Supreme Court of India
M/S. MSD REAL ESTATE LLP versus THE COLLECTOR OF STAMPS & ANR. on 17 September 2020
[2020] 6 S.C.R. 1027
M/S. MSD REAL ESTATE LLP
v.
THE COLLECTOR OF STAMPS & ANR.
(Civil Appeal No. 3194 of 2020)SEPTEMBER 17, 2020[ASHOK BHUSHAN, R. SUBHASH REDDY ANDM. R. SHAH, JJ.]
Stamp Duty:
Deficit stamp duty – Demand for – Penalty imposed ten timesthe deficit duty – In litigation Supreme Court modified the penaltyamount reducing the same to half – Stamp duty was paid – Thereafterthe property in question was sold – Permission for construction onthe property was sought by the subsequent purchaser – Propertywas mutated in the name of the purchaser – The purchaser submittedpost-dated cheques towards the penalty amount – Notice was issuedby competent authority demanding outstanding amount towardspenalty – Permission for construction was denied – High Courtupheld the demand of penalty and holding that payment of penaltyby post-dated cheques cannot be approved – As regards notice byMunicipal Corporation, High Court observed that the purchasercould apply afresh for permission for construction after paying thepenalty amount in toto – Appeal to Supreme Court – Duringpendency of the appeal orders issued by Municipal Corporation tohandover the land in question to the Corporation – Challenged ininterlocutory application – Held: High Court rightly did not interferewith the demand of penalty – As regards the notice by MunicipalCorporation, the observation of the High Court amply protects theright of the purchaser – The orders of Municipal Corporation passedduring pendency of the appeal being subsequent actions cannot beentertained in the present appeal.
Disposing of the appeal, the Court
HELD: 1.1 In pursuance of the order of the Collector dated22.09.2008, the Trustees were liable to deposit stamp duty aswell as penalty. Although deficiency of stamp duty was depositedthrough the Treasury Challan dated 01.11.2019 but the penalty
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Awas not deposited and only post-dated cheques were submitted.The High Court has rightly observed that facility to deposit thepenalty by post-dated cheques cannot be approved and theappellant being subsequent purchaser was liable to deposit theamount of penalty which was outstanding against the propertyand which was subject matter of the gift deed dated 21.04.2005.BThe High Court has rightly not interfered with the order dated04.06.2020 issued by the Addl. Tehsildar(Recovery) demandingan amount of Rs.8,80,97,025/- which was outstanding on the abovedate. [Para 16][1034-C-E]
1.2 The order of Collector dated 22.09.2008 was modifiedCby Supreme Court and the amount of penalty was reduced to theextent of half of the ten times penalty. Therefore, the respondentsare to take steps in compliance to the said order. The issue ofpenalty as imposed by the order of the Collector of Stamps dated22.09.2008 having already been decided, all the parties are to Dact in accordance with the said judgment. [Para 18][1034-G-H;1035-A]
2. As regards order dated 4.6.2020 issued by the BuildingOfficer of Municipal Corporation, the direction of the High Courtthat after the deposit of the stamp duty and the penalty, theEMunicipal authorities to reconsider the application for buildingpermission, amply protects the rights of the appellant. In view ofthe deposit made by the appellant towards the penalty, theappellant is free to apply for building permission which is to beconsidered by the Municipal Corporation as observed by the HighCourt. [Paras 19 and 20][1035-C-E]F
3. The orders and notices issued by the MunicipalCorporation and other State Authorities which have been broughton record by the IA No. 72517/2020 are all subsequent actionswhich were not subject matter of the writ petition before the HighCourt and cannot be taken into consideration in the presentGappeal. The said issues cannot be entertained. Liberty is givento the parties to seek such remedy with regard to subsequentactions and orders as permissible in law. [Paras 21-22][1035-F-G]
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M/S. MSD REAL ESTATE LLP v. COLLECTOR OF STAMPS &ANR.
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M/S. MSD REAL ESTATE LLP v. COLLECTOR OF STAMPS &ANR.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3194of 2020.
From the Judgment and Order dated 10.06.2020 of the High Courtof Madhya Pradesh, Bench at Indore in W.P. No. 8145 of 2020.
Puneet Jain, Ms. Christi Jain, Arjun Garg, Aakash Nandolia andMishra Saurabh, Advs. for the appearing parties.
The Judgment of the Court was delivered by ASHOK BHUSHAN, J.
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1. Leave granted.
2. This appeal has been filed against the judgment of the HighCourt of Madhya Pradesh at Indore dated 10.06.2020 by which the writpetition filed by the appellant challenging the notice dated 04.06.2020issued by Additional Tehsildar (Recovery), District Indore as well asnotice dated 04.06.2020 issued by Building Officer, Zone No.09, MunicipalCorporation Indore has been dismissed.
