Civil Appeal No.2586 of 2020 @ SLP (C)No.15790 of 2019 etc.

The Inspector General of Registration, Tamil Nadu & Ors. vs. K. Baskaran

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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.2586 OF 2020

(Arising out of Special Leave Petition (Civil) No.15790 of 2019)

THE INSPECTOR GENERAL OF REGISTRATION,

TAMIL NADU AND ORS. …Appellants

Versus

K. BASKARAN …Respondent

WITH

CIVIL APPEAL NO.2587 OF 2020

(Arising out of Special Leave Petition (Civil) No.2609 of 2019)

WITH

CIVIL APPEAL NO.2588 OF 2020

(Arising out of Special Leave Petition (Civil) No.17103 of 2019)

WITH

CIVIL APPEAL Nos.2589-2592 OF 2020

(Arising out of Special Leave Petition (Civil) Nos.6011-6014 of 2019)

WITH

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The Inspector General of Registration, Tamil Nadu & Ors. vs. K. Baskaran

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CIVIL APPEAL Nos.2593-2597 OF 2020

(Arising out of Special Leave Petition (Civil) Nos.31633-31637 of 2018)

WITH

CIVIL APPEAL NO.2598 OF 2020

(Arising out of Special Leave Petition (Civil) No.31632 of 2018)

WITH

CIVIL APPEAL NO.2599 OF 2020

(Arising out of Special Leave Petition (Civil) No.15616 of 2019)

WITH

CIVIL APPEAL NO.2600 OF 2020

(Arising out of Special Leave Petition (Civil) No.7722 of 2020)

(Arising out of Special Leave Petition (Civil) D.No.45876 of 2018)

J U D G M E N T

Uday Umesh Lalit, J.

1. Leave granted.

2. These eight appeals raise common questions touching upon the

interpretation of Section 47A

1

of the Indian Stamp Act, 1899 (‘the Act’, for

short) and the Tamil Nadu Stamp (Prevention of Undervaluation of

Instruments) Rules, 1968 (‘the Rules’, for short) as amended from time to

time. Said Section 47-A of the Act now stands:-

1 As inserted by the Tamil Nadu Act 24 of 1967. Later, by the Tamil Nadu Act 1 of 2000, Sub-

Sections (4) to (10) in Section 47-A were substituted for Sub-Sections (4) and (5)

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“Section 47-A. Instrument of conveyance etc.,

undervalued how to be dealt with.- (1) If the

Registering Officer appointed under the Indian

Registration Act, 1908 (Central Act XVI of 1908),

while registering any Instrument of conveyance,

[exchange, gift, release of benami right or settlement]

has reason to believe that the market value of the

property of which is the subject matter of conveyance,

exchange, gift, release of benami right or settlement,

has not been truly set forth in the instrument, he may,

after registering such instrument, refer the same to the

Collector, for determination of the market value of

such property and the proper duty payable thereon.

(2)On receipt of reference under sub-section (1), the

Collector shall, after giving the parties reasonable

opportunity of being heard and after holding an

enquiry in such manner as may be prescribed by

Rules made under this Act, determine the market

value of the property which is the subject matter of

conveyance, exchange, gift, release of benami right or

settlement, and the duty as aforesaid. The difference,

if any, in the amount of duty, shall be payable by the

person liable to pay the duty.

(3) The Collector may, suo motu, or otherwise, within

five years from the date of registration of any

instrument of conveyance, exchange, gift, release of

benami right or settlement, not already referred to him

under sub-section (1), call for and examine the

instrument for the purpose of satisfying himself as to

the correctness of the market value of the property

which is the subject matter of conveyance, exchange,

gift, release of benami right or settlement, and the

duty payable thereon and if after such examination, he

has reason to believe that the market value of the

property has not been truly set forth in the instrument,

he may determine the market value of such property

and the duty as aforesaid in accordance with the

procedure provided for in sub-section (2). The

difference, if any, in the amount of duty, shall be

payable by the persons liable to pay the duty;

Provided that nothing in this sub-section shall apply

to any instrument registered before the date of

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commencement of the Indian Stamp (Tamil Nadu

Amendment) Act, 1967.

(4) Every person liable to pay the difference in the

amount of duty under sub-section (2) or sub-section

(3) shall, payable such duty within such period as may

be prescribed. In default of such payment, such

amount of duty outstanding on the date of default

shall be a charge on the property affected in such

instrument. On any amount remaining unpaid after

the date specified for its payment, the person liable to

pay the duty shall pay, in addition to the amount due,

interest at one per cent per month on such amount for

the entire period of default.

… … …

(5) Any person aggrieved by an order of the Collector

under sub-section (2) or sub-section (3), may appeal

to such Authority as may be prescribed in this behalf.

All such appeals shall be preferred within such time,

and shall be heard and disposed of in such manner, as

may be prescribed by rules made under this Act.

… … …

(6)The Chief Controlling Revenue Authority may,

suo motu, call for and examine an order passed under

sub-section (2) or sub-section (3) and if such order is

prejudicial to the interests of revenue, he may make

such inquiry or cause such inquiry to be made and,

subject to the provisions of this Act, may initiate

proceedings to revise, modify or set aside such order

and may pass such order thereon as he thinks fit.

(7)The Chief Controlling Revenue Authority shall

not initiate proceedings against any order passed

under sub-section (2) or sub-section (3) if, -

(a) the time for appeal against that order has

not expired; or

(b)more than five years have expired after the

passing of such order.

(8) No order under sub-section (6) adversely

affecting a person shall be passed unless that person

has had a reasonable opportunity of being heard.

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(9) In computing the period referred to in clause (b)

of sub-section (7), the time during which the

proceedings before the Chief Controlling Revenue

Authority remained stayed under the order of Court

shall be excluded.

(10) Any person aggrieved by an order of the

Authority prescribed under sub-section (5) of the

Chief Controlling Revenue Authority under sub-

section (6) may, within such time and in such manner,

as may be prescribed by rules made under this Act,

appeal to the High Court.

Explanation.- For the purpose of this Act, market

value of any property shall be estimated to be price

which, in the opinion of the Controller or the Chief

Controlling Revenue Authority or the High Court, as

the case may be, such property would have fetched or

would fetch, if sold in the open market on the date of

execution of the instrument of conveyance, exchange,

gift, release or benami right or settlement.”

3. The appeal arising out of Special Leave Petition (Civil) No.15790

of 2019 is taken as the lead matter and facts pertaining to said appeal are

set out in detail for facility. The facts involved in other appeals are almost

identical except for details such as the case numbers, dates of orders and

the details of properties in question.

4. The appeal from Special Leave Petition (Civil) No.15790 of 2019

arises out of the final judgment and order dated 02.02.2018 passed by the

High Court

2

in CMA No. 2666 of 2012 in following circumstances: -

2 The High Court of Judicature at Madras

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A. The Respondent purchased two properties comprised in

R.S. No.372/2A – Sidharavuthanpalayam Village, Tiruppur Taluk, Erode

District, (i) admeasuring about 46216 sq.ft. through Sale Deed dated

21.02.2000 registered as Doct. No.2647 of 2000 of Book 1 valued at

Rs.4,78,000/- and (ii) admeasuring about 47960 sq. ft through Sale Deed

dated 18.02.2000 registered as Doct. No.2648 of 2000 of Book 1 valued at

Rs.4,96,000/- (i.e. Rs.10.34 per sq.ft.).

B.As the value in said Sale Deeds was less than the Guideline

Value of Rs.58.30 per sq.ft., the Sub-Registrar, Dharapuram, Appellant

No.5 herein, referred the matter to the Special Deputy Collector (Stamps),

Coimbatore i.e. Appellant No.2 herein, under Section 47-A of the Act.

C.On 13.9.2000 Appellant No. 2 issued Form No. 1 notices in

Mu.Pa. (S.R.) No.3667 of 2000 D and Mu.Pa. (S.R.) No. 3668/2000 D

seeking explanation from the Respondent why the deficit stamp duty of

Rs.2,66,088/- and Rs.2,76,132/- respectively should not be collected.

Thereafter, Appellant No. 2 issued Form No. II notices on 04.02.2003 to

the Respondent, whereby the provisional value of the property was

determined at the rate of Rs.58.30/- per sq.ft. as against the value of

Rs.10.34/- per sq.ft. set forth in the Sale Deeds in question.

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D.Appellant No.2 issued Final Orders on 30.04.2003 in

Mu.Pa. (S.R.) Nos. 3667 and 3668 of 2000 D. In Mu.Pa. (S.R.) No.3667

of 2000 D, it was observed: -

“With reference to the Form I notice no

representations received from the registrant and he

never turned for hearing in spite of several reminders

and notices issued and no objections filed.

Hence, provisional order in Form II was issued.

Neither the objections received from the purchaser

nor appeared for the hearing. It is learnt that the

registrant has no objection regarding the valuation of

the document. It is hereby ordered confirming the

provisionally determined value as noted in the Form

II cited in the reference 3.

It is hereby ordered that the open market value is

finally determined at Rs.26,95,400/- purchased

through the document as per details noted in the pre

page.

With reference to the above value the stamp duty

leviable at Rs.3,23,448/- excluding the stamp duty

already paid Rs.57,360/- the deficit stamp duty to be

paid Rs.2,66,088/- (Rupees Two Lakhs Sixty Six

Thousand Eighty Eight Only).

The registrant is requested to remit the deficit stamp

duty Rs.2,66,088/- under the head of account 0030

stamps Registration 030G Fee deficit stamp duty

ABAA0202 in the State Bank of India or in the Sub

Treasury office and the original Challan shall be sent

to this office within 2 weeks from the date of this

order.”

In Mu.Pa. (S.R.) No.3668 of 2000 D, the market value was

assessed at Rs.27,97,100/- and similar consequential directions were

passed.

