# Hajari Lal Sahu v. State of U.P. and others

- **Citation:** (2004) 1 ILRA 275
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2004-01-29
- **Case number:** Writ Petition No. 26414 of 2003
- **Bench:** S.N. Srivastava
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/hajari-lal-sahu-v-state-of-u-p-and-others-40342
- **Pages:** 10

## Headnote

Indian Stamp Act-Sec.47-A-U.P. Stamp
(Valuation of property) Rules, 1997-Rr.
3,4 and 5-Natural Justice-Market ValueAssessment Agricultural land situated
between two villages-Payment of stamp
duty by after assessing valuation thereof
in
accordance
with
law-Proceedings
under S.47-A initiated by S.D.O. upon
complaint of third person-orders passed
without affording any opportunity of
hearing-Impugned
order
demanding
additional Stamp duty on basis of Note 2
of
guidelines
formulated
by
D.M.
determining valuation of certain land
and
presuming
agricultural
land
calculated as per sq. meter highly
discriminatory
and
arbitrary-S.D.O.
proceeded on report of Sub-Registrar
without any inquiry finding based on any
verifiable evidence-held impugned order
liable to be quashed.

Held: Para 12

From a bare perusal of the impugned
order, it would transpire that the S.D.O.
concerned
proceeded
to
pass
the
impugned order merely on being so
directed on the complaint of one Kishan
Lal Sahu and on the basis of report dated
24.4.1999 submitted by the Deputy
Registrar II and no proper enquiry was
made nor it appears from the record that
there
was
any
material
direct,
circumstantial or even intrinsic evidence
on the basis of which a reasonable belief
could be formed that the instrument has
been undervalued in observance of Rules
3 and 4 of the Stamp Rules and Section
47 A of the Stamp Act. The authority
concerned appears to have heavily relied
upon Note-2 of the impugned order and
on a punctilious reading of the Note-2,
proceeded to pass the impugned order in
utter disregard of the mandate contained
in Rules 4 (1) (a) (i) to (iv) or 5 of the
Stamp Rules, 1997 in which condition
precedent was the proximity of land to
road, market, bus station railway station,
factories,
educational
institutions,
hospitals
and
government
offices,
classification of soil and availability
irrigation facility etc. It would also
appear
that
the
S.D.O.
concerned
proceeded on the report of Sub Registrar
without making enquiry and recording of
finding based on any verifiable evidence.
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276 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
By this reckoning, the impugned order is
liable to be quashed as it has been
passed
without
affording
fair
opportunity of hearing to the petitioner
and also that his opinion based on the
report of Sub Registrar without there
being any other verifiable evidence,
material direct, circumstantial or even
intrinsic evidence to form a reasonable
belief. In view of the above, Note-2 of
the order dated 3.8.1997 is also held to
be not consistent with the Act and the
Rules and being in antagonism with the
provisions of Rules 3 and 4 of the U.P.
Stamp (Valuation of Property) Rules,
1997
besides
being
arbitrary
and
discriminatory, is unsustainable.
Case law discussed:

## Text

1 All] Hajari Lal Sahu V. State of U.P. and others 275
7. This Court vide its order dated
23.8.2003
as
extracted
above
only
observed that if so advised the petitioners
may move appropriate application in
pending revision before the Deputy
Director of Consolidation. The said order
do not entitled the petitioner to approach
the Collector by moving an application on
administrative side praying for stay of
entire
allotment
proceedings.

The
Collector has rightly observed in the
impugned order that it will be open to the
petitioner to move an application in the
pending revision as per judgment of this
Court dated 23.8.2003. No error has been
committed by the Collector in rejecting
the application. The order dated 4.12.2003
does not suffer from any error warranting
interference by this Court under Article
226 of Constitution of India.

8. The writ petition lacks merit and
is dismissed summarily.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 29.01.2004

BEFORE
THE HON'BLE S.N. SRIVASTAVA, J.

Writ Petition No. 26414 of 2003

Hajari Lal Sahu

...Petitioner
Versus
State of U.P. and others ...Respondents

Counsel for the Petitioner:
Sri B.N. Yadav

Counsel for the Respondents:
S.C.

