Nagnatham Vs. Revenue Divisional Officer  INSC 52 (25 January 1994)
K. Ramaswamy, K. Venkatachala N. (J)
1994 SCR (1) 368 1994 SCC (4) 595 JT 1994 (2) 604 1994 SCALE (2)298
appellant is the owner of 18 gunthas of land, i.e., 2178 sq. yards, situated in
Ward No. 5, Block No. 7 in Adilabad Municipality of A.P., which was proposed
for acquisition under notification issued under Section (1) of the Land
Acquisition Act and published on April 17, 1975, for a 598 public purpose. The
Land Acquisition officer awarded compensation on the basis of letting value. On
reference under Section 18, the Additional District Judge, Adilabad in his
award and decree enhanced the market value to Rs 75 per sq. yard. Not having
been satisfied, the appellant filed the appeal in the High Court and claimed Rs
300 per sq. yard. The High Court by the impugned judgment and decree dated
29-10-821, dismissed the appeal.
A.K. Ganguli, the learned Senior Counsel for the appellant contended that the
High Court having accepted that the acquired lands were situated in the heart
of the municipal area; the State Bank of Hyderabad and the Andhra Bank were
located on the eastern and western sides across the roads; Gandhi Chowk Market
and Ambedkar Chowk Market also existed on the National Highway towards Nagpur
each at a distance of 200 yards from the land; two cinema theatres were
situated at a distance of 50 to 60 yards from the acquired site; three
cooperative consumers' stores were situated at a short distance of 10 yards
from the acquired land; the Basic Valuation Register showed that for stamp duty
the Revenue Authorities had fixed the market value in commercial area at Rs 300
(on complaints being reduced to Rs 250) and for residential area Rs 75 per sq.
yard, it should have seen that the land had a very high market value. The
Revenue Authorities themselves having determined market value in that area at Rs
300 per sq. yard for purposes of stamp duty, unless the respondent produced
contra-evidence, which was not done, the Basic Valuation Register formed
foundation to determine the market value of acquired land at Rs 300. The
fixation of market value at Rs 75 per sq. yard was unjust and arbitrary. It is
also contended that the appellant is entitled to interest at 6% under the Act.
The State Act has no application to and the owner cannot be discriminated in
payment only at the rate of 4%, while other land acquired for Central
Government would get interest at the rate of 6%.
Having given anxious consideration to the contentions we find them to be
without force. Though the District Court fixed the market value at the rate of Rs
75 per sq. yard, the State did not file any cross-objection or appeal. So the
need for the High Court to go into the question whether fixation of the market
value at Rs 75 per sq. yard was high did not arise. The High Court held that
the post- notification sale deeds were not admissible as none of the persons
connected with them were examined to establish the genuineness of the sales or
of similarity of the lands acquired and those covered in the sale transactions.
It also rejected the agreements of sales finding them to be those fabricated to
inflate the market value. We cannot find fault with the approach made by the
High Court in the facts and circumstances of the case. The sales claimed to be
comparable were rightly not acted upon.
High Court found that Basic Valuation Register had no evidentiary value, in
that it had no statutory basis.
the entries in the Basic Valuation Register cannot form the basis to enhance
the market 1 AIR 1983 AP 155 599 value. The contention of Shri Ganguli, as
stated earlier was that the Basic Valuation Register, prepared in official
capacity by Revenue Department having been acted upon to collect stamp duty and
registration charges at Rs 300 per sq. yard for commercial use, the Government
cannot ask the court to adopt different standards to award market value under
Section 23(1). Having regard to the fact that the lands are situated in
commercial area of the busy town, the appellant is entitled to the market value
at Rs 300 per sq. yard, Firstly, the contention that the lands are to be
treated as of commercial area cannot be accepted to be totally correct.
Admittedly, the appellant had not prepared nor got approved any lay-out
demarcating as sites either for commercial purpose or for residential purpose.
The entire extent of 2178 sq. yard cannot be treated as capable of being sold
only for commercial purpose. May be the lands abutting the main road were
capable of being sold for commercial purpose. But the entire land, unless there
is proof of lay-out and demarcation for commercial purpose, cannot be treated
as land available for commercial purpose.
addition the entire land cannot be earmarked for sites unless some land is set
apart under the Building Rules for laying roads. Deduction ought equally to be
made for further developmental purposes. The entire land cannot be treated to
be possessed of commercial value. Under Section 24 clause sixthly of the Act,
in fact, the future potential use is not relevant but decided cases show that
it may be a factor to be kept in view in an appropriate case for determining
the market value. In this case, there is no evidence on record except the Basic
Valuation Register admittedly maintained by the authorities.
question, therefore, is whether the Basic Valuation Register is evidence to
determine the market value. This Court in Special Land Acquisition Officer v. T.
Adhinarayan Setty2 in paragraph 9 held that the function of the Court in
awarding compensation under the Act is to ascertain the market value of the
land at the date of the notification under Section 4(1). The methods of
valuation may be
the price paid within a reasonable time in bona fide transactions of purchase
of the lands acquired or the lands adjacent to the lands acquired and
possessing similar advantages; and
number of years purchase of the actual or immediately prospective profits of
the lands acquired. Same was the view in Tribeni Devi v. Collector of Ranchi3.
