# Ajay Agarwal & Ors v. Commissioner, Lko. & Ors

- **Citation:** (2023) 2 ILRA 338
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-01-10
- **Case number:** Writ-C No. 1000019 of 2008
- **Bench:** Manish Mathur
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ajay-agarwal-ors-v-commissioner-lko-ors-49662
- **Pages:** 8

## Headnote

A. Civil Law - UP Stamp Act, 1899 -
Section 47-A Clause (1) & (2) - UP
Stamp (Valuation of Property) Rules,
1997 - Rule 7 - Applicability of Rule 7 -
Held, no distinction whatsoever has
been carved out under Rule 7 of the
Rules of 1997 with regard to procedure
being required to be followed under
section 47 A - There being no distinction
indicated under provisions of the Act,
Rule 7 of Rules of 1997 would be
applicable on proceedings under section
47A (1) as well as under Section 47A (3)
and are mandatory in nature. (Para 14
and 21)
Writ petition allowed. (E-1)
List of Cases cited :-

## Text

338 INDIAN LAW REPORTS ALLAHABAD SERIES
said findings, the first question is decided
accordingly."

22.

Considering
the
aforesaid
judgments, the Court allowed the appeal
and set aside the judgment and decree of
the
First
Appellate
Court
and
the
respondent was directed to execute the sale
deed.
In
my
considered
view
the
proposition of law as has been discussed
above and laid down are fully attracted to
the present case, and therefore, the order
passed by the Collector and the order
passed
by
the
Commissioner
are
unsustainable and deserve to be set aside.

23. The order passed by the Collector
dated 3.9.2004 and the order passed by the
Additional
Commissioner,
Saharanpur
dated 1.6.2012 impugned herein this
petition as Annexures 2 and 4 are hereby
quashed.

24. The petitioner is at liberty to move
an appropriate application for making
necessary deposit to validate the transaction
that has already taken place in respect of
which his name is recorded in the revenue
records within a period of three months and
if any application as such is made, the
petitioner may be required to deposit the
amount if any that he would have been
required to pay in the year 2004-05 and no
interest shall be charged upon such amount.
An appropriate order in the above regard
shall be passed within two weeks of the
received of the application.

25. With the aforesaid observations
and directions, this petition stands disposed
of.
----------
(2023) 2 ILRA 338
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 10.01.2023

BEFORE

THE HON'BLE MANISH MATHUR, J.

Writ-C No. 1000019 of 2008

Ajay Agarwal & Ors. ...Petitioners
Versus
Commissioner, Lko. & Ors. ...Respondents

Counsel for the Petitioners:
Sudeep Kumar, A.K. Pandey

Counsel for the Respondents:
C.S.C.

A. Civil Law - UP Stamp Act, 1899 -
Section 47-A Clause (1) & (2) - UP
Stamp (Valuation of Property) Rules,
1997 - Rule 7 - Applicability of Rule 7 -
Held, no distinction whatsoever has
been carved out under Rule 7 of the
Rules of 1997 with regard to procedure
being required to be followed under
section 47 A - There being no distinction
indicated under provisions of the Act,
Rule 7 of Rules of 1997 would be
applicable on proceedings under section
47A (1) as well as under Section 47A (3)
and are mandatory in nature. (Para 14
and 21)
Writ petition allowed. (E-1)
List of Cases cited :-
1. Ram Khelawan @ Bachcha Vs St. of U.P. &
ors. reported in 2005(2) JCLR 610 (Allahabad)
2. Ganga Ram Vs St. of U.P. & ors. reported in
2020(38) LCD 1991
(Delivered by Hon'ble Manish Mathur, J.)

1.

Heard
learned
counsel
for
petitioners and Mr. Devendra Mohan
Shukla, learned State counsel appearing for
opposite parties.
2 All. Ajay Agarwal & Ors. Vs. Commissioner, Lko. & Ors.
339

2. Petition has been filed assailing
order dated 29.03.2006 passed under
Section 47A(3) of the U.P. Stamp Act,
1899 as well as order dated 04.10.2007
passed in appeal under Section 56 of the
said Act.

