# THE INSPECTOR GENERAL OF REGISTRATION, TAMIL NADU AND ORS v. K. BASKARAN

- **Citation:** [2020] 11 S.C.R. 345
- **Court:** Supreme Court of India
- **Decided:** 2020-06-15
- **Case number:** Civil Appeal No. 2586 of 2020
- **Bench:** Uday Umesh Lalit, Indu Malhotra
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-inspector-general-of-registration-tamil-nadu-and-ors-v-k-baskaran-34507
- **Pages:** 52

## Headnote

Tamil Nadu Stamp (Prevention of Undervaluation of
Instruments) Rules, 1968: r.11-A - Whether the directions issued by
the appellate authority namely Chief Controlling Revenue Authority
(Inspector General of Registration) in asking the Deputy Inspector
General of Registration, or any other officer, to conduct the site
inspection, amounted to delegation of his functions and violated
r.11-A of the Rules and thereby vitiated the entire proceedings -
Held: r.11A empowers the appellate authority to call for any
information or record from any public office, officer or authority
or to examine and record statements from any member of the public
office or authority - In exercise of such power, if the appellate
authority calls for any information or calls for any record or any
inputs, that by itself, will not amount to delegation of essential
functions - If, in terms of such power, the appellate authority deputes
a responsible official to enquire into certain facets and calls for a
report, that would be an ordinary mode of exercise of power vested
in the appellate authority - So long as the essential function, that is
to say of considering all the necessary factors and inputs and
thereafter arriving at an informed decision is done by the appellate
authority, the burden of performing ancillary tasks need not be
shouldered by the appellate authority - Stamp Act, 1899.
Stamp Act, 1899: s.76-A - Submission that powers that can
be delegated are specifically provided under s.76-A of the Act, and
the power under s.47-A is not one such power; and unless the power
to sub-delegate is conferred expressly or impliedly under a statute,
the power cannot be sub-delegated - Held: Submission is completely
misplaced - s.76-A of the Principal Act enables the State Government
to delegate some of the statutory powers conferred upon it by the
Principal Act to the Chief Controlling Revenue Authority - Such
[2020] 11 S.C.R. 345
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empowerment has nothing to do with the legislative power exercised
by the State in terms of which s.47-A was inserted, or with the Rules
promulgated to effectuate s.47-A - For interpreting and considering
the context of s.47-A or the Rules, the fact that certain other statutory
powers in favour of the State Government are delegable, has
absolutely no relation - s.47-A was inserted by the State in its
legislative power and the Rules framed thereunder have to be
considered on their own and without being influenced by s.76-A of
the Act - Tamil Nadu Stamp (Prevention of Undervaluation of
Instruments) Rules, 1968.
Tamil Nadu Stamp (Prevention of Undervaluation of
Instruments) Rules, 1968: r.7 - Whether r.7 of the Rules prescribing
3 months' time for the Collector to pass an order determining the
market value of the properties and duty payable on the instrument
from the first notice, is directory or mandatory - Held: Under subsection (1) of s.47-A of the Stamp Act, if there is reason to believe
that the market value has not been truly set forth in the Instrument
tendered for registration, a reference can be made to the Collector,
who (i) after giving the parties reasonable opportunity of being
heard; and (ii) after holding an enquiry in such manner as may be
prescribed by Rules, has to determine the correct value of the
concerned property - The Section by itself does not lay down any
period within which the entire process is to be completed by the
Collector - It simply states that the enquiry be held in "such manner"
as may be prescribed by Rules - If the stipulation or fixation of
period of three months from the first notice in terms of r.6 or from
notice in Form II is taken to be mandatory, it would lead to a
situation of incongruity - The fact that Form II notice had been
issued, would mean that on a prima facie view of the record and
material, the value stated in the instrument was not the correct value;
which in turn would mean that prima facie the Government Coffers
were bei

## Text

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THE INSPECTOR GENERAL OF REGISTRATION,
TAMIL NADU AND ORS.
v.
K. BASKARAN
(Civil Appeal No. 2586 of 2020)
JUNE 15, 2020
[UDAY UMESH LALIT AND INDU MALHOTRA, JJ.]
Tamil Nadu Stamp (Prevention of Undervaluation of
Instruments) Rules, 1968: r.11-A - Whether the directions issued by
the appellate authority namely Chief Controlling Revenue Authority
(Inspector General of Registration) in asking the Deputy Inspector
General of Registration, or any other officer, to conduct the site
inspection, amounted to delegation of his functions and violated
r.11-A of the Rules and thereby vitiated the entire proceedings -
Held: r.11A empowers the appellate authority to call for any
information or record from any public office, officer or authority
or to examine and record statements from any member of the public
office or authority - In exercise of such power, if the appellate
authority calls for any information or calls for any record or any
inputs, that by itself, will not amount to delegation of essential
functions - If, in terms of such power, the appellate authority deputes
a responsible official to enquire into certain facets and calls for a
report, that would be an ordinary mode of exercise of power vested
in the appellate authority - So long as the essential function, that is
to say of considering all the necessary factors and inputs and
thereafter arriving at an informed decision is done by the appellate
authority, the burden of performing ancillary tasks need not be
shouldered by the appellate authority - Stamp Act, 1899.
