State of Haryana Ors. Vs. Manoj Kumar  INSC 193 (9 March 2010)
Judgement IN THE
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 2226 OF
2010 [Arising out of Special Leave to Appeal (C) No.26684 of 2008] State of
Haryana & Ors. ... Appellants Versus Manoj Kumar ... Respondent
This appeal is directed against the judgment dated 4.2.2008 passed
by the Division Bench of the High Court of Punjab & Haryana at Chandigarh
in a Civil Writ Petition No. 12094 of 2007.
The appellants are aggrieved by the impugned judgment of the High
Court by which the High Court has set aside the 2 concurrent findings of courts
below while exercising its extraordinary jurisdiction under Article 227 of the
Constitution of India.
Brief facts which are necessary to dispose of this appeal are as
On 10.11.1999, an agreement to sell a commercial plot measuring
788 sq.yards located on Delhi-Mathura Mewla Maharajpur, Faridabad was executed
by Smt. Manjula Gulati in favour of respondent, Manoj Kumar. The entire sale
consideration was paid and the actual possession was also given, but the sale
deed was not executed till 9.2.2001.
According to the appellants, in order to evade substantial stamp duty,
the respondent filed a suit, without impleading the appellants as parties to
the suit, for specific performance of agreement to sell dated 10.11.1999
executed by Smt. Gulati for the sale of property measuring 788 sq.yards for a
total consideration of Rs.1,95,000/-. The suit was promptly decreed in favour
of the respondent by the Civil Judge (Junior Division), Faridabad. The suit as
a matter of fact was filed on 3 14.9.2000 and decreed on 9.2.2001 and no
further appeal was filed which clearly indicated that the suit was filed
between the parties only with the purpose to evade the substantial stamp duty.
The court directed its Reader to execute the decree and get the sale deed
registered in favour of the respondent. The Reader of the court at the court's direction
appeared before the Sub Registrar on 9.2.2001 and got the sale deed registered
in favour of the respondent for the property for a sale consideration of
Rs.2,00,000/-. According to the appellants, the court decree was obtained by
concealing the material facts in order to evade the actual payable stamp duty.
According to the appellants, the Joint Sub Registrar, Faridabad
made a report that the sale deed executed on 9.2.2001 by respondent Manoj Kumar
and the owner Manjula Gulati was under-valued. According to him, no sale deed
can be registered for an amount which is less than the amount fixed by the
collector or the circle rate (Rs.4,200/- per Sq.Yard).
The total value of the land at the rate of Rs.4,200/- per Sq.Yard
works out to be Rs.33,09,600/-. On that amount, 4 the stamp duty registration
charges of the sale deed payable would be Rs.5,13,050/-. In the instant case,
the respondent has only paid Rs.31,000/- towards the stamp duty which was
The District Collector, Faridabad in his order directed the
respondent to make payment of difference of the amount of stamp duty amounting
The interpretation of amended section 47(A) of the Haryana Act has
to be in consonance with the notified circle rates and any value fixed below
that would be in direct conflict with the prevalent law of the land and,
therefore, liable to be struck down by the authorities.
Section 47-A of the Haryana Amendment to Stamp Act, as applicable
to the parties, reads as under:- S.47-A. - Instruments under-valued, how to be
dealt with. - (1) If the Registering Officer appointed under the Registration Act,
1908, while registering any instrument transferring
any property, has reason to believe that the value of the property or the
consideration, as the case may be, 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 value or consideration, as the case may be,
and the proper duty payable thereon.
5 (2) On
receipt of reference under sub-section (1), 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 value or consideration and the duty as aforesaid and the
deficient amount of duty, if any, shall be payable by the person liable to pay
Collector may suo motu, or on receipt of reference from the Inspector-General
of Registration or the Registrar of a district, in whose jurisdiction the
property or any portion thereof, which is the subject- matter of the instrument
is situate, appointed under the Registration Act,
1908, shall, within three years from the date of registration of any
instrument, 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 its value or consideration, as the case may be, and the duty
payable thereon and if after such examination, he has reasons to believe that
the value or consideration has not been truly set forth in the instrument, he may
determine the value or consideration and the duty as aforesaid in accordance
with the procedure provided for in sub-section (2); and the deficient amount of
duty, if any, shall be payable by the person liable to pay the duty.
