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CHANDRAMALLIKA SUPPLIERS PRIVATE LIMITED & ANR. Versus THE STATE OF WEST BENGAL & ORS.

2016 (11) TMI 81 - CALCUTTA HIGH COURT

Determination of the “Market Value” of an immovable property based on “Proposed Land Use” - whether information obtained by the Registering Officer on the basis of the details provided by the applicant in the appropriate form mentioned in Appendix V of the West Bengal Registration Rules, can mandatorily include such information required to be provided under the column specifically relating to “Proposed Land Use”? - Held that:- The rate per square feet of market value of any flat or structure for .....

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structure for residential use in the same locality shall be appreciated following the same methodology as elucidated in clause (13) under Rule 3B. Thus, following the scheme of the Rules as introduced by the 2010 amendment of the West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules, 2001, this Court is of the view that there cannot be an indefinite period of time attached to the details as required to be filled-up under the column “Proposed Land Use” and it is imperative to atta .....

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a photostat certified copy of the order. - WP No.1224 of 2015 - Dated:- 5-10-2016 - JUSTICE BISWANATH SOMADDER For the Petitioners : Mr. Ashok Kumar Banerjee, Senior Advocate, Mr. Aniruddha Mitra, Advocate, Ms. Swati Bhattacharyya, Advocate, Mr. Aditya Poddar, Advocate, Mr. Ankit Shroff, Advocate. For the State : Mr. Jayanta Kumar Mitra, Ld. Advocate General, Mr. Ayan Banerjee, Advocate, Mr. Paritosh Kumar Sinha, Advocate, JUDGEMENT Biswanath Somadder, J.: The writ petitioner no.1 is a company .....

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alue of an immovable property based on Proposed Land Use is contrary to The West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules, 2001; c) A writ of and/or order and/or directions in the nature of Prohibition do issue injuncting the respondent authorities and/or each one of them from determining the Market Value of an immovable property based on information with regard to Proposed Land Use ; d) A writ of and/or order and/or directions in the nature of Certiorari do issue directi .....

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ted in buying further land in Mouzas Chaketbati, Chakmanik, Chakparan and Pujali, amongst other parts of West Bengal. The writ petitioners have stated that in certain registration offices, if the transferee is an individual, the registering authority does not force him to change the proposed land use either to Bastu or Industrial , but if the transferee is an entity other than an individual, the registering authority forces him to change the proposed name to these. This change of the Proposed Us .....

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fees, as applicable. The writ petitioners have further stated that ascertainment of market value and stamp duty payable is being done on anticipation and apprehension of happening of a future event. The same is, therefore, bad in law. Being taxed at a higher rate upon anticipation of a future event is against the basic structure of Indian laws. The respondents are illegally and arbitrarily determining the market value of an immovable property based on proposed land use and fixing stamp duty pay .....

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r or the transferee about such purpose, the registering authority has travelled beyond his authority and jurisdiction. The action of the respondents is absolutely in violation of the principles of natural justice. It is also contended by the petitioners that they have been forced to pay exorbitant stamp duty while buying land and their interest are at serious prejudice at the hands of the respondents. The introduction of the column, Proposed Land Use , under serial no. 9 in Form 1, 2 and 4 under .....

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001 Rules, (as amended vide notification no. 1614 F.T dated 5th October, 2010) and clause 16B of section 2 of the Indian Stamp Act, 1899 (as amended by West Bengal Act no. 17 of 1990 with effect from 31.01.1994). The respondent authorities are anticipating and apprehending an uncertain event to fix the market value of a property, which is bad in law and also contending that the change of the Proposed Use of Land in the records of the registration office has no bearing with the records maintained .....

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e rules and in the absence of any specific averment of violation, the writ petition is not maintainable. The State has, all along, acted in compliance of the provisions of the Indian Stamp Act, 1899 and the 2001 Rules and the 2001 Rules provide for classification of land after taking into account the use of land for the purpose of preparation of annual statement of rates of land. Therefore, nature of use of land is one of the factors to be considered for preparing the annual statement of rates o .....