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E.The Respondent filed statutory appeal which was rejected

by the Inspector General of Registration i.e. Appellant No. 1 vide order

dated 05.08.2005. At the appellate stage, a report was called for from

District Registrar, Erode, which was referred to in the order dated

05.08.2005 as under:-

“…This Appeal was admitted and the Deputy

Inspector General Kovai appointed as the enquiry

officer and to inspect the document property premises

and to recommend determination of the true market

value of the document property as per enquiry. The

original file was also required from the District

Revenue Officer (Stamps). On perusal of the original

file of the District Revenue Officer (Stamps) office

and it was found that, since the appellant not turned

for enquiry and considered that there are no

objections, the guideline value was confirmed.

In the report of the District Registrar Erode enclosed

with the letter received from the Deputy Inspector

General Kovai he has recommended that while

conducting the spot Inspection of the Survey field the

properties lying in the village on the date of

registration on 21.02.2002 were not incorporated with

the municipality and it was incorporated with the

municipality only on 01.04.2003, since the document

properties were incorporated in the Municipality area

at present value is fixed at Rs.200/- per sq.ft. and it is

apt to determine the value at Rs.58.30/- per sq.ft., on

the date of registration.”

F.The Respondent, being aggrieved, filed CMA No. 2666 of

2012 in the High Court challenging the said order dated 05.08.2005 which

was allowed by the High Court by its judgment and order dated

02.02.2018. The High Court observed that Appellant No.1 had delegated

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The Inspector General of Registration, Tamil Nadu & Ors. vs. K. Baskaran

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his duty to the Deputy Inspector General of Registration, which was

against the decision of the High Court in the case of S. Santhi vs. Chief

Revenue Controlling Authority (CMA No. 2820 of 2012) decided on

05.06.2015. It was also observed that Rule 6 was not followed. The High

Court thus concluded:-

“8. Therefore, the first Respondent is not empowered

to delegate the powers conferred on him. Similarly,

the procedure contemplated under Rule 6 of the Rules

is also not followed by the authorities while

determining the market value of the property. As

such, the entire proceedings are vitiated, in view of

violation of Rules 6 and 11-A of the Rules.

Accordingly, the impugned order passed by the first

Respondent is not sustainable in law and the same is

set aside. The authorities are directed to release the

document to the Appellant.”

It was, however, not stated how the procedure contemplated by

Rule 6 was not followed.

G.The decision in S. Santhi (supra) which was relied upon,

had observed as under:-

“17. The Authority conferred with certain functions

under a statute has to carry out the same on its own

such function and cannot delegate the same to another

in the absence any contemplation for such delegation

under the Act. In the present case, under rule 4(3)(c)

and rule 11-A of the rules, 2nd respondent-Collector

and the 1st respondent-Inspector General of

Registration respectively, have to inspect the property

and there is no enabling provision under the rules or

under the Act to delegate such power. Therefore,

inspections by other officers at the behest of the

respondents vitiate the entire proceedings.

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18. The failure on the part of the 2nd respondent to

pass a final order within 3 months from the date of

Form-I notice as mandated under rule 7 of the rules

vitiates the entire proceedings. Form-I notice was

issued on 17.05.2005 and the final order was passed

on 05.12.2006, after 11/2 years, i.e., after 3 months

and hence the entire proceedings are vitiated.

19. The impugned order has been passed by the 1st

respondent purely based on inspection reports of the

District registrar /Deputy Thasildar, who are not

authorised under the Act and hence the said inspection

reports are not materials collected by the authorities,

entitled under the Act. Hence the proceedings of the

2nd respondent and 1st respondent are vitiated.”

5. Similar orders were passed by the High Court in other matters

which orders are presently under appeal in companion matters. Since the

matters arise in the backdrop of provisions contained in the Rules, Rules 4

to 7 and 11A of the Rules are quoted hereunder: -

“4. Procedure on receipt of reference under

Section 47-A. (1) On receipt of a reference under

sub-Section (1) of Section 47-A, from a registering

officer, the Collector shall issue a notice in Form I.

(a)to every person by whom, and

(b)to every person in whose favour the

instrument has been executed.

Informing him of the receipt of the reference and

asking him to submit to him his representations, if

any, in writing to show that the market value of the

property has been truly set forth in the instrument, and

also to produce all evidence that he has in support of

his representation, within 21 days from the date of

service of the notice.

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(2) The Collector may, if he thinks fit, record a

statement from any person to whom a notice under

sub-rule (1) has been issued.

(3) The Collector may for the purpose of his enquiry

–

(a) call for any information or record from

any public office, officer or authority under

the government or any local authority;

(b) examine and record statements from

any member of the public, officer or

authority under the Government or the local

authority; and

(c) inspect the property after due notice to

the parties concerned.

(4) After considering the representations, if any,

received from the person to whom notice under sub-

rule (1) has been issued, and after examining the

records and evidence before him, the Collector shall

pass an order in writing provisionally determining the

market value of the properties and the duty payable.

The basis on which the provisional market value was

arrived at shall be clearly indicated in the order.

5. Principles for determination of market value.-

The Collector shall, as far as possible, have also

regard to the following points in arriving, at the

provisional market value,

(a)In the case of lands –

(i)classification of the land as dry, manavari,

wet and the like;

(ii)classification under various tarams in the

settlement register and accounts;

(iii)the rate of revenue assessment for each

classification;

(iv)other factors which influence the valuation

of the land in question;

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(v)points if any, mentioned by the parties to

the Instrument or any other person which

requires special consideration.;

(vi)value of adjacent lands or lands in the

vicinity;

(vii)average yield from the land, nearness to

road and market, distance from village site,

level of land, transport facilities, facilities

available for irrigation such as tank, wells

and pumpsets.

(viii)The nature of crops raised on the land; and

(ix)The use of land, domestic, commercial,

industrial or agricultural purposes and also

the appreciation in value when an

agricultural land in being converted to a

residential, commercial or an industrial

land.

(b)In the case of house sites –

(i)the general value of house sites in the

locality;

(ii)nearness to roads, railway station, bus

route;

(iii)nearness to market, shops and the like;

(iv)amenities available in the place like public

offices, hospitals and educational

institutions;

(v)development activities, industrial

improvements in the vicinity;

(vi)land tax valuation of sites with reference to

taxation records of the local authorities

concerned;

(vii)any other features having a special bearing

on the valuation of the site; and

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(viii)any special feature of the case represented

by the parties.

(c)In the case of buildings –

(i)type and structure;

(ii)locality in which constructed;

(iii)plinth area;

(iv)year of construction;

(v)kind of materials used;

(vi)rate of depreciation;

(vii)fluctuation in rates;

(viii)any other features that have bearing on the

value;

(ix)property tax with reference to taxation

records of local authority concerned;

(x)the purpose for which the building is being

used and the income if any, by way of rent

per annum secured on the building; and

(xi)any special feature of the case represented

by the parties.

(d)Properties other than lands, house sites and

buildings –

(i)The nature and condition of the property;

(ii)Purpose for which the property is being put

to use; and

(iii)Any other special features having a bearing

on the valuation of the property.

6. Procedure after arriving at provisional

market value.- The Collector shall communicate

a copy of his order provisionally determining the

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market value of the properties and the duty

payable, to all the persons who are liable to pay

the duty along with the notice in Form II and call

upon the parties to lodge their objections, if any, to

such determination of the market value within the

time specified in the notice. The Collector shall

also hear the parties on the date specified in the

notice or on such other day as may be fixed by

him.

7. Final Order determining the market value.-

(1) The Collector shall, after considering the

representations received in writing and those urged

at the time of hearing or in the absence of any

representation from the parties concerned or their

failure to appear in person at the time of hearing in

any case after careful consideration of all the

relevant factors and evidence available with him

pass an order within three months from the date of

first notice determining the market value of the

properties and the duty payable on the instrument,

and communicate the order so passed to the parties

and take steps to collect the difference in the

amount of stamp duty, if any.

(2) A copy of the order shall be communicated to

the registering officer concerned for his record.

(3) The difference in the amount of duty

determined by the Collector shall be paid within

two months from the date of final order passed

under sub-Section (2) or sub-Section(3) of Section

47-A

(4) The Collector shall, after collecting the

difference in amount of stamp duty and interest, if

any, under Section 47-A, give a certificate in Form

III by endorsement on the instrument.

… … …

11-A. Decision of the appellate authority. The

appellate authority may, for the purpose of deciding

an appeal, -

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(a)call for any information or record from

any public office, officer or authority

under the government or any local

authority;

(b)examine and record statements from

any member of the public officer of

authority under the government or the

local authority

3

; and

(c)inspect the property after due notice to

the parties concerned.”

6. We heard Mr. Jayanth Muth Raj, learned Additional Advocate

General for the Appellants in all the appeals and M/s. T. Sundar

Ramanathan, M.A. Venkata Subramanian, K.V. Mohan, Raghav Shankar,

P.J. George and Pulkit Tare, learned Advocates for the concerned

Respondents. Following questions arise for our consideration: -

1.Whether the directions issued by the appellate authority

namely Chief Controlling Revenue Authority (Inspector

General of Registration) in asking the Deputy Inspector

General of Registration, or any other officer, to conduct the

site inspection, amounted to delegation of his functions

and violated Rule 11-A of the Rules and thereby vitiated

the entire proceedings?

This question arises in all the appeals.

3 The text is as per the Gazette published on 09.03.2001. The language is, however, not

similar to that of Rule 4(3)(b).

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2.Whether Rule 7 of the Rules prescribing 3 months’ time

for the Collector to pass an order determining the market

value of the properties and duty payable on the instrument

from the first notice, is directory or mandatory?

This issue arises in all the appeals, except the one

arising out of Special Leave Petition (Civil)No. 17103 of

2019.

3.Whether the appellate authority has power under Section

47A of the Act to enhance the market value of the property

while deciding the appeal filed by the registrants?

