Chief Revenue Controlling Officer Cum Inspector General of Registration, & Ors. vs P. Babu

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 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 precondition 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 Collector, after considering the representation if received in writing and the submissions that might have been urged at the time of hearing or even in the absence of any representation from the parties concerned, proceed to pass the final order – However, the Collector (Stamps) directly issued the final order without complying with sub-rules (2), (3) and (4) respectively of Rule 4 and also without following Rule 6 – Appeals dismissed. [Paras 18-21, 27, 31, 32, 34]

Words and Phrases – ‘reason to believe’ – Meaning – Discussed.