Pirbhai Janubhai Shaikh And Ors. vs B.R. Manepatil And Anr.

on 10 December, 1964

Gujarat High Court Gujarat High Court Pirbhai Janubhai Shaikh And Ors. vs B.R. Manepatil And Anr. on 10 December, 1964 Equivalent citations: AIR 1966 Guj 175, (1965) GLR 554 Author: Bhagwati Bench: J Shelat, P Bhagwati JUDGMENT Bhagwati, J. 1. This petition challenges a determination made by the Collector under Section 31 of the Bombay Stamp Act, 1958. The determination came to he made by the Collector under the following circumstances. The first and second petitioners owned a piece of land admeasuring 55 square yards situate at Lal Darwaja in the city of Ahmedabad. They agreed to grant a lease of the said piece of land to the third petitioner on the terms and conditions contained in a draft indenture of lease which was agreed upon between the parties. The third petitioner brought the draft indenture of lease to the Collector and applied to have the opinion of the Collector as to the duty with which it was chargeable under Section 31 of the Bombay Stamp Act, 1958. This application was made on 20th June 1961 and was accompanied by the requisite fee directed by the Collector. On receipt of the application, it appears, the Collector felt doubt as to the amount of duty with which the draft indenture of lease was chargeable and be accordingly drew up a statement of the case and referred it with his own opinion thereon for the decision of the Inspector General of Registration who is the Chief Controlling Revenue Authority under Section 53(2) of the Act. The Chief Controlling Revenue Authority by his letter dated 13th October 1961 communicated his decision to the Collector and the decision was that the draft indenture of lease was both a lease and a mortgage and was therefore chargeable with a stamp duly of Rs. 2,720-03 nP. being the higher stamp duty as on a mortgage as provided in Section 6. The Collector in conformity with this decision of the Chief Controlling Revenue Authority determined the amount of duty chargeable on the draft indenture of lease at Rs. 2,720-03 nP. and addressed a letter dated 14th November 1061 to the third petitioner communicating this decision. This letter was sent to the third petitioner at the address of her advocate, but according to the third petitioner, it was not received at that address. According to the third petitioner several reminders were sent by her and ultimately on 30th March 1962 the Collector informed the third petitioner by a letter of that date, which, it appears, was delivered to her representative, that the draft indenture of lease was both a lease and a mortgage and was, therefore, chargeable with the stamp duty of Rs. 2,720-03 nP. as a mortgage, that being the higher stamp duty as provided in Section 6. By this letter the Collector directed the third petitioner to credit the sum of Rs. 2,720-03 nP in the State Bank of India for necessary certification under Section 32 Now according to the third petitioner, on receipt of this letter, the third petitioner applied for a certified copy of the adjudication order in order to know the reasons which had prompted the respondent to determine the amount of duty chargeable on the draft indenture of lease in the manner he had done, but there was no reply to this application the third petitioner thereupon made a fresh application for a certified copy of the adjudication order on 7th August, 1962. In response to this application the Collector addressed a letter dated 21st August 1962 reiterating what was stated in the leller dated 30th March, 1962 Since the Collector determined the amount of duty chargeable on the draft indenture of lease at Rs 2,720-03 nP. on the basis that the draft indenture of lease was both a lease and a mortgage, the petitioners filed the present petition challenging the legality of such determination In the petition as filed the Collector alone was made respondent and the decision of the Collector was challenged on the ground, first that no reasons were given for the decision and secondly, that the decision disclosed an error of law apparent on the face of the record and a writ of certiorari was claimed for quashing and setting aside the decision At the date when the petition was filed, the petitioner was not aware that the Collector had referred the matter for the decision of the Chief Controlling Revenue Authority under Section 53(2) and no challenge to the decision of the Collector was, there-fore, levelled on the ground that the Chief Controlling Revenue Authority had acted contrary to the principles of natural justice in deciding the matter referred to him by the Collector. But when the hearing of the petition commenced, the learned Advocate General appearing on behalf of the Revenue, with the frankness which we expect of him and which we always find with him, drew our attention to the
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letter, of the Chief Controlling Revenue Authority dated 13th October 1961 which showed that the matter had been referred by the Collector to the Chief Controlling Revenue Authority under Section 53(2) and the amount of duly chargeable on the draft indenture of lease was determined by him in conformity with the decision of the Chief Controlling Revenue Authority. Mr. S. M. Shah, learned advocate appearing on behalf of the petitioners, thereupon applied for leave to amend the petition by adding the Chief Controlling Revenue Authority as respondent No. 2 to the petition and introducing a new paragraph in the petition challenging the determination of the Collector on the ground that the decision of the Chief Controlling Revenue Authority in accordance with which the determination was made by the Collector was bad inasmuch as it was given without observing the principles of natural justice The amendment was not opposed by the learned Advocate General on behalf of the Revenue and we allowed it inasmuch as it was based on facts which were not known to the petitioners at the time when the petition was filed but which came to their knowledge only during the hearing of the petition. An affidavit in reply to the petition as unamended was already filed by an Aval Karkun in the office of the Collector and though the amendment was allowed, neither the. Collector nor the Chief Controlling Revenue Authority filed any affidavit in reply to the amendment obviously because the allegation made in the amendment, namely, that the decision was given by the Chief Controlling Revenue Authority without hearing the petitioner or with-out issuing any notice to him was a true allegation and the Collector and the Chief Controlling Revenue Authority did not there fore, seek to controvert it. The main answer given on behalf of the respondents was that the decision of the Chief Controlling Revenue Authority was not a quasi-judicial act and it was therefore not necessary for him to observe the principles of natural justice before giving his decision. We shall presently examine this contention. 