by the Collector under sub-section(3)  
is not produced or cannot be produced, the 
Collector may after recording the reasons for its 
non-production call for a certified copy of the 
entries of the document from the registering 
officer concerned and exercise the powers conferred 
on him under sub-section (3).


(5)For the purpose of enquiries under this section, 
the Collector shall have power to summon and 
enforce the attendance of witnesses including the 
parties to the instrument or any of them, and to 
complete the production of documents by the same 
means, and so far as may be in the same manner, as 
is provided in the case of Civil Court under Code 
of Civil Procedure, 1908 (Central Act V of 1908)"


9. The contention of the learned counsel for the State  that as per 
Section 17 of the Act, the market value has to be taken into 
consideration because Section 17 stipulates that all the instruments 
chargeable with duty and  executed by person of India  shall be 
stamped before or "at the time of execution".  The word "execution" 
has been defined in Section 2(12) of the Act which says that 
"Execution"  used with reference to the instruments, mean "signed" and 
"signature".    Therefore, it shows that the document which is sought 
to be registered has to be signed by both the parties.  Till that time 
the document does not become an instrument for registration.   A 
reading of Section  2(12)  with Section 17 clearly contemplates that 
the document should be complete in  all respects when both the parties 
should have signed it with regard to the transfer of the immovable 
property.  It is irrelevant  whether the matter had gone in for  
litigation.  
10. It may  be mentioned that there is a difference between an 
agreement to sell and a sale.  Stamp duty on a sale has to be assessed 
on the  market value of the property at the time of the sale, and not  
at the time of the prior agreement to sell, nor at the time of  filing 
of the suit.  This is evident from section 17 of the Act.   It is true 
that as per Section 3,  the instrument is to be registered on the 
basis of the valuation disclosed therein.     But Section 47-A  of the 
Rajasthan(Amendment) Stamp Duty Act  contemplates that in case it is 
found that properties are under valued then it is open for the 
Collector (Stamps)  to assess  the correct market value.    Therefore, 
in the present case when the  registering  authority found that  
valuation of the property was not correct as mentioned in the 
instrument, it sent the document to the Collector for  ascertaining 
the correct market value of the property.  The expression "execution"  
read with Section 17 leaves no manner of  doubt that  the  current 
valuation is to be seen when the instrument is sought to be 
registered.  The Stamp Act is in the  nature of a taxing statute,  and  
a taxing statute is not dependant  on any contingency.  Since the word 
"execution"  read with Section 17 clearly says that  the instrument 
has to be seen at the time when it is sought to be  registered and in 
that if it is found that the instrument has  been undervalued then it 
is  open  for the registering authority to enquire into its  correct 
market value.    The learned single Judge as well as the Division 
Bench in the present case had  taken into consideration that the 
agreement to sell was entered into but  it was not executed.  
Therefore, the incumbent  had to file a suit for  seeking a  decree 
for execution of the agreement and that took a long time.  Therefore, 
the Courts below concluded that the valuation which was in the 
instrument should be taken into account.  In our opinion this is not a 
correct approach.  Even the valuation at the time of the decree is 
also not relevant.  What is relevant  in fact is the actual valuation 
of the property at the time of the sale.   The crucial expression used  
in Section 17 is "at the time of execution".     Therefore, the market  
value of the  instrument has to be seen at the time of the execution 
of the sale deed, and   not at the time  when agreement to sale was 
entered into.  An agreement to sell is not a sale. An agreement to 
sell becomes  a sale after both the parties signed the sale deed.  A 
taxing  statute is not  contingent on the inconvenience of the 
parties.   It is needless to emphasize  that a taxing statute has to 
be construed  strictly and  considerations of  hardship or equity  
have no role to play in its construction.   VISCOUNT SIMON quoted with 
approval a passage from ROWLATT, J. expressing the  principle in the 
following words
" In a taxing Act one has to look merely at what  
is clearly said.  There is no  room for any 
intendment.  There is no equity about a tax.   
There is no  presumption as to tax.   Nothing is 
to be read in, nothing is to be implied.  One can 
only look fairly at the language used."

11.      The same view was expressed by Hon'ble  Bhagwati J. in the 
case of A.V. Fernandez v. State of  Kerala   reported in AIR 1957 SC 
657.  The principle is as follows:  
"In construing fiscal statutes and in determining 
the liability of a subject to tax one must have 
regard to the strict letter of the law.   If the 
revenue satisfies the court that the case falls 
strictly  within the provisions of the law,  the 
subject can be taxed.  If on the other hand, the 
case is not covered within the four corners of the 
provisions of the taxing statute, no tax can be 
imposed by inference or by analogy or by trying to 
probe into the intention of the Legislature and by  
considering what was the substance of the matter."


