Kerala Builders Forum v. State Of Kerala

G. Sivarajan, J.

A common question arises in all the three Writ Petitions as to whether a registering authority while registering a document (a sale deed) under the Registration Act, 1908 has got the power to retain the registered document (original) while making a reference to the District Collector (District Registrar, notified authority) under S.45B(1) of the Kerala Stamp Act, 1959. (Hereinafter referred to as the)

2. The petitioner in O.P. No. 16943/2001 is an association registered under the Travancore Cochin Literary, Scientific and Charitable Societies Act (Act 12 of 1955). It is stated that the said association is found, inter alia, with the object to constitute and maintain an organisation for co-operation between all those engaged in business or profession as builders and property developers; to represent to the Government the matters pertaining to the industry as and when found necessary and so on. The petitioner in O.P. No. 18089/2001 is a builder. The grievance of the petitioners in both these cases is against the action taken by the Government in the Registration Department all over the State by which instruments conveying the land or undivided interest over the land are being retained by the registering officers for the purpose of initiating proceedings under S.45B of the. The association has filed the Original Petition seeking for a declaration that the levy of Stamp Duty under S.3 of the on instruments which seek to transfer undivided interest over the land from one person to another can be effected only on the value of the land, and for a further direction to respondents 1 to 3 to issue appropriate directions to the District Registrars of the various districts in the State of Kerala to register the instrument purporting to transfer undivided interest of the land without insisting on payment of stamp duty on the value of the super structure, if any, constructed in such land. The petitioner in O.P. No. 18089/2001 in addition to the reliefs already mentioned challenges a notice (Ext. PI) issued by the Sub Registrar, Ernakulam for the attention of the document writers and the public to the provisions of S.28 of the which requires the furnishing of the details regarding the value of the property sought to be conveyed. There is also a prayer for direction to the registering officers not to retain any documents presented to them for registration and to direct them to return the documents to the parties immediately after registration. The petitioner in O.P. No. 17651/2001 seeks for a direction to the 2nd and 3rd respondents therein to return the registered sale deed No. 1667/2001, Aluva SRO forth with to the petitioner. While the petitioners in O.P. Nos. 16943 & 18089/2001 have no case that any of the documents presented by them for registration is withheld or retained by the registering officers, the petitioner in O.P. No. 17651/2001 has got a specific case that the sale deed No. 1667/2001 presented for registration is not being returned to the petitioner even after the registration on the ground that the registering officer has referred the question of under valuation of consideration under S.45B(1) of the for adjudication by the District Registrar under S.45B(2) of the.

3. As already noted in the first mentioned two Original Petitions, the petitioners therein seek for other reliefs also. The respondents have filed statements and/or counter-affidavits in all the cases. The stand taken by the respondents is that all the documents which are presented for registration are being registered, provided the requirements of the Registration Act are satisfied and that the original of the registered documents are also being returned as provided in sub-s.2 of S.61 of the Registration Act, 1908 in the normal course. It is also stated that under the provisions of S.45B(1) of the, if the registering officer, while registering an instrument transferring any property, has reason to believe that the value of the property or consideration, as the case may, has not been truly set forth in the instrument, he may after registering such instrument refer the same to the Collector for determination of the value or consideration, as the case may be, and the proper duty payable thereon. It is also stated that by virtue of the aforesaid provision the registering officer is bound to refer the original instrument to the Collector (here the District Registrar) for determination in case of any doubt. It is also stated that as per Clause 390 of Registration Manual the registering officer, while referring the matter under S.45B(1) of the to the District Collector, has to forward the original of the sale deed along with the reference to the said authority. It is also the stand of the respondents that though the provisions of S.-61 (2) of the Registration Act provides for return of the original of the registered document after registration to the person who presented the same for registration or to his nominee, in view of the provisions of S.45B(1) of the, the registering officer and the District Collector are entitled to retain the same till the question referred to under S.45B(1) is adjudicated by the latter under S.45B(2) of the. It is their case that there is no inconsistency in the provisions of S.45B of the with the provisions of S.61(2) of the Registration Act and that both the provisions have to be harmoniously construed.

