THE INSPECTOR GENERAL OF REGISTRATION, TAMIL NADU AND ORS. versus K. BASKARAN on 15 June 2020

THE INSPECTOR GENERAL OF REGISTRATION,TAMIL NADU AND ORS.

v.

K. BASKARAN

(Civil Appeal No. 2586 of 2020)

JUNE 15, 2020

[UDAY UMESH LALIT AND INDU MALHOTRA, JJ.]

Tamil Nadu Stamp (Prevention of Undervaluation ofInstruments) Rules, 1968: r.11-A – Whether the directions issued bythe appellate authority namely Chief Controlling Revenue Authority(Inspector General of Registration) in asking the Deputy InspectorGeneral of Registration, or any other officer, to conduct the siteinspection, amounted to delegation of his functions and violatedr.11-A of the Rules and thereby vitiated the entire proceedings –Held: r.11A empowers the appellate authority to call for anyinformation or record from any public office, officer or authorityor to examine and record statements from any member of the publicoffice or authority – In exercise of such power, if the appellateauthority calls for any information or calls for any record or anyinputs, that by itself, will not amount to delegation of essentialfunctions – If, in terms of such power, the appellate authority deputesa responsible official to enquire into certain facets and calls for areport, that would be an ordinary mode of exercise of power vestedin the appellate authority – So long as the essential function, that isto say of considering all the necessary factors and inputs andthereafter arriving at an informed decision is done by the appellateauthority, the burden of performing ancillary tasks need not beshouldered by the appellate authority – Stamp Act, 1899.

Stamp Act, 1899: s.76-A – Submission that powers that canbe delegated are specifically provided under s.76-A of the Act, andthe power under s.47-A is not one such power; and unless the powerto sub-delegate is conferred expressly or impliedly under a statute,the power cannot be sub-delegated – Held: Submission is completelymisplaced – s.76-A of the Principal Act enables the State Governmentto delegate some of the statutory powers conferred upon it by thePrincipal Act to the Chief Controlling Revenue Authority – Such

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Aempowerment has nothing to do with the legislative power exercisedby the State in terms of which s.47-A was inserted, or with the Rulespromulgated to effectuate s.47-A – For interpreting and consideringthe context of s.47-A or the Rules, the fact that certain other statutorypowers in favour of the State Government are delegable, hasabsolutely no relation – s.47-A was inserted by the State in itsBlegislative power and the Rules framed thereunder have to beconsidered on their own and without being influenced by s.76-A ofthe Act – Tamil Nadu Stamp (Prevention of Undervaluation ofInstruments) Rules, 1968.

Tamil Nadu Stamp (Prevention of Undervaluation ofCInstruments) Rules, 1968: r.7 – Whether r.7 of the Rules prescribing3 months’ time for the Collector to pass an order determining themarket value of the properties and duty payable on the instrumentfrom the first notice, is directory or mandatory – Held: Under sub-section (1) of s.47-A of the Stamp Act, if there is reason to believe Dthat the market value has not been truly set forth in the Instrumenttendered for registration, a reference can be made to the Collector,who (i) after giving the parties reasonable opportunity of beingheard; and (ii) after holding an enquiry in such manner as may beprescribed by Rules, has to determine the correct value of theconcerned property – The Section by itself does not lay down anyEperiod within which the entire process is to be completed by theCollector – It simply states that the enquiry be held in “such manner”as may be prescribed by Rules – If the stipulation or fixation ofperiod of three months from the first notice in terms of r.6 or fromnotice in Form II is taken to be mandatory, it would lead to a

Procedure

Fsituation of incongruity – The fact that Form II notice had beenissued, would mean that on a prima facie view of the record andmaterial, the value stated in the instrument was not the correct value;which in turn would mean that prima facie the Government Cofferswere being denied the rightful dues – If for any reason, the proceedings are not completed within three months and, therefore,Gmust be held to be vitiated, the public interest would suffer, and thepersons who were prime facie responsible for suppressing real valuewould stand to gain – The amendment of r.7 incorporating the periodof three months was essentially to guide the public officials tocomplete the process as early as possible but was not intended toHcreate a right in favour of those who had prima facie conducted themselves prejudicing public interest – Pertinently, the concernedprovision has not spelt out any consequence for non-adherence tosaid period of three months – The fixation of timeline of three monthsin r.7 is, therefore, purely directory – Stamp Act, 1899 – s.47A.

Stamp Act, 1899: s.47A – Whether the appellate authority haspower under s.47A of the Act to enhance the market value of theproperty while deciding the appeal filed by the registrants – Held:Sub-section (6) of s.47-A of the Act empowers the Chief ControllingRevenue Authority, in exercise of suo motu power, to call for andexamine the correctness of an order passed under sub-section (2)or sub-section (3) of s.47-A; and if the order is prejudicial to theinterest of Revenue, the Chief Controlling Authority may make suchenquiry or cause such enquiry to be made and either revise, modifyor set aside such order and pass any order that it deems appropriate– There are some limitations on the exercise of said power, since noproceedings can be initiated against an order passed under sub-section (2) or sub-section (3), if the time for preferring an appealagainst that order has not expired, or if more than five years haveexpired after passing of the order – The intent is clear that if therebe sufficient time to prefer a regular appeal challenging that order,the remedy of filing an appeal ought to be taken resort to – Further,if the period of five years has expired, no suo motu power can beexercised – Another limitation is prescribed by sub-section (8), interms of which no order in exercise of suo motu exercise of powercan be passed which may adversely impact a person, unless thatperson has had reasonable opportunity of being heard – Apart fromthese limitations, the statutory provisions do not impose any otherrestriction, and the power is conferred principally to ensure that noorder passed under sub-sections (2) or (3) of s.47-A is prejudicialto the interest of the revenue – In the present case, while proposingto enhance the market value higher than what was determined bythe Collector, the appellate authority had put the appellant-registrantto sufficient notice and had called for response with regard to theproposed enhancement – It was nobody’s case that as on the datewhen the proceedings were initiated in exercise of the power undersub-section (6) of s.47-A, the period for preferring the appeal hadnot expired, or that more than five years had expired after the passingof the order under sub-section (2) or sub-section (3) – In thecircumstances, none of the limitations which the statute has imposed A

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Allowing the appeals, the Court

Conclusion

HELD: 1.1 Rule 11A of theTamil Nadu Stamp (PreventionCof Undervaluation of Instruments) Rules, 1968 empowers theappellate authority to call for any information or record from anypublic office, officer or authority or to examine and recordstatements from any member of the public office or authority. Inline with the principles laid down by this Court, it can thereforebe said that in exercise of such power, if the appellate authorityDcalls for any information or calls for any record or any inputs, thatby itself, will not amount to delegation of essential functions.Practical necessities and exigencies of administration demandthat the appellate authority must be able to delegate certain taskssuch as collecting information after causing inspection. So longEas the essential function, that is to say of considering all thenecessary factors and inputs and thereafter arriving at an informeddecision is done by the appellate authority, the burden ofperforming ancillary tasks need not be shouldered by the appellateauthority. [Para 15][375-F-H; 376-A]F1.2 The submission that powers that can be delegated arespecifically provided under Section 76-A of the Act, and the powerunder Section 47-A is not one such power; and unless the powerto sub-delegate is conferred expressly or impliedly under astatute, the power cannot be sub-delegated is completelymisplaced and does not deserve acceptance. Section 76-A wasGinserted in the Principal Act vide the Decentralization Act, 1914(Act No. IV of 1914). The legislative head in Entry 44, namely“Stamp duties other than duties on or fees collected by means ofjudicial stamps, but not including rates of stamps” is in theConcurrent List of Schedule VII to the Constitution. Section 47-HA was inserted in the Principal Act by the State Legislature by enacting the Tamil Nadu Act No.24 of 1967 which received theassent of the President on 29[th] March, 1968. The Rules includingRule 11-A were framed to effectuate the letter and spirit of Section47-A. Section 76-A of the Principal Act enables the StateGovernment to delegate some of the statutory powers conferredupon it by the Principal Act to the Chief Controlling RevenueAuthority. Such empowerment has nothing to do with thelegislative power exercised by the State in terms of which Section47-A was inserted, or with the Rules promulgated to effectuateSection 47-A. For interpreting and considering the context ofsaid Section 47-A or the Rules, the fact that certain other statutorypowers in favour of the State Government are delegable, hasabsolutely no relation. Section 47-A was inserted by the State inits legislative power and the Rules framed thereunder have tobe considered on their own and without being influenced bySection 76-A. Therefore, in observing that the inspection oughtto have been carried out by the Inspector General of Registrationhimself, and such function could not have been delegated, theHigh Court failed to appreciate the principles laid down by thisCourt. Any report that was called for was essentially in the natureof rendering assistance to the appellate authority in discharge ofits functions. The final order passed by the appellate authority,after considering all the necessary material, must be taken to beone rendered by the appellate authority on its own, and therewas no delegation of any essential functions vitiating exercise ofpower. [Paras 8, 16, 17][367-B-C; 376-B, D-H; 377-A-B]

2.1 Under sub-section (1) of Section 47-A of the Act, if thereis reason to believe that the market value has not been truly setforth in the Instrument tendered for registration, a reference canbe made to the Collector, who (i) after giving the partiesreasonable opportunity of being heard; and (ii) after holding anenquiry in such manner as may be prescribed by Rules, has todetermine the correct value of the concerned property. TheSection by itself does not lay down any period within which theentire process is to be completed by the Collector. It simply statesthat the enquiry be held in “such manner” as may be prescribedby Rules. According to the Rules, following steps are requiredto be undertaken to hold the enquiry: On receipt of reference asstated above, the Collector must issue notice in Form I to the ABC

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Apersons by whom and in whose favour the Instrument is executed,informing such persons to produce all evidence to show that themarket value has been truly set forth in said instrument. Thenotice must give such persons time of twenty one days from thereceipt of notice to represent or respond. [Rule 4(1)] TheCollector may record statement of any such noticee. [Rule 4(2)].BFor the purposes of the enquiry, the Collector may call forinformation from any public office or examine and recordstatements or inspect the property after due notice as stated indetail in Rule 4(3). After considering the representations, if any,and the record and evidence, a provisional order determiningCthe market value must be passed indicating the basis for suchconclusion. [Rule 4(4)]. The provisional order must becommunicated in Form II to all the concerned persons who mustbe given some time to prefer objections, if they so wish; and theymust be heard on the day fixed in the notice or on such other day as may be fixed. [Rule 6] After considering the representationsDin writing and those urged at the time of hearing as well as all therelevant factors and evidence, the Collector must pass an orderdetermining the market value of the concerned property andassess the element of duty payable on the instrument of transfer.Such order is required to be passed “within three months fromEthe date of first notice”. [Rule 7] [Para 20][378-G-H; 379-A-G]

2.2 The expression “within three months from the date offirst notice” is crucial. The description “first notice” is notreferable to notice in Form I issued in terms of Rule 4(1). FormI notice itself must give 21 days to the concerned persons to Frespond. Depending upon their response, their statements wouldbe recorded and/or certain information may be required to becalled for, whereafter the Order in Form II is to be issuedprovisionally determining the market value. The concernedpersons are entitled to raise objections in writing and must beafforded hearing. After fulfilling these requirements, the order inGterms of Rule 7 can be passed. All these stages may not becompleted in three months. Further, the reference in Rule 7 is tothe “first notice” and not to “notice in Form I”. Considering thecontext and various stages preceding the stage of passing of theOrder under Rule 7, the reference has to be to the first “noticeH

in Form II”. There could possibly be more than one notices inForm II, specially when the hearing is to take place on anadjourned date and that is why the period must be reckoned fromthe first notice in Form II. The expression immediately following“first notice” in Rule 7 is “determining the market value of theproperties….” That is also indicative that the reference to thenotice is one in Form II in the immediately preceding Rule 6.[Para 21][379-H; 380-A-D]

State of Mysore and others v. V. K. Kangan and others(1976) 2 SCC 895 : [1976] 1 SCR 369; T. V. Usman v.Food Inspector, Tellicherry Municipality, Tellicherry(1994) 1 SCC 754; P. T. Rajan v. T.P.M. Sahir andothers (2003) 8 SCC 498 : [2003] 4 Suppl. SCR 84;Mackinnon Mackenzie and Company Ltd. v. MachinnonEmployees Union (2015) 4 SCC 544 : [2015] 4 SCR 45;State of UP v. Babu Ram Upadhyay AIR 1961 C 751 :[1961] SCR 679; Shrif Uddin v. Abdul Gani Lone(1980) 1 SCC 403 : [1980] 1 SCR 1177 – relied on.