2. Mr. S M. Shall on behalf of the petitoners attacked the determination of the Col-lector on three grounds. The first ground was that the determination of the Collector was vitiated inasmuch, as it was not supported by any reasons. According to Mr. S. M Shah the determination being a quasi judicial decision it was incumbent on the Collector to give reasons for the determination and in the absence of reasons, the determination could not be regard-ed as a valid determination. The same ground of attack was also urged against the decision of the Chief Controlling Revenue Authority Now the premise on which this attack was founded was that the determination of the Collector as also the decision of the Chief Controlling Revenue Authority were quasi judicial decisions, but as we shall presently point out, this premise is incorrect and the argument urged on behalf of the petitioners must, therefore, fall to the ground along with the premise. But apart from this answer to the argument, there is also another answer and it is that neither principle nor authority requires, that a quasi judicial body giving its decision must give reasons in support of the decision. The only qualification to this rule is where an appeal is provided against the decision of the quasi judicial body. In such a case the necessity of giving reasons in support of the decision is imported because unless reasons are given, it would not be possible for the appellate authority to examine the correctness of the decision But apart from such case, there is ho obligetion on a quasi judicial body to give reasons in support of the decision arrived at by it so long as the decision is reached after observing the principles of natural justice. 3. The second ground urged by Mr S M Shall on behalf of the petitioners was that the determination of the Collector as also the decesion of the Chief Controlling Revenue Authority disclosed an error of law apparent on the face of the record and that error of law lay in the construction of the draft Indenture of Lease Now it is apparent that the Court can examine the question whether the determination of the Collector and the decision of the Chief Controlling Revenue Authority disclosed an error of law apparent on the face of the record only if these decisions can be said to be quasi judicial decisions The question whether an order of a Tribunal is bad on the ground that it suffers from an error of law apparent on the face of the record would become material only where it is sough) to quash and set aside the order by issuing a writ of certiorari and it is well settled that a writ of certiorari can issue only where the Tribunal whose order is sought to be quashed is performing a quasi judicial function. We cannot therefore, be called upon to consider the question whether the determination of the Collector and the decision of the Chief Controlling Revenue Authority disclosed an erroi of law apparent on the fact of the record unless the petitioners first salisfy us that in giving these decisions the Collector and the Chief Controlling Revenue Authority were acting in a quasi judicial capacity. Bill for reasons which we shall presently discuss while dealing with the third argument urged on behalf of the
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petitioners. we are of the view that the Collector and the Chief Controlling Revenue Authority were not performing any quasi judicial funtions when they gave their decisions and the second ground urged on behalf of the petitioners must therefore be rejected. 4. The third and last ground urged by Mr. S. M. Shah on behalf of the petitioners was that the decision of the Chief Controlling Revenue Authority was bad inasmuch as it was given without hearing the third petitioner or without even giving any notice to the third petitioner so that the third petitioner could urge whatever she wanted to say in regard to the question referred to the Chief Controlling Revenue Authority for its decision and if the decision of the Chief Controlling Revenue Authority was vitiated, the determination of the Collector which was given in conformity with the decision of the Chief Conlrolling Revenue Authority was also vitiated and was liable to be set aside Now there can be no dispute that if the decision of the Chief Controlling Revenue Authority was bad, the determination of the Col-lector must also fall along with it since the determination of the Collector was not an inde pendent determination but was a determination made in conformity with thedecision of theChief Controlling Revenue Authority The question which, therefore, requires to be considered is whether the decision of the Chief Controlling Revenue Authority was invalidated by reason of the Chief Controlling Revenue Authority not observing the principle of natural justice embodied in the maxim audi alterant parlem Now it is well-settled that a Tribunal is not hound to observe the principles of natural justice unless it is acting in a quasi judicial capacity. If a Tribunal is acting merely administratively, there is no obligation on it to give a hearing to a party who might he affected by its decision. The principles of natural justice including the maxim audi alleram partem apply only to a Tribunal performing quasi judicial functions What we must there-fore consider is whether the Chief Controlling Revenue Authority was exercising quasi judi cial functions or purely administrative fun-tions when he save his decision on the matter referred to him by the Collector and that calls for an examination of the true nature of the functions entrusted to the Chief Controlling Revenue Authorily under Section 53(2) read with Section 31. 