Stamp Act, 1899: s.76-A - Submission that powers that can
be delegated are specifically provided under s.76-A of the Act, and
the power under s.47-A is not one such power; and unless the power
to sub-delegate is conferred expressly or impliedly under a statute,
the power cannot be sub-delegated - Held: Submission is completely
misplaced - s.76-A of the Principal Act enables the State Government
to delegate some of the statutory powers conferred upon it by the
Principal Act to the Chief Controlling Revenue Authority - Such
[2020] 11 S.C.R. 345
345
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empowerment has nothing to do with the legislative power exercised
by the State in terms of which s.47-A was inserted, or with the Rules
promulgated to effectuate s.47-A - For interpreting and considering
the context of s.47-A or the Rules, the fact that certain other statutory
powers in favour of the State Government are delegable, has
absolutely no relation - s.47-A was inserted by the State in its
legislative power and the Rules framed thereunder have to be
considered on their own and without being influenced by s.76-A of
the Act - Tamil Nadu Stamp (Prevention of Undervaluation of
Instruments) Rules, 1968.
Tamil Nadu Stamp (Prevention of Undervaluation of
Instruments) Rules, 1968: r.7 - Whether r.7 of the Rules prescribing
3 months' time for the Collector to pass an order determining the
market value of the properties and duty payable on the instrument
from the first notice, is directory or mandatory - Held: Under subsection (1) of s.47-A of the Stamp Act, if there is reason to believe
that the market value has not been truly set forth in the Instrument
tendered for registration, a reference can be made to the Collector,
who (i) after giving the parties reasonable opportunity of being
heard; and (ii) after holding an enquiry in such manner as may be
prescribed by Rules, has to determine the correct value of the
concerned property - The Section by itself does not lay down any
period within which the entire process is to be completed by the
Collector - It simply states that the enquiry be held in "such manner"
as may be prescribed by Rules - If the stipulation or fixation of
period of three months from the first notice in terms of r.6 or from
notice in Form II is taken to be mandatory, it would lead to a
situation of incongruity - The fact that Form II notice had been
issued, would mean that on a prima facie view of the record and
material, the value stated in the instrument was not the correct value;
which in turn would mean that prima facie the Government Coffers
were being denied the rightful dues - If for any reason, the
proceedings are not completed within three months and, therefore,
must be held to be vitiated, the public interest would suffer, and the
persons who were prime facie responsible for suppressing real value
would stand to gain - The amendment of r.7 incorporating the period
of three months was essentially to guide the public officials to
complete the process as early as possible but was not intended to
create a right in favour of those who had prima facie conducted
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themselves prejudicing public interest - Pertinently, the concerned
provision has not spelt out any consequence for non-adherence to
said period of three months - The fixation of timeline of three months
in r.7 is, therefore, purely directory - Stamp Act, 1899 - s.47A.
Stamp Act, 1899: s.47A - Whether the appellate authority has
power under s.47A of the Act to enhance the market value of the
property while deciding the appeal filed by the registrants - Held:
Sub-section (6) of s.47-A of the Act empowers the Chief Controlling
Revenue Authority, in exercise of suo motu power, to call for and
examine the correctness of an order passed under sub-section (2)
or sub-section (3) of s.47-A; and if the order is prejudicial to the
interest of Revenue, the Chief Controlling Authority may make such
enquiry or cause such enquiry to be made and either revise, modify
or set aside such order and pass any order that it deems appropriate
- There are some limitations on the exercise of said power, since no
proceedings can be initiated against an order passed under subsection (2) or sub-section (3), if the time for preferring an appeal
against that order has not expired, or if more than five years have
expired after passing of the order - The intent is clear that if there
be sufficient time to prefer a regular appeal challenging that order,
the remedy of filing an appeal ought to be taken resort to - Further,
if the period of five years has expired, no suo motu power can be
exercised - Another limitation is prescribed by sub-section (8), in
terms of which no order in exercise of suo motu exercise of power
can be passed which may adversely impact a person, unless that
person has had reasonable opportunity of being heard - Apart from
these limitations, the statutory provisions do not impose any other
restriction, and the power is conferred principally to ensure that no
order passed under sub-sections (2) or (3) of s.47-A is prejudicial
to the interest of the revenue - In the present case, while proposing
to enhance the market value higher than what was determined by
the Collector, the appellate authority had put the appellant-registrant
to sufficient notice and had called for response with regard to the
proposed enhancement - It was nobody's case that as on the date
when the proceedings were initiated in exercise of the power under
sub-section (6) of s.47-A, the period for preferring the appeal had
not expired, or that more than five years had expired after the passing
of the order under sub-section (2) or sub-section (3) - In the
circumstances, none of the limitations which the statute has imposed
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL
NADU AND ORS. v. K. BASKARAN
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upon the exercise of power were present - It is not as if the
assessment made by the appellate authority was either opposed to
principles of natural justice, or was so palpably incorrect, that it
could never be sustained - The exercise of power was definitely
designed to obviate an obvious illegality and prejudice to the interest
of the revenue - The exercise was, thus, absolutely correct, and
there was no occasion to set aside the orders passed in pursuance
thereof.
