MRS. RUHI MARY THOMAS AND ORS.versusTRANSCON-SHETH CREATORS PVT. LTD. AND ANR.

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                      Shabnoor
                                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                         CIVIL APPELLATE JURISDICTION

                                       WRIT PETITION NO.10725 OF 2015

                      Transcon Sheth Creators Private Limited
                      & Anr.                                      … Petitioners
                                 V/s.
                      State of Maharashtra & Anr.                 … Respondents

                                                     WITH
                                      CIVIL APPLICATION NO.3397 OF 2015
                                                      IN
                                       WRIT PETITION NO.10725 OF 2015

                      Ruhi Mary Thomas & Ors.                     … Applicants
SHABNOOR                       In the matter between:
AYUB                  Transcon Sheth Creators Private Limited
PATHAN
Digitally signed by
                      & Anr.                                      … Petitioners
SHABNOOR AYUB
PATHAN                            V/s.
Date: 2026.08.31
14:51:54 +0530        State of Maharashtra & Anr.                 … Respondents

                      Mr. Girish S Godble, Sr. Advocate a/w Mr. Aditya
                      Shiralkar, Ms. Nuput Desai, and Mr. Ishaan Chaudhary
                      i/b I. C. Legal, for the Petitioners.
                      Mr. S. H. Kankal, AGP, for the State – Respondent Nos.1
                      and 2.


                                       CORAM                : AMIT BORKAR, J.

                                       RESERVED ON          : AUGUST 24, 2026

                                       PRONOUNCED ON        : AUGUST 31, 2026

                      JUDGMENT:

                      1.    By the present Petition, filed under Articles 226 and 227 of
                      the Constitution of India, the Petitioners have challenged the order



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dated 15 September 2015 passed by the Chief Controlling Revenue
Authority, Maharashtra State, Pune. According to the Petitioners,
the said order suffers from clear errors and has been passed
without proper jurisdiction.

2.     The brief facts which have given rise to the present Petition
are as follows. The dispute relates to a Deed of Conveyance dated
9 May 2007. The said Deed was adjudicated by the Collector of
Stamps and was registered on 1 August 2007 as Serial No. 5550 of
2007. By the said Conveyance, the subject property was conveyed
in favour of the Petitioners. The property consisted of 17 separate
plots of land. Some part of the said land was occupied by slum
dwellers. After adjudication, the market value of the subject
property was determined at about Rs. 12 crores, and stamp duty of
Rs. 60 lakhs was paid by the Petitioners. The Impugned Order
records that, after payment of the required stamp duty, the
Collector made his endorsement and issued the necessary
certificate on the instrument on 27 July 2007., on 12 March 2008,
a notice was issued seeking to invoke Section 53A of the
Maharashtra Stamp Act, 1958. Subsequently, the Joint Director,
Town     Planning,   Valuation   Department,     submitted        various
Valuation Reports. The report dated 17 January 2009 was only a
provisional report. In that report, the market value of the property
was tentatively shown at about Rs. 50.12 crores. However, the
report made it clear that several deductions were still required to
be considered. These included development rights granted to other
developers in respect of different portions of the slum and non-
slum land forming part of the subject property. The report referred



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to 47 litigations pending before different Courts and Tribunals, for
which necessary information from the legal officers was still
awaited. It referred to exemptions and benefits which may be
available to the assessees in respect of the declared slum area.

3.    The second report dated 12 September 2013 was only a
provisional report. It tentatively assessed the market value of the
property at about Rs. 52.61 crores. However, even this report
contained an important qualification. It stated that a deduction
was required in respect of 23,423 square metres of land forming
part of Plot No. 10, since there was an injunction restraining
development of that land. The third report dated 6 December 2014
was, in substance, a supplementary report to the earlier reports. It
again assessed the market value of the subject property at about
Rs. 52.61 crores. However, according to the Petitioners, the
matters relating to various deductions and other relevant factors,
which were specifically referred to in the earlier reports, were not
considered while arriving at the said valuation. By the Impugned
Order dated 15 September 2015, the Chief Controlling Revenue
Authority accepted the revised valuation of about Rs. 52.61 crores
on the basis of the report dated 6 December 2014. This was as
against the original adjudicated market value of about Rs. 12
crores. On that basis, the authority demanded alleged deficit stamp
duty of Rs. 2,03,07,750, together with penalty.

