Holding

The Registering Authority must register the instrument and may only refer it to the Collector under Section 47A(1); the State's valuation guidelines are not binding and must be revised to conform with the law.

Summary

The respondents entered into a sale agreement for a portion of a house in Jalandhar and presented the deed for registration. The Sub‑Registrar, relying on government‑issued valuation guidelines, believed the market value was higher than stated and demanded a revision before registration. The respondents challenged this, and the High Court held that the guidelines could not control the Registering Authority’s quasi‑judicial discretion under Section 47A(1) of the Indian Stamp Act. The Supreme Court affirmed that the Registering Authority must first register the instrument and may only refer the matter to the Collector for valuation, and that the State’s guidelines are not binding and must be brought into conformity with the statute. Consequently, the appeals were dismissed and the State was directed to revise its guidelines.

Issues considered

Whether the guidelines issued by the State Government under Section 47A(1) are binding on the Registering Authority.
Whether the Registering Authority can withhold registration of a deed when he suspects undervaluation.
Whether the Registering Authority must register the instrument before referring the case to the Collector.
Whether the State Government's instructions are consistent with the provisions of Section 47A(1) of the Indian Stamp Act.

Legislation cited

Indian Stamp Act, 1899 (as amended by the Punjab Stamp Act, 1982)s. 47A(1), s. 47A(2), s. 47A(3), s. 47A(4)

Subjects

stamp dutyregistrationvaluation guidelinesquasi‑judicial discretionSection 47AIndian Stamp ActState government instructionsproperty transfer

Judgment

A STATE OF PUNJAB AND ORS.
v.
MOHABIR SINGH ETC. ETC.

NOVEMBER 21, 1995
B [K. RAMASWAMY AND K. S. PARIPOORNAN, JJ.)

Indian Stamp Act, 1899 (as amended by the Punjab Stamp Act 1982):

S.47A-Document presented for registration-Duty of Registering
C Authority-Guideline valuation-Instructions issued by Govemment-Effect
of-Held; Not consistent with sub-se~tion (1) of S.47A-Open to State Govt.
to revise its guidelines and issue proper directions consistent with law.

In the main appeals, the respondents entered into an agreement of
D sale for purchase of a portion of a house situated in Jallandhar of an extent
of 20 marlas for a consideration valued at Rs. 7500 per maria. While the
sale deed was to be executed and registered, the Sub-registrar, based on
the Govt. instructions, opined that the prevailing market value was not
·less than Rs. 15,000 per maria and on that basis he required the vendee
to revise the instrument and fix the consideration for. the purpos.e of stamp
E duty and registration charges on the revised valuation. Respondents filed
writ petition and the High Court held that the guidelines cannot control
the quasi-judicial discretion given to the Registering authority under '
S.47 (1) of the Indian Stamp Act 1899 as amended by Punjab Stamp Act,
1982. Hence these appeals.
F
Disposing of the appeals, this Court

HELD : 1. Registering Authority has to satisfy himself that value of
the property or the t;onsideration for it has not been truly set forth in the
instrumeQt. He may make a reference to the Collector in accordance with
G the provisions of sub-section (2) of section 47A of the Indian Stamp Act.
Before making reference, he is required to register the document and he is
not empowered to withhold the registration. Such a registration, of course,
will be subject to the determination of the true market value 11revailing in
the locality though the value mentioned in the instruction for such registra-
H tion under sub-section (1) of section 47A was not conclusive. [524-B-C]
520
STATE v. MOHABIR SINGH 521

2. The guidelines provided by the State would only serve as prima A
f acie material available before the Registering Authority to alert him
regarding the value. It is common knowledge that the value of the property
varies from place to place or even from locality to locality in the same
place. No absolute higher or minimum value can be pre-determined. It
would depend on prevailing prices in the locality in which the land covered
B
by the instrument is situated. It will be only on objective satisfaction that
the Authority has to reach a reasonable belief that the instrument relating
to the transfer of property has not been truly set forth or valued or
consideration mentioned when it is presented for registration. The ul-
timate decision would be with the Collector subject to the decision on an
appeal before the District Court as provided under sub-section (4) of C
section 47A. (524-D-E]

3. The offending instructions are not consistent with sub-section (1)
of section 47A. It would, therefore, be open to the State Government to
revise its guidelines and issue proper directions consistent \\ith law.
[525-Al D
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 5337-41
of 1990 Etc.

From the Judgment and Order dated 18.5.90 of the Punjab &
Haryana High Court in C.W.P. Nos. 15447-49, 16047 and 16802 of 1989. E
U.N. Bachawat, Ujagar Singh, Alakahendra Misra, G.K. Bansal,
Ashok Grover, C.K. Mahajan, P.N. Puri, S.M. Sarin, Devadar Verma,
Satish Vig, Ms. Rekha Palli, Anant Palli, Atul Sharma, Prem Malhotra and
Naresh Bakshi for the appearing parties. F
The following Order of the Court was delivered :

Leave granted in all the Special Leave Petitions.

The facts in C.A. Nos. 5337-41 of 1990 are sufficient for disposal of G
all these appeals.

The respondents had entered into an agreement of sale on March 4,
1989, to purchase from the vendors, Virender Singh and Rupinder Singh,
a portion of house (Kathi No. 519) situated in Model Town, Jallandhar, of
an extent of 20 marlas for a consideration valued at Rs. 9,700 per maria H
522 SUPREME COURT REPORTS (1995] SUPP. 5 S.C.R.