According to the District Collector, Faridabad the respondent did
not truly set-forth the true value in the instrument, therefore, order under
section 47-A was passed against him.
The respondent aggrieved by the said order of the District
Collector filed an appeal before the Commissioner, Gurgaon 6 Division, Gurgaon
(Haryana) challenging the order dated 6.12.2005. The Commissioner by order
dated 8.6.2007 dismissed the appeal by holding that the Collector rate or
circle rate prescribed for sale of land in village Mewla Maharajpur of
commercial nature was Rs.4,200/- per sq.yard and the respondent was directed to
pay the balance amount of stamp duty.
The respondent aggrieved by the said order of the Commissioner
preferred a Civil Writ Petition No.12094 of 2007 before the High Court of
Punjab and Haryana.
The High Court while exercising its jurisdiction under Article 227
of the Constitution has set aside the concurrent findings of facts of the
courts below and observed that "where the specific performance of contract
in respect of immovable property has been granted, the ostensible sale price
given in the transfer deed is to be accepted by the Registering
According to the High Court, this was done primarily on the two
grounds, firstly, "because the court has accepted that price and has
decreed the suit for specific performance";
secondly, "there cannot be any opportunity with the vendee to fabricate an
agreement of sale for showing the incorrect sale price because litigating
parties would not ordinarily reach such an agreement and sign the fabricated
The High Court further observed that "the authenticity of the
decree passed by the court cannot be questioned.
the genuineness of the sale price has to be presumed."
The appellants were not parties in the first place in the said
suit and, therefore, either in law or on facts could not be bound by such a
decree hence, such observation and finding on the fact of it is illegal and
liable to set aside.
The High Court in the impugned judgment has set aside the
concurrent findings of fact of the courts below. The appellants aggrieved by
the impugned judgment of the High Court have preferred this appeal. The
appellants are particularly aggrieved by the observations of the High Court
that "the authenticity of the decree passed by the court cannot be
questioned. Therefore, the genuineness of the sale price has to be
According to the appellants, the High Court failed to appreciate
that the respondent had intentionally evaded payment of the true stamp duty.
The circle rate or the collector rate for the sale of commercial plot of 788
sq.yards was Rs.5,13,050 whereas the respondent paid only Rs.31,000/-. Hence
the respondent was under the bounden obligation to pay the balance amount of
The appellants also urged that when the respondent had paid the
full amount of sale consideration on 10.11.1999, then why was the sale deed
executed only on 9.2.2001? The respondent has given no explanation for
non-registration of sale deed for such a long time.
The appellants urged that the jurisdiction of the High Court under
Article 227 is very limited and the High Court, while exercising the
jurisdiction under Article 227, has to ensure that the courts below work within
the bounds of their authority.
More than half a century ago, the Constitution Bench of this court
in Nagendra Nath Bora and Another v. 9 Commissioner of Hills Division and
Appeals, Assam & Others AIR 1958 SC 398 settled that power under Article
227 is limited to seeing that the courts below function within the limit of its
authority or jurisdiction.
This court placed reliance on Nagendra Nath's case in a subsequent
judgment in Nibaran Chandra Bag v. Mahendra Nath Ghughu AIR 1963 SC 1895. The
court observed that jurisdiction conferred under Article 227 is not by any
means appellate in its nature for correcting errors in the decisions of
subordinate courts or tribunals but is merely a power of superintendence to be
used to keep them within the bounds of their authority.
