Fair value of land existing as on the date of execution of deed to be considered


Fair value of land existing as on the date of execution of deed to be considered

IN THE HIGH COURT OF KERALA AT ERNAKULAM

The Text of the Order as follows :

This writ appeal is filed by the respondents in the writ petition, who are State of Kerala and its officials challenging the judgment of the learned single Judge in W.P.(C) No. 2384 of 2016 dated 20.01.2016.

2. The subject issue relates to the fixation of the fair value of land by the Statutory authority under Section 28A of the Kerala Stamp Act, 1959 (‘the Act, 1959’ for short), the attendant rules, and the consequences arising from the order passed by the Government and the Revenue Divisional Officer.

3. The learned single Judge, after considering the rival contentions has passed the judgment with the following observations and directions:

4. Thereafter, the petitioners approached this Court with W.P. (C).No.30139/2015 and this Court by judgment dated 16/10/2015 directed the District Collector to reconsider the matter and the District Collector took the view that in the light of the fact that the fair value of the petitioners was fixed only on 06/11/2014, the fair value has to be increased as per the existing rate. The Government Order came into effect only on 14.11.2014. The Government by order dated 14.11.2014, ordered to increase 50% of the fair value on the existing rate taking note of the market fluctuation. The fair value on the petitioners’ land was fixed on 06/11/2014. The Government, in fact, in the order dated 14/11/2014 has noted that the fair value of the land had been revised in tune with the increased market value of the land. Herein, in this case, the fair value was fixed on 06/11/2014. The Government in the order dated 14/11/2014 directed that if there is any real grievances, that have to be addressed by the District Collector. In such scenario, the method adopted by the District Collector has to be taking note of the market value that is prevalent in that area. It is unreal to expect that the market value as noted in the notification dated 06/11/2014 would undergo substantial change within one week. Therefore, this Court is of the view that in such circumstances, the order of the District Collector is unsustainable. Accordingly, it is set aside. The registering authority is directed to register the documents based on the fair value fixed as per Ext.P13. The writ petition is disposed of as above. No costs.”

4. According to the appellants, the judgment of the learned single Judge is erroneous, since the learned single Judge has not appreciated the provisions of Section 28A of the Kerala Stamp Act and the Rules framed thereunder in its correct perspective and therefore, the State Government is put to innumerable financial difficulties. It is also pointed out that the learned single Judge erred in holding that the fixation of the land value on 06.11.2014 was based on the current market value of the land. However, the learned single Judge has not taken into account the subtle distinction between the provisions of Section 28A, and the power enjoyed by the State Government to enhance the land value of the properties as a whole within the State of Kerala. That apart, it is submitted that the learned single Judge was carried away by the land value fixed by the Revenue Divisional Officer to the property of the writ petitioners, and without properly appreciating the law held that the land value fixed by the said authority cannot increase all on a sudden and that too within a week.

5. On the other hand, the learned counsel for the writ petitioners submitted that the property was transacted by and between the writ petitioners and the owner of the property somewhere in 2007. But, since the issue with respect to the fixation of the land value was under dispute and pending consideration before the statutory authority under the Kerala Stamp Act, the document when presented for registration was not accepted by the Sub Registrar and it was accordingly that the document of sale could not be registered. That apart, the learned counsel submitted that, Section 54 of the Transfer of Property Act, 1882 defines the word ‘sale’ as a transfer of ownership in exchange for a price paid or promised or part- paid and part-promised, and therefore the transaction was complete when the consideration has passed on. In that view of the matter it is contended that the learned single Judge was right in directing the Sub Registrar to register the documents submitted by the writ petitioners based on the fair value fixed as per Ext.P13 gazette notification dated 16.11.2014.

6. We have heard Sri. Surin Goerge Ipe, learned Senior Government Pleader and the learned counsel appearing for the respondents/writ petitioners, Dr. George Abraham, and perused the pleadings and documents on record.

