SC quashes Andhra Stamp Act amendment

Putting a premium on the citizen's right to privacy, the Supreme Court has quashed an amendment to the Andhra Pradesh Stamp Act allowing unhindered power to the collector to inspect documents with private individuals and banks for the purpose of assessing and levy of stamp duty.

A Bench comprising Chief Justice RC Lahoti and Justice Ashok Bhan, upholding the high court judgement, said, "We agree with the view taken by the high court that Section 73 of the Indian Stamp Act as amended in its application to the state of Andhra Pradesh by Andhra Pradesh Act no. 17 of 1986 is ultra vires the Constitution."

Chief Justice Lahoti, writing for the Bench, said, "it is clear that this provision empowers invasion of the home of the person in whose possession the documents, 'tending' to or leading to the various facts stated in Section 73, are in existence.

"Section 73, being one without any safeguards as to probable or reasonable cause or reasonable basis or materials, violates the right to privacy both of the house and of the person," he said.

The CJI observed that a bare reading of Section 73 indicates the informities with which the provision suffers.

The provision empowered any person, authorised in writing by the collector, to have access to documents in private custody or custody of a public officer without regard to the fact whether the documents were sought to be used before any authority competent to receive evidence.

The high court had also quashed the amendment to the Stamp Act on petitions filed by 25 parties, including 11 banks.

The main grievance was that documents, executed between private parties and received and retained by the bank in ordinary course of their loan advancing transactions, were inspected and then the banks were served with a request to remit the amount of deficit duty on the documents inspected and to recover the same from the parties concerned.

The high court, while quashing the amendment as unconstitutional, had not gone into the question of violation of right to privacy of individuals.

The Supreme Court said that the AP amendment permitted inspection being carried out by the collector by having access to the documents, which were in private custody other than that of a public officer.

"The documents or copies of documents of the customer which are in bank, must continue to remain confidential vis-a-vis the person, even if they are no longer at the customer's house and have been voluntarily sent to the bank," Justice Lahoti said.

The apex court said as Section 73 enabled the collector to authorise "any person" whatsoever to inspect, to take notes or extracts from the papers in public office, it suffered from the vice of excessive delegation.

"Under the garb of power conferred by Section 73, the person authorised may go on rampage searching house after house, that is, the residence of persons or places used for the custody of documents," Justice Lahoti said.