The issue arises only in the appeal from Special Leave Petition

(Civil) Nos. 31633-31637 of 2018.

7.Before we deal with these questions, an issue regarding alleged

violation of Rule 6 may be addressed first. In the petition of appeal in the

lead matter, the following grounds are taken: -

“L. Because the Hon’ble High Court failed to

appreciate that Form II provisional notices were

issued by the 2

nd

Petitioner determining the

provisional market value of the subject properties in

consonance with Rule 6 of the Rules. The Hon’ble

High Court erred in passing an order in the favour of

the Respondent without appreciating the facts of the

instant matter wherein no violation of Rule 6 occurred

and the procedure laid down under Rule 6 was duly

followed.

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M.Because the Hon’ble High Court failed to

appreciate that as no objections were received from

the Respondent against the notices issued in Form I or

Form II, the 2

nd

Petitioner accordingly proceeded with

passing the final orders. The procedure for arriving at

the final market value was suitably followed in

accordance to the Rules.”

The order of the appellate authority does not disclose any ground

of such violation being raised. We, therefore, find that there was no

violation of the procedure prescribed under Rule 6. Similar situation

obtains in appeals arising of Special Leave Petition (Civil) Nos.17103 of

2019 and 31633-31637 of 2018.

8. With regard to question no.1, it is submitted on behalf of the

Appellants that under Rule 11-A the appellate authority can call for any

information from any officer or authority, and can direct any officer or

authority under the government, or any public authority, to inspect the

property, collect information and send the report; and that causing such

inspection of the property or collection of evidence and calling for a

report, does not amount to delegation of his core function. It is

emphasized that causing personal inspection of properties in every appeal

would be humanly impossible. In response, it is submitted on behalf of

the Respondents: -

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a) Powers that can be delegated are specifically provided under

Section 76-A of the Act, and the power under Section 47-A is not

one such power; and

b) Unless the power to sub-delegate is conferred expressly or

impliedly under a statute, the power cannot be sub-delegated

(Reliance is placed on the decision of this Court in Sahni Silk

Mills (P) Ltd. and another vs. Employees’ State Insurance

Corporation

4

in support of the proposition).

9. In Pradyat Kumar Bose vs. The Hon’ble the Chief Justice of

Calcutta High Court

5

, a Judge of the High Court was deputed by the

Chief Justice of the High Court to make an enquiry into the charges

against the Registrar of the High Court and submit a report. After

considering the report and grant of hearing, the Registrar was dismissed

from service. While dealing with the submission that the Chief Justice

could not have delegated the enquiry into the charges to another Judge,

the Constitution Bench of this Court stated the principles as under:-

“… …It is well-recognised that a statutory

functionary exercising such a power cannot be said to

have delegated his functions merely by deputing a

responsible and competent official to enquire and

report. That is the ordinary mode of exercise of any

administrative power. What cannot be delegated

4 (1994) 5 SCC 346

5 (1955) 2 SCR 1331

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except where the law specifically so provides — is the

ultimate responsibility for the exercise of such power.

As pointed out by the House of Lords in Board of

Education v. Rice

6

, a functionary who has to decide an

administrative matter, of the nature involved in this

case, can obtain the material on which he is to act in

such manner as may be feasible and convenient,

provided only the affected party “has a fair

opportunity to correct or contradict any relevant and

prejudicial material”. The following passage from the

speech of Lord Chancellor in Local Government

Board v. Arlidge

7

is apposite and instructive:

“My Lords, I concur in this view of the

position of an administrative body to which

the decision of a question in dispute between

parties has been entrusted. The result of its

inquiry must, as I have said, be taken, in the

absence of directions in the statute to the

contrary, to be intended to be reached by its

ordinary procedure. In the case of the Local

Government Board it is not doubtful what this

procedure is. The Minister at the head of the

Board is directly responsible to Parliament

like other Ministers. He is responsible not

only for what he himself does but for all that

is done in his department. The volume of

work entrusted to him is very great and he

cannot do the great bulk of it himself. He is

expected to obtain his materials vicariously

through his officials, and he has discharged

his duty if he sees that they obtain these

materials for him properly. To try to extend

his duty beyond this and to insist that he and

other members of the Board should do

everything personally would be to impair his

efficiency. Unlike a Judge in a Court he is not

only at liberty but is compelled to rely on the

assistance of his staff.”

6 [1911] A.C. 179, 182

7 [1915] A.C. 120, 133

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10.In Union of India and anr. vs. P.K. Roy and ors.

8

, another

Constitution Bench of this Court ruled as under: -

“… …In other words, if a statutory authority

empowers a delegate to undertake preparatory work

and to take an initial decision in matters entrusted to it

but retains in its own hands the power to approve or

disapprove the decision after it has been taken, the

decision will be held to have been validly made if the

degree of control maintained by the authority is close

enough for the decision to be regarded as the

authority’s own. In the context of the facts found in

the present case we are of opinion that the High Court

was in error in holding that there has been an

improper delegation of its statutory powers and duties

by the Central Government and that the final

gradation list dated April 6, 1962 was therefore ultra

vires and illegal. Even on the assumption that the task

of integration was exclusively entrusted to the Central

Government, we are of the opinion that the steps

taken by the Central Government in the present case

in the matter of integration did not amount to any

delegation of its essential statutory functions. There is

nothing in Sections 115 or 117 of the said Act which

prohibits the Central Government in any way from

taking the aid and assistance of the State Government

in the matter of effecting the integration of the

services. So long as the act of ultimate integration is

done with the sanction and approval of the Central

Government and so long as the Central Government

exercises general control over the activities of the

State Government in the matter it cannot be held that

there has been any violation of the principle

“delegatus non potest delegare”. For instance, it was

observed by this Court in Pradvat Kumar Bose v.

Hon’ble the Chief Justice of Calcutta High Court

5

:”

11.In State of Bombay (Maharashtra) vs. Shivbalak

Gourishanker Dube and others

9

, the decision of the High Court holding

8 (1968) 2 SCR 186

9 (1965) 1 SCR 211

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21

that the State Government could not have delegated its duty to make an

enquiry under Section 65(1) of the Bombay Tenancy and Agricultural

Lands Act, 1948, was under challenge. While setting aside said decision

of the High Court, it was observed: -

“Realising the infirmity in the view taken by the High

Court, Mr Pathak attempted to support the decision of

the High Court on another ground. He argued that

since the enquiry was made by the Talathi and the

Mamlatdar under Section 65 and not by the Deputy

Collector, the declaration made by the Deputy

Collector was invalid. In other words, the argument is

that the State Government may have validly delegated

its powers under Section 65(1) to the Deputy

Collector, but the Deputy Collector who is a delegate

of the State Government cannot, in turn, delegate a

part of his power or authority to a subordinate of his

own, and that is what he has done in the present case.

This argument proceeds on the basis that in exercising

his powers under Section 65(1), the Deputy Collector

must himself hold the enquiry and cannot delegate the

function of holding such an enquiry to any other

subordinate re venue officer. There is no doubt that a

delegate who has received the authority from the

principal cannot, in turn, delegate his own authority to

a delegate of his own, but there is hardly any question

of delegation by a delegate in the present case. All

that Section 65(1) requires is that the State

Government and therefore its delegate may after

making such enquiry as it thinks fit, declare that the

management of the land shall be resumed. In other

words, in what form the enquiry should be held is a

matter left entirely in the discretion of the State

Government or its delegate. All that the Deputy

Collector has done in the present case is to direct his

subordinate officers to collect material relevant to the

purpose of the enquiry. The Talathi went on the spot

and ascertained as to whether the respondent's lands

were lying fallow for the requisite period. He

submitted his report to the Mamlatdar. The Mamlatdar

in turn made his report to the Deputy Collector. In

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22

other words, all that the Deputy Collector has done is

to collect the relevant material, so that he can enquire

into the question as to whether the lands are lying

fallow or not. This procedure does not, in our opinion,

involve the question of any delegation at all. The form

of the enquiry and its mode are entirely in the

discretion of the Deputy Collector. Section 65(1) does

not require that the Deputy Collector must himself go

to the agricultural fields and enquire on the spot

whether they are lying fallow. He may, if he so

desires, record evidence himself, or the recording of

the evidence and the actual inspection on the spot can

be left to some subordinate officer. The report of such

local inspection and the record of the evidence

collected in that behalf would be forwarded to the

Deputy Collector, and that would be the material on

which he would hold the enquiry himself. The enquiry

is thus held by the Deputy Collector, though the

mechanical work of collecting material has been

entrusted to a subordinate revenue officer. In such a

case, we do not see how the principle that a delegate

cannot delegate comes into operation.”

12.In Sahni Silk Mills

4

case, the issue was whether an officer or

authority as a delegate of certain powers by the Corporation, could further

sub-delegate said powers. It was observed by this Court:-

“5. The courts are normally rigorous in requiring the

power to be exercised by the persons or the bodies

authorised by the statutes. It is essential that the

delegated power should be exercised by the authority

upon whom it is conferred and by no one else. At the

same time, in the present administrative set-up

extreme judicial aversion to delegation cannot be

carried to an extreme. A public authority is at liberty

to employ agents to exercise its powers. That is why

in many statutes, delegation is authorised either

expressly or impliedly. Due to the enormous rise in

the nature of the activities to be handled by statutory

authorities, the maxim delegatus non potest delegare

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23

is not being applied specially when there is question

of exercise of administrative discretionary power.

6. By now it is almost settled that the legislature can

permit any statutory authority to delegate its power to

any other authority, of course, after the policy has

been indicated in the statute itself within the

framework of which such delegatee is to exercise the

power. The real problem or the controversy arises

when there is a sub-delegation. It is said that when

Parliament has specifically appointed authority to

discharge a function, it cannot be readily presumed

that it had intended that its delegate should be free to

empower another person or body to act in its place. In

Barium Chemicals Ltd. v. Company Law Board

10

, this

Court said in respect of sub-delegation:

“Bearing in mind that the maxim delegatus

non potest delegare sets out what is merely

a rule of construction, sub-delegation can be

sustained if permitted by express provision

or by necessary implication.”

