P.D. Desai, J.
1. This petition is directed against an order dated February 17, 1965, passed by the Collector of Kaira, who is the respondent herein, under Section 39(1)(b) of the Bombay Stamp Act, 1958, hereinafter referred to as the Act. By the said order, the respondent directed that a sum of Rs. 500/-, being the deficit stamp duty, and a further sum of Rs. 1500/-, being the amount of penalty, be recovered from the first petitioner who had allegedly presented an insufficiently stamped instrument of gift for registration before the Sub-Registrar of Anand.
2. The facts giving rise to this petition may be briefly stated. One Bafatisha Jivasha was the original owner of an open plot of land bearing survey No. 12435/1-2, admeasuring 32 Gunthas, situate in Anand, District Kaira. In or about 1956-57, two building each consisting of 15 single-room tenements were constructed upon the said open plot of land. By an instrument dated January 15, 1958, Bafatisha Jivasha made a gift of one of the said two buildings, known as Rajabsha Quarters, to his daughter Hasinabibi who is the mother of the petitioners. Hasinabibi in her turn made a gift of the said property to the petitioners by an instrument of gift dated April 29, 1963. In the said instrument of gift, the property in question was valued at Rs. 20,000/-. The instrument was duly presented for registration before the Sub-Registrar at Anand by the first petitioner. The Sub-Registrar impounded the said instrument of gift under Section 33 of the Act as it appeared to him that it was not duly stamped and sent it to the respondent under Section 37(2) of the Act. The respondent thereupon passed the impugned order on February 17, 1965 under Section 39(1)(b) of the Act valuing the property in question at Rs. 30,000/- and further directing that the deficit stamp duty of Rs. 500/- together with the penalty of Rs. 1500/- be recovered from the first petitioner. The order was served upon the petitioners on 20th February, 1965. Closely on the heels of the said order followed a notice under Section 200 of the Bombay Land Revenue Code, which was served upon the first petitioner, stating that since the amount payable by the first petitioner under the impugned order was not paid till the date of the notice, the Revenue Officer of the Taluka was authorised to enter the house of the first petitioner and recover the said amount within 7 days from the receipt of the said notice. The petitioners thereupon filed the present petition challenging the impugned order and praying that the same be quashed and set aside.
3. On behalf of the petitioners, the impugned order is challenged on diverse grounds; but we need to take notice only of two grounds which are fatal to the validity of the order. It was contended on behalf of the petitioners that the proceeding before the Collector under Section 39 of the Act is a quasi judicial proceeding and that the Collector in exercising his powers under the said section is bound to comply with the principles of natural justice. It was further contended that in a proceeding under the said section, the Collector is also bound to make a speaking order, i'. e. an order which, on the face of it, discloses the reasons in support of the findings given in the said order. In the instant case, before making the impugned order the Collector has failed to give any opportunity to the petitioners to represent their case, nor has he made a speaking order and, therefore, according to the petitioners, the order is vitiated.
4. It may be convenient at this stage to very briefly examine the relevant provisions of the Act. Section 33 of the Act reads as under:
Section 33(1): 'Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office except an officer of police, before whom any instrument chargeable, in his opinion, with duty, is produced or comes in the performance of his functions shall if it appears to him that such instrument is not duly stamped, impound the same.
Section 37 of the Act reads as under:
Section 37: '(1) When the person impounding an instrument under Section 33 has by law or consent of parties authority to receive evidence and admits such instrument in evidence upon payment of a penalty as provided by Section 34 or of duty as provided by Section 36, he shall send to the Collector an authenticated copy of such instrument, together with a certificate in writing, stating the amount of duty and penalty levied in respect thereof and shall send such amount to the Collector, or to such person as he may appoint in this behalf.
(2) In every other case, the person so impounding an instrument shall send it in original to the Collector.
Section 39 of the Act reads as under:
Section 39: '(1) When the Collector impounds any instrument under Section 33, or receives any instrument sent to him under Sub-section (2) of Section 37, not being an instrument chargeable with a duty of twenty naye paise, or less, he shall adopt the following procedure:
(a) if he is of opinion that such instrument is duly stamped or is not chargeable with duty, 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 penalty 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;
provided that, when such instrument has been impounded only because it has been written in contravention or Section 13 or Section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section.
(2) Every certificate under Clause (a) of Sub-section (1) shall, for the purposes of this Act, be conclusive evidence of the matters stated therein.
(3) Where an instrument has been sent to the Collector under Sub-section (2) of Section 37 the Collector shall, when he has dealt with it as provided by this section, return it to the impounding officer.
5. On the submissions made on behalf of the petitioners, the first question which arises for our consideration is whether the proceedings before the Collector under Section 39 of the Act are quasi judicial proceedings. In Province of Bombay v. Khushaldas S. Advani : 1SCR621 , Das J., formulated the following tests for deciding whether a particular act is an administrative act or a quasi judicial act:
(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 under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are 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 duty to 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 prejudicially affect the subject, then although there are not two parties apart from the authority and the contest 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.
The case before us falls in the second category of cases indicated in the aforesaid tests.