Allowing the appeals, the Court
HELD: 1.1 Rule 11A of theTamil Nadu Stamp (Prevention
of Undervaluation of Instruments) Rules, 1968 empowers the
appellate authority to call for any information or record from any
public office, officer or authority or to examine and record
statements from any member of the public office or authority. In
line with the principles laid down by this Court, it can therefore
be said that in exercise of such power, if the appellate authority
calls for any information or calls for any record or any inputs, that
by itself, will not amount to delegation of essential functions.
Practical necessities and exigencies of administration demand
that the appellate authority must be able to delegate certain tasks
such as collecting information after causing inspection. So long
as the essential function, that is to say of considering all the
necessary factors and inputs and thereafter arriving at an informed
decision is done by the appellate authority, the burden of
performing ancillary tasks need not be shouldered by the appellate
authority. [Para 15][375-F-H; 376-A]
1.2 The submission that powers that can be delegated are
specifically provided under Section 76-A of the Act, and the power
under Section 47-A is not one such power; and unless the power
to sub-delegate is conferred expressly or impliedly under a
statute, the power cannot be sub-delegated is completely
misplaced and does not deserve acceptance. Section 76-A was
inserted in the Principal Act vide the Decentralization Act, 1914
(Act No. IV of 1914). The legislative head in Entry 44, namely
"Stamp duties other than duties on or fees collected by means of
judicial stamps, but not including rates of stamps" is in the
Concurrent List of Schedule VII to the Constitution. Section 47A was inserted in the Principal Act by the State Legislature by
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enacting the Tamil Nadu Act No.24 of 1967 which received the
assent of the President on 29th March, 1968. The Rules including
Rule 11-A were framed to effectuate the letter and spirit of Section
47-A. Section 76-A of the Principal Act enables the State
Government to delegate some of the statutory powers conferred
upon it by the Principal Act to the Chief Controlling Revenue
Authority. Such empowerment has nothing to do with the
legislative power exercised by the State in terms of which Section
47-A was inserted, or with the Rules promulgated to effectuate
Section 47-A. For interpreting and considering the context of
said Section 47-A or the Rules, the fact that certain other statutory
powers in favour of the State Government are delegable, has
absolutely no relation. Section 47-A was inserted by the State in
its legislative power and the Rules framed thereunder have to
be considered on their own and without being influenced by
Section 76-A. Therefore, in observing that the inspection ought
to have been carried out by the Inspector General of Registration
himself, and such function could not have been delegated, the
High Court failed to appreciate the principles laid down by this
Court. Any report that was called for was essentially in the nature
of rendering assistance to the appellate authority in discharge of
its functions. The final order passed by the appellate authority,
after considering all the necessary material, must be taken to be
one rendered by the appellate authority on its own, and there
was no delegation of any essential functions vitiating exercise of
power. [Paras 8, 16, 17][367-B-C; 376-B, D-H; 377-A-B]
2.1 Under sub-section (1) of Section 47-A of the Act, if there
is reason to believe that the market value has not been truly set
forth in the Instrument tendered for registration, a reference can
be made to the Collector, who (i) after giving the parties
reasonable opportunity of being heard; and (ii) after holding an
enquiry in such manner as may be prescribed by Rules, has to
determine the correct value of the concerned property. The
Section by itself does not lay down any period within which the
entire process is to be completed by the Collector. It simply states
that the enquiry be held in "such manner" as may be prescribed
by Rules. According to the Rules, following steps are required
to be undertaken to hold the enquiry: On receipt of reference as
stated above, the Collector must issue notice in Form I to the
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL
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persons by whom and in whose favour the Instrument is executed,
informing such persons to produce all evidence to show that the
market value has been truly set forth in said instrument. The
notice must give such persons time of twenty one days from the
receipt of notice to represent or respond. [Rule 4(1)] The
Collector may record statement of any such noticee. [Rule 4(2)].
