CHENNAI: The Madras High Court has struck down the circular issued by the Tamil Nadu Inspector General of Registration on March 30, 2023, revising the guideline value for registration of properties and has ordered the state to stick to the 2017 value until new guidelines are framed. Justice P Velmurugan, in a recent order, said the state government has not followed statutory provisions on revision of guideline values of properties while issuing the circular.
While statutory provisions were followed in revising the guideline value in 2017, no procedure, including obtaining of the report of a sub-committee or experts, fixing the value by an evaluation committee, or calling for objections from the public were followed while revising the guideline value in 2023, the judge ruled. No doubt the government has the power to revise guideline value, but rules must be complied with, the HC said.
‘Circular violates principles of natural justice’
“The authority before adopting the method, had to duly follow the procedures in the manner known to law,” the judge said. Since the authority/government has not followed the statutory provisions, the impugned circular “violates the principles of natural justice”, the judge said.
“The impugned circular is arbitrary and the same is quashed, and until new guidelines are framed in the manner known to law, the respondents have to follow 2017 guidelines which are the last revised guidelines as per the rules,” Justice Velmurugan said in his order.
The circular was issued for fixing the guidelines value in accordance with the prevailing market value of properties as per an announcement made by the finance minister in the State Assembly on March 20, 2023, which said that the government had decided to increase the guideline value by considering the general increase in value of properties.
Since the determination of guideline value by the valuation committee is a time-consuming exercise, the government decided to revert to the guideline value prevailing till June 8, 2017, as an interim measure until the estimation is completed. The government also reduced the registration fee from 4% to 2% and said the new values would come into effect from April 1, 2023.
The Confederation of Real Estate Developers Association of India and two developers challenged the circular saying that is ultra-vires to provisions of Tamil Nadu Stamp (Constitution of Valuation Committee for Estimation, Publication and Revision of Market Value Guidelines of Properties) Rules, 2010.