2.3 Section 47-A by itself does not prescribe any timeline.If the stipulation or fixation of period of three months from thefirst notice in terms of Rule 6 or from notice in Form II is takento be mandatory it would lead to a situation of incongruity. Thefact that Form II notice had been issued, would mean that on aprima facie view of the record and material, the value stated inthe instrument was not the correct value; which in turn wouldmean that prima facie the Government Coffers were being deniedthe rightful dues. If for any reason the proceedings are notcompleted within three months and, therefore, must be held tobe vitiated, the public interest would suffer, and the persons whowere prime facie responsible for suppressing the real value, wouldstand to gain. The amendment of Rule 7 incorporating the periodof three months was essentially to guide the public officials tocomplete the process as early as possible but was not intendedto create a right in favour of those who had prime facie conductedthemselves prejudicing public interest. Pertinently, theconcerned provision has not spelt out any consequence for non-adherence to said period of three months. The fixation of timeline A

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[2020] 11 S.C.R.

Aof three months in Rule 7 is, therefore, purely directory.[Paras 25, 26][385-D-F, G-H; 386-A]

State of Mysore and others v. V. K. Kangan and others(1976) 2 SCC 895 : [1976] 1 SCR 369 – relied on.

3.1 Sub-section (6) of Section 47-A of the Act empowersBthe Chief Controlling Revenue Authority, in exercise of suo motupower, to call for and examine the correctness of an order passedunder sub-section (2) or sub-section (3) of Section 47-A; and ifthe order is prejudicial to the interest of Revenue, the ChiefControlling Authority may make such enquiry or cause suchCenquiry to be made and either revise, modify or set aside suchorder and pass any order that it deems appropriate. There aresome limitations on the exercise of said power, since noproceedings can be initiated against an order passed under sub-section (2) or sub-section (3), if the time for preferring an appealagainst that order has not expired, or if more than five yearsDhave expired after passing of the order. Further, if the period offive years has expired, no suo motu power can be exercised.Another limitation is prescribed by sub-section (8), in terms ofwhich no order in exercise of suo motu exercise of power can bepassed which may adversely impact a person, unless that personEhas had reasonable opportunity of being heard. Apart from theselimitations, the statutory provisions do not impose any otherrestriction, and the power is conferred principally to ensure thatno order passed under sub-sections (2) or (3) of Section 47-A isprejudicial to the interest of the revenue. [Para 30][390-D-G]

FRajendran v. The Inspector General of Registration,Tamil Nadu and others 2012 (3) CTC 589 – relied on.

3.2 In the present case, adequate notice was issued to theconcerned persons and, therefore, there was no infirmity on thatcount. It is nobody’s case that as on the date when theGproceedings were initiated in exercise of the power under sub-section (6) of Section 47-A, the period for preferring the appealhad not expired, or that more than five years had expired afterthe passing of the order under sub-section (2) or sub-section (3).In the circumstances, none of the limitations which the statutehas imposed upon the exercise of power were present. [ParaH30][391-A-B]

M/s Ram Kanai Jamini Ranjan Pal Pvt. Ltd. v. Member,Board of Revenue, West Bengal (1976) 3 SCC 369 :[1976] Suppl. SCR 110; State of Orissa and others v.Brundaban Sharma and another (1995) 3 Suppl. SCC249; Vijayabai and others v. Shriram Tukaram andothers (1999) 1 SCC 693 : [1998] 3 Suppl. SCR 54;Sree Balaji Rice Mill, Bellary v. State of Karnataka(2005) 4 SCC 21 : [ 2005] 3 SCR 12 – relied on.

3.3 For exercising revisional power “suo motu” or “on itsmotion”, the concerned authority must be satisfied that an orderhas been passed by the authority or officer subordinate to it whichmay be prejudicial to the interest of the revenue. If an infirmityor illegality is brought to the notice or knowledge of the revisionalauthority, through normal and regular process of reporting bythe subordinate officer or authority, the power of revision cancertainly be exercised. The requisite knowledge enabling therevisional authority to exercise the power vested in it, can alsobe gathered from the appeal preferred by the registrant himself.That may only be an occasion or a source which enables theauthority to gather information about the possible infirmity orillegality in the process. Upon being so aware, the revisionalauthority would thereafter be exercising power vested in it.[Para 35][395-E, F-H]

3.4 There is nothing in the scheme of the Act which purportsto restrict the exercise of suo motu power under Section 47-A,and confines it to cases where knowledge of any illegality orinfirmity in the proceedings undertaken by the subordinateofficers must be gathered from sources other than through apending appeal. Unless the statute expressly or even bynecessary implication restricts the exercise of power, there wouldbe no occasion to read into the power, any other limitations. TheHigh Court has not found the exercise of power to be invalid onany count, nor was any such submission advanced before the HighCourt. The High Court had simply gone on the existence of powerrather than on the exercise of power. It is not as if the assessmentmade by the appellate authority was either opposed to principlesof natural justice, or was so palpably incorrect, that it could neverbe sustained. The High Court completely erred in setting aside A

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Athe exercise of power undertaken by the concerned authority.The exercise of power was definitely designed to obviate anobvious illegality and prejudice to the interest of the revenue.The exercise was, thus, absolutely correct, and there was nooccasion to set aside the orders passed in pursuance thereof.[Para 36][396-C-F]B

Sahni Silk Mills (P) Ltd. and another v. Employees’ StateInsurance Corporation (1994) 5 SCC 346 : [1994] 1Suppl. SCR 626; Pradyat Kumar Bose v. The Hon’blethe Chief Justice of Calcutta High Court [1955] 2 SCR1331; Union of India and Anr. v. P. K. Roy and Ors.C[1968] 2 SCR 186; State of Bombay (Maharashtra) v.Shivbalak Gourishanker Dube and others [1965] 1SCR 211; Sidhartha Sarawgi v. Board of Trustees forthe Port of Kolkata and others (2014) 16 SCC 248 :[2014] 14 SCR 1493 – referred to.

D

THE INSPECTOR GENERAL OF REGISTRATION, TAMILNADU AND ORS. v. K. BASKARAN

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2586of 2020.

From the Judgment and Order dated 02.02.2018 of the High Courtof Judicature at Madras in C.M.A. No. 2666 of 2012.

With

C.A. Nos. 2587, 2588, 2589-2592, 2593-2597, 2598, 2599, 2600of 2020.

Jayanth Muth Raj, AAG, S. Nagamuthu, Sr. Adv., M. YogeshKanna, S. Raja Rajeshwaran, Ms. Uma Prasuna Bachu, T. SundarRamanathan, Abhishek Anand, Ishaan Chakrabarti, M. P. Devanath,M. A. Venkata Subramanian, Rakesh K. Sharma, K. V. Mohan, K. V.Balakrishnan, Rahul Kumar Sharma, Raghav Shankar, PrateekK. Chadha, Ms. Arshiya Sharda, P.J. George, Madhusudan Reddy,Najeeb Usman Khan, M.P. Srivignesh, Abinaya Kalaignan T., JoseAbraham, Pulkit Tare, D. Kumanan, Suvendu Suvasis Dash, Ms. MishaRohatgi Mohta, Muthu Thangaturai, Johnson Subba, Nakul Mohta, AntonyR. Julian, Danish Zubair Khan, Anish R. Shah, Manjunath Meled, M.V.V.Ramana, Ganesh Kumar R., Advs. for the appearing parties.

The Judgment of the Court was delivered by UDAY UMESH LALIT, J.

1. Leave granted.

2. These eight appeals raise common questions touching upon theinterpretation of Section 47A[1] of the Indian Stamp Act, 1899 (‘the Act’,for short) and the Tamil Nadu Stamp (Prevention of Undervaluation ofInstruments) Rules, 1968 (‘the Rules’, for short) as amended from timeto time. Said Section 47-A of the Act now stands:- “Section 47-A. Instrument of conveyance etc., undervaluedhow to be dealt with.- (1) If the Registering Officer appointedunder the Indian Registration Act, 1908 (Central Act XVI of 1908),while registering any Instrument of conveyance, [exchange, gift,release of benami right or settlement] has reason to believe thatthe market value of the property of which is the subject matter of 1 As inserted by the Tamil Nadu Act 24 of 1967. Later, by the Tamil Nadu Act 1 of2000, Sub- Sections (4) to (10) in Section 47-A were substituted for Sub-Sections (4) and(5)

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conveyance, exchange, gift, release of benami right or settlement,has not been truly set forth in the instrument, he may, afterregistering such instrument, refer the same to the Collector, fordetermination of the market value of such property and the properduty payable thereon.

(2) On receipt of reference under sub-section (1), the Collectorshall, after giving the parties reasonable opportunity of being heardand after holding an enquiry in such manner as may be prescribedby Rules made under this Act, determine the market value of theproperty which is the subject matter of conveyance, exchange,gift, release of benami right or settlement, and the duty as aforesaid.The difference, if any, in the amount of duty, shall be payable bythe person liable to pay the duty.

(3) The Collector may, suo motu, or otherwise, within five yearsfrom the date of registration of any instrument of conveyance,exchange, gift, release of benami right or settlement, not alreadyreferred to him under sub-section (1), call for and examine theinstrument for the purpose of satisfying himself as to the correctnessof the market value of the property which is the subject matter ofconveyance, exchange, gift, release of benami right or settlement,and the duty payable thereon and if after such examination, hehas reason to believe that the market value of the property hasnot been truly set forth in the instrument, he may determine themarket value of such property and the duty as aforesaid inaccordance with the procedure provided for in sub-section (2).The difference, if any, in the amount of duty, shall be payable bythe persons liable to pay the duty; Provided that nothing in this sub-section shall apply to anyinstrument registered before the date of commencement of theIndian Stamp (Tamil Nadu Amendment) Act, 1967.

(4) Every person liable to pay the difference in the amount ofduty under sub-section (2) or sub-section (3) shall, payable suchduty within such period as may be prescribed. In default of suchpayment, such amount of duty outstanding on the date of defaultshall be a charge on the property affected in such instrument.On any amount remaining unpaid after the date specified for itspayment, the person liable to pay the duty shall pay, in addition to the amount due, interest at one per cent per month on such amountfor the entire period of default.

… … …

(5) Any person aggrieved by an order of the Collector under sub-section (2) or sub-section (3), may appeal to such Authority asmay be prescribed in this behalf. All such appeals shall be preferredwithin such time, and shall be heard and disposed of in suchmanner, as may be prescribed by rules made under this Act.

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(6) The Chief Controlling Revenue Authority may, suo motu, callfor and examine an order passed under sub-section (2) or sub-section (3) and if such order is prejudicial to the interests of revenue,he may make such inquiry or cause such inquiry to be made and,subject to the provisions of this Act, may initiate proceedings torevise, modify or set aside such order and may pass such orderthereon as he thinks fit.

(7) The Chief Controlling Revenue Authority shall not initiateproceedings against any order passed under sub-section (2) orsub-section (3) if, - (a) the time for appeal against that order has not expired; or (b) more than five years have expired after the passing of suchorder.

(8) No order under sub-section (6) adversely affecting a personshall be passed unless that person has had a reasonable opportunityof being heard.

(9) In computing the period referred to in clause (b) of sub-section(7), the time during which the proceedings before the ChiefControlling Revenue Authority remained stayed under the orderof Court shall be excluded.

