Registration case full order disposed THE HONOURABLE MR.JUSTICE S.M. SUBRAMANIAMAndTHE HONOURABLE MR. JUSTICE K.RAJASEKAR

IN THE HIGH COURT OF JUDICATURE AT MADRAS
JUDGMENT RESERVD ON 28-02-2024
JUDGMENT PRONOUNCED ON 06-03-2024
CORAM

THE HONOURABLE MR.JUSTICE S.M. SUBRAMANIAM
And
THE HONOURABLE MR. JUSTICE K.RAJASEKAR

WA No.512 of 2024
And
CMP No.3530 of 2024

1.State of Tamil Nadu Represented by
its Secretary to the Government,
Commercial Taxes and Registration Department,
Secretariat,
Fort St. George,
Chennai-600 009.

2.Inspector General,
Registration Department,
Secretariat,
Fort St. George,
Chennai-600 009. .. Appellants

-vs-

1.CREDAI, CHENNAI Represented by
its President, Mr.S.Sivagurunathan,
8th Floor, 8E, Century Plaza,
#526, (560-562), Anna Salai,
Chennai-600 018.

2.Shree Mahalaxmi Enterprises,
Represented by its Partner
Mr.Pravin Jain,
Doshi Towers, 9th Floor,
No.156, PH Road,
Kilpauk,
Chennai-600 010.

3.Magnum Infra Represented by its
Managing Partner Mr.Suyash Surana,
No.2, Arvamuthu Garden Street,
Egmore,
Chennai-600 008. .. Respondents

Writ Appeal is preferred under Clause 15 of Letters Patent against the  order passed by this Court in WP No.12649 of 2023 dated 08.12.2023.

For Appellants          :   Mr.P.S.Raman, Advocate General
                                                          Assisted by Mr.B.Vijay, 
                                                          Additional Government Pleader.

For Respondents     :   Mr.R.Parthasarathy,
                                                          Senior Counsel for Mr.Rahul
                                                          Balaji.

JUDGMENT
S.M.SUBRAMANIAM, J.

FACTS IN BRIEF:

    The Tamil Nadu Act No.13 of 2018 amended Indian Stamp Act, 1899 was made and certain provisions of the said amending Act, were brought into force with effect from 01.06.2010. By way of the said amending Act, Section 47AA was inserted in the said Act, thereby empowering the State Government to constitute a Valuation Committee at the State level for the purpose of estimation, publication and revision of market value guidelines [hereinafter referred as 'MVG', in short] of properties in the State. The said Amending Law declared the Valuation Committee as the Final Authority for formulation of policy, methodology and administration of MVG and also empowered the Valuation Committee to constitute the Valuation Sub Committee in each District for assisting the Valuation Committee functioning at the State level.



    2. In accordance with the powers vested under the said amending Act through G.O.Ms.No.76, Commercial Taxes and Registration Department, dated 01.06.2010, Valuation Committee at the State level headed by Inspector General of Registration was constituted by the State Government. Further through G.O.Ms.No.75, Commercial Taxes and Registration Department, dated 01.06.2010, Valuation Sub Committees at the District level headed by the respective District Collectors were constituted.

    3. Subsequent to constitution of State level and District level Committees, necessary action for calendar revision of MVG for the year 2012 was taken up by following the due procedures contemplated under the Act and the Rules thereunder and revised MVG implemented with effect from 01.04.2012. Thereafter, calendar year revision for each year was deferred and in the year 2017, considering the requests received from the stakeholders, the State Level Valuation Committee had deliberations among its members and on 31.05.2017, the Committee resolved to effect an uniform reduction of MVG by 33% and the reduced guideline values were brought into force from 09.06.2017.

    4. After lapse of 11 years, since the last revision of guideline value in the State on 01.04.2012 and after lapse of 5 years of downward revision of guideline value, which was effected on 09.06.2017 and considering the fact that there is a steep increase in prevailing market value, the State Level Valuation Committee in its resolution dated 30.03.20203 decided to revert back to the pre-reduced guideline values instead of resorting to State-wide guideline value revision. 

    5. Aggrieved over the decision, WP No.12649 of 2023 was filed by CREDAI, CHENNAI, which was allowed by the learned single Judge on 18.12.2023. Thus the present writ appeal came to be instituted.