7. Again in Mangulal Chunilal v. Manilal Maganlal

11

,

while considering the scope of Section 481(1)(a) of

the Bombay Provincial Municipal Corporation Act

(59 of 1949) this Court said that Commissioner of the

Ahmedabad Municipal Corporation had delegated his

power and function under the aforesaid section to a

Municipal Officer to launch proceedings against a

person charged with offences under the Act or the

rules and that officer to whom such functions were

delegated could not further delegate the same to

another.

8. In Halsbury’s Laws of England, 4th Edn., Vol. I, in

respect of sub-delegation of powers it has been said:

“In accordance with the maxim delegatus

non potest delegare, a statutory power must

be exercised only by the body or officer in

whom it has been confided, (H. Lavender &

10 AIR 1967 SC 295 : 1966 Supp SCR 311

11 AIR 1968 SC 822 : (1968) 2 SCR 401

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24

Son Ltd. v. Minister of Housing and Local

Government

12

) unless sub-delegation of the

power is authorised by express words or

necessary implication (Customs and Excise

Comrs. v. Cure and Deeley Ltd.

13

and

Mungoni v. Attorney General of Northern

Rhodesia

14

). There is a strong presumption

against construing a grant of legislative,

judicial, or disciplinary power as impliedly

authorising sub-delegation; and the same

may be said of any power to the exercise of

which the designated body should address

its own mind. Allam & Co. v. Europa

Poster Services Ltd.

15

…”

9. In the case of Harishankar Bagla v. State of M.P.

16

,

while examining the scope of Section 4 of the

Essential Supplies (Temporary Powers) Act, 1946 it

was said:

“Section 4 of the Act was attacked on the

ground that it empowers the Central

Government to delegate its own power to

make orders under Section 3 to any officer

or authority subordinate to it or the

Provincial Government or to any officer or

authority subordinate to the Provincial

Government as specified in the direction

given by the Central Government. In other

words, the delegate has been authorized to

further delegate its power in respect of the

exercise of the powers of Section 3. Mr

Umrigar contended that it was for the

Legislature itself to specify the particular

authorities or officers who could exercise

power under Section 3 and it was not open

to the Legislature to empower the Central

Government to say what officer or authority

could exercise the power.

12 (1970) 3 All ER 871 : (1970) 1 WLR 1231

13 (1962) 1 QB 340 : (1961) 3 All ER 641 : (1961) 3 WLR 798

14 (1960) 1 All ER 446 : (1960) 2 WLR 389 : 1960 AC 336, PC

15 (1968) 1 All ER 826 : (1968) 1 WLR 638

16 AIR 1954 SC 465, 468 ; (1955) 1 SCR 380

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Reference in this connection was made to

two decisions of the Supreme Court of the

United States of America — Panama

Refining Co. v. Ryan

17

and Schechter v.

United States

18

. In both these cases it was

held that so long as the policy is laid down

and a standard established by a statute, no

unconstitutional delegation of legislative

power is involved in leaving to selected

instrumentalities the making of subordinate

rules within prescribed limits and the

determination of facts to which the policy as

declared by the legislature is to apply. These

decisions in our judgment do not help the

contention of Mr Umrigar as we think that

Section 4 enumerates the classes of persons

to whom the power could be delegated or

sub-delegated by the Central Government

and it is not correct to say that the

instrumentalities have not been selected by

the Legislature itself.”

In the aforesaid case, the sub-delegation was

upheld because Section 4 itself enumerated the

classes of persons to whom the power could be

delegated or sub-delegated by the Central

Government.

10. So far as the present Section 94-A is

concerned, it says that the Corporation subject to

any regulation made by the Corporation in that

behalf, may direct that particular or any of the

powers and functions which may be exercised or

performed by the Corporation, may, in relation

to such matters and subject to such conditions, if

any, as may be specified “be also exercisable by

any officer or authority subordinate to the

Corporation”. Section 94-A does not specifically

provide that any officer or authority subordinate

to the Corporation to whom the power has been

delegated by the Corporation, may in his turn

17 (1934) 293 US 388 : 79 L Ed 446

18 (1934) 295 US 495 : 79 L Ed 1570

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authorise any other officer to exercise or

perform that power or function. But by the

resolution dated 28-2-1976 the Corporation has

not only delegated its power under Section 85-

B(1) of the Act to the Director General, but has

also empowered the Director General to

authorise any other officer to exercise the said

power. Unless it is held that Section 94-A of the

Act, enables the Corporation to delegate any of

its powers and functions to any officer or

authority subordinate to the Corporation, and he

in his turn can sub-delegate the exercise of the

said power to any other officer, the last part of

the resolution dated 28-2-1976 cannot be held to

be within the framework of Section 94-A.

According to us, Parliament while introducing

Section 94-A in the Act, only conceived direct

delegation by the Corporation to different

officers or authorities, subordinate to the

Corporation, and there is no scope for such

delegate to sub-delegate that power, by

authorising any other officer to exercise or

perform the power so delegated.”

13.In Sidhartha Sarawgi vs. Board of Trustees for the Port of

Kolkata and others

19

, the matter was dealt with by this Court as under:-

“5. Regarding delegation of non-legislative/

administrative powers on a person or a body to do

certain things, whether the delegate himself is to

perform such functions or whether after taking decision

as per the terms of the delegation, the said agency can

authorise the implementation of the same on somebody

else, is the question to be considered. Once the power

is conferred, after exercising the said power, how to

implement the decision taken in the process, is a matter

of procedure. The legislature may, after laying down

the legislative policy, confer discretion on an

administrative agency as to the execution of the policy

and leave it to the agency to work out the details within

the framework of that policy

20

. So long as the essential

19 (2014) 16 SCC 248

20 Khambhalia Municipality vs. State of Gujarat, AIR 1967 SC 1048 at p. 1051, para 7

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function of decision making is performed by the

delegate, the burden of performing the ancillary and

clerical task need not be shouldered by the primary

delegate. It is not necessary that the primary delegate

himself should perform the ministerial acts as well. In

furtherance of the implementation of the decision

already taken by the primary delegate as per the

delegation, ministerial or clerical tasks may be

performed by authorised officers. The complexity of

modern day administration and the expansion of

functions of the State to the economic and social

spheres have made it necessary that the legislature

gives wide powers to various authorities when the

situation requires it. Today’s governmental functions

are a lot more complex and the need for delegation of

powers has become more compelling. It cannot be

expected that the head of the administrative body

performs each and every task himself.

… … …

7. Practical necessities or exigencies of administration

require that the decision-making authority who has

been conferred with statutory power, be able to

delegate tasks when the situation so requires. Thus, the

maxim delegatus non potest delegare, gives way in the

performance of administrative or ministerial tasks by

subordinate authorities in furtherance of the exercise of

the delegated power by an authority.”

14.The following principles can thus be culled out from the decisions

of this Court: (i) A statutory functionary exercising a power cannot be

said to have delegated his functions merely by deputing a responsible and

competent official to enquire and report, as that is the ordinary mode of

exercise of any administrative power; (ii) If a statutory authority

empowers a delegate to undertake preparatory work, and to take an initial

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decision in matters entrusted to it, but retains in its own hands the power

to approve or disapprove the decision after it has been taken, the decision

will be held to have been validly made if the degree of control maintained

by the authority is close enough for the decision to be regarded as the

authority’s own; (iii) Even in cases of sub-delegation, so long as the

essential function of decision making is performed by the delegate, the

burden of performing the ancillary and clerical task need not be

shouldered by the primary delegate and it is not necessary that the primary

delegate himself should perform the ministerial acts as well; and (iv)

Practical necessities or exigencies of administration require that the

decision-making authority who has been conferred with statutory power,

be able to delegate tasks when the situation so requires.

15. Rule 11A of the Rules empowers the appellate authority to call for

any information or record from any public office, officer or authority or to

examine and record statements from any member of the public office or

authority. In line with the principles laid down by this Court, it can

therefore be said that in exercise of such power, if the appellate authority

calls for any information or calls for any record or any inputs, that by

itself, will not amount to delegation of essential functions. If, in terms of

such power, the appellate authority deputes a responsible official to enquire

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into certain facets and calls for a report, that would be an ordinary mode of

exercise of the power vested in the appellate authority. Practical

necessities and exigencies of administration demand that the appellate

authority must be able to delegate certain tasks such as collecting

information after causing inspection. So long as the essential function, that

is to say of considering all the necessary factors and inputs and thereafter

arriving at an informed decision is done by the appellate authority, the

burden of performing ancillary tasks need not be shouldered by the

appellate authority.

16. The submission based on Section 76-A of the Act is completely

misplaced and does not deserve acceptance. Section 76-A is quoted

hereunder for facility:

“76-A. Delegation of certain powers- The State

Government may, by notification in the Official

Gazette delegate-

(a)all or any of the powers conferred on it by

sections 2(9), 33(3)(b), 70(1), 74 and 78 to the

Chief Controlling Revenue Authority; and

(b)all or any of the powers conferred on the

Chief Controlling Revenue-Authority by sections

45(1), (2), 56(1) and 70(2) to such subordinate

Revenue Authority as may be specified in the

notification.”

Section 76-A was inserted in the Principal Act vide the

Decentralization Act, 1914 (Act No. IV of 1914). The legislative head in

Entry 44, namely “Stamp duties other than duties on or fees collected by

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means of judicial stamps, but not including rates of stamps” is in the

Concurrent List of Schedule VII to the Constitution. Section 47-A was

inserted in the Principal Act by the State Legislature by enacting the

Tamil Nadu Act No.24 of 1967 which received the assent of the President

on 29

th

March, 1968. The Rules including Rule 11-A were framed to

effectuate the letter and spirit of Section 47-A.