A and they appear to have paid as earnest money of Rs. 95.000. The sale deed
was required to be executed and registered before November 30, 1989. Few
days prior to the aforesaid date the instrument appears to have been valued
at Rs. 50,000 and stamp duty was paid and presented for the same. The
Sub-Registrar. Jallandhar, opined that prevailing market value was not less
B than Rs. 15,000 per marla and, on that basis, he required the vendee to
revise the instrument and fix the consideration for that purpose of stamp
duty and registration charges on the revised valuation. He formed his
opinion on the basis of the instructions issued by the Government in Ex.
PW. dated August 04, 1988. Feeling aggrieved, the respondents filed writ
C petition in the High Court. The Division Bench in C.W.P. No. 7360/88 by
order dated May 18, 1990 held that the guide lines cannot control the
quasi-judicial discretion given to the Registering Authority under section
47A(l) of the Indian Stamp Act, 1899 as amended by Punjab Stamp Act,
1982 which came into force with effect from August 04,1982. Section 47A
Reads thus:
D
"47-A(l) : Instrument under valued how to be dealt with - If the
Registering Officer appointed under the Registration Act, 1908
(Central Act No. 16 of 1908), while registering any instrument
relating to the transfer of any property has reason to believe that
E the value of the property or consideration, as the case may be, has
not been truly set forth in the instrument, he may, after registering
such instrument, prefer the case to the Collector, for determination
of the value of the property or the consideration, as the case may
be, and the proper duty payable thereon.

F (2) On receipt of reference under sub-section (1), the Collector
shall, after giving the parties reasonable opportunity of being heard
and after holding an enquiry in such manner as may be prescribed
by rules under this Act, determine the value or consideration and
the duty as aforesaid and the deficient amount of duty, if any, shall
G be payable by the person liable to pay the duty.

(3) The Collector may suo motu, or on receipt of reference from
the Inspector General of Registration or the Registrar of a district,
appointed under the Registration Act, 1908 (Central Act No. 16
H of 1908) in whose jurisdiction the property or any portion thereof
STATE v. MOHABIR SINGH 523

which is the subject matter of the instrument is situate, shall, within A
two 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 to B
believe that the value of 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 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. C
(4) Any person aggrieved by an order of the Collector under
sub-section (2) or sub-section (3) may, within thirty days from the
date of that order, prefer an appeal before the District Judge and
all such appeals shall be heard and disposed of in such manner as
may be prescribed by rules made under this Act. D

Explanation : For the purpose of this section, value of any property
shall be estimated to be the price which in the opinion of the
Collector or the appellate authority, as the case may be, such
property would have fetched, if sold in the open market on the E
date of execution of the instrument relating to the transfer of such
property."

The Relevant portion of the guidelines are :

"These floor prices will act only as guidelines to the Sub-Registrars
F
and the Sub-Registrar is free to invoke section 47-A if he is quasi-
judicially satisfied that the value of the property in a particular
transaction is higher than the prescribed rate and has not been so
rate etc. in that document. In other words, these prices are only,
the minimum prices prescribed." • G

Sub-section (1) of section 47A empowers the Registering Officer,
while registering any instrument relating to the transfer of any property, if
he has reasons to believe that the value of the property or consideration,
as the case may be, has not been truly set forth in the instrument, after H
524 SUPREME COURT REPORTS [1995] SUPP. 5 S.C.R.
,... -
A registering such instrument, to refer the same to the Collector for deter-
mination of the value of the property or the consideration, as the case may
be, and the proper duty payable thereon. It would , therefore, be clear that
the Registering Authority has to satisfy himself that value of the property
or the consideration for it has not bee truly set forth in the instrument. He
B may make a reference to the Collector in accordance with the provisions
of sub-section (2) of section 47A. Before making reference, he.is required
to register the document and he is not empowered to withhold the registra-
tion. Such a registration, of course, will be subject to the determination of
the true market value prevailing in the locality though the value mentioned
in the instrument for such registration under sub- section (1) of section
c 47A was not conclusive.

The guideline provided by the State would only serve as plima f acie
material available before the Registering Authority to alert him regarding
the value. It is common knowledge that the value of the property varies
D from place to place or even from locality to locality in the same place. No
absolute higher or minimum value can be pre-determined. It would depend
on prevailing prices in the locality in which the land covered by the
instrument is situated. It will be only on objective satisfaction that the
Authority has to reach a reasonable belief that the instrument relating to
E the transfer or property has not been truly set forth or valued or considera-
tion mentioned when it is presented for registration. The uitimate decision
would be with the Collector subject to the decision on an appeal before
The District Court as provided under sub-section (4) of section 47A.

It would thus be seen that the aforesaid guidelines would inhibit the
F 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 indi-
cates that as and when such an instrument is presented for registration, the
sub-Registrar is required to satisfy himself, before registering the docu-
G ment, whether true price is reflected in the instrument as it prevails in the
locality. If he is so satisfied, he registers the document. If he is not satisfied
that the market value or the consideration has been truly set forth in the
instrument, subject to his making reference under Sub-section (1) of sec-
tion 47A, he registers the document. Thereafter, he should make a refer-
H ence to the Collector for action under sub-section (2) and (3) of section
STATE v. MOHABIR SINGH 525

47A. Accordingly, we hold that the offending instructions are not consistent A
with sub-section (1) of section 47A. It would, therefore, be open to the
State Government to revise its guidelines and issue proper directions
consistent with law.

The appeals are accordingly disposed of. No costs.

G.N. Appeal disposed of.