LexCHIEF REVENUE CONTROLLING OFFICER CUM INSPECTOR GENERAL OF REGISTRATION, & ORS. versus P. BABU
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[2025] 1 S.C.R. 576 : 2025 INSC 44 Chief Revenue Controlling Officer Cum Inspector General of Registration, & Ors. v. P. Babu (Civil Appeal No(s). 75-76 of 2025) 03 January 2025 [J.B. Pardiwala and R. Mahadevan, JJ.] Issue for Consideration Matter referred by Joint Sub-Registrar to the Special Deputy Collector (Stamps) for determining the correct market value of the property. When both the authorities viz., the Registering Authority and the Collector are vested with the discretion to decide the market value of the property, by the expression ‘reason to believe’, then whether it reflects the subjective satisfaction of the authorities concerned or it reflects the objective determination of the market value of the property; what is meant by ‘reason to believe’; when the Registering Officer holds that the sale consideration in the sale deed is not correct and the sale is undervalued, whether it is obligatory for the Registering Authority to assign reason for arriving at such conclusion before referring the sale deed to the Collector; High Court whether justified in setting aside the order of the authorities below w.r.t the stamp valuation. Headnotes† Stamp Act, 1899 – 47-A – Instruments of conveyance etc., undervalued how to be dealt with Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968 – rr.3, 4, 6, 7 – Reference made by the Registering Authority under Section 47A for determination of the market value of the property in question without following the procedure – Market value enhanced, additional stamp duty demanded – High Court allowed the appeals filed by the respondent-purchaser and set aside the orders passed by the authorities below – Correctness: Held: Impugned order is correct – The Registering Officer, after registration of the document, can refer the same for adjudication before the Collector, if he has reason to believe that there was [2025] 1 S.C.R. 577 Chief Revenue Controlling Officer Cum Inspector General of Registration, & Ors. v. P. Babu deliberate undervaluation of the property – Such a reference is not a mechanical act, but the Registering Officer should have a basis for coming to prima facie finding of undervaluation of the property – Enquiry by the Registering Authority is a pre- condition for making reference to the Collector for determination of market value of the property – The determination of market value without Notice of hearing to parties is liable to be set aside – The expression ‘reason to believe’ is not synonymous with subjective satisfaction of the officer – The belief must be held in good faith, it cannot be merely a pretence – It is open to the Court to examine the question whether the reasons for the belief must have a rational connection or a relevant bearing to the formation of the belief and are not irrelevant or extraneous to the purpose of the section – The word ‘reason to believe’ means some material on the basis of which the department can re-open the proceedings – However, satisfaction is necessary in terms of material available on record, which should be based on objective satisfaction arrived at reasonably – Registering Officer cannot undertake a roving enquiry for ascertaining the correct market value of the property – If the Registering Officer is bona fide of the view that the sale consideration shown in the sale deed is not correct and the sale is undervalued, then it is obligatory on the part of the Registering Authority as also the Special Deputy Collector (Stamps) to assign some reason for arriving at such a conclusion – If the document in question is straightway referred to the Collector without recording any prima facie reason, the same would vitiate the entire enquiry and the ultimate decision – In the present case, the Form I notices prescribed under the Rules did not contain any reason – Also, the Collector (Stamps) in his order failed to indicate the basis on which the sale consideration shown in the two sale deeds was undervalued – Furthermore, the Collector is obligated to communicate the provisional order to the parties concerned in respect of fixation of the correct value of the property and also the duty payable in Form II – Form II was issued however, after the issue of Form II, the parties have to be given an opportunity to submit their representation in respect of determining the market value of the subject property – Thereafter, as contemplated in Rule 7 the C
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