Section 76-A of the Principal Act enables the State Government to

delegate some of the statutory powers conferred upon it by the Principal

Act to the Chief Controlling Revenue Authority. Such empowerment has

nothing to do with the legislative power exercised by the State in terms of

which Section 47-A was inserted, or with the Rules promulgated to

effectuate Section 47-A. For interpreting and considering the context of

said Section 47-A or the Rules, the fact that certain other statutory powers

in favour of the State Government are delegable, has absolutely no

relation. Section 47-A was inserted by the State in its legislative power

and the Rules framed thereunder have to be considered on their own and

without being influenced by Section 76-A.

17.Therefore, in observing that the inspection ought to have been

carried out by the Inspector General of Registration himself, and such

function could not have been delegated, the High Court failed to

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appreciate the principles laid down by this Court. Any report that was

called for was essentially in the nature of rendering assistance to the

appellate authority in discharge of its functions. The final order passed by

the appellate authority, after considering all the necessary material, must

be taken to be one rendered by the appellate authority on its own, and

there was no delegation of any essential functions vitiating exercise of

power. We do not, therefore, find any impropriety or invalidity touching

upon the exercise of power by the appellate authority. We, thus, accept the

contentions raised by the learned counsel for the Appellants, and set aside

the view taken by the High Court in that behalf.

18.The ground with respect to delegation of power under Rule 11-A

was taken in all these matters, on the basis of which the High Court set

aside the determination made by the appellate authority. The conclusions

of the High Court in that behalf being erroneous, we set aside said

conclusions in each of the matters, and restore the findings arrived at by

the appellate authority on the basis of the report called for in exercise of

power under Rule 11-A in all the matters.

19.We now turn to question no. 2, in respect of which the High Court

in six of these appeals, had concluded that the stipulation of period of

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three months in Rule 7 being mandatory, the orders passed after the expiry

of said period would be invalid.

19.1It is submitted on behalf of the Appellants that sub-sections (1)

and (2) of Section 47-A do not prescribe any time limit and the stipulation

in Rule 7 ought to be seen in the context and setting of various stages in

the proceedings. It is submitted: -

“…Rules 4-7 of Rules 1968 require the

collector/authority to perform various tasks namely

issuance of Form I notice by granting 21 days time to

the parties to represent his case with evidence,

consider the representations sent by the parties, verify

the records, call for information or record from the

public office, officer or authority, inspect the property

after due notice and recording statements of the

parties etc. Thereafter, the collector is required to

provisionally determine the market value by taking

into consideration of various factors mentioned in

Rules and the same has to be communicated to the

parties with Form II notice calling upon them to lodge

their objections if any. Thereafter he has to consider

the representations and points urged at the time of

hearing and pass an order determining the market

value of the properties and the duty payable on the

instrument and communicate the said order. The

entire exercise is time consuming and the same cannot

be completed within 3 months time.”

19.2In response, it is submitted by the Respondents :-

“Rule 7 of the Rules also mandates that the Collector

shall after considering the representations and after

careful consideration of all relevant factors and

evidence available with him pass an order within 3

months from the date of first notice. Rule 7 also has

to be read in the light of Rule 4 (1) of the Rules which

provides for a timeline of 21 days from the date of

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service of the notice for parties to provide their

representations on whether the market value has been

truthfully set forth. Therefore, Rule 7 read in the light

of Rules 4 and Section 47-A (2) provides for a

mandatory requirement to complete the inquiry and

pass an order within the timelines set forth. It would

also be pertinent to note that the timeline to pass an

order within 3 months was introduced vide an

amendment indicating the intention to have a

mandatory timeline to pass orders.

… … …

Rule 7 as originally enacted did not prescribe a time

period for the Collector to pass an order determining

the market value of the properties. Rule 7 was

amended vide G.O.Ms.No. 69 dated 26.02.1997 on

suggestion of the Inspector General of Registration

(the “1997 Amendment) to introduce a month time

period.”

20. Under sub-section (1) of Section 47-A of the Act, if there is reason

to believe that the market value has not been truly set forth in the

Instrument tendered for registration, a reference can be made to the

Collector, who (i) after giving the parties reasonable opportunity of being

heard; and (ii) after holding an enquiry in such manner as may be

prescribed by Rules, has to determine the correct value of the concerned

property. The Section by itself does not lay down any period within

which the entire process is to be completed by the Collector. It simply

states that the enquiry be held in “such manner” as may be prescribed by

Rules. In this backdrop the manner in which the enquiry must be held as

set out in the Rules, is required to be considered.

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According to the Rules, following steps are required to be

undertaken:

A)On receipt of reference as stated above, the Collector must

issue notice in Form I to the persons by whom and in whose

favour the Instrument is executed, informing such persons to

produce all evidence to show that the market value has been truly

set forth in said instrument. The notice must give such persons

time of twenty one days from the receipt of notice to represent or

respond. [Rule 4(1)]

B)The Collector may record statement of any such noticee.

[Rule 4(2)].

C)For the purposes of the enquiry, the Collector may call for

information from any public office or examine and record

statements or inspect the property after due notice as stated in

detail in Rule 4(3).

D)After considering the representations, if any, and the record

and evidence, a provisional order determining the market value

must be passed indicating the basis for such conclusion. [Rule

4(4)]. For arriving at the provisional market value, regard must be

had to the principles set out in Rule 5.

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E)The provisional order must be communicated in Form II to

all the concerned persons who must be given some time to prefer

objections, if they so wish; and they must be heard on the day

fixed in the notice or on such other day as may be fixed. [Rule 6]

F)After considering the representations in writing and those

urged at the time of hearing as well as all the relevant factors and

evidence, the Collector must pass an order determining the market

value of the concerned property and assess the element of duty

payable on the instrument of transfer. Such order is required to be

passed “within three months from the date of first notice”. [Rule 7]

21. The expression “within three months from the date of first notice”

is crucial. Is the description “first notice” referable to notice in Form I

issued in terms of Rule 4(1)? The answer would obviously be in the

negative. Form I notice itself must give twenty-one days to the concerned

persons to respond. Depending upon their response, their statements

would be recorded and/or certain information may be required to be called

for, whereafter the Order in Form II is to be issued provisionally

determining the market value. The concerned persons are entitled to raise

objections in writing and must be afforded hearing. After fulfilling these

requirements, the order in terms of Rule 7 can be passed. All these stages

may not be completed in three months.

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Further, the reference in Rule 7 is to the “first notice” and not to

“notice in Form I”. Considering the context and various stages preceding

the stage of passing of the Order under Rule 7, the reference has to be to

the first “notice in Form II”. There could possibly be more than one

notices in Form II, specially when the hearing is to take place on an

adjourned date and that is why the period must be reckoned from the first

notice in Form II. The expression immediately following “first notice” in

Rule 7 is “determining the market value of the properties….” That is also

indicative that the reference to the notice is one in Form II in the

immediately preceding Rule 6.

22.We now deal with the question whether the stipulation of period of

three months in Rule 7 is mandatory or directory.

23. Some of the decisions of this Court dealing with question as to in

what circumstances and context a statutory provision can be considered to

be mandatory or directory may first be noted.

A) In State of Mysore and others v. V.K. Kangan and others

21

a bench of three Judges of this Court observed: -

“10. In determining the question whether a provision is

mandatory or directory, one must look into the subject-

matter and consider the importance of the provision

21 (1976) 2 SCC 895

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disregarded and the relation of that provision to the

general object intended to be secured. No doubt, all

laws are mandatory in the sense they impose the duty

to obey on those who come within its purview. But it

does not follow that every departure from it shall taint

the proceedings with a fatal blemish. The determination

of the question whether a provision is mandatory or

directory would, in the ultimate analysis, depend upon

the intent of the law-maker. And that has to be gathered

not only from the phraseology of the provision but also

by considering its nature, its design and the

consequences which would follow from construing it in

one way or the other. … …”

B) In T.V. Usman vs. Food Inspector, Tellicherry

Municipality, Tellicherry

22

, this Court was called upon to consider

whether stipulation of period in Rule 7(3) of the Prevention of Food

Adulteration Rules, 1955 within which time the report of the analysis

of the sample must be delivered, would be mandatory or directory.

This Court quoted the following passage from the decision of the

Constitution Bench of this Court:-

“10. In Dattatraya Moreshwar v. State of Bombay

23

it

was held as under:

“[G]enerally speaking the provisions of a

statute creating public duties are directory

and those conferring private rights are

imperative. When the provisions of a

statute relate to the performance of a public

duty and the case is such that to hold null

and void acts done in neglect of this duty

would work serious general inconvenience

or injustice to persons who have no control

22 (1994) 1 SCC 754

23 AIR 1952 SC 181

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The Inspector General of Registration, Tamil Nadu & Ors. vs. K. Baskaran

38

over those entrusted with the duty and at

the same time would not promote the main

object of the legislature, it has been the

practice of the Courts to hold such

provisions to be directory only, the neglect

of them not affecting the validity of the

acts done.”

B.1) Thereafter, this Court considered the effect of stipulation in

Rule 7(3):

“11. In Rule 7(3) no doubt the expression “shall” is

used but it must be borne in mind that the rule deals

with stages prior to launching the prosecution and it is

also clear that by the date of receipt of the report of

the Public Analyst the case is not yet instituted in the

court and it is only on the basis of this report of the

Public Analyst that the authority concerned has to

take a decision whether to institute a prosecution or

not. There is no time-limit prescribed within which

the prosecution has to be instituted and when there is

no such limit prescribed then there is no valid reason

for holding the period of 45 days as mandatory. Of

course that does not mean that the Public Analyst can

ignore the time-limit prescribed under the rules. He

must in all cases try to comply with the time-limit.

