Stamp Duty – One Transaction through Multiple Documents
Stamp Duty on Development cum Sale Agreements on “as is where is basis” of the slum land.
The Petitioners, by two separate letters, appointed Hemal Muni and Yunis J. Shroff as Consultants for registration of the documents and for adjudication of the stamp duty. The Petitioners executed two duly registered General Powers of Attorney, both dated 7 May 2012, in their favour. The said Consultants arranged for the Conveyances to be adjudicated by the Collector of Stamps, Borivali. The Collector of Stamps certified under Section 32 of the Stamp Act that the Conveyances required payment of stamp duty of Rs.40,000/-, taking into account the aggregate original value of Rs.8,00,000/-, under Article 25(b) of the Stamp Act. The Petitioners paid stamp duty of Rs.40,000/-. The Conveyances dated 10 July 2012 were executed and duly registered. Subsequently, on 17 July 2012, the Maharashtra Pollution Control Board published a Public Notice regarding an environmental public hearing for development of the slum plot. The said public hearing was held on 16 August 2012 and was video recorded.
In the present cases, the earlier agreements and the subsequent Conveyances relate to the same parties, the same properties and the same underlying transactions. Possession had been delivered under the earlier agreements. Consideration had been paid pursuant thereto. Powers of Attorney had been executed. The Petitioners had been brought on the municipal assessment records and had been paying municipal taxes.
pplying that test to the present cases, the Petitioners submit that the Development-cum-Sale Agreements dated 9 December 1985 and the Conveyances dated 10 July 2012 in Writ Petition Nos.9358, 9360 and 9361 of 2016 relate to the same properties and the same transactions. Similarly, the Agreement for Sale dated 28 March 1996 and the Conveyance dated 10 July 2012 in Writ Petition No.9359 of 2016 relate to the same property and the same transaction. The Petitioners submit that Section 4 of the Act applies to all four cases. The stamp duty liability cannot be determined by treating the Conveyances dated 10 July 2012 as fresh transactions of sale and by applying the market value prevailing in 2012.
The Petitioners raise a separate challenge to the manner in which the market value of the properties has been determined. It is submitted that the Stamp Authorities have proceeded on the basis of the Ready Reckoner or Annual Statement of Rates, despite the admitted physical, statutory and development restrictions affecting the properties. The Petitioners submit that the properties are affected, in varying degrees, by CRZ-I and CRZ-II restrictions,
However, by the order dated 10.2.2014, the IGR held that there was deficit stamp duty of Rs.2,00,63,825/-.
The Respondents rely upon the fact that the Conveyances of 2012 do not say, in words, that they are only “completion” or “perfection” documents. This submission has some force from the drafting point of view, but it cannot be treated as a complete answer in law. The Court is not deciding the matter only on the basis of one sentence or one omission. The transaction has to be seen as a whole. Section 4 requires the several instruments used for completing the transaction to be identified. I hold that the earlier Development-cum-Sale Agreements and Agreement for Sale, the connected possession documents, Powers of Attorney, receipts and the Conveyances dated 10 July 2012 constitute several instruments employed for completing the same underlying transactions within the meaning of Section 4 of the Maharashtra Stamp Act, 1958. 83. This conclusion does not mean that no stamp duty can ever be charged. Section 4 does not give exemption from stamp duty. It only provides the manner in which stamp duty is to be charged where several instruments are used for completing one transaction. The principal instrument has to be dealt with according to the duty prescribed for the principal transaction and the other instruments have to be dealt with in the manner provided under Section 4. The basic error in the impugned orders 42 Uploaded on – 05/10/2026 Downloaded on – 06/10/2026 23:23:52 wp9358-2016 & connected-J.doc is more fundamental. The Authorities treated the Conveyances of 2012 as if an entirely new sale had taken place in 2