Indian Stamp Act-Sec.47-A-U.P. Stamp
(Valuation of property) Rules, 1997-Rr.
3,4 and 5-Natural Justice-Market ValueAssessment Agricultural land situated
between two villages-Payment of stamp
duty by after assessing valuation thereof
in
accordance
with
law-Proceedings
under S.47-A initiated by S.D.O. upon
complaint of third person-orders passed
without affording any opportunity of
hearing-Impugned
order
demanding
additional Stamp duty on basis of Note 2
of
guidelines
formulated
by
D.M.
determining valuation of certain land
and
presuming
agricultural
land
calculated as per sq. meter highly
discriminatory
and
arbitrary-S.D.O.
proceeded on report of Sub-Registrar
without any inquiry finding based on any
verifiable evidence-held impugned order
liable to be quashed.

Held: Para 12

From a bare perusal of the impugned
order, it would transpire that the S.D.O.
concerned
proceeded
to
pass
the
impugned order merely on being so
directed on the complaint of one Kishan
Lal Sahu and on the basis of report dated
24.4.1999 submitted by the Deputy
Registrar II and no proper enquiry was
made nor it appears from the record that
there
was
any
material
direct,
circumstantial or even intrinsic evidence
on the basis of which a reasonable belief
could be formed that the instrument has
been undervalued in observance of Rules
3 and 4 of the Stamp Rules and Section
47 A of the Stamp Act. The authority
concerned appears to have heavily relied
upon Note-2 of the impugned order and
on a punctilious reading of the Note-2,
proceeded to pass the impugned order in
utter disregard of the mandate contained
in Rules 4 (1) (a) (i) to (iv) or 5 of the
Stamp Rules, 1997 in which condition
precedent was the proximity of land to
road, market, bus station railway station,
factories,
educational
institutions,
hospitals
and
government
offices,
classification of soil and availability
irrigation facility etc. It would also
appear
that
the
S.D.O.
concerned
proceeded on the report of Sub Registrar
without making enquiry and recording of
finding based on any verifiable evidence.
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276 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
By this reckoning, the impugned order is
liable to be quashed as it has been
passed
without
affording
fair
opportunity of hearing to the petitioner
and also that his opinion based on the
report of Sub Registrar without there
being any other verifiable evidence,
material direct, circumstantial or even
intrinsic evidence to form a reasonable
belief. In view of the above, Note-2 of
the order dated 3.8.1997 is also held to
be not consistent with the Act and the
Rules and being in antagonism with the
provisions of Rules 3 and 4 of the U.P.
Stamp (Valuation of Property) Rules,
1997
besides
being
arbitrary
and
discriminatory, is unsustainable.
Case law discussed:

(Delivered by Hon'ble S.N.Srivastava, J.)

1. Petitioner has assailed the order
dated 20th Dec 1999 passed by Stamp
authority Kaushambhi and also the
revisional
order
passed
in
revision
preferred against the said order dated
3.6.2003.

2. Facts forming background to the
challenge are that petitioner purchased
plot no. 117 admeasuring 11 Biswa 19/25
Dhoor situated in village Jodhlilwar
Pargana
and
Tahsil
Chail
district
Kaushambhi and plot no.330 admeasuring
3 Biswas, 9,1/10 Dhoor situated in village
Faridpur Sulempur Pargana and Tahsil
Chail District Kaushambhi from One
Kishan Lal resident of Sulempur. From a
perusal of the record, it is clear that
Kishan Lal sold off his entire share in the
land in dispute and petitioner paid stamp
duty after assessing valuation thereof in
accordance with law.