Hon'ble Shah J has formulated the principle thus: 
"In interpreting a taxing statute,  equitable 
considerations are entirely out of place.  Nor  can 
taxing statutes be interpreted on any presumptions 
or assumptions. The court must look squarely at the  
words of the statute and interpret them.   It must 
interpret a taxing statute in the light of what is 
clearly expressed;  it cannot imply anything which 
is not expressed;  it cannot import provisions in 
the statute so as to supply any assumed 
deficiency."




Therefore, a taxing statute has to be read as it is.  In other 
words,  the literal rule of interpretation applies to it.
12.    In this back-ground, if we construe Section 17 read with 
Section 2(12) then there is no manner of doubt  that  at the time of 
registration, the Registering Authority is under an obligation  to 
ascertain the correct market value at that time, and should not go by 
the value mentioned in the instrument.  


 13.   Learned counsel for the respondent submitted that if we 
construe Section 3 read with Section 27 of the Act then the 
Registering Authority is under an obligation to  only see the  value 
mentioned in the instrument.  In our opinion  Section 3 which is the 
charging section cannot be read  in isolation but has  to be read 
along with Section 17 of the Act.  From a composite reading of  
Sections 3,17 and 27,  it becomes abundantly clear that the valuation 
given in an instrument is not conclusive.  If any doubt arises in the 
mind of the  Registering Authority that the instrument is under-
valued then as per Section 47-A of the Rajasthan (Amendment) the 
instrument can be sent to the Collector for determination  of the  
correct market value.  Under Section 47-A read with Sections 3,17 and 
27, it becomes clear  that the  Registering Authority has to 
ascertain the correct valuation given  in the instrument regarding 
market value of the  property at the time of the sale.
14.  Learned Counsel for the respondent strenuously urged before us 
that in fact when the agreement to sell was not executed by the  
vendor,  the respondent  had no option  but  to file a suit  and  a 
long time was taken  for obtaining a decree for execution of  the 
agreement. He was not at fault and as such the valuation given in the 
instrument should be taken into consideration because during the 
litigation the valuation of the property has shot up.  In this 
connection, learned counsel  has invited our attention to the 
principle "Actus curie neminem gravabit" meaning thereby that no 
person shall suffer on account of litigation. Hence learned counsel 
submitted that  since the  matter had been in the litigation for a 
long time, the respondent cannot be made to suffer.  He invited our 
attention to the decision of the Andhra Pradesh High Court  Sub-
Registrar, Kodad Town and Mandal (supra).   It is true that no one 
should suffer on account of the pendency of the  matter but this 
consideration does  not affect the Principles of  interpretation of a  
taxing statute. A taxing statute has to be construed as it is  all 
these contingencies  that  the matter was under litigation and the  
value of  the propeprty by that time shot up cannot  be taken into 
account for  interpreting the provisions of a taxing statute.  As 
already mentioned above a taxing statute has to be construed strictly 
and if  it is construed strictly then the plea that the incumbent 
took a long time to get a decree for execution against the vendor  
that consideration cannot  weigh with the Court for interpreting the 
provisions of the taxing statutes.  Therefore,  simply because the 
matter have been  in the litigation for a long time  that cannot  be 
a consideration to accept the market value of  the instrument when 
the agreement to sale was entered. As per Section 17, it clearly says   
at the time  when registration is made, the  valuation is to be seen 
on that basis.
15.   In the case of Sub-Registrar, Kodad Town and Mandal (Supra),  
the learned single Judge of  the Andhra Pradesh High Court felt  
persuaded  on account of 30 years' long litigation and therefore, 
declined to send the papers back to the Collector for valuation at 
the market value. With great respect, the view taken by the learned 
single Judge is against the principles of interpretation of a  taxing 
statute.  Therefore, we are of  the opinion that the view taken by 
the learned single Judge of the Andhra Pradesh High Court is not 
correct.
16.   Accordingly, we are of the opinion that the view taken by the 
learned single Judge  as well as by the Division Bench  cannot be 
sustained and the same is set aside.    The Collector shall determine 
was the  valuation of  the instrument on the basis of the market 
value of the property at the date when the  document was tendered by 
the  respondent for registration,   and the respondent shall pay the 
stamp duty charges and surcharge,  if any, as assessed by the 
Collector as per the provisions of the Act.  The appeal of  the State 
is allowed.  No order as to costs.