CONTENTIONS OF THE APPELLANTS:

    6. Mr.P.S.Raman, learned Advocate General would articulate by stating that no revision by deliberation under the Act and the Rules, were undertaken after 01.04.2012. Since the stakeholders raised an objection across the State, a decision was taken to reduce the MVG by 33% uniformly, which came into force from 09.06.2017. The said uniform reduction of MVG by 33% was cancelled through resolution dated 30.03.2023, which came to be challenged in the writ petition. Therefore, the impugned order in the writ petition dated 30.03.2023, cannot be construed as a revision as contemplated under Section 47-AA of the Act and the Rules framed thereunder. It is just restoration of MVG fixed with effect from 01.04.2012, which was fixed by following due procedures as contemplated. Cancellation of uniform reduction of MVG by 33% granted with effect from 09.06.2017 would not cause any prejudice to the interest of stakeholders. Revised MVG of 2012 was restored in the year 2023 and the current market value will be far higher than the market value prevailing in the year 2012. Thus stakeholders have not aggrieved from and out of restoration of 2012 MVG and the learned single Judge has failed to consider this aspect.

    7. Learned Advocate General would submit that the Government is empowered to continue the market guideline value fixed in the year 2012 until a deliberation is undertaken by the Valuation Committee to revise the market guideline value. After 01.04.2012, no such deliberations were made by the Valuation Committee and the Government allowed to continue the market guideline value fixed in the year 2012, which is within the powers conferred under the Act and the Rules. Uniform reduction of MVG by 33% was made at the request of the stakeholders and cancellation of reduction was effected in the year 2023 after lapse of about 5 years and therefore, the contention of the respondents that the due process had not been followed is misconceived. Due process need not be followed in such circumstances, since the Government has decided to restore the MVG duly fixed with effect from 01.04.2012. Therefore, there was no decision regarding fresh revision of MVG. Thus, the Writ Court has proceeded in a wrong direction by holding that due process has not been followed by the Government, while taking a decision in its resolution dated 30.03.2023.

CONTENTIONS OF THE RESPONDENTS:

    8. Mr.R.Parthasarathy, learned Senior Counsel, appearing on behalf of the respondents, would strenuously oppose the contentions raised on behalf of the appellants, by stating that the decision impugned in the writ petition was taken unilaterally to cancel the reduction of MVG by 33% with effect from 09.06.2017. Once the Valuation Committee has decided to enhance or restore the MVG, due process as contemplated to be followed mandatorily. There is no possibility of uniformity in MVG and it depends on various factors prevailing in the market. During Covid-19 period, the MVG were far less than that of the previous values and thereafter the market value slowly got its momentum upwards. Therefore, the very object of the amended Section 47AA and the Rules framed thereunder is to ensure that the processes as contemplated are followed, whenever a decision is taken to revise the MVG, upwards or downwards. Pragmatic and practical approach in fixation of MVG are important as contemplated. Admittedly, due process had not been undertaken by the appellants. The learned single judge considered these issues in a right perspective by relying on the Rules framed under the Act.

    9. It is an admitted fact that the Government made certain deliberations, while uniformly reducing the MVG by 33% with effect from 09.06.2017. While-so, the due process as contemplated under Section 47-AA of the Act and the Rules framed thereunder were not followed, while cancelling reduction of market value by 33% granted with effect from 09.06.2017. Therefore, cancellation resulted in enhancement/revision of MVG. Thus adherence of due process became imminent. The purpose and object of the amended provisions are to provide opportunity to the stakeholders to ventilate their grievances. Such process as contemplated in order to develop transparency in fixation of MVG and the public interest involved, cannot be dispensed with at the sole discretion of the Government. The opinions, grievances and suggestions of the stakeholders are duly recognised in the amended provisions and the Rules framed thereunder. Thus non-adherence of due process would invalidate the unilateral decision taken by the Government in the proceedings dated 30.03.2023, which was impugned in the writ proceedings. 