5. Now as to what is a quasi judicial act there are many judicial pronouncements Mav C. J . in Queen v. Dublin Corporation, (1878) 2 LR h 371. described a quasi judicial act us follows"In this connection the term 'judicial' does not necessarily mean acts of a judge or legal tribunal sitting for the determination of matters of law but for the purpose of this question a judicial act seems to be an acl done by com petent authority, upon consideration of facts and circumstances, and imposing liahility or affering the rights of others." This definition was approved by Lord Alkiusun in Frome United Breweries Co. Ltd v. Bath Justices (1926) AC 586 as one of the best defi- nitions However the definition that has now become classic is that given by Atkin C, J as he then was in Rex v. Electricity Commissioners, (1924) I KB. 171 It runs as follows. "Wherever any body of persons having legal authority to determine questions affecting the rights of subjects, and having the duly to act judicially, act in excess of their legal authority they are subject to the controlling jurisdiction of the King s Bench Division exercised in these writs." This definition was accepted as correct in Rex v. London County Council. (1931) 2 KB 215 and has been approved in many subsequent cases In England including the decision of the Privy Council in Nakkuda Ali v. M K De S. Jayaratne, 54 Ca] WN 883 (886) Even though some doubt has dcen cast on the refinement of this definition made by Lord Hewart. C. J in Rex v. Legislative Committee of the Church Assembly, (1928) 1 KB 411 by the latesl decision of the House of Lords in Ridge v. Baldwin, (1964) 1 AC 40--Lord Reid has actually called it a gloss on the definition the definition has always been accepted as laying down the correct test for distinguishing a quasi judicial act from an administrative act. S. R. Das. J., also in Province of Bombay v. Khushaldas S. Advani, AIR 1950 SC 222 quoted this definition with approval and after examining various authorities, pointed out what were the principles which could be gleaned from these authorities for deciding
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whether a particular act is an administrative act or a quasi judicial act. He said: "....The principles, as I apprehend them, are: (i) that if a statute empowers an authority, not being a Court in the ordinary sense, to decide disputes arising out of a claim made by one party tinder the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who arc opposed to each other there is a lis and prima facie, and in the absence of anything in; the statute to the contrary it is the duly of the authority to act judicially and the decision of the authority is a quasi judicial act; and (ii) that if a statutory authority has power to do any act which will prejudicialy affect the subject then although there are not two parties apart from the authority and the context is between the authority proposing to do the act and the subject opposing it the final determination of the authority will yet be a quasi-judicial act provided the authority is required by the statute to act judicially" This is the test which we must apply for determining the true nature of the functions entrusted to the Chief Controlling Revenue Authority under Section 53(2) read with Section 31. namely, whether they ate quasi judicial or administrative. 6. In order to apply this test we must first examine the relevant provisions of the Act. Chapter I comprises what may be called preliminary sections containing inter alia definitions of the words used in the Act Chapter II makes provisions dealing with the liability of instruments to duly, affixation of stamps, time of stamping instruments and valuations for the purpose of duty Nothing contained in these provisions throws any light on the question before us and we need not make any detailed reference to these provisions. Then comes Chapter III which is headed "Adjudication as to Stamps". This Chapter consists of only two sections, namely Sections 81 and 82. These sections are very material to the determination of the present question and it would, therefore, be desirable to set them out in full. They run as follows: "31. Adjudication as to proper stamps: (1) When any instrument, whether executed or not and whether previously stamped or not, is brought to the Collector, and the person bringing if applies to have the opinion of that officer as to the duty (if any) with which it is chargeable, and pays a fee of such amount (not exceeding five rupees and not less than fifty naye paise) as the Collector may in each case direct, the Collector shall determine the duty (if any) with which, in his judgment, the instrument is chargeable. (2) For this purpose the Collector may require to he furnished with an abstract of the instrument, and also with such affidavit or other evidence as he may deem necessary to prove that all the facts and circumstances affecting the chargcability of the instrument with duly, or the amount of the duty with which it is chargeable, are fully and truly set forth therein, and may refuse to proceed upon any such application until such abstract and evidence have been furnished accordingly: xx xx xx xx xx xx xx xx 32. Certificate by Collector:-- (1) When an instrument brought to the Collector under Section 31. is in his opinion, one of a description chargeable with duly, and(a) the Collector determines that it is already fully stamped, or (b) the duty determined by the Collector under Section 31, or such a sum as with the duty already paid in respect of the instrument, is equal to the duly so determined, has been paid the Collector shall certify by endorsement on such instrument that the full duty (stating the amount) with winch it is chargeable has been paid.