4. The stand of the petitioners is that the registering officer is bound to register the document when presented if the said document satisfies the requirements of the Registration Act, that the registering officer is bound to return the same after registration to the person who presented the same for registration or to his nominee as provided in S.61(2) of the said Act, that the retention of the registered document by invoking the provisions of S.45B(1) of the is illegal that and the provisions in a State Legislation cannot over ride the provisions of the Central Legislation on the same subject in view of the provisions of Art.254(1) of the Constitution of India. It is also the case of the petitioner that though the provisions of the has received the assent of the President, no assent has been obtained in respect of the provisions of S.45B of the said Act introduced later. Regarding the contention based on the Constitutional provision the respondents case is that the provisions of the Registration Act and the provision of the Kerala Stamp Act do not deal with the same subject matter and therefore there is no question of any repugnancy coming in the way.

5. With regard to the other two questions, (1) that the registering officer can impose stamp duty only on the value of the property that is being transferred as mentioned in the instrument, from the counter-affidavit filed by the respondents it would appear that there is consensus on this aspect. However, according to the respondents what is the subject matter of the transfer has to be gathered by reading the instrument as a whole and that if the registering officer, on reading the instrument; has got reason to believe that there is under valuation of consideration for the transfer, he has got the power to refer the same to the District Registrar for adjudication and it is for the District Registrar to adjudicate the same in exercise of the powers vested in him under S.45B(2) r/w. the provision of the Kerala Stamp (Prevention of Under Valuation of Instruments) Rules, 1968. On this aspect of the matter also there is not much controversy similarly, the second question viz; the registering officer is bound to register the document when presented for registration the/e is no controversy since a registering officer is bound to register a document (sale deed) presented for registration provided the requirements of the Registration Act is complied with.

6. I will now consider the question as to whether the registering officer in exercise of the power vested in him under S.45B(1) of the is justified in retaining the registered document (original) for forwarding it to the District Registrar along with the reference for adjudication of the question of under valuation of consideration. I have already noted S.45B (1) of the which provides for reference of the question of under valuation to the District Registrar. I have also noted the contention of the respondents that the Registration Manual, Clause 390 clearly states that the original

document with respect of which the reference is being made to the District Registrar has to be enclosed along with the reference and therefore the registering officer is bound to comply with the said provision in the Registration Manual and to forward the original along with the reference to the District Registrar. Since the petitioners have raised the contention that the registering officer has no power under the and the Rules to retain the document and that even if there is an enabling provision in the said Act and the Rules in view of the provisions of S.61(2) of the Registration Act such a

provision, it cannot survive the question requires consideration. Therefore, it is necessary to refer to the relevant provisions of the Registration Act, 1908, Kerala Stamp Act and Kerala Stamp (Prevention of Under Valuation of Instruments) Rules, 1968.

7, S.61(2) of the Registration Act reads as follows:

"The registration of the document shall thereupon be deemed complete, and the document shail then be returned to the person, who presented the same for registration, or to such other person (if any) as he has nominated in writing in that behalf on the receipt mentioned in S.52".

S.45B of the Kerala Stamp Act reads as follows:

"45B. Instruments under valued how to be dealt with:

(1)If the Registering Officer, while registering any property, has reason to believe that the value of the property or the consideration, as the case may be, has not been truly set forth in the instrument, he may, after registering such instrument, refer the same to the Collector for determination of the value or consideration, as the case may be, and the proper duty payable thereon.

(2) On receipt of a reference under sub-s, (1), Collector shall, after giving the parties a reasonable opportunity of being heard and after holding an enquiry in such manner as may be prescribed by rules made under this Act, by order, determine the value of the property or the consideration and the duty aforesaid; and the deficient amount of duty, if any shall be payable by the person liable to pay the duty and, on the payment of such duty, the Collector shall endorse a certificate of such payment on the instrument under his seal and signature.