    10. Mr.R.Parthasarathy, learned Senior Counsel further contended that the MVG are fluctuating depending on various factors. Therefore, the logic adopted by the appellants by cancelling the reduction of 33% and restoration of the guideline value fixed in the year 2012 has no nexus and thus the decision is flawed. The learned single judge considered the amended Section 47-AA of the Act and the Rules framed thereunder, in a correct perspective. Thus, the present writ appeal is to be rejected.

DISCUSSIONS:

    11. Section 47-AA of the Indian Stamp Act, 1899 contemplates,  as under:-
“47-AA. Constitution of Valuation Committee -
(1) The State Government shall, by notification, constitute a Valuation Committee under the Chairmanship of Inspector -General of Registration and such other member as may be specified for estimation, publication and revision of MVG of properties in any area in the State at such intervals and in such manner as may be prescribed, for the purpose of Section 47-A.
(2) The Valuation Committee is the final authority for the formulation of policy, methodology and administration of the MVG in the State and may for the said purpose constitute valuation sub-committee in each district comprising of such members as may be prescribed, for estimation and revision of the MVG. 
(3) The sub-committee so constituted shall function under the Valuation Committee and shall follow such procedures as  may be prescribed and shall be subject to reconstitution whenever found necessary.”

    12. In exercise of the powers conferred under Section 75 read with Section 47-AA of the Indian Stamp Act, Tamil Nadu Stamp (Constitution of Valuation Committee For Estimation, Publication And Revision of MVG of Properties) Rules, 2010 (hereinafter referred to as 'Rules', in short) has been notified. Rule 4 speaks about estimation of MVG. Sub-clause (1) contemplates deliberations to be made by Valuation Committee at the State level. Sub-clause (2) to Rule 4 enumerates deliberations to be made by the Valuation Sub Committee. The procedures, as contemplated, to be adopted by the Valuation Sub Committee under Rule 4(2), are of paramount importance. Receiving objections and suggestions from the public as stipulated under Sub-Rule (2) are mandatory. In compliance with the Rules of transparency and Rules of Natural Justice, the suggestions, opinions and objections of stakeholders and public in general are to be considered for the purpose of estimation of MVG under Rule 4 of the Rules, 2010 

    13. Rule 5 provides guidelines for the estimation of the market value by Valuation Sub Committee. The said Rule more importantly provides methodology through which components are to be taken for estimation of MVG. Classification of lands, house-sites etc., are provided. 

    14. Rule 6 speaks about revisions, special revisions and rectification of anomalies. Rule 6(2) stipulates that “notwithstanding anything contained in these rules, if for any reason the Committee could not either order or undertake revision of MVG for any year, the same may be communicated to the Registrar of the district, who will issue instructions to all the Registering Officers to adopt the last revised guidelines, for the year for which the revision is not intended to be undertaken”.

    15. Thus, Rule 6 paves way for Valuation Committee to adopt the existing MVG for the next calendar year, without following due process. The Rules confer powers to the Valuation Committee to defer fresh estimation of MVG by adopting due process. This is exactly how 2012 MVG fixed was being adopted and continued until 08.06.2017. With effect from 09.06.2017, MVG was reduced by 33% en masse across the State. The said decision taken by reducing MVG by 33% was further adopted till 30th March 2023, the date on which the impugned resolution dated 30.03.2023, was issued. By virtue of Rule 6(2)(D) the Government is empowered to continue the existing MVG for the next calendar year.

    16. The Writ Court relying on Rules 3, 4 and 6 arrived a decision that withdrawal of reduction of MVG without adopting due process as contemplated under the Act is unsustainable. Accordingly, the impugned order in the writ proceedings dated 30.03.2023 was set aside on the ground that due process as contemplated under Section 47-AA of the Act and the Rules framed thereunder were not followed. The Writ Court further issued a direction to follow 2017 guideline, which is the last revised guideline as per the Rules until Valuation Committee by adopting due process revise MVG.

    17. The learned Advocate General would raise a serious objection with reference to the above direction on the ground that the impugned circular was issued on 30.03.2023. Thereafter thousands of documents were registered and stamp duties were collected. Thus restoration of 2017 MVG  would result in refund of stamp duty already collected for registration of documents. The financial constraint of the State in this regard has not been taken into consideration by the Writ Court. The said directions would cause an irreparable financial loss to the State Exchequer. Thus the impugned order of the Writ Court, is to be set aside. It is further contended that restoration of 2012 market guideline value would not cause any prejudice to the stakeholders, since it is far less than that of the prevailing MVG in the year 2023.

