Collector Can Determine Market Value Of Land At The Time Of Execution Of Sale Deed Or Period Reasonably Proximate Thereto: Allahabad High Court

The Allahabad High Court has held that the Collector has power to determine market value of the land at the time of execution of sale deed or period reasonably proximate thereto.While dealing with challenge to proceedings under the Stamp Act, 1899, Justice Abdul Moin relied on the full bench decision of the Allahabad High Court in Smt. Pushpa Sareen vs. State of U.P. and others and the decision of the Allahabad High Court in Gyan Prakash vs. State of U.P. and others to hold that “the market value of the land would have got nothing to do with the circle rates inasmuch as it is the determination of the Collector which would determine the market value of the land along with some material which may have a direct, circumstantial or even intrinsic value on the basis of which he can come to a reasonable belief that the market value of the property has not been correctly indicated in the instrument/sale deed.”Factual BackgroundPetitioners claim to have purchased a piece of land in District Gonda through registered sale deed on which stamp duty was affixed at agricultural rates. Since higher market value was paid, stamp duty was paid at the sale consideration. On inspection of the land, it was found that plots were being carved out over the land and road and electricity poles were existing . Based on the inspection report, proceedings were initiated against the petitioner under Section 47-A of the Stamp Act, 1899. Since petitioners had not put in appearance, ex-parte orders were passed assessing the market value of the land at Rs.3900 per square meter. Petitioners were required to deposit additional stamp duty, registration charges and penalty. Appeal against the order under Section 56(1-A) of the Act, 1899 was rejected. Counsel for petitioner contended that petitioners had already paid an excess amount while purchasing the land more amount was paid for sale consideration despite agricultural rate being less. It was further argued that the Authority calculated the market value based on prospective utilization of the land which was illegal. It was also submitted that the inspection was made at a later date. Counsel for petitioner relied on the decision of Allahabad High Court in Smt. Omwati vs. Commissioner, Meerut and others to argue that future market value of the land cannot be considered for arriving at the fair market value of the said land.Per Contra, counsel for respondents relied on the decision of full bench of the Allahabad High Court in Smt. Pushpa Sareen vs. State of U.P. and others to argue that the inspection was carried out within close proximity to the sale deed being entered into. Since it was found that the plots were being carved out of the land, fair market value of the land was arrived at. Further, the value arrived under U.P. Stamp (Valuation of Property) Rules, 1997 was justified based on the decision of the Allahabad High Court in Gyan Prakash vs. State of U.P. and others. High Court VerdictThe Court observed that the full bench in Smt. Pushpa Sareen vs. State of U.P. and others had held that “the power of the Collector cannot be unduly circumscribed by ruling out the potential to which the land can be advantageously deployed at the time of the execution of the instrument or a period reasonably proximate thereto.”Relying on the judgment of the Allahabad High Court in Gyan Prakash vs. State of U.P. and others, the Court held that market value of the land has nothing to do with circle rates as Collector determines that market value of the land based on material which may show that the value in the sale deed has not been correctly calculated. The Court observed that the inspection was carried out in reasonable proximate period wherein it was found that plots had been carved out, 25 feet road was existing and electricity poles had been installed. The Court held that from the above it was clear that the land was being carved out for residential use, accordingly the value arrived at under U.P. Stamp (Valuation of Property) Rules, 1997 was justified. Further, the Court rejected the argument of the petitioners stating that they had already deposited excess amount. The Court held that amount paid them was found less than the market value determined by the Collector. Accordingly, the writ petition was dismissed. Case Title: Saurabha Srivastava And 2 Others vs. State Of U.P. Thru. Secy. Revenue Deptt. Lko. And 4 Others 2024 LiveLaw (AB) 19 [WRIT - C No. - 12 of 2024]Case citation: 2024 LiveLaw (AB) 19Click Here To Read/Download Order

Collector Can Determine Market Value Of Land At The Time Of Execution Of Sale Deed Or Period Reasonably Proximate Thereto: Allahabad High Court

Upasna Agrawal

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