7. The learned Government Pleader as well as the learned counsel appearing for the respondents addressed their arguments in accordance with the facts discussed above.

8. As we have pointed out earlier, the subject issue is guided by Section 28A of the Kerala Stamp Act, 1959 brought into force on and with effect from 01.04.1994, as per the Finance Act, 1994, and the Kerala Stamp (Fixation of Fair Value of Land) Rules, 1995. Section 28A of Act, 1959 reads thus:

“28A. Fixation of fair value of land.- (1) Every Revenue Divisional Officer shall, subject to such rules as may be made by the Government in this behalf, fix the fair value of the lands situate within the area of his jurisdiction, for the purpose of determining the duty chargeable at the time of registration of instruments involving lands.

(1A) Subject to such rules as may be prescribed, the fair value of land fixed under sub-section (1) may be revised by the Revenue Divisional Officer every five years or earlier if so directed by the Government, if in the opinion of the Government any substantial change of the fair value of land has taken place.

(1B) Notwithstanding anything contained in this Act or the Rules made thereunder, the Government may, by notification published in the Official Gazette, make an increase of a fixed percentage in the fair value of land fixed as per sub-Section (1), from time to time, before revision is made under sub-section (1A) and the value so increased shall be deemed to be the fair value of the land.

(2) The Revenue Divisional Officer shall, in fixing the fair value of a land under subsection (1), have regard inter alia to the following matters, namely:-

(a) development of the area in which the land is situate such as the commercial importance, facilities for water supply, electricity, transport and communication;

(b) proximity of the land to markets, bus stations, railway stations, factories, educational institutions or other institutions;

(c) the geographical lie of the land, the nature of the land such as dry, waste, wet or garden land, fertility, nature of crop, yielding capacity and cost of cultivation; and

(d) such other matters as may be provided in the rules made under this Act.

(3) The fair value of land fixed under sub-section (1) and the revised fair value of land fixed under sub-section (1A) shall be published in such manner as may be provided in the rules made under this Act.

(4) Any person aggrieved by the fixation of fair value under sub- section (1) or the revision of fair value under sub-section (1A) may, within one year of its publication under sub-section (3), appeal to the Collector.

(5) After the publication of the increased fair value of land under sub-Section (1B), any person aggrieved by the fixation of fair value of land in an appeal under sub-Section (4) may, within a period of one year from the date of publication of the notification under sub-Section (1B), file an application to the Collector to review the order passed in appeal and the Collector shall dispose of the same in such manner and within such period as may be prescribed.

Provided that the Collector may admit an appeal preferred after the said period of one year if he is satisfied that the appellant had sufficient cause for not preferring the appeal within the said period.”

9. A reading of sub-Section (1) above makes it clear that the Revenue Divisional Officer concerned, subject to the Rules made by the Government for the fixation of the fair value of lands, fix the fair value of lands situate within the area of his jurisdiction, for the purpose of determining the duty chargeable at the time of registration of instruments involving lands.

10. Sub-Section (1A) empowers the Revenue Divisional Officer to fix the fair value of the land as provided under sub- Section (1) every 5 years or earlier, if and when it is so directed by the Government, if in the opinion of the Government any substantial change of the fair value of land has taken place. The peculiar feature of sub-Section (1A) shows that the power conferred under Sub-Section (1A) is to fix the land value of the entire properties within the jurisdiction of the Revenue Divisional Officer on completion of every five years or earlier, however, it can only be done as per the directions of the Government, if the Government is of the opinion that any substantial change of the fair value of the land has taken place. Therefore, the power conferred on the Revenue Divisional Officer under sub-Section (1A) is a dependent power, contemplating a general revision of the fair value of the lands on the directions issued by the Government. This would be more clear on a reading of sub-Section (1B). The power conferred on the Government under Sub-Section (1B) is an omnibus power, irrespective of the powers conferred under sub-Sections (1) and (1A). However, such a revision of the fair value of the land shall be made by the Government before any revision is made under sub-Section (1A) by the Revenue Divisional Officer on the directions of the Government. Which thus means if a direction was issued by the Government to the Revenue Divisional Officer under sub- Section (1A) to revise the fair value of the land within his jurisdiction, then the Government is precluded from exercising the power conferred under sub-Section (1B). It is also clear that when the Government exercised the power under sub-Section (1B), it shall be published in the official gazette. So also, the fair value fixed by the Revenue Divisional Officer under Sub-Section (1) and the revised fair value of land fixed under sub-Section (1A) shall be published in the gazette in such manner as may be provided in the rules made under the Act, which is obviously the Kerala Stamp (Fixation of Fair Value of Land) Rules, 1995.

