Insufficiency of Stamp Duty - Treated as Rectifiable
The High Court of Madhya Pradesh, Indore Bench in a recent Order dated 12 June 2023 once again reconfi rmedthe positi on in law that RERA ought not to dismiss an applicati on for RERA registrati on of document for defi citpayment in stamp duty and the applicant ought to be allowed a chance to recti fy the same.
Accrual Realiti es Pvt. Ltd. (Accrual Realities) had entered into development agreement dated 11 February 2021 (Development Agreement) with one Mr Nazar Mohammed and Mr Abdul Hassan (Owners) for redevelopmentof land and accordingly, paid stamp duty of Rs. 12,45,630/- (Rupees Twelve Lakhs Forty Five Thousand SixHundred and Thirty Only) for the purpose of redevelopment of land.
The Real Estate Regulatory Authority (RERA) dismissed the applicati on of Accrual Realiti es vide Order dated 19April 2022 for defi cit payment of stamp duty i.e. as per Indian Stamp Act, 1899. The stamp duty arrived at wasRs. 22,40,333/- (Rupees Twenty Two Lakhs Forty Thousand Three Hundred and Thirty Three Only) however, theAccrual Realiti es had paid stamp duty of Rs. 12,45,630/- (Rupees Twelve Lakhs Forty Five Thousand SixHundred and Thirty Only).
The Accrual Realiti es fi led a Writ Peti ti on No. 11550 of 2022 before the High Court of Madhya Pradesh, IndoreBench (Court) as RERA Appellate Tribunal was not functi oning at the ti me of fi ling of the applicati on.
Main issue for considerati on:
Whether RERA is empowered to dismiss an applicati on for RERA registrati on solely on the ground defi citpayment of stamp duty on a document?
High Court Judgment:
The Court held that even though the Development Agreement was insuffi ciently stamped, it was necessary forthe RERA to refer the document to the Registrar of Stamps for impounding, adjudicati on and payment of actualstamp duty instead of dismissing applicati on for RERA registrati on.
The Court set aside order dated 19 April 2022 passed by RERA dismissing applicati on for RERA registrati on fi ledby Accrual Realiti es and the matt er was remanded back to RERA to be heard afresh and in case of defi cit stampduty, the Accrual Realiti es ought to recti fy the same as per the directi ons of RERA.
It is once again repeated and reiterated that a document which is insuffi ciently stamped can be stampedappropriately and applicati on for RERA registrati on ought not to be dismissed on that ground. The Court hastaken mindful view that applicati on for RERA registrati on of document ought not to be dismissed solely onground of defi cit payment of stamp duty and the same can be recti fi ed by paying the diff erence in the amountof stamp duty.
Author: Purvi Asher - Partner | Aakash Mehta - Associate
This update was released on 25 Oct 2023.
Legal Update Team
MANSUKHLAL HIRALAL & COMPANY
Advocates, Solicitors and Notaries
T: +91 22 40565252
Mumbai Office: Surya Mahal, 2nd Floor, 5, Burjorji Bharucha Marg, Fort, Mumbai-400 023, India
Delhi Office: Block C-9, Lower Ground Floor, Jangpura Extension, New Delhi - 110 014, India
"Noted lawyer in the Real Estate practitioner from India" - Chambers & Partners
Please consider the environment before printing this email
The information contained in this communication is intended solely for the use of the individual or entity to whom it is addressed and others authorized to receive it. This communication may contain confidential or legally privileged information. If you are not the intended recipient, any disclosure, copying, distribution or action taken relying on the contents is prohibited and may be unlawful. If you have received this communication in error, or if you or your employer does not consent to email messages of this kind, please notify the sender immediately by responding to this email and then delete it from your system. No liability is accepted for any harm that may be caused to your systems or data by this message.
Subscribe to our Knowledge Repository
If you would like to receive content directly in your inbox from our knowledge repository, please complete this subscription form.