# M/S Young Style Overseas v. State of U.P. & Ors

- **Citation:** (2024) 10 ILRA 671
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-10-17
- **Case number:** Writ -C No. 26449 of 2022
- **Bench:** Saral Srivastava
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-young-style-overseas-v-state-of-u-p-ors-51083
- **Pages:** 37

## Headnote

A. Civil Law - Indian Stamp Act,1899section
47-A(3)-Securitisation
and
Reconstruction of Financial Assets and
Enforcement
of
Security
Interest
Act,2002(SARFAESI Act,2002)-Section 13,
rule 8,9-Whether sale of property under
SARFAESI Act through public tender is
exempt from reassessment under section
47-A of the Indian Stamp Act,1899-The
petitioner
purchased
a
mortgaged
property
through
a
tender
process
conducted
under
SARFAESI
Act-the
District Magistrate later determined a
deficiency of Rs. 1.45 crore in stamp duty,
claiming that the sale price did not reflect
the
market
value
of
the
industrial
property-The petitioner argued tht the
tender
process
constituted
a
public
auction and stamp duty was correctly paid
based on the sale consideration-Held, the
court
set
aside
the
Collector's
determination of stamp duty deficiency,
holding that the sale under SARFAESI
rules was a public sale, with the sale
consideration representing the market
value-the court found no fraudulent intent
or undervaluation justifying reassessment
under section 47-A.(Para 1 to 108)

The writ petition is disposed of.(E-6)

List of Cases cited:

## Text

_Characters 0–39,950 of 114,020. This is a partial read: ask again with offset=39950 for what follows._

10 All. M/S Young Style Overseas Vs. State of U.P. & Ors.
671
in a vague manner. The allegation that
petitioners' signatures were forged in the
suit being one of plaintiffs does not inspire
confidence since no expert opinion is
placed on record in this regard as well as
application for same was not even pressed
before learned Trial Court or Revisional
Court.

22. The fraud cannot be considered
on vague ground and for that there must be
substance but in present case, it is
absolutely vague without any material,
since it required satisfaction of high
standard of proof, which is absolutely
absent.

23. Petitioners have miserably
failed to provide reasonable explanation to
condone huge delay of about half of
century of years and as referred above, in
such cases, instead of liberal, a strict
approach has to be adopted, therefore, I do
not find that there is any illegality in
impugned order whereby application filed
under Order 9 Rule 13 C.P.C. was rejected
by learned Trial Court on ground that
extraordinary delay of 48 years remained
unexplained and such findings were rightly
upheld by Board of Revenue. Accordingly,
this writ petition is dismissed.
----------
(2024) 10 ILRA 671
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 17.10.2024

BEFORE

THE HON'BLE SARAL SRIVASTAVA, J.

Writ -C No. 26449 of 2022

M/S Young Style Overseas ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sanjay
Goswami,
Shreyas
Srivastava,
Sudhanshu Kumar

Counsel for the Respondents:
Chandan Kumar, Swapnil Kumar

A. Civil Law - Indian Stamp Act,1899section
47-A(3)-Securitisation
and
Reconstruction of Financial Assets and
Enforcement
of
Security
Interest
Act,2002(SARFAESI Act,2002)-Section 13,
rule 8,9-Whether sale of property under
SARFAESI Act through public tender is
exempt from reassessment under section
47-A of the Indian Stamp Act,1899-The
petitioner
purchased
a
mortgaged
property
through
a
tender
process
conducted
under
SARFAESI
Act-the
District Magistrate later determined a
deficiency of Rs. 1.45 crore in stamp duty,
claiming that the sale price did not reflect
the
market
value
of
the
industrial
property-The petitioner argued tht the
tender
process
constituted
a
public
auction and stamp duty was correctly paid
based on the sale consideration-Held, the
court
set
aside
the
Collector's
determination of stamp duty deficiency,
holding that the sale under SARFAESI
rules was a public sale, with the sale
consideration representing the market
value-the court found no fraudulent intent
or undervaluation justifying reassessment
under section 47-A.(Para 1 to 108)

The writ petition is disposed of.(E-6)

List of Cases cited:

1. V.N. Devadoss Vs Chief Rev. Contl. Offr.-
cum-Insp. & ors.(2009) 7 SCC 438

2. Ballyfabs Intrnl. Ltd. Vs St. of W.B. & ors.,
WPA No. 7006 of 2020

3. Vishwanath Agarwal Vs St. of U.P. &
ors.(2004) 96 RD 635

4. Secy. Of St. Vs Sunderji Shivaji & Co. &
ors.(1938) AIR Privy Council 12,
672 INDIAN LAW REPORTS ALLAHABAD SERIES
5. Purushottam Ramanata Quenim Vs Makan
Kalyan Tandel & ors., Civil Appeal No. 844 of
1973

6. Sumati Nath Jain Vs St. of U.P. & ors.(2016)
ILR 1 All 132

7. Kaka Singh Vs The Addl. Collr. & D.M.( F& R),
Bulandshahr (1986) AIR All 107

8. Hajari Lal Sahu Vs St. of U.P. & ors.(2004) 1
AWC 899

9. Vijay Kr. & anr. Vs Commr. Meerut Div.
Meerut & anr. (2008) 7 ADJ 293

10. Shanti Bhushan (D) Thr. Lr. & ors.Vs St. of
UP & ors.(2023) SCC Online SC 489

11. St. of Raj. & ors.Vs Khandaka Jain Jewellers
(2007) 14 SCC 339

12. M/s. Saya Traders Vs St. of UP Writ-C No.
31061 of 2010

13. Ashok Kr. & ors.Vs Chief Contrl. Rev.
Authority & ors.(2011) AIR All 142

14. Duncans Indus. Ltd. Vs St. of UP &
ors.(2000) AIR 1 SCC 633

(Delivered by Hon'ble Saral Srivastava, J.)