(10) Any person aggrieved by an order of the Authority prescribedunder sub-section (5) of the Chief Controlling Revenue Authorityunder sub- section (6) may, within such time and in such manner,as may be prescribed by rules made under this Act, appeal to theHigh Court.

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AExplanation.- For the purpose of this Act, market value of anyproperty shall be estimated to be price which, in the opinion of theController or the Chief Controlling Revenue Authority or the HighCourt, as the case may be, such property would have fetched orwould fetch, if sold in the open market on the date of execution ofthe instrument of conveyance, exchange, gift, release or benamiBright or settlement.”

3. The appeal arising out of Special Leave Petition (Civil) No.15790of 2019 is taken as the lead matter and facts pertaining to said appealare set out in detail for facility. The facts involved in other appeals arealmost identical except for details such as the case numbers, dates ofCorders and the details of properties in question.

4. The appeal from Special Leave Petition (Civil) No.15790 of2019 arises out of the final judgment and order dated 02.02.2018 passedby the High Court[2] in CMA No. 2666 of 2012 in following circumstances:- DA. The Respondent purchased two properties comprised in R.S.No.372/2A – Sidharavuthanpalayam Village, Tiruppur Taluk, ErodeDistrict, (i) admeasuring about 46216 sq.ft. through Sale Deed dated21.02.2000 registered as Doct. No.2647 of 2000 of Book 1 valued atRs.4,78,000/- and (ii) admeasuring about 47960 sq. ft through Sale Deeddated 18.02.2000 registered as Doct. No.2648 of 2000 of Book 1 valuedEat Rs.4,96,000/- (i.e. Rs.10.34 per sq.ft.).

B. As the value in said Sale Deeds was less than the GuidelineValue of Rs.58.30 per sq.ft., the Sub-Registrar, Dharapuram, AppellantNo.5 herein, referred the matter to the Special Deputy Collector(Stamps), Coimbatore i.e. Appellant No.2 herein, under Section 47-A ofFthe Act.

C. On 13.9.2000 Appellant No. 2 issued Form No. 1 notices inMu.Pa. (S.R.) No.3667 of 2000 D and Mu.Pa. (S.R.) No. 3668/2000 Dseeking explanation from the Respondent why the deficit stamp duty ofRs.2,66,088/- and Rs.2,76,132/- respectively should not be collected.GThereafter, Appellant No. 2 issued Form No. II notices on 04.02.2003 tothe Respondent, whereby the provisional value of the property wasdetermined at the rate of Rs.58.30/- per sq.ft. as against the value ofRs.10.34/- per sq.ft. set forth in the Sale Deeds in question.

H2 The High Court of Judicature at Madras

D. Appellant No.2 issued Final Orders on 30.04.2003 in Mu.Pa.(S.R.) Nos. 3667 and 3668 of 2000 D. In Mu.Pa. (S.R.) No.3667 of2000 D, it was observed: - “With reference to the Form I notice no representations receivedfrom the registrant and he never turned for hearing in spite ofseveral reminders and notices issued and no objections filed.

Hence, provisional order in Form II was issued. Neither theobjections received from the purchaser nor appeared for thehearing. It is learnt that the registrant has no objection regardingthe valuation of the document. It is hereby ordered confirmingthe provisionally determined value as noted in the Form II citedin the reference 3.

It is hereby ordered that the open market value is finally determinedat Rs.26,95,400/- purchased through the document as per detailsnoted in the pre page.

With reference to the above value the stamp duty leviable atRs.3,23,448/- excluding the stamp duty already paid Rs.57,360/-the deficit stamp duty to be paid Rs.2,66,088/- (Rupees Two LakhsSixty Six Thousand Eighty Eight Only).

The registrant is requested to remit the deficit stamp dutyRs.2,66,088/- under the head of account 0030 stamps Registration030G Fee deficit stamp duty ABAA0202 in the State Bank ofIndia or in the Sub Treasury office and the original Challan shallbe sent to this office within 2 weeks from the date of this order.”

In Mu.Pa. (S.R.) No.3668 of 2000 D, the market value wasassessed at Rs.27,97,100/- and similar consequential directions werepassed.

E. The Respondent filed statutory appeal which was rejected bythe Inspector General of Registration i.e. Appellant No. 1 vide orderdated 05.08.2005. At the appellate stage, a report was called for fromDistrict Registrar, Erode, which was referred to in the order dated05.08.2005 as under:- “…This Appeal was admitted and the Deputy Inspector GeneralKovai appointed as the enquiry officer and to inspect the documentproperty premises and to recommend determination of the truemarket value of the document property as per enquiry. The original AB

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Afile was also required from the District Revenue Officer (Stamps).On perusal of the original file of the District Revenue Officer(Stamps) office and it was found that, since the appellant notturned for enquiry and considered that there are no objections, theguideline value was confirmed.

BIn the report of the District Registrar Erode enclosed with theletter received from the Deputy Inspector General Kovai he hasrecommended that while conducting the spot Inspection of theSurvey field the properties lying in the village on the date ofregistration on 21.02.2002 were not incorporated with themunicipality and it was incorporated with the municipality only onC01.04.2003, since the document properties were incorporated inthe Municipality area at present value is fixed at Rs.200/- persq.ft. and it is apt to determine the value at Rs.58.30/- per sq.ft.,on the date of registration.”

F. The Respondent, being aggrieved, filed CMA No. 2666 of 2012Din the High Court challenging the said order dated 05.08.2005 whichwas allowed by the High Court by its judgment and order dated 02.02.2018.The High Court observed that Appellant No.1 had delegated his duty tothe Deputy Inspector General of Registration, which was against thedecision of the High Court in the case of S. Santhi vs. Chief RevenueEControlling Authority (CMA No. 2820 of 2012) decided on 05.06.2015.It was also observed that Rule 6 was not followed. The High Court thusconcluded:- “8. Therefore, the first Respondent is not empowered to delegatethe powers conferred on him. Similarly, the procedure contemplatedFunder Rule 6 of the Rules is also not followed by the authoritieswhile determining the market value of the property. As such, theentire proceedings are vitiated, in view of violation of Rules 6 and11-A of the Rules. Accordingly, the impugned order passed by thefirst Respondent is not sustainable in law and the same is setaside. The authorities are directed to release the document to theGAppellant.”It was, however, not stated how the procedure contemplated byRule 6 was not followed.

G. The decision in S. Santhi (supra) which was relied upon, hadobserved as under:-H

“17. The Authority conferred with certain functions under a statutehas to carry out the same on its own such function and cannotdelegate the same to another in the absence any contemplationfor such delegation under the Act. In the present case, under rule4(3)(c) and rule 11-A of the rules, 2nd respondent-Collector andthe 1st respondent-Inspector General of Registration respectively,have to inspect the property and there is no enabling provisionunder the rules or under the Act to delegate such power. Therefore,inspections by other officers at the behest of the respondents vitiatethe entire proceedings.

18. The failure on the part of the 2nd respondent to pass a finalorder within 3 months from the date of Form-I notice as mandatedunder rule 7 of the rules vitiates the entire proceedings. Form-Inotice was issued on 17.05.2005 and the final order was passedon 05.12.2006, after 11/2 years, i.e., after 3 months and hence theentire proceedings are vitiated.

19. The impugned order has been passed by the 1st respondentpurely based on inspection reports of the District registrar /DeputyThasildar, who are not authorised under the Act and hence thesaid inspection reports are not materials collected by the authorities,entitled under the Act. Hence the proceedings of the 2nd respondentand 1st respondent are vitiated.”

5. Similar orders were passed by the High Court in other matterswhich orders are presently under appeal in companion matters. Sincethe matters arise in the backdrop of provisions contained in the Rules,Rules 4 to 7 and 11A of the Rules are quoted hereunder: - “4. Procedure on receipt of reference under Section 47-A.(1) On receipt of a reference under sub-Section (1) of Section47-A, from a registering officer, the Collector shall issue a noticein Form I.

(a) to every person by whom, and

(b) to every person in whose favour the instrument has beenexecuted.

Informing him of the receipt of the reference and asking him tosubmit to him his representations, if any, in writing to show thatthe market value of the property has been truly set forth in the A

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Ainstrument, and also to produce all evidence that he has in supportof his representation, within 21 days from the date of service ofthe notice.

(2) The Collector may, if he thinks fit, record a statement fromany person to whom a notice under sub-rule (1) has been issued.

B(3) The Collector may for the purpose of his enquiry –

(a) call for any information or record from any public office,officer or authority under the government or any local authority; (b) examine and record statements from any member of thepublic, officer or authority under the Government or the localauthority; and C

(c) inspect the property after due notice to the partiesconcerned.

(4) After considering the representations, if any, received fromDthe person to whom notice under sub- rule (1) has been issued,and after examining the records and evidence before him, theCollector shall pass an order in writing provisionally determiningthe market value of the properties and the duty payable. The basison which the provisional market value was arrived at shall beclearly indicated in the order.

E

5. Principles for determination of market value.- The Collectorshall, as far as possible, have also regard to the following points inarriving, at the provisional market value, (a) In the case of lands –

F

(i) classification of the land as dry, manavari, wet and thelike;

(ii) classification under various tarams in the settlementregister and accounts;

(iii) the rate of revenue assessment for each classification;(iv)other factors which influence the valuation of the landin question; G

(v) points if any, mentioned by the parties to the Instrumentor any other person which requires specialHconsideration.;

(vi) value of adjacent lands or lands in the vicinity;A

(vii) average yield from the land, nearness to road and market,distance from village site, level of land, transport facilities,facilities available for irrigation such as tank, wells andpumpsets.

B

(viii) The nature of crops raised on the land; and

(ix) The use of land, domestic, commercial, industrial oragricultural purposes and also the appreciation in valuewhen an agricultural land in being converted to aresidential, commercial or an industrial land.

C

(b) In the case of house sites –

(i) the general value of house sites in the locality;

(ii) nearness to roads, railway station, bus route;

(iii) nearness to market, shops and the like; D

(iv) amenities available in the place like public offices,hospitals and educational institutions;

(v) development activities, industrial improvements in thevicinity; E

(vi) land tax valuation of sites with reference to taxationrecords of the local authorities concerned;

(vii) any other features having a special bearing on thevaluation of the site; and(viii)any special feature of the case represented by the parties.

F

(c) In the case of buildings –

(i) type and structure;

(ii) locality in which constructed;

(iii) plinth area;

G

(iv) year of construction;

(v) kind of materials used;

(vi) rate of depreciation;

(vii) fluctuation in rates;

H

A(viii)any other features that have bearing on the value;

(ix) property tax with reference to taxation records of localauthority concerned;

(x) the purpose for which the building is being used and theincome if any, by way of rent per annum secured on thebuilding; and B

(xi) any special feature of the case represented by the parties.

(d) Properties other than lands, house sites and buildings –

(i) The nature and condition of the property; C

(ii) Purpose for which the property is being put to use; and

(iii) Any other special features having a bearing on thevaluation of the property.

6. Procedure after arriving at provisional market value.-DThe Collector shall communicate a copy of his order provisionallydetermining the market value of the properties and the duty payable,to all the persons who are liable to pay the duty along with thenotice in Form II and call upon the parties to lodge their objections,if any, to such determination of the market value within the timespecified in the notice. The Collector shall also hear the parties onEthe date specified in the notice or on such other day as may befixed by him.

D

7. Final Order determining the market value.-

(1) The Collector shall, after considering the representationsFreceived in writing and those urged at the time of hearing or in theabsence of any representation from the parties concerned or theirfailure to appear in person at the time of hearing in any case aftercareful consideration of all the relevant factors and evidenceavailable with him pass an order within three months from thedate of first notice determining the market value of the propertiesGand the duty payable on the instrument, and communicate theorder so passed to the parties and take steps to collect the differencein the amount of stamp duty, if any.

(2) A copy of the order shall be communicated to the registeringofficer concerned for his record.

