Instrument of conveyance, etc. undervalued how to be dealt with

2[(1) If the registering officer appointed under the Registration Act, 1908 (Central Act XVI of 1908) while registering 3[any instrument of,-

1. (a) Conveyance [section 2(1)(d) ]; (b) Gift [Article 28(a)]; (c) Exchange of property (Article 26); (d) Settlement (Article 48-A(i)) (e) Reconstitution of Partnership (Article 40-B (a) );
2. (f) Dissolution of partnership (Article 40-C (a) );
3. (g) An agreement to sell covered under sub-clause (i) of clause (e) of Article 5; 7[(h) a lease covered under item 8[(vi)] 8 of Article 30;] 7
   • (i) A power of Attorney covered 7[under clause (e), clause (ea) and clause (eb)]7 of Article 41;
4. (j) Release 6[(Article 45-(a)]6; (k)Conveyance under a decree or final order of any Civil Court has reason to believe]3 having regard to the estimated market value published by the Committee constituted under section 45B, if any or otherwise, that the market value of the property which is the subject matter of such instrument has not been truly set forth, he shall after arriving at the estimated market value, communicate the same to the parties and unless the parties pay the duty on the basis of such valuation, shall keep pending the process of registration and refer the matter along with a copy of such instrument to the Deputy Commissioner for determination of the market value of property and the proper duty payable thereon.]1 5[(l) Agreement [Article 5(f)]
5. (m) Award [Article 11(a)]
6. (n) Trust [Article 54 (A) (iii)]5 9[(o) Transferable Development Rights [ Article 20(7)].] 9 3. Substiuted by Act 8 of 2003 w.e.f. 1.4.2003.

¹ Inserted by Act 12 of 1975 w.e.f. 1.5.1975 in Bangalore City, Hubli-Dharwad City, Municipalities of Mysore, Mangalore, Belgaum, Gulbarga, Bellary, Davanagere, Bijapur, Shimoga and Bhadravathi and w.e.f. 1.4.1991 in other areas of the State by notification.

² Substituted by Act 24 of 1999 w.e.f. 18.8.1999.

⁴ Inserted by Act 7 of 2006 w.e.f. 1.4.2006.

⁵ Inserted by Act 7 of 2007 w.e.f. 1.4.2007.

⁶ Substituted by Act 7 of 2007 w.e.f. 1.4.2007.

⁷ Substituted by Act 9 of 2009 w.e.f..1.4.2009.

⁸ Substituted by Act 8 of 2010 w.e.f.1.4.2010.

⁹ Inserted by Act 8 of 2010 w.e.f.1.4.2010.

1. (2) On receipt of a reference under sub-section (1), the Deputy Commissioner shall, after giving the parties a reasonable opportunity of being heard and after holding an inquiry in such manner as the State Government may by rules prescribe, determine by order 1[as for as may be within ninety days from the date of receipt of such reference]1 the market value of the property which is the 2[subject matter of instrument specified in sub-section (1) and the duty payable thereon.]2 The difference, if any, in the amount of duty, shall be payable by the person liable to pay the duty. 3[with interest at twelve percent per annum if he does not pay within ninety days from the date of order of the Deputy Commissioner]3 3[Provided that the payment of interest is not applicable to instruments executed prior to 31st day of March, 2006.]3
2. (3) The Deputy Commissioner may, suo motu within two years from the date of registration of 1[any instrument specified in sub-section (1)]1 not already referred to him under sub-section (1), call for and examine the instrument for the purpose of satisfying himself as to the correctness of the market value of the property which is the 1[subject matter of any instrument specified in sub-section (1) and the duty payable thereon]1 and if after such examination he has reason to believe that the market value of such property has not been truly set forth in the instrument, he may determine by order the market value of such property and the duty payable thereon in accordance with the procedure provided for in sub-section (2). The difference, if any, in the amount of duty, shall be payable by the person liable to pay the duty 2[with interest at twelve percent per annum if he does not pay within ninety days from the date of order of the Deputy Commissioner]2: Provided that nothing in this sub-section shall apply to any instrument registered before the commencement of the Karnataka Stamp (Amendment) Act, 1975 2[Provided further that the payment of interest is not applicable to instruments executed prior to 31st day of March 2006.]2.
3. (4) The order of the Deputy Commissioner under sub-section (2) or (3) shall be communicated to the person liable to pay the duty. A copy of every such order shall be sent to the registering officer concerned.
4. (5) Any person aggrieved by an order of the Deputy Commissioner under sub-section (2) or sub- section (3) may, prefer an appeal before the 1[Regional Commissioner]1 and all such appeals shall be preferred within such time and be heard and disposed off in such manner as the State Government may by rules prescribe.]1 1[Provided that no appeal shall be admitted unless the person aggrieved has deposited, in the prescribed manner, fifty percent of the difference in the amount of duty as determined by the Deputy Commissioner under sub-section (2) or (3): 1. Proviso 1,2 and 3 inserted by Act 24 of 1999 w.e.f. 18.8.1999. Provided further that where after the determination of the market value by the Appellate Authority or determined again by the Deputy Commissioner on a remand of the case the stamp duty borne is found to be sufficient, the amount deposited shall be returned to the person concerned: 1[Provided also that such person shall pay the difference in duty along with interest at twelve percent per annum if he does not pay with in ninety days from the date of order of the Deputy Commissioner or sixty days from the date of order of the Appellate Authority, so however, the payment of interest is not applicable to instruments executed prior to eighteenth day of August 1999]1]1

¹ Inserted by Act 24 of 1999 w.e.f. 18.8.1999.

² Substituted by Act 8 of 2003 w.e.f. 1.4.2003.

³ Inserted by Act 7 of 2006 w.e.f. 1.4.2006.

¹ Substituted by Act 8 of 2003 w.e.f. 1.4.2003.

² Inserted by Act 7 of 2006 w.e.f. 1.4.2006.

² Inserted by Act 7 of 2006 w.e.f. 1.4.2006.

¹ Substituted by Act 17 of 2007 w.e.f. 5.1.2007.

¹ Substituted by Act 8 of 2003 w.e.f. 1.4.2003. 1[Explanation.- x x x ]1

¹ Omitted by Act 6 of 1999 w.e.f. 1.4.1999.