It was reiterated in catena of decisions, vide, Periyar and Pareekanni Rubbers
Ltd. v. State of Kerala4.
it is settled law that in determining the market value, the Court has to take
into account either one or the other three methods to determine market value of
the lands appropriate on the facts of a given case to determine the market
value. Generally the second method of valuation is accepted as the best. The
question, therefore, is whether the Basic Valuation Register would form
foundation to determine the market value. The Indian Stamp Act, 1899 2 AIR 1959
SC 429: 1959 Supp 1 SCR 404 : 1959 Cri LJ 526 3 (1972) 1 SCC 480 :(1972) 3 SCR
208 4 (1991) 4 SCC 195 600 provides the power to prescribe stamp duty on
instruments, etc. Entry 44 of List 111, Concurrent List, of the VIIth Schedule
read with Article 254 of the Constitution empowers the State Legislature to
amend the Indian Stamp Act, 1899.
exercise thereof all the State Legislatures including the Legislature of A.P.
amended the Act and enacted Section 47-A empowering the registering officer to
levy stamp duty on instruments of conveyance, etc., if the registering officer
has reason to believe that the market value of the property, covered by the
conveyance, exchange, gift, release of right or settlement, has not been truly
set forth in the instrument, he may refuse registering such instrument and
refer the same to the Collector for determination of the market value of such
property and the proper duty payable thereon. On receipt of such opinion, he
may call upon the vendor as per the rules prescribed, to pay the additional
duty thereon. If the vendor is dissatisfied, he has been given the right to
file an appeal and further getting reference made to the High Court for
decision in that behalf. Section 47-A would thus clearly show that the exercise
of the power thereunder is with reference to a particular land covered by the
instrument brought for registration. When he has reasons to believe it to be
undervalued, he should get verified whether the market value was truly
reflected in the instrument for the purpose of stamp duty; the Collector on
reference could determine the same on the basis of the prevailing market value.
Section 47-A conferred no express power to the Government to determine the
market value of the lands prevailing in a particular area, village, block,
district or the region and to maintain Basic Valuation Register for levy of
stamp duty for registration of an instrument, etc. No other statutory provision
or rule having statutory force has been brought to our notice in support
thereof. Whether an instrument is liable for higher stamp duty on the basis of
valuation maintained in the Basic Valuation Register, came up for consideration
in Sagar Cements Ltd. v. State of A.p.5 B.P. Jeevan Reddy, J., as he then was,
considered the question and held that the Government has unilaterally fixed the
valuation of the lands, the Basic Valuation Register had no statutory
foundation and therefore it does not bind the parties. Neither the Registrar
nor the vendor is bound by it. The market value of the land for proper stamp
duty has to be determined as per the law under Section 47-A itself.
view was followed by another learned Single Judge in P. Sasidar v.
Sub-Registrar6. It is, therefore, clear that the Basic Valuation Register
prepared and maintained for the purpose of collecting stamp duty has no
statutory base or force. It cannot form a foundation to determine the market
value mentioned thereunder in instrument brought for registration. Equally it
would not be a basis to determine the market value under Section 23 of the Act,
of the lands acquired in that area or town or the locality or the taluk etc.
Evidence of bona fide sales between willing prudent vendor and prudent vendee
of the lands acquired or situated near about that land possessing same or
similar advantageous features would furnish basis to determine market value.
The 5 (1989) 3 Andh LT 677 6 (1992) 1 Andh LT 49 601 Division Bench followed,
in support of its view a decision of another Division Bench in Land Acquisition
Officer v. Venkateswara Prasad7 which also decided that Basic Valuation
Register cannot be relied on to determine the market value.
would appear that in Govt. of A.P. v. Sohan Lal8 a Division Bench of that High
Court, without noticing these two binding decisions, held that the Basic
Valuation Register would form foundation to determine the market value and directed
to determine the compensation on that basis.
entire controversy was considered by yet another Division Bench in Vasireddi Bharata
Rao v. Revenue Divisional Officer9. The Division Bench, after considering the
case law disagreeing with Sohan Lal8 view as per incuriam, also reiterated that
the Basic Valuation Register maintained by the registering authority has no
statutory foundation to determine the market value and cannot form the base
under Section 23(1) to determine the market value.
Court in Gulzara Singh v. State of Punjab10 held that mutation entries of the land transactions in the revenue
records are not evidence unless the parties to the transactions have been
examined in proof of documents. In Director of Survey-cum-LAO v. Mohd. Ghouse11
relied on by Mr Ganguli, the Division Bench of Madras High Court, relying upon
the instructions issued by the Government to determine the market value for the
purpose of registration of the instrument under Section 47-A, held that it
would form basis to determine the market value under Section 23 in an
appropriate case, subject to proof of the market value.
were the instructions issued by the Government and whether they had any
statutory foundation, have not been stated by the Division Bench. If the broad
proposition of law that under Section 47-A of Stamp Act such instructions could
be issued, as contended for the appellant herein, as appears to be the view of
the High Court, it is not correct law. As we have already noted, Section 47-A
being local amendment, made by each State Legislature did not find any such
statutory basis. Like A.P. Act, Tamil Nadu Act is also referable to
transactions intra vivos and not as general guidelines. If they are based on
evidence inter partes it would be consistent with Section 47-A. Accordingly we
hold that the basic value of registration has no statutory base.
cannot form any basis to determine the market value of the acquired lands under
Section 23 of the Act. The burden of proof is always on the claimant to prove,
in each case the prevailing market value as on the date of notification
published in the State Gazette under Section 4(1) of the Act with reference to
the sale deeds of the same lands or neighbour's lands possessed of same or
similar advantages and features executed between willing vendor and willing
vendee or other relevant evidence in the reference court.