3. From a perusal of the report of
Lekhpal it is clear that the land in dispute
are situated on the boundaries of two
villages. It is also not disputed that one of
the village, namely, Jodhlilwar is a nonresidential village (Ger Chiragi) and
further that the land in dispute is an
agricultural plot and the same could not
be utilised for purposes other than
agricultural purposes. Proceedings under
section 47-A were initiated against the
petitioner by the S.D.O. Chail District
Kaushambhi as a sequel to application
dated 19.11.1998 made by one Kundan
Lal Sahu and consequent direction made
to the S.D.O. Chail by the Addl. District
Magistrate (F. & R.) Kaushambi which
culminated in passing of the impugned
order dated 20.12.1999. The impugned
order has its grounding in the facts that
the District Magistrate had already
pegged valuation of the agricultural plots
situated in the village as contained in the
order dated 3.8.97 made under the U.P.
Stamp (Valuation of Property) Rules,
1997, (In Short the 'Stamp Rules, 1997')
and that according to Note (2) of the
Order, in case agricultural land is not
transferred in favour of a co-tenure holder
or a person having adjoining agricultural
plot shall be valued on the basis of per
square meter in the same manner as is
done as regards the land situated in Urban
Area, semi-urban Area and the Rural
Area. A direction was issued by the
Stamp authority to pay additional stamp
duty of Rs. 18000/- in addition to what
was already paid within 15 days. A recall
application filed by the petitioner was
rejected on the ground that both the plots
did not adjoin each other and are situated
at the distance of 16 Lathas. A revision
preferred before the Addl. Commissioner
under section 56 of the Indian Stamp Act
was rejected.

4. Learned counsel for the petitioner
urged that in the facts and circumstances
of the case, where admittedly, one of the
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1 All] Hajari Lal Sahu V. State of U.P. and others 277
village being a non-residential village and
plots in question being agricultural plots
which could not be used for residential or
any other purposes, the impugned order
demanding additional stamp duty on the
basis of Note No. (2) of the guidelines
formulated by the District Magistrate
determining the valuation of certain land
and presuming agricultural land to be
calculated on the basis of per square
meter is highly arbitrary and that the
District Magistrate has wrongly fixed the
principles
of
valuation
in
arbitrary
manner, which is contrary to Rules 3 and
4 and 5 of the Rules 1997, apart from
being discriminatory and arbitrary. He
further urged that Note (2) specifically
makes it clear that in case sale deed is
executed in favour of a co-tenure holder
or a person whose plot adjoins the plot,
the same shall be treated as agricultural
plots but direction that in case sale deed is
executed in favour of third person it shall
be calculated on the basis of per square
meter at par with urban, semi-urban or
rural property is highly unreasonable and
discriminatory.
The
learned
counsel
further submitted that acting on the
complaint, the stamp authority hastened to
issue notice demanding additional stamp
duty without allowing the petitioner to
have his say and without affording
opportunity of hearing to him. Per
contra,
learned
Standing
counsel,
contended that the order passed by the
District
Magistrate
dated
3.5.1997
determining
valuation
of
different
properties in districts for the purposes of
transfer under the U.P. Stamp Rules, 1997
was rightly passed in accordance with the
provisions of U.P. Stamp (Valuation of
Property) Rules 1997 and Note (2) of the
said order was justified having been made
in accordance with law. It was further
contended that the impugned order of
fixing valuation of the property in dispute
and the demand of additional stamp duty
on the basis of the same was rightly made
in
accordance
with
law
and
in
consequence, it was canvassed, the order
is liable to be affirmed and writ petition
deserves to be dismissed.

5. Before scanning the rival
contentions made across the bar, it is
essential to scan Note-2 of the guidelines
prepared and furnished to Sub Registrar
as envisaged in Rule 3 (vii) of the Stamp
Rules
by
the
District
Magistrate,
Kaushambhi. Note 2 as contained in the
guidelines is excerpted below:

"Sahkhatedar Ya Chauhaddi Ke
Khatedar Se Bhinna Kisi Ek Byakti Ke
Paksha Me Antarit Hone Wali Krishi
Bhumi
Ki
Prati
Vargmeter
Daren
Nagariye, Ardh Nagariye va Gramin
Kshetra Mein 500 Varg Meter Tak Ki Dar
Kramshe 700, 500 Va 300 Rupiye Tatha
501 Se 1500 Varg Meter Tak Kramshe
200, 125 Va 100 Rupiye Hogi."

