On 21 October 2024, the Bombay High Court, presided over by Justice Sharmila Deshmukh, delivered a significant judgment in the case of Bhavesh Co-operative Housing Society Ltd. Versus The State of Maharashtra and Ors. The ruling addressed crucial aspects of stamp duty assessment related to deemed conveyance under the Maharashtra Ownership of Flats Act (MOFA) and provided clarity on the adjudication procedure for unregistered documents.
Background of the Case
The case arose when Bhavesh Co-operative Housing Society sought adjudication for stamp duty after being granted deemed conveyance under MOFA. The society filed the deed for adjudication shortly after the conveyance was approved and submitted documentation for 39 flat members. However, it came to light that six members possessed unregistered agreements, despite having paid stamp duty at the relevant time.
The Collector of Stamps issued an interim notice on 14 December 2020, citing a total stamp duty liability of ₹5,26,870 for these six flats. The society contested this figure, and the Assistant Town Planner assessed the market value of the flats at ₹1,82,64,500, confirming the stamp duty amount, which was subsequently challenged in court after the society’s appeal was rejected.
Legal Arguments Presented
The Petitioner-Society argued that the only concern was whether the last member paid the proper stamp duty, as outlined in the Government Resolution dated 12 April 2012. The GR states that if the last member purchased the tenement before the circular’s issuance, the adjudication should only consider the stamp duty payment, irrespective of document registration.
Conversely, the opposing party contended that Article 25(da) of the Maharashtra Stamp Act mandates that unregistered documents incur stamp duty based on current market value, which justified the additional stamp duty demand.
Court’s Analysis and Findings
The Bombay High Court analyzed the pertinent provisions of the Stamp Act and the circular governing adjudication procedures. The court emphasized that the essence of the adjudication process for deemed conveyance is to confirm whether the stamp duty has been duly paid by the members, regardless of the registration status of their agreements. The judgment noted:
“Neither from the statutory provisions nor from the Circular dated 12 April 2012 emerges any position that while adjudicating the deed of deemed conveyance, the registration of documents must be considered or that for want of registration, stamp duty should be levied on the prevailing market value.”
This clear interpretation led the court to conclude that the authorities had acted beyond their mandate by imposing additional stamp duty based solely on the non-registration of agreements.
Ruling and Implications
The High Court quashed the impugned orders, reinforcing that the authorities are bound by the statutory provisions of the Stamp Act and the guidelines laid out in the 2012 circular. The court directed the respondents to register the deed of deemed conveyance in accordance with the law, thus upholding the society’s rights.
This ruling is a landmark decision that clarifies the adjudication process for deemed conveyance and emphasizes the importance of adhering to established procedures. It provides much-needed reassurance to housing societies about the treatment of stamp duty for unregistered agreements, ultimately promoting a fairer approach in the real estate sector.