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(2) When such instrument is in his opinion, not chargeable with duty the Collector shall certify in manner aforesaid that such instrument is not so chargeable (3) Any instrument upon which an endorsement das been made under this section, shall be deemed to be duly stamped or not chargeable with duty, as the case may be; and, if chargeable with duly, shall be receivable in evidence or otherwise, and may be acted upon and registered as if it bad been originally duly stamped: xx xx xx xx xx xx xx xx Chapter IV contains provisions laying down is to what would happen if a person produces an instrument as a piece of evidence or for its being acted upon before any person who is a Judge or in charge of a public office and it is found that the instrument is not duly stamped. Section 33 requires every person having by law or consent of parties authority to receive evidence or in charge of a public office before whom an instrument chargeable with duly is produced or comes in the performance of bis functions to Impound the instrument if It appears to him not to be duly stamped. Section 34 says that an instrument which is not duly stamped shall not be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, nor shall it be acted upon, registered or authenticated by any such person or by any public officer unless ii is duly stamp ed provided, however, that any such Instrument not being an instrument chargeable with a duly of 20 nP and less may be admitted in evidence on payment of proper duty or deficient portion thereof and penalty of Rs. 5 or of a sum equal to ten limes sucb duly or- deficient portion whichever is higher Sections 35 and 36 are not material and we need not, therefore, refer to them. Section 37 prescribes as to how an instrument which is impounded tinder Section 33 is to be dealt with. Where an instrument has been impounded by a person authorized by law or consent of parties to receive evidence and has been admitted in evidence upon payment of proper duly and penalty as provided by Section 34 Section 37. Sub-section (1) says that an authenticated copy of such instrument shall be sent by such person to the Colleclor together with a certificate in writing stating the amount of duly and penally levied in respect of the instrument and in every other case the person impounding the document is required under Section 37, Sub-section (2) to send the instrument in original to the Collector Section 38 empowers the Collector in case of an instrument sent to him under Section 37, Sub-section (1) to refund the whole or any part of the penalty paid in respect of the instrument Section 39 declares what the Collector must do when he impounds an instrument under Section 33, or receives an instrument sent to him under Section 37. Sub-section (2) and lays down the following procedure to be adopted by him in both these cases: (a) if he is of opinion that such instrument is duly stamped or is not chargeable with duly, he shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable, as the case may be; (b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped he shall require the payment of the proper duty or the amount required to make up the same, together with a penally of five rupees; or, if he thinks fit, an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees Section 40 which is the next section deals with a case where an instrument may have been unduly stamped by accident and any person' produces it of his own motion before the Collector within one year from the date of its execution and offers to pay to the Collector the amount of the proper duty, or the amount required to make up the same. The Collector in such a case, if satisfied that the omission to duly stamp the instrument has been occasioned by accident, mistake or urgent necessity, may, instead of proceeding under Sections 88 find 89, receive the amount of proper duty or deficiency and certify by endorsement on the instrument as provided in Section

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41. Section 41 says that when the duty and penally, if any, leviable in respect of any instrument have been paid under Section 34, Section 38 or Section 40, the person admitting the instrument in evidence or the Collector, as the case may be, shall certify by endorsement on the instrument that the proper duty and penally have been levied in respect of the instrument and when that happens the instrument becomes admissible in evidence and may be registered, acted upon and authenticated as if it had been duly stamped. The rest of the sections in this Chapter are not material and we will, therefore, omit reference to them. So also Chapter V is not material and we need not, therefore, dwell on the provisions enacled in that chapter. Then we come to Section 53 which is the section which empowers the Colleclor to make a reference to the Chief Controlling Revenue Authority when acting under Section 31 That section is in the following terms: "53 Control of and statement of case to Chief Controlling Revenue Authority: (1) The powers exercisable by a Collector under Chapter IV and Chapter V and under Clause (a) of the first proviso to Section 27 shall in all cases be subject to the control of the Chief Controlling Revenue Authority. (2) If any Collector, acting under Section 31, Section 39 or Section 10, feels doubt as to the amount of duly wild which any instrument is chargeable, he may draw up a statement of the case, and refer if, with his own opinion thereon, for the Decision of the Chief