4.    Mr. Godbole, learned Senior Advocate appearing for the
Petitioners, submitted that the Impugned Order is barred by
limitation under Section 53A of the Maharashtra Stamp Act, 1958.
He submitted that Section 53A permits the revisional power to be



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exercised within six years from the date of the Collector's
certificate. He relied upon the decision of this Court in Sony Mony
Electronics Ltd. v. State of Maharashtra, 2025 SCC OnLine Bom
2848, in which this Court has held that the period of six years
applies not only for starting the proceedings but for completing
them and passing the final recovery order. According to Mr.
Godbole, this Court rejected the contention that, once a notice is
issued within time, the authority can continue the proceedings for
an unlimited period. He submitted that the same principle has
been followed by this Court in Kolte Patil Developers Ltd. v. State
of Maharashtra, 2026 SCC OnLine Bom 677 . He pointed out that,
even in that case, some steps were taken within the period of six
years. However, the final recovery order was passed after expiry of
six years. This Court held that such an order was without
jurisdiction. Mr. Godbole submitted that the position is made clear
by the decision of this Court in Romell Real Estate Pvt. Ltd. v. State
of Maharashtra, 2026 SCC OnLine Bom 1462. In the said decision,
this Court approved the principles laid down in Sony Mony and
Kolte Patil. It was held that the period of six years covers the entire
process, from the commencement of the proceedings until the
reviewed assessment is completed. According to him, the
principles laid down in the said decision apply to the facts of the
present case.

5.    Mr. Godbole submitted that, in the present case, the
certificate issued by the Collector is dated 27 July 2007., according
to him, the period of six years expired on 27 July 2013. However,
the Impugned Order was passed only on 15 September 2015. He



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submitted that the Impugned Order was thus passed after expiry of
the prescribed period of limitation. According to him, the authority
had no jurisdiction to pass such order and the Impugned Order is
liable to be quashed and set aside on this ground alone. He
submitted that even if the alternative reasoning in Sony Mony is
considered, the proceedings under Section 53A cannot be kept
pending indefinitely. This Court had considered two years from the
date of commencement of the proceedings as the maximum
reasonable period for completing them. In the present case, though
the notice was issued on 12 March 2008, the final order was
passed more than seven years. According to Mr. Godbole, the
issuance of notice within time cannot save the proceedings.

6.   Mr. Godbole submitted that stamp duty is required to be
determined on the basis of the market value of the property as it
existed on the date when the instrument was executed. He relied
upon State of U.P. v. Ambrish Tandon, (2012) 5 SCC 566 , in which
the Supreme Court held that a subsequent use cannot decide the
stamp value and that the nature and use of the property must be
considered with reference to the date of purchase. He relied upon
State of Rajasthan v. Khandaka Jain Jewellers, (2007) 14 SCC 339,
in which the Supreme Court held that the relevant value is the
value prevailing on the date of sale or execution and not the value
at an earlier or later point of time. He submitted that the
Department has not applied the above test in the present case.
According to him, while valuing Plot No. 10, the Valuation Reports
have taken into consideration Slum FSI, Slum TDR and other
redevelopment benefits which had not come into existence as on 9



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May 2007. The specific case of the Petitioners is that, on the date
of the Conveyance, no SRA scheme had even been submitted and
no such scheme was in existence.

7.   Mr. Godbole submitted that there was no SRA scheme in
existence in respect of the property at the relevant time. According
to him, the Valuation Reports have,, valued the property on the
basis of a future redevelopment project instead of valuing the land
which was conveyed on 9 May 2007. He submitted that the land,
as it existed on that date, was occupied by slum dwellers and was
subject to various encumbrances and difficulties. He submitted
that the Valuation Reports take into account the possible future
benefits of FSI and TDR but do not consider the costs and burdens
necessary for obtaining those benefits. According to him, the
valuation exercise is one-sided. The Reports consider the possible
value arising from future FSI and TDR but do not deduct the
expenses and difficulties connected with the same. These include
the presence of existing occupants, their rehabilitation, transit
accommodation, shifting expenses, corpus payments, development
expenditure, pending litigation, reservations, delay and deferment,
and the various steps which were required to be completed before
TDR could be generated.

