Madhur Dabani vs The State Of Madhya Pradesh
- Court
- Madhya Pradesh High Court
- Decided on
- 18-03-2026
1 NEUTRAL CITATION NO. 2026:MPHC-IND:7468
W.P. No. 3965/2020
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE JAI KUMAR PILLAI
WRIT PETITION No. 3965 of 2020
MADHUR DABANI
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
Shri Lokendra Joshi -Advocate for petitioner.
Shri Kushagra Singh –Dy.G.A for the respondents/State
through VC.
Reserved on : 13/03/2026
Post on : 18/03/2026
______________________________________________________
ORDER
This writ petition under Article 226 of the Constitution of India
has been preferred by the petitioner challenging the order dated
10/10/2012 passed by the Board of Revenue, Madhya Pradesh,
Signature Not Verified
Signed by: HARIKUMAR
NAIR
Signing time: 3/18/2026
5:08:45 PM
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W.P. No. 3965/2020
Gwalior, which affirmed the ex-parte order dated 26/09/2009
passed by the Collector of Stamps, Indore.
2. The petitioner further challenges the consequential Revenue
Recovery Certificate (RRC) No. 199/A-76/2008-09 dated
27/10/2009, and the subsequent public notification dated
03/02/2020 issued by the Tehsildar, Indore-2, for the recovery of
deficit stamp duty and penalty as arrears of land revenue through
the auction of the petitioner’s property.
FACTS OF THE CASE
3. The factual matrix of the case is that the petitioner purchased
the lease right transfer of a property situated at House No. 585/1,
Mahatma Gandhi Marg, Indore, admeasuring 185.87 square meters
(comprising open land and a 46.46 square meter temporary shed),
vide a registered sale deed dated 27/03/2008 and a prior lease right
transfer agreement dated 01/04/2003. The petitioner purchased the
said rights for Rs. 34,00,000/- and paid a stamp duty of Rs.
3,40,100/-.
4. The Sub-Registrar, Indore, vide a letter dated 30/12/2008,
alleged that insufficient stamp duty had been paid and referred the
matter to the Collector of Stamps, Indore.
Signature Not Verified
Signed by: HARIKUMAR
NAIR
Signing time: 3/18/2026
5:08:45 PM
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W.P. No. 3965/2020
5. The Respondent No. 1 took cognizance on 31/12/2008 under
Section 33 of the Indian Stamp Act, 1899 (for short ‘the Act of
1899’), and proceeded ex-parte . Assuming the property to be a fully
constructed commercial shop, the Respondent No. 1 calculated the
market value at Rs. 80,67,000/- and concluded that the transaction
was a "Lease Right Sale".
6. Vide order dated 26/09/2009, Respondent No. 1 determined
the deficit stamp duty at Rs. 14,50,260/- and imposed a penalty of
five times the payable duty, amounting to Rs. 72,51,300/-, directing
the petitioner to deposit a total sum of Rs. 87,01,560/- within 30
days.
7. Consequently, an RRC was issued on 27/10/2009. The
petitioner preferred a revision before the Revenue Board, Gwalior,
which was dismissed vide order dated 10/10/2012.
8. Subsequently, the Tehsildar issued a public notification on
03/02/2020 to take possession and auction the petitioner’s property,
leading to the institution of the present writ petition.
CONTENTIONS OF THE PETITIONER
9. The learned counsel for the petitioner principally contends
that the impugned orders were passed ex-parte , in sheer violation of
the principles of natural justice, as no proper notice in the
prescribed Form II or III under Rule 4(2)(a) of the Madhya Pradesh
Signature Not Verified
Signed by: HARIKUMAR
NAIR
Signing time: 3/18/2026
5:08:45 PM
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Prevention of Undervaluation of Instruments Rules, 1975 was ever
served upon the petitioner.
10. It is submitted that the Sub-Registrar acted arbitrarily by
ignoring the prevailing Collector's Guidelines of 2007-2008. As per
the guidelines, the value of the residential open land (Rs. 28,800/-
per sq. meter) and the temporary shed (Rs. 3,000/- per sq. meter)
totaled approximately Rs. 52,92,436/-. However, the authorities
erroneously assessed the market value at Rs. 80,67,000/- by treating
the property as a fully constructed commercial shop without any
physical verification or legal reasoning, ignoring Rule 5 of the 1975
Rules.
11. The petitioner asserts that the authorities failed to appreciate
the legal distinction between the transfer of leasehold rights under
Section 105 of the Transfer of Property Act, 1882, and a sale of
ownership under Section 54.
12. It is further contended that the Sub-Registrar referred the
matter after a delay of 9 months without recording any "reasons to
believe," which is a mandatory pre-condition. In support of this
contention, reliance is placed on the judgment of this Court in
Harvinder Kaur vs. State of Madhya Pradesh [2007 (2) MPHT
172] , wherein it was held that proceedings initiated without
recording proper factual and legal reasons for referral are liable to
be quashed.
Signature Not Verified
Signed by: HARIKUMAR
NAIR
Signing time: 3/18/2026
5:08:45 PM
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13. The petitioner also raises the ground of discrimination,
pointing out that on the exact same date (27/03/2008), the Sub-
Registrar registered three other similar instruments of the same
locality (Document Nos. 1220, 1221, and 1222) without
impounding them, thereby acting with partiality.
