# Abdul Rasheed v. Ayuktat, Lucknow Division, Lucknow & Anr

- **Citation:** (2016) 8 ILRA 133
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2016-08-02
- **Bench:** Dr Devendra Kumar Arora
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/abdul-rasheed-v-ayuktat-lucknow-division-lucknow-anr-44200
- **Pages:** 6

## Text

8 All. Abdul Rasheed Vs Ayuktat, Lucknow Division, Lucknow & Anr.
133
(2016) 8 ILRA 133
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 02.08.2016

BEFORE

THE HON'BLE DR DEVENDRA KUMAR ARORA, J.

Writ Petition No.- 558 (MS) Of 2006

Abdul Rasheed ...Petitioner
Versus
Ayuktat, Lucknow Division, Lucknow & Anr. ...Opposite parties

The sole question involved in the instant writ petition is whether the stamp duty is payable on the property as
it stands on the date of execution of deed or demand for additional stamp duty can be created on the
presumption of future or intended change of use to which the property may be put to by the vendee.

Court observed that the authority had proceeded to determine the value on the presumption that though the
land is agricultural land but it has not been purchased for the said purpose. The said presumption does not
appear to be sound and reasonable. It may be added that the report of the Sub-Registrar could not legally
form basis of the impugned orders. There is no material in possession of the respondents to show that on the
date of the execution of sale deed, the land in dispute was not agricultural land. The petitioner has brought
on record copies of Khasra of 1422 Fasli and Khatauni of 1418-1423 Fasli ( issued on 21.4.2015) to show the
land is still recorded in the Revenue records as agricultural land and agricultural activities are being carried
out by the petitioner.

The writ petition is allowed.

(Delivered by Hon'ble Dr Devendra Kumar Arora, J.)

1. Heard Sri Ram Karan Verma, learned Counsel for the petitioner and Standing Counsel
for the respondents.

2. The sole question involved in the instant writ petition is whether the stamp duty is
payable on the property as it stands on the date of execution of deed or demand for additional
stamp duty can be created on the presumption of future or intended change of use to which the
property may be put to by the vendee.

3. Abdul Rasheed, the petitioner, by means of a registered sale deed dated 27.8.2002
purchased the 1⁄4 piece of land of Gata no. 126/.242 hectare situate in village Pipariya Dhani
Pargana Atwapipariya, Tehsil Mohammadi, District Kheri from one Karamjeet Singh son of
Jagdish Singh and paid the stamp duty as applicable to agricultural land at the relevant time. After a
long time, proceedings under Section 47-A of the Indian Stamp Act were initiated on the report of
Sub Registrar and a show cause notice was issued to the petitioner requiring him to pay a sum of
Rs. 64,936/- as there has been deficiency in the payment of stamp duty. A report in this connection
134 INDIAN LAW REPORTS ALLAHABAD SERIES

was also sought for from the Naib- Tehsildar, who after inspection submitted his report indicating
therein that the land in question situates in close proximity to residential area and commercial
establishment on main road of Mohammadi-Gola. Therefore, the land being purchased for
residential purposes, as such the stamp duty is payable thereon at the rate applicable to an Abadi
land. In response to the show cause notice, the petitioner submitted that the proper stamp duty has
been paid on the instrument in question as per circle rate fixed for this purpose by the Collector. It
has been contended that the land purchased by them was and still is being used for agricultural
purposes and the stamp duty has been paid accordingly. The said plea did not find favour with the
authority concerned, who under the order dated 21.3.2003 held that the land purchased by the
petitioner was for residential purpose and as such, the stamp duty is payable thereon at the rate
applicable to an Abadi land. A sum of Rs. 64,936/- was demanded towards the deficiency in stamp
duty, Rs. 4240/- towards registration charge and Rs. 10,390/- towards penalty.

4. The said order dated 21.3.2003 was challenged by way of Appeal No. 232/2002-03
under-Section 56 of the Indian Stamp Act before the Commissioner, Lucknow Division, Lucknow,
unsuccessfully. He, by the order dated 12.5.2005 dismissed the appeal on the ground that the order
of the Collector Stamps/Sub Divisional Officer, Mohammadi, Kheri is perfectly justified, which is
based on cogent materials.