The learned counsel for the petitioner
canvassed that there is nothing in Rules 3
and 4 which may be eloquent of the fact
that the District Magistrate was invested
with the power to fix different valuation
of the one and the same property in case
the property is not transferred in favour of
a co-tenant or a person whose land
adjoins the land transferred. Rule 3 (1) (a)
(i) to (vii) being germane to the
controversy are excerpted below for ready
reference.

"3. Facts to be set forth in an instrument.
In case of an instrument relating to
immovable property chargeable with an
ad valorem duty, the following particulars
shall also be fully and truly stated in the
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278 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
instrument in addition to the market value
of the property;-
(1) In case of land:
(a) included in the holding of a tenure
holder, as defined in the law relating to
land tenures:-
(i) the khasra number and area of each
plot forming part of the subject matter of
the instrument;
(ii) whether irrigated or un-irrigated and
if irrigated, the source of irrigation;
if under cultivation whether do-fasali or
otherwise;
(iii) land
revenue
or
rent
whether
exempted or not and payable by such
tenure holder;
(iv) classification of soil, supported in
case of instruments exceeding twenty
thousand rupees in value, by the certified
copies, or extracts from the relevant
revenue records issued in accordance with
law;
(v) location (whether lies in an urban
area, semi-urban area, or country side);
and
(vi) minimum
value
fixed
by
the
Collector of the district;"

(vii) Similarly, Rule 4 (1) (a) (i) to iv)
being rules in point are also quoted below
for edification;

"4. Fixation of minimum rate for
valuation of land, construction value of
non-commercial building and minimum
rate of rent and commercial building.- (1)
The Collector of the district shall
biennially, as far as possible in the month
of August, fix the minimum value per
acre/per square meter of land, the
minimum value per square metre of
construction of non-commercial building
and the minimum monthly rent per square
metre of commercial building, situated in
different parts of the district taking into
consideration the following facts-

(a) in case of land-
(i) classification of soil;
(ii) availability irrigation facility;
(iii) proximity to road, market, busstation,
railway
station,
factories,
educational institutions, hospitals and
government offices; and
(iv) location
with
reference
to
its
situation in urban area, semi-urban area or
countryside."