This court had an occasion to examine this aspect of the matter in
the case of Mohd. Yunus v. Mohd. Mustaqim & Others (1983) 4 SCC 566 . The
court observed as under:- "The supervisory jurisdiction conferred on the
High Courts under Article 227 of the Constitution is limited "to seeing
that an inferior Court or Tribunal functions within the limits of its
authority," and not to correct an error apparent on the face of the
record, much less an error of law. for this case there was, in our opinion, no
error of law much less an error apparent on the face of the record. There was
no failure on the part of the learned Subordinate Judge to exercise
jurisdiction nor did he act in 10 disregard of principles of natural justice.
Nor was the procedure adopted by him not in consonance with the procedure
established by law. In exercising the supervisory power under Article 227, the
High Court does not act as an Appellate Court or Tribunal. It will not review
or reweigh the evidence upon which the determination of the inferior court or
tribunal purports to be based or to correct errors of law in the
This court again clearly reiterated the legal position in
Laxmikant Revchand Bhojwani & Another v. Pratapsing Mohansingh Pardeshi
(1995) 6 SCC 576. The court again cautioned that the High Court under Article
227 of the Constitution cannot assume unlimited prerogative to correct all
species of hardship or wrong decisions. It must be restricted to cases of grave
dereliction of duty and flagrant abuse of fundamental principles of law or
justice, where grave injustice would be done unless the High Court interferes.
A three-Judge Bench of this court in Rena Drego (Mrs.) v. Lalchand
Soni & Others (1998) 3 SCC 341 again abundantly made it clear that the High
Court cannot interfere with the findings of fact recorded by the subordinate
court or the tribunal while exercising its jurisdiction under Article 227.
function is limited to seeing that the subordinate court or 11 the tribunal
functions within the limits of its authority. It cannot correct mere errors of
fact by examining the evidence and re-appreciating it.
In Virendra Kashinath Ravat & Another v. Vinayak N. Joshi
& Others (1999) 1 SCC 47 this court held that the limited power under
Article 227 cannot be invoked except for ensuring that the subordinate courts
function within its limits.
This court over 50 years has been consistently observing that
limited jurisdiction of the High Court under Article 227 cannot be exercised by
interfering with the findings of fact and set aside the judgments of the courts
below on merit.
According to the appellants, the High Court was not justified in
interfering with the findings of fact of the courts below. Consequently, the
impugned judgment of the High Court is totally unsustainable.
Mr. Manoj Swarup, Advocate appearing on behalf of the respondent
supported the impugned judgment. According to him, the enquiry under section
47-A is confined to whether value has not been truly set forth in the
According to him, the Legislature has expressed its intention clearly by
emphasizing the detail i.e. that value as set forth in the instrument. Or else,
the Legislature would have used the terminology `market value' or `circle
Mr. Swarup placed reliance on State of Punjab & Others v.
Mohabir Singh etc.etc. (1996) 1 SCC 609. This Court in this case held as under:
It will be only on objective satisfaction that the Authority has to reach a
reasonable belief that the instrument relating to the transfer or property has
not been truly set forth or valued or consideration mentioned when it is
presented for registration......
would thus be seen that the aforesaid guidelines would inhibit the Registering
Authority to exercise his quasi-judicial satisfaction of the true value of the
property or consideration reflected in the instrument presented before him for
registration. The statutory language clearly indicates that as and when such an
instrument is presented for registration, the sub-Registrar is required to
satisfy himself, before registering the document, whether true price is
reflected in the instrument as it prevails in the locality..........."
Mr. Swarup further submitted "that circle rates have been
held to constitute only one of the factors to be taken into consideration.
Circle rates cannot be regarded as the last 13 word on the subject. This Court
in the case of R. Sai Bharathi v. J. Jayalalitha & Others (2004) 2 SCC 9
held that:- "22.....The authorities cannot regard the guideline valuation
as the last word on the subject of market value....."
is clear, therefore, that guideline value is not sacrosanct as urged on behalf
of the appellants, but only a factor to be taken note of if at all available in
respect of an area in which the property transferred lies........."
In the light of the above it is submitted that circle rates could
have been taken as one of the factors and not the last word on the subject. The
other factors being:- i) the price agreed upon between the vendor and the
vendee ii) whether it was a distress sale iii) whether the price in the local
area had gone down/escalated - at the time of the sale iv) Other relevant
It is submitted that these other factors have not been considered,
not even noticed by the Authority under the Act."