1. Heard Sri Shashi Nandan, learned
Senior Counsel assisted by Sri Sanjay
Goswami and Sri Shreyas Srivastava,
learned counsel for the petitioner and Sri
M.C.
Chaturvedi,
learned
Additional
Advocate General assisted by Sri Chandan
Kumar,
learned
counsel
for
the
respondents.

2. The petitioner in the instant writ
petition has assailed two orders dated
17.08.2022 and 02.08.2017 passed by the
District Magistrate/Collector (Stamp), Agra
(hereinafter referred to as 'respondent
no.2') in Stamp Case No.94 of 2013-14.
Respondent no.2 by order dated 02.08.2017
decided the issue no.1 formulated by the
Chief Controlling Revenue Authority vide
order dated 16.12.2011, and by order dated
17.08.2022, he determined the deficiency
in
stamp
duty
to
the
tune
of
Rs.1,45,35,270/-

3. The brief facts of the case are
that the petitioner is a partnership firm
having its registered office in Agra and is
primarily dealing in the export of shoes.

4. As per the petition, one M/s.
Wasan Shoes Limited was the owner of
Khasra No.191 (old) having an area of 2
Bigha, 5 Biswa, and 16 Biswansi, and
Khasra No.192 (old) having an area of 3
Bigha, 11 Biswa, and 8 Biswansi situated at
Mauja Mangtai, Bodhla, Bichpuri Road,
Tehsil and District Agra (hereinafter
referred to as 'property').

5. The aforesaid properties are
bounded on the North by Nala/Bichpuri
Road, and on the South, East, and West by
agricultural land. M/s Wasan Shoes Limited
was running a factory over the aforesaid
properties. It had taken financial assistance
from the Canara Bank, Overseas Branch
Sanjay Place, Agra to run the factory. The
aforesaid property and one other property
had been mortgaged by M/s. Wasan Shoes
Limited with the Canara Bank as a security
for the financial assistance. M/s. Wasan
Shoes Limited defaulted in repayment of
the loan amount of Rs.4,57,04,195.24/-.
Consequently, a proceeding under Section
13 and Rules 8 and 9 of the Securitisation
and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002
(hereinafter referred to as 'SARFAESI Act,
2002') and the SARFAESI Security Interest
(Enforcement) Rules, 2002 (hereinafter
referred to as 'Rules, 2002') was drawn
against M/s. Wasan Shoes Limited by the
10 All. M/S Young Style Overseas Vs. State of U.P. & Ors.
673
Canara Bank (hereinafter referred to as
'Bank') for the default in repayment of the
loan amount. Accordingly, the Bank took
possession of the aforesaid property. The
Bank published a notice of possession in
two daily newspapers namely, Dainik
Jagran and I-Next on 21-12-2008.

6. Before proceeding with the
auction of the property, the Bank had
obtained
a valuation
report
from
a
Government Approved Valuer as mandated
under Rule 8(5) of the Rules, 2002. Further
case of the petitioner is that as per the
report of the valuer, the realisable value of
the
property
was
ascertained
at
Rs.1,95,00,000/-. Accordingly, the Bank
kept the reserved price of the mortgaged
property at Rs.2,00,00,000/- (Rupees Two
Crores) in the auction notice.

7. The Bank, thereafter, invited
tenders for the sale of the property by
publishing notice in two newspapers
notifying the date of the auction of the
property. It transpires from the record that
there was only a single bid by the
petitioner. According to the petitioner, the
petitioner offered a bid of Rs.2,02,00,000/-
which was accepted by the Bank, and after
depositing the aforesaid amount, the sale
was confirmed in favour of the petitioner.
Consequently, a sale certificate was issued
to the petitioner by the Bank in the exercise
of power under Rule 9 (6) of the Rules,
2002.

8. It appears that an inspection of
the property was conducted by the
Additional District Magistrate (Finance &
Revenue),
Agra
on
04.08.2009.
On
inspection, it was found that a factory is
being
run
over
the
property,
and
construction over 4000 square meters has
been raised on the property. The report
further stated that the aforesaid property
has been sold out for Rs.2,02,00,000/-, and
the stamp duty has been paid as per Article
18 of Schedule 1-B of the Stamp Act, 1899.
The report further stated that in the said
instrument, it is not stated that the aforesaid
property had been sold out in public
auction, therefore, the said sale did not
come within the periphery of Schedule 1-B
of Article 18, and said instrument comes
within the ambit of Article 23 of Schedule
1-B. Thus, there was a deficiency in
payment of stamp duty. The report further
stated that about 4000 square meters of the
land was constructed and this fact had not
been disclosed in the sale certificate, thus,
the instrument has been deliberately
undervalued
and
the
petitioner
has
deliberately evaded the payment of correct
stamp duty.