6. It would transpire from a perusal
of the above Rules that only relevant
consideration for fixing of valuation is the
classification of soil, availability of
irrigation facility, proximity to the road,
market, bus station, railway station,
factory educational institution, hospital
and government offices and location with
reference to its situation in urban area,
semi urban area or countryside. In the
present case, it bears no dispute that the
land in question lies on the boundaries of
two villages i.e. villages Jodhlilwar and
Faridpur Sulempur Pargana and Tahsil
Chail District Kaushambhi out of which
village Jodhlilwar is a non residential
(Ger Chiragi) village. It has not been
refuted in the counter affidavit that the
land in dispute is being used or could be
used for agricultural purposes only and
not for residential or commercial purposes
and that the land lies between the
boundaries of the two villages far away
from Abadi. In the light of the above
admitted position, Note-2 contained in
the order dated 3.8.1997 postulating that
in case an agricultural land is transferred
in favour of a person other than co-tenant
or to a person whose property adjoins the
plot, the same shall be fixed on a higher
valuation as per square metre at par with
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1 All] Hajari Lal Sahu V. State of U.P. and others 279
situation of property as in semi-urban area
or the countryside cannot be said to be
consistent with the provisions of the
Stamp Rules. The logic behind Note-2
appears to be that in case the property is
transferred by a person in favour of a cotenant or in favour of a person whose
property adjoins the plot, he can use the
transferred property in a better away and
for those transferees, the land may have
higher valuation for better use but it does
not visualize the position in relation to a
person who has purchased the land and he
happens to be neither a co-tenure holder
nor is a person whose land adjoins the
land in dispute cannot use in a better way.
In the above conspectus, the order passed
by the District Magistrate fixing valuation
of such agricultural plots calculating it on
the basis of per square meter valuation
fixed in the said order suffers from patent
arbitrariness
particularly
when
the
materials on record do not point to the
factum that the land was used for
residential, commercial or for any other
use but is being used for agricultural
purposes. As stated supra, the relevant
consideration contained in Rule 4 are the
classification of soil, availability of
irrigation facility, proximity to the road,
market, bus station, railway station,
factory educational institution, hospital
and government offices and location with
reference to its situation in urban area,
semi urban area or countryside. It would
appear that no such consideration was
taken into reckoning while fixing the
valuation of the agricultural land, which
was not transferred in favour of a cotenant or a person whose land adjoins the
transferred land. The only reason assigned
in the impugned order for fixing higher
valuation of the land is that both the plots
lie at a distance of 16 metres and as the
same did not adjoin the property in favour
of a co-tenant, the agricultural land was
valued taking into reckoning the valuation
per square metre and also considering it
an urban or semi-urban property. This
consideration, in my firm view, for
transfer in favour of a co-tenant or a
person whose land adjoins the sold off
property is not a relevant factor within the
meaning of Rule 3 or Rule 4 of the U.P.
Stamp (Valuation of Property) Rules
1997. Even otherwise on merits also,
fixing higher valuation of a land which
was not transferred in favour of a cotenant or a person whose land adjoins the
sold off property errs on the side of
arbitrariness particularly when there is no
material
conspicuous
on
record
to
manifest that the land was used for
residential, commercial or for any other
use but is being used for agricultural
purposes only and also that the land is
situated on the boundaries of the two
villages and one of the villages is nonresidential village and that there is no
residential area in and around the land in
question and therefore, Note-2 added to
the order is highly arbitrary and not
attuned to the letter and spirit of the
relevant Rules and therefore, the order
impugned cannot be sustained in law. The
distillate of what has been discussed
above is that the land which was sold off
in favour of a person who is not a cotenant or whose land does not adjoin the
property sold off, and if there is no
material on record matching any of the
consideration contained in Rule 4 is liable
to be valued accordingly and not in terms
of circle rate as contained in the Note-2 of
the order dated 3.8.1997 and such person
is liable to pay stamp duty on the basis of
valuation not calculated per square metre,
which was made in favour of any other
person whether he is a co-tenant or owns
an adjoining plot/property and a person
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280 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
liable to pay stamp duty on the basis of
the same. Regard being had to the fact
that petitioner has purchased the entire
share of a co-tenant and not a single inch
of land was left out in the share, the stamp
duty paid by the petitioner is held to be
sufficient being in consonance with the
U.P. Stamp Rules, 1997.

7. Yet another aspect which the
learned counsel forcefully argued is that
the S.D.O. concerned did not afford fair
opportunity of hearing nor conducted any
enquiry in terms of phrase "reason to
believe" as contained in Section 47 A of
the Stamp Act and merely acting on the
complaint and direction of the Addl.
District Magistrate (F & R) passed the
impugned order. He further submitted that
the Stamp Act and the Rules prescribed
due procedure for enquiry but the S.D.O.
passed the impugned order without
material, direct, substantial and there
being no intrinsic evidence which could
be said to be the basis for his reasonable
belief that there was any valid basis vis-àvis rules 3 and 4 of the Stamp Rules. In
connection with this proposition, section
47 A may be quoted below:

"47-A. Instruments of Conveyance
etc. if under-valued, how to be dealt
with.- (1) If the market value of any
property which is the subject of any
instrument of conveyance, exchange, gift
settlement, award, or trust, as set forth in
such instrument is less than even the
minimum value determined in accordance
with any rules made under this Act, the
registering officer appointed under the
Indian Registration Act, 1908, shall refer
the
same
to
the
Collector
for
determination of the market value of such
property and the proper duty payable
thereon.
(2) Without prejudice to the provisions
of sub-section (1), if such registering
officer while registering any instrument of
conveyance, exchange, gift, settlement
award or trust, has reason to believe that
the market value of the property which is
the subject of conveyance, exchange, gift
settlement, award or trust, has not been
truly set forth in the instrument, he may, a
after registering such instrument, refer the
same to the Collector for determination of
the market value of such property and the
proper duty payable thereon.
(3) On receipt of a reference under subsection (1) or sub-section (2) the Collector
shall after giving the parties a reasonable
opportunity of being heard and after
holding an inquiry in such manner as may
be prescribed by rules made under this
Act, determine the market value of
property
which
is
the
subject
of
conveyance, exchange, gift, settlement,
award or trust and the duty as aforesaid.
The difference, if any, in the amount of
duty shall be payable by the person liable
to pay the duty."