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tement of rates of market value of an immovable property on the basis of proposed use of land. If the proposed use of land is mentioned as Shali , the Registering Authority does not refuse to register it and asks the applicant to change the proposed use to either Bastu or Industrial . The ascertainment of market value and stamp duty are not being done based on anticipation or apprehension of happening of a future event or that a person is being taxed at a higher rate on anticipation of a future .....

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ffice of the Block Land and Land Reforms Officer. The 2001 Rules clearly provide for disclosure of proposed land use and for taking into consideration the land use for arriving at the annual statement of rates as well as valuation of land. The respondents being bound by the statute are duty bound to follow the Rules as well as the statute and they have never deviated from the Rules and as such there is no scope for interference by this Court on the basis of the averments made in the writ petitio .....

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re vague and unfounded. A thorough scrutiny of records was made in that regard, but no document has been found to have been presented by the petitioners upon due execution for registration prior to institution of the said application. The writ petitioners have purportedly relied upon the Market Value Assessment Slips, allegedly obtained by them from the official website of the Directorate of Registration and Stamp Revenue. Thus, there is no basis for the writ petition to have been filed and the .....

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d Advocate General appearing on behalf of the State respondents: • Raghubans Narain Singh v. Uttar Pradesh Government through Collector of Binjor reported in AIR 1967 SC 465. • Dadu Yogendra Nath Singh and Ors. v. The Collector, Seoni reported in 1977 (2) SCC 1. • Prithvi Raj Taneja v. The State of Madhya Pradesh and another, reported in 1977 (1) SCC 684. • Atma Singh (Dead) Through Lrs. & Others v. State of Haryana & Another, reported in 2008 (2) SCC 568. • Diga .....

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ounsel appearing on behalf of the petitioners cited State of Rajasthan v. Ganesh Lai reported in (2008) 2 SCC 533 in order to distinguish the judgments relied upon by the learned Advocate General. He also cited Comptroller And Auditor-General of India, Gian Prakash, New Delhi and Another vs. K.S.Jagannathan and Another reported in AIR 1987 SC 537 (para 20) = (1986) 2 SCC 679 (para 20) in order to submit that the High Court - in the given facts and circumstances of the instant case - has sufficie .....

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ecifically relating to Proposed Land Use or, in other words, whether such information can be mandatorily obtained for the purpose of determination of market value based on the statutory definition of market value as provided under clause 16B of the Indian Stamp Act, 1899. In this context, one may at first take notice of the various judicial pronouncements which have been referred to and relied on by the learned Advocate General for the State. In Raghubans Narain Singh v. Uttar Pradesh Government .....

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r the purposes for which the property is compulsorily acquired. As observed in South Eastern Rail Co. v. L.C.C. (1915) 2 Ch 252:- The value to be ascertained is the price to be paid for the land with all its potentialities, and with all the use made of it by the vendor. In Dadu Yogendra Nath Singh and Ors. v. The Collector, Seoni reported in 1977 (2) SCC 1, the doctrine of potential value as espoused in N.B. Jeejabhoy v. The District Collector, Thana, Civil Appeals Nos. 313 to 315 of 1965, D/-30 .....

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many questions will have to be asked and answered, whether there is pressure on the land for building activity, whether the acquired land is suitable for building purposes, whether the extension of the said activity is towards the land acquired, what is the pace of the progress and how far the said activity has extended and within what time, whether buildings have been put up on lands purchased for building purposes, what is the distance between the built-in-land and the land acquired and simila .....

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and its potential possibilities when laid out in the most advantageous manner excluding any advantage due to the carrying out of the scheme for which the property is compulsorily acquired. In considering market value, the disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy should be disregarded. There is an element of guess-work inherent in most cases involving determination of the market value of the acquired land. But this in the very nature of t .....

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land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality. It is well settled that market value of a property has to be determined having due regard to its existing condition with all its existing advantages and its potential possibility when led out in its most advantageous manner. The question whether a land has potential value or not, is primarily one of fact depending upon its condition, situation, user to whi .....

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ommercial purpose or not - should be the relevant criteria for determining the market value while applying the principles laid down in Atma Singh (supra). In other words, for ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. In P.Ram Reddy and others v. Land Acquisition Officer, Hyderabad Urban Development Authority, Hyderabad and others reported in 1995 (2) SCC 305, it was held, inter alia, to the effect that building poten .....