9. Consequent to the said report, a
notice dated 15.12.2009 was issued by the
respondent no.2 to the petitioner on the
allegation that the sale deed was executed
on 21.07.2009 between the petitioner and
the Bank in which the valuation of the
property was shown as Rs.2,02,00,000/-
whereas as per the market rate, the
valuation
of
the
property
is
Rs.39,91,31,180/-. Thus, the instrument had
been
undervalued
to
the
tune
of
Rs.37,89,31,180/- and accordingly, there
was a deficiency in payment of stamp duty
of Rs.2,65,24,240/-. By the said notice, the
petitioner was called upon to show cause as
to why the deficiency in stamp duty
alongwith interest be not recovered from
the petitioner and penalty be not imposed
upon the petitioner.

10.

The
petitioner
feeling
aggrieved by the notice dated 15.12.2009
preferred writ petition bearing Writ-C
No.10013 of 2010 which was disposed off
674 INDIAN LAW REPORTS ALLAHABAD SERIES
by this Court by judgement and order dated
24.02.2010 observing that the Collector has
jurisdiction to consider the issue that since
the sale has been made by inviting tenders,
therefore, the market value of the property
essentially has to be considered in terms of
the actual sale consideration.

11. After the order of this Court in
the aforesaid writ petition, respondent no.2
passed
an
order
dated
30.05.2011
determining deficiency in stamp duty to the
tune of Rs.2,65,24,240/-. Respondent no.2
by the said order imposed interest @ 1.5%
per month from the date of execution of the
instrument and a penalty of Rs.2,00,000/-.

12. The said order was assailed by
the petitioner in statutory appeal under
Section 56(1-A) of the Indian Stamp Act,
1899 (hereinafter referred to as 'Act, 1899')
registered as Stamp Appeal No.54 of 201112. The main ground of attack by the
petitioner in the appeal before the Chief
Controlling Revenue Authority was that since
the property had been sold out in a public sale
by inviting tenders from the public under
Rule 8(5) (b) of the Rules, 2002, therefore,
the instrument is covered under Article 18 of
Schedule 1-B and thus, petitioner is liable to
pay stamp duty on the sale consideration
shown in the sale certificate.

13. The Chief Controlling Revenue
Authority by order dated 16.12.2011
remanded the matter to respondent no.2 to
consider the three issues formulated by it in
para 9 of the order, which reads as under:-

"01- क्या नववानदत सम्पनि सावयजननक
नीलामी वारा नवक्रय की गयी और ननगयत प्रमाण-पत्र
अनुसूची 1ख के अनुच्छेद 18 के अन्तगयत मान्य
नवलेख होगा अर्थवा बाजारू मूल्य पर स्टाम्प शुल्क
प्रभायय होगा?
02- क्या नववानदत सम्पनि औद्योनगक
प्रनतष्ठान है ? यनद हॉ तो व्यवसानयक दर पर मूल्यांकन
करते हुए स्टाम्प शुल्क क्यों प्रभायय नकया जा सकता
है।? जो नक दुकान एवं वानणनययक अनधननयम-1962
की धारा-4 की उपधारा (2) के अन्तगयत व्यवसानयक
प्रनतष्ठान की ननम्न पररभाषा के अनुसार नहीं हो सकता
हैूँः-
"Commercial
establishment means any premises,
not being the premises of a factory
or a shop wherein any trade,
business, manufacture or any work
in connection with or incidental or
ancillary thereto, is carried on for
profit and includes a premises
wherein journalistic or printing
work, or business of banking
insurance,
stocks
and
shares
brokerage or produce exchange is
carried on or which is used as
theater, cinema or for any other
public amusement or entertainment
or where the clerical and other
establishment of a factory to whom
the provisions of the Factories Act,
1948 do not apply work"
03- यनद नववानदत स्र्थल के नलए सनकयल
रेट में औद्योनगक दर ननधायररत नहीं है तो नकस दर पर
मूल्यांकन नकस प्रकार नकया जाएगा।"

14. After the remand by the Chief
Controlling
Revenue
Authority
to
respondent no.2, the case was renumbered
as Case No.94 of 2013.

15. It appears that after the
remand, a Committee consisting of (i)
Executive
Engineer,
Public
Works
Department, Agra, (ii) Sub-Registrar-II,
(iii) Tehsildar, Sadar Agra, (iv) Assistant
Inspector General (Registration), Agra and
(v) Additional District Magistrate (Finance
&
Revenue)
was
constituted,
which
conducted a spot inspection of the property
10 All. M/S Young Style Overseas Vs. State of U.P. & Ors.
675
to assess the valuation of the property as
per Uttar Pradesh Stamp (Valuation of
Property) Rules, 1997 (hereinafter referred
to as 'Rules, 1997'). Respondent no.2,
thereafter, proceeded to decide Case No.94
of 2013-14 (Computerised Case No.D201301100810) by recording the following
finding:-

