THE GOVT. OF TAMIL NADUversusPV. ENTER. REP. BY SCM JAMALUDEEN AND ORS.

A                          THE GOVT. OF TAMIL NADU
                                            v.
             PV. ENTER. REP. BY SCM JAMALUDEEN AND ORS.

                                NOVEMBER 21, 2000

B          [UMESH C. BANERJEE AND K.G. BALAKRlSHNAN, JJ.]


        Indian Stamp Act, 1899-Section 27, 35, 47A-Circular issued by
  State directing the authorities to register documents after inspection of
C property (Ind collection of amount-Validity of-Held, violative of the
  provisions of the Act-Tamil Nadu Stamp (Prevention of Under Valuation of
  Instruments) Rules, 1968-Rule 3.3.

           State issued a circular directing the authorities to refuse registration
    of documents relating to property if, after inspection, the value disclosed is
D   found undervalued and that registration should be done only after collecting
    the stamp duty on correct valuation. Respondents challenged the circular by
    filing writ petitions before the High Court, as being violative of section 47 A
    of the Indian Stamp Act, 1899. The High Court quashed the circular holding
    that the circular was violative of the provisions of the Act. Hence the appeals
    by the State.
E
           Appellant-State contended that section 27 read with section 35 of the
    Indian Stamp Act, 1899 does not prevent the State from issuing circular to
    inspect building and collection of amount before registration and that there
    is existing legislative sanction in that regard.

F         Dismissing the appeals, the Court

          HELD: I.I. On a close scrutiny of the statute, it is not accepted by reason
    of the provisions of Section 47 A read with Rule 4 of the Tamil Nadu Stamp
    (Prevention of Under-Valuation of Instruments) Rules, 1968 framed under
    Sections 47A and 75 of the Indian Stamp Act. Section 47A has been engrafted
G   in the statute book for the State of Tamil Nadu only, obviously to meet the
    exigencies of the situation in the State. A plain reading of section 47 A
    categorically provides the methods to be taken recourse to in the event of
    instrument of conveyance stands undervalued. [14-B[

          1.2. The body of section 47A of the Indian Stamp Act, 1899 in any event
H                                          10
         GOVT OF TAMIL NADU v.PV. ENTER. REP BY SCM JAMALUDEEN                   11

  expressly records a situation after registration and not at a stage prior            A
· thereto. The intent of the Legislature in the matter of placement of sections
  also needs to be gone into since a later section will carry its effectiveness in
  the event of contra intention expressed in an earlier provision of the statute.
  The law is well settled on this score and there is no need to dilate any further
  but the factum of the refusal to register by reason of undervaluation in terms       B
  of Section 47 A cannot stand scrutiny of acceptance having regard to the
  language used therein. The legislative intent as expressed in Section 35
  stands clear to the fact that refusal to register is not permissible in terms
  thereof. Section 35 is a provision to cater for the instruments not being
  properly stamped and as such being inadmissible in evidence. It is not that
  the legislature was not aware of stamp duty but a special power has been             C
  conferred on to the registrar in that regard and the Collector has been
  empowered to impose appropriate fees and stamp duty in terms of provision of
  Section 38 read With Sections 39 and 40 of the Act. The powers of the collector
  as specified therein stands in an unambiguous situation as the final authority
  in the matter of assessment of the duty leviable thereon and that is precisely
  the reason as to why the State legislature engrafted Section 47 A and                D
  specifically records in the statute that steps to be taken only after registration
  of such an instrument. It can thus conclusively be said that there exists a
  categorical expression of legislative intent in regard to the registration of
  the document - the registration is effected subject to the condition as provided
  in the statute itself with proper safeguard being taken note by the legislature      E
  and contra expression of opinion would run counter to the legislative intent
  which is otherwise not permissible in law. 115-H; 16-A-Dl

       1.3. Rule 3.3 of the Tamil Nadu Stamp (Prevention of Under-Valuation
of Instruments) Rules, 1968 authorises the registering officer for the purpose
of the assessment of the market value but the rule by itself does not suggest          F
that the registration of a document is dependent on the recording of satisfaction
pertaining to the evidence received. As a matter of fact the rule cannot possibly
be read to provide the same, since that would be contra to the statute and it is
in this perspective that the circular was stated to be beyond the executive power.
                                                                            116-HI G
       1.4. While it is true that the Government revenue should be protected
and there cannot be any exception, provided however, the same is otherwise in
consonance with the principles of law and not de hors the same. The statute
itself expressly provides that it is only after registration that the Registrar
or an officer authorised in that behalf can take certain steps and on the wake         H
     12                       SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A of such a statutory provision, the question of taking steps before the
    registration does not and cannot arise and it is this conclusion which has
    prompted the High Court to decry the validity of the circular. The judgment
    decrying the validity of the circular cannot possible be faulted in any way
    whatsoever. j18-B-Cj

B            Mh Park View Enterprises and Ors. v. State ofTamilnadu and Ors., AIR
    (1990) Madras 251, referred to.