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re. Possibility of the acquired land put to certain use on the date envisaged under section 4(1) of the LA Act, becoming available for better use in the immediate or near future, is regarded as its potentiality. It is for this reason, that the market value of the acquired land when to be determined with reference to the date envisaged under section 4(1) of the LA Act, the same has to be done not merely with reference to the use to which it was put on such date, but also on the possibility of it .....

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learly defines market value, which includes in its definition, its potential value. The significance of the word potential should not be lost sight of. It connotes, by itself, something having such latent qualities which has a capacity to develop or lead to future success or usefulness. (Please see Concise Oxford English Dictionary, Tenth Edition, Revised.) The relevant provision of the Indian Stamp Act, 1899, which defines market value , namely, clause (16B) of section 2, was introduced by a We .....

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the consideration stated in the instrument, whichever is higher; The statutory definition of market value thus means the price which a property would have fetched or would fetch if sold in open market on the date of execution of an instrument as determined in such manner and by such authority as may prescribed by the Rules made under the Indian Stamp Act, 1899 or the consideration stated in the instrument, whichever is earlier. The West Bengal Stamp (Prevention of Undervaluation of Instruments) .....

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istration Act, 1908 - after receiving the instruments of conveyance - is required to ascertain the market value of the property, which is the subject matter of such instruments in the manner prescribed and compute the proper stamp duty chargeable on the market value so ascertained, in the event he has reasons to believe that the market value of the property - which is the subject matter of the relevant instrument - has not been truly set forth in that instrument presented for registration. In th .....

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Act, 1998). The State Government, by a notification published in the Kolkata Gazette on 21st May, 2008, introduced certain amendments in the West Bengal Registration Rules, 1962. The relevant Rule which is required to be considered in the instant case is Rule 123. Rule 123 provides, inter alia, that the market value of the property, which is the subject matter of a deed chargeable with an ad valorem duty on market value, shall be determined through Computerization of Registration of Documents (C .....

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rious columns, including the column Proposed Land Use under Plot-wise details of the land . The State of West Bengal, however, by that time had already introduced the West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules, 2001, which came into force from 15th March, 2001. The said 2001 Rules, however, were significantly amended by a notification dated 5th October, 2010, which was published in the Official Gazette on the same date. The 2001 Rules (upon its 2010 amendment) provide, .....

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ts effected in the year 2010, thus clearly reveals the State Government s conscious intention to evolve a complete mechanism for computation of market value when using the CORD software. Rule 3A provides the manner in which market value is required to be determined when an instrument is registered through the system of CORD. Rules 3B to 3E are the statutory modalities prescribed by the State for the purpose of determination of the market value (as defined under clause 16(B) of section 2 of the I .....

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V of the West Bengal Registration Rules. Sub-Rule (2) under Rule 3E further provides that every Registering Officer may call for production of any document for the purpose of verifying whether all the facts for determination of market value of the property, which is the subject matter of the instrument, has been truly set forth as mentioned in section 27 of the Indian Stamp Act. It is thus seen that information regarding any immovable property is required to be mandatorily obtained by every regi .....

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- has not been challenged in the writ proceeding. That apart and in any event, it is quite apparent that the 2010 amendments to the West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules, 2001, were introduced only for the purpose of bringing the 2001 Rules in sync with the amendments which were introduced to the West Bengal Registration Rules, 1962, by the State Government in the year 2008, primarily for the purpose of registration of documents through the system of Computerizati .....

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ear 2010). Information provided by an applicant under the said column is mandatorily required by the Registering Officer for the purpose of determination of Market Value as provided under clause 16B of the Indian Stamp Act, 1899. Now, a question that requires some consideration is whether the Proposed Land Use column - when required to be filled-up by an applicant - will have any time frame attached to it or not. The answer to this question lies in a plain reading of Rules 3A to 3E, as introduce .....

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delines and principles carefully, one would notice that preparation of market value of the concerned land and the rate per square feet of market value of any flat or structure for residential or commercial or semi-commercial use has to be determined in the manner laid down under the various clauses under Rule 3B. What appears to be noteworthy is the recurrence - in some of the clauses - of a period of five consecutive years immediately preceding the year of preparation of annual statement of mar .....

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