8.   Mr. Godbole submitted that, on the date of execution of the
instrument, as many as 47 litigations were pending in relation to
the subject property. According to him, this was an important
factor which would reduce the market value of the property and
proper deductions were required to be made on that account. He
submitted that the Impugned Order does not consider this material



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factor at all. Instead, the Valuation Reports proceed as if the
property was clear, freely saleable andly available for development.
According to him, that was not the condition of the property on 9
May 2007. The pending proceedings, adverse claims, injunctions,
occupation and other difficulties were existing features of the
property and would affect the price which a prudent and willing
purchaser would have agreed to pay.

9.    Mr. Godbole relied upon the judgment of the Constitution
Bench of the Supreme Court in C.B. Gautam v. Union of India,
(1993) 1 SCC 78, particularly paragraph 30 thereof. He submitted
that the Supreme Court held that a dispute relating to title may
result in the property being sold for less than its fair market value.
He relied upon the judgment of the Division Bench of this Court in
Vimal Agarwal v. Appropriate Authority, 1994 SCC OnLine Bom
314, in which it was held that the valuation has to be adjusted by
considering such “minus factors”.

10.   Mr. Godbole submitted that there is an independent error in
the manner in which the 2007 Valuation Guidelines have been
applied. According to him, the correct formula was the SDRR base
value plus 40 per cent, namely 1.4 times the base value.,
deductions were required to be made towards development
expenditure and deferment. However, according to him, the
Valuation Reports have effectively applied 1.6 times the base value.
He submitted that the applicable deduction of 15 per cent towards
area has not been given.




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11.   Mr. Godbole submitted that the error going to the
jurisdiction of the matter is clear from the Impugned Order. The
authority has recorded the objections raised by the Petitioners,
including the objection that the 2014 report was based on an
incorrect method and that the pending matters relating to the
property were not considered. However, according to him, the
authority merely states that the report dated 6 December 2014 is
“proper” and, “hence”, accepts the same., the authority adopts the
revised valuation and raises the demand. He submitted that the
Impugned Order does not give any proper reasons for deciding the
main objections raised by the Petitioners. According to him, the
order does not explain why future SRA or TDR benefits could be
treated as having accrued on 9 May 2007. It does not explain why
the occupation of the property, pending litigation, reservations,
development     expenses    and       deferment   were       treated       as
unimportant. He submitted that the order does not give any
reasons for rejecting the independent Valuation Report produced
by the Petitioners. According to him, the specific and material
objections raised by the Petitioners have not been dealt with.

12.   Mr. Godbole submitted that the authorities under the Act
have failed to consider the pending litigation concerning the plots
in question, which, according to him, would considerably reduce
their market value. He submitted that the market value has been
determined on the basis of an assumed future event which may or
may not happen. According to him, a possible future income
cannot be treated as a factor for deciding the market value of the
property described in the instrument for the purpose of calculating



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stamp duty. He submitted that, unlike proceedings under the
Income Tax Act, the market value of the property cannot be
determined on the basis of a possible future income.

13.   Mr. Godbole submitted that the judgment of this Court in
Uma Niwas CHSL has been challenged before the Supreme Court.
However, according to him, only the operation of the order has
been stayed. He submitted that unless the entire judgment is
stayed by a superior Court, the observations and principles laid
down in the judgment continue to bind a subsequent Bench. In
support of this submission, Mr. Godbole relied upon the judgment
of the Supreme Court in Shree Chamundi Mopeds Limited v.
Church of South India Trust Association CSI CINOD Secretariat,
Madras, (1992) 3 SCC 1.

14.   On the other hand, Mr. Kankal, learned AGP, submitted that
Respondent No. 2 received a question raised in the Legislative
Assembly regarding possible undervaluation of the document and
the resulting short payment of stamp duty. According to him,
Respondent No. 2,, considered it necessary to verify whether the
allegation was correct and accordingly exercised the powers
available under Section 53A of the Maharashtra Stamp Act, 1958.
He submitted that Section 53A gives the Chief Controlling Revenue
Authority the power, within six years from the date of the
certificate issued by the Collector under Sections 32, 39 or 41, to
call upon the concerned party to produce the instrument. After
giving the concerned party a reasonable opportunity of being
heard, the authority can examine whether proper stamp duty was
chargeable and whether any duty had been paid short. If a deficit



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is found, the authority can direct its recovery.