“CONCESSION” NOT A “REVISION”:

    18. Reduction of MVG by 33% brought into force from 09.06.2017 is a “Concession”. Admittedly, due process of law was not followed for taking a decision to reduce MVG by 33% from the MVG fixed in the year 2012. Thus the decision of the Government is “Concession” granted with effect from 09.06.2017.


    19. “Concession” cannot be equated with revision of MVG. For revision, due process, as contemplated, is to be followed mandatorily. “Concession” would not affect the consumers/stakeholders. Any decision affecting the rights of the people, cannot be taken without following due process of law.

    20. Uniform opinion given by the Deputy Inspector General of Registrations from respective Districts, made the Valuation Committee to take a decision to reduce the MVG by 33%. The reason furnished to withdraw the concession is that no revision took place for about six years. The MVG increased by that time. Thus the Government decided to restore the MVG fixed with effect from 01.04.2012. Further reason stated is that fresh process will take more than one year. The Inspector General of Registration submitted a proposal, seeking permission to undo the uniform reduction of 33% made in the year 2017.

    21. Accepting the proposal of the Inspector General of Registration, the Government passed the impugned order dated 30.03.20203 stating that “the Government have decided to revise the MVG to the rates prevailing till 08.06.2017”. Thus the decision of the Government to set the clock back was unilateral. In other words, “Concession” of 33% of reduction of MVG granted with effect from 09.06.2017 has been withdrawn.

    22. The effect of revision would affect the public interest and the interest of the consumers/stakeholders. Thus withdrawal of “Concession” amounts to “Revision”.

    23. The contention of the learned Advocate General that if the decision of the Government dated 30.03.20203, is violation of Rules on the ground due process of law has not been followed, then the decision taken in the year 2017, reducing the MVG to 33% is also to be held as invalid. Such an argument is untenable in view of the fact that a distinction between “Concession” and “Revision” is to be drawn. Granting “Concession” to the consumers by the Government, cannot be equated with “Revision” as stated above. By reduction, there is no infringement of public right and the stakeholders/consumers are not aggrieved.

THE IMPUGNED CIRCULAR SUFFERS FROM ABSENCE OF GERMANE CONSIDERATIONS:
24. The object of this circular must also be examined. The intent behind this as stated by the learned Advocate General for the appellants is to revise the MVG in consonance with the current demands and needs of the real estate sector. This can be done only after scrutiny by the Valuation committee based on the circumstances prevailing then. It is a known fact that there has been a paradigm shift in the real estate sector post the COVID-19 pandemic, which has had an impact on the economy and finance sector. There has been a shift in the demands and economic conditions of the public at large and their buying and spending capacity has seen visible changes. This needs to be considered in detail before any such decisions affecting the public at large are taken by the Government.

    25. This Court is well aware that it has limited powers to interfere in the economic policy decisions of the Government. But arbitrary decision making process is always within the screening limits of judicial review.

ARBITRARINESS AND NON-COMPLIANCE WITH THE RULES:

    26. The Court can examine the object and intent behind the said policy and can also examine if all legal compliance measures are followed. In the present case, the object here seems to be that 2017 MVG needs to change as 5 years have passed since its fixation and that the Government can revisit the same. But the vital question that arises here is, there has been a definite change in the market value in 2023 but the appellants before such revision of guideline value ought to have examined the present day market value. But they have instead, just reverted back to the 2012 MVG. When the appellants have stated that the 2017 guideline value is old for the present day needs and demands, how can the 2012 guideline value serve any purpose and, what will the Government achieve through this fixation. This Court is of the opinion that the object of the entire process suffers from arbitrariness and legal irregularities.



    27. The appellants have simply issued the circular stating that the 2012 guideline value is restored. There has been non compliance of Rules 3, 4 and 5 of the Tamil Nadu Stamp Rules, 2010. So without adequate inputs from the valuation sub-committees on the prevailing market rates, there arise a question as to how did the valuation committee arrive at this 2012 guideline value. The rationale behind this decision is unexplained and illogical at all ends.