H

(3) The difference in the amount of duty determined by the Collectorshall be paid within two months from the date of final order passedunder sub-Section (2) or sub-Section(3) of Section 47-A

(4) The Collector shall, after collecting the difference in amountof stamp duty and interest, if any, under Section 47-A, give acertificate in Form III by endorsement on the instrument.

………

11-A. Decision of the appellate authority. The appellateauthority may, for the purpose of deciding an appeal, - (a) call for any information or record from any public office,officer or authority under the government or any localauthority; (b) examine and record statements from any member of thepublic officer of authority under the government or thelocal authority[3] ; and

(c) inspect the property after due notice to the partiesconcerned.”

6. We heard Mr. Jayanth Muth Raj, learned Additional AdvocateGeneral for the Appellants in all the appeals and M/s. T. SundarRamanathan, M.A. Venkata Subramanian, K.V. Mohan, Raghav Shankar,P.J. George and Pulkit Tare, learned Advocates for the concernedRespondents. Following questions arise for our consideration: -

1. Whether the directions issued by the appellate authoritynamely Chief Controlling Revenue Authority (InspectorGeneral of Registration) in asking the Deputy InspectorGeneral of Registration, or any other officer, to conduct thesite inspection, amounted to delegation of his functions andviolated Rule 11-A of the Rules and thereby vitiated theentire proceedings?

This question arises in all the appeals.

2. Whether Rule 7 of the Rules prescribing 3 months’ timefor the Collector to pass an order determining the market 3 The text is as per the Gazette published on 09.03.2001. The language is, however, notsimilar to that of Rule 4(3)(b).

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B

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A

value of the properties and duty payable on the instrumentfrom the first notice, is directory or mandatory?

This issue arises in all the appeals, except the one arisingout of Special Leave Petition (Civil)No. 17103 of 2019.

3. Whether the appellate authority has power under SectionB47A of the Act to enhance the market value of the propertywhile deciding the appeal filed by the registrants?

The issue arises only in the appeal from Special LeavePetition (Civil) Nos. 31633-31637 of 2018.

C7. Before we deal with these questions, an issue regarding allegedviolation of Rule 6 may be addressed first. In the petition of appeal in thelead matter, the following grounds are taken: - “L. Because the Hon’ble High Court failed to appreciate thatForm II provisional notices were issued by the 2[nd] PetitionerDdetermining the provisional market value of the subject propertiesin consonance with Rule 6 of the Rules. The Hon’ble High Courterred in passing an order in the favour of the Respondent withoutappreciating the facts of the instant matter wherein no violationof Rule 6 occurred and the procedure laid down under Rule 6 wasduly followed.

E

M. Because the Hon’ble High Court failed to appreciate that asno objections were received from the Respondent against thenotices issued in Form I or Form II, the 2[nd] Petitioner accordinglyproceeded with passing the final orders. The procedure for arrivingat the final market value was suitably followed in accordance toFthe Rules.”

The order of the appellate authority does not disclose any groundof such violation being raised. We, therefore, find that there was noviolation of the procedure prescribed under Rule 6. Similar situationobtains in appeals arising of Special Leave Petition (Civil) Nos.17103 ofG2019 and 31633-31637 of 2018.

8. With regard to question no.1, it is submitted on behalf of theAppellants that under Rule 11-A the appellate authority can call for anyinformation from any officer or authority, and can direct any officer orauthority under the government, or any public authority, to inspect theHproperty, collect information and send the report; and that causing such inspection of the property or collection of evidence and calling for areport, does not amount to delegation of his core function. It is emphasizedthat causing personal inspection of properties in every appeal would behumanly impossible. In response, it is submitted on behalf of theRespondents: -

a) Powers that can be delegated are specifically provided underSection 76-A of the Act, and the power under Section 47-A is notone such power; and

b) Unless the power to sub-delegate is conferred expressly orimpliedly under a statute, the power cannot be sub-delegated(Reliance is placed on the decision of this Court in Sahni SilkMills (P) Ltd. and another vs. Employees’ State InsuranceCorporation[4]in support of the proposition).

9. In Pradyat Kumar Bose vs. The Hon’ble the Chief Justiceof Calcutta High Court[5], a Judge of the High Court was deputed bythe Chief Justice of the High Court to make an enquiry into the chargesagainst the Registrar of the High Court and submit a report. Afterconsidering the report and grant of hearing, the Registrar was dismissedfrom service. While dealing with the submission that the Chief Justicecould not have delegated the enquiry into the charges to another Judge,the Constitution Bench of this Court stated the principles as under:-

“… …It is well-recognised that a statutory functionary exercisingsuch a power cannot be said to have delegated his functions merelyby deputing a responsible and competent official to enquire andreport. That is the ordinary mode of exercise of any administrativepower. What cannot be delegated except where the lawspecifically so provides — is the ultimate responsibility for theexercise of such power. As pointed out by the House of Lords inBoard of Education v. Rice[6], a functionary who has to decide anadministrative matter, of the nature involved in this case, can obtainthe material on which he is to act in such manner as may befeasible and convenient, provided only the affected party “has afair opportunity to correct or contradict any relevant and prejudicialmaterial”. The following passage from the speech of Lord 4 (1994) 5 SCC 346

5 (1955) 2 SCR 1331

6 [1911] A.C. 179, 182

A

BC

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AChancellor in Local Government Board v. Arlidge[7]is appositeand instructive:

“My Lords, I concur in this view of the position of anadministrative body to which the decision of a question in disputebetween parties has been entrusted. The result of its inquiryBmust, as I have said, be taken, in the absence of directions inthe statute to the contrary, to be intended to be reached by itsordinary procedure. In the case of the Local Government Boardit is not doubtful what this procedure is. The Minister at thehead of the Board is directly responsible to Parliament like otherMinisters. He is responsible not only for what he himself doesCbut for all that is done in his department. The volume of workentrusted to him is very great and he cannot do the great bulkof it himself. He is expected to obtain his materials vicariouslythrough his officials, and he has discharged his duty if he seesthat they obtain these materials for him properly. To try toDextend his duty beyond this and to insist that he and othermembers of the Board should do everything personally wouldbe to impair his efficiency. Unlike a Judge in a Court he is notonly at liberty but is compelled to rely on the assistance of hisstaff.”

E10. In Union of India and anr. vs. P.K. Roy and ors.[8], anotherConstitution Bench of this Court ruled as under: - “… …In other words, if a statutory authority empowers a delegateto undertake preparatory work and to take an initial decision inmatters entrusted to it but retains in its own hands the power toFapprove or disapprove the decision after it has been taken, thedecision will be held to have been validly made if the degree ofcontrol maintained by the authority is close enough for the decisionto be regarded as the authority’s own. In the context of the factsfound in the present case we are of opinion that the High Courtwas in error in holding that there has been an improper delegationGof its statutory powers and duties by the Central Government andthat the final gradation list dated April 6, 1962 was therefore ultravires and illegal. Even on the assumption that the task of integration 7 [1915] A.C. 120, 133H8 (1968) 2 SCR 186

was exclusively entrusted to the Central Government, we are ofthe opinion that the steps taken by the Central Government in thepresent case in the matter of integration did not amount to anydelegation of its essential statutory functions. There is nothing inSections 115 or 117 of the said Act which prohibits the CentralGovernment in any way from taking the aid and assistance of theState Government in the matter of effecting the integration of theservices. So long as the act of ultimate integration is done withthe sanction and approval of the Central Government and so longas the Central Government exercises general control over theactivities of the State Government in the matter it cannot be heldthat there has been any violation of the principle “delegatus nonpotest delegare”. For instance, it was observed by this Court inPradvat Kumar Bose v. Hon’ble the Chief Justice of CalcuttaHigh Court[5]:”

11. In State of Bombay (Maharashtra) vs. ShivbalakGourishanker Dube and others[9], the decision of the High Court holdingthat the State Government could not have delegated its duty to make anenquiry under Section 65(1) of the Bombay Tenancy and AgriculturalLands Act, 1948, was under challenge. While setting aside said decisionof the High Court, it was observed: - “Realising the infirmity in the view taken by the High Court, MrPathak attempted to support the decision of the High Court onanother ground. He argued that since the enquiry was made bythe Talathi and the Mamlatdar under Section 65 and not by theDeputy Collector, the declaration made by the Deputy Collectorwas invalid. In other words, the argument is that the StateGovernment may have validly delegated its powers under Section65(1) to the Deputy Collector, but the Deputy Collector who is adelegate of the State Government cannot, in turn, delegate a partof his power or authority to a subordinate of his own, and that iswhat he has done in the present case. This argument proceeds onthe basis that in exercising his powers under Section 65(1), theDeputy Collector must himself hold the enquiry and cannotdelegate the function of holding such an enquiry to any othersubordinate re venue officer. There is no doubt that a delegatewho has received the authority from the principal cannot, in turn, ABC

D

EF

G

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A

Adelegate his own authority to a delegate of his own, but there ishardly any question of delegation by a delegate in the presentcase. All that Section 65(1) requires is that the State Governmentand therefore its delegate may after making such enquiry as itthinks fit, declare that the management of the land shall be resumed.In other words, in what form the enquiry should be held is a matterBleft entirely in the discretion of the State Government or its delegate.All that the Deputy Collector has done in the present case is todirect his subordinate officers to collect material relevant to thepurpose of the enquiry. The Talathi went on the spot andascertained as to whether the respondent’s lands were lying fallowCfor the requisite period. He submitted his report to the Mamlatdar.The Mamlatdar in turn made his report to the Deputy Collector.In other words, all that the Deputy Collector has done is to collectthe relevant material, so that he can enquire into the question asto whether the lands are lying fallow or not. This procedure doesnot, in our opinion, involve the question of any delegation at all.DThe form of the enquiry and its mode are entirely in the discretionof the Deputy Collector. Section 65(1) does not require that theDeputy Collector must himself go to the agricultural fields andenquire on the spot whether they are lying fallow. He may, if he sodesires, record evidence himself, or the recording of the evidenceEand the actual inspection on the spot can be left to somesubordinate officer. The report of such local inspection and therecord of the evidence collected in that behalf would be forwardedto the Deputy Collector, and that would be the material on whichhe would hold the enquiry himself. The enquiry is thus held by theDeputy Collector, though the mechanical work of collecting materialFhas been entrusted to a subordinate revenue officer. In such acase, we do not see how the principle that a delegate cannotdelegate comes into operation.”

12. In Sahni Silk Mills[4] Case, The Issue Was Whether An OfficerOr Authority As A Delegate Of Certain Powers By The Corporation,GCould Further Sub-delegate Said Powers. It Was Observed By ThisCourt:- “5. The courts are normally rigorous in requiring the power to beexercised by the persons or the bodies authorised by the statutes.It is essential that the delegated power should be exercised by theH

authority upon whom it is conferred and by no one else. At thesame time, in the present administrative set-up extreme judicialaversion to delegation cannot be carried to an extreme. A publicauthority is at liberty to employ agents to exercise its powers.That is why in many statutes, delegation is authorised eitherexpressly or impliedly. Due to the enormous rise in the nature ofthe activities to be handled by statutory authorities, the maximdelegatus non potest delegare is not being applied speciallywhen there is question of exercise of administrative discretionarypower.

6. By now it is almost settled that the legislature can permit anystatutory authority to delegate its power to any other authority, ofcourse, after the policy has been indicated in the statute itselfwithin the framework of which such delegatee is to exercise thepower. The real problem or the controversy arises when there is asub-delegation. It is said that when Parliament has specificallyappointed authority to discharge a function, it cannot be readilypresumed that it had intended that its delegate should be free toempower another person or body to act in its place. In BariumChemicals Ltd. v. Company Law Board[10], this Court said inrespect of sub-delegation:

“Bearing in mind that the maxim delegatus non potest delegaresets out what is merely a rule of construction, sub-delegationcan be sustained if permitted by express provision or bynecessary implication.”