15.   According to Mr. Kankal, after receiving the Legislative
Assembly question raised by a duly elected representative,
Respondent No. 2 issued a notice dated 12 March 2008 and called
upon the Petitioners to produce the document. He submitted that
the Chief Controlling Revenue Authority gave several opportunities
of personal hearing to the concerned party from time to time. After
considering the submissions made by the Petitioners, the authority
passed the order dated 15 September 2015 directing the
Petitioners to pay deficit stamp duty of Rs. 2,03,07,750.

16.   Mr. Kankal submitted that the market value was determined
in accordance with Rules 3 and 6 of the Maharashtra Stamp
(Determination of True Market Value) Rules, 1995, read with
Section 3 of the Maharashtra Stamp Act. He submitted that the
valuation mentioned in the report of the Joint Director, Town
Planning, was made by an expert authority. Relying upon Section
28 of the Maharashtra Stamp Act, he submitted that all relevant
facts are required to be stated in the instrument for the purpose of
determining the market value of the property described therein.
He, therefore, submitted that the Petition deserves to be dismissed.

REASONS AND FINDINGS:

17.   I have considered the Petition, the Impugned Order dated 15
September 2015, the Deed of Conveyance, the submissions of Mr.
Godbole, learned Senior Advocate for the Petitioners, and those of
Mr. Kankal, learned AGP for the Respondents. So far as the
question of limitation under Section 53A is concerned, I do not



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find it necessary to decide that question in this Petition. In case of
M/S. Sahyog Homes Ltd vs The State Of Maharashtra, Writ
Petition No. 6437 of 2015, this Court has referred the questions
arising from Sony Mony Electronics Ltd. v. State of Maharashtra,
2025 SCC OnLine Bom 2848, Kolte Patil Developers Ltd. v. State of
Maharashtra, 2026 SCC OnLine Bom 677 and Romell Real Estate
Pvt. Ltd. v. State of Maharashtra, 2026 SCC OnLine Bom 1462 to a
larger Bench. The question of limitation is kept open. The present
Petition can be considered on the question of market value on
merits.

18.   The Deed of Conveyance was placed before the Collector of
Stamps for adjudication. The Collector determined the market
value at Rs.12 crores and stamp duty of Rs.60 lakhs was paid. The
order of the Chief Controlling Revenue Authority records that
Rs.60 lakhs was deposited and that the endorsement or certificate
was made on the document on 27 July 2007. The question which
now       arises   is   whether   the   subsequent      valuation         of
Rs.52,61,54,916/-, rounded off to Rs.52,61,55,000/-, can be
accepted on the material available on record.

19.   Before considering the valuation report, it is necessary to see
what was purchased by the Petitioners. The property was not a
vacant property, free from disputes and ready for development.
The recitals in the Deed show that several difficulties were
attached to the property. There were earlier Development
Agreements with Conwood Developers Private Limited and rights
had been created under those agreements. The Deed refers to
proceedings filed by members of the Vendor Society. The Deed



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specifically states: “There are above 45 suits filed by and against
the Vendor”. It refers to an injunction restraining creation of third
party rights in respect of a portion of the property. The Deed
records that there were “several claims made by several persons”
and a claim made by one of the original owners of the land. It
states, “There are several encroachments on the larger properties.”
The Deed refers to a suit filed by the Vendor for specific
performance of the earlier Conwood Agreements and states that
the said suit was pending., these disputes and difficulties were not
something which came up after the transaction. They were existing
when the transaction was entered into. The Deed shows that the
Purchaser agreed to purchase the property despite these
difficulties. The Purchaser had inspected the title documents and
the larger properties. The Purchaser agreed to take the property
“on as-is-where-is basis”. The Deed records that the Purchaser
agreed to purchase the properties “with the full knowledge of
existing litigations and encumbrances”. It was agreed that the
pending litigations would be dealt with, settled, prosecuted or
defended by the Purchaser at its own risk, cost and consequences.