For the purposes of the enquiry, the Collector may call for
information from any public office or examine and record
statements or inspect the property after due notice as stated in
detail in Rule 4(3). After considering the representations, if any,
and the record and evidence, a provisional order determining
the market value must be passed indicating the basis for such
conclusion. [Rule 4(4)]. The provisional order must be
communicated in Form II to all the concerned persons who must
be given some time to prefer objections, if they so wish; and they
must be heard on the day fixed in the notice or on such other day
as may be fixed. [Rule 6] After considering the representations
in writing and those urged at the time of hearing as well as all the
relevant factors and evidence, the Collector must pass an order
determining the market value of the concerned property and
assess the element of duty payable on the instrument of transfer.
Such order is required to be passed "within three months from
the date of first notice". [Rule 7] [Para 20][378-G-H; 379-A-G]
2.2 The expression "within three months from the date of
first notice" is crucial. The description "first notice" is not
referable to notice in Form I issued in terms of Rule 4(1). Form
I notice itself must give 21 days to the concerned persons to
respond. Depending upon their response, their statements would
be recorded and/or certain information may be required to be
called for, whereafter the Order in Form II is to be issued
provisionally determining the market value. The concerned
persons are entitled to raise objections in writing and must be
afforded hearing. After fulfilling these requirements, the order in
terms of Rule 7 can be passed. All these stages may not be
completed in three months. Further, the reference in Rule 7 is to
the "first notice" and not to "notice in Form I". Considering the
context and various stages preceding the stage of passing of the
Order under Rule 7, the reference has to be to the first "notice
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in Form II". There could possibly be more than one notices in
Form II, specially when the hearing is to take place on an
adjourned date and that is why the period must be reckoned from
the first notice in Form II. The expression immediately following
"first notice" in Rule 7 is "determining the market value of the
properties...." That is also indicative that the reference to the
notice is one in Form II in the immediately preceding Rule 6.
[Para 21][379-H; 380-A-D]
State of Mysore and others v. V. K. Kangan and others
(1976) 2 SCC 895 : [1976] 1 SCR 369; T. V. Usman v.
Food Inspector, Tellicherry Municipality, Tellicherry
(1994) 1 SCC 754; P. T. Rajan v. T.P.M. Sahir and
others (2003) 8 SCC 498 : [2003] 4 Suppl. SCR 84;
Mackinnon Mackenzie and Company Ltd. v. Machinnon
Employees Union (2015) 4 SCC 544 : [2015] 4 SCR 45;
State of UP v. Babu Ram Upadhyay AIR 1961 C 751 :
[1961] SCR 679; Shrif Uddin v. Abdul Gani Lone
(1980) 1 SCC 403 : [1980] 1 SCR 1177 - relied on.
2.3 Section 47-A by itself does not prescribe any timeline.
If the stipulation or fixation of period of three months from the
first notice in terms of Rule 6 or from notice in Form II is taken
to be mandatory it would lead to a situation of incongruity. The
fact that Form II notice had been issued, would mean that on a
prima facie view of the record and material, the value stated in
the instrument was not the correct value; which in turn would
mean that prima facie the Government Coffers were being denied
the rightful dues. If for any reason the proceedings are not
completed within three months and, therefore, must be held to
be vitiated, the public interest would suffer, and the persons who
were prime facie responsible for suppressing the real value, would
stand to gain. The amendment of Rule 7 incorporating the period
of three months was essentially to guide the public officials to
complete the process as early as possible but was not intended
to create a right in favour of those who had prime facie conducted
themselves prejudicing public interest. Pertinently, the
concerned provision has not spelt out any consequence for nonadherence to said period of three months. The fixation of timeline
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL
NADU AND ORS. v. K. BASKARAN
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of three months in Rule 7 is, therefore, purely directory.
[Paras 25, 26][385-D-F, G-H; 386-A]
State of Mysore and others v. V. K. Kangan and others
(1976) 2 SCC 895 : [1976] 1 SCR 369 - relied on.
3.1 Sub-section (6) of Section 47-A of the Act empowers
the Chief Controlling Revenue Authority, in exercise of suo motu
power, to call for and examine the correctness of an order passed
under sub-section (2) or sub-section (3) of Section 47-A; and if
the order is prejudicial to the interest of Revenue, the Chief
Controlling Authority may make such enquiry or cause such
enquiry to be made and either revise, modify or set aside such
order and pass any order that it deems appropriate. There are
some limitations on the exercise of said power, since no
proceedings can be initiated against an order passed under subsection (2) or sub-section (3), if the time for preferring an appeal
against that order has not expired, or if more than five years
have expired after passing of the order. Further, if the period of
five years has expired, no suo motu power can be exercised.