"मैंने पत्रावली का अवलोकन तर्था
पत्रावली पर उपलब्ध समस्त तथ्यों का पररशीलन
नकया। पत्रावली पर उपलब्ध तथ्यों एवं नजला शासकीय
अनधवक्ता (राजस्व) एवं प्रनतपक्षी अनधवक्ता के तकय
सुनने के उपरान्त मैं इस ननष्कषय पर पहुंचा ह ूँ नकूँः-

1.बैंक वारा प्रश्नगत सम्पनि का सावयजननक
नीलाम न कर, एक ही समाचार पत्र फाइनेंनशयल
एक्सप्रेस में मुहरबंद नननवदायें आमंनत्रत नकये जाने की
सूचना प्रकानशत कराकर टेण्डर की काययवाही की गयी
है, नजसमें एक ही टेण्डर प्राप्त हुआ है, नजसे बैंक वारा
स्वीकार कर नलया गया है, जब नक सरफेसी एक्ट के
ननयम8(2) में नदये गये प्रानवधानों के अनुसार दो प्रमुख
स्र्थानीय क्षेत्रीय भाषा के समाचार पत्रों में प्रकाशन नकया
जाना चानहये र्था, स्पष्ट है नक बैंक वारा सावयजननक
नीलामी की ननधायररत प्रनक्रया का पालन नहीं नकया है।
यहां यह भी उल्लेखनीय है नक प्रश्नगत सम्पनि
4,57,04,195/- रूपये में बंधक रखी गयी र्थी जब
नक सम्पनि केवल 2,02,00,000/- रूपये में नवक्रय
कर दी गयी है। बैंक वारा एक ही टैण्डर को नबना
प्रनतस्पधाय के स्वीकार कर नलया गया है और न ही शेष
धनरानश प्राप्त करने हेतु कोई प्रयास नकया गया। स्टाम्प
अनधननयम की अनुसूची-1ख के अनुच्छेद-18 में मात्र
सावयजननक नीलामी को ही उनल्लनखत नकया गया है।
बैंक वारा प्रश्नगत सम्पनि की नीलामी हेतु सावयजननक
नीलामी की प्रनक्रया नहीं अपनाई गई है तर्था मुहरबंद
नननवदा में प्राप्त एक ही टैण्डर को स्वीकार नकया गया,
जो सावयजननक नीलामी नहीं मानी जा सकती। बनल्क
प्रश्नगत नवलेख स्टाम्प अनधननयम की अनुसूची-1ख क
अनुच्छेद 23 की पररनध में आता है, ऐसी नस्र्थनत में
प्रश्नगत नवलेख पर बाजारू मूल्यांकन पर स्टाम्प देय है,
जो नवलेख पर अदा नहीं नकया गया है, इससे स्पष्ट है
नक प्रश्नगत नवलेख पर स्टाम्प अपवंचना की गयी है।
2. पत्रावली पर उपलब्ध यंग स्टाइल
ओवरसीज वारा अपने पत्र नदनांक 13.6.2009 में
स्वयं यह स्वीकार नकया है नक प्रश्नगत सम्पनि में फैक्ट्री
संचानलत है, नजसकी पुनष्ट संयुक्त जाूँच टीम की ररपोटय
नदनांक 19.3.2012 से भी होती है। उपरोक्त तथ्यों से
स्पष्ट है नक प्रश्नगत सम्पनि औद्योनगक है। चूंनक संयुक्त
जाूँच टीम की ररपोटय नदनांक 19.3.2012 में प्रश्नगत
सम्पनि का मूल्याकंन व्यवसानयक एवं आवासीय दर से
नकया गया है, जो न्यायोनचत नहीं है। ऐसी नस्र्थनत में
प्रश्नगत सम्पनि पर औद्योनगक दर से मूल्याकंन करते हुये
स्टाम्प शुल्क नलया जाना उनचत एवं न्याय संगत है।
आदेश
प्रश्नगत सम्पनि औद्योनगक की श्रेणी में
आती है, ऐसी नस्र्थनत में नवलेख संख्या 6017 नदनांक
21.7.2009 वारा अन्तररत सम्पनि (फैक्ट्री) का
सहायक महाननरीक्षक (ननबन्धन)/ सहायक आयुक्त
स्टाम्प आगरा एवं अपर नजलानधकारी (नव०रा०)
आगरा औद्योनगक दर से मूल्यांकन का आंकलन करके
एक सप्ताह में मूल्यांकन आख्या प्रस्तुत करें। मूल्यांकन
आख्या प्राप्त होने पर प्रश्नगत नवलेख पर स्टाम्प कमी का
ननधायरण कर अनन्तम आदेश पाररत नकया जायेगा तर्था
यह आदेश अनन्तम आदेश का भाग रहेगा।
ह०अप०
(गौरव दयाल)
नजलानधकारी/ कलेक्टर स्टाम्प,
आगरा
02.08.2017"

16. Respondent no.2 by order
dated 02.08.2017 held that the property is
situated
in
the
industrial
area
and
accordingly, it directed the Assistant
Inspector General (Registration)/Assistant
Commissioner
(Stamp),
Agra
and
Additional District Magistrate (Finance &
Revenue), Agra to submit valuation report
of the property as per the rates applicable to
the industrial area. Accordingly, he deferred
the matter of determination of deficiency in
the stamp duty till the report is obtained.

