In an important judgment that can benefit a large number of people, Delhi High Court has held, on 23 December 2015, that property can be registered with stamp duty less than the circle rate. It has held that the stamp duty paid on a transfer document need not always be in accordance with the prescribed circle rates and that if the valuation and stamp duty is below the circle rates, the procedure as prescribed in Section 47-A of the Stamp Act (as applicable to Delhi) is to be followed and the property can be registered with lesser stamp duty also.
This judgment was delivered by a bench of the Chief Justice G. Rohini and Justice Rajiv Sahai Endlaw in the case of Manu Narang v. Lt. Governor, Government of National Capital Territory Of Delhi [W.P.(C) No.5975/2013 decided on 23 December 2015] and two other writ petitions that had been filed by Amit Gupta and Atul Gupta.
The High Court observed that the contentions of the petitioners was that the Delhi Government, by ordering/directing in the relevant circulars/orders that in the eventuality of consideration declared in the transfer document (Deed of Conveyance/Sale etc.) being less than the minimum value (Circle Rates) of the property as prescribed from time to time, the stamp duty shall be charged on the basis of the minimum rates/circle rates, have taken away the discretion vested in the authorities concerned inter alia under Section 47-A of the Stamp Act as applicable to Delhi.
It was argued by the petitioners that Section 47-A of the Stamp Act requires the Registering Officer, if has reason to believe that the value of the property or the consideration as set out in the instrument presented for registration is not truly set forth and/or that the property is under valued, to “after registering such instrument” refer the same to the Collector for determination of the value of consideration and the proper duty payable thereon. It was further the contention of the petitioners that even if the consideration as set forth in the transfer document/instrument presented for registration was/is below the prescribed circle rates, the Registering Officer cannot refuse to register the document or require the parties thereto to pay the stamp duty as per the circle rate, as required under the impugned orders/circulars. It was contended that Section 47-A required the Registering Officer to, notwithstanding being of the view that the document is under-valued and the stamp duty is under-paid, register the document/instrument and to only thereafter refer the same to the Collector for determination of the appropriate value/stamp duty. Hence it was contended that the procedure which the impugned orders/circulars requires the Registering Officers to follow is contrary to Section 47-A of the Stamp Act.
The High Court disposed of two of the said three petitions by directing / clarifying that notwithstanding anything contained in any order/circular of the Delhi Government, in the event of the consideration mentioned in the instrument/transfer document presented for registration being less than the valuation as per the prescribed circle rates, the Registrar / Sub Registrar entrusted with the responsibility of registration of the documents, shall,
A) notify the parties presenting the instrument/document for registration that the consideration set forth in the instrument and the stamp duty computed on the basis thereof is less than the valuation as per the circle rates;
B) give them an opportunity to amend the document/instrument, to bring the valuation thereof for the purpose of payment of stamp duty, in consonance with the circle rates and make up deficiency in stamp duty;
C) if parties do not amend/revise the valuation and do not pay the deficient stamp duty/transfer duty in terms of the circle rates, follow the procedure as prescribed in Section 47-A supra i.e. register the document/instrument (instead of returning the same to the parties) with endorsement of registration and forward the same to the Collector of Stamps for determination of value or consideration as the case may be and the proper duty payable thereon; and
D) the Collector thereafter shall proceed in accordance with law including Section 27 of the Stamp Act.
Likewise, the third petition was disposed of by clarifying that the parties presenting instruments/transfer document of basements of residential properties for registration, if of a consideration lower than the consideration / valuation in accordance with the circle rates, shall upon their instruments/transfer documents after registration, under Section 47-A being referred to the Collector, be entitled to satisfy the Collector of the consideration/valuation of the subject basement in residential properties being lower than the consideration applicable to instruments/transfer documents of other floors in the same property and the Collector shall proceed to determine the same.
Thus, this judgment of Delhi High Court is going to be very useful for a large number of people who want to register transfer of property at values less than the circle rates applicable in the area concerned. Now, such people can avoid a lot of harassment that is caused to them by the arrogant attitude of the authorities, notwithstanding the provisions of Section 47-A of the Stamp Act.
Full judgment of the Delhi high court can be read online by clicking here.