Another limitation is prescribed by sub-section (8), in terms of
which no order in exercise of suo motu exercise of power can be
passed which may adversely impact a person, unless that person
has had reasonable opportunity of being heard. Apart from these
limitations, the statutory provisions do not impose any other
restriction, and the power is conferred principally to ensure that
no order passed under sub-sections (2) or (3) of Section 47-A is
prejudicial to the interest of the revenue. [Para 30][390-D-G]
Rajendran v. The Inspector General of Registration,
Tamil Nadu and others 2012 (3) CTC 589 - relied on.
3.2 In the present case, adequate notice was issued to the
concerned persons and, therefore, there was no infirmity on that
count. It is nobody's case that as on the date when the
proceedings were initiated in exercise of the power under subsection (6) of Section 47-A, the period for preferring the appeal
had not expired, or that more than five years had expired after
the passing of the order under sub-section (2) or sub-section (3).
In the circumstances, none of the limitations which the statute
has imposed upon the exercise of power were present. [Para
30][391-A-B]
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M/s Ram Kanai Jamini Ranjan Pal Pvt. Ltd. v. Member,
Board of Revenue, West Bengal (1976) 3 SCC 369 :
[1976] Suppl. SCR 110; State of Orissa and others v.
Brundaban Sharma and another (1995) 3 Suppl. SCC
249; Vijayabai and others v. Shriram Tukaram and
others (1999) 1 SCC 693 : [1998] 3 Suppl. SCR 54;
Sree Balaji Rice Mill, Bellary v. State of Karnataka
(2005) 4 SCC 21 : [ 2005] 3 SCR 12 - relied on.
3.3 For exercising revisional power "suo motu" or "on its
motion", the concerned authority must be satisfied that an order
has been passed by the authority or officer subordinate to it which
may be prejudicial to the interest of the revenue. If an infirmity
or illegality is brought to the notice or knowledge of the revisional
authority, through normal and regular process of reporting by
the subordinate officer or authority, the power of revision can
certainly be exercised. The requisite knowledge enabling the
revisional authority to exercise the power vested in it, can also
be gathered from the appeal preferred by the registrant himself.
That may only be an occasion or a source which enables the
authority to gather information about the possible infirmity or
illegality in the process. Upon being so aware, the revisional
authority would thereafter be exercising power vested in it.
[Para 35][395-E, F-H]
3.4 There is nothing in the scheme of the Act which purports
to restrict the exercise of suo motu power under Section 47-A,
and confines it to cases where knowledge of any illegality or
infirmity in the proceedings undertaken by the subordinate
officers must be gathered from sources other than through a
pending appeal. Unless the statute expressly or even by
necessary implication restricts the exercise of power, there would
be no occasion to read into the power, any other limitations. The
High Court has not found the exercise of power to be invalid on
any count, nor was any such submission advanced before the High
Court. The High Court had simply gone on the existence of power
rather than on the exercise of power. It is not as if the assessment
made by the appellate authority was either opposed to principles
of natural justice, or was so palpably incorrect, that it could never
be sustained. The High Court completely erred in setting aside
THE INSPECTOR GENERAL OF REGISTRATION, TAMIL
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the exercise of power undertaken by the concerned authority.
The exercise of power was definitely designed to obviate an
obvious illegality and prejudice to the interest of the revenue.
The exercise was, thus, absolutely correct, and there was no
occasion to set aside the orders passed in pursuance thereof.
[Para 36][396-C-F]
Sahni Silk Mills (P) Ltd. and another v. Employees' State
Insurance Corporation (1994) 5 SCC 346 : [1994] 1
Suppl. SCR 626; Pradyat Kumar Bose v. The Hon'ble
the Chief Justice of Calcutta High Court [1955] 2 SCR
1331; Union of India and Anr. v. P. K. Roy and Ors.
[1968] 2 SCR 186; State of Bombay (Maharashtra) v.
Shivbalak Gourishanker Dube and others [1965] 1
SCR 211; Sidhartha Sarawgi v. Board of Trustees for
the Port of Kolkata and others (2014) 16 SCC 248 :
[2014] 14 SCR 1493 - referred to.
Case Law Reference
[1994] 1 Suppl. SCR 626
referred to
Para 8
[1955] 2 SCR 1331
referred to
Para 9
[1968] 2 SCR 186
referred to
Para 10
[1965] 1 SCR 211
referred to
Para 11
[2014] 14 SCR 1493
referred to
Para 13
[1976] 1 SCR 369
relied on
Para 23 A
(1994) 1 SCC 754
relied on
Para 23 B
[2003] 4 Suppl. SCR 84
relied on
Para 23 C
[2015] 4 SCR 45
relied on
Para 24
[1961] SCR 679
relied on
Para 24
[1980] 1 SCR 1177
relied on
Para 24
[1976] Suppl. SCR 110
relied on
Para 32
(1995) Supp. 3 SCC 249
relied on
Para 33 A
[1998] 3 Suppl. SCR 54
relied on
Para 33 B
[2005] 3 SCR 12
relied on
Para 34
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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2586
of 2020.