7. Again in Mangulal Chunilal v. Manilal Maganlal[11], whileconsidering the scope of Section 481(1)(a) of the BombayProvincial Municipal Corporation Act (59 of 1949) this Court saidthat Commissioner of the Ahmedabad Municipal Corporation haddelegated his power and function under the aforesaid section to aMunicipal Officer to launch proceedings against a person chargedwith offences under the Act or the rules and that officer to whomsuch functions were delegated could not further delegate the sameto another.

10 AIR 1967 SC 295 : 1966 Supp SCR 311

11 AIR 1968 SC 822 : (1968) 2 SCR 401

AB

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A8. In Halsbury’s Laws of England, 4th Edn., Vol. I, in respect ofsub-delegation of powers it has been said:

“In accordance with the maxim delegatus non potest delegare,a statutory power must be exercised only by the body or officerin whom it has been confided, (H. Lavender & Son Ltd. v.BMinister of Housing and Local Government[12]) unless sub-delegation of the power is authorised by express words ornecessary implication (Customs and Excise Comrs. v. Cureand Deeley Ltd.[13]and Mungoni v. Attorney General ofNorthern Rhodesia[14]). There is a strong presumption againstconstruing a grant of legislative, judicial, or disciplinary powerCas impliedly authorising sub-delegation; and the same may besaid of any power to the exercise of which the designatedbody should address its own mind. Allam & Co. v. EuropaPoster Services Ltd.[15]…”

9. In the case of Harishankar Bagla v. State of M.P.[16], whileDexamining the scope of Section 4 of the Essential Supplies(Temporary Powers) Act, 1946 it was said:

“Section 4 of the Act was attacked on the ground that itempowers the Central Government to delegate its own powerto make orders under Section 3 to any officer or authorityEsubordinate to it or the Provincial Government or to any officeror authority subordinate to the Provincial Government asspecified in the direction given by the Central Government. Inother words, the delegate has been authorized to furtherdelegate its power in respect of the exercise of the powers ofFSection 3. Mr Umrigar contended that it was for the Legislatureitself to specify the particular authorities or officers who couldexercise power under Section 3 and it was not open to theLegislature to empower the Central Government to say whatofficer or authority could exercise the power.

Reference in this connection was made to two decisions ofGthe Supreme Court of the United States of America — Panama 12 (1970) 3 All ER 871 : (1970) 1 WLR 123113 (1962) 1 QB 340 : (1961) 3 All ER 641 : (1961) 3 WLR 79814 (1960) 1 All ER 446 : (1960) 2 WLR 389 : 1960 AC 336, PC

15 (1968) 1 All ER 826 : (1968) 1 WLR 638H16 AIR 1954 SC 465, 468 ; (1955) 1 SCR 380

Refining Co. v. Ryan[17]and Schechter v. United States[18]. Inboth these cases it was held that so long as the policy is laiddown and a standard established by a statute, no unconstitutionaldelegation of legislative power is involved in leaving to selectedinstrumentalities the making of subordinate rules withinprescribed limits and the determination of facts to which thepolicy as declared by the legislature is to apply. These decisionsin our judgment do not help the contention of Mr Umrigar aswe think that Section 4 enumerates the classes of persons towhom the power could be delegated or sub-delegated by theCentral Government and it is not correct to say that theinstrumentalities have not been selected by the Legislatureitself.”

In the aforesaid case, the sub-delegation was upheld becauseSection 4 itself enumerated the classes of persons to whom thepower could be delegated or sub-delegated by the CentralGovernment.

10. So far as the present Section 94-A is concerned, it says thatthe Corporation subject to any regulation made by the Corporationin that behalf, may direct that particular or any of the powers andfunctions which may be exercised or performed by theCorporation, may, in relation to such matters and subject to suchconditions, if any, as may be specified “be also exercisable by anyofficer or authority subordinate to the Corporation”. Section 94-Adoes not specifically provide that any officer or authoritysubordinate to the Corporation to whom the power has beendelegated by the Corporation, may in his turn authorise any otherofficer to exercise or perform that power or function. But by theresolution dated 28-2-1976 the Corporation has not only delegatedits power under Section 85- B(1) of the Act to the Director General,but has also empowered the Director General to authorise anyother officer to exercise the said power. Unless it is held thatSection 94-A of the Act, enables the Corporation to delegate anyof its powers and functions to any officer or authority subordinateto the Corporation, and he in his turn can sub-delegate the exerciseof the said power to any other officer, the last part of the resolution 17 (1934) 293 US 388 : 79 L Ed 446

18 (1934) 295 US 495 : 79 L Ed 1570

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Adated 28-2-1976 cannot be held to be within the framework ofSection 94-A. According to us, Parliament while introducingSection 94-A in the Act, only conceived direct delegation by theCorporation to different officers or authorities, subordinate to theCorporation, and there is no scope for such delegate to sub-delegatethat power, by authorising any other officer to exercise or performBthe power so delegated.”

13. In Sidhartha Sarawgi vs. Board of Trustees for the Portof Kolkata and others[19], the matter was dealt with by this Court asunder:- “5. Regarding delegation of non-legislative/ administrative powersCon a person or a body to do certain things, whether the delegatehimself is to perform such functions or whether after takingdecision as per the terms of the delegation, the said agency canauthorise the implementation of the same on somebody else, isthe question to be considered. Once the power is conferred, afterDexercising the said power, how to implement the decision taken inthe process, is a matter of procedure. The legislature may, afterlaying down the legislative policy, confer discretion on anadministrative agency as to the execution of the policy and leaveit to the agency to work out the details within the framework ofthat policy[20]. So long as the essential function of decision making Eis performed by the delegate, the burden of performing the ancillaryand clerical task need not be shouldered by the primary delegate.It is not necessary that the primary delegate himself should performthe ministerial acts as well. In furtherance of the implementationof the decision already taken by the primary delegate as per theFdelegation, ministerial or clerical tasks may be performed byauthorised officers. The complexity of modern day administrationand the expansion of functions of the State to the economic andsocial spheres have made it necessary that the legislature giveswide powers to various authorities when the situation requires it.Today’s governmental functions are a lot more complex and theGneed for delegation of powers has become more compelling. Itcannot be expected that the head of the administrative bodyperforms each and every task himself.

…

…

…

19 (2014) 16 SCC 248H20 Khambhalia Municipality vs. State of Gujarat, AIR 1967 SC 1048 at p. 1051, para 7

7. Practical necessities or exigencies of administration requirethat the decision-making authority who has been conferred withstatutory power, be able to delegate tasks when the situation sorequires. Thus, the maxim delegatus non potest delegare, givesway in the performance of administrative or ministerial tasks bysubordinate authorities in furtherance of the exercise of thedelegated power by an authority.”

14. The following principles can thus be culled out from thedecisions of this Court: (i) A statutory functionary exercising a powercannot be said to have delegated his functions merely by deputing aresponsible and competent official to enquire and report, as that is theordinary mode of exercise of any administrative power; (ii) If a statutoryauthority empowers a delegate to undertake preparatory work, and totake an initial decision in matters entrusted to it, but retains in its ownhands the power to approve or disapprove the decision after it has beentaken, the decision will be held to have been validly made if the degreeof control maintained by the authority is close enough for the decision tobe regarded as the authority’s own; (iii) Even in cases of sub-delegation,so long as the essential function of decision making is performed by thedelegate, the burden of performing the ancillary and clerical task neednot be shouldered by the primary delegate and it is not necessary thatthe primary delegate himself should perform the ministerial acts as well;and (iv) Practical necessities or exigencies of administration require thatthe decision-making authority who has been conferred with statutorypower, be able to delegate tasks when the situation so requires.

15. Rule 11A of the Rules empowers the appellate authority tocall for any information or record from any public office, officer orauthority or to examine and record statements from any member of thepublic office or authority. In line with the principles laid down by thisCourt, it can therefore be said that in exercise of such power, if theappellate authority calls for any information or calls for any record orany inputs, that by itself, will not amount to delegation of essentialfunctions. If, in terms of such power, the appellate authority deputes aresponsible official to enquire into certain facets and calls for a report,that would be an ordinary mode of exercise of the power vested in theappellate authority. Practical necessities and exigencies of administrationdemand that the appellate authority must be able to delegate certaintasks such as collecting information after causing inspection. So long as AB

C

D

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Athe essential function, that is to say of considering all the necessaryfactors and inputs and thereafter arriving at an informed decision is doneby the appellate authority, the burden of performing ancillary tasks neednot be shouldered by the appellate authority.

16. The submission based on Section 76-A of the Act is completelyBmisplaced and does not deserve acceptance. Section 76-A is quotedhereunder for facility:

“76-A. Delegation of certain powers- The State Governmentmay, by notification in the Official Gazette delegate- (a) all or any of the powers conferred on it by sections 2(9), 33(3)(b),C70(1), 74 and 78 to the Chief Controlling Revenue Authority; and (b) all or any of the powers conferred on the Chief ControllingRevenue-Authority by sections 45(1), (2), 56(1) and 70(2) to suchsubordinate Revenue Authority as may be specified in thenotification.”D

Section 76-A was inserted in the Principal Act vide theDecentralization Act, 1914 (Act No. IV of 1914). The legislative head inEntry 44, namely “Stamp duties other than duties on or fees collected bymeans of judicial stamps, but not including rates of stamps” is in theConcurrent List of Schedule VII to the Constitution. Section 47-A wasEinserted in the Principal Act by the State Legislature by enacting theTamil Nadu Act No.24 of 1967 which received the assent of the Presidenton 29[th] March, 1968. The Rules including Rule 11-A were framed toeffectuate the letter and spirit of Section 47-A.

Section 76-A of the Principal Act enables the State GovernmentFto delegate some of the statutory powers conferred upon it by thePrincipal Act to the Chief Controlling Revenue Authority. Suchempowerment has nothing to do with the legislative power exercised bythe State in terms of which Section 47-A was inserted, or with the Rulespromulgated to effectuate Section 47-A. For interpreting and consideringthe context of said Section 47-A or the Rules, the fact that certain otherGstatutory powers in favour of the State Government are delegable, hasabsolutely no relation. Section 47-A was inserted by the State in itslegislative power and the Rules framed thereunder have to be consideredon their own and without being influenced by Section 76-A.

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17. Therefore, in observing that the inspection ought to have beencarried out by the Inspector General of Registration himself, and suchfunction could not have been delegated, the High Court failed toappreciate the principles laid down by this Court. Any report that wascalled for was essentially in the nature of rendering assistance to theappellate authority in discharge of its functions. The final order passedby the appellate authority, after considering all the necessary material,must be taken to be one rendered by the appellate authority on its own,and there was no delegation of any essential functions vitiating exerciseof power. We do not, therefore, find any impropriety or invalidity touchingupon the exercise of power by the appellate authority. We, thus, acceptthe contentions raised by the learned counsel for the Appellants, and setaside the view taken by the High Court in that behalf.

18. The ground with respect to delegation of power under Rule11-A was taken in all these matters, on the basis of which the HighCourt set aside the determination made by the appellate authority. Theconclusions of the High Court in that behalf being erroneous, we setaside said conclusions in each of the matters, and restore the findingsarrived at by the appellate authority on the basis of the report called forin exercise of power under Rule 11-A in all the matters.

19. We now turn to question no. 2, in respect of which the HighCourt in six of these appeals, had concluded that the stipulation of periodof three months in Rule 7 being mandatory, the orders passed after theexpiry of said period would be invalid.

19.1 It is submitted on behalf of the Appellants that sub-sections(1) and (2) of Section 47-A do not prescribe any time limit and thestipulation in Rule 7 ought to be seen in the context and setting of variousstages in the proceedings. It is submitted: - “…Rules 4-7 of Rules 1968 require the collector/authority toperform various tasks namely issuance of Form I notice by granting21 days time to the parties to represent his case with evidence,consider the representations sent by the parties, verify the records,call for information or record from the public office, officer orauthority, inspect the property after due notice and recordingstatements of the parties etc. Thereafter, the collector is requiredto provisionally determine the market value by taking intoconsideration of various factors mentioned in Rules and the same AB

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Ahas to be communicated to the parties with Form II notice callingupon them to lodge their objections if any. Thereafter he has toconsider the representations and points urged at the time of hearingand pass an order determining the market value of the propertiesand the duty payable on the instrument and communicate the saidorder. The entire exercise is time consuming and the same cannotBbe completed within 3 months time.”