3. Learned counsel for petitioners has
submitted that petitioners purchased a flat
having area of 1473 sq. feet situated on
third floor of a building constructed on plot
no.B-3/122, Vivek Khand, Gomti Nagar by
means
of
sale
deed
executed
on
06.11.2003.

4. It is submitted that upon
presentation of the deed of transfer, the
same was registered but referred in terms of
Section 47A(3) of the Act after spot
inspection was conducted and report dated
18.11.2003
submitted
indicating
the
property in question to have commercial
value though Stamp Duty was paid in terms
of the property having residential value.
The proceedings under Section 47A(3) of
the Act culminated in imposition of
additional stamp duty along with penalty,
which was challenged by the petitioners in
Appeal No.552 of 2005-2006 under section
56 of the Act which has also been rejected
by means of order dated 04.10.2007.

5. Learned counsel for petitioners
submits that a perusal of the impugned
order dated 29.03.2006 passed under
Section 47 of the Act makes it apparent that
the proceedings have been decided ex parte
against petitioners and is based only on the
spot
inspection
report
indicating
the
property in question to have commercial
value. It is submitted that against the order,
petitioners filed appeal specifically taking
the plea that order passed under Section 47
of the Act was ex parte in which reasonable
opportunity of being heard was never
provided to him. Further ground which was
taken in appeal was that spot inspection
was conducted without giving prior notice
to the petitioners as is required to be done
in terms of Rule 7 (iii)(c) of the U.P. Stamp
(Valuation of Property) Rules, 1997 and
since it was mandatory on the part of
authorities to have given prior notice before
spot inspection of property in question, the
impugned orders are liable to be set aside
on that very ground. Learned counsel has
also submitted that even otherwise the
authorities are required to record their
subjective satisfaction in terms of Section
47(3) of the Act with regard to correctness
of the market value of the property which is
subject matter of the instrument of transfer.
It is submitted that no such subjective
satisfaction having been recorded either
under section 47 or even other Section 56
of the Act, the orders suffer from the vice
of non-application of mind and are also
against the mandatory statutory provision
of Section 47(3) of the Act. Learned
counsel has adverted to judgment of
Coordinate Bench in the case of Ram
Khelawan @ Bachcha versus State of U.P.
Ors. reported in 2005(2) JCLR 610
(Allahabad) to buttress his submission.

6. Learned State counsel appearing on
behalf of opposite party has refuted
submissions advanced by learned counsel
for petitioners with the submission that
there is no error in the orders challenged in
present writ petition since the authorities
were correct in relying on the spot
inspection report for which purpose prior
notice as envisaged under Rule 7(3)(c) of
the Act was not required to be given to
petitioner since the aforesaid provision was
inapplicable in present case. It is submitted
that
there
is
material
difference
in
provisions pertaining to under valuation of
instrument sought to be registered under
340 INDIAN LAW REPORTS ALLAHABAD SERIES
section 47A(i)(a) and the provisions of
Section 47 A(3) of the Act. It is submitted
that while under valuation of an instrument
under section 47 A(i) of the Act pertains to
inquiry required to be done by the Collector
prior to registration of instrument of
transfer, Section 47 A (3) of the Act
pertains to examination of the instrument of
transfer in order to ascertain under
valuation after its registration. It is
submitted that in terms of procedure
provided, reference is made to the Collector
upon an initial spot inspection for which
purpose no prior notice was required to be
given to the petitioners.

7. Learned State counsel has further
submitted that provisions of Rule 7(3)(c)
would be applicable only in case the
petitioners would have submitted their
objections to initial spot inspection report
and since in the present case no objection
by the petitioners was filed to initial spot
inspection report, there was no question of
Collector inspecting the property under
Rule 7(3)(c) of the Rules of 1997. It is
further submitted that even otherwise, in
terms of Section 47(A)(3) of the Act, under
valuation of the instrument of transfer is
required to be seen only upon examination
of the instrument of transfer and is distinct
from an inquiry required to be held by the
Collector in terms of Section 47A (1) of the
Act. As such, it is submitted that in cases
where
the
Collector
embarks
upon
examination of the instrument of transfer
for the purposes of determining under
valuation of the instrument, no spot
inspection is required to be made and
therefore provisions of Rule 7(3)(c) would
be inapplicable as in the present case where
the instrument was merely examined in
terms of Section 47A(3) of the Act. It is
also submitted that even under section 47A
(3) of the Act, if spot inspection is
conducted, the same not being under rule
7(3)(c) of 1997 Rules, any infringement
thereof would be immaterial.