But if there is some delay, in a given case, there is no

reason to hold that the very report is void and on that

basis to hold that even prosecution cannot be

launched. May be, in a given case, if there is

inordinate delay, the court may not attach any value to

the report but merely because the time-limit is

prescribed, it cannot be said that even a slight delay

would render the report void or inadmissible in law.

In this context it must be noted that Rule 7(3) is only

a procedural provision meant to speed up the process

of investigation on the basis of which the prosecution

has to be launched. No doubt, sub-section (2) of

Section 13 of the Act confers valuable right on the

accused under which provision the accused can make

an application to the court within a period of 10 days

from the receipt of copy of the report of Public

Analyst to get the samples of food analysed in the

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39

Central Food Laboratory and in case the sample is

found by the said Central Food Laboratory unfit for

analysis due to decomposition by passage of time or

for any other reason attributable to the lapses on the

side of prosecution, that valuable right would stand

denied. This would constitute prejudice to the accused

entitling him to acquittal but mere delay as such will

not per se be fatal to the prosecution case even in

cases where the sample continues to remain fit for

analysis in spite of the delay because the accused is in

no way prejudiced on the merits of the case in respect

of such delay. Therefore it must be shown that the

delay has led to the denial of right conferred under

Section 13(2) and that depends on the facts of each

case and violation of the time-limit given in sub-rule

(3) of Rule 7 by itself cannot be a ground for the

prosecution case being thrown out.”

C) In P.T. Rajan vs. T.P.M. Sahir and others

24

the principles

were summed up as follows: -

“48. Furthermore, even if the statute specifies a time

for publication of the electoral roll, the same by itself

could not have been held to be mandatory. Such a

provision would be directory in nature. It is a well-

settled principle of law that where a statutory

functionary is asked to perform a statutory duty

within the time prescribed therefor, the same would

be directory and not mandatory. (See Shiveshwar

Prasad Sinha v. District Magistrate of Monghyr

25

,

Nomita Chowdhury v. State of W.B.

26

and Garbari

Union Coop. Agricultural Credit Society Ltd. v.

Swapan Kumar Jana

27

.)

49. Furthermore, a provision in a statute which is

procedural in nature although employs the word

“shall” may not be held to be mandatory if thereby no

prejudice is caused. (See Raza Buland Sugar Co. Ltd.

24 (2003) 8 SCC 498

25 AIR 1966 Pat 144 : ILR 45 Pat 436 (FB)

26 (1992) 2 Cal LJ 21

27 (1997) 1 CHN 189

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40

v. Municipal Board, Rampur

28

, State Bank of Patiala

v. S.K. Sharma

29

, Venkataswamappa v. Special Dy.

Commr. (Revenue)

30

and Rai Vimal Krishna v. State of

Bihar

31

.)”

24. Reliance is, however, placed by the learned Counsel for the

Respondents on the decision of this Court in Mackinnon Mackenzie and

Company Ltd. vs. Machinnon Employees Union

32

. One of the issues

that arose for consideration in that case was whether the provisions of

Section 25FFA of the Industrial Disputes Act, 1947 contemplating

issuance of notice of closure are mandatory or directory and the

submission advanced on behalf of the Union of Workmen was noted as

under:

“37. The contention urged by Mr C.U. Singh, the

learned Senior Counsel for the respondent Union is

that if the interpretation of the provision under

Section 25-FFA of the ID Act as contended by the

learned counsel on behalf of the appellant Company is

accepted to be directory and not mandatory as it

would attract the penal provision against the appellant

Company under Section 30-A of the ID Act, then the

purpose and intendment of the amendment in the year

1972 made to Section 25-FFA of the ID Act, will be

defeated and would nullify the Objects and Reasons

for amending the provisions of the ID Act and it

would be contrary to the legislative wisdom of

Parliament. The statutory protection has been given to

the workmen under the provision of Section 25-FFA

of the ID Act, with an avowed object to protect

workmen being retrenched due to closing down of a

28 AIR 1965 SC 895 : (1965) 1 SCR 970

29 (1996) 3 SCC 364 : 1996 SCC (L&S) 717

30 (1997) 9 SCC 128

31 (2003) 6 SCC 401

32 (2015) 4 SCC 544

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41

department/unit of the undertaking as the livelihood

of such workmen and their family members will be

adversely affected on account of their retrenchment

from their service. To avert such dastardly situation to

be faced by the workmen concerned in the

company/establishment, the statutory obligation is

cast upon the employer to serve at least 60 days’

notice on the State Government before such intended

closure of the department/unit to be served upon the

State Government informing the reasons as to why it

intends to close down its department/unit.”

This Court accepted the afore-stated submission. It relied upon

the decisions of this Court in State of UP v. Babu Ram Upadhyay

33

, State

of Mysore v. V.K. Kangan

21

and Shrif Uddin v. Abdul Gani Lone

34

and

other decisions and held the concerned provisions to be mandatory. It was

observed:

“44. The statutory provisions contained in Section 25-

FFA of the ID Act mandate that the Company should

have issued the intended closure notice to the

appropriate Government should be served notice at

least 60 days before the date on which it intended to

close down the department/unit concerned of the

Company. As could be seen from the pleadings and

the findings recorded by the Industrial Court, there is

a categorical finding of fact recorded that there is no

such mandatory notice served on the State

Government by the appellant Company. The object of

serving of such notice on the State Government is to

see that it can find out whether or not it is feasible for

the company to close down a department/unit of the

company and whether the workmen concerned ought

to be retrenched from their service, made unemployed

and to mitigate the hardship of the workmen and their

family members. Further, the said provision of the ID

33 AIR 1961 C 751

34 (1980) 1 SCC 403

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42

Act is the statutory protection given to the workmen

concerned which prevents the appellant Company

from retrenching the workmen arbitrarily and

unreasonably and in an unfair manner.

45. The cumulative reading of the Statement of

Reasons, the retrenchment notice served on the

workmen concerned, the pleadings of the appellant

Company and in the absence of evidence on record to

justify the action of retrenchment of workmen

concerned on the alleged closure of the

department/unit of the appellant Company is shown as

bona fide. However, the concurrent finding of fact

recorded by the High Court on this aspect of the case

cannot be held to be bad in law by this Court in

exercise of its appellate jurisdiction in this appeal.”

While concluding so, this Court also relied upon the Objects and

Reasons of the Amending Act 32 of 1972 inserting Section 25FFA in the

Industrial Disputes Act, and the fact that the legislation provided penalty

for closing down any undertaking without serving requisite notice.

25. As noted above, Section 47-A by itself does not prescribe any

timeline. If the stipulation or fixation of period of three months from the

first notice in terms of Rule 6 or from notice in Form II is taken to be

mandatory it would lead to a situation of incongruity. The fact that Form

II notice had been issued, would mean that on a prima facie view of the

record and material, the value stated in the instrument was not the correct

value; which in turn would mean that prima facie the Government Coffers

were being denied the rightful dues. If for any reason the proceedings are

not completed within three months and, therefore, must be held to be

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43

vitiated, the public interest would suffer, and the persons who were prime

facie responsible for suppressing the real value, would stand to gain. The

amendment of Rule 7 incorporating the period of three months was

essentially to guide the public officials to complete the process as early as

possible but was not intended to create a right in favour of those who had

prime facie conducted themselves prejudicing public interest.

In keeping with the principles laid down in State of Mysore and

others v. V.K. Kangan and others

21

, if the subject matter of the provision

as well as the inter-relation of the period of three months to the general

object of the provision are considered, the fixation of period has to be

taken to be directory. Otherwise, the very object of sub-serving public

interest and securing public revenue would get defeated. Pertinently, the

concerned provision has not spelt out any consequence for non-adherence

to said period of three months.

26. We, therefore, hold the fixation of timeline of three months in

Rule 7 to be purely directory. In the premises, the conclusion by the High

Court holding the said provision to be mandatory is set aside, and no

benefit on that ground can accrue to the Respondents.

27. We now turn to question No.3, which incidentally arises only in

one appeal viz. one arising from SLP(C) Nos.31633-31637 of 2018. At

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44

this stage, the relevant portions from the order of the appellate authority

may be extracted hereunder:-

“District Registrar has recommended a value of

Rs.480/- per sq.ft., for the documents registered in

2005 and Rs.544/- per sq.ft., for the documents

registered in 2007. He has stated that the lands are

located in WIMCO Nagar opposite to WIMCO Nagar

Railway Station and lies between Thiruvottriyur High

Road and Ennore Express Road. Further he has stated

that as per local enquiry, at the time of registration the

value of the lands ranged between Rs.11.5 to 12

Lakhs per ground for 2005 documents and Rs.13 to

14 Lakhs per ground for the documents registered in

2007.

Perusal of Sales Statistics reveals registration of

documents upto 2006 adopting a value of Rs.204/- per

sq.ft., and referred under 46A and are still pending.

Again, from 25-09-2006 onwards large number of

documents (nearly 40) have been registered adopting

a value of Rs.544/- per sq.ft. However, extents

involved in all these cases ranges from 1 ground to 2

grounds except in few cases were extend involved

in1200 sq.ft. All these are sanctioned layouts. One

Doct. No.10084/2007 has been registered in

S.No.168/7, 9, 9 adopting a value of Rs.625/- per

sq.ft. Further vide Doct. No.10675/07 an extent of

4.957 acres was registered adopting a value of

Rs.485/- per sq.ft. and the same was referred under

47A for which District Revenue Offricer (Stamps)

fixed a value of Rs.920/- per sq.ft. This property is

adjoining the subject property as it shares one of the

boundaries with the subject document properties

similarly, for another Doct. No.10676/07, involving

an extent of 16290/- sq.ft. document value adopted

was Rs.841/- per sq.ft. for which District Revenue

Officer (Stamps) fixed a value of Rs.920/- per sq.ft.