19.2 In response, it is submitted by the Respondents :- “Rule 7 of the Rules also mandates that the Collector shall afterconsidering the representations and after careful consideration ofCall relevant factors and evidence available with him pass an orderwithin 3 months from the date of first notice. Rule 7 also has to beread in the light of Rule 4 (1) of the Rules which provides for atimeline of 21 days from the date of service of the notice forparties to provide their representations on whether the marketvalue has been truthfully set forth. Therefore, Rule 7 read in theDlight of Rules 4 and Section 47-A (2) provides for a mandatoryrequirement to complete the inquiry and pass an order within thetimelines set forth. It would also be pertinent to note that thetimeline to pass an order within 3 months was introduced vide anamendment indicating the intention to have a mandatory timelineEto pass orders.

… … …

Rule 7 as originally enacted did not prescribe a time period for theCollector to pass an order determining the market value of theproperties. Rule 7 was amended vide G.O.Ms.No. 69 datedF26.02.1997 on suggestion of the Inspector General of Registration(the “1997 Amendment) to introduce a month time period.”

20. Under sub-section (1) of Section 47-A of the Act, if there isreason to believe that the market value has not been truly set forth in theInstrument tendered for registration, a reference can be made to theGCollector, who (i) after giving the parties reasonable opportunity of beingheard; and (ii) after holding an enquiry in such manner as may beprescribed by Rules, has to determine the correct value of the concernedproperty. The Section by itself does not lay down any period within whichthe entire process is to be completed by the Collector. It simply statesthat the enquiry be held in “such manner” as may be prescribed byH

Rules. In this backdrop the manner in which the enquiry must be held asset out in the Rules, is required to be considered.

According to the Rules, following steps are required to beundertaken:

A) On receipt of reference as stated above, the Collector mustissue notice in Form I to the persons by whom and in whosefavour the Instrument is executed, informing such persons toproduce all evidence to show that the market value has been trulyset forth in said instrument. The notice must give such personstime of twenty one days from the receipt of notice to represent orrespond. [Rule 4(1)]

B) The Collector may record statement of any such noticee.[Rule 4(2)].

C) For the purposes of the enquiry, the Collector may call forinformation from any public office or examine and recordstatements or inspect the property after due notice as stated indetail in Rule 4(3).

D) After considering the representations, if any, and the recordand evidence, a provisional order determining the market valuemust be passed indicating the basis for such conclusion. [Rule4(4)]. For arriving at the provisional market value, regard must behad to the principles set out in Rule 5.

E) The provisional order must be communicated in Form II to allthe concerned persons who must be given some time to preferobjections, if they so wish; and they must be heard on the dayfixed in the notice or on such other day as may be fixed. [Rule 6]

F) After considering the representations in writing and those urgedat the time of hearing as well as all the relevant factors andevidence, the Collector must pass an order determining the marketvalue of the concerned property and assess the element of dutypayable on the instrument of transfer. Such order is required to bepassed “within three months from the date of first notice”.[Rule 7]

21. The expression “within three months from the date of firstnotice” is crucial. Is the description “first notice” referable to notice inForm I issued in terms of Rule 4(1)? The answer would obviously be in A

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Athe negative. Form I notice itself must give twenty-one days to theconcerned persons to respond. Depending upon their response, theirstatements would be recorded and/or certain information may be requiredto be called for, whereafter the Order in Form II is to be issuedprovisionally determining the market value. The concerned persons areentitled to raise objections in writing and must be afforded hearing. AfterBfulfilling these requirements, the order in terms of Rule 7 can be passed.All these stages may not be completed in three months.

Further, the reference in Rule 7 is to the “first notice” and not to“notice in Form I”. Considering the context and various stages precedingthe stage of passing of the Order under Rule 7, the reference has to beCto the first “notice in Form II”. There could possibly be more than onenotices in Form II, specially when the hearing is to take place on anadjourned date and that is why the period must be reckoned from thefirst notice in Form II. The expression immediately following “first notice”in Rule 7 is “determining the market value of the properties….” That isDalso indicative that the reference to the notice is one in Form II in theimmediately preceding Rule 6.

22. We now deal with the question whether the stipulation of periodof three months in Rule 7 is mandatory or directory.

23. Some of the decisions of this Court dealing with question as toEin what circumstances and context a statutory provision can beconsidered to be mandatory or directory may first be noted.

A) In State of Mysore and others v. V.K. Kangan and others[21]a bench of three Judges of this Court observed: -

F“10. In determining the question whether a provision is mandatoryor directory, one must look into the subject- matter and considerthe importance of the provision disregarded and the relation ofthat provision to the general object intended to be secured. Nodoubt, all laws are mandatory in the sense they impose the dutyto obey on those who come within its purview. But it does notGfollow that every departure from it shall taint the proceedingswith a fatal blemish. The determination of the question whether aprovision is mandatory or directory would, in the ultimate analysis,depend upon the intent of the law-maker. And that has to begathered not only from the phraseology of the provision but also H21 (1976) 2 SCC 895

by considering its nature, its design and the consequences whichwould follow from construing it in one way or the other. … …”

B) In T.V. Usman vs. Food Inspector, Tellicherry Municipality,Tellicherry[22], this Court was called upon to consider whetherstipulation of period in Rule 7(3) of the Prevention of FoodAdulteration Rules, 1955 within which time the report of theanalysis of the sample must be delivered, would be mandatory ordirectory. This Court quoted the following passage from thedecision of the Constitution Bench of this Court:- “10. In Dattatraya Moreshwar v. State of Bombay[23] it washeld as under:

“[G]enerally speaking the provisions of a statute creatingpublic duties are directory and those conferring private rightsare imperative. When the provisions of a statute relate tothe performance of a public duty and the case is such thatto hold null and void acts done in neglect of this duty wouldwork serious general inconvenience or injustice to personswho have no control over those entrusted with the duty andat the same time would not promote the main object of thelegislature, it has been the practice of the Courts to holdsuch provisions to be directory only, the neglect of them notaffecting the validity of the acts done.”

B. 1) Thereafter, this Court considered the effect of stipulation inRule 7(3):

“11. In Rule 7(3) no doubt the expression “shall” is used but itmust be borne in mind that the rule deals with stages prior tolaunching the prosecution and it is also clear that by the date ofreceipt of the report of the Public Analyst the case is not yetinstituted in the court and it is only on the basis of this report ofthe Public Analyst that the authority concerned has to take adecision whether to institute a prosecution or not. There is notime-limit prescribed within which the prosecution has to beinstituted and when there is no such limit prescribed then thereis no valid reason for holding the period of 45 days as mandatory.Of course that does not mean that the Public Analyst can ignore 22 (1994) 1 SCC 754

23 AIR 1952 SC 181

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22 (1994) 1 SCC 754

23 AIR 1952 SC 181

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the time-limit prescribed under the rules. He must in all casestry to comply with the time-limit. But if there is some delay, ina given case, there is no reason to hold that the very report isvoid and on that basis to hold that even prosecution cannot belaunched. May be, in a given case, if there is inordinate delay,the court may not attach any value to the report but merelybecause the time-limit is prescribed, it cannot be said that evena slight delay would render the report void or inadmissible inlaw. In this context it must be noted that Rule 7(3) is only aprocedural provision meant to speed up the process ofinvestigation on the basis of which the prosecution has to belaunched. No doubt, sub-section (2) of Section 13 of the Actconfers valuable right on the accused under which provisionthe accused can make an application to the court within a periodof 10 days from the receipt of copy of the report of PublicAnalyst to get the samples of food analysed in the CentralFood Laboratory and in case the sample is found by the saidCentral Food Laboratory unfit for analysis due to decompositionby passage of time or for any other reason attributable to thelapses on the side of prosecution, that valuable right wouldstand denied. This would constitute prejudice to the accusedentitling him to acquittal but mere delay as such will not per sebe fatal to the prosecution case even in cases where the samplecontinues to remain fit for analysis in spite of the delay becausethe accused is in no way prejudiced on the merits of the casein respect of such delay. Therefore it must be shown that thedelay has led to the denial of right conferred under Section13(2) and that depends on the facts of each case and violationof the time-limit given in sub-rule (3) of Rule 7 by itself cannotbe a ground for the prosecution case being thrown out.”

C) In P.T. Rajan vs. T.P.M. Sahir and others[24] the principleswere summed up as follows: - “48. Furthermore, even if the statute specifies a time forpublication of the electoral roll, the same by itself could nothave been held to be mandatory. Such a provision would bedirectory in nature. It is a well- settled principle of law thatwhere a statutory functionary is asked to perform a statutory duty within the time prescribed therefor, the same would bedirectory and not mandatory. (See Shiveshwar Prasad Sinhav. District Magistrate of Monghyr[25], Nomita Chowdhury v.State of W.B.[26] and Garbari Union Coop. AgriculturalCredit Society Ltd. v. Swapan Kumar Jana[27].)

49. Furthermore, a provision in a statute which is procedural innature although employs the word “shall” may not be held tobe mandatory if thereby no prejudice is caused. (See RazaBuland Sugar Co. Ltd. v. Municipal Board, Rampur[28], StateBank of Patiala v. S.K. Sharma[29], Venkataswamappa v.Special Dy. Commr. (Revenue)[30] and Rai Vimal Krishna v.State of Bihar[31].)”

24. Reliance is, however, placed by the learned Counsel for theRespondents on the decision of this Court in Mackinnon Mackenzieand Company Ltd. vs. Machinnon Employees Union[32]. One of theissues that arose for consideration in that case was whether the provisionsof Section 25FFA of the Industrial Disputes Act, 1947 contemplatingissuance of notice of closure are mandatory or directory and the submissionadvanced on behalf of the Union of Workmen was noted as under:

“37. The contention urged by Mr C.U. Singh, the learned SeniorCounsel for the respondent Union is that if the interpretation ofthe provision under Section 25-FFA of the ID Act as contendedby the learned counsel on behalf of the appellant Company isaccepted to be directory and not mandatory as it would attract thepenal provision against the appellant Company under Section 30-A of the ID Act, then the purpose and intendment of theamendment in the year 1972 made to Section 25-FFA of the IDAct, will be defeated and would nullify the Objects and Reasonsfor amending the provisions of the ID Act and it would be contraryto the legislative wisdom of Parliament. The statutory protection 25 AIR 1966 Pat 144 : ILR 45 Pat 436 (FB)26 (1992) 2 Cal LJ 2127 (1997) 1 CHN 18928 AIR 1965 SC 895 : (1965) 1 SCR 97029 (1996) 3 SCC 364 : 1996 SCC (L&S) 71730 (1997) 9 SCC 12831 (2003) 6 SCC 40132 (2015) 4 SCC 544

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Ahas been given to the workmen under the provision of Section 25-FFA of the ID Act, with an avowed object to protect workmenbeing retrenched due to closing down of a department/unit ofthe undertaking as the livelihood of such workmen and their familymembers will be adversely affected on account of theirretrenchment from their service. To avert such dastardly situationBto be faced by the workmen concerned in the company/establishment, the statutory obligation is cast upon the employerto serve at least 60 days’ notice on the State Government beforesuch intended closure of the department/unit to be served uponthe State Government informing the reasons as to why it intendsCto close down its department/unit.”