20.   The fact that the Purchaser accepted the litigation and
encumbrances does not mean that those matters had no effect on
the value of the property. In fact, the Purchaser was taking the
property together with those burdens. A purchaser would consider
the   risk   of   litigation,   encroachments     and      difficulties      in
development while deciding the price which he is willing to pay.
These circumstances have a bearing on the price which a willing
purchaser would agree to pay. The Deed contains material showing



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how the price of Rs.12 crores came to be agreed. It refers to the
earlier negotiations, the Escrow Agreement and the Resolution
passed in the Special General Meeting of the Society. In particular,
the Deed records that by Resolution dated 15 July 2006 passed at
the Special General Meeting, the offer of the Purchaser of
Rs.12,00,00,000/- for the larger properties was accepted on “as-is-
where-is” basis. This is material existing at the time of the
transaction and shows the circumstances in which the price was
accepted. In these circumstances, the submission of Mr. Godbole
that the property could not have been treated as a clear property
having and unrestricted development potential has substance. The
Deed supports this submission. At the same time, the mere
existence of litigation and encumbrances does not mean that Rs.12
crores must be accepted as the true market value. The authority
was entitled to examine the valuation. But while doing so, it was
required to consider the property in the condition in which it
existed   on   the   relevant   date.   Both    its   advantages         and
disadvantages had to be considered.

21.   This is where the decision in Vimal Agarwal                  becomes
relevant. This Court stated:

      “When the fair market price is to be determined on the basis
      of comparable sale instances, every sale instance relied upon
      by the appropriate authority or by the aggrieved party has to
      be considered on its own merits.”
22.   The same judgment states that the “advantages or
disadvantages” of the property have to be considered and that
suitable adjustments have to be made for the “plus and minus




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factors”. The Court observed that the determination of fair market
value “cannot be a guess work” and “cannot be left to conjectures
and surmises”.

23.   The valuation report relied upon by the authority does not
show that the positive as well as negative features of the property
were considered. The valuation appears to have been made by
giving values to the different plots and arriving at the total figure
of about Rs.52.61 crores. However, the report does not show how
the value was reduced on account of the litigation, encumbrances,
restrictions and other burdens which existed on 9 May 2007.

24.   The   Valuation   Report   dated   17     January       2009      was
provisional. It referred to development rights given to other
developers concerning different portions of the land. It referred to
47 litigations and stated that inputs from the legal officers were
awaited. It referred to deductions and benefits concerning the
slum portion., the report showed that several matters were still
required to be considered before the final valuation could be
made. The second report dated 12 September 2013 was
provisional. It referred to a deduction concerning 23,423 square
metres of land in Plot No.10 because development was under
injunction. The third report dated 6 December 2014 retained the
valuation at about Rs.52.61 crores. The difficulty is that the
material pointed out by the Petitioners concerning the earlier
restrictions and deductions is not shown to have been considered
before the same figure was accepted. The authority has not
explained why the factors which had earlier been considered
relevant for making deductions had later ceased to have any effect



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upon the market value.

25.   The manner in which the valuation report was accepted is
clear from the Impugned Order. In paragraph 4.3, the authority
records:

      “This Authority believes that the said report is proper and
      hence accepts the same.”
26.   Thereafter, in paragraph 4.4, the authority accepts the
valuation of Rs.52,61,54,916/- and proceeds to calculate the
alleged deficit stamp duty. In my view, the statement “believes that
the said report is proper and hence accepts the same” cannot by be
treated as a proper reason for determining the market value. The
question before the authority was whether the valuation stated in
that report represented the true market value of the particular
property conveyed on 9 May 2007. For deciding that question, the
authority was required to consider the objections of the Petitioners,
the condition of the property, the litigations, encroachments,
injunction, development restrictions, existing rights and the other
relevant circumstances appearing from the Deed.

27.   Mr. Kankal submitted that the valuation was prepared by the
Joint Director of Town Planning and Valuation, who is an expert,
and that Rules 3 and 6 of the Maharashtra Stamp (Determination
of True Market Value of Property) Rules, 1995 were followed.
There is no difficulty in accepting that an expert valuation report
can be relevant material. But merely because a report has been
prepared by an expert, every conclusion in that report cannot be
accepted without examination. The authority was still required to




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consider whether the report dealt with the condition of the
property.

28.   Rule 4 refers to classification of properties having regard to
“the type of the land, types of construction, location and
situational advantages or disadvantages of property”. Rule 6
requires consideration of “all the relevant factors and evidence
placed before his” while determining the true market value., the
Rules do not support a method where the possible advantages of
the property are considered but the disadvantages are left out.
Therefore, the submission of Mr. Kankal that the valuation was
made under Rule 3 and Rule 6 cannot be accepted in its entirety.
In the present case, a valuation exercise was undertaken. The
difficulty is that the Impugned Order does not show how the
material disadvantages affecting the property were considered
while arriving at the final figure.