5. Being dis-satisfied with the aforesaid orders, the petitioner has filed the instant writ
petition questioning the correctness and validity of the aforesaid impugned orders.

6. The learned Counsel for the petitioner submits that the authorities below have wrongly
held that the land in question is not agricultural land. The date when it was purchased, it was
recorded as agricultural land in the Revenue records and it continues to be so even till date. There
being no declaration under Section 143 of the UP ZA & LR Act declaring it as a Abadi/residential,
the authorities below have acted arbitrarily and illegally in treating the land in question as nonagricultural land. The burden to prove that the land was other than the agricultural land, lay upon
the shoulders of respondents and not on the petitioners.

7. To substantiate the aforesaid assertions, the petitioner has placed reliance on Anirudha
Kumar and Ashwini Kumar Versus Chief Controlling Revenue Authority [2000 (3) A.W.C.
2587] and Smt. Anasuya Singh vs. Commissioner, Faizabad Division[2008(26) LCD 588],
Surendra Singh and another vs. State of U.P. And others [2009(106) RD 427], Smt. Anasuya
Singh vs. Commissioner Faizabad Division, Faizabad [2008(104) RD 725], Kuldeep Chaurasia
vs. State of U.P. And another decided on 14.11.2008.

8. The learned Standing Counsel, on the other hand, supports the impugned orders and
submits that authorities below were justified in treating the land in dispute as non-agricultural land
in view of the spot inspection report of the Naib Tehsildar. Placing reliance on the decisions
rendered in Wasi Ur Rehman and another Vs. Commissioner Moradabad Division
Moradabad (decided on 26.2.2015) Haroon Ahmad and another vs. State of U.P. And others (
decided on 30.8.2011) and Radhey Shyam vs.State of U.P. And others (decided on 6.8.2013),
8 All. Abdul Rasheed Vs Ayuktat, Lucknow Division, Lucknow & Anr.
135
learned Standing Counsel submitted that property in question was undervalued, not disclosing that
the property has future potential, whereas stamp duty was paid as applicable on agricultural
property.

9. In the case of Prakashwati v. Chief Controlling Revenue Authority, Board of
Revenue;1996 AWC 1331, the Apex Court had held that situation of a property in an area close to
a decent colony not by itself would make it part thereof and should not be a factor for approach of
the authority in determining the market value. According to the said decision, valuation has to be
determined on constructive materials which could be made available before the authorities
concerned.

10. In Anirudha Kumar and Ashwini Kumar Versus Chief Controlling Revenue
Authority [2000 (3) A.W.C. 2587] and Smt. Anasuya Singh vs. Commissioner, Faizabad
Division[2008(26) LCD 588], on which reliance has been placed by the petitioner, this Court has
referred the aforesaid Prakashwati's case [supra] and observed as under:-

"In the present case, the market value is to be determined on the basis of the value
that would satisfy the vendor. Thus, the question of future potential cannot be a factor for
determining the market value of such a land for the purpose of stamp duty payable under the Stamp
Act. The vendee pays the price that satisfies the vendor and, therefore, it is the utility of the land as
on the date of transfer by the vendor and as such, if the land was an agricultural land, it has to be
treated as such and the valuation has to be done accordingly. Whether in future the purchaser puts
the land into residential use or changes the character is immaterial for the purpose of payment of
stamp duty. The principle that has been laid down in P. Ram Reddy (supra) can be attracted for the
purpose of determining the market value only to the extent of potential as on the date of transfer
and not beyond. Thus, the market value has to be determined according to the factors, which
includes the situation of the land, the amenities available in and around and various other factors,
including the close proximity of the residential area as well as any transfer made immediately
before the transfer or after the transfer in close proximity if such documents are produced in respect
of the area that similarly situated land by either of the parties."