14. Furthermore, it is argued that the imposition of a five-times
penalty under Section 40(b) of the Act based on an arbitrary market
value, rather than merely assessing the deficit duty under Section
47-A, is illegal and without jurisdiction.
15. In response to the preliminary objection regarding delay and
latches, the petitioner, via rejoinder, relies upon the Full Bench
decision of this Court in Mustaq Bai versus State of Madhya
Pradesh [1975 MPLJ 827 : AIR 1976 MP 20] . It is submitted that
the law of limitation does not strictly bar relief in writ jurisdiction
where an order is passed wholly without jurisdiction, violating
fundamental rights, and causing grave injustice. Furthermore, the
fresh auction notification dated 03/02/2020 gives rise to a
continuing cause of action.
CONTENTIONS OF THE RESPONDENTS
16. Per contra, the respondents contend that the Sub-Registrar
rightly impounded the instrument for deficit stamp duty and
Signature Not Verified
Signed by: HARIKUMAR
NAIR
Signing time: 3/18/2026
5:08:45 PM
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referred the matter to the Collector of Stamps under Section 33 of
the Act.
17. It is submitted that the Collector of Stamps duly issued
notices to the petitioner, which were served via registered post.
Despite service, the petitioner chose not to appear, leading to the
ex-parte assessment.
18. The respondents justify the assessment, stating that the
property is situated in a prime location in Indore, and the
nomenclature of the instrument was effectively a "Lease Right
Sale", thereby legitimately attracting the duty and penalty as levied.
19. It is emphatically argued that the writ petition is hopelessly
barred by limitation. The order of the Collector of Stamps attained
finality when the Board of Revenue affirmed it in 2012. The
issuance of the RRC and the auction notification are merely
consequential administrative actions arising from an order that the
petitioner failed to challenge in a timely manner.
ANALYSIS AND CONCLUSION
20. Heard the learned counsel for the parties and perused the
record, including the rejoinder and the judgments cited therein.
21. The core issue revolves around the mandatory statutory
procedure contemplated for the adjudication of undervalued
Signature Not Verified
Signed by: HARIKUMAR
NAIR
Signing time: 3/18/2026
5:08:45 PM
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instruments. So far as Section 47-A(2) of the Act of 1899 is
concerned, the same reads as under:-
"47-A. Instruments undervalued how to be dealt with-
(1) xxxx (2) On receipt of a reference under section (1)
the Collector shall after giving the parties a
reasonable opportunity of being heard and after
holding enquiry in such manner as may be prescribed,
determine the market value of property which is the
subject matter of such instrument 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."
(Emphasis Supplied)
22. It has been categorically contended by the petitioner that no
notice was given to him prior to the ex-parte adjudication,
depriving him of the opportunity to place the Collector Guidelines
of 2007-2008 or the Master Plan on record. Upon a careful perusal
of the record, this Court finds that while the respondents claim that
notices were served, there is no substantive material on record to
demonstrate that such notices were actually and effectively served
upon the petitioner in compliance with Rule 4 of the 1975 Rules.
Furthermore, no additional reply to the rejoinder has been filed by
the respondents to controvert the specific assertions made by the
petitioner regarding the lack of notice, the disparity in property
classification (commercial vs. residential), or the contemporaneous
registration of similar documents.
Signature Not Verified
Signed by: HARIKUMAR
NAIR
Signing time: 3/18/2026
5:08:45 PM
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W.P. No. 3965/2020
23. The imposition of a penalty of five times the deficit duty
under Section 40(b) of the Act, coupled with the determination of
market value without adhering to the parameters laid down in Rule
5 of the 1975 Rules, cannot be sustained when the foundational
requirement of affording a "reasonable opportunity of being heard"
under Section 47-A(2) has been bypassed.
24. Thus, testing the facts of the case on the anvil of the aforesaid
provisions of law and the principles of natural justice, this Court has
no hesitation to come to a conclusion that the petitioner was not
given any opportunity of hearing to rebut the assertions made by the
respondents, to clarify the nature of the document under the
Transfer of Property Act, or to reply to the exorbitant demand
raised.
25. In view of the same, the order passed by the Board of
Revenue dated 10/10/2012, as also the order passed by the
Collector of Stamps dated 26/09/2009, are hereby quashed. The
matter is remanded back to the Collector of Stamps, Indore for his
decision afresh on the merits of the matter, in strict accordance with
law, the prevailing guidelines, and after giving due opportunity of
hearing to the petitioner.
26. Consequently, the RRC dated 27/10/2009 and the subsequent
auction notification dated 03/02/2020 also stand quashed.
Signature Not Verified
Signed by: HARIKUMAR
NAIR
Signing time: 3/18/2026
5:08:45 PM
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27. The petitioner is directed to appear before the Collector of
Stamps, Indore on 06/04/2026 and file his reply along with all
supporting documents.
28. The writ petition is accordingly allowed to the extent
indicated above.
29. Pending applications, if any, shall be disposed of accordingly.
No order as to costs.
(Jai Kumar Pillai)
Judge
hk/
Signature Not Verified
Signed by: HARIKUMAR
NAIR
Signing time: 3/18/2026
5:08:45 PM