29.   Mr. Kankal relied upon Section 28 and submitted that the
necessary particulars have to be stated in the instrument. In the
present case, the Deed contains material regarding litigation,
encroachments, injunction, earlier development arrangements,
claims and the “as-is-where-is” basis of the transaction. The
authority had material before it from which the condition of the
property could be understood. The submission of Mr. Godbole that
valuation has to be made with reference to the condition of the
property on the relevant date requires consideration. In Ambrish
Tandon, the Supreme Court observed in paragraph 15:




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      “Merely because the property is being used for purpose at
      the later point of time may not be a relevant criterion for
      assessing the value for the purpose of stamp duty. The nature
      of user is relatable to the date of purchase and it is relevant
      for the purpose of calculation of stamp duty.”
30.   The principle which follows is that a later development or
later condition of the property cannot be brought into the earlier
date for increasing the stamp value. What has to be considered is
the condition and relevant circumstances of the property on the
date of the transaction. The same principle is found in Khandaka
Jain Jewellers. In paragraph 20, the Supreme Court stated:

      “What is relevant in fact is the valuation of the property at
      the time of the sale.”
31.   The Supreme Court stated:

      “Therefore, the market value of the instrument has to be
      seen at the time of the execution of the sale deed, and not at
      the time when agreement to sale was entered into.”
32.   Though that case arose under the Rajasthan statute, the
principle regarding the relevant date for valuation is useful in the
present case. The authority has to determine the value relevant to
the transaction under consideration. A later value cannot be
substituted for the value on the relevant date. The Deed does not
show that on 9 May 2007 there was an completed redevelopment
scheme which gave the Purchaser a available development benefit.
On    the   contrary,   the   Deed     records    earlier      development
arrangements, pending litigation and restrictions. A possible future
benefit could not be treated as if it was available to the Purchaser
on the date of the transaction.



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33.   Mr. Godbole submitted that future FSI, TDR and SRA related
benefits could not be treated as an existing asset as on 9 May
2007. There is substance in this submission. A future possibility
cannot be treated as present market value. For obtaining such
future development benefits, different steps and expenditure may
be required. There may be litigation, rehabilitation obligations,
and uncertainty. All these circumstances can affect the price which
a purchaser would be ready to pay on the relevant date. The Deed
shows   these      difficulties.   It    refers   to   pending       litigation,
encroachments and claims. It refers to an injunction in respect of a
portion of the property. The Purchaser accepted the burden of the
pending disputes. The Purchaser accepted the property on “as-is-
where-is” basis.

34.   The importance of such circumstances is held in C.B. Gautam
. In paragraph 30, the Supreme Court observed:

      “There might be some dispute as to the title of the
      immovable property as a result of which it might have to be
      sold at a price lower than the fair market value”
35.   The Supreme Court held that there may be “other genuine
reasons” because of which a property may be sold for a price lower
than the market value.        C.B. Gautam does not hold that every
property having a dispute must be given a fixed percentage of
deduction. That is not the principle. The principle is that where
genuine disadvantages affect the property, those disadvantages are
relevant for deciding the price which a willing purchaser would
agree to pay. The authority cannot determine the value as if such
disadvantages did not exist.



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36.   The reasoning in Vimal Agarwal is to the effect that the
authority has to consider the “plus factors” and “minus factors”
and make suitable adjustments for arriving at the fair market
value.   A   property    having    litigation,      encumbrances           and
development restrictions cannot be treated in the same manner as
a property having clear title and and unrestricted development
potential. Therefore, I find that the valuation in the report dated 6
December 2014, insofar as it proceeds on the higher prospective
value of the different plots without showing corresponding
deductions for the burdens affecting the property, cannot be
accepted as a reliable determination of the true market value.