11. In Rakesh Chandra Mittal's case[supra] a Division Bench of this Court held:-

"It is well settled that market value of the property has to be determined with
reference to the date on which the document is executed. Market value as such keeps on varying
and changing. Any subsequent improvement or change in the nature or user of the land, which may
result into enhancement of the market value of the property on the date of execution of the
document that is to be considered for the purpose of determination of stamp duty payable on the
instrument."

12. Apart from the above decisions, recently a Full Bench of this Court in the case of Shri
Ramesh Chandra Srivastava, Kanpur v. State of U.P. and others; 2007 UPTC 335 held that the
136 INDIAN LAW REPORTS ALLAHABAD SERIES

market value of the property has to be determined with reference to the date on which the document
is executed.

13. Recently, a question was referred to the Full Bench in the case of Smt. Pushpa Sareen
Vs. State of U.P. And others [ 2015(33) LCD 1575] as to whether the Collector Stamps has power
to fix the valuation of a plot on the assumption that the same is likely to be used for commercial
purposes, and whether the presumed future prospective use of the land can be a criterion for
valuation by the Collector?

14. The Full Bench while answering the aforesaid question answered as follows:-

"Now insofar as the second question is concerned, the issue posed for consideration
before the Court is whether the Collector has the power to fix the valuation of a plot on the
assumption that it is likely to be used for commercial purposes and whether the presumed future
prospective use of the land can be a criterion for valuation by the Collector. The Collector, while
exercising his jurisdiction under Section 47-A, is required to determine the market value of the
property on the date of the instrument. It is a well settled principle of law that stamp duty is a levy
which is imposed not on the transaction but on the instrument."

15. The valuation cannot be determined straightway on such an assumption that the land is
situated in close proximity of ''abadi' area or on the presumption that the land is to be used for a
purpose other than the agriculture. As averred above, the Full Bench of this Court has clearly held
on the basis of the various provisions of the Stamp Act, that the market value is to be determined
with reference to the date on which the document was executed and that any subsequent change in
the nature or use of the land which may result in the enhancement of the market value of the
property was not to be taken into account.

16. Thus, the legal position which emerges out from the aforesaid cases is that the market
value of the land cannot be determined with reference to the use of the land to which buyer intends
to put it. The market value is what a general buyer may offer and what the seller may reasonably
expect. In determining the market value, the potential of the land as on the date of sale alone can be
taken into account and not what potential it may have in the distant future. Any subsequent
improvement or change in the nature or user of the land, which may result into enhancement of the
market value of the property, is not to be taken into account and it is only the value of the property
on the date of execution of the document that is to be considered for the purpose of determination
of proper stamp duty payable on the instrument.

17. In addition to above legal proposition, the State Government with a view to remove
doubts of the Collector (Stamps) issued a Government Order dated 16.9.1999 to all the Divisional
Commissioners, District Magistrates and Additional District Magistrates (Finance & Revenue),
providing therein that while determining the valuation of the property under 1997 Rules, neither the
future potential or use of the property nor the status of the purchaser (Organization, Society,
8 All. Abdul Rasheed Vs Ayuktat, Lucknow Division, Lucknow & Anr.
137
Company etc.) will be taken into consideration. The relevant clause of the Government Order dated
16.9.1999 reads as under :

1⁄4d1⁄2 vpy lEifRr ds Hkfo"; esa laHkkfor mi;ksx rFkk dzsrk dk Hkwfe dks dz; djus ds ihNs Hkfo"; esa
mldk D;k mn~ns'; gS] bldks cktkj ewY; ds fu/kkZj.k o mlds vkxa.ku dk vk/kkj ugha cuk;k tkuk pkfg,]

1⁄4[k1⁄2 fnukad 01 flrEcj] 1997 ls izHkkoh dysDVj jsV fyLV esa ;fn Hkfo"; ds Hkw&Hkkx rFkk i{kdkj dsa
fdlh fof'k"V uke ls gksus ds dkj.k 1⁄4;Fkk fdlh fof'k"V iz;kstu gsrq LFkkfir dksbZ laLFkk] lfefr] dEiuh vkfn1⁄2 Hkwfe ds dz;
gsrq jsV fyLV ls M~;ks

18. Having considered the submissions made by the learned Counsel for the parties and the
materials placed before this Court, it appears that the authority had proceeded to determine the
value on the presumption that though the land is agricultural land but it has not been purchased for
the said purpose. The said presumption does not appear to be sound and reasonable.