Controlling Revenue Authority. (3) Such authority shall consider the case mid send a copy of its decision to the Collector, who shall proceed to assess and charge the duly (if any) in conformity with such decision " Section 54 empowers the Chief Controlling Revenue Authority to state any case referred to it under Section 53(2), or otherwise coming to its notice and refer such case, with its own opinion thereon to the High Court, and when the High Court decides the question raised by, such case the High Court has to send a copy of its judgment to the Chief Controlling Revenue Authority and on receiving such copy of the judgment, the Revenue Authority, says Section 56(2), shall dispose of the case conformably to such judgment. These are the relevant provisions of the Act which have a bearing on the determination of the question before us. 7. Now it is clear from the brief resume of the provisions of the Act which we have given above, that it is for the parties who execute an instrument to decide for themselves, according to the provisions contained in the Act, as to what is the stamp duty with which the instrument is chargeable. If the instrument is not duly stamped, no consequence flows upon it except when it is sought to be produced before a judicial officer or other officer performing judicial functions as evidence of any fact to be proved or comes before any other public officer who has to perform any functions in regard to the instrument when it conies before him, e.g., registration or authentication. It is only when a person wants to rely upon an instrument as evidence of any fact to he proved or wants to do any further act in regard to the instrument so as to effectuate its operation that difficulty comes in his way if the instrument is not duly stamped At that stage if the instrument is not duly stamped the person before whom it is produced is required to impound the instrument under Section 33 and in that case the person impounding the instrument if he acts under Section 34 or the Collector to whom the instrument may be sent by the person im pounding it acting under Section 39 would require payment of the proper duty chargeable on the instrument as also penalty which may be as high as ten times the amount of proper duty or the deficient portion thereof, as the case may be. The person producing the document would, therefore, render himself liable not only to payment of the amount of proper duty but also payment of a heavy penalty if the instrument is found not to be duly stamped. Having regard to these consequences, which may flow from an instrument being found to be not duly stamped, the Legislature made provision for granting a certain measure of protection to persons wishing to execute an instrument or even to persons who had executed an instrument. The Legislature by Section 31 provided that an instrument, whether executed or not and whether previously stamped or not, could be brought to the Collector and the person bringing it could apply for the opinion of the Collector as to the duty with which it was chargeable The Collector would, thereupon determine the duly with which in his judgment the instrument was chargeable and if the person bringing the instrument before the Collector paid the duty determined by the Collector, Section 32 provided
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that the Collector would have to certify by endorsement on the instrument that the full duly with which it is chargeable has been paid and on such certificate being given, the instrument would be regarded as duly stamped and no person having by law or consent of parties authority to receive evidence, and no person in charge of a public office would thereafter be entitled to raise any objection to the instrument on the ground that it is not duly stamped. Sections 31 and 32 thus enable a person to obtain protection from future scrutiny to regard to the sufficiency or otherwise of the duly paid on the instrument by applying to the Collector for determining the duly with which the instrument is chargeable and paying the amount of the duly determined by the Collector. These sections are not intended to provide for any final or conclusive determination of the amount of duly chargeable on an instrument but are intended to secure protection to a person who acting on the determination of the Collector pays the amount of duly determined by the Collector The determination made by the Colleclor is not binding on the person obtaining it. He can very well ignore the determination and execute the instrument after stamping it with such duty as he considers proper having regard to the provisions of the Act and no adverse consequence would follow upon it merely by reason of his having acted contrary to the determination of the Collector. If the stamp affixed by him is adequate, the determination of the Collector would not affect him. If the stamp affixed by him is not adequate, the instrument would be liable to be impounded and he would be liable to pay the amount of proper duty and penally, if any, imposed upon him, but that would be not because he acted contrary to the determination of the Collector but because the instrument was not duly stamped. He may even decide not to execute the instrument at all. The determination of the Collector has, therefore, no adverse consequence on the person seeking the determination. The only effect which the determination has is that if the amount of duly determined is paid by the person obtaining the determination, he would get a certificate from the Collector