37.   The Deed records that offers for purchase had been received
and that the Purchaser's offer was the best offer accepted by the
Vendor. The transaction was supported by the Resolution of the
Special General Meeting accepting the offer of Rs.12 crores on “as-
is-where-is” basis. This does not make Rs.12 crores conclusive.
However, it is contemporaneous material showing the price which
was agreed after negotiations and with knowledge of the condition
of the property. The authority has not dealt with this circumstance.
If the Department wanted to reject the negotiated consideration of
Rs.12 crores and replace it by a value of more than Rs.52 crores,
the authority was required to explain why the transaction could
not be relied upon. It was required to explain why the offer
accepted by the Society was not a genuine offer and why the
litigation, encumbrances and other burdens accepted by the
Purchaser did not have an effect on the price. No such exercise is
found in the Impugned Order. There is no finding that the



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transaction was not at arm's length. There is no finding that the
Vendor and Purchaser had colluded to suppress the consideration.
There is no finding that the consideration of Rs.12 crores was
artificial. There is no finding based upon any comparable sale of a
similar property having similar litigation, restrictions and other
conditions which had fetched a higher price.

38.   The fact that the authority obtained a Town Planning Report
does not remove the requirement of proper valuation. As stated in
Vimal Agarwal:

      “The determination of the fair market value must be based
      on evidence on record. It cannot be a guess work. The figure
      of fair market value cannot be left to conjectures and
      surmises.”
39.   In the present case, the record does not show the
comparative exercise and proper adjustments which were
necessary for determining the fair market value.

40.   Mr. Godbole submitted that the 2007 Valuation Guidelines
were wrongly applied and that the appropriate factor was 1.4
times the SDRR base value instead of 1.6 times, along with the
claimed deduction of 15 per cent area. A formula can be applied
only after the correct property and its circumstances are
considered. If the factual basis is not correctly taken, applying a
formula to that basis cannot result in a correct market value.

41.   Mr. Kankal submitted that the annual statement of rates and
the statutory guidelines provide the basis for determining market
value. This can be accepted to the extent that such rates and
guidelines are relevant material. But they cannot be treated as the



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answer in every case, particularly where the property has special
circumstances. The Rules contemplate enquiry and consideration
of other evidence where the true market value cannot be arrived at
only from the statement of rates. In the present case, the litigation,
encroachments, injunction and development difficulties required
consideration. The authority has stated that the objections raised
by the Petitioners were based on factors which were “not
applicable to present case”. But the Impugned Order does not
explain why those factors were not applicable. This is important
because those objections concerned the value of the property. Once
the Petitioners placed before the authority material regarding
litigation, development restrictions and other difficulties, the
authority was required to give reasons for rejecting those
objections.

42.   A fair hearing requires that the material submissions made
by a party be considered.      The authority has to consider the
submissions and documents placed before it and decide whether
they have any effect upon the conclusion. In the present case, the
Petitioners had placed valuation material and written submissions.
But the Impugned Order does not show a consideration of that
material against the Department's valuation report.

43.   I have considered whether the existence of several litigations
and encumbrances is sufficient to hold that Rs.12 crores was the
true market value. The existence of these difficulties does not
establish the figure of Rs.12 crores. These factors were required to
be considered while determining the true market value. The
Department has not shown that they were considered in the



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manner required by the valuation principles.

44.   I have considered the submission that future redevelopment
potential may have some value in the market. That submission
cannot be rejected. A purchaser may be willing to pay something
for future potential. But such potential cannot be treated as a
present and certain benefit without considering the uncertainty,
expenses, delay, legal difficulties and other conditions which may
come in the way of obtaining that benefit. In the present case, the
valuation report does not show that this exercise was undertaken.
The Court has to determine the true market value of the property
on the relevant date. The Court is not required to decide what the
property could become after several years. Future development
possibility could be considered only to the extent that a willing
purchaser, knowing the existing difficulties, would have taken that
possibility into account while agreeing to the price.

45.   The Deed shows that the Purchaser was taking considerable
risks. It records pending litigation, encroachments, claims and the
obligation of the Purchaser to deal with those matters at its own
risk. These matters would affect the decision of a purchaser. A
purchaser would not pay for future benefits as if those benefits
were certain.

46.   The Impugned Order suffers from a basic difficulty. The
method of valuation gives a picture of the property as though its
development potential was readily available. The Deed shows that
obstacles existed. The valuation gives importance to the possible
future benefit but does not show corresponding consideration of




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the existing difficulties.