8. Now the question arises whether
S.D.O. Chail was justified in acting on
order
dated
3.8.1997
in
which
is
contained
Note
2
oblivious
of
requirements of Rule 3 and 4 and Section
47 A of the Stamp Act. Section 47 A (2)
of the Stamp Act prescribes that if such
Registering Officer has reason to believe
that the market value of the property has
not been truly set forth in the instrument,
he may refer the same to the Collector for
determination of the market value of such
property and the proper duty payable
thereon. Likewise, Section 47 A (3)
envisages that on reference, Collector
shall after giving the parties reasonable
opportunity of being herd and after
holding enquiry in such manner as may be
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1 All] Hajari Lal Sahu V. State of U.P. and others 281
prescribed by the Rules, determine the
market value of property. In connection
with the proposition that Phrase "reason
to believe" is a sine qua non for section
47 A (2), it is settled position that subsection (2) of Section 47-A is the
condition precedent o making of a
reference to the Collector under sub
Section (2). The phrase "reason to
believe" came up for judicial exposition
in I.T.O. v. Lakhmani Mewal Das1. It was
a case relating to a dispute under Income
Tax Act. The Apex Court was considering
Section 147 (a) of the Income Tax Act,
1961 and it was held that the words in the
statute are "reasons to believe" and not
"reason to suspect". It was also held that
the expression "reason to believe" does
not mean a purely subjective satisfaction
on the part of the Income Tax Officer.
The reason must be held in good faith. It
cannot be merely a pretence. It is open to
the Court to examine whether the reasons
for the formation of the belief have a
rational connection with or a relevant
bearing on the formation of the belief and
not extraneous or irrelevant for the
purpose of the section. In Duncans
Industrial Ltd. Kanpur. V. State of
U.P. and others2, Hon. S.R.Singh, J. (As
he then was) explained the significance of
the phrase "reason to believe" as under:

"The
term
'reason
to
believe'
occurring in sub-section (2) of Section 47
A spells out that Registering Officer, must
have some material direct, circumstantial
or even intrinsic evidence on the basis of
which, he may come to a reasonable
belief that the market value of the
property has not been truly set forth in the
instrument. In other words, the belief

1 AIR 1976 SC 1753
2 1997 (3) AWC 1928
must be that of the honest and reasonable
person
based
upon
reasonable
grounds...."

The learned single Judge further
observed in the self-same decision as
under:

"Formulation of the requisite belief
under section 47 A of the Stamp At is not
a
matter
of
purely
subjective
satisfaction.....It is thus patent that it
would be matter of objective satisfaction
of the Registering Authority to reach a
reasonable belief that the value or
consideration of the property which is the
subject matter of transfer, has not been
truly set forth.

Section 340 A of the U.P. Stamp Rules,
1942 and also the U.P. Stamp (Valuation
of Property) Rules, 1997 framed under the
Stamp Act, 1899, the Collector is
empowered to frame guidelines for land
valuation and supply the same to the
District Registrar for guidance. The
guidelines so framed are prima facie
opinion of the Collector based on certain
factors but in case Registering Officer is
of the opinion that valuation of the
property is not the same or that it may be
higher or lower qua the guidelines, it may
refer the matter to the Stamp Collector to
consider and decide the matter in
accordance with law. The guidelines are
not conclusive or binding but it is simply
a tentative opinion based on certain
consideration inasmuch as the valuation
may differ from village to village, place to
place and case to case due to various
factors
coming
into
consideration
including situation of the locality, the
market value of the locality prevailing on
the date of registration etc. and by this
reckoning, the guidelines supplied by the
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282 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
District Magistrate is not conclusive proof
for the purpose of valuation of property.
In Collector of Nilgiris at Ootacamund
v. M/S Mahavir Plantations Pvt. Ltd.3,
the Madras High Court while dealing with
the valuation guidelines held as under:

"These guidelines were avowedly
intended merely to assist the SubRegistrars to find out, prima facie,
whether the market value set out in the
instruments had been set forth correctly.
The guidelines were not intended as a
substitute for market value or to foreclose
the inquiry by the Collector which he is
under a duty to make under section 47 A
of the Act when once a reference comes
to him from the registering authority. The
Collector, under Section 47 A cannot
shirk his responsibility of determining the
market value by adopting the guidelines
nor can he fix the market value without
proper materials and evidence to support
it.
The
very
idea
of
an
inquiry
contemplated by Section 47 A and the
detailed procedure prescribed in the
relevant rules goes to show that the
Collector's finding must be verifiable by
evidence.
The
valuation
guidelines
prepared by the Revenue officials at the
instance of the Board of Revenue were
not prepared on the basis of any open
hearing of the parties concerned, or of any
documents with a view to eliciting the
market value of the properties concerned.
They were based on data gathered broadly
with reference to classification of land,
grouping of lands and the like. This being
so, the Collector acting under Section 47
A cannot regard the guidelines valuation
as the last word on the subject of market
value. To do so would be to surrender his
statutory obligation to determining market

3 AIR 1982 Madras 138
value on the basis of evidence, which is a
judicial or a quasi-judicial function which
he has to perform. To adopt figures
prepared at the instance of the Board of
Revenue in the valuation guidelines
which are merely a compilation of data by
subordinate officials of an administrative
authority on the basis of administrative
action would be dangerous, because they
offer no guarantee of truth or correctness
of the data, not being susceptible to check
or verification by a judicial or quasi
judicial
process
of
evaluation
of
evidence."

9. The aforesaid view also receives
countenance
from
the
following
observations rendered in Ramesh Chand
Bansal v. District Magistrate4 by the
Apex Court. The observation of the Apex
Court runs as under:

"Reading Section 47 A with the
aforesaid Rule 340 A it is clear that the
circle rate fixed by the Collector is not
final
but
is
only
a
prima
facie
determination of rate of an area concerned
only to give guidance to the Registering
Authority to test prima facie whether the
instrument has properly described the
value of the property.

The Apex Court further observed:

"The circle rate does not take away
the right of such person to show that the
property in question is correctly valued as
he gets an opportunity in case of undervaluation to prove it before the Collector
after reference is made. This also marks
the dividing line for the exercise of power
between the Registering Authority and the
Collector. In case the valuation in the

4 1999 (90) SC 499
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1 All] Hajari Lal Sahu V. State of U.P. and others 283
instrument is same as recorded in the
circle rate or is truly described it could be
registered by Registering Authority but in
case it is under-valued in terms of sub
section (1) or sub-section (2) it has to be
referred and decided by the Collector.
Thus, the circle rate, as aforesaid, is
merely guideline and is also indicative of
division of exercise of power between the
Registering Authority and the Collector."

10. The guidelines value received
focus of the Apex Court in R. Sai
Bharathi v. J. Jayalalitha5 as well and in
para 23 of the decision, it was observed
that guidelines value has relevance only in
the context of section 47 A of the Indian
Stamp Act. It was further quipped that the
guideline value is a rate fixed by
authorities under the Stamp Act for
purposes of determining the true market
value of the property disclosed in an
instrument requiring payment of stamp
duty and in quintessence it was observed
that "Thus the guidelines value fixed is
not final but only a prima facie rate
prevailing in an area. It is not open to the
registering authority as well as the person
seeking registration to prove the actual
market value of property. The authorities
cannot regard the guidelines valuation as
the last word on the subject of market
value." The aforestated stand point of the
Apex Court also proves the point that the
Stamp Authority in the instant case erred
in law in giving religious reverence to the
guidelines furnished by the District
Magistrate Kaushambhi.