17. Subsequently, respondent no.2
by order dated 06.10.2017 constituted a
676 INDIAN LAW REPORTS ALLAHABAD SERIES
Committee of five members to assess the
valuation of the property as per the rates
applicable to the industrial area. The details
of the five members of the Committee are
given below:-

"1.
Deputy
Inspector
General
(Registration),
Agra
Division, Agra (Chairman)
2.
Additional
District
Magistrate (Finance & Revenue),
Agra (Member)
3.
Assistant
Inspector
General
(Registration),
Agra
(Member)
4. Tehsildar Sadar, Agra
(Member)
5. Sub-Registrar (II), Agra
(Member)"

18. It transpires from the record that
though the five member Committee was
constituted in compliance with the order of
respondent
no.2
dated
02.08.2017
for
determining the valuation of the property as
per the circle rate applicable to the industrial
area, the Committee did not submit any
report. Consequently, the Additional District
Magistrate (Finance & Revenue) wrote a
letter dated 17.01.2022 asking the Assistant
Inspector General (Registration), Agra to
submit a report with respect to the valuation
of the property on the basis of rates
applicable to the industrial area. The Assistant
Inspector General (Registration), Agra replied
to the aforesaid letter by letter dated
29.01.2022 showing its inability to calculate
the valuation of the property on the basis of
industrial rates inasmuch as no circle rate
with regard to industrial area was prescribed
in the list of circle rates published in the year
2009 in District Agra.

19.

The Additional
District
Magistrate (Finance & Revenue), Agra
again by letter dated 05.02.2022 directed
the
Assistant
Inspector
General
(Registration), Agra to submit a report in
the light of the direction contained in the
order dated 02.08.2017 of respondent no.2.
Thereafter,
the
Sub-Registrar-II, Agra
submitted a report dated 26.02.2022 stating
therein that the Committee constituted by
the District Magistrate on 20.01.2012 of
which
Additional
District
Magistrate
(Finance & Revenue), Agra was Chairman
and Executive Engineer, Public Works
Department,
Sub-Registrar-II
Agra,
Tehsildar, Agra and Assistant Inspector
General (Registration), Agra were members
of the Committee assessed the valuation of
the property @ 15,000/- square meter.

20. The petitioner, thereafter,
submitted an objection on 27.04.2022
contending inter alia that since the sale in
the present case is a public sale by inviting
tenders from the public under Rule 8(5)(b)
of Rules, 2002, therefore, said sale would
fall under Article 18 of Schedule 1-B of the
Act, 1899, and the petitioner is liable to pay
stamp duty on the sale consideration i.e.
Rs.2,02,00,000/- mentioned in the sale
certificate which was above the reserved
price. Accordingly, it prayed that the report
of the Committee be rejected.

21. Respondent no.2 held that a
detailed order dated 02.08.2017 had been
passed by his predecessor in the present
case whereby it was directed that the
valuation of the property be calculated as
per the rates applicable to the industrial
area, and the Committee constituted for the
said purpose recommended for calculating
the valuation of the property by applying
the rates of Rs.15,000/- per square meter.
Accordingly, respondent no.2 by order
dated 17.08.2022 held the deficiency of
Rs.1,45,35,270/- and imposed interest @
10 All. M/S Young Style Overseas Vs. State of U.P. & Ors.
677
1.5% per month from 21.07.2009 till the
payment of deficient stamp duty and also
imposed the penalty of Rs.36,33,818/-
under Section 40(b) of the Act, 1899.

22. Challenging the aforesaid
orders, Sri Shashi Nandan, learned Senior
Counsel for the petitioner submitted that it
is not in dispute that the property was
mortgaged to the Bank by M/s. Wasan
Shoes Limited, and on default in repayment
of loan amount by M/s. Wasan Shoes
Limited, the possession of the property was
taken over by the Bank under Rule 8 (1) of
the Rules, 2002, and a possession notice
was published by the Bank in two daily
newspapers, namely, Dainik Jagran and INext. It is submitted that after taking over
the possession under Rules 2002, the
Authorized Officer of the Bank obtained
the valuation of the property from an
approved valuer and according to the
valuation report of the approved valuer, the
valuation
of
the
property
was
Rs.1,97,00,000/-.
Accordingly,
the
Authorized Officer fixed the reserved price
of the property at Rs.2,00,00,000/- and
published a notice for sale of the property
by inviting tenders from the public as
provided under Rule 8(5)(b) of the Rules,
2002. The petitioner offered a bid of Rs.
2,02,00,000/- for the purchase of the
property in response to notice published by
the Bank for auction of the property, and
the Bank accepted the bid of the petitioner
being the highest bid, and on complying
with the terms and conditions of the
payment, the Authorized Officer issued a
sale certificate contemplated under Rule
9(6) of the Rules, 2002. It is contended that
since it was a public sale, therefore, it was
open to the public to participate in the sale
proceeding pursuant to the sale notice
published in the newspaper, and the bid of
the petitioner of Rs. 2,02,00,000/- being the
highest bid was maximum price, which in
the opinion of the Bank, the property could
fetch in the market, therefore, the sale
consideration
mentioned
in
the
sale
certificate is the market value of the
property, and petitioner has paid stamp duty
on the market value of the property,
therefore, there was no deficiency in
payment of stamp duty.