47.   I find that the authority has not dealt with the several
litigations referred to in the material. The Deed states that “There
are above 45 suits filed by and against the Vendor”. The valuation
material referred to 47 litigations. There may be some difference
in the number because the documents may relate to different dates
or different categories of proceedings. That difference is not
necessary for deciding the present matter. What is important is that
a number of litigations existed and their effect upon the market
value had to be considered. The same reasons apply to the
injunction affecting the concerned portion. The Deed records the
injunction concerning 28,000 square yards. The later valuation
material held development restrictions concerning Plot No.10.
Land which is subject to such restriction cannot be valued in the
same manner as unrestricted land without considering the effect of
that restriction upon its market value.

48.   Mr. Kankal submitted that the authority had given several
opportunities of hearing to the Petitioners. To that limited extent,
the submission can be accepted. The Impugned Order records
several dates on which the matter was taken up for hearing. The
question    before   this    Court   is   whether   the    order      shows
consideration of the objections and documents placed by the
Petitioners. In my view, it does not.

49.   The final conclusion of the authority is that the report is
“proper” and it is accepted. This cannot be treated as sufficient
when the earlier reports contained qualifications and provisional




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aspects and when the Petitioners had raised specific objections
regarding    the    valuation.   The   authority   was      required       to
independently determine the market value. It could not accept the
latest figure because it appeared in the latest report.

50.   I find that the Department has not established from the
material on record that Rs.52,61,54,916/- was the true market
value of the property on the relevant date. The said figure is not
supported by proper consideration of the condition of the property
and the disadvantages affecting it. Consequently, the demand of
Rs.2,03,07,750/- towards alleged deficit stamp duty cannot be
sustained.

51.   As regards the original valuation of Rs.12 crores, there is
contemporaneous material supporting the same. The Collector had
determined the market value at Rs.12 crores and stamp duty of
Rs.60 lakhs was paid. The Deed records the offer of Rs.12 crores,
its acceptance by the Society, the “as-is-where-is” basis of the
transaction and the Purchaser's acceptance of the existing litigation
and encumbrances. I am conscious that merely because the
Collector had earlier adjudicated the document, such adjudication
does not become beyond the statutory power of revision. The
existence of an earlier valuation cannot prevent a later
examination. However, where the revised authority seeks to
replace the earlier adjudicated value of Rs.12 crores by a figure of
more than Rs.52 crores, the material before the authority must
show why the earlier valuation was wrong and why the new figure
represents the true market value. Such an exercise is not found in
the present case.



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52.   Considering the material as a whole, I find that the figure of
Rs.12 crores is supported by the transaction between the parties,
the contemporaneous offer accepted by the Society, the Special
General Meeting Resolution, the “as-is-where-is” basis and the
known litigation and encumbrances. The Department has not
placed on record any comparable transaction concerning a
property having similar burdens which would justify replacing the
value of Rs.12 crores by Rs.52.61 crores. I hold that the market
value of the subject property for the purpose of the Conveyance
cannot be enhanced to Rs.52,61,54,916/- on the basis of the
Valuation Report dated 6 December 2014. The valuation made by
the Collector at Rs.12 crores has not been displaced by sufficient
and reasoned material. The stamp duty remains payable on the
value of Rs.12 crores as adjudicated.

53.   For all these reasons, the Impugned Order dated 15
September 2015 cannot be sustained on merits. The finding that
the market value of the property was Rs.52,61,54,916/- and the
consequential demand of Rs.2,03,07,750/- towards deficit stamp
duty are liable to be quashed and set aside. The original
adjudication made by the Collector of Stamps, determining the
market value at Rs.12 crores and the stamp duty at Rs.60 lakhs,
stands restored.

54.   In view of the foregoing discussion, and upon overall
assessment of the material record, the following order is passed:

      i)    The writ petition is allowed;

      ii)   The impugned order dated 15 september 2015 passed



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by respondent no. 2 is quashed and set aside;

iii)   The petitioners shall be entitled to withdraw the
amount deposited by them in this Court in furtherance of the
order dated 27 october 2015, together with the interest
accrued thereon, if any. The amount shall be permitted to be
withdrawn by the petitioners upon due verification by the
registry;

iv)    The question regarding limitation under section 53a of
the Maharashtra Stamp Act, 1958 is kept open and is not
decided by this court;

v)     The petition is disposed of in the above terms. There
shall be no order as to costs.

vi)    In view of disposal of the Writ Petition, all pending
interlocutory application(s) stand disposed of as infructuous.


                                       (AMIT BORKAR, J.)




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