8. Upon consideration of submissions
advanced by learned counsel for parties and
perusal of material available on record, it is
evident that proceedings in the present case
have been drawn in terms of Section
47A(3) of the Act of 1899 after registration
of the instrument of transfer and not under
section 47A (1) of the Act. It also appears
that proceedings have been drawn in
pursuance of the spot inspection report
dated 18.11.2003 which does not indicate
the presence of or any prior notice being
given to the petitioners. While filing appeal
under section 56 of the Act, specific plea
has been taken by petitioners that the spot
inspection report has been relied upon by
the prescribed authority but the same being
ex parte in nature, was liable to be ignored.
Despite the specific pleadings having been
taken in the memorandum of appeal, the
same does not appear to have been adverted
to by the appellate authority.

9.

Nonetheless,
in
view
of
submissions advanced by learned State
counsel,
the
question
arising
for
determination
would
be
whether
compliance of Rule 7(3)(c) is required in
proceedings under Section 47(A)(1) as well
as under section 47 A(3) of the Act? Here it
is also relevant to indicate that both the
orders impugned in present writ petition are
based only on the aforesaid spot inspection
report, which admittedly was ex parte in
nature.

10. The provision of Section 47 A of
the Act have two distinct components with
sub section (1) pertaining to inquiry being
held for determination of valuation of an
instrument
of
transfer
prior
to
its
2 All. Ajay Agarwal & Ors. Vs. Commissioner, Lko. & Ors.
341
registration and upon its presentation for
registration while provisions of sub-section
3
of
the
said
section
pertains
to
examination of an instrument of transfer for
the purposes of determination of stamp
duty chargeable on the market value of
property.
In
the
present
case,
the
proceedings have been held in terms of
section 47 A(3) of the Act of 1899 after its
registration and upon reference being
made.

11. The procedure required to be
followed for determination of market value
of the property and stamp duty required to
be paid on the instrument of transfer have
been indicated in sub section (4) of Section
47 A which clearly states that if on inquiry
under sub-section (2) and examination
under sub-section (3) the Collector finds
the market value of the property to be set
forth or not truly set forth, he is required to
pass appropriate orders pertaining to same.
Thus, it is evident that the Collector is
required to embark upon an inquiry under
sub-section (2) and an examination of
instrument of transfer under sub-section 3
in order to find the correct market value of
the property and for determination of stamp
duty required to be paid.

12. Learned State counsel in his
submission has adverted to the fact that
under sub-section (3) of Section 47(A) of
the Act, the Collector upon a reference
being made or suo motu is required to
examine the instrument for the purpose of
satisfying himself as to the correctness of
the market value. It has been submitted that
since the examination is only with regard to
examination of the instrument of transfer, it
would thus not require any spot inspection
to be made by the Collector particularly
when no objection to the ex parte spot
inspection initially has been made by the
petitioner. It is thus submitted that since the
Collector was not required to make spot
inspection of the property in question, the
provisions of Rule 7(3)(c) would be
inapplicable.

13. For the purposes of determination
of aforesaid question, it is the provisions of
Section 47 and Rule 7 which are pertinent
and required to be seen, which are as
follows:-

47. Power of payer to stamp bills
and promissory notes received by him
unstamped.-When any bill of exchange or
promissory note chargeable 1[with the duty
not exceeding ten paise] is presented for
payment unstamped, the person to whom it
is so presented, may affix thereto the
necessary adhesive stamp, and, upon
cancelling
the
same
in
manner
hereinbefore provided, may pay the sum
payable upon such bill or note, and may
charge the duty against the person, who
ought to have paid the same, or deduct it
from the sum payable as aforesaid, and
such bill or note shall, so far as respects
the duty, be deemed good and valid:

Provided that nothing herein
contained shall relieve any person from
any penalty or proceeding to which he may
be liable in relation to such bill or note.

