Document executed by Parties prior to Revision of Fair Value, Valuation will be done with Fair Value at the Time of Execution: Kerala HC [Read Judgment]

The High Court of Kerala in the light of section 47 of ‘The Indian Registration Act, 1908 held that if the document was executed by the parties prior to the revision of the fair value, the valuation need only be done in accordance with the fair value existing as on the date of execution of the document and the stamp duty for the purpose of registration need be calculated accordingly. The subject issue relates to the fixation of the fair value of land by the Statutory authority under Section 28A of the Kerala Stamp Act, 1959, the attendant rules, and the consequences arising from the order passed by the Government and the Revenue Divisional Officer.

The learned single Judge while setting aside the order of the District Collector held that the fixation of the land value on November 6, 2014, was based on the current market value of the land.

The appellant contended that the judgment of the Single Judge is erroneous since the learned single Judge has not appreciated the provisions of Section 28A of the Kerala Stamp Act and the Rules framed thereunder in its correct perspective and therefore, the State Government is put to innumerable financial difficulties.

The division bench headed by the Chief Justice S. Manikumar held that if the document was executed by the parties prior to the revision of the fair value, the valuation need only be done in accordance with the fair value existing as on the date of execution of the document and the stamp duty for the purpose of registration need be calculated accordingly.

The court was of the opinion that the distinction by and between the powers conferred on the Revenue Divisional Officer under the provisions of Sections 28A (i) and 28(1A), the powers conferred on the Government under Section 28A (1B), and the powers enjoyed by the District Collector to entertain an appeal and review were not properly brought to the notice of the Single Judge, which persuaded the learned single Judge to arrive at a finding that the fair value fixed by the Revenue Divisional Officer as per Ext.P12 order dated  November 6, 2014, has only a difference of a week with the fair value fixed by the Government as per Ext. P14, and therefore the fair value so fixed by the Government cannot be sustained.

However, the court further pointed out that the contention made by the counsel for the writ petitioners that there is clear evidence that the purchase price was paid by the vendee to the vendor much before the fair value of the property so re-fixed by the Government as per Ext.P14 gazette notification, has no foundation at all.

“A transaction by and between private persons with respect to a property will not stand in the way of the State Government fixing the fair value of the land, and merely because the financial transaction has taken place earlier, by and between the parties, that will not disable the registering authority from insisting for payment of stamp duty in accordance with the law, for registration of documents,” the Court said.