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CHANDRAMALLIKA SUPPLIERS PRIVATE LIMITED & ANOTHER V/S THE STATE OF WEST BENGAL & OTHERS, decided on Wednesday, October 5, 2016.
[ In the High Court of Calcutta, WP No. 1224 of 2015. ] 05/10/2016
Judge(s) : BISWANATH SOMADDER
Advocate(s) : Ashok Kumar Banerjee, Senior , Aniruddha Mitra, Swati Bhattacharyya, Aditya Poddar, Ankit Shroff, Jayanta Kumar Mitra, Ld. General, Ayan Banerjee, Paritosh Kumar Sinha.
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  Chandramallika Suppliers Private Limited & Another Versus The State of West Bengal & Others,   05/10/2016.  




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    Biswanath Somadder J.1.The writ petitioner no.1 is a company registered under the Companies Act and the writ petitioner no.2 is its Director. The petitioners have approached this Court praying inter alia for the following principal reliefs:“a) A writ of and/or order and/or directions in the nature of Mandamus do issue declaring that the determination of the “Market Value” of an immovable property based on “Proposed Land Use” is illegal;b) A writ of and/or order and /or directions in the nature of Mandamus do declaring that the determination of the market value of an immovable property based on “Proposed Land Use” is contrary to The West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules 2001;c) A writ of and/or order and/or directions in the nature of Prohibition do issue injuncting the respondent authorities and/or each one of them from determining the “Market Value” of an immovable property based on information with regard to “Proposed Land Use”;d) A writ of and/or order and/or directions in the nature of Certiorari do issue directing the respondent authorities and/or each one of them to certify and transmit all records pertaining to the instant case so that same may be quashed and conscionable justice be done between the parties;”From the pleadings it appears that the petitioner no.1 is in the business of supplying and trading in various agricultural goods and services and is desirous of setting up farms for vegetables pulses grains dairy organic food etc. for which the petitioners have already bought and are interested in buying further land in Mouzas Chaketbati Chakmanik Chakparan and Pujali amongst other parts of West Bengal.The writ petitioners have stated that in certain registration offices if the transferee is an individual the registering authority does not force him to change the proposed land use either to “Bastu” or “Industrial” but if the transferee is an entity other than an individual the registering authority forces him to change the proposed name to these. This change of the “Proposed Use of Land” in the records of Registration Offices has no bearing with the records maintained in the office of the B.L and L.R.O. Separate application is required to be made with the concerned office of the B.L and L.R.O seeking permission for such conversion. Granting of such conversion is based on several rules regulations and bye-laws which may or may not be granted by the office of the B.L and L.R.O depending on the prevailing circumstances. Moreover the B.L and L.R.O also charges conversion fees as applicable.The writ petitioners have further stated that ascertainment of market value and stamp duty payable is being done on anticipation and apprehension of happening of a future event. The same is therefore bad in law. Being taxed at a higher rate upon anticipation of a future event is against the basic structure of Indian laws. The respondents are illegally and arbitrarily determining the market value of an immovable property based on “proposed land use” and fixing stamp duty payable accordingly. The West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules 2001 (hereinafter referred to as the ‘2001 Rules’) do not take into consideration the proposed land use while preparing annual statement of market value of immovable property. Further at the time of registration neither the transferor nor the transferee has any obligation to disclose to the registering authority the purpose for which the land would be used after the transfer and by asking the transferor or the transferee about such purpose the registering authority has travelled beyond his authority and jurisdiction. The action of the respondents is absolutely in violation of the principles of natural justice.It is also contended by the petitioners that they have been forced to pay exorbitant stamp duty while buying land and their interest are at serious prejudice at the hands of the respondents. The introduction of the column “Proposed Land Use” under serial no. 9 in Form 1 2 and 4 under Appendix V to the West Bengal Registration Rules 1962 is absolutely illegal.On behalf of the petitioners it is submitted that the respondent authorities are “State” within the meaning of Article 12 having limited and restricted authority and cannot travel beyond the scope of the particular statute. They are acting in colourable exercise of power