    28. The Appellants themselves have stated in their Memorandum of grounds that the present day market value is much higher than the 2012 value. So to revise the guideline value in 2023, the present day market values from the sub-committee ought to have been examined before arriving at the decision. This process as contemplated under Rule 3, 4 and 5 of Tamil Nadu Stamp Rules ought to have been followed. Revision of values without due consideration to the present day market values renders the entire exercise futile.

THE OBJECT OF SECTION 47-AA AND TAMILNADU STAMP RULES IS DEFEATED:

    29. The Valuation committee is the recommending committee and Rule 4 clearly sets out the process to be adopted for estimation of MVG. When the rules are clear as to the process to be adopted by the valuation committee, non compliance of the same leads to chaos and arbitrariness.

    30. It is the contention of the appellants that the process stipulated under Rules 3, 4 and 5 need not be complied with as no new fixation is undertaken but there has been only restoration of the 2012 fixation. This argument cannot be accepted. The Rules does not differentiate between new and restored fixation. Any estimation of MVG ought to be conducted as laid down in the rules. In fact the rules mandate the estimation market guideline value on a regular basis by the valuation sub-committees:-
"4. Estimation of market value guidelines. -(1)The Valuation Committee shall, as far as possible in the first week of October of every calendar year, issue instructions along with general policy guidelines to all the valuation sub-committees in the State for the estimation of market value guidelines of properties for the next calendar year. Such instruction may be sent to any valuation sub- committee, at any time of the calendar year for the revision of the rates, if required."

    31. When the rules place such a mandate, any deviation from the same defeats the object. Though the appellants may contend that only an older market guideline value is re-fixed and no new valuation is done, this action does not concur with Rule 4 of the Rules.

    32. This Court opines that revision of the MVG in 2023 by fixing an older value deduced in 2012 without following the process set out under Rules is against the object for which Valuation committee was brought about vide section 47-AA of the Act.

THE OBJECT OF THE ENTIRE PROCESS IS RENDERED FUTILE:

    33. The purpose for the constitution of the Valuation committee is to fix the MVG based on the market demands and pricing demands relevant to that particular period of time. By restoring the 2012 MVG in 2023 without taking into consideration the present day market situation, the object of the entire process stands defeated. It is the contention of the appellants themselves that the market value today is much higher than the value in 2012. By restoring the 2012 value, the purpose sought to be achieved by the appellants becomes unfulfilled and such irrelevant and illogical revision of MVG will only lead to more chaos and unrest among the public at large.

OBJECT OF PUBLIC INTEREST:
34. It is also the contention of the appellants that such revision of MVG increases the revenue for the Government, which will benefit the public at large. But by restoring the 2012 MVG, the revenue sought to be generated will be much lower as resorting to an MVG fixed 10 years back will be much lesser to the rising present day market demands and pricing. Further, by reverting to 2012 MVG, the 33% concession granted in 2017 is indirectly been removed and such removal of concession will in turn burden the consumers who are members of the public. So the ultimate burden bearers will be the public, Firstly by fixing a lower value, the revenue of the Government is hampered which in turn affects the public and secondly through the indirect removal of 33% concession granted in 2017, the burden of increasing costs will be borne by the public who are also the consumers. And on top of that, admittedly, by deviating from all the legal procedures set out under the Rules, the entire legal process is vitiated and flawed.

NON- APPLICATION OF MIND AND LEAVING OUT RELEVANT CONSIDERATION IN THE DECISION MAKING PROCESS:

    35. There has been non application of mind on the part of the appellants in not considering the relevant factors. Leaving out relevant considerations like the current market situation and reports from Valuation sub-committee as mandated under the 2010 Rules in a decision making process affects the end output and renders the entire process null and void. The administrative authority exercising the discretionary power is required to take into account all the relevant facts. If the relevant considerations are left out then its action will be invalid.

    36. It is well settled principle of law that application of mind by the authority concerned is pivotal in the decision making process and such application of mind must be based on materials brought on record. The materials should be such, which are required to be collected by the statutorily prescribed authorities. A statutory authority is bound by the procedure laid down in the statue and the corresponding rules. Any non application of mind coupled with deviation from the statutorily mandated procedure vitiates the entire process.