This Court accepted the afore-stated submission. It relied uponthe decisions of this Court in State of UP v. Babu Ram Upadhyay[33],State of Mysore v. V.K. Kangan[21] and Shrif Uddin v. Abdul GaniLone[34]and other decisions and held the concerned provisions to beDmandatory. It was observed:

“44. The statutory provisions contained in Section 25- FFA of theID Act mandate that the Company should have issued the intendedclosure notice to the appropriate Government should be servednotice at least 60 days before the date on which it intended toEclose down the department/unit concerned of the Company. Ascould be seen from the pleadings and the findings recorded by theIndustrial Court, there is a categorical finding of fact recordedthat there is no such mandatory notice served on the StateGovernment by the appellant Company. The object of serving ofsuch notice on the State Government is to see that it can find outFwhether or not it is feasible for the company to close down adepartment/unit of the company and whether the workmenconcerned ought to be retrenched from their service, madeunemployed and to mitigate the hardship of the workmen and theirfamily members. Further, the said provision of the ID Act is theGstatutory protection given to the workmen concerned whichprevents the appellant Company from retrenching the workmenarbitrarily and unreasonably and in an unfair manner.

33 AIR 1961 C 751H34 (1980) 1 SCC 403

45. The cumulative reading of the Statement of Reasons, theretrenchment notice served on the workmen concerned, thepleadings of the appellant Company and in the absence of evidenceon record to justify the action of retrenchment of workmenconcerned on the alleged closure of the department/unit of theappellant Company is shown as bona fide. However, the concurrentfinding of fact recorded by the High Court on this aspect of thecase cannot be held to be bad in law by this Court in exercise of itsappellate jurisdiction in this appeal.”

While concluding so, this Court also relied upon the Objects andReasons of the Amending Act 32 of 1972 inserting Section 25FFA in theIndustrial Disputes Act, and the fact that the legislation provided penaltyfor closing down any undertaking without serving requisite notice.

25. As noted above, Section 47-A by itself does not prescribe anytimeline. If the stipulation or fixation of period of three months from thefirst notice in terms of Rule 6 or from notice in Form II is taken to bemandatory it would lead to a situation of incongruity. The fact that FormII notice had been issued, would mean that on a prima facie view of therecord and material, the value stated in the instrument was not the correctvalue; which in turn would mean that prima facie the Government Cofferswere being denied the rightful dues. If for any reason the proceedingsare not completed within three months and, therefore, must be held tobe vitiated, the public interest would suffer, and the persons who wereprime facie responsible for suppressing the real value, would stand togain. The amendment of Rule 7 incorporating the period of three monthswas essentially to guide the public officials to complete the process asearly as possible but was not intended to create a right in favour of thosewho had prime facie conducted themselves prejudicing public interest.

In keeping with the principles laid down in State of Mysore andothers v. V.K. Kangan and others[21], if the subject matter of the provisionas well as the inter-relation of the period of three months to the generalobject of the provision are considered, the fixation of period has to betaken to be directory. Otherwise, the very object of sub-serving publicinterest and securing public revenue would get defeated. Pertinently,the concerned provision has not spelt out any consequence for non-adherence to said period of three months.

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26. We, therefore, hold the fixation of timeline of three months inRule 7 to be purely directory. In the premises, the conclusion by theHigh Court holding the said provision to be mandatory is set aside, andno benefit on that ground can accrue to the Respondents.

27. We now turn to question No.3, which incidentally arises onlyBin one appeal viz. one arising from SLP(C) Nos.31633-31637 of 2018.At this stage, the relevant portions from the order of the appellateauthority may be extracted hereunder:- “District Registrar has recommended a value of Rs.480/- per sq.ft.,for the documents registered in 2005 and Rs.544/- per sq.ft., forCthe documents registered in 2007. He has stated that the landsare located in WIMCO Nagar opposite to WIMCO Nagar RailwayStation and lies between Thiruvottriyur High Road and EnnoreExpress Road. Further he has stated that as per local enquiry, atthe time of registration the value of the lands ranged betweenRs.11.5 to 12 Lakhs per ground for 2005 documents and Rs.13Dto 14 Lakhs per ground for the documents registered in 2007.

Perusal of Sales Statistics reveals registration of documents upto2006 adopting a value of Rs.204/- per sq.ft., and referred under46A and are still pending. Again, from 25-09-2006 onwards largenumber of documents (nearly 40) have been registered adoptingEa value of Rs.544/- per sq.ft. However, extents involved in allthese cases ranges from 1 ground to 2 grounds except in fewcases were extend involved in1200 sq.ft. All these are sanctionedlayouts. One Doct. No.10084/2007 has been registered in S.No.168/7, 9, 9 adopting a value of Rs.625/- per sq.ft. Further vide Doct.FNo.10675/07 an extent of 4.957 acres was registered adopting avalue of Rs.485/- per sq.ft. and the same was referred under 47Afor which District Revenue Offricer (Stamps) fixed a value ofRs.920/- per sq.ft. This property is adjoining the subject propertyas it shares one of the boundaries with the subject documentproperties similarly, for another Doct. No.10676/07, involving anGextent of 16290/- sq.ft. document value adopted was Rs.841/-per sq.ft. for which District Revenue Officer (Stamps) fixed avalue of Rs.920/- per sq.ft. Both the values were accepted by theregistrants and they paid the deficit Stamp Duty. The Guidelinevalue of those properties was Rs.1200/- per sq. ft. with effectfrom 01.08.2000.

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The present Guideline value of the subject properties with effectfrom 01.04.2012 is Rs.3500/- per sq.ft.

The sale deed in Doc. Nos.10675/2007 and 10676/2007 involvelarge extent of industrial land and, hence, are similar to the landsinvolved in subject documents. Therefore, for the 5 documentsregistered in 2005, it is proposed to adopt the value of Rs.544/-per sq.ft since, there seems no reason to believe that the guidelinevalues are abnormal in light of registration adopting a value ofRs.920/- per sq.ft. in 2007. Similarly, for the three documentsregistered in 2007, it is proposed to fix a value of Rs.920/- persq.ft. aking to the value fixed and accepted by the registrants inDoct.Nos.10675/2007 and 10676/2007.

Hence issue shows cause Notice to the Petitioner accordingly forall the 8 cases. Hence a new show cause notice was issued incontinuation of the personal enquiry to the Appellant and to hisAdvocate with reference to the 9 cited why the value atRs.544/- per sq.ft. for the 5 document properties registered during2005 and at Rs.920/- per sq.ft in respect of 3 document registeredin 2007 and to furnish fresh objections if any within 10 days incontinuation of this with reference to the 10[th] cited the Advocaterequested to furnish on which basis the provisional value wasdetermined and the sales statistics of documents and to send thecopies of document Nos.10675, 10676/2007 and whether there isany ways and means to give show cause notice under Section47A5 of the Indian Stamps Act and to give details of thedocumentary basis in continuation of that with reference to the 11cited the details requested by the Petitioner the report of spotInspection of the District Revenue Officer and the copies ofDocument Nos.10675, 10676/2007 where despatched.”

Thus, while proposing to enhance the market value higher thanwhat was determined by the Collector, the appellate authority had putthe appellant-registrant to sufficient notice and had called for responsewith regard to the proposed enhancement. It was only thereafter thatthe exercise was undertaken to determine the true market value atRs.544/- per sq.ft. and Rs.920/- per sq.ft for documents registered inthe year 2005 and 2007 respectively.

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A28. In the challenge arising therefrom, the High Court vide itsorder dated 19.03.2018 in CMA Nos.2449 to 2453 of 2014 observed:-

“13. It is seen that the first respondent, while deciding the appeal,had enhanced the market value determined by the secondrespondent and fixed a higher value. As per Section 47-A(5) ofBthe Indian Stamp Act, the first respondent shall only scrutinize thecorrectness of the order passed by the second respondent, as anappeal has been preferred by the presentant concerned. In theappeal preferred by the presentant, the Inspector General ofRegistration, has no power to enhance the market value.

C14. This Court, in its judgment in Rajendran v. The InspectorGeneral of Registration and others[35] has held that while decidingthe appeal preferred by the presentant, unlike the suo motu revisionunder Section 47-A(6) of the Indian Stamp Act, the appellateauthority is not empowered to enhance the market value of theproperty and he can only decide on the correctness of the orderDpassed by the District Collector or District Revenue Officer.Therefore, it is clearly seen that the order passed by the firstrespondent is in total violation of Rules 6, 7 and 11-A of the abovesaid rules and in excess of powers conferred under Section 47-A(5) of the Indian Stamp Act. In such circumstances, I have noEhesitation to set aside the impugned order passed by the firstrespondent.”

29. In Rajendran v. The Inspector General of Registration,Tamil Nadu and others (supra) the High Court had observed: - “33. Perusal of the impugned orders in all these appeals does notFindicate that the Chief Controlling Revenue Authority cum InspectorGeneral of Registration, Chennai, has arrived at the subjectivesatisfaction that the order passed under sub-section 2 of Section47, by the Collector of Stamps, is prejudicial to the interest of therevenue and that the abovesaid appellate authority has not madeGany inquiry or cause such inquiry to be conducted, before enhancingthe market value of the property in each of these appeals. Readingof the Section 47-A(6) of the Act makes it clear that the primaryobject behind, engrafting suo-motu exercise of power is that theorder passed under sub-Sections (2) and (3) of Section 47 of the H35 2012(3) CTC 589

Act, should be first examined and found that it is prejudicial to theinterests of revenue. There should be a categorical finding to thateffect. Therefore, when a provision in the statute, enjoins a dutyon the authority, to arrive at a conclusion, form a subjectivesatisfaction, with a specific objective to protect the revenue, if theorders passed under Section 47-A(2) and/or 47-A(3) is prejudicialto the revenue, then the order of the Chief Controlling RevenueAuthority-cum-Inspector General of Registration, Chennai, shouldadvert to the said objective on the facts and circumstances ofeach case and arrive at a satisfaction, before proceeding further,under the provisions of the Act.

34. Further, even assuming that the Chief Controlling RevenueAuthority cum Inspector General of Registration, Chennai, arrivesat a provisional conclusion that an order passed by the Collector(Stamps) is prejudicial to the interest of the revenue, no orderunder sub-section 6 of section 47-A of the Act can be passedadversely, without a reasonable opportunity of being heard. Firstof all, in the cases on hand, as stated supra, no such exercise ascontemplated under sub-section 6 of Section 47-A of the Act, hasbeen done by the Chief Controlling Revenue Authority cumInspector General of Registration, Chennai. Therefore, this Courtis of the view that the impugned orders in all these appeals do notfall within the ambit of sub-section (6) of Section 47 of the Act.

35. The jurisdiction of the Chief Controlling Revenue Authority inexercise of his suo motu power has its own limitations, as providedfor, in sub-sections (6) and (7) of section 47-A and from the languageemployed in the section. It could be construed that it is onlysupervisory, as he has all the authority to call for and examine anyorder passed under sub-section 2 or sub-section 3 suo motu, ifsuch an order is prejudicial to the interests of the revenue. Beforepassing an order under Section 47(6) of the Act, after making aninquiry or causing any such enquiry to be made, the materialscollected, the report if any, should be provided to the person againstwhom proceedings are initiated, to satisfy the requirements of theprinciples of natural justice, otherwise, the parties would be deprivedof their right to offer their explanation, if any.

36. Enhancement of market value of the property on the appealspreferred by the land owners under Section 47(5) is not A

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Acontemplated under the scheme of the Act, without recourse tosub-section 6 of section 47, wherein the statute has contemplateda procedure of conducting an inquiry and reasonable opportunity.No doubt, the statute empowers the Chief Controlling RevenueAuthority-cum-Inspector General of Registration, Chennai, toexercise suo- motu powers under Section 47(6) of the Act, withinBfive years, from the date of passing of an order, under Section47(2) and (3) of the Act, as the case may be, but the Statutemandates, consideration of the records, in terms of the objective,specifically incorporated in the Section and that he should arriveat a subjective satisfaction, as to whether, the order passed underCsub-Sections (2) and (3) of Section 47-A of the Act, is prejudicialto the interests of Revenue. He must record reasons for arrivingat the satisfaction.”