23. It is submitted that the
aforesaid fact demonstrates that there was
no deliberate intention on the part of the
petitioner to evade the stamp duty. Thus, it
is submitted that there was no material on
record based on which respondent no.2
could have formed an opinion that the
petitioner has deliberately evaded the
payment
of
correct
stamp
duty.
Consequently, it is submitted that in the
absence of any material on record based on
which respondent no.2 could form an
opinion that evasion of stamp duty by the
petitioner was deliberate, the proceeding
under Section 47-A of the Act, 1899 could
not have been drawn against the petitioner.
Thus, it is submitted that the proceeding
being without jurisdiction is void ab initio,
therefore, the orders impugned cannot be
sustained in law.

24. He further submits that since it
is a public sale, the sale consideration is the
market value of the property and there was
no jurisdiction with respondent no.2 to
reassess the market value of the property
inasmuch as in the case of public sale, the
market value mentioned in the sale
certificate is the market value of the
property. In this respect, he has placed
reliance upon the judgement of the Apex
Court in the case of V.N. Devadoss Vs.
Chief
Revenue
Control
Officer-cumInspector and Others, (2009) 7 SCC 438
and the judgement of the Calcutta High
678 INDIAN LAW REPORTS ALLAHABAD SERIES
Court in the case of Ballyfabs International
Limited Vs. The State of West Bengal and
Others in W.P.A. No.7006 of 2020 decided
on 22.04.2022.

25. In other words, it is contended
that the sale conducted by an Authorized
Officer under the SARFAESI Act, 2002 is
an open market sale and thus excluded
from the scrutiny contemplated under
Section 47-A of the Act, 1899 (as amended
in State of Uttar Pradesh).

26. It is further submitted by Sri
Shashi
Nandan
that
if
the
correct
description of the property is not set forth
in the instrument of sale and there is loss of
revenue to the State, the remedy to the
State is to approach Debt Recovery
Tribunal
under
Section
17
of
the
SARFAESI Act, 2002, and till any order is
passed under Section 17 of the SARFAESI
Act, 2002 accepting the contention of the
State that the correct description of the
property is not set forth in the instrument
and the State has suffered loss, the power is
not vested with the respondent no.2 to draw
any proceeding under Section 47-A of the
Act, 1899 and to make any inquiry with
respect to sale consideration of the
property.

27. He further contends that it is
admitted on record that on the date of
execution of the sale deed, there was no
circle rate for the industrial area, and to
determine the value of the property as per
industrial area, setting up a Committee is
beyond the competence of the respondent
no.2. In pith and substance, the argument of
Sri Shashi Nandan, learned Senior Counsel
is that on the date of execution of the sale
deed, there was no circle rate in respect to
industrial area in District- Agra and that
lacuna cannot be cured by setting up a
Committee to determine the circle rate for
industrial area.

28.

Per
contra,
Sri
M.C.
Chaturvedi, learned Additional Advocate
General submits that the petitioner has an
alternative remedy of statutory appeal
under Section 56(1-A) of the Act, 1899,
therefore,
the
writ
petition
is
not
maintainable.

29. He further contends that the
case of the petitioner right from the
initiation of the proceeding under Section
47-A of the Act, 1899 was that the sale
deed would fall under Article 18 of
Schedule 1-B and the petitioner treating the
instrument to be a document falling under
Article 18 of Schedule 1-B of the Act, 1899
paid the stamp duty and got it registered,
therefore,
the
petitioner
cannot
be
permitted to take a somersault and urge the
ground to assail impugned order that the
instrument would fall under Article 23 of
Schedule 1-B of the Act, 1899, and since it
was a public sale, therefore, the sale
consideration
mentioned
in
the
sale
certificate is the market value of the
property,
and
since
there
was
no
concealment and deliberate intention of the
petitioner to evade payment of stamp duty,
the proceeding under Section 47-A of the
Act, 1899 could not be drawn against the
petitioner. It is also contended that the sale
by tender cannot be equated with sale by
auction. He has placed reliance upon the
judgement of this Court in the case of
Vishwanath Agarwal Vs. State of U.P. and
Others 2004 (96) RD 635, Secretary of
State Vs. Sunderji Shivaji & Company &
Others AIR 1938 Privy Council 12 and
judgement of the Apex Court in the case of
Purushottam
Ramanata
Quenim
Vs.
Makan Kalyan Tandel and Others in Civil
Appeal No.844 of 1973 on the point that
10 All. M/S Young Style Overseas Vs. State of U.P. & Ors.
679
there is difference between the sale by
inviting tender and by public auction.

30. It is further submitted that had
the petitioner treated the said instrument
being one falling under Article 23 of
Schedule 1-B of the Act, 1899 and
submitted the same for registration treating
it to be under Article 23 of Schedule 1-B of
the Act, 1899, the Sub-Registrar would
have exercised the power under Section 33
of the Act, 1899 and would have
impounded the instrument.