and are violating the rights of the petitioners as enshrined under Articles 14 19 and 300A of the Constitution of India and are also violating the 2001 Rules (as amended vide notification no. 1614 F.T dated 5th October 2010) and clause 16B of section 2 of the Indian Stamp Act 1899 (as amended by West Bengal Act no. 17 of 1990 with effect from 31.01.1994). The respondent authorities are anticipating and apprehending an uncertain event to fix the market value of a property which is bad in law and also contending that the change of the “Proposed Use of Land” in the records of the registration office has no bearing with the records maintained in the office of the B.L and L.R.O. and that a separate application is required to be made with the concerned office of the B.L and L.R.O seeking permission for such conversion and the B.L and L.R.O also charges conversion rate as applicable.On the other hand in the two affidavit-in-oppositions filed on behalf of the State respondents the following points have been taken: It is contended that the petitioners have failed to disclose any violation of any provision of the relevant statute or the rules and in the absence of any specific averment of violation the writ petition is not maintainable. The State has all along acted in compliance of the provisions of the Indian Stamp Act 1899 and the 2001 Rules and the 2001 Rules provide for classification of land after taking into account the use of land for the purpose of preparation of annual statement of rates of land. Therefore nature of use of land is one of the factors to be considered for preparing the annual statement of rates of immovable property.The petitioners have not challenged the relevant provisions of the 2001 Rules or the West Bengal Registration Rules 1962. The said Rules empowered the Registering Officer to demand disclosure of proposed land use before registering the document. Hence the writ petitioner has not made out any case for interference by this Court sitting in its high prerogative writ jurisdiction. The 2001 Rules provide for determination of valuation of a land for preparation of an annual statement of rates of market value of an immovable property on the basis of proposed use of land. If the proposed use of land is mentioned as “Shali” the Registering Authority does not refuse to register it and asks the applicant to change the proposed use to either “Bastu” or “Industrial”. The ascertainment of market value and stamp duty are not being done based on anticipation or apprehension of happening of a future event or that a person is being taxed at a higher rate on anticipation of a future event. The State respondents are not illegally or arbitrarily determining the market value of the immovable property and fixing the stamp duty accordingly. At the time of registration the transferor and transferee are obliged to disclose the proposed land use to the registering authority. The disclosure of the proposed use of land during the registration process is a specific requirement under the 2001 Rules as well as the West Bengal Registration Rules 1962 and it has nothing to do with the office of the Block Land and Land Reforms Officer. The 2001 Rules clearly provide for disclosure of proposed land use and for taking into consideration the land use for arriving at the annual statement of rates as well as valuation of land. The respondents being bound by the statute are duty bound to follow the Rules as well as the statute and they have never deviated from the Rules and as such there is no scope for interference by this Court on the basis of the averments made in the writ petition.The introduction of the column of proposed land use is not illegal or contrary to law. The 2001 Rules take into consideration the proposed land use contrary to what was alleged by the writ petitioners. The petitioners were not forced to pay exorbitant rate of Stamp Duty by the respondent authorities while buying land. The petitioners have failed to disclose a single instance where exorbitant rates have been charged and in absence of any material particulars the allegations under reference are vague and unfounded. A thorough scrutiny of records was made in that regard but no document has been found to have been presented by the petitioners upon due execution for registration prior to institution of the said application. The writ petitioners have purportedly relied upon the Market Value Assessment Slips allegedly obtained by them from the official website of the Directorate of Registration and Stamp Revenue. Thus there is no basis for the writ petition to have been filed and the petitioners have no cause of action or locus standi to move the instant writ petition and if orders as prayed for by the petitioners in the said application are not granted the petitioners shall not suffer any loss or injury. The instant petition is speculative and harassing and is liable to be dismissed with exemplary cost.In order to buttress his submission based on the stand taken by the State in its two affidavits as summarized above the following judgments were referred to by the learned Advocate General appearing on behalf of the State respondents:• Raghubans Narain Singh v. Uttar Pradesh Government through Collector of Binjor reported in AIR 1967 SC 465.