30. Sub-section (6) of Section 47-A of the Act empowers theChief Controlling Revenue Authority, in exercise of suo motu power, toDcall for and examine the correctness of an order passed under sub-section (2) or sub-section (3) of Section 47-A; and if the order is prejudicialto the interest of Revenue, the Chief Controlling Authority may makesuch enquiry or cause such enquiry to be made and either revise, modifyor set aside such order and pass any order that it deems appropriate.There are some limitations on the exercise of said power, since noEproceedings can be initiated against an order passed under sub-section(2) or sub-section (3), if the time for preferring an appeal against thatorder has not expired, or if more than five years have expired afterpassing of the order. The intent is clear that if there be sufficient time toprefer a regular appeal challenging that order, the remedy of filing anFappeal ought to be taken resort to. Further, if the period of five years hasexpired, no suo motu power can be exercised. Another limitation isprescribed by sub-section (8), in terms of which no order in exercise ofsuo motu exercise of power can be passed which may adversely impacta person, unless that person has had reasonable opportunity of beingheard. Apart from these limitations, the statutory provisions do not imposeGany other restriction, and the power is conferred principally to ensurethat no order passed under sub-sections (2) or (3) of Section 47-A isprejudicial to the interest of the revenue.

The limitation in sub-section (8) of Section 47-A, was high-lightedin paragraphs 33 to 36 of the judgment of the High Court in RajendranH

v. The Inspector General of Registration, Tamil Nadu and others(supra). In the present case, adequate notice was issued to the concernedpersons and, therefore, there was no infirmity on that count. It is nobody’scase that as on the date when the proceedings were initiated in exerciseof the power under sub-section (6) of Section 47-A, the period forpreferring the appeal had not expired, or that more than five years hadexpired after the passing of the order under sub-section (2) or sub-section(3). In the circumstances, none of the limitations which the statute hasimposed upon the exercise of power were present.

31. The observations of the High Court in the instant case indicatethat while dealing with an appeal preferred by the registrant against anorder passed under Section 47-A(2), no suo motu exercise of powercould be initiated. It is the correctness of that view which is now inissue.

32. While considering the nature of power conferred by Section20(3) of the Bengal Finance (Sales Tax) Act, 1941 where theCommissioner “upon application or of his own motion” could reviseany assessment or order, this Court in M/s Ram Kanai Jamini RanjanPal Pvt. Ltd. v. Member, Board of Revenue, West Bengal[36] quotedwith approval following passage from the judgment of the High Court ofMadras:

13. The following observations made by Ramaswami, J. in EastAsiatic Co. (India) Ltd. v. State of Madras[37 ]are also relevant “The purposes of this Act are twofold viz. the levy of a generaltax on the sale of goods to supplement the lost revenues and forpromoting the general public good; and secondly, to see that this isdone under the provisions of the Act and not by carrying out in acapricious or arbitrary manner. Therefore, a revisional authorityhas to be created. What is revision? The essence of revisionaljurisdiction lies in the duty of the superior tribunal or officerentrusted with such jurisdiction to see that the subordinate tribunalsor officers keep themselves within the bounds prescribed by lawand that they do what their duty requires them to do and thatthey do it in a legal manner. This jurisdiction being one ofsuperintendence and correction in appropriate cases, it is 36 (1976) 3 SCC 369

37 (1956) 7 STC 299 (Mad)

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Aexercisable even suo motu as is clear from the numerous statutoryprovisions relating to revision found in various Acts and Regulationssuch as the Civil Procedure Code, Criminal Procedure Code,Income Tax Act, etc. The jurisdiction of suo motu revision is notcribbed and cabined or confined by conditions and qualifications.The purpose of such an amplitude being given suo motu revisionsBappears to be as much to safeguard the interests of the exchequeras in the interests of the assessee. The State can never be theappellant and if there is an order against the State to its prejudice,and naturally the assessee in whose favour the order is passeddoes not prefer an appeal, the State would suffer unless its interestsCare safeguarded by the exercise of such supervisory jurisdictionas the one given to the authorities abovementioned.”

33. The essence of revisional jurisdiction is thus accepted to be inthe duty of the superior tribunal or officer to ensure that the subordinatetribunal or officers remain within the bounds prescribed by law andDdischarge their functions in accordance with law. The nature of suchpower to be exercised “suo motu”, or “on its own motion”, has alsobeen dealt with in following decisions:

A) While considering Section 38-B of the Orissa Estates AbolitionAct, 1951, which did not impose any restriction akin to those found inEsub- section (7) of Section 47-A of the Act, this Court in State of Orissaand others v. Brundaban Sharma and another[38] observed:-

“12. ..…. When and under what circumstances the suo motuinquiry would be initiated and orders passed is left to the discretionof the Board of Revenue depending on the facts and circumstancesof each case.”FAfter considering some of the decisions of this Court, it wasobserved:- “16. It is, therefore, settled law that when the revisional powerwas conferred to effectuate a purpose, it is to be exercised in aGreasonable manner which inheres the concept of its exercise withina reasonable time. Absence of limitation is an assurance to exercisethe power with caution or circumspection to effectuate the purposeof the Act, or to prevent miscarriage of justice or violation of theprovisions of the Act or misuse or abuse of the power by theH38 (1995) Supp. 3 SCC 249

lower authorities or fraud or suppression. Length of time dependson the factual scenario in a given case. Take a case that patta wasobtained fraudulently in collusion with the officers and it comes tothe notice of the authorities after a long lapse of time. Does it liein the mouth of the party to the fraud to plead limitation to getaway with the order? Does lapse of time an excuse to refrainfrom exercising the revisional power to unravel fraud and to set itright? The answers would be no.”

B) In Vijayabai and others V. Shriram Tukaram and others[39]this Court expressed caution as under: - “9. The Tahsildar while exercising his suo motu power underSection 49-B has to initiate on the basis of the materials beforehim not arbitrarily. Every exercise of suo motu power explicitly orimplicitly reveals to correct an error crept in under a statute, whatought to have been done was not done or which escaped theattention of any statutory authority, or error or deliberate omissionor commission by the subject concerned requires correction, ofcourse, within the limitation of any such statute. This has to bebased on some relevant material on record, it is not an omnipowerto be exercised on the likes and dislikes of such an authority. Thoughsuch a power is a wide power but it has to be exercised withcircumspection within the limitations of such statute. Wider thepower, the greater circumspection has to be exercised.”

34. In Sree Balaji Rice Mill, Bellary v. State of Karnataka[40]the basic facts were stated in the decision rendered by a Bench ofthree Judges of this Court as under:- “3. The Additional Commissioner of Commercial Taxes,Devangere Zone, Devangere issued notices dated 16-2-1994 and21-3-1994 under Section 22-A of the Act proposing to revise theorder of assessment dated 12-7-1990 passed by the assessingauthority on the ground that the assessment order was erroneousand prejudicial to the interest of the Revenue. In the notices, therevisional authority had made observations to the effect that thebooks of accounts have not been properly maintained. In responseto the notices, the appellant filed reply on 4-4-1994 denying the 39 (1999) 1 SCC 693

40 (2005) 4 SCC 21

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Aobservations made by the revisional authority and had requestedthe said authority to drop the proceedings initiated under Section22-A of the Act. The revisional authority on 8-4-1994 issued afurther notice under Section 22-A(1) of the Act making the sameproposal as made in the earlier notices and further proposed tolevy penalty under Section 18-A of the Act. The revisional authorityBconfirmed the proposals made in the notices issued under Section22-A of the Act vide order dated 2-6-1994 and modified the set-off granted by the assessing authority.”

One of the questions that came up for consideration was set out inparagraph 11 as under:-C

“11. The following questions of law arise for consideration by thisCourt:

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(c) While purporting to revise an order under Section 12-A whichneither expressly nor impliedly refers to any proceeding underSection 18-A and was thus not within the contemplation of theassessing authority while passing the order under Section 12(3),is it open for the Commissioner, while purporting to act underESection 22-A in respect of the order under Section 12(3) to passan order under Section 18-A either as a part of the order underSection 22-A or separately as such under Section 18-A?

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The question was considered as under:

“14. Section 18-A of the Act prohibits excess collection of taxby an assessee. If any person contravenes Section 18, penaltyis provided under Section 18-A of the Act. The question iswhen at the time of assessment, if no penalty is imposed by theassessing authority, can the revisional authority, by invoking hissuo motu powers under Section 22-A of the Act impose penaltyfor the first time on the ground that the order of assessment isprejudicial to the interests of the Revenue?

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17. It must be noted that there is a difference between exerciseof revisional powers over orders passed by lower authorityand exercise of revisional powers in the assessment proceedingitself. A revision of an order may be confined to what the ordercontains or dealt with. But when the assessment proceedingsthemselves are before the revisional authority it can go beyondthe order of the assessing authority and pass such orders asthe assessing authority could or should have passed.

22. The argument of the learned counsel for the appellant thatthe revising authority or the appellate authority higher than theassessing authority is not competent to levy a penalty for thefirst time when no penalty has been levied by the assessingauthority is wholly untenable, without statutory basis andunreasonable from any point of view. The said plea is liable tobe rejected. The necessity for there to be an order underSection 18-A for the exercise of revisionary jurisdiction underSection 22-A is once again fallacious. The non-levy of penaltyis itself an illegality caused by a failure to exercise the jurisdictionby the assessing authority and therefore, prejudicial to theinterests of the Revenue.”

35. For exercising revisional power “suo motu” or “on its motion”,the concerned authority must be satisfied that an order has been passedby the authority or officer subordinate to it. which may be prejudicial tothe interest of the revenue. As indicated in some of the hypotheticalinstances noted in the decisions quoted hereinabove, the error may havecrept in unknowingly, or there may be a genuine mistake, or in somecases there could be a deliberate attempt to prejudice the interest ofrevenue. If an infirmity or illegality is brought to the notice or knowledgeof the revisional authority, through normal and regular process of reportingby the subordinate officer or authority, the power of revision can certainlybe exercised. The requisite knowledge enabling the revisional authorityto exercise the power vested in it, can also be gathered from the appealpreferred by the registrant himself. That may only be an occasion or asource which enables the authority to gather information about thepossible infirmity or illegality in the process. Upon being so aware, therevisional authority would thereafter be exercising power vested in it.Qualitatively, it makes no difference as to what was the source of theinformation or knowledge, so long as the power is exercised within the A

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Aconfines of the limitations or restrictions imposed by the statute, and is inaccordance with law. Apart from the restrictions imposed by the statute,none can be read into the exercise of power on the ground as to thenature or source of information.

While entertaining an appeal, if an obvious illegality is noticed byBthe revisional authority, it can certainly exercise suo motu power to undothe mistake, or rectify an error committed by the subordinate officer orauthority, subject to such restrictions as are imposed on the exercise ofthe power by the statute.

36. There is nothing in the scheme of the Act which purports toCrestrict the exercise of suo motu power under Section 47-A, and confinesit to cases where knowledge of any illegality or infirmity in the proceedingsundertaken by the subordinate officers must be gathered from sourcesother than through a pending appeal. Unless the statute expressly oreven by necessary implication restricts the exercise of power, there wouldbe no occasion to read into the power, any other limitations. The HighDCourt has not found the exercise of power to be invalid on any count, norwas any such submission advanced before the High Court. The HighCourt had simply gone on the existence of power rather than on theexercise of power. It is not as if the assessment made by the appellateauthority was either opposed to principles of natural justice, or was soEpalpably incorrect, that it could never be sustained. In our view, the HighCourt completely erred in setting aside the exercise of power undertakenby the concerned authority. The exercise of power was definitelydesigned to obviate an obvious illegality and prejudice to the interest ofthe revenue. The exercise was, thus, absolutely correct, and there wasno occasion to set aside the orders passed in pursuance thereof. We,Ftherefore, answer question No.3 accordingly.

37. Having thus considered and answered all the questions whichhave arisen for our consideration, all these appeals deserve to be allowed.We order accordingly, and set aside the decisions of the High Courtunder appeal and restore the orders passed by the appellate authority.GNo costs.

Devika Gujral

Appeals allowed.

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