6. It is true that Section 39 does not in terms cast a duty upon the Collector to act judicially. However, it is by now well established that the duty to act judicially is not required to be super added or superimposed by the statute. Such a duty may be inferred or spelt out from the nature of the power conferred upon the authority. If the nature of the power is such that it empowers the authority to determine question which will prejudicially affect the subject, the judicial character of the duty has to be inferred from the very nature of the power conferred upon the autho rity. We will, therefore, examine Section 39 of the Act to find out whether it empowers the Collector to do any act which will prejudicially affect the subject.
7. Section 39 empowers the Collector to determine in the first instance whether an instrument impounded by him under Section 33 or sent to him under Section 37(2) of the Act is chargeable with duty and if so, whether it is duly stamped or not. The section empowers the Collector in cases where he is of the opinion that the instrument is chargeable with duty and is not duly stamped to require the payment of the proper duty or the amount required to make up the same together with a penalty of Rs. 5/- or if he thinks fit an amount not exceeding 10 times the amount of the proper duty or of the deficient portion thereof whether such amount exceeds or falls short of Rs. 5/-. It is thus clear that Section 39 of the Act confers upon the respondent a wide power which includes the power to adjudicate the proper stamp duty and to impose a penalty and it cannot be gainsaid that an order made in exercise of the power conferred under such a section would prejudicially affect the person against whom the order is made. The requirement of quasi judicial act which postulates that the determina tion must affect some right of the subject or impose some liability on him is, therefore, satisfied. The duty to act judicially musts therefore, be inferred from the nature of the power conferred upon the Collector under Section 39 of the Act.
8. In the view which we are taking we are fortified by a decision of the Andhra Pradesh High Court in Board of Revenue, Chepauk, Madras, (Now Andhra) at Madras Referring Officer v. Poosarla China Appallanarasimhulu A.I.R. 1957 Andhra Pradesh 237 (Full Bench.) In that case, Section 40 of the Stamp Act, 1899, came up for consideration before a Full Bench of the Andhra Pradesh High Court. The Court examined the scheme of that Act with particular reference to Sections 40, 56(2) and 59(2) of the Act and Subba Rao, C.J., with whom Krishna Rao J. concurred, observed as follows:
These sections are part of an integral scheme for ascertaining the quantum of stamp duty and penalty payable on a document which depend upon the interpretation of the document and the provisions of the Stamp Act and which sometimes raise complicated questions thereof. The duty of the Collector is, therefore, a judicial one and the fact that the higher tribunal is provided for emphasised that fact. Though the Section 40 does not, in term, say that the opinion of the Collector should be expressed and implemented after giving notice to the parties, principles of natural justice require that it should be done so.
We may mention that the provisions of Sections 40, 56(2) and 59(2) of the Stamp Act, 1899, and the provisions of Sections 39, 53, 54 and 56 of the Act with which we are concerned are substantially the same.
9. We are, therefore, of the opinion that the power conferred upon the respondent under Section 39 of the Act is a quasi judicial power and before exercising the power conferred upon him under the said section, the Collector should consider the questions arising before him in a judicial spirit. In exercising the power, the Collector must act justly and fairly and not arbitrarily or capriciously: he must act in accordance with the principles of natural justice. Before taking any action under the said section, the Collector should give to the person likely to be affected by the order proposed to be made a notice of the action intended to be taken, make available to him the material on the basis of which the Collector proposes to take action under the said section and give a fair and reasonable opportunity to such person to represent his case and to correct or controvert the material sought to be relied against him.
10. Since the impugned order is undisputedly made in the instant case without complying with these essential principles of natural justice, the petitioners are entitled to succeed and the order is liable to be quashed and set aside. But there is yet another infirmity in the impugned order and that infirmity is that the impugned order is not a speaking order, i.e. an order which, on the face of it, discloses the reasons in support of the findings given in the said order. It is now well settled that every administra tive Officer exercising quasi judicial functions is bound to give reasons in support of the order he makes. (Vide The Testeels Limited v. N.M. Desai (1969) 10 G.L.R. 622). In the impugned order, the respondent has recorded the finding that the value of the property gifted to the petitioners is Rs. 30,000/- and not Rs. 20,000/- as recited in the instrument of gift. Now, surely the respondent ought to have given reasons in support of this basic finding on the strength of which he has given a further finding to the effect that the document in question was insufficiently stamped and conse quently imposed a penalty on the petitioners. The respondent ought to have indicated in his order the grounds and materials on the basis of which he disagreed with the valuation of the gifted property as made in the instrument of gift and valued the property in respect of which the instrument of gift was made at Rs. 30,000/-. The respondent ought also to have given reasons for imposing penalty at three times the deficient portion of the proper stamp duty and indicated why a lesser or higher penalty was not imposed on the petitioners in the circumstances of the case. The order, therefore, is vitiated also on account of this infirmity.
We, therefore, allow the petition and make the rule absolute by issuing a writ of certiorari quashing and setting aside the order dated February 17, 1965 passed by the Collector of Kaira under Section 39(1)(b) of the Act. The respondent will pay the costs of the petition to the petitioners.