District Registrar & Collector, Hyderabad v.

Canara Bank
(2005) 1 SCC 496

India inherits the common law notion that “a man’s house is his castle”. In a recent case, the
Supreme Court struck down provisions of a legislation on grounds that it was too intrusive of
citizens’ right to privacy. The case involved an evaluation of the Andhra Pradesh Stamp Act
which authorized the collector to delegate “any person” to enter any premises in order to
search for and impound any document that was found to be improperly stamped. Thus, for
instance, banks could be compelled to cede all documents in their custody, including clients
documents, for inspection on the mere chance that some of them may be improperly stamped.
These banks were then compelled under law to pay the deficit stamp duty on the documents,
even if they themselves were not party to the transactions recorded in the documents. After an
exhaustive analysis of privacy laws across the world, and in India, the Supreme Court held
that in the absence of any safeguards as to probable or reasonable cause or reasonable basis,
this provision was violative of the constitutionally guaranteed right to privacy “both of the
house and of the person”.

The brief facts of case are as follows. The A.P. State Legislature amended Section 73 of the
Stamp Act, 1899 which gave inspecting officers not only the power to search premises but
also the power to seize deficiently stamped documents. The purpose behind the amendment
was to combat stamp duty evasion and also to supplement the stamp revenue of the state. The
amendment was challenged before the Andhra Pradesh High Court as the amendment had
given unbridled power to the officers with respect to exercising discretion and, consequently
the amendment was held to be arbitrary and violative of Article14 of the Constitution of
India. The decision of the High Court was challenged by the Appellant before the Supreme
Court, and the Respondent contended that the impugned provision amounted to a violation of
the fundamental Right to Privacy. A two Judge Bench of the Supreme Court upheld the A.P.
High Court decision and reiterated recent Supreme Court decisions and held that the Right to
Privacy was implicit in the Constitution of India. Furthermore, that the impugned amendment
was arbitrary and violative of Article 14 of the Constitution, thus it cannot be construed as
procedure established by law under Article 21 of the Constitution. Therefore the amendment
was held unconstitutional as the Right to Privacy had been violated in the absence of
procedure established by law.
It is respectfully submitted that the two Judge Bench in this decision has grossly misinterpreted, the
six-Judge Bench decision in the Kharak Singh case wherein it was categorically held by the majority
opinion that: “As already pointed out, the right of privacy is not a guaranteed right under our
Constitution and therefore the attempt to ascertain the movements of an individual which is merely a
manner in which privacy is invaded, is not an infringement of a fundamental right guaranteed by Part
III.” In addition, in the Kharak Singh case, it was conceded by the Respondent that the U.P. Police
Regulations was not a law under Article 13(3)(a) of the Constitution of India, thereby taking away the
only defence of the state under Article 21, i.e., procedure established by law. Hence, the law laid
down by the Supreme Court in the Kharak Singh case was that there is no Right to Privacy under
Article 21 of the Constitution regardless of the existence of a law infringing the Right to Privacy;
because the U.P. Police Regulations were not considered to be law under Article 13(3)(a) of the
Constitution of India. Therefore, regardless of the constitutional validity of the amendment in the
District Registrar & Collector, Hyderabad case the respondent cannot claim a fundamental Right to
Privacy. Hence it is humbly submitted that the decision of the Supreme Court is bad in law insofar as
it implicitly reads a fundamental right of privacy under the Constitution of India.

A perusal of the judgment of the High Court shows that in holding the impugned Section
73 of the Act ultra vires of the Constitution and other provisions of the Indian Stamp Act, the
High Court has arrived at four findings: firstly, that the amended Section 73 is inconsistent
with the other provisions of the Act; secondly, that the provision is violative of the principles
of natural justice; thirdly, the provision is arbitrary and unreasonable and hence violative
of Article 14 of the Constitution; and fourthly, there are no guidelines provided for the
exercise of power by the authorized persons under the amended Section 73 which is either
arbitrary and unreasonable or vitiated on account of excessive delegation of statutory powers.

Senior counsel for the appellants has vehemently attacked the correctness of the impugned
judgment submitting that the A.P. Amendments are directed towards safeguarding the
revenue of the State and striking at the evil of stamp duty evasion, and therefore the validity
of such reasonable legislation was not liable to be questioned as unconstitutional. On the
other hand, the learned counsel appearing for the respondents have defended the judgment of
the High Court by reiterating the same grounds of attack on the constitutional validity of the
impugned amendment as were urged in the High Court; of course enlarging the reach of
submissions by developing the dimensions thereof.

Nature of stamp legislation Stamp Act is a piece of fiscal legislation. Remedial statutes and
statutes which have come to be enacted on demand of the permanent public policy generally
receive a liberal interpretation. However, fiscal statutes cannot be classed as such, operating
as they do to impose burdens upon the public and are, therefore, construed strictly. A few
principles are well settled while interpreting a fiscal law. There is no scope for equity or
judiciousness if the letter of law is clear and unambiguous. The benefit of any ambiguity or
conflict in different provisions of statute shall go for the subject. In Dowlatram Harji & Anr.
Vs. Vitho Radhoti & Anr., (1881) 5 ILR (Bom) 188, the Full Bench indicated the need for
balancing the harshness which would be inflicted on the subjects by implementation of the
Stamp Law as against the advantage which would result in the form of revenue to the State;
the latter may not be able to compensate the discontent which would be occasioned amongst
the subjects.