Stamp Duty – Property of Public Trust – Market value of property sold in auction – Rule 4 of the Maharashtra Stamp Rules 1995
Judgment dated 4.3.2024 in Writ Petition No.2540 of 2023 of Crystal Construction Company and another Vs. State of Maharashtra and others
Stamp Duty –Rule 4 of the Maharashtra Stamp Rules 1995 – Whether the market value of the property as per Sale conducted by the Government / Local Authority / Undertaking – Whether it is true market value or it is to be calculated as per Ready Reckoner (ASR)
Land property at village Marol Mumbai owned by the public trust A.H.Wadia Trust was sold in auction. The highest bid of Rs.1.60 crores was accepted. An application under Section 36(1)(a) of the Maharashtra Public Trusts Act for approval of the Charity Commissioner was filed. However, the Charity Commissioner had directed re-auction. In the re-auction, the price was fixed at Rs.2.10 crores. It was approved by the Charity Commissioner.
The Collector of Stamps had determined the market value of the property at Rs.30,55,88,000/- by the order dated 16.3.2017. This was challenged in the High Court and the matter was remanded by the order dated 22.5.2020 holding that the Charity Commissioner is covered by the proviso to Rule 4(6) of the Maharashtra Stamp (Determination of True Market Value of Property) Rules 1995.
The Collector of Stamps, by the order dated 16.9.2021, fixed the market value at Rs.41,69,02,000/- and stamp duty at Rs.1,97,95,100/-.
This order was challenged in the High Court.
HELD that Rule 4 of the Stamp Rules provides for Annual Statement of Rates of Immovable Property. However, the first proviso to sub-rule (6) of Rule 4 provides that if the property is sold or allotted by Government or local authority or undertaking, the value determined by the same shall be the true market value. The Circular dated 13.10.2006 of the Inspector General of Registrar and Stamp Duty, Maharashtra state, Pune, provides that the auction conducted by the Charity Commissioner is covered by the first proviso to Rule 4(6) of the Stamp Rules. However, the authority should first verify whether the Charity Commissioner had conducted auction by general notice and if it is found that the sale transaction is effected by other means than auction by the Charity Commissioner, the Collector of Stamps is empowered to inquire from the Charity Commissioner as to how price of the property is fixed at the time of sale. In this case, the auction was conducted by the Trust and valuation report of the Valuer was accepted. The re-auction was done amongst the bidders who had given their bids earlier. Thus, the Charity Commissioner himself did not issue the public notice. In view of this, it was held that the sale price was not covered by the proviso to Rule 4(6) of the Stamp Rules and therefore, the order of the Collector of Stamps was upheld with modification of market value at rs.30,55,88,000/-.