which would preclude future scrutiny of the instrument in regard to the sufficiency or otherwise of the duly paid upon it. The instrument is brought before the Collector merely, as observed by the Supreme Court in Government of Uttar Pradesh v. Mohd. Amir, AIR 1961 SC 787 "for seeking his advise as to what the proper duty would be" and to again quote the words of the Supreme Court in the same case "the scheme of the Act shows that where a person is simply seeking the opinion of the Collector as to the proper duly in regard to an instrument, he approaches him under Section 31" and "if he does not want to proceed any further loan seeking the determination of the duty payable, then no consequence will follow". It would, therefore, be seen that when the Collector determines the duty with which, in his judgment an instrument brought to him is charge able, he does not perform an act which in any Way affects the person applying for the deter initiation. He merely says what in his judgment is the duty with which the inslrumenl is chargeable, it being open to the party applying for the determination to accept the determination and act upon it by paying the amount of duly determined or not so to do. If he ads upon it and obtains the certificate, no further challenge can be made to the instrument on the ground that it was unduly stamped, but if he does not act upon it, it has no consequence if on an application made to him for determination of the duty chargeable on an instrument, the Collector feels any doubt, he is empowered by Section 58(2) to draw up a statement of the case and refer it with his own opinion thereon to the Chief Controlling Revenue Authority and the Chief Controlling Revenue Authority would then consider the case and send a copy of his decision to the Collector who would have to assess the duty in conformity with such decision. The Chief Controlling Revenue Authority is thus entrusted under Section 63(2) with the same function with which the Collector is entrusted under Section 31 and that function is not for the purpose of arriving at a final and binding determination but for the purpose of arriving at a determination which has only this con- sequence, namely, that if the person applying for it acts upon it by paying up the amount of duty determined, he earns immunity against any future challenge to the instrument on the ground of insufficiency of stamp. There is here no question of any contest between two contending parties for there are no two parties before the Collector or the Chief Controlling Revenue Authority. It was of course contended on behalf of the petitioners that there would be two contending parties since there are always two parties to an instrument but this contention is wholly devoid of merit for there is no dispute between parties to an instrument which is required to be referred for the adjudication of the Collector under Section 31. The rule enunciated under the first head of the test formulated by S. R Das. J., in AIR 1951) SC 222 (supra) cannot, therefore, have any application in the present case The rule enunciated under the second bead has also no applica-tion and the reasons are obvious. When the Collector or the Chief Controlling Revenue Authority is discharging this function, there is no contest between the Collector or the Chief Controlling Revenue Authority on the one
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hand and the person applying for the determination on the other. It is not as if the person applying for the determination puts forward a particular point of view for the acceptance of the Collector or the Chief Controlling Revenue Authority and the Collector or the Chief Con trolling Revenue Authority is railed upon to accept that point of view or to reject it Equally there is no particular point of view put forward by the Collector or the Chief Controlling Revenue Authority to which objection may be made by the person applying for the determination. There is nothing in the nature of a quasi lis between the Collector or the Chief Controlling Revenue Authority and the person seeking the determination All that the person applying under Section 31 does is to seek the opinion of the Collector as to the amount of duty chargeable on the instrument so that he may pay the amount of duly determinsed by the Collector and earn protection if he wants to do so. There is no question at that stage of two opposing points of view of a proposition and an opposition between which determination has to be made by the Colloctor or the Chief Controlling Revenue Authority Moreover, as pointed out above, the determination of the Collector under Section 31 or the decision of the Chief Controlling Revenue Authority under Section 53(2) does not affect any right of the person applying for the determination nor does it impose any liability on him and it cannot be said that it prejudicially affects him. The requirement of a quasi judicial act which says that the determination must affect some right of the subject or impose some liability on him is. therefore, not satisfied. The rule laid down under the second head of the test is, therefore, clearly not satisfied and the determination of the Collector under Section 31 as also, the decision of the Chief Controlling Revenue Authority under Section 53(2) cannot be said to be quasi judicial acts. 8. Mr. S. M. Shah relied very strongly on the use of the word "adjudication" occurring in the heading of Chapter II as also in the marginal note to Section 31. Now it is no doubt true that the word "adjudication" ordinarily