Legal Question in Real Estate Law in India

A property was auctioned under SARFAESI act and all the necessary rules were followed by the Bank as per the act. I purchased the same and registered the sale certificate paying Stamp Duty on Sale Consideration and not on the market Value ( The Property is Located in Uttar Pradesh ). I received notice from Collector saying we evaded the stamp duty and we must Pay at the market value . We laid stress on Section 18(I) of Indian Stamp act where it says where there is a public auction the stamp duty would be paid on the actual sale consideration only and not on the market value, also we laid emphasis on V.N.Devadoss V/S Chief Revenue Control Officer - Supreme Court , however collector has passed Judgement against us and had issued order for depositing the balance stamp amount which is 1.5 times more than the total auction value , it's strange but true that someone buys an property in SARFAESI auction for Rupee 1 has to pay the stamp Duty to Rs 1.5 , so total he lands up paying Rupees 2.5 for something which he thought was worth Rs 1 . This is just because the Collector says the market Value of the property is very high compared to the auction value . If it was so then why the Public Auction couldn't fetch a better prices ? This is simple injustice and illogical judgement . The Collector has relied on Bombay High Court Judgement AIR 1987 Bombay 90 , Gulab Singh V/S Chandarapal Singh as well as Allahabad High Court Order 2004(96) RD .P-635 Vishwanath Agarwal V/S State of UP , wherein the courts have decided that auction by way of advertising and receiving sealed bids does not mean it is a public auction and the Stamp act clearly says it should be a PUBLIC AUCTION where stamp will be paid on the auction price and not on Market Value .

The Collector has ruled that this auction cannot be considered public as its by inviting tenders . Can anyone help me with a court order which can prove that property auctioned as per the procedure of SARFAESI by wau of sealed bids act will be considered as public auction or any court order where its defined that when auction is conducted inviting public bids , it is a Public Auction.

Many Thanks in advance for your answers and Help


Asked on 6/12/11, 2:44 am

1 Answer from Attorneys
RAJIV GUPTA (Cell: +91 9811284735) [email protected]

it is prima facie a public auction as the same is published in the local newspaper inviting bids from the general public. even the statutory interpretation goes in your favour.

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Answered on 6/16/11, 11:21 pm


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