19. It may be added that the report of the Sub-Registrar could not legally form basis of the
impugned orders. There is no material in possession of the respondents to show that on the date of
the execution of sale deed, the land in dispute was not agricultural land. The petitioner has brought
on record copies of Khasra of 1422 Fasli and Khatauni of 1418-1423 Fasli ( issued on 21.4.2015) to
show the land is still recorded in the Revenue records as agricultural land and agricultural activities
are being carried out by the petitioner. In view of the proposition of law as laid down in
Prakashwati 's case by the Apex Court and by the Full Bench in Smt. Purshpa Sareen's case, the
case law relied upon by the Standing Counsel are of no avail.

20. This being so, there is no hesitation to hold that the respondent no.2 did not possess any
cogent material on record to show that the instrument in question is deficiently stamped or under
valued in any manner. The first respondent was, therefore, not justified in confirming the order
passed by the Collector (Stamps). The Appellate Authority proceeded to dismiss the appeal without
recording any finding for discarding the pleas as raised by the petitioner in his appeal.

21. In view of the above discussion, the impugned orders dated 21.3.2003 passed by the
Collector (Stamps)/Sub Divisional Officer and the order dated 20.12.2005 passed by the
Commissioner in appeal are quashed by issuing a writ of certiorari. Any amount deposited by the
petitioner shall be refunded to him within a period of two month from the date of production of
certified copy of the order.

22. With the aforesaid observations and directions, the writ petition is allowed. No order as
to costs.
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138 INDIAN LAW REPORTS ALLAHABAD SERIES

(2016) 8 ILRA 138
APPELLATE JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 24.08.2016

BEFORE

THE HON'BLE RITU RAJ AWASTHI, J.

Second Appeal No.- 231 Of 2008

Mohd. Iliyas & Ors. ...Appellants
Versus
Smt. Ram Dulari & Ors. ...Respondents

Counsel for Appellants:
Mr. Mohiuddin Khan, Mr. Mohd. Aslam Khan, Mr. Mohd. Adil Khan, Mr. Ghaus Beg, Mr. Mohd. Arif Khan, Sr.
Advocate

Counsel for Respondents:
Apoorva Tiwari & Sunil Pandey
Held

The Court held that the suit for specific performance filed in 1990 on the basis of agreement dated
07.01.1983 was barred by limitation under Article 54 of the Limitation Act, as the period commenced from the
date of knowledge of permission (24.01.1983) and not from alleged refusal. It further held that extension of
time or oral agreement was not proved and Section 15 of the Limitation Act was inapplicable in absence of
any stay/injunction. The Court also held that the plaintiff failed to establish continuous readiness and
willingness as required under Section 16(c) of the Specific Relief Act, and mere pleading without evidence is
insufficient. Consequently, the appellate court erred, and the trial court's dismissal was upheld while setting
aside the decree for specific performance.

CASE LAW CITED

Ramzan vs. Smt. Hussaini (AIR 1990 SC 529)

Damodaran Pillai vs. South Indian Bank Ltd. (2005) 7 SCC 300

Director of Inspection of Income Tax vs. Pooran Mall & Sons (1975 AIR SC)

Ahmadsahab Abdul Mulla vs. Bibijan (2009) 5 SCC 462

Panchanan Dhara vs. Monmatha Nath Maity (2006) 5 SCC 340

Badat & Co. vs. East India Trading Co. (AIR 1964 SC 538)

Muddasani Venkata Narsaiah vs. Muddasani Sarojana (2016)

Faquir Chand vs. Sudesh Kumari (2006) 12 SCC 146