     1990.
             CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 5656-5914 of              -
C        From the Judgment and Order dated 18.10.89 of the Madras High Court
   in W.P. Nos. 16147-48/88, 68,603, 639, 1266, 1419, 1523, 1683-85, 1776-78, 1789,
   1821-23, 1827-29, 1836-37, 1928, 1946-56,2117,2168,2214,2238,236!-64,2468-
   69,2532-34,2562,2566.2667-70,2739,2785,2867,2869,2878-80,2883-85,2915,
   2961, 2966, 2967, 3004, 3019-21, 3041-43, 3046-47, 3051-55, 3118-19, 3125, 3130,
I) 3131-39, 3173,3175,3236,3237,3250-52,3258,3262,3281,3291,3313-3317,
   3320,3411,3412,3517,3525,3561,3626,3632,3653,3659,3721,3728,3732,
   3855, 3863-66, 3868, 3879-82, 3889, 3894, 391I,3925, 3953, 3991, 3993, 3995,
   4022,4044,4045,4049,4075,4!35-38,4199,4210-19,4252-54,4293,4294,4360-
   65,4375,4440,4481-91,4497,4498,4505,4540-56,4559,4560,4571,4612,4629,
   4643-45, 4661, 4701, 4741, 4770, 4771, 4860, 4886-93, 4905-13, 4974, 5057, 5116,
f: 5143,5165,5207,5217,5265,5269,5282,5309,5350-51,5360,5776,S812,5866,
   7492, 8766, 8774, 8776, 9206, 9208, I004 7-49, I0068, I0399 and 10396 of I989.

                                            WITH

             Civil Appeal Nos. 5914-E/1990 and 4597/1997.
F
          R. Mohan, R. Sundaravardan, V. Krishnamurthy, P.R. Kovilan, K. Swami,
    Ashok Kumar Singh for Ms. Lata Krishnamurthi and Y. Suveer for S. Srinivasan
    for the appearing parties.

             The Judgment of the Court was delivered by
G
           BANERJEE, J. The State Government is in appeal against the judgment
    of the High Coutt wherein Article 5(i) of the Indian Stamp Act stands challenged
    together with a circular being No. 67296/C 1188 dated 9th December, 1988 :
    whereas the High Court has approved the validity of the statutory provisions
    but it has expressed its negation to the validity of the circular dated 9th
H   December, I 988 and it is in that regard that the State has come up in appeal
 GOVT. OF TAMIL NADU 1· PY ENTER REP. BY SCM JAMALCDEEN [BANERJEE, J ]        ]3

before this Court by the grant of special leave.                                    A
     Since the challenge is restricted to the circular as noticed above the
scope of the appeal also thus stands restricted and limited.

       Before, however, adverting to the rival contention, two basic canons of
statutory interpretation ought to be noted : firstly avoidance of redundancy        B
by the legislature and the second count pertains to the limitation of exercise
of jurisdiction so far as the law court is concerned since the law court ought
not to embark upon the inquiry of legislative intent.

      The learned senior advocate Mr. Mohan appearing for the State
Government in support of the appeal very strongly contended that by reason          C
of the provisions of Section 27 read with Section 35, question of their being
any embargo in the matter of issuance of circular directing the Inspector
General of Registration to have an inspection of building prior to registration
does not and cannot arise and there is exisfr.1g appropriate legislative sanction
in that regard. The submission on the first blush seems to be rather attractive     D
and it is on this score that Sections 27 and 35 ought to be noticed for
ascertaining the true scope and effect. The Sections read as below:

      "Section 27

        Facts affecting duty to be set forth in instrument-The consideration        E
        (if any) and the market value and all other facts and circumstances
        affecting the chargeability of any instrument with which it is chargeable
        shall be fully and truly set forth therein."