We have heard the learned counsel for the parties at length. We
are clearly of the opinion that the High Court, in the impugned judgment, has
erred in interfering with the 14 concurrent findings of fact of the courts
below under its limited jurisdiction under Article 227 of the Constitution. The
High Court erroneously observed that the "the authenticity of the decree
passed by the court cannot be questioned.
the genuineness of the sale price has to be presumed." This finding of the
High Court cannot be sustained. It would have far reaching ramifications and
consequences. If the genuineness of the sale price entered into by the buyer
and the seller cannot be questioned, then in majority of the cases it is
unlikely that the State would ever receive the stamp duty according to the
circle rate or the collector rate. The approach of the High Court is totally
The High Court in the impugned judgment has also erroneously
observed that "there cannot be any opportunity with the vendee to
fabricate an agreement of sale for showing the incorrect sale price because the
litigating parties would not ordinarily reach such an agreement and sign the
The High Court gravely erred in not properly comprehending the
facts of this case in proper perspective and which has led to grave miscarriage
It is not disputed that the commercial plot of 788 sq.yards
located at Delhi-Mathura Mewla Maharajpur, Faridabad was valued by the Circle
rate at Rs.4,200 per sq. yard fixed by the Collector of Faridabad meaning
thereby that after the notification, no sale deed can be registered for an
amount lesser than Rs.4,200/- per sq.yard. It may be pertinent to mention that,
in order to ensure that there is no evasion of stamp duty, circle rates are
fixed from time to time and the notification is issued to that effect. The
issuance of said notification has become imperative to arrest the tendency of
evading the payment of actual stamp duty. It is a matter of common knowledge
that usually the circle rate or the collector rate is lower than the prevalent
actual market rate but to ensure registration of sale deeds at least at the
circle rates or the collector rates such notifications are issued from time to
time by the appellants.
In the impugned judgment, the High Court has not properly
construed the observations of the District Collector, Faridabad in which he has
clearly stated as under :- "It appears that the suit has been filed in the
Civil Court and decree passed with the intention to avoid tax and stamp duty to
be paid to the Government, because when respondent had paid entire sale
consideration to the vendor, then he should have got the sale deed also
executed at that time, whereas the same has not been done. Therefore, keeping
into consideration the above facts, I come to this conclusion that sale deed
No.11200 dated 9.2.2001 has been executed in respect of land measuring 788
sq.yard situated in village Mewla Maharajpur, which abuts Delhi Mathur Road.
This plot is commercial and this fact has been concealed by the respondent. The
sale deed had been registered for less value. The market value of the land in
dispute as per Collector rate is Rs.33,09,600/- on which a total stamp duty of
Rs.5,13,050/- was payable whereas the respondent has affixed stamp duty of
Rs.31,000/-. In this manner on the above deed, the stamp duty of Rs.4,82,050/-
is payable, which is ordered to be recovered from the respondent in accordance
This order was upheld by the Commissioner. The High Court while
exercising its jurisdiction under Article 227 has 17 set aside the orders
passed by the District Collector, Faridabad and upheld by the Commissioner,
Gurgaon without any basis or rationale. Apart from the jurisdiction, even what
is factually stated in the order of the District Collector, Faridabad as upheld
by the Commissioner, Gurgaon is unexceptionable and any interference was
In the facts and circumstances of the case, the impugned judgment
of the High Court cannot be sustained and is accordingly set aside and the
order passed by the District Collector, Faridabad which was upheld by the
Commissioner, Gurgaon is restored. The respondent is directed to pay the
balance stamp duty within four weeks from the date of this judgment, otherwise
the appellants would be at liberty to take appropriate steps in accordance with
The appeal is allowed and disposed of. The parties are directed to
bear their respective costs.
......................................J. (Dalveer Bhandari)
.......................................J. (Dr. Mukundakam Sharma)