imports the performance of a judicial process, but the nature of the functions entrusted to the Collector under Section 31 and the Chief Controlling Revenue Authority under Section 53(2) cannot be determined by reference to one word or the other occurring in the section. The totality of the circumstances must be taken into account for the purpose of determining the true nature of the functions and it must be seen whether there are any rights of any person affected by the determination or any liability is imposed on anyone by the determination. If the determination does not affect the rights of anyone or impose liability on anyone and docs not have any adverse consequence it is difficult to see how the determination can be regarded as a quasi judicial act. What we have said above in regard to the use of the word "adjudication" must apply equally in regard to the use of the word "judgment" in Section 31 The functions performed by the Collector under Section 31 and the functions performed by the Chief Controlling Revenue Authority under Section 53(2) are essentially administrative functions and cannot be regarded as quasi judirial in their nature or character. 9. Strong reliance was however placed by Mr S. M Shall on behalf of the petitioners on the decision of the Supreme Court in Board of Revenue v. Sardarni Vidyawali. AIR 1962 SC 1217 and it was contended by him that this decision dearly look the view that the functions discharged by the Chief Controlling Revenu Authority under Section 56(2) of the Indian Stamp Act. 1899, were quasi indicial functions and since Section 515(2) of the Indian Stamp Act. 1899. was in identical terms with Section 53(2) of our Act, the functions discharged by the Chief Controlling Revenue Authority under Section 53(2) if our Act must also be held to be quasi judicial functions and having regard to this decision it was not open to us to lake any other view of the question. This contention, plausible though it may seem is based on an erroneous reading of the decision of the Supreme Court. It is no doubt true that Section 56(2) of the Indian Stamp Act, 1899 is in identical terms with Section 53(2) of our Ad and the scheme of the sections in the Indian Stamp Act 1899. is also the same as the scheme of the sections in our Act and if, therefore, this decision of the Supreme Court had laid down that even where a reference is made by the Collector acting under Section 31 of the Indian Stamp Act, 1899. corresponding to Section 31 of our Act. the Chief Controlling Revenue Authorily must act judicially in discharging his functions under Section 50(2) of the Indian Stamp Act, 1899. corresponding to Section 53(2) of our Act, this decision would have had compulsive force on us in determining the question whether the Chief Controlling Revenue Authority performs quasi judicial functions or not when deciding a reference made to him by the Collector acting under Section 31. But as we shall presently show, this decision does not decide that particular question. The case before the Supreme Court was in relation to an instrument which was
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impounded by a Judicial Officer before whom the instrument was produced and he forwarded it to the Deputy Commissioner of Kheri, who was acting as the Collector for the purposes of the Act. The Collector referred the matter to the Board of Revenue under Section 66(2) of the Indian Stamp Act, 1899, and the Board of Revenue disposed of the matter and upheld the view of the Collector that the instrument was not duly stamped and a larger amount by way of duty as also penalty should be paid by the respondent. The respondent thereupon filed a petition in the High Court challenging the decision of the Board of Revenue on the ground that the Board of Revenue had decided the matter without giv-ing a hearing to the respondent. The petition was allowed by a Division Bench of the High Court and the Board of Revenue thereupon carried the matter in appeal, to the Supreme Court. The only question which was debated before the Supreme Court was whether the decision of the Board of Revenue was bad inasmuch as it was given without observing the principles of natural justice. The determination of this question required an examination of the true nature of the functions entrusted to the Board of Revenue under Section 56(2) for unless the decision of the Board of Revenue was a quasi judicial decision, there could be no obligation on the Board of Revenue to observe the principles of natural justice. The Supreme Court dealing with this question first examined the scheme loading up to the reference under Section 56(2). Since Section 56(2) refers to Section 81. Section 40 and Section 41. the provisions of those Sections were summarized and it was pointed out that it was clear from those provisions that Section 56(2) dealt with cases where there is a doubt in the mind of the Collector in regard to an instrument which conies up before him under these provisions as to the construction of the instrument and the provisions of the Act applicable to it and such doubt itself showed that the point raised for the Collector's decision was a difficult point of law. The Supreme Court then proceeded to consider whether there was any duty laid on the Board of Revenue to act judicially when exercising its functions under Section 56(2) Now it must be remembered that the Supreme Court was concerned with a case where the Board of Revenue had acted under Section 56(2) in a reference made by the Collector acting under Section 40 