Madras HC directs State to follow guidelines value fixed in 2017

CHENNAI: The Madras High Court (MHC) directed the State to follow the market value guidelines (MVG) of properties fixed in 2017 and upheld the single judge's order quashing the circular reverting back to MVG fixed in 2012.

Whenever the fundamental rights of the citizens are at stake, the Court does not hesitate to step in, wrote a division bench comprising Justice SM Subramaniam and Justice K Rajasekar, directed the State to follow the MVG fixed in 2017, until the Valuation Committee revise the MVG following the due process of law and dismissed an appeal preferred by the State.

Arbitrary decisions of the executive authorities shake the foundation of a democracy, such decisions cannot get protection under the garb of 'policy decision', wrote the bench.

Further, the bench wrote that the documents already registered during the interregnum period, stand excluded. No person is entitled to claim a refund of stamp duty already paid for registering documents, as the circular is quashed, the bench wrote.

On March 30, 2023, the Tamil Nadu Commercial Taxes and Registration issued a circular cancelling the MVG fixed in 2017 by reducing 33 percent of the guidelines value uniformly and reverting back to the guidelines value fixed in 2012.

Aggrieved by this the Confederation of Real Estate Developers Association of India (CREDAI) moved the MHC seeking to quash the circular. On December 8, 2023, the single judge allowed the petition preferred by CREDAI and quashed the circular issued by the State. However, the State preferred an appeal challenging the single-judge order.

Advocate General (AG) PS Raman submitted that the State is empowered to continue the MVG fixed in the year 2012 until a deliberation is undertaken by the valuation committee to revise the guideline value.

The impugned circular cannot be construed as a revision as contemplated under Section 47-AA of the Indian Stamp Act, 1899 and the rules framed thereunder.

It is just the restoration of MVG fixed with effect from 2012, which was fixed by following due procedures as contemplated, the AG submitted. A uniform reduction of MVG by 33 percent was made at the request of the stakeholders and cancellation of reduction was implemented in 2023 after a lapse of about 5 years and therefore, the contention of CREDAI that the due process had not been followed is misconceived, submitted the AG.

Senior counsel R Parthasarathy appeared for CREDAI and submitted that MVG is fluctuating depending on various factors. Therefore, the logic adopted by the State by cancelling the reduction of 33 percent and restoration of the guideline value fixed in 2012 has no nexus and thus the decision is flawed.