11. It is quite clear and evident from sub-Section (4) of Section 28A that any person aggrieved by the fixation of fair value under sub-section (1) or the revision of fair value under sub-section (1A) may, within one year of its publication under sub-section (3), appeal to the Collector. \

12. So also, it is clear that after the publication of the increased fair value of land under sub-Section (1B), any person aggrieved by the fixation of fair value of land in an appeal under sub-Section (4) may, within a period of one year from the date of notification under sub-Section (1B), file an application to the Collector to review the order passed in appeal, and the Collector shall dispose of the same in such manner and within such period as may be prescribed.

13. Therefore, it is clear and evident that there is a clear distinction between the powers conferred on the Revenue Divisional Officer under sub-Sections (1) and (1A). Both operate in different fields. But fact remains, the fair value under section 28A (1) of the properties in question was fixed by the District Collector instead of the Revenue Divisional Officer. Challenging the said action, petitioners filed W.P.(C) No. 14663 of 2014 before this Court and secured Ext. P5 judgment dated 10-06- 2014 setting aside the said order and further directing the Revenue Divisional Officer to reconsider the entire matter and pass fresh orders within three months. It was accordingly that the Revenue Divisional Officer passed Ext. P12 order and Ext. P13 consequential gazette publication dated 6-11-2014 and 16-11-14 respectively in respect of the property of the writ petitioners alone. However, it is quite clear and evident that the State Government, as per Ext.P14 gazette publication dated 14.11.2014, in exercise of the powers conferred under sub-Section (1B) of Section 28A of the Act, 1959 increased the existing fair value of the land in Kerala fixed as per sub-Section (1) of Section 28A by 50%, which was declared to have come into force on the 17th day of November, 2014. It is specified thereunder that separate notifications for the purpose by the Revenue Divisional Officers concerned are not necessary. The explanatory note of the said gazette notification makes it clear that by virtue of the power conferred under sub-Section (1) of Section 28A of the Act, 1959, the Revenue Divisional Officers within the area of their jurisdiction have fixed the fair value of lands in the State and necessary notification was published in the Kerala Gazette Extraordinary No. 515 dated 06.03.2010. Therefore, the State Government was of the opinion that the market value of land has increased considerably , however, the fair value of the land was not revised in tune with the increase in the market value. The gazette notification is extracted hereunder for the proper disposal of the writ appeal:

“GOVERNMENT OF KERALA
Taxes (E) Department
NOTIFICATION

G.O.(P) No. 188/2014/TD                                                                          Dated Thiruvananthapuram 14th November, 2014

  28th Thulam 1190

S.R.O No. 698/2014: In exercise of the powers conferred under sub-Section (1B) of Section 28A of the Kerala Stamp Act, 1959 (Act 17 of 1959), the Government of Kerala hereby increase the existing fair value of land in Kerala fixed as per sub- section (1) of Section 28A by fifty per cent. It shall come into force on the 17th day of November, 2014. Separate notifications for this purpose by the Revenue Divisional Officers concerned are not necessary.