and it was in the context of these facts that the Supreme Courl examined the nature of the functions discharged by the Board of Revenue The Supreme Court pointed out the general principle that where the provisions of the Act are silent, the duty to act judicially may be inferred from the provisions of the statute or may be gathered from the cumulative effect of the nature of the rights affected, the manner of the disposal provided, the objective criterion to be adopted, the phraseology used and other indicia afforded by the statute. The Supreme Court then proceeded to apply this general principle to the case before it. The Supreme Court first pointed out that the question which the Chief Controlling Revenue Authority was required to decide under Section 56(2) was a question of law requiring construction of an instrument submitted to the Board of Revenue and the application of the Act to it. The Supreme Court then pointed out that the nature of the duty cast on the Board of Revenue was such that its determination if it goes against the person executing the instrument may result in payment of heavy amounts of deficit duty and even heavier amounts as penalty and it, there fore, seemed clear that the Legislature intend ed that the Board of Revenue should hear the person executing the document before saddling him with large pecuniary liability. When the Supreme Court emphasized this consideration, if was obviously referring to the case of an executed instrument which was impounded that being the case before it. This particular circumstance was further emphasized by the Supreme Court by saving: "The question before the Board under Section 66(2) being one of construction of an instrument and the application of the Act to it being a pure question of law which may result in payment of large amounts by the executants of the document, it would not in our opinion be improper to hold that for the determination of such a question the legislature intended that the party affected by the decision of the Board of Revenue should be given a hearing, and that the Board should act judicially in deciding a pure question of law." These observations clearly have reference to the case of an impounded document under Section 40 and not to the case of an instrument submitted for the opinion of the Collector under Section 31 Where an instrument is submitted for the opinion of the Collector under Section

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31. there will be no difficulty of the determination of the Collector resulting in payment of any amount by way of deficit duty or by way of penalty and that would be so even if the instrument happens to be an executed instrument since the Collector in such a case would have no power to impound the executed instrument. (Vide AIR 1961 SC 787). After emphasizing this circumstance the Supreme Court referred to the third circumstance. namely, that the Chief Controlling Revenue Authority may state a case referred to it under Section 56(2) for the decision of the High Court under Section 67 and the hearing before the High Court under Section 57 being judicial, it would be proper to infer that the hearing before the Chief Controlling Revenue Authority under Section 56(2) which deals with similar questions must also be judicial. After referring to these three circumstances the Supreme Court concluded in the following words: "We are therefore of opinion that, considering the totality of circumstances and the nature of the matter to be determined by the Board of Revenue under Section 56(2), the Board has to act judicially when proceeding under Section 56(2) and must therefore on princples of natural justice give a hearing to the other party, namely, the executant of the instrument......" It is clear from the words in which the conclusion is couched that the Supreme Court was dealing merely with the case of the Chief Controlling Revenue Authority exercising functions under Section 56(2) in a case referred to it by the Collector acting under Section 40 in respect of an executed instrument impounded and sent to the Collector. It is only in such a case that the determination of the Chief Controlling Revenue Authority would affect the executant of the instrument for if the determination goes against the executant of the instrument, it must result in payment of heavy amounts of deficit duly and even heavier amounts as penalty The rights of the executant of the instrument would be clearly affected and a liability would be clearly imposed upon him by the determination But in a case referred by the Collector acting under Section 31 the decision of hiP Chief Controlling Revenue Authority would have no such consequence and the reasoning of this decision of the Supreme Court, cannot, therefore, apply to such a case We cannot, therefore, regard this decision of the Supreme Court as laving down that when the Chief Controlling Revenue Authority acts under Section 56(2) in a matter referred to it by the Collector acting under Section 31 the Chief Controlling Revenue Authority must act judicially and consequently observe the principles of natural justice 10. We are therefore, of the view that the decision of the Chief Controlling Revenue Authority as also the determination of the Collector were not quasi judicial arts and the attack levelled on behalf of the petitioners against those decisions must, therefore, fail at all the three points at which it was levelled The petition, therefore, fails and the Rule is discharged with costs.'

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