      "Section 35
                                                                                    F
        Instrument not duly stamped inadmissible in evidence, etc.-

            No instrument chargeable with duty shall be admitted in Evidence
        for any purpose by any person having by law or consent of parties
        authority to receive evidence, or shall be acted upon, r·egistered or
        authenticated by any such person or by any public officer, unless           G
        such instrument is duly stamped:

        Provided that :-


                                                                                    H
    14                       SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A          Having regard to .the language of the Sections the learned senior
    Advocate contented that the expression used by the legislature is 'registered'
    as such it is a step before registration and thus empowering the authority to
    refuse registration. On a close scrutiny of the statute, however, we record our
    inability to concur with the submissions, more so by reason of the provisions
B   of Section 47 A, read with Rule 4 of the Tamil Nadu Stamp (Prevention of
    Under-Valuation of Instruments) Rules, 1968 framed under Sections 4 7A and
    75 of the Indian Stamp Act. Section 47 A has been engrafted in the statute
    book for the State of Tamil Nadu only, obviously to meet the exigencies of
    the situation in the State. Section 47 A reads as below :

C          "Section 47 A : Instrument of conveyance etc., under-valued how to
           be dealt with -

            (I) 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,
D           has reason to believe that the market value of the property which is
           the subject matter of 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. (Emphasised)
E
           (2) On receipt of a reference under sub-section (I) , the collector shall,
           after giving the parties a 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
F          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,
G
           gift, release of benami right or settlement not already referred to him
           under sub-section (I), 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
H          and if after such examination, he has reason to believe that the market.
l



      GOVT. OF TA\1!L NADU v.PV. ENTER. REP. BY SCM JAMALUDEEN [BANERJEE, J.J     JS

             value of the property has not been truly set forth in the instrument,     A
             he may detennine 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 person liable to pay the duty:

                 Provided that nothing in this sub- section shall apply to any         B
             instrument registered before the date of commencement of the Indian
             Stamp (Madras 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, pay such duty within
             such period as may be prescribed. In default of such payment, such        C
             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 the amount due, interest at two
             percent per month on such amount for the entire period of default.        D
            ----·-------------,,
          A plain reading of this Section (47-A) thus categorically provides the
    methods to be taken recourse to in the event of instrument of conveyance
    stands under valued. The heading of the Section is very opposite with the
    content and indicative of the true intent of the legislature. The heading reads    E
    as under :

         "Section 47-A : Instruments of conveyance etc., under-valued how to
    be dealt with."

           The body of this section in any event expressly records a situation after F
    registration and not at a stage prior thereto. In the event of acceptance of
    submission of Mr. Mohan then it cannot but be said to be a duplication of
    statutory provision which as noticed above de hors one of the methods of
    interpretation of statutes. The factum of the instrument being referred to the
    collector for determination of the market value of such property runs totally G
    counter to the submission made in support of the appeal.

          The intent of the legislature in the matter of placement of sections also
    needs to be gone into since a later section will carry its effectiveness in the
    event of contra intention expressed in an earlier provision of the statute. The
    law is well settled on this score and we need not dilate thereon any further       H
    16                      SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A   but the factum of the refusal to register by reason of under valuation in terms
    of Section 4 7 A cannot stand scrutiny of acceptance having regard to the
    language used therein. The legislative intent as expressed in Section 35
    stands clear to the fact that refusal to register is not permissible in terms
    therewith. Section 35 is a provision to cater for the instruments not being
B   properly stamped and as such being inadmissible in evidence. It is not that
    the legislature was not aware of the stamp duty but a special power has been
    conferred on to the registrar in that regard and the collector has been
    empowered to impose appropriate fees and stamp duty in terms of provision
    of Section 38 read with Sections 39 and 40 of the Act. The powers of the
    collector as specified therein stands in an unambiguous situation as the final
C   authority in the matter of assessment of the duty leviable thereon and that
    is precisely the reason as to why the State legi5lature engrafted Section 47
    A and specifically records in the statute that steps to be taken only after
    registration of such an instrument. It can thus conclusively be said that there
     is existing a categorical expression of legislative intent in regard to the
    registration of the document--the registration is effected subject to the
D   condition as provided in the statute itself with proper safeguard being taken
     note by the legislature and contra expression of opinion would run counter
    to the legislative intent which is otherwise not permissible in law.

          Incidentally, the Tamil Nadu Stamp (Prevention of Under-Valuation of
E   Instruments) Rules, 1968 were framed on 22nd April, 1968 in terms of the
    provision of Section 47 A read with Section 75 of the Indian Stamp Act. The
    Rules prescribe as to the circumstances under which the authority ought to
    calculate the market value of the property as required under Section 27 of the
    Act and the functions of the Registering Authority on that count. Specific
    reference has, however, been made to Rule 3.3 which reads as under:
F               "Rule 3.3: The registering officer may, for the purpose of finding
            out whether the market value has been correctly furnished in the
            instrument, make such enquiries as he may deem fit. He may elicit from
            the parties concerned any information bearing on the subject and call
            for and examine any records kept with any public officer or authority."
G          The Rule noted above authorises the registering officer for the purpose      r
                                                                                        )
    of the assessment of the market value but the rule by itself does not suggest
    that the registration of a document is dependent on the recording of satisfaction
    pertaining to the evidence received in terms therewith. As a matter of fact the
    rule cannot possibly be read to provide the same, since that would be contra
H   to the statute and it is in this perspective that the circular was stated to be
 GOVT. OF TAMIL NADU v.PV. ENTER. REP BY SCM JAMA LC DEEN [BANER.IEE,J.]          J7

beyond the executive power and for true appreciation of the submissions it              A
would be convenient to note relevant extracts of the circular at this juncture,
The circular reads as below:-