COLOURABLE EXERCISE OF POWER:

    37. The appellants have opted for colourable exercise of power. By contending that only an older MVG has been restored and that no new fixation is undertaken and so the rules need not be followed is nothing short of colourable exercise of power. To avoid complying with the detailed legal process set out under Rules, the appellants have resorted to an older fixation. The argument put forth that an older fixation need not be put through the process contemplated under the Rules, is flawed and legally unsustainable. Moreover the new amendment of section 47-AA in the Indians Stamp Act was brought about only in the year 2010, so the mandate under this section and corresponding rules is quintessential.

    38. On many occasions this Court comes across litigations challenging the administrative decisions of the Government. It is no doubt that the decisions are to be carried out by statutorily prescribed authorities by following the due process set out by law. Though some decisions may have some impact on the public, it is the opinion of this Court that the ultimate aim of any decision making authorities across different organs of the Government should be to ensure that public interest is never compromised. The primary principle for any administrative decision making authorities especially the statutorily created authorities should be to place the interest of public in a higher pedestal and all other considerations must flow from the same.

    39. The tenets of administrative law are clear in its terms that no administrative decision must suffer from the vires of mala fideness or arbitrariness. The decision of the authorities must balance the interest of different sections of the public. The duty of any elected Government is to protect the interest of the public and any decision which interferes with the same shall stand frustrated.

    40. The Court deals with litigations where ill-made decisions are burdened on the shoulders of the Public. It is beyond doubt that good administrative decisions always stand the test of law and time but poorly thought-out decisions knock the doors of the Court and This Court will never fail to extend its supportive arm to the general public under any given circumstance. The doors of this Court shall ever remain open for the people of our Great Nation under whose solemn resolve the Constitution thrives.

    41. Judiciary has to step in under such circumstances in a vibrant democracy. The Court shall not be a witness to any policy decision or authority induced decision, which affects the public. Whenever the fundamental rights of the citizens are at stake, the Court does not hesitate to step in. Arbitrary decisions of the executive authorities shakes the foundation of a democracy. Such decisions cannot get protection under the garb of 'policy decision'. It must never be forgotten that we are in a "Vibrant democracy of the people, by the people and above all for the people".

    42. In view of the discussions in the aforementioned paragraphs, the following orders are passed:- 
    (i) The writ order impugned, quashing the Circular bearing No.5247/L1/2023-1, dated 30.3.2023, stands confirmed.
    (ii) The appellants/Government are directed to follow the MVG fixed with effect from 09.06.2017 until the Valuation Committee revise the MVG by following the due process of law. 
    (iii) The documents already registered during the interregnum period from the date of the Circular dated 30.03.2023 and the date of the judgement in the present writ appeal, stand excluded. Consequently, no person is entitled to claim refund of stamp duty already paid for registering documents based on the Circular dated 30.03.2023, which is quashed.

    43. With the above directions, the present writ appeal stands disposed of. However, there shall be no order as to costs. Consequently, the connected miscellaneous petition is closed.


            (S.M.SUBRAMANIAM,J.) (K.RAJASEKAR,J.)
                              06-03-2024

Index : Yes/No
Internet: Yes/No
Speaking order/Non-Speaking order
Neutral Citation : Yes/No
Svn/Sha/Svn

To

1.CREDAI, CHENNAI Represented by
its President, Mr.S.Sivagurunathan,
8th Floor, 8E, Century Plaza,
#526, (560-562), Anna Salai,
Chennai-600 018.

2.Shree Mahalaxmi Enterprises,
Represented by its Partner
Mr.Pravin Jain,
Doshi Towers, 9th Floor,
No.156, PH Road,
Kilpauk,
Chennai-600 010.

3.Magnum Infra Represented by its
Managing Partner Mr.Suyash Surana,
No.2, Arvamuthu Garden Street,
Egmore,
Chennai-600 008.

S.M.SUBRAMANIAM, J.
AND
K.RAJASEKAR, J.

Svn/Sha/Svn

Judgment in
WA 512 of 2024

06-03-2024