• Dadu Yogendra Nath Singh and Ors. v. The Collector Seoni reported in 1977 (2) SCC 1.• Prithvi Raj Taneja v. The State of Madhya Pradesh and another reported in 1977 (1) SCC 684.• Atma Singh (Dead) Through Lrs. & Others v. State of Haryana & Another reported in 2008 (2) SCC 568.• Digamber & Others v. State of Maharashtra & Others reported in 2013 (14) SCC 406.• P.Ram Reddy and others v. Land Acquisition Officer Hyderabad Urban Development Authority Hyderabad and others reported in 1995 (2) SCC 305.• Sabhia Mohammed Yusuf Abdul Hamid Mulla (dead) by Lrs. And Ors. v. Special Land Acquisition Officer and Others reported in 2012 (7) SCC 595.• Census Commissioner and Ors v. R. Krishnamurthy reported in 2015 (2) SCC 796.In reply the learned senior counsel appearing on behalf of the petitioners cited State of Rajasthan v. Ganesh Lai reported in (2008) 2 SCC 533 in order to distinguish the judgments relied upon by the learned Advocate General. He also cited Comptroller And Auditor-General of India Gian Prakash New Delhi and Another vs. K.S.Jagannathan and Another reported in AIR 1987 SC 537 (para 20) = (1986) 2 SCC 679 (para 20) in order to submit that the High Court – in the given facts and circumstances of the instant case – has sufficient power to issue a writ of mandamus or a writ in the nature of mandamus or to pass orders and give necessary directions.The question which falls for consideration in the facts and circumstances of the instant case is whether information obtained by the Registering Officer on the basis of the details provided by the applicant in the appropriate form mentioned in Appendix V of the West Bengal Registration Rules can mandatorily include such information required to be provided under the column specifically relating to “Proposed Land Use” or in other words whether such information can be mandatorily obtained for the purpose of determination of market value based on the statutory definition of “market value” as provided under clause 16B of the Indian Stamp Act 1899. In this context one may at first take notice of the various judicial pronouncements which have been referred to and relied on by the learned Advocate General for the State.In Raghubans Narain Singh v. Uttar Pradesh Government through Collector of Binjor reported in AIR 1967 SC 465 it was held inter alia that market value on the basis of which compensation is payable under section 23 of the Land Acquisition Act means the price that a willing purchaser would pay to a willing seller for a property having due regard to its existing condition with all its existing advantages and its potential possibilities when laid out in its most advantageous manner excluding any advantage due to the carrying out of the scheme for the purposes for which the property is compulsorily acquired. As observed in South Eastern Rail Co. v. L.C.C. (1915) 2 Ch 252:-“The value to be ascertained is the price to be paid for the land with all its potentialities and with all the use made of it by the vendor.” In Dadu Yogendra Nath Singh and Ors. v. The Collector Seoni reported in 1977 (2) SCC 1 the doctrine of potential value as espoused in N.B. Jeejabhoy v. The District Collector Thana Civil Appeals Nos. 313 to 315 of 1965 D/-30-8-1965 (SC) was quoted as under:“A vendor willing to sell his land at the market value will take into consideration a particular potentiality or special adaptability of the land in fixing the price. It is not the fancy or the obsession of the vendor that enters the market value but the objective factor namely whether the said potentiality can be turned to account within a reasonably near future. The question therefore turns upon the facts of each case. In the context of building potentiality many questions will have to be asked and answered whether there is pressure on the land forbuilding activity whether the acquired land is suitable for building purposes whether the extension of the said activity is towards the land acquired what is the pace of the progress and how far the said activity has extended and within what time whether buildings have been put up on lands purchased for building purposes what is the distance between the built-in-land and the land acquired and similar other questions will have to be answered. It is the over-all picture drawn on the said relevant circumstances that affords the solution.” In Prithvi Raj Taneja v. The State of Madhya Pradesh and another reported in 1977 (1) SCC 684 while considering section 23 of the Land Acquisition Act the Supreme Court observed that market value means price that a willing purchaser would pay to a willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities when laid out in the most advantageous manner excluding any advantage due to the carrying out of the scheme for which the property is compulsorily