From the Judgment and Order dated 02.02.2018 of the High Court
of Judicature at Madras in C.M.A. No. 2666 of 2012.
With
C.A. Nos. 2587, 2588, 2589-2592, 2593-2597, 2598, 2599, 2600
of 2020.
Jayanth Muth Raj, AAG, S. Nagamuthu, Sr. Adv., M. Yogesh
Kanna, S. Raja Rajeshwaran, Ms. Uma Prasuna Bachu, T. Sundar
Ramanathan, Abhishek Anand, Ishaan Chakrabarti, M. P. Devanath,
M. A. Venkata Subramanian, Rakesh K. Sharma, K. V. Mohan, K. V.
Balakrishnan, Rahul Kumar Sharma, Raghav Shankar, Prateek
K. Chadha, Ms. Arshiya Sharda, P.J. George, Madhusudan Reddy,
Najeeb Usman Khan, M.P. Srivignesh, Abinaya Kalaignan T., Jose
Abraham, Pulkit Tare, D. Kumanan, Suvendu Suvasis Dash, Ms. Misha
Rohatgi Mohta, Muthu Thangaturai, Johnson Subba, Nakul Mohta, Antony
R. Julian, Danish Zubair Khan, Anish R. Shah, Manjunath Meled, M.V.V.
Ramana, Ganesh Kumar R., Advs. for the appearing parties.
The Judgment of the Court was delivered by
UDAY UMESH LALIT, J.
1. Leave granted.
2. These eight appeals raise common questions touching upon the
interpretation of Section 47A1 of the Indian Stamp Act, 1899 ('the Act',
for short) and the Tamil Nadu Stamp (Prevention of Undervaluation of
Instruments) Rules, 1968 ('the Rules', for short) as amended from time
to time. Said Section 47-A of the Act now stands:-
"Section 47-A. Instrument of conveyance etc., undervalued
how to be dealt with.- (1) If the Registering Officer appointed
under the Indian Registration Act, 1908 (Central Act XVI of 1908),
while registering any Instrument of conveyance, [exchange, gift,
release of benami right or settlement] has reason to believe that
the market value of the property of which is the subject matter of
1 As inserted by the Tamil Nadu Act 24 of 1967. Later, by the Tamil Nadu Act 1 of
2000, Sub- Sections (4) to (10) in Section 47-A were substituted for Sub-Sections (4) and
(5)
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conveyance, exchange, gift, release of benami right or settlement,
has not been truly set forth in the instrument, he may, 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.
(2) On receipt of reference under sub-section (1), the Collector
shall, after giving the parties reasonable opportunity of being heard
and after holding an enquiry in such manner as may be prescribed
by Rules made under this Act, determine the market value of the
property which is the subject matter of conveyance, exchange,
gift, release of benami right or settlement, 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.
(3) The Collector may, suo motu, or otherwise, within five years
from the date of registration of any instrument of conveyance,
exchange, gift, release of benami right or settlement, 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 matter of
conveyance, exchange, gift, release of benami right or settlement,
and the duty payable thereon and if after such examination, he
has reason to believe that the market value of the property has
not been truly set forth in the instrument, he may determine the
market value of such property and the duty as aforesaid in
accordance with the procedure provided for in sub-section (2).
The difference, if any, in the amount of duty, shall be payable by
the persons liable to pay the duty;
Provided that nothing in this sub-section shall apply to any
instrument registered before the date of commencement of the
Indian Stamp (Tamil Nadu Amendment) Act, 1967.
(4) Every person liable to pay the difference in the amount of
duty under sub-section (2) or sub-section (3) shall, payable such
duty within such period as may be prescribed. In default of such
payment, such amount of duty outstanding on the date of default
shall be a charge on the property affected in such instrument.
On any amount remaining unpaid after the date specified for its
payment, the person liable to pay the duty shall pay, in addition to
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the amount due, interest at one per cent per month on such amount
for the entire period of default.
 ... ... ...
(5) Any person aggrieved by an order of the Collector under subsection (2) or sub-section (3), may appeal to such Authority as
may be prescribed in this behalf. All such appeals shall be preferred
within such time, and shall be heard and disposed of in such
manner, as may be prescribed by rules made under this Act.
 ... ... ...
(6) The Chief Controlling Revenue Authority may, suo motu, call
for and examine an order passed under sub-section (2) or subsection (3) and if such order is prejudicial to the interests of revenue,
he may make such inquiry or cause such inquiry to be made and,
subject to the provisions of this Act, may initiate proceedings to
revise, modify or set aside such order and may pass such order
thereon as he thinks fit.