31. He further submits that the Act,
1899 is a fiscal statute, therefore, the
provision of the said Act has to be
construed strictly. He further submits that
applying the said principle, there can be no
fetter to the power of the Collector to
invoke power under Section 47-A (3) of the
Act, 1899, and if he finds that the correct
description of the property has not been set
forth in the instrument and there has been
deliberate evasion of stamp duty, he can
draw proceeding under Section 47-A (3) of
the Act, 1899 to determine the correct
market value of the property and the stamp
duty payable thereon.

32. He submits that in the instant
case, the correct details of the property had
not been set forth in the instrument,
therefore, there was ample material before
respondent no.2 to form an opinion that
there is deliberate evasion of the stamp
duty to draw proceeding under Section 47A (3) of the Act, 1899. In this respect, he
has placed reliance upon Rules 3 & 6 of the
Rules, 1997.

33. He submits that it is admitted
on record that a factory is established over
the property and there was construction
over the property, details of which have not
been disclosed in the instrument whereas in
view of Rules 3 & 6 of Rules, 1997, a duty
is cast upon the petitioner to disclose all the
details contemplated under the aforesaid
Rules in the instrument of sale. It is
contended that since the correct description
of the property has not been set forth in the
instrument affecting the market value of the
property, there was adequate material
before respondent no.2 to invoke power
under Section 47-A (3) of the Act, 1899 and
draw proceeding against the petitioner.

34. It is submitted that respondent
no.2 under Rule 7 of the Rules 1997 has the
power to constitute a Committee to
ascertain the correct market value of the
property.

35. It is submitted that the powers
conferred upon respondent no.2 under the
Act, 1899 are independent powers of
respondent no.2 and are not circumscribed
by SARFAESI Act, 2002, therefore, the
submission of the learned counsel for the
petitioner that if the correct description of
the property is not set forth in the
instrument of sale, the remedy of the State
is to approach under Section 17 of the
SARFAESI Act, 2002 is misconceived.

36. I have considered the rival
submissions of learned counsels of parties
and perused the record.

37. With respect to the preliminary
objection
by
the
learned
Additional
Advocate General that the petitioner has
statutory alternative remedy of appeal, this
Court may note that this Court in the case
of Sumati Nath Jain Vs. State of U.P and
Others (2016) ILR 1 All 132 has held that
an increase of eight times over the initial
stamp duty which was paid on the
instrument is one of the exceptional
680 INDIAN LAW REPORTS ALLAHABAD SERIES
circumstances that were envisaged by the
Apex Court in Smt. P. Laxmi Devi and Har
Devi Asnani as an instance where the
petitioner is not liable to be relegated to the
alternative remedy of appeal or revision
under Section 56 of the Act. Thus, applying
the law laid down by this Court in the case
of Sumati Nath Jain (supra), this Court is
of the view that the present case also falls
in the category of exceptional cases where
deficiency in stamp duty has been assessed
manifolds than the initial stamp duty paid
on
the
instrument.
Accordingly,
the
argument
of
the
learned
Additional
Advocate
General
for
relegating
the
petitioner to alternative remedy is devoid of
merits and cannot be sustained.

38. In order to appreciate the
submission
advanced
by
Sri
Shashi
Nandan, learned Senior Counsel for the
petitioner, it would be beneficial to have a
glance at Section 47-A of the Act, 1899 and
a few precedents of this Court elaborating
the object behind inducting Section 47-A in
the Act, 1899. Section 47-A of the Act,
1899 reads as under:-

Section
47-A
Undervaluation of the instrument - [(1)
(a) If the market value of any
property which is the subject of any
instrument, on which duty is
chargeable on market value of the
property as set forth in such
instrument, is less than even the
minimum
value
determined
in
accordance with the rules made
under this Act, the registering
officer
appointed
under
the
Registration
Act,
1908
shall,
notwithstanding anything contained
in the said Act, immediately after
presentation of such instrument and
before accepting it for registration
and taking any action under
Section 52 of the said Act, require
the person liable to pay stamp duty
under Section 29, to pay the deficit
stamp duty as computed on the
basis
of
the
minimum
value
determined in accordance with the
said rules and return the instrument
for presenting again in accordance
with Section 23 of the Registration
Act, 1908.
(b) When the deficit stamp
duty required to be paid under
clause (a), is paid in respect of any
instrument and the instrument is
presented again for registration,
the registering officer shall certify
by endorsement thereon, that the
deficit stamp duty has been paid in
respect thereof and the name and
the residence of the person paying
them and register the same.
(c)
Notwithstanding
anything contained in any other
provisions of this Act, the deficit
stamp duty may be paid under
clause (a) in the form of impressed
stamps containing such declaration
as may be prescribed.
(d) If any person does not
make the payment of deficit stamp
duty after receiving the order
referred to in clause (a) and
presents the instrument again for
registration, the registering officer
shall,
before
registering
the
instrument, refer the same to the
Collector, for determination of the
market value of the property and
the proper duty payable thereon].
(2)
On
receipt
of
a
reference under sub-section (1) the
Collector shall, after giving the
parties a reasonable opportunity of
being heard and after holding an
10 All. M/S Young Style Overseas Vs. State of U.P. & Ors.
681
inquiry in such manner as may be
prescribed by rules made under this
Act, determine the market value of
the property which is the subject of
such instrument and the proper
duty payable thereon.
(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 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.
[Explanation.- The payment
of deficit stamp duty by any person
under any order of registering officer
under sub-section (1) shall not
prevent the Collector from initiating
proceedings on any instrument under
sub-section (3).]
(4) If on enquiry under subsection (2) and examination under
sub- section (3), the Collector finds
the market value of the property-
(i) truly set forth and the
instrument duly stamped, he shall
certify by endorsement that it is duly
stamped and return it to the person
who made the reference;
(ii) not truly set forth and the
instrument not duly stamped, he shall
require the payment of proper duty or
the amount required to make up the
deficiency in the same, together with
a penalty of an amount not exceeding
four times the amount of the proper
duty or the deficient portion thereof.
[(4-A)...
(4-B)...
(4-C)...
(4-D)...
(5)...
(6)..."