Both the values were accepted by the registrants and

they paid the deficit Stamp Duty. The Guideline

value of those properties was Rs.1200/- per sq. ft.

with effect from 01.08.2000.

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45

The present Guideline value of the subject properties

with effect from 01.04.2012 is Rs.3500/- per sq.ft.

The sale deed in Doc. Nos.10675/2007 and

10676/2007 involve large extent of industrial land

and, hence, are similar to the lands involved in subject

documents. Therefore, for the 5 documents registered

in 2005, it is proposed to adopt the value of Rs.544/-

per sq.ft since, there seems no reason to believe that

the guideline values are abnormal in light of

registration adopting a value of Rs.920/- per sq.ft. in

2007. Similarly, for the three documents registered in

2007, it is proposed to fix a value of Rs.920/- per

sq.ft. aking to the value fixed and accepted by the

registrants in Doct.Nos.10675/2007 and 10676/2007.

Hence issue shows cause Notice to the Petitioner

accordingly for all the 8 cases. Hence a new show

cause notice was issued in continuation of the

personal enquiry to the Appellant and to his Advocate

with reference to the 9 cited why the value at Rs.544/-

per sq.ft. for the 5 document properties registered

during 2005 and at Rs.920/- per sq.ft in respect of 3

document registered in 2007 and to furnish fresh

objections if any within 10 days in continuation of

this with reference to the 10

th

cited the Advocate

requested to furnish on which basis the provisional

value was determined and the sales statistics of

documents and to send the copies of document

Nos.10675, 10676/2007 and whether there is any

ways and means to give show cause notice under

Section 47A5 of the Indian Stamps Act and to give

details of the documentary basis in continuation of

that with reference to the 11 cited the details

requested by the Petitioner the report of spot

Inspection of the District Revenue Officer and the

copies of Document Nos.10675, 10676/2007 where

despatched.”

Thus, while proposing to enhance the market value higher than

what was determined by the Collector, the appellate authority had put the

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46

appellant-registrant to sufficient notice and had called for response with

regard to the proposed enhancement. It was only thereafter that the

exercise was undertaken to determine the true market value at Rs.544/-

per sq.ft. and Rs.920/- per sq.ft for documents registered in the year 2005

and 2007 respectively.

28. In the challenge arising therefrom, the High Court vide its order

dated 19.03.2018 in CMA Nos.2449 to 2453 of 2014 observed:-

“13. It is seen that the first respondent, while

deciding the appeal, had enhanced the market value

determined by the second respondent and fixed a

higher value. As per Section 47-A(5) of the Indian

Stamp Act, the first respondent shall only scrutinize

the correctness of the order passed by the second

respondent, as an appeal has been preferred by the

presentant concerned. In the appeal preferred by the

presentant, the Inspector General of Registration, has

no power to enhance the market value.

14. This Court, in its judgment in Rajendran v. The

Inspector General of Registration and others

35

has

held that while deciding the appeal preferred by the

presentant, unlike the suo motu revision under Section

47-A(6) of the Indian Stamp Act, the appellate

authority is not empowered to enhance the market

value of the property and he can only decide on the

correctness of the order passed by the District

Collector or District Revenue Officer. Therefore, it is

clearly seen that the order passed by the first

respondent is in total violation of Rules 6, 7 and 11-A

of the above said rules and in excess of powers

conferred under Section 47-A(5) of the Indian Stamp

Act. In such circumstances, I have no hesitation to set

aside the impugned order passed by the first

respondent.”

35 2012(3) CTC 589

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47

29. In Rajendran v. The Inspector General of Registration, Tamil

Nadu and others (supra) the High Court had observed: -

“33. Perusal of the impugned orders in all these

appeals does not indicate that the Chief Controlling

Revenue Authority cum Inspector General of

Registration, Chennai, has arrived at the subjective

satisfaction that the order passed under sub-section 2

of Section 47, by the Collector of Stamps, is

prejudicial to the interest of the revenue and that the

abovesaid appellate authority has not made any

inquiry or cause such inquiry to be conducted, before

enhancing the market value of the property in each of

these appeals. Reading of the Section 47-A(6) of the

Act makes it clear that the primary object behind,

engrafting suo-motu exercise of power is that the

order passed under sub-Sections (2) and (3) of Section

47 of the Act, should be first examined and found that

it is prejudicial to the interests of revenue. There

should be a categorical finding to that effect.

Therefore, when a provision in the statute, enjoins a

duty on the authority, to arrive at a conclusion, form a

subjective satisfaction, with a specific objective to

protect the revenue, if the orders passed under Section

47-A(2) and/or 47-A(3) is prejudicial to the revenue,

then the order of the Chief Controlling Revenue

Authority-cum-Inspector General of Registration,

Chennai, should advert to the said objective on the

facts and circumstances of each case and arrive at a

satisfaction, before proceeding further, under the

provisions of the Act.

34. Further, even assuming that the Chief Controlling

Revenue Authority cum Inspector General of

Registration, Chennai, arrives at a provisional

conclusion that an order passed by the Collector

(Stamps) is prejudicial to the interest of the revenue,

no order under sub-section 6 of section 47-A of the

Act can be passed adversely, without a reasonable

opportunity of being heard. First of all, in the cases on

hand, as stated supra, no such exercise as

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48

contemplated under sub-section 6 of Section 47-A of

the Act, has been done by the Chief Controlling

Revenue Authority cum Inspector General of

Registration, Chennai. Therefore, this Court is of the

view that the impugned orders in all these appeals do

not fall within the ambit of sub-section (6) of Section

47 of the Act.

35. The jurisdiction of the Chief Controlling Revenue

Authority in exercise of his suo motu power has its

own limitations, as provided for, in sub-sections (6)

and (7) of section 47-A and from the language

employed in the section. It could be construed that it

is only supervisory, as he has all the authority to call

for and examine any order passed under sub-section 2

or sub-section 3 suo motu, if such an order is

prejudicial to the interests of the revenue. Before

passing an order under Section 47(6) of the Act, after

making an inquiry or causing any such enquiry to be

made, the materials collected, the report if any, should

be provided to the person against whom proceedings

are initiated, to satisfy the requirements of the

principles of natural justice, otherwise, the parties

would be deprived of their right to offer their

explanation, if any.

36. Enhancement of market value of the property on

the appeals preferred by the land owners under

Section 47(5) is not contemplated under the scheme

of the Act, without recourse to sub-section 6 of

section 47, wherein the statute has contemplated a

procedure of conducting an inquiry and reasonable

opportunity. No doubt, the statute empowers the Chief

Controlling Revenue Authority-cum-Inspector

General of Registration, Chennai, to exercise suo-

motu powers under Section 47(6) of the Act, within

five years, from the date of passing of an order, under

Section 47(2) and (3) of the Act, as the case may be,

but the Statute mandates, consideration of the records,

in terms of the objective, specifically incorporated in

the Section and that he should arrive at a subjective

satisfaction, as to whether, the order passed under

sub-Sections (2) and (3) of Section 47-A of the Act, is

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49

prejudicial to the interests of Revenue. He must

record reasons for arriving at the satisfaction.”

30. Sub-section (6) of Section 47-A of the Act empowers the Chief

Controlling Revenue Authority, in exercise of suo motu power, to call for

and examine the correctness of an order passed under sub-section (2) or

sub-section (3) of Section 47-A; and if the order is prejudicial to the

interest of Revenue, the Chief Controlling Authority may make such

enquiry or cause such enquiry to be made and either revise, modify or set

aside such order and pass any order that it deems appropriate. There are

some limitations on the exercise of said power, since no proceedings can

be initiated against an order passed under sub-section (2) or sub-section

(3), if the time for preferring an appeal against that order has not expired,

or if more than five years have expired after passing of the order. The

intent is clear that if there be sufficient time to prefer a regular appeal

challenging that order, the remedy of filing an appeal ought to be taken

resort to. Further, if the period of five years has expired, no suo motu

power can be exercised. Another limitation is prescribed by sub-section

(8), in terms of which no order in exercise of suo motu exercise of power

can be passed which may adversely impact a person, unless that person has

had reasonable opportunity of being heard. Apart from these limitations,

the statutory provisions do not impose any other restriction, and the power

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50

is conferred principally to ensure that no order passed under sub-sections

(2) or (3) of Section 47-A is prejudicial to the interest of the revenue.

The limitation in sub-section (8) of Section 47-A, was high-lighted

in paragraphs 33 to 36 of the judgment of the High Court in Rajendran v.

The Inspector General of Registration, Tamil Nadu and others (supra).

In the present case, adequate notice was issued to the concerned persons

and, therefore, there was no infirmity on that count. It is nobody’s case

that as on the date when the proceedings were initiated in exercise of the

power under sub-section (6) of Section 47-A, the period for preferring the

appeal had not expired, or that more than five years had expired after the

passing of the order under sub-section (2) or sub-section (3). In the

circumstances, none of the limitations which the statute has imposed upon

the exercise of power were present.

31. The observations of the High Court in the instant case indicate that

while dealing with an appeal preferred by the registrant against an order

passed under Section 47-A(2), no suo motu exercise of power could be

initiated. It is the correctness of that view which is now in issue.

32. While considering the nature of power conferred by Section 20(3)

of the Bengal Finance (Sales Tax) Act, 1941 where the Commissioner

“upon application or of his own motion” could revise any assessment or

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51

order, this Court in M/s Ram Kanai Jamini Ranjan Pal Pvt. Ltd. v.

Member, Board of Revenue, West Bengal

36

quoted with approval

following passage from the judgment of the High Court of Madras:

13. The following observations made by Ramaswami,

J. in East Asiatic Co. (India) Ltd. v. State of Madras

37

are also relevant

“The purposes of this Act are twofold viz. the levy of a

general tax on the sale of goods to supplement the lost

revenues and for promoting the general public good; and

secondly, to see that this is done under the provisions of

the Act and not by carrying out in a capricious or arbitrary

manner. Therefore, a revisional authority has to be created.