        " ............. Article 5(1) was inserted enabling levy of 13% on the cost of
        the proposed construction in respect of properties situated in Chennai,
        Madurai, Coimbatore, Sale and Trichirapalli Municipal towns and 12%             B
        in respect of other areas. In view of this amendment levy of 13%
        stamp duty on the value of undivided share of the land and another
        13% stamp duty on the value of construction affected in the agreement
        will replace the practice of levy of 13% on the value of the undivided
        share of land and Rs. 2.5 for agreement. The large scale registration           C
        of such documents in Chennai was brought to the notice of the I.G.R.
        In order to prevent loss of revenue by way of stamp duty to the
        Government the following instructions are issued.

        In all cases of documents presented for registration involving undivided
        share of lands relating to multi storeyed buildings, such documents             D
        shall be kept pending and reference made to the 0.1.G. 's with the copy
        of the documents. The D.l.G. shall inspect the property and find
        whether such documents come under the purview of the amended Act
        38/87 or the facts relating to the building has been suppressed against
        Section 27 and instruct the sub-registrar to register the document
        accordingly. In case of short levy of stamp duty such document shall            E
        be registered only after collecting the duty.

        This circular comes to effect immediately. The sub-registrars are
        instructed to function without allowing room for complaint. The receipt
        of the circular shall be acknowledged immediately."
                                                                                        F
      The circular, thus, in no uncertain terms provides registration only upon
collection of duty and it is this circular which stands challenged as in excess
of the powers conferred in terms of the provisions of Section 47 A read with
Section 75. The circular itself records " ........... such document shall be registered
only after collecting the duty ......... ". This particular insertion has prompted the G
parties, the writ petitioner being the appellants herein to move the court as
the same is violative of Section 47(A). The High Court while dealing with the
matter expressly dealt with the issue rather elaborately and came to the
conclusion that the circular cannot be possibly said to be within the powers
conferred in terms of the provisions of Section 47 A. The High Court also
came to the conclusion that Article 5(!) by itself does not authorise issuance H
    18                        SUPRE:v!E COURT REPORTS 120001SUPP.5 S.C.R.

A of the circular to the effect of having an embargo in the matter of registration.
            The learned senior Advocate, however, impressed upon the Court the
    large scale activities in the matter of avoidance of stamp duty now being
    practiced in the State and the circular has been introduced only to avoid such
    avoidance of stamp duty. While it is true that the Government n:venue should
B   be protected and there cannot be any exception provided. however, the same
    is otherwise in consonance with the principles of law and not de hors the
    same. The statute itself expressly provides that it is only after registration that
    the Registrar or an officer authorised in that behalf can take certain steps and
    on the wake of such a statutory provision question taking steps before the
C   registration does not and cannot arise and it is this conclusion which has
    prompted the High Court to decry the validity of the circular. We also think
    it fit to lend our concurrence therewith. The judgment decrying the validity
    of the circular cannot possibly be faulted in any way whatsoever.

           Mr. Mohan next contended that the conclusions as recorded in paragraph
D   97 of the judgment in Mis. Park View Enterprises & Ors. v. State of Tamilnadu
    & Ors., AIR (1990) Madras 251 at 30 I however, cannot in any event be
    sustained since they tantamount to the issuance of a mandamus. While it is
    trne that the direction of the nature as contained in sub paragraphs 1-16 under
    paragraph 97 may be with a bit of stretch can be termed to be so but they
    themselves do not pose any difficulty in the matter of their implementation.
E   In any event, however, since, some contentions have been raised in that
    regard and to avoid all future confusions we would clarify the same by
    recording that the concerned authority ought to act in accordance with the
    provisions of law and the same thus stands substituted for paragraphs noted
    above. With that clarification, the appeals are dismissed with however no
F   order as to costs.

           Civil Appeal Nos. 5914 A-E/1990 and 4597/1997.

         In view of the above judgment, these appeals are also dismissed with
    no order as to costs.
G
    B.S.                                                         Appeals dismissed.