3. Brief facts giving rise to this appeal are:
The property in question in this appeal is Lantern Hotel havingMunicipal No.28, Yeshwant Niwas Road, Indore with regard to which aDeed of Assent was executed on 21.04.2005 by the Trustees of PrivateTrust, namely, H.C. Dhanda Trust. H.C. Dhanda executed Will dated26.10.2002. The Collector of Stamps issued notice stating that there isdeficiency in the stamp duty on deed dated 21.04.2005 and passed anorder dated 22.09.2008 holding the deed to be a Gift Deed anddetermined a deficiency of stamp duty to the extent of Rs.1,28,09,700/-and imposed penalty of ten times to the tune of Rs.12,80,97,000/-. H.C.Dhanda Trust filed writ petition in the High Court challenging order dated22.09.2008 which was dismissed on 30.03.2017. An SLP(C) DiaryNo.30539 of 2017 was filed by the Trustees of H.C. Dhanda Trust againstthe judgment of the Madhya Pradesh High Court dated 30.03.2017 inwhich this Court passed following interim order dated 10.11.2017:
“Issue notice, returnable in six weeks, limited to the quantumof penalty that has been imposed by the Collector (Stamps).
Subject to the condition that stamp duty is paid within aperiod of one month, there shall be stay of the order qua thepenalty.”
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A4. The Trustees of H.C. Dhanda Trust could not deposit the stampduty, this Court made it clear by order dated 22.04.2019 in SLP(C) DiaryNo.30539 of 2017 that no interim order is operating as on date. Anamount of Rs.1,28,09,700/- was deposited through a Treasury Challandated 07.11.2019 which was the amount of stamp duty on behalf ofJogesh Dhanda son of late Shri H.C. Dhanda.B
5. The appellant, M/s. MSD Real Estate LLP by a RegisteredSale Deed dated 27.11.2019, purchased the property in question, LanternHotel from the Trustees of the Trust of Jogesh Dhanda and Ishan Dhanda.The appellant applied for development permission and vide letter dated18.11.2019 the appellant was granted permission for construction.CApplication for mutation was filed by the appellant in the MunicipalCorporation. The appellant also deposited Rs.2,92,20,794/- property taxunder protest, mutation in the name of the appellant was also madeagainst the property in question.
6. On 20.11.2019 the appellant along with Jogesh Dhanda submittedDan application to Collector of Stamps regarding stamp duty and penaltyimposed upon Lantern Hotel, Indore situate at Municipal No.28,Yeshwant Niwas Road, Indore. Along with letter the appellant submittedsix post dated cheques totaling Rs.12,80,97,025/-. A notice dated04.06.2020 was issued by Addl. Tehsildar (Recovery) for depositing anEamount of Rs.8,80,97,095/-, outstanding amount towards the penalty.On 04.06.2020 itself another letter was issued by the Office of MunicipalCorporation, Indore regarding application received from the appellantfor permission of building construction. The application for buildingpermission was rejected by notice dated 04.06.2020. Aggrieved by theaforesaid two notices dated 04.06.2020 Writ Petition No.8145 of 2020Fwas filed by the appellant. In the writ petition the appellant has challengednotice dated 04.06.2020 issued by the Addl. Tehsildar(Recovery) as wellas order dated 04.06.2020 of the Office of Municipal Corporation, Indore.The appellant also prayed for direction to restraint the respondents fromgiving effect to their impugned orders and from taking any coercive/Gpenal action against the appellant.
7. Learned Single Judge by its order dated 10.06.2020 dismissedthe writ petition. Learned Single Judge held that the appellant beingsubsequent purchaser is liable to pay the penalty amount. Learned SingleJudge noticed that there being no interim order in SLP(C) Diary No.H30539 of 2017 pending in this Court he was liable to pay the penalty amount. The High Court also took the view that payment of penalty bypost dated cheques cannot be approved by the High Court. Insofar asnotice dated 04.06.2020 issued by the Municipal Corporation, the HighCourt took the view that at that time no interference was called for andafter payment of penalty amount in toto, the appellant would be free toapply afresh for building permission again whereafter the Municipalauthorities are directed to reconsider the application for buildingpermission. With the above discussion, the writ petition was dismissed.Aggrieved by the judgment of the High Court, the appellant has filed thisappeal.
8. This appeal arising out of SLP(C)No.7990 of 2020 was filed on24.06.2020.
9. During the pendency of this appeal order dated 26.07.2020 hasbeen issued by the Municipal Corporation, Indore as well as order dated25.07.2020 and 28.07.2020 has been issued by the Municipal Corporation,Indore. The Municipal Corporation also issued letter dated 27.07.2020to the Sub-Divisional Officer, Revenue, Indore requesting him to removeall encroachment on Municipal property and to handover possession ofthe land in question to the Municipal Corporation. The appellant by meansof I.A.No.72517 of 2020 has prayed for stay the aforesaid orders andnotices and has prayed for other reliefs consequent to the notices andorders issued as referred to in aforesaid IA. Counter-affidavit has alsobeen filed by the Municipal Corporation, Indore to which Rejoinder-affidavit has also been filed. On 07.07.2020 while issuing notice thisCourt passed the following order:
“Issue notice.