(3) The Collector may, suo motu,
or on a reference from any Court or from
the Commissioner of Stamps or an
Additional Commissioner of Stamps or a
Deputy Commissioner of Stamps or an
Assistant Commissioner of Stamps or any
officer authorised by the State Government
in that behalf, within four years from the
date of registration of any instrument on
which duty is chargeable on the market
value of the property, not already referred
to him under sub-section (1), call for and
examine the instrument for the purpose of
342 INDIAN LAW REPORTS ALLAHABAD SERIES
satisfying himself as to the correctness of
the market value, of the property which is
the subject for such instrument, and the
duty payable thereon, and if after such
examination he has reason to believe that
the market value of such property has not
been truly set forth in such instrument, he
may determine the market value of such
property and the duty payable thereon :

Provided that, with the prior
permission of the State Government, an
action under this sub-section may be taken
after a period of four years but before a
period of eight years from the date of
registration of the instrument on which
duty is chargeable on the market value of
the property.

"7. Procedure on receipt of a
reference or when suo motu action is
proposed under Section 47-A-(1) On receipt
of a reference or where action is proposed to
be taken suo motu under Section 47-A, the
Collector shall issue notice to parties to the
instrument to show cause within thirty days of
the receipt of such notice as to why the
market value of the property set forth in the
instrument and the duty payable thereon be
not determined by him.

(2) The Collector may admit oral
or documentary evidence, if any, produced
by the parties to the instrument and call for
and examine the original instrument to
satisfy himself as to the correctness of the
market value of the subject-matter of the
instrument and for determining the duty
payable thereon.

(3) The Collector may-

(a) call for any information or
record from any public office, officer or
authority under the Government or a local
authority;

(b) examine and record the
statement of any public officer or authority
under the Government or the local
authority; and

(c) inspect the property after due
notice to parties to the instrument.

(4)
After
considering
the
representation of the parties, if any and
examining the records and other evidence,
the Collector shall determine the market
value
of
the
subject-matter
of
the
instrument and the duty payable thereon.

(5) If, as a result to such inquiry,
the market value is found to be fully and
truly set forth and the instrument duly
stamped according to such value, it shall
be returned to the person who made the
reference with a certificate to that effect. A
copy of such certificate shall also be sent to
the Registering Officer concerned.

(6) If, as a result of inquiry, the
instrument is found to be undervalued and
not duly stamped, necessary action shall be
taken in respect of it according to relevant
provisions of the Act."

14. It is quite discernible that the
starting provision of Rule 7 itself indicates
the applicability of the Rule to the extent
that on receipt of a reference or where
action is proposed to be taken suo motu
under section 47 A the Collector shall issue
notice to parties to the instrument to showcause. A reading of the aforesaid provision
makes it evident that no distinction
whatsoever has been carved out under Rule
7 of the Rules of 1997 with regard to
procedure being required to be followed
under section 47 A. On the contrary, it
specifically indicates that the aforesaid
Rule is required to be followed even in case
suo motu action is taken under section 47 A
of the Act, which in effect pertains to
Section 47 A(3) of the Act of 1899 with
regard to determination of stamp duty after
registration of a document of instrument of
transfer. As such no such distinction having
been carved out under Rule 7, it is not
feasible to accede to the submissions of
2 All. Ajay Agarwal & Ors. Vs. Commissioner, Lko. & Ors.
343
learned State counsel that Rule 7 (3)(c) of
the Rules would not be applicable in case
of proceeding under section 47 A( 3) of the
Act.

15. A reading of the aforesaid
provision also does not indicate any such
procedure requiring the petitioner to file
objection against the initial spot inspection
report whereafter only the Collector is
required to inspect the property in terms of
Rule 7(3)(c) of the Rules. Although it has
been submitted that the aforesaid provision
is not mandatory in nature but coordinate
benches of this Court particularly in the
case of Ganga Ram versus State of U.P.
and others reported in 2020(38) LCD 1991
has clearly held the provision of Rule 7(3)
(c) to be mandatory in nature.