(7) The Chief Controlling Revenue Authority shall not initiate
proceedings against any order passed under sub-section (2) or
sub-section (3) if, -
(a) the time for appeal against that order has not expired; or
(b) more than five years have expired after the passing of such
order.
(8) No order under sub-section (6) adversely affecting a person
shall be passed unless that person has had a reasonable opportunity
of being heard.
(9) In computing the period referred to in clause (b) of sub-section
(7), the time during which the proceedings before the Chief
Controlling Revenue Authority remained stayed under the order
of Court shall be excluded.
(10) Any person aggrieved by an order of the Authority prescribed
under sub-section (5) of the Chief Controlling Revenue Authority
under sub- section (6) may, within such time and in such manner,
as may be prescribed by rules made under this Act, appeal to the
High Court.
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Explanation.- For the purpose of this Act, market value of any
property shall be estimated to be price which, in the opinion of the
Controller or the Chief Controlling Revenue Authority or the High
Court, as the case may be, such property would have fetched or
would fetch, if sold in the open market on the date of execution of
the instrument of conveyance, exchange, gift, release or benami
right or settlement."
3. The appeal arising out of Special Leave Petition (Civil) No.15790
of 2019 is taken as the lead matter and facts pertaining to said appeal
are set out in detail for facility. The facts involved in other appeals are
almost identical except for details such as the case numbers, dates of
orders and the details of properties in question.
4. The appeal from Special Leave Petition (Civil) No.15790 of
2019 arises out of the final judgment and order dated 02.02.2018 passed
by the High Court2 in CMA No. 2666 of 2012 in following circumstances:-
A. The Respondent purchased two properties comprised in R.S.
No.372/2A - Sidharavuthanpalayam Village, Tiruppur Taluk, Erode
District, (i) admeasuring about 46216 sq.ft. through Sale Deed dated
21.02.2000 registered as Doct. No.2647 of 2000 of Book 1 valued at
Rs.4,78,000/- and (ii) admeasuring about 47960 sq. ft through Sale Deed
dated 18.02.2000 registered as Doct. No.2648 of 2000 of Book 1 valued
at Rs.4,96,000/- (i.e. Rs.10.34 per sq.ft.).
B. As the value in said Sale Deeds was less than the Guideline
Value of Rs.58.30 per sq.ft., the Sub-Registrar, Dharapuram, Appellant
No.5 herein, referred the matter to the Special Deputy Collector
(Stamps), Coimbatore i.e. Appellant No.2 herein, under Section 47-A of
the Act.
C. On 13.9.2000 Appellant No. 2 issued Form No. 1 notices in
Mu.Pa. (S.R.) No.3667 of 2000 D and Mu.Pa. (S.R.) No. 3668/2000 D
seeking explanation from the Respondent why the deficit stamp duty of
Rs.2,66,088/- and Rs.2,76,132/- respectively should not be collected.
Thereafter, Appellant No. 2 issued Form No. II notices on 04.02.2003 to
the Respondent, whereby the provisional value of the property was
determined at the rate of Rs.58.30/- per sq.ft. as against the value of
Rs.10.34/- per sq.ft. set forth in the Sale Deeds in question.
2 The High Court of Judicature at Madras
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D. Appellant No.2 issued Final Orders on 30.04.2003 in Mu.Pa.
(S.R.) Nos. 3667 and 3668 of 2000 D. In Mu.Pa. (S.R.) No.3667 of
2000 D, it was observed: -
"With reference to the Form I notice no representations received
from the registrant and he never turned for hearing in spite of
several reminders and notices issued and no objections filed.
Hence, provisional order in Form II was issued. Neither the
objections received from the purchaser nor appeared for the
hearing. It is learnt that the registrant has no objection regarding
the valuation of the document. It is hereby ordered confirming
the provisionally determined value as noted in the Form II cited
in the reference 3.
It is hereby ordered that the open market value is finally determined
at Rs.26,95,400/- purchased through the document as per details
noted in the pre page.
With reference to the above value the stamp duty leviable at
Rs.3,23,448/- excluding the stamp duty already paid Rs.57,360/-
the deficit stamp duty to be paid Rs.2,66,088/- (Rupees Two Lakhs
Sixty Six Thousand Eighty Eight Only).
The registrant is requested to remit the deficit stamp duty
Rs.2,66,088/- under the head of account 0030 stamps Registration
030G Fee deficit stamp duty ABAA0202 in the State Bank of
India or in the Sub Treasury office and the original Challan shall
be sent to this office within 2 weeks from the date of this order."
In Mu.Pa. (S.R.) No.3668 of 2000 D, the market value was
assessed at Rs.27,97,100/- and similar consequential directions were
passed.
E. The Respondent filed statutory appeal which was rejected by
the Inspector General of Registration i.e. Appellant No. 1 vide order
dated 05.08.2005. At the appellate stage, a report was called for from
District Registrar, Erode, which was referred to in the order dated
05.08.2005 as under:-
"...This Appeal was admitted and the Deputy Inspector General
Kovai appointed as the enquiry officer and to inspect the document
property premises and to recommend determination of the true
market value of the document property as per enquiry. The original
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file was also required from the District Revenue Officer (Stamps).
On perusal of the original file of the District Revenue Officer
(Stamps) office and it was found that, since the appellant not
turned for enquiry and considered that there are no objections, the
guideline value was confirmed.
In the report of the District Registrar Erode enclosed with the
letter received from the Deputy Inspector General Kovai he has
recommended that while conducting the spot Inspection of the
Survey field the properties lying in the village on the date of
registration on 21.02.2002 were not incorporated with the
municipality and it was incorporated with the municipality only on
01.04.2003, since the document properties were incorporated in
the Municipality area at present value is fixed at Rs.200/- per
sq.ft. and it is apt to determine the value at Rs.58.30/- per sq.ft.,
on the date of registration."
F. The Respondent, being aggrieved, filed CMA No. 2666 of 2012
in the High Court challenging the said order dated 05.08.2005 which
was allowed by the High Court by its judgment and order dated 02.02.2018.
The High Court observed that Appellant No.1 had delegated his duty to
the Deputy Inspector General of Registration, which was against the
decision of the High Court in the case of S. Santhi vs. Chief Revenue
Controlling Authority (CMA No. 2820 of 2012) decided on 05.06.2015.
It was also observed that Rule 6 was not followed. The High Court thus
concluded:-
"8. Therefore, the first Respondent is not empowered to delegate
the powers conferred on him. Similarly, the procedure contemplated
under Rule 6 of the Rules is also not followed by the authorities
while determining the market value of the property. As such, the
entire proceedings are vitiated, in view of violation of Rules 6 and
11-A of the Rules. Accordingly, the impugned order passed by the
first Respondent is not sustainable in law and the same is set
aside. The authorities are directed to release the document to the
Appellant."
It was, however, not stated how the procedure contemplated by
Rule 6 was not followed.
G. The decision in S. Santhi (supra) which was relied upon, had
observed as under:-
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"17. The Authority conferred with certain functions under a statute
has to carry out the same on its own such function and cannot
delegate the same to another in the absence any contemplation
for such delegation under the Act. In the present case, under rule
4(3)(c) and rule 11-A of the rules, 2nd respondent-Collector and
the 1st respondent-Inspector General of Registration respectively,
have to inspect the property and there is no enabling provision
under the rules or under the Act to delegate such power. Therefore,
inspections by other officers at the behest of the respondents vitiate
the entire proceedings.
18. The failure on the part of the 2nd respondent to pass a final
order within 3 months from the date of Form-I notice as mandated
under rule 7 of the rules vitiates the entire proceedings. Form-I
notice was issued on 17.05.2005 and the final order was passed
on 05.12.2006, after 11/2 years, i.e., after 3 months and hence the
entire proceedings are vitiated.
19. The impugned order has been passed by the 1st respondent
purely based on inspection reports of the District registrar /Deputy
Thasildar, who are not authorised under the Act and hence the
said inspection reports are not materials collected by the authorities,
entitled under the Act. Hence the proceedings of the 2nd respondent
and 1st respondent are vitiated."
5. Similar orders were passed by the High Court in other matters
which orders are presently under appeal in companion matters. Since
the matters arise in the backdrop of provisions contained in the Rules,
Rules 4 to 7 and 11A of the Rules are quoted hereunder: -
"4. Procedure on receipt of reference under Section 47-A.
(1) On receipt of a reference under sub-Section (1) of Section
47-A, from a registering officer, the Collector shall issue a notice
in Form I.
(a) to every person by whom, and
(b) to every person in whose favour the instrument has been
executed.
Informing him of the receipt of the reference and asking him to
submit to him his representations, if any, in writing to show that
the market value of the property has been truly set forth in the
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instrument, and also to produce all evidence that he has in support
of his representation, within 21 days from the date of service of
the notice.
(2) The Collector may, if he thinks fit, record a statement from
any person to whom a notice under sub-rule (1) has been issued.
(3) The Collector may for the purpose of his enquiry -
(a) call for any information or record from any public office,
officer or authority under the government or any local authority;
(b) examine and record statements from any member of the
public, officer or authority under the Government or the local
authority; and
(c) inspect the property after due notice to the parties
concerned.
(4) After considering the representations, if any, received from
the person to whom notice under sub- rule (1) has been issued,
and after examining the records and evidence before him, the
Collector shall pass an order in writing provisionally determining
the market value of the properties and the duty payable. The basis
on which the provisional market value was arrived at shall be
clearly indicated in the order.
5.