List along with Diary No.30539/2017.
Learned counsel for the petitioner submits that towards thepenalty amount Rs.6.8 crores have already been encashed/paidand for rest of the penalty amount post-dated cheques have alreadybeen given. The petitioner undertakes to ensure that all post-datedcheques are cleared so that entire amount of penalty is paid which1 shall, however, be subject to the order of this Court in the pendingpetition i.e. Diary No.30539/2017.
In the meantime, impugned orders including the auctionproceeding shall remain stayed.”
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1032SUPREME COURT REPORTS
A10. We have heard Shri Kapil Sibal, learned senior counselappearing for the appellant. Shri Tushar Mehta, learned Solicitor Generalhas appeared on behalf of the State. Shri Purushaindra Kaurav, learnedAdvocate General, has appeared for Municipal Corporation, Indore.
11. Shri Kapil Sibal submits that the action of the Addl. TehsildarB(Recovery) asking for recovery of amount of Rs.8,80,9725/- wasunjustified. It is submitted that the appellant after purchasing of theproperty has deposited the amount of deficit stamp duty as well as postdated cheques covering the entire amount of penalty of Rs.12,80,97,025/- by letter dated 20.11.2019 which was accepted by the Collector Stampsand letter dated 23.11.2019 was issued by the Collector of Stamps thatCcheques of total amount has been received and no stamp duty isoutstanding. It is submitted that by 04.06.2020 on which date notice wasissued by Addl. Tehsildar (Recovery) out of the abovesaid cheques, twocheques of Rs.2 crores each have already been encashed by the StateGovernment. Shri Sibal submits that subsequently he has also depositedDfurther amount and he has undertaken before this Court to ensure thatall cheques given by him towards penalty amount shall be cleared.
12. Shri Sibal further submits that building permission was grantedto the appellant after being satisfied with all necessary requirementswhich could not have been cancelled by order dated 04.06.2020 by theEMunicipal Corporation, Indore. He submits that the appellant wascommitted to pay the entire amount of the penalty which commitmentwas accepted by the Collector of Stamps by letter dated 23.11.2019 andthe action taken for cancelling the building permission was unjustified.Shri Sibal further submitted that in spite of the interim order passed bythis Court on 07.07.2020 by which this Court has stayed the impugnedForders and auction proceedings by the Municipal Corporation, theMunicipal Corporation has issued several orders which are malafideand illegal. The order dated 25.07.2020 passed by the MunicipalCorporation of Indore cancelling the mutation of the appellant on theground that proceeding is pending in this Court and by the CollectorGregarding title of the property was wholly unauthorized and illegal. Theappellant having purchased the property by registered sale deed, gotmutation of title in his name. He further submitted that no proceeding ispending regarding title of property as mentioned in the letter dated25.07.2020. He further submits that another order issued on 28.07.2020by the Office-Commissioner Municipal Corporation which mentions thatH
Indore Municipal Corporation has already sent letter to Sub-DivisionalOfficer Revenue for putting up the application before the competentofficer for taking action under Section 4/5 of Madhya Pradesh PublicPremises Eviction Act, 1974 for eviction is wholly illegal and unauthorised.He submits that the house property No.28, Yashwant Niwas Road, Indorewas in the ownership of late Shri H.C. Dhanda which was gifted by hisHighness Maharaja by order dated 22.04.1948 as free gift to late ShriH.C. Dhanda being Minister in the Cabinet of his Highness and rightfrom 1948 late Shri H.C. Dhanda was the owner in possession withregard to which subsequently he created a Trust by his Will. He submittedthat property had been purchased by the appellant by registered saledeed dated 23.11.2019 and there is no question of Corporation or anyoneelse claiming any title in the property, no determination of title is pendingin any Court of law and the observation made by the Corporation in itsletter that determination of title is pending with the office of DistrictCollector is wholly malafide and unjustified. He submits that subsequentletters and action taken by the Corporation as well as by the Stateauthorities are only with the intent to harass the appellant and all areactions are beyond their jurisdiction and deserve to be set aside byaccepting the IAs filed by the appellant.