16. The aspect as to whether the
Collector is required mandatory to inspect
the property in terms of Rule 7(3)(c) upon
proceedings being drawn up under section
47(3) of the Act is not required to be
considered in the present case particularly
when it is admitted that no such inspection
whatsoever
was
undertaken
by
the
Collector which would have required prior
and due notice to the parties to the
instrument.

17. However upon perusal of Section
47A (3) of the Act, it is evident that the
Collector either suo motu or on a reference
is required to determine the market value of
property for the purposes of satisfying
himself as to correctness of the market
value of property which is subject of such
instrument and the duty payable thereon.
The provisions of Section 47A(3) of the
Act clearly indicates that while determining
market value of the property on the basis of
instrument of transfer, the Collector has to
satisfy himself with regard to correctness of
a
market
value
and
if
after
such
examination, he has reason to believe that
market value of such property has not been
truly set forth in the instrument, he may
determine the market value of such
property and the duty payable thereon.

18. The provisions of section 47A (3)
of the Act clearly prescribed that prior to
passing an order in terms of the aforesaid
provision, the Collector has to satisfy
himself, which in fact would mean that he
has to record his subjective satisfaction
with regard to the correctness of market
value of the property. Furthermore he is
also required to record reasons to believe
that market value of such property has not
been truly set forth in the instrument,
whereafter he is also required to determine
the market value of his property and duty
payable thereon. Clearly the Collector in
exercise of power under section 47 A(3) of
the Act as such is required not to rely only
on the spot inspection report but also to
record his subjective satisfaction with
regard to under valuation of the instrument
of transfer. As such while passing orders
under section 47 of the Act, Collector
cannot rely only on the post inspection
report.

19. A coordinate bench of this Court
in the case of Ram Khelawan (supra) has
also adverted to the aforesaid provisions
and has enunciated the law that the method
of determining market value and factors to
be taken into consideration for the said
purpose
particularly
with
regard
to
determining the quantum of compensation
under land acquisition laws are also
applicable for determining market value
while deciding a case by Collector under
section 47 A of the Act. The three standard
principles of determining market value in
land acquisition cases have also been
344 INDIAN LAW REPORTS ALLAHABAD SERIES
indicated in paragraphs 9 and 11 of the
aforesaid judgement which are as follows;

"9. Entire basis of report of
Tahsildar and judgment of A.D.M. is
that the land is of residential use/
potential (Awasiya prayojan). Even if it
is assumed for the sake of argument that
the land in dispute is having Abadi
potential, still no basis of determining
its valuation has been given. Once sale
deed is registered then for determining
market value of the land under Section
47-A Stamp Act no reliance can be
placed upon Rules of 1997. If a case is
instituted under Section 47-A of the
Stamp Act after registration of the deed
particularly sale-deed then valuation
has to be determined on the general
principles applicable for determining
market value of immovable property.
The method of determining market value
and the factors to be taken into
consideration for the said purpose have
been discussed in detail and laid down
with precision by the Courts white
determining quantum of compensation
under Land Acquisition laws. Exactly
same
principles
shall
apply
for
determining market value while deciding
a case by Collector under Section 47-A
Stamp Act.

11.
The
three
standard
principles of determining market value
in
Land
Acquisition
cases
are;
comparable sale method i.e. value of
similar adjoining property sold in near
past,
multiplication
by
a
suitable
multiplier of monthly or yearly rent,
income or yield; and adding the cost of
construction to the value of the land."

20. In view of aforesaid, it is
evident that the power to be exercised by
Collector under section 47A (3) of the
Act is not pedantic in nature but is
required to be made on the basis of
observations
made
hereinabove
particularly with regard to the fact that
he is required to apply his mind and
record subjective satisfaction not only
with regard to under valuation of the
instrument of transfer but also to record
a separate satisfaction regarding market
value of the property and the duty
payable thereupon and cannot place
reliance only on the spot inspection
report.