By order of the Governor,

A. AJITH KUMAR,
Secretary to Government

Explanatory Note

(This does not form part of the notification, but is intended to indicate its general purport)

Sub-section (1) of Section 28A of the Kerala Stamp Act, 1959 (17 of 1959) empowers the Revenue Divisional Officers to fix the fair value of lands situated within the area of his jurisdiction for the purpose of determining the duty chargeable at the time of registration of instruments involving lands. Accordingly, 21 Revenue Divisional Officers in the State and necessary notification was published in the Kerala Gazette Extraordinary No. 515 dated 6th March, 2010. Thereafter, the market value of the land has increased considerably. As the fair value of land has not been revised in tune with the increase in market value, the Government have decided to increase the existing fair value fixed as per sub- Section (1) of Section 28A (including decisions in appeals and review petitions) by fifty per cent invoking the provision under sub-Section (1B) of Section 28A of the said Act.

The notification is intended to achieve the above object”

14. The learned single Judge, however has taken into account the fair value fixed by the Revenue Divisional Officer as per Ext.P12 order dated 06.11.2014, and the consequential Ext.P13 gazette publication dated 06.11.2014 in accordance with the stipulation contained under sub-Section (3) of Section 28A of Act, 1959, and evaluated that there cannot be any considerable increase of the land value, within a week thus enabling the State Government to publish the fair value of the land within the State by enhancing the same by 50%, as per Ext.P14 Gazette notification dated 14-11-14.

15. As we have pointed out earlier, the powers conferred on the Revenue Divisional Officer under sub-Sections (1) and (1A) of Section 28A and the power conferred on the State Government under sub-Section (1B) of Section 28A are entirely different. It is true, sub-Section (1A) was brought to the statute book as per the Kerala Finance Act, 2014 published in the official gazette dated 23.07.2014 on and with effect from 01.04.2014, which thus means prior to the same, the Revenue Divisional Officers were fixing the land value under Section 28A(1) in accordance with the Rules framed by the Government for the said purpose. Be that as it may, in exercise of the powers conferred under Section 69 of the Kerala Stamp Act, 1959 r/w Sections 28A, 45A and 45C, the Government has made the Kerala Stamp (Fixation of Fair Value of Land) Rules, 1995. Rule (3) deals with fixation of fair value of land, which reads thus:

3. Fixation of Fair Value of Land.–(1) The Revenue Divisional Officer, shall for the purpose of fixation of fair value of land as required under Section 28A of the Act, ascertain the fair value of land by classifying the lands as those lying in (1) Municipal Corporation Areas (ii) Municipalities and (iii) Rural areas.

(2) Within each of the above categories, the lands may again be classified as commercial area, residential area, areas adjoining railway station, bus stations, factories, educational institutions etc., agricultural lands (wet and dry) and others as provided in sub- Section (2) of the said section.

(3) Based on the above classification and categorisation to be used for comparative valuation, in the same village/area/survey number, for different types of land and also considering the mitigating circumstances, if any, such as land being rockey/water logged or in close proximity to dumping yards, grave yards or similar other circumstances, the RDO shall fix a draft of the fair value of lands in his jurisdiction.

(4) The draft of the fair value prepared under sub-Rule (3) shall be notified in the Gazette, inviting objections or suggestions, if any, thereon from interested persons.

(5) Copies of the notifications published under sub-rule (4) shall be exhibited in conspicuous places in the office of the RDO, the taluk offices, the village offices, offices of the Grama Panchayats concerned.

(6) The objections and suggestions under sub-rule (4) shall be filed before the Revenue Divisional Officers concerned within a period of sixty days from the date of notification of the draft fair value in Gazette.

(7) After the expiry of the period fixed under sub-rule (6) the RDO shall consider, on merit, the objections and suggestions received within the time limit and shall fix the final fair value of lands in his jurisdiction within a period of sixty days from the date of expiry of the period specified in sub-rule (6).

(8) Fair value shall be fixed in units of “Are’.”

For Further Details – Read Full Order

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