13. Shri Tushar Mehta, learned Solicitor General appearing onbehalf of the State submits that no error was committed by the Addl.Tehsildar (Recovery) in issuing recovery notice dated 04.06.2020 sincethe interim order being not operating in SLP(C) Diary No.30539 of 2017the amount of penalty was outstanding. He submits that there is noprocedure or provision for accepting the amount of penalty by post datedcheques as it claimed by the appellant. Shri Mehta further submits thatamount of penalty being outstanding against the property, mutation in thename of the appellant against the property as well as building permissionhas rightly been rejected. Shri Mehta further submits that subsequentactions including the notices and orders brought by the appellant by IANo.72517 of 2020 are all actions which are subsequent actions and hasno relation to issues which have been raised in this appeal. He submitsthat neither subsequent actions, letters were part of the writ petition northey can be considered in this appeal. He submits if so advised it isalways open to take appropriate proceeding if he is aggrieved by anyaction subsequently taken after the decision of the writ petition.
14. Shri Purushaindra Kaurav, learned Advocate General appearingfor the Corporation fairly submitted that it is the appellant who are in A
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Apossession of the property in question. He submitted that notices andactions taken by the Corporation and other authorities subsequent to thedecision of the writ petition cannot be made subject matter of challengein this appeal, remedy of the appellant if any is elsewhere. He supportsthe order of the Municipal Corporation by which building permissionearlier granted has been cancelled.B15. We have considered the submission of the parties and perusedthe record.
16. In pursuance of the order of the Collector dated 22.09.2008,Trustees of H.C. Dhanda Trust were liable to deposit stamp duty as wellCas penalty. In SLP(C) Diary No.30539 of 2017 the interim order grantedby this Court on 10.11.2017 having not been complied with there was nointerim order operating and the Trustees of H.C. Dhanda Trust wereliable to deposit the stamp duty and penalty. Although deficiency of stampduty was deposited through the Treasury Challan dated 01.11.2019 butthe penalty was not deposited and only post dated cheques betweenDdates 25.02.2020 to 25.05.2020 were submitted on behalf of the appellantand Jogesh Dhanda. The High Court has rightly observed that facility todeposit the penalty by post dated cheques cannot be approved and theappellant being subsequent purchaser was liable to deposit the amountof penalty which was outstanding against the property and which wasEsubject matter of the gift deed dated 21.04.2005. The High Court hasrightly not interfered with the order dated 04.06.2020 issued by the Addl.Tehsildar(Recovery) demanding an amount of Rs.8,80,97,025/- whichwas outstanding on the above date.
17. We by our order of the date passed inC.A.Nos……………………of 2020 (arising out of SLP(C)Nos.10972-F10973 of 2020) allowing the appeals partly, held:
“In result the appeals are allowed the order of the Collectorof Stamps dated 22.09.2008 is modified to the extent that penaltyimposed of ten times of Rs.12,80,97,000/- is modified into fivetimes penalty i.e. Rs.6,40,48,500/-. The appeals are partly allowedGto the above extent. “
18. The order of Collector dated 22.09.2008 having been modifiedand the amount of penalty having been reduced to the extent of half ofthe ten times penalty, respondents are to take steps in compliance to thesaid order. Shri Sibal has submitted that total deposit as on date by theHappellant towards the penalty is about Rs.8.8 crores. The issue of penalty as imposed by the order of the Collector of Stamps dated 22.09.2008having already been decided by order of even date inC.A.Nos……………………of 2020 (arising out of SLP(C)Nos.10972-10973 of 2020) all the parties are to act in accordance with the saidjudgment.
19. Now, we come to order dated 04.06.2020 which was underchallenge in the writ petition before the High Court by which theMunicipal Corporation, Indore has cancelled the building permissiongranted earlier was rejected. The High Court while considering theaforesaid by its judgment in paragraph 8 has held:
“8. So far as order dated 4.6.2020 issued by the Building Officerof Indore Municipal Corporation is concerned, at this stage, nointerference is called for as the petitioner has failed to deposit thepenalty amount and this fact was suppressed in the applicationsubmitted for building permission. After the deposit of the stampduty and the penalty, the Municipal authorities are directed toreconsider the application for building permission.”
20. The above observation of the High Court amply protects therights of the appellant. In view of the deposit made by the appellanttowards the penalty, the appellant is free to apply for building permissionwhich is to be considered by the Municipal Corporation as observed bythe High Court in its judgment and order dated 10.06.2020. Nothingmore is required to be said about the order dated 04.06.2020 issued bythe Office of the Municipal Corporation.
21. Now, we come to the submission of Shri Sibal with regard toorders and notices issued by the Municipal Corporation and other StateAuthorities subsequent to filing of this appeal. The orders and noticesissued by the Municipal Corporation and other State Authorities whichhave been brought on record by the IA No. 72517/2020 are all subsequentactions which were not subject matter of the writ petition before theHigh Court and cannot be taken into consideration in this appeal.
22. With regard to subsequent notices, actions and orders, as noticedabove, brought on record by IA noted above the said issues cannot beentertained in this appeal. We give liberty to the parties to seek suchremedy with regard to subsequent actions and orders as permissible inlaw. The appeal is disposed of accordingly.
Appeal disposed of.
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