acquired. In considering market value the disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy should be disregarded. There is an element of guess-work inherent in most cases involving determination of the market value of the acquired land. But this in the very nature of things cannot be helped. The essential thing is to keep in view the relevant factors prescribed by the Act. If the judgment of the High Court reveals that it has taken into consideration the relevant factors the assessment of the market value of the acquired land should not be disturbed.It was observed in Atma Singh (Dead) Through Lrs. & Others v. State of Haryana & Another reported in 2008 (2) SCC 568 that for ascertaining the market value of the land the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality. It is well settled that market value of a property has to be determined having due regard to its existing condition with all its existing advantages and its potential possibility when led out in its most advantageous manner. The question whether a land has potential value or not is primarily one of fact depending upon its condition situation user to which it is put or is reasonably capable of being put and proximity to residential commercial or industrial areas or institutions. The existing amenities like water electricity possibility of their further extension whether near about town is developing or has prospects of development have to be taken into consideration.In Digamber & Ors v. State Of Maharashtra & Ors reported in 2013 (14) SCC 406 it was held inter alia to the effect that the acquisition of the land – whether for commercial purpose or not – should be the relevant criteria for determining the market value while applying the principles laid down in Atma Singh (supra). In other words for ascertaining the market value of the land the potentiality of the acquired land should also be taken into consideration.In P.Ram Reddy and others v. Land Acquisition Officer Hyderabad Urban Development Authority Hyderabad and others reported in 1995 (2) SCC 305 it was held inter alia to the effect that building potentiality of acquired land is required to be taken into account while determining its market value with reference to the date envisaged under section 4(1) of the Land Acquisition Act. Such market value of the acquired land cannot only be its value with reference to the actual use to which it was put on the relevant date envisaged under of the Land Acquisition Act but ought to be its value with reference to the better use to which it is reasonably capable of being put in the immediate or near future. Possibility of the acquired land put to certain use on the date envisaged under section 4(1) of the LA Act becoming available for better use in the immediate or near future is regarded as its potentiality. It is for this reason that the market value of the acquired land when to be determined with reference to the date envisaged under section 4(1) of the LA Act the same has to be done not merely with reference to the use to which it was put on such date but also on the possibility of it becoming available in the immediate or near future for better use i.e. on its potentiality. In Sabhia Mohammed Yusuf Abdul Hamid Mulla (dead) by Lrs. And Ors. v. Special Land Acquisition Officer and Others reported in 2012 (7) SCC 595 the principles for determination of market value of an acquired land was reiterated.The judgments of the Supreme Court which have been relied on by the learned Advocate General for the State – although rendered in the context of land acquisition proceedings – clearly defines market value which includes in its definition its potential value. The significance of the word “potential” should not be lost sight of. It connotes by itself something having such latent qualities which has a capacity to develop or lead to future success or usefulness. (Please see Concise Oxford English Dictionary Tenth Edition Revised.)The relevant provision of the Indian Stamp Act 1899 which defines “market value” namely clause (16B) of section 2 was introduced by a West Bengal amendment i.e. The Indian Stamp (West Bengal Amendment) Act 1990 [section 3(d)] which came into effect on and from 31st January 1994 and reads as follows:-“ “market value” means in relation to any property which is the subject-matter of an instrument the price which such property would have fetched or would fetch if sold in open market on the date of execution of such instrument as determined in such manner and by such authority as may be prescribed by rules made under this Act or the consideration stated in the instrument whichever is higher;”The statutory definition of market value thus means the price which a property would have fetched or would fetch if sold in open market on the date of execution of an instrument as determined in such manner and by such authority as may prescribed by the Rules made under the Indian Stamp Act 1899 or the consideration stated in the instrument whichever is earlier.The West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules 2001 was introduced by the State Government in exercise of the power conferred under clause (16B) of section 2 read with sections 27 47A and 75 of the Indian Stamp Act 1899 and came into force from 15th March 2001. Rule 3 of the 2001 Rules provides for the manner of determination of market value and furnishing of particulars relating to any property.In order to arrive at the correct market value and in order to eliminate undervaluation the Registering Officer appointed under the Registration Act 1908 – after receiving the instruments of conveyance – is required to ascertain the market value of the property which is the subject matter of such instruments in the manner prescribed and compute the proper stamp duty chargeable on the market value so ascertained in the event he has reasons to believe that the market value of the property – which is the subject matter of the relevant instrument – has not been truly set forth in that instrument presented for registration. In this context one may take notice of section 47A of the Indian Stamp Act (introduced under the Indian Stamp (West Bengal) Amendment Act of 1998). If a person is aggrieved by an order determining the market value passed by the Registering Officer under sub-section (5) or subsection (8) of section 47A of the Indian Stamp Act 1899 such person has a right of preferring a statutory appeal in terms of section 47B of the Indian Stamp Act 1899 (introduced under the Indian Stamp (West Bengal) Amendment Act 1998).The State Government by a notification published in the Kolkata Gazette on 21st May 2008 introduced certain amendments in the West Bengal Registration Rules 1962. The relevant Rule which is required to be considered in the instant case is Rule 123. Rule 123 provides inter alia that the market value of the property which is the subject matter of a deed chargeable with an ad valorem duty on market value shall be determined through Computerization of Registration of Documents (CORD) software. For such purpose in terms of sub-Rule(2) of Rule 123 every person is required to submit a duly filled in requisition form appended to Appendix V mentioned in column (2) of the Table set out under the sub-Rule (2) corresponding to the subject matter of a deed mentioned in column (1) of the said Table. Appendix V essentially contains four requisition forms. All the requisition forms are for the purpose of assistance on market value / chargeability. Each of these forms contains various columns including the column “Proposed Land Use” under “Plot-wise details of the land”.The State of West Bengal however by that time had already introduced the West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules 2001 which came into force from 15th March 2001. The said 2001 Rules however were significantly amended by a notification dated 5th October 2010 which was published in the Official Gazette on the same date. The 2001 Rules (upon its 2010 amendment) provide inter alia a complete mechanism for the manner of determination of market value when an instrument is registered through the system of CORD; guidelines for preparation of annual statement of market value of immovable property; principles for determination of the market value of immovable property; revision of annual statement of rates of immovable property and forms for obtaining information regarding immovable property.The introduction of Rules 3A 3B 3C 3D and 3E by virtue of the amendments effected in the year 2010 thus clearly reveals the State Government’s conscious intention to evolve a complete mechanism for computation of market value when using the CORD software. Rule 3A provides the manner in which market value is required to be determined when an instrument is registered through the system of CORD. Rules 3B to 3E are the statutory modalities prescribed by the State for the purpose of determination of the market value (as defined under clause 16(B) of section 2 of the Indian Stamp Act 1899) in relation to any land or any land with building or any flat used for residential or commercial or semi commercial purpose when an instrument is registered through the system of CORD. It is noticed that Rule 3E – which is in respect of forms for obtaining information regarding immovable property – specifically provides that every Registering Officer shall obtain information in respect of any immovable property from the person in the appropriate form mentioned in Appendix V of the West Bengal Registration Rules. Sub-Rule (2) under Rule 3E further provides that every Registering Officer may call for production of any document for the purpose of verifying whether all the facts for determination of market value of the property which is the subject matter of the instrument has been truly set forth as mentioned in section 27 of the Indian Stamp Act. It is thus seen that information regarding any immovable property is required to be mandatorily obtained by every registering officer from the person concerned on the basis of information supplied by such