(3) The Collector may, suo mote, within two years from the date of registration of any instrument not already referred to him under sub-s.(1), call for and examine the instrument for the purpose of satisfying himself as to the correctness of its value or consideration, as the case may be, and the duty payable thereon, and if after such examination he has reason to believe that the value or consideration has not been truly set forth in the instrument, he may determine the value or consideration and the duty aforesaid, in accordance with the procedure provided for in sub-s.(2), and the deficient amount of duty, if any, shall be payable by the person liable to pay the duty and, on the payment of such duty, the Collector shall endorse a certificate of such payment on the instrument under his seal and signature.

(4) Any person aggrieved by an order of the Collector under sub-s.(2) or sub-s.(3) may appeal to the District Court within whose jurisdiction the property transferred is situate.

(5)An appeal under sub-s.(4) shall be filed within thirty days of the date of the order sought to be appealed against.

(6)The District Court shall hear and dispose of the appeal in such manner as may be prescribed by rules made under this Act."

S.45B(1) provides that, if the registering officer, while registering any instrument transferring any property, has reason to believe that the value of the property or the consideration, as the case may be, has not been truly set forth in the instrument, he may, after registering such instrument, refer the same to the Collector for determination of the value or consideration, as the case may be, and the proper duty payable thereon. As per sub-s.2, the Collector, on receipt of such reference, has to afford a reasonable opportunity of being heard to the parties and also to hold enquiry in the manner provided in the rules and to pass order determining the value of the property or the consideration and the duty aforesaid and the deficient amount of duty, if any, shall be payable by the person liable to pay the duty and on the payment of such duty the Collector shall endorse a certificate of such payment on the instrument under his seal and signature. S.45B(3) deals with a situation where the registering authority does not refer the instrument for adjudication but the Collector takes suo moto proceedings on the ground that there is under valuation of consideration. The subsequent procedure to be followed by the District Collector are the same both on reference and on suo moto proceedings. The procedure for reference and for adjudication of the reference are contained in the Kerala Stamp (Prevention of Under Valuation of Instruments) Rules, 1968. R.4 thereof deals with the procedure for determination of the value or consideration and the proper duty payable under S.45B. Sub-r.1 thereof states that the reference under sub-s.1 of S.45B from a registering officer shall be accompanied by a statement in Form 1 A. R.9 provides for appeal against the order passed by the District Collector. Sub-r.2(b) thereof provides that every appeal shall be accompanied by the original or certified copy of the instrument.

8. On a reading of S.45B (1) of the Kerala Stamp Act it appears to me that by the use of the words refer the same, occurring therein the intention of the Legislature is that the instrument in original must be referred to the Collector for determination. This view finds support from the provisions of sub-s.2 of S.45B which states that "the Collector shall endorse a certificate of such payment on the instrument under his seal and signature". Of course in a case where proceedings are initiated by the District Collector under S.45B (3) of the, the original of the instrument does not come in the possession of the District Collector at any stage of the proceedings except for making endorsement of the certificate regarding payment on the instrument after adjudication.

9. It is relevant to note here the provisions of S.33(1) and (2) and S.34 of the without the proviso which reads as follows:

"33. Examination and impounding of instruments:

(1) Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an Officer of Police, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.

(2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him, in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in the State when such instrument was executed or first executed."

"34. instrument not duty stamped inadmissible in evidence, etc.:

No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped."

According to me, the reason for retaining the registered document during the pendency of reference under S.45B(1) of the is that a registered instrument not duly stamped should not be allowed to be used as evidence for any purpose. Ss.33 & 34 of the, the relevant portions extracted above prompts me to make the above observations. Thus on a construction of provisions of S.45(B) and Ss.33 & 34 of the Kerala Stamp Acl,primafacie, it would appear that the registering authority and the District Collector are entitled to retain the registered documents after registration until the reference made under S.45B(1) is determined.

