1. The petitioner purchased 61 Ares and 92 square metres of cardamom estate comprised in Survey No.206 of Bison Valley Village, Udumbanchola Taluk, through court auction. The said property was the subject matter in EP No.2/2019 in execution of the decree in OS No.46/2017 on the files of the Subordinate Judges Court, Devikulam. The petitioner participated in the auction purchase and became the successful bidder. On payment of the entire bid amount, the property was transferred to the name of the petitioner by issuing Ext.P1 sale certificate. The petitioner also remitted an amount of ₹2,44,900/- as stamp duty, on Ext.P1.

2. Thereafter, the Subordinate Judges Court forwarded a copy of Ext.P1 certificate to the 1st respondent for necessary action, as per Ext.P2. Upon receipt of Ext.P2, the 1st respondent issued Ext.P3, stating that the stamp duty paid by the petitioner on the sale certificate is not sufficient and since, the fair value of the particular land is not shown, there is deficit stamp duty. The 1st respondent also demanded an additional stamp duty for an amount of ₹1,73,580/- and returned back Ext.P1. The mutation applied for by the petitioner was also rejected by the 2nd respondent stating the very same reason. It is in such circumstance, the petitioner approached this Court by filing this writ petition seeking the following reliefs:

                  (i) Issue a Writ in the nature of Certiorari or any other appropriate writ, order, or direction and quash Exhibit P3 intimation as being arbitrary, illegal, and without jurisdiction.

                  (ii) Issue a Writ in the nature of Mandamus or any other appropriate writ, order, or direction directing the 2nd respondent to effect the mutation of the property in the name of the Petitioner based on the Certificate of Sale issued by the Hon’ble Subordinate Judges Court, Devikulam, without insisting on any additional Stamp Duty.

3. Heard the learned counsel for the petitioner and the learned Government Pleader appearing for respondents 1 and 2.

4. The learned counsel for the petitioner, by relying on the decision of the Hon'ble Apex Court in Registrar of Assurances and another v. ASL Vyapar Private Limited and another [2022 SCC OnLine SC 1554] and an unreported decision of this Court in Sajeevan P.S. v. Revenue Divisional Officer (W.P.(C) No.42908/2023 dated 03.07.2024), contended that the petitioner is not bound to pay stamp duty on the basis of the fair value fixed since, he has purchased the property through court sale. He further contended that Section 45A of the Kerala Stamp Act will not be applicable to court auction sale since, there is no question of any undervaluation in such cases. He further, by relying on Article 16 of the Schedule to the Kerala Stamp Act, contended that in case of sale of property by public auction by civil, revenue court, etc. the duty which is payable is the same as on a conveyance for a consideration equal to the amount of the purchase money only and nothing more.

5. Per contra, the learned Government Pleader submitted that the petitioner is bound to pay the deficit stamp duty in Ext.P1 sale certificate since, the consideration reflected in the document is much less than the fair value fixed for the land. He also submitted that as per Section 45A of the Kerala Stamp Act, a document can be registered by the SRO only if the consideration set for the document is not less than the fair value of the land fixed under Section 28A and in case, the same is less than the fair value, the party has to pay stamp duty as per the fair value fixed.

6. On an appraisal of the rival contentions and the materials on record, it can be seen that the respondents are heavily relying upon Section 45A of the Kerala Stamp Act in order to justify their contention that the petitioner is bound to pay stamp duty as per the fair value fixed, even though he has purchased the property in court auction. Sections 45A (1), (2) and (3) which are relevant in the instant case, are extracted herewith for more clarity:

“45A. Instrument not bearing stamp of sufficient amount as per fair value of land how to be dealt with—

(1) Notwithstanding anything contained in this Act, the registering officer shall, while registering an instrument transferring any land, chargeable with duty verify whether the value of land or the consideration set forth in the instrument is the fair value of that land.

(2) Where on such verification, the registering officer is satisfied that the value of the land or the consideration set forth in the instrument is not less than the fair value of the land, he shall duly register the instrument.

(3) Where, on verification the registering officer finds that the value of the land or the consideration set forth in the instrument is less than the fair value of the land fixed under Section 28A, he shall, by order, direct the payment of proper stamp duty on the fair value of the land fixed under Section 28A within a period of seven days from the date of the order and on payment of the deficit stamp duty, he shall duly register such instrument and certify by endorsement on the instrument under his seal and signature that proper stamp duty has been charged and paid.”

7. It is true that going by the afore provision, the registering authority has a duty to verify whether the value of the land or consideration set forth in the instrument is the fair value of the land and that it is only if he is satisfied that the value of the land or the consideration set forth in the instrument is not less than the fair value of the land, he has to register the instrument. It also says that if the registering authority finds that the value of the land or the consideration set forth in the instrument is less than the fair value of the land fixed under Section 28A, it has to direct payment of stamp duty on the fair value of the land.