person in the appropriate form mentioned in Appendix V of the West Bengal Registration Rules. It is in these forms – mentioned in Appendix V of the West Bengal Registration Rules – where one finds existence of a column under the heading “Proposed Land Use”. Significantly the 2010 amendments to the West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules 2001 – whereby Rule 3E has been introduced – has not been challenged in the writ proceeding. That apart and in any event it is quite apparent that the 2010 amendments to the West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules 2001 were introduced only for the purpose of bringing the 2001 Rules in sync with the amendments which were introduced to the West Bengal Registration Rules 1962 by the State Government in the year 2008 primarily for the purpose of registration of documents through the system of Computerization of Registration of Documents (CORD).Since it is quite well settled in law through several pronouncements of the Supreme Court that “Market Value” includes within its definition its potential value and meaning of the word “potential” having been discussed earlier the column under the heading “Proposed Land Use” required to be filled-up amongst other columns in order to determine the potential value of a land cannot be held to be either illegal or contrary to the 2001 Rules (as amended in the year 2010). Information provided by an applicant under the said column is mandatorily required by the Registering Officer for the purpose of determination of “Market Value” as provided under clause 16B of the Indian Stamp Act 1899.Now a question that requires some consideration is whether the “Proposed Land Use” column – when required to be filled-up by an applicant – will have any time frame attached to it or not.The answer to this question lies in a plain reading of Rules 3A to 3E as introduced by virtue of the 2010 amendment of the West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules 2001. The scheme of the said Rules clearly reveals that the Registering Officer is required to revise the annual statement of rates of immovable property annually. The guidelines for preparat ion of annual statement of market value of immovable property and the principles for such determination of the market value has been clearly laid down under Rules 3B & 3C.If one reads the guidelines and principles carefully one would notice that preparation of market value of the concerned land and the rate per square feet of market value of any flat or structure for residential or commercial or semi-commercial use has to be determined in the manner laid down under the various clauses under Rule 3B. What appears to be noteworthy is the recurrence – in some of the clauses – of a period of five consecutive years immediately preceding the year of preparation of annual statement of market value of immovable property taken as one of the methods of computation. While determining market value of the concerned land whether such land has been transacted during the five consecutive years immediately preceding the year of preparation of annual statement of market value of immovable property is required to be taken into consideration amongst other factors. Similarly the rate per square feet of market value of any flat or structure for residential use shall be determined on the basis of the highest rate on which such flat or structure of similar nature in the same locality or a comparable locality has been transacted during the five consecutive years immediately preceding the year of preparation of annual statement of rate of such flat or structure. While determining the rate per square feet of market value of any flat or structure for commercial use or semi-commercial use the rate per square feet of market value of flat or structure for residential use in the same locality shall be appreciated following the same methodology as elucidated in clause (13) under Rule 3B.Thus following the scheme of the Rules as introduced by the 2010 amendment of the West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules 2001 this Court is of the view that there cannot be an indefinite period of time attached to the details as required to be filled-up under the column “Proposed Land Use” and it is imperative to attach a time frame to the details to be filled-up under the said column. Such time frame should be in sync with the scheme of Rules 3A 3B 3C 3D and 3E and ideally five years.The concerned authority of the State of West Bengal is directed to incorporate such time frame in the column “Proposed Land Use” accordingly. Such incorporation shall be carried out as expeditiously as possible preferably within a period of eight weeks but not later than twelve weeks from date of communication of a photostat certified copy of the order.This judgment and order shall also govern W.P.no. 1268 of 2015 (Chandramallika Suppliers Private Limited & Others vs. The State of West Bengal & Others) which stands disposed of alongwith the instant writ petition accordingly.