10. I also do not find any substance in the argument that the provisions of S.45B, if it is construed as enabling the Registering Officer/ District Registrar to retain the registered document pending adjudication of the reference under S.45B(1) of the is repugnant to the provisions of S.61(2) of the Registration Act, Art.254(1) of the Constitution of India says that if any provision of a law made by the Legislature of a State is repugnant to any provision of law made by Parliament which Parliament is competent to enact or to any provision of an existing law with respect to one of the matters enumerated in the concurrent list, then subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of any State, or as the case may be, the existing law, shall prevail and the law made by the Legislature of the State, shall to the extent of the repugnancy shall be void. However, Art.254(2) provides that when a law made by the Legislature of a State with respect to one of the matters enumerated in the concurrent list contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then the law so made by the Legislative of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State. For the application of the provisions of Art.254(1) and (2) of the Constitution necessarily the conflict between the laws made by both the Legislatives must relate to the same subject. (Zaverbhai v. State of Bombay, AIR 1954 SC 752 [LQ/SC/1954/125] ). It is also a settled position that when a question of repugnancy arises under Art.254, every effort should be made to reconcile the two enactments and to construe them so as to avoid their repugnant to each other and care should be taken to see whether the two really operate in different fields without encroachment. (Shyamakant v. Rambhajan, AIR 1939 PC 74 [LQ/PC/1938/73] ). Entry 6 of List III (concurrent list) Schedule VII is "Transfer of property other than agricultural land, registration of deeds and documents". Entry 44 of List III is stamp duties other than duties or fees collected by means of judicial stamps but not including rates of stamp duty. Thus it is clear that transfer of property and registration of deeds and documents (Entry 6) and stamp duty (Entry 44) are two different, subjects in the concurrent list - one dealing with registration of deeds and documents and the other dealing with stamp duties. As such there is no question of application of Art.254(1) and (2) of the Constitution in the instant case. The power to retain the document after registration under S.45B of the is a necessary incidence of the power to enforce payment of stamp duty under the. There is no repugnancy at all as alleged. Here it must be noted that the has received the assent of the President. This is for the reason that the Parliament had enacted the Indian Stamp Act invoking the very same entry in the concurrent list and it is for the purpose of giving force to the State Act Art.254(2) is invoked. In view of the aforesaid circumstances I do not think it necessary to consider the submission of the counsel for the petitioners that though the has received the assent of the President, S.45B introduced later by way of amendment has not received the assent of the President and therefore void as repugnant to the provisions of decision of the Supreme Court in Rishikesh v. Salma Begum (1995 (4) SCC 718 [LQ/SC/1995/604] ) and K.S.E.B. v. Indian Aluminium Co. (1976 (1) SCC.466).

11. Thus on a conspectus of the Constitutional provisions as well as the provisions of the Registration Act and the Kerala Stamp Act, I am of the definite view that the Registering Officer/ District Registrar has got the power to retain the original document after registration till the adjudication of the reference under S.45B(1) is over and its compliance. The provisions of clause 390 of the Registration Manual which provided for forwarding the original of the instrument along with the reference to the District Registrar is consistent with the provisions of S.45B of the.

12. 391However, it has come to my notice after the case was reserved for judgment that another Single Bench in O.P. No. 16474/2001 by judgment dt.15.6.2001 in similar circumstances directed return of the original instrument after registration and a Division Bench in appeal W.A. No. 2507/2001 by judgment dt. 12.7.2001 declined to interfere with the said judgment. I have perused the said two judgments. I do not find any discussion or consideration of any of the matters dealt with herein above. In such a situation the following observation made by a Division Bench in Thomas v. State of Kerala (1991 (1) KIT 19) applies:

"Ordinarily, when a contention has been evaluated by this Court and a decision rendered thereon, that will be taken as the case governing similar transactions. A single judge is doubtless bound by the decision. If he entertains a doubt on the correctness of the decision, the matter can be referred to a Division Bench. The Division Bench also cannot make a vie w different from that which had been already declared by another Bench. Judicial discipline and institutional decorum demand that even in the case of serious doubt about the correctness of the conclusion taken on the earlier occasion, it can only direct the matter be considered by a Full Bench of the Court. Following the procedure mentioned above, I am of the view that this question requires consideration by a Division Bench. I do so.

These cases are accordingly adjourned to be heard by the Division Bench.