39. In the case of Kaka Singh Vs.
The Additional
Collector
and
District
Magistrate
(Finance
&
Revenue),
Bulandshahr AIR 1986 All 107 the vires of
Rule 341 of the Rules framed by the State of
U.P. under Section 75 of the Stamp Act, 1899
was challenged. This Court while answering
the said question elaborated the object and
reason for inserting Section 47-A in the Act,
1899 by means of an amendment. In this
respect, paragraphs 6 & 7 of the judgement
are reproduced herein below:-

"6.
Section
47-A
was
inserted
by
means
of
an
amendment. The scheme of Section
682 INDIAN LAW REPORTS ALLAHABAD SERIES
47-A of the Act is to deal with those
cases where private parties by
arrangement
clandestinely
or
fraudulently
undervalued
the
property which is the subject matter
of transfer with a view to deprive
the
government
of
legitimate
revenue by way of Stamp duty.
Before addition of Section 47-A,
there was no provision in the Stamp
Act
empowering
the
revenue
authorities to make an enquiry of
the value of the property conveyed
for
determining
the
duty
chargeable. Section 27 of the
Stamp Act laid down that 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.
In case a person did not set forth
true
amount
for
which
the
transaction had taken place, the
revenue authorities had no power
to proceed with the defaulter,
Himalaya House Co. Ltd. v. The
Chief
Controlling
Revenue
Authority, AIR 1972 SC 899. The
Supreme Court held that for the
purpose of Article 23, the value of
consideration must be taken to be
one as set forth in the conveyance
deed. The question whether the
purpose of determining the value of
the consideration to revenue must
have regard to what the parties to
the instrument have elected to state
the consideration to be.
7. In order to meet such a
difficulty and to empower the
revenue authority to determine the
market value of the property, which
is the subject of the conveyance,
exchange, gift, settlement, award,
or trust, and the duty as payable by
the person liable to pay the same
that Section 47-A was inserted."

40. Under the scheme of the Act,
1899, Section 47-A is in two parts. Section
47-A(1) envisages a case where reference
is made by the registering officer before
registration if the market value of the
property as set forth in the instrument is
less
than
even
the minimum value
determined in accordance with rules made
under the Act, 1899.

41. The other part of Section 47-A
viz Section 47-A (3) contemplates a
situation where the Collector suo moto or
on a reference by a Court or by the
authorities
on
examination
of
the
instrument has reason to believe that the
market value of the property has not been
truly set forth in the instrument, he may
determine the correct market value of the
property and duty payable thereon. The
expression 'reason to believe' has been
elaborated by this Court in the case of
Hajari Lal Sahu Vs. State of U.P. and
Others 2004 (1) AWC 899 wherein this
Court in considering the expression 'reason
to believe' held that it has to be an honest
belief based upon the constructive material
on record and should not be based upon
conjectures or on flimsy grounds.

42. In the case of Vijay Kumar
and Another Vs. Commissioner, Meerut
Division, Meerut and Another 2008 (7)
ADJ
293
this
Court
explained
the
expression 'belief'. Paragraphs no.7 to 9 of
the said judgement are reproduced herein
below:-

"7. The Stamp Act is a
fiscal statute and it has to be
10 All. M/S Young Style Overseas Vs. State of U.P. & Ors.
683
interpreted
strictly
and
construction of hardship or equity
has no role to play in its
construction. It is a taxing statute
and has to be read as it is. In other
words,
the
literal
rule
of
interpretation applies to it. SeeState of Rajasthan v. Khandaka
Jain Jewellers, AIR 2008 SC 509.
In this case the Supreme Court has
referred its earlier judgment in the
case of A.V. Fernandez v. State of
Kerala, AIR 1957 SC 657. Also
Government of A.P. and others v.
Smt. P. Laxmi Devi, 2008 AIR SCW
1826.
8. In the above background
the phrase 'reason to believe'
occurring in sub-section (3) of
Section 47-A has to be considered.
Identical phrases have been placed
in almost every fiscal statutes such
as Income Tax Act, Sales Tax Act
etc.
With
reference
to
the
expression 'reason to believe' used
in Section 34 of the Old Income Tax
Act it has been held that they do not
mean purely subjective satisfaction
on the part of the Income Tax
Officer. The 'belief' must have been
held in good faith, it cannot be
merely a pretence.