21. It is also evident that there
being no distinction indicated under
provisions of the Act, Rule 7 of Rules of
1997
would
be
applicable
on
proceedings under section 47A (1) as
well as under Section 47A (3) and are
mandatory in nature.

22. Upon applicability of aforesaid
in the present case, it is evident from a
reading of the impugned orders that the
same are based only on the spot
inspection report and no subjective
satisfaction at all has been recorded by
the authority either under section 47 A
or under section 56 of the Act as
required to be done as per observation is
made hereinabove.

23. Considering the aforesaid facts,
impugned
orders
dated
29.03.2006
passed under Section 47A(3) of the U.P.
Stamp Act, 1989 and order dated
04.10.2007 passed in appeal under
Section 56 of the said Act not being in
consonance with the law laid down are
set aside.

24. Consequently, the writ petition
is allowed. Consequences to follow.
Parties to bear their own costs.
2 All. T.R.C. Mahavidyalaya Satrikh, Nawabganj Vs. State of U.P. & Ors.
345
----------
(2023) 2 ILRA 345
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 20.01.2023

BEFORE

THE HON'BLE MANISH MATHUR, J.

Writ-C No. 1003921 of 2015

T.R.C. Mahavidyalaya Satrikh, Nawabganj
 ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Ram Narain Gupta, M.K. Dixit, Ram Kumar
Singh

Counsel for the Respondents:
C.S.C.

A. Civil Law - Indian Stamp Act, 1899 -
Sections 33 & 47-A - UP Stamp
(Valuation of Property) Rules, 1997 - Rule
7(3)(c) - Stamp deficiency - Property in
question abuts a Khadanja road, which is
not a metalled road - The Circular dated
01.08.2010 has explained the meaning of
the term road as a metalled or RCC road -
Held, once the authorities themselves in
their order u/s 47A of the Act of 1899
indicate
location
of
the
property in
question
not
to
be
abutting
a
metalled/RCC road, there was no occasion
for them to have established market value
in
terms
of
non-agricultual
property
abutting a road - High Court directed the
authority
to
re-determine
additional
stamp
duty
taking
the
property
in
question to be non-agricultural but not in
the vicinity of a road. (Para 11 and 13)
B. Indian Stamp Act, 1899 - Sections 33
& 47-A - Imposition of penalty - Reason,
how for necessary - No concealment of
fact - Effect
- Held, no reasoning
whatsoever
has
been
attributed
for
imposition of such penalty particularly in
view of the fact that there was no
concealment by the petitioner-institution
in the instrument of transfer - Held
further, the orders also do not indicate
any concealment of fact having been
made in the instrument of transfer and
therefore in the considered opinion of this
Court, there was no occasion for the
authorities to have imposed penalty. (Para
12)
Writ petition partly allowed. (E-1)
List of Cases cited :-
1. Ganga Ram Vs St. of U.P. & ors. reported in
2020 (38) LCD 1991
(Delivered by Hon'ble Manish Mathur, J.)

1.

Heard
learned
counsel
for
petitioner and learned State Counsel
appearing on behalf of opposite parties.

2. Petition has been filed assailing
order dated 12.10.2012 passed under
Sections 47-A/33 of the Indian Stamp
Act,1899 (hereinafter referred to as the Act
of 1899) as well as order dated 16.03.2015
passed under Section 56 of the Act of 1899.
A further prayer seeking a direction to
opposite parties not to adopt any coercive
measure against petitioner in respect of
recovery citation dated 29.12.2012 has also
been sought.

3. Learned counsel for petitioner
submits that the property in question is a
part of Gata No.88 having an area of 0.731
hectare situate in the Village concerned
which was purchased by one Umesh
Chandra Chaturvedi by means of registered
sale deed dated 03.01.2005. Since the said
property was being utilised for agricultural
purposes, the purchaser filed an application
dated 09.06.2005 for declaration under
Section 143 of U.P. Zamindari Abolition
and
Land
Reforms
Act.
The
said