8. Now, the question to be considered is whether Section 45A can be strictly made applicable to a court sale. The legislative history of Sections 28A and 45A of the Kerala Stamp Act demonstrates a consistent legislative objective of preventing undervaluation of land transactions and safeguarding State revenue, through proper collection of stamp duty. The Hon'ble Apex Court in the decision in Registrar of Assurances and another (supra) had an occasion to consider the powers of a registering authority under Section 47A of the Indian Stamp Act (as amended by West Bengal) to decide the question of undervaluation in a case of court sale. In the said decision, the Hon'ble Apex Court has held thus:

“24. On the conspectus of the matter, we have not the slightest hesitation in upholding the view that the provision of S.47A of the Act cannot be said to have any application to a public auction carried out through Court process / receiver as that is the most transparent manner of obtaining the correct market value of the property.

25. It is no doubt true that in a Court auction, the price obtainable may be slightly less as any bidder has to take care of a scenario where the auction may be challenged which could result in passage of time in obtaining perfection of title, with also the possibility of it being overturned. But then that is a price obtainable as a result of the process by which the property has to be disposed of. We cannot lose sight of the very objective of the introduction of the Section whether under the West Bengal Amendment Act or in any other State, i.e., that in case of under valuation of property, an aspect not uncommon in our country, where consideration may be passing through two modes - one the declared price and the other undeclared component, the State should not be deprived of the revenue. Such transactions do not reflect the correct price in the document as something more has been paid through a different method. The objective is to take care of such a scenario so that the State revenue is not affected and the price actually obtainable in a free market should be capable of being stamped. If one may say, it is, in fact, a reflection on the manner in which the transfer of an immovable property takes place as the price obtainable in a transparent manner would be different. An auction of a property is possibly one of the most transparent methods by which the property can be sold. Thus, to say that even in a Court monitored auction, the Registering Authority would have a say on what is the market price, would amount to the Registering Authority sitting in appeal over the decision of the Court permitting sale at a particular price.

26. It is not as if a public auction is carried out just like that. The necessary pre - requisites require fixation of a minimum price and other aspects to be taken care of so that the bidding process is transparent. Even after the bidding process is completed the Court has a right to cancel the bid and such bids are subject to confirmation by the Court. Once the Court is satisfied that the bid price is the appropriate price on the basis of the material before it and gives its imprimatur to it, any interference by the Registering Authority on the aspect of price of transaction would be wholly unjustified.

9. The afore dictum unerringly shows that since the auction sale of a property conducted by the court is in a most transparent manner, and that too, after obtaining the correct market value of the property, the registering authority has no say in that process, which includes the fixation of sale consideration / purchase money. In other words, the registering authority has no authority to direct the auction purchaser to pay stamp duty for a consideration / land value other than the one fixed by the court and paid by the auction purchaser. As held by the Apex Court, if the registering authority directs the auction purchaser to pay stamp duty as per the fair value fixed, it would undoubtedly amount to sitting in appeal over the decision of the court and such interference is wholly unwarranted. At this juncture, it would be apt to keep in mind that the purpose for introducing Sections 28A and 45A in the Stamp Act was only to prevent undervaluation of documents and the same does not arise in a court monitored sale.

10. Be that as it may, a perusal of Article 16 to the Schedule to the Kerala Stamp Act, shows that the stamp duty prescribed for a certificate of sale granted to the purchaser of any property sold by public auction by a civil court, revenue court, Government, etc. is the same as on a conveyance, for a consideration equal to the amount of purchase money only unlike Articles 21 and 22 (for conveyance) which says that stamp duty is to be paid on the fair value or the actual consideration, whichever is higher. It is to be taken note that the legislature has consciously deemed it fit, not to tinker with Article 16, even after the introduction of Sections 28A and 45A, as was done in Articles 21 and 22. This also adds credence and support to the finding that fair value of a property need not be taken into account, in a court sale.

12. The upshot of the afore discussions is that Section 45A will not be applicable to sale of property conducted by civil or revenue court or Government, Collector or other revenue officer or a civil officer as specified in Article 16 of the Kerala Stamp Act and that the stamp duty has to be paid on the amount of purchase money only. Hence, it is held that the 1st respondent cannot demand payment of stamp duty as per the fair value fixed for the land, on Ext.P1 sale certificate issued by the civil court.

Ergo, this writ petition is allowed and Ext.P3 is quashed. Consequentially, there will be a direction to the 2nd respondent to effect mutation of the property covered by Ext.P1 in the name of the petitioner, within a period of three weeks from the date of receipt of a copy of this judgment.