What is revision? The essence of revisional jurisdiction

lies in the duty of the superior tribunal or officer entrusted

with such jurisdiction to see that the subordinate tribunals

or officers keep themselves within the bounds prescribed

by law and that they do what their duty requires them to

do and that they do it in a legal manner. This jurisdiction

being one of superintendence and correction in appropriate

cases, it is exercisable even suo motu as is clear from the

numerous statutory provisions relating to revision found in

various Acts and Regulations such as the Civil Procedure

Code, Criminal Procedure Code, Income Tax Act, etc. The

jurisdiction of suo motu revision is not cribbed and

cabined or confined by conditions and qualifications. The

purpose of such an amplitude being given suo motu

revisions appears to be as much to safeguard the interests

of the exchequer as in the interests of the assessee. The

State can never be the appellant and if there is an order

against the State to its prejudice, and naturally the assessee

in whose favour the order is passed does not prefer an

appeal, the State would suffer unless its interests are

safeguarded by the exercise of such supervisory

jurisdiction as the one given to the authorities

abovementioned.”

33. The essence of revisional jurisdiction is thus accepted to be in the

duty of the superior tribunal or officer to ensure that the subordinate

36 (1976) 3 SCC 369

37 (1956) 7 STC 299 (Mad)

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52

tribunal or officers remain within the bounds prescribed by law and

discharge their functions in accordance with law. The nature of such

power to be exercised “suo motu”, or “on its own motion”, has also been

dealt with in following decisions:

A) While considering Section 38-B of the Orissa Estates Abolition

Act, 1951, which did not impose any restriction akin to those found in sub-

section (7) of Section 47-A of the Act, this Court in State of Orissa and

others v. Brundaban Sharma and another

38

observed:-

“12. ..…. When and under what circumstances the

suo motu inquiry would be initiated and orders passed

is left to the discretion of the Board of Revenue

depending on the facts and circumstances of each

case.”

After considering some of the decisions of this Court, it was

observed:-

“16. It is, therefore, settled law that when the

revisional power was conferred to effectuate a

purpose, it is to be exercised in a reasonable manner

which inheres the concept of its exercise within a

reasonable time. Absence of limitation is an assurance

to exercise the power with caution or circumspection

to effectuate the purpose of the Act, or to prevent

miscarriage of justice or violation of the provisions of

the Act or misuse or abuse of the power by the lower

authorities or fraud or suppression. Length of time

depends on the factual scenario in a given case. Take

a case that patta was obtained fraudulently in

collusion with the officers and it comes to the notice

of the authorities after a long lapse of time. Does it lie

38 (1995) Supp. 3 SCC 249

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53

in the mouth of the party to the fraud to plead

limitation to get away with the order? Does lapse of

time an excuse to refrain from exercising the

revisional power to unravel fraud and to set it right?

The answers would be no.”

B) In Vijayabai and others V. Shriram Tukaram and others

39

this Court expressed caution as under: -

“9. The Tahsildar while exercising his suo motu

power under Section 49-B has to initiate on the basis

of the materials before him not arbitrarily. Every

exercise of suo motu power explicitly or implicitly

reveals to correct an error crept in under a statute,

what ought to have been done was not done or which

escaped the attention of any statutory authority, or

error or deliberate omission or commission by the

subject concerned requires correction, of course,

within the limitation of any such statute. This has to

be based on some relevant material on record, it is not

an omnipower to be exercised on the likes and

dislikes of such an authority. Though such a power is

a wide power but it has to be exercised with

circumspection within the limitations of such statute.

Wider the power, the greater circumspection has to be

exercised.”

34. In Sree Balaji Rice Mill, Bellary v. State of Karnataka

40

the basic

facts were stated in the decision rendered by a Bench of three Judges of

this Court as under:-

“3. The Additional Commissioner of Commercial

Taxes, Devangere Zone, Devangere issued notices

dated 16-2-1994 and 21-3-1994 under Section 22-A of

the Act proposing to revise the order of assessment

dated 12-7-1990 passed by the assessing authority on

the ground that the assessment order was erroneous

39 (1999) 1 SCC 693

40 (2005) 4 SCC 21

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The Inspector General of Registration, Tamil Nadu & Ors. vs. K. Baskaran

54

and prejudicial to the interest of the Revenue. In the

notices, the revisional authority had made

observations to the effect that the books of accounts

have not been properly maintained. In response to the

notices, the appellant filed reply on 4-4-1994 denying

the observations made by the revisional authority and

had requested the said authority to drop the

proceedings initiated under Section 22-A of the Act.

The revisional authority on 8-4-1994 issued a further

notice under Section 22-A(1) of the Act making the

same proposal as made in the earlier notices and

further proposed to levy penalty under Section 18-A

of the Act. The revisional authority confirmed the

proposals made in the notices issued under Section

22-A of the Act vide order dated 2-6-1994 and

modified the set-off granted by the assessing

authority.”

One of the questions that came up for consideration was set out in

paragraph 11 as under:-

“11. The following questions of law arise for

consideration by this Court:

(a) ……

(b) ……

(c) While purporting to revise an order under Section

12-A which neither expressly nor impliedly refers to

any proceeding under Section 18-A and was thus not

within the contemplation of the assessing authority

while passing the order under Section 12(3), is it open

for the Commissioner, while purporting to act under

Section 22-A in respect of the order under Section

12(3) to pass an order under Section 18-A either as a

part of the order under Section 22-A or separately as

such under Section 18-A?

(d) ……”

The question was considered as under:

“14. Section 18-A of the Act prohibits excess

collection of tax by an assessee. If any person

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The Inspector General of Registration, Tamil Nadu & Ors. vs. K. Baskaran

55

contravenes Section 18, penalty is provided under

Section 18-A of the Act. The question is when at the

time of assessment, if no penalty is imposed by the

assessing authority, can the revisional authority, by

invoking his suo motu powers under Section 22-A of

the Act impose penalty for the first time on the ground

that the order of assessment is prejudicial to the

interests of the Revenue?

17. It must be noted that there is a difference between

exercise of revisional powers over orders passed by

lower authority and exercise of revisional powers in

the assessment proceeding itself. A revision of an

order may be confined to what the order contains or

dealt with. But when the assessment proceedings

themselves are before the revisional authority it can

go beyond the order of the assessing authority and

pass such orders as the assessing authority could or

should have passed.

22. The argument of the learned counsel for the

appellant that the revising authority or the appellate

authority higher than the assessing authority is not

competent to levy a penalty for the first time when no

penalty has been levied by the assessing authority is

wholly untenable, without statutory basis and

unreasonable from any point of view. The said plea is

liable to be rejected. The necessity for there to be an

order under Section 18-A for the exercise of

revisionary jurisdiction under Section 22-A is once

again fallacious. The non-levy of penalty is itself an

illegality caused by a failure to exercise the

jurisdiction by the assessing authority and therefore,

prejudicial to the interests of the Revenue.”

35. For exercising revisional power “suo motu” or “on its motion”, the

concerned authority must be satisfied that an order has been passed by the

authority or officer subordinate to it. which may be prejudicial to the

interest of the revenue. As indicated in some of the hypothetical instances

noted in the decisions quoted hereinabove, the error may have crept in

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The Inspector General of Registration, Tamil Nadu & Ors. vs. K. Baskaran

56

unknowingly, or there may be a genuine mistake, or in some cases there

could be a deliberate attempt to prejudice the interest of revenue. If an

infirmity or illegality is brought to the notice or knowledge of the

revisional authority, through normal and regular process of reporting by the

subordinate officer or authority, the power of revision can certainly be

exercised. The requisite knowledge enabling the revisional authority to

exercise the power vested in it, can also be gathered from the appeal

preferred by the registrant himself. That may only be an occasion or a

source which enables the authority to gather information about the possible

infirmity or illegality in the process. Upon being so aware, the revisional

authority would thereafter be exercising power vested in it. Qualitatively,

it makes no difference as to what was the source of the information or

knowledge, so long as the power is exercised within the confines of the

limitations or restrictions imposed by the statute, and is in accordance with

law. Apart from the restrictions imposed by the statute, none can be read

into the exercise of power on the ground as to the nature or source of

information.

While entertaining an appeal, if an obvious illegality is noticed by

the revisional authority, it can certainly exercise suo motu power to undo

the mistake, or rectify an error committed by the subordinate officer or

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57

authority, subject to such restrictions as are imposed on the exercise of the

power by the statute.

36. There is nothing in the scheme of the Act which purports to restrict

the exercise of suo motu power under Section 47-A, and confines it to

cases where knowledge of any illegality or infirmity in the proceedings

undertaken by the subordinate officers must be gathered from sources other

than through a pending appeal. Unless the statute expressly or even by

necessary implication restricts the exercise of power, there would be no

occasion to read into the power, any other limitations. The High Court has

not found the exercise of power to be invalid on any count, nor was any

such submission advanced before the High Court. The High Court had

simply gone on the existence of power rather than on the exercise of

power. It is not as if the assessment made by the appellate authority was

either opposed to principles of natural justice, or was so palpably incorrect,

that it could never be sustained. In our view, the High Court completely

erred in setting aside the exercise of power undertaken by the concerned

authority. The exercise of power was definitely designed to obviate an

obvious illegality and prejudice to the interest of the revenue. The exercise

was, thus, absolutely correct, and there was no occasion to set aside the

orders passed in pursuance thereof. We, therefore, answer question No.3

accordingly.

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37. Having thus considered and answered all the questions which have

arisen for our consideration, all these appeals deserve to be allowed. We

order accordingly, and set aside the decisions of the High Court under

appeal and restore the orders passed by the appellate authority. No costs.

……………………..J

(Uday Umesh Lalit)

…………………….J

(Indu Malhotra)

New Delhi;

June 15, 2020.