Palladium Constructions PVT LTD vs. The Central Valuation Committee

Held

The Court held that the respondents did not follow the Karnataka Stamp (Constitution of Central Valuation Committee for Estimation, Publication and Revision of Market Value Guidelines of Properties) Rules, 2003, in re-fixing the guideline value for the "Kessaku" block. The Court found that the entire process emanated from respondent No. 3 and not from the Market Valuation Sub-Committee as defined in Rules 5 and 6 of the Rules of 2003. The Court reasoned that internet advertisements are merely offers and cannot form the basis for determining guideline value, and charges like clubhouse subscriptions and maintenance, which do not form part of the actual property value, should not be included. Therefore, the revision of the guideline value for the "Kessaku" block at Rs. 1,81,000/- per sq. mtr. was deemed unrealistic, unscientific, and arbitrary. The Court quashed the Memorandum dated 17.07.2019 and the notification dated 05.05.2020. The respondents were directed to re-fix the guideline value in accordance with the Rules of 2003. The reliefs concerning the constitution of a Sub-Committee and the scope of Section 45-B were kept open for later consideration.

Facts

The petitioner, Palladium Constructions Pvt. Ltd., challenged a revised guideline value of Rs. 1,81,000/- per sq. mtr. for its "Kessaku" block, part of the "One Bangalore West" project. Initially, the guideline value was fixed at Rs. 76,000/- per sq. mtr. in 2017, then revised to Rs. 1,61,500/- per sq. mtr. in 2018. The District Registrar recommended Rs. 1,50,000/- for the main project and Rs. 1,85,000/- for "Kessaku" based on premium facilities and internet data. The petitioner objected, citing lower transaction values and discrepancies in the reported facilities. Despite objections, a notification dated 05.05.2020 fixed the guideline value for "Kessaku" at Rs. 1,81,000/- per sq. mtr. The petitioner argued this revision was arbitrary and not in accordance with the Rules of 2003.

Key Issues

1. Whether the respondent No. 1 is bound to constitute a Sub-Committee for every District or Sub-District as contemplated under Rule 5 of the Karnataka Stamp (Constitution of Central Valuation Committee for Estimation, Publication and Revision of Market Value Guidelines of Properties) Rules, 2003? - Petitioner's contention: The respondent No. 1 is bound to constitute a Sub-Committee and cannot act upon recommendations not obtained through the prescribed procedure under Rule 5. - Revenue's contention: Not recorded. 2. Whether the power conferred by Section 45-B of the Karnataka Stamp Act, 1957, is limited to fixing "average rates" for specific types of land/properties and does not extend to fixing guideline values for standalone properties? - Petitioner's contention: The power under Section 45-B is limited to fixing "average rates" and not for individual properties. - Revenue's contention: Not recorded. 3. Whether the revision of the guideline value for the "Kessaku" block at Rs. 1,81,000/- per sq. mtr. was arbitrary, unscientific, and not in accordance with the Rules of 2003? - Petitioner's contention: The revision was arbitrary, based on incorrect information (e.g., existence of a golf stadium), relied on internet advertisements which are not actual transaction values, and failed to follow the procedure laid down in the Rules of 2003. The revision was also disproportionately high compared to other projects. - Revenue's contention: Not explicitly recorded, but implicitly defended the revised guideline value based on premium facilities and market data.