11. As urged by the learned counsel
for the petitioner, no enquiry was held and
no reasonable opportunity of hearing was
afforded to the petitioner and further that

5 2003 AIR SCW 6349
the impugned order was passed without
following the principles of natural justice.
It was further canvassed that the orders of
the Stamp Collector were passed on the
only ground that in case, two sale deeds
had been executed considering the area of
both the villages, it would be calculated as
residential and as such the petitioner has
purposely
not
registered
sale
deed
separately
with
intention
to
avoid
payment of correct stamp duty. From a
perusal of the impugned order, it is clear
that both the authorities have neither
applied mind to the relevant factors as
contained in Rule 405 of the relevant
Rules, 1997 nor the documents filed by
the petitioner to show that the property
was actually being used other than for
agricultural property. The Stamp collector
has erred in passing the impugned order
on the ground that the property is
straddling over the boundaries of two
villages and area of agricultural plot is
such and under the guidelines the
assessment could be made on the basis of
per square meter and not as agricultural
land. It is settled position in law that at the
time
of
registration,
if
registering
authority is of the opinion that stamp duty
was not properly paid and valuation was
not made it may refer the same as
required under section 47-A of the Stamp
Act. As stated supra, the proceeding did
not commence on the basis of any
reference made by the Registering officer
but on the basis of complaint made by one
Kishan Lal Sahu. It transpires that the
Registering officer did not find any
deficiency in valuation or payment of
stamp duty at the time of registration or
even thereafter nor did he make any
reference as envisaged in the Rules.
Besides, it has not been pointed out by the
learned
Standing
Counsel
that
the
registration of two plots situated in two
http://www.allahabadhighcourt.nic.in
284 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
different villages in one instrument by one
owner is prohibited under law. My
attention has not been drawn to any such
law that in case registration was made by
an owner for his property situated in two
villages, it will lead to any illegality.
Once it is not forbidden by any law, it is
permissible and it cannot be called in
question merely on the basis of Note-2
which itself has been held not consistent
with the provisions of the Stamp Rules
and the Act.

12. In the light of the above, I would
revert to scan the impugned order again.
From a bare perusal of the impugned
order, it would transpire that the S.D.O.
concerned
proceeded
to
pass
the
impugned order merely on being so
directed on the complaint of one Kishan
Lal Sahu and on the basis of report dated
24.4.1999 submitted by the Deputy
Registrar II and no proper enquiry was
made nor it appears from the record that
there
was
any
material
direct,
circumstantial or even intrinsic evidence
on the basis of which a reasonable belief
could be formed that the instrument has
been undervalued in observance of Rules
3 and 4 of the Stamp Rules and Section
47 A of the Stamp Act. The authority
concerned appears to have heavily relied
upon Note-2 of the impugned order and
on a punctilious reading of the Note-2,
proceeded to pass the impugned order in
utter disregard of the mandate contained
in Rules 4 (1) (a) (i) to (iv) or 5 of the
Stamp Rules, 1997 in which condition
precedent was the proximity of land to
road, market, bus station railway station,
factories,
educational
institutions,
hospitals
and
government
offices,
classification of soil and availability
irrigation facility etc. It would also appear
that the S.D.O. concerned proceeded on
the report of Sub Registrar without
making enquiry and recording of finding
based on any verifiable evidence. By this
reckoning, the impugned order is liable to
be quashed as it has been passed without
affording fair opportunity of hearing to
the petitioner and also that his opinion
based on the report of Sub Registrar
without there being any other verifiable
evidence, material direct, circumstantial
or even intrinsic evidence to form a
reasonable belief. In view of the above,
Note-2 of the order dated 3.8.1997 is also
held to be not consistent with the Act and
the Rules and being in antagonism with
the provisions of Rules 3 and 4 of the
U.P. Stamp (Valuation of Property) Rules,
1997
besides
being
arbitrary
and
discriminatory, is unsustainable.

13. As a result of foregoing
discussion, the petition succeeds and is
allowed and the impugned orders dated
20.12.1999 and 3.6.2002 and the Note-2
contained in the order-dated 3.8.1997 are
quashed. In consequence, it is held that
stamp duty paid by the petitioner was
sufficient. In the facts and circumstances
of the case, there would be no order as to
costs.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD: 10.3.2004

BEFORE
THE HON'BLE M. KATJU, J.
THE HON'BLE R.S. TRIPATHI, J.

Civil Misc. Writ Petition No. 52064 of 2003

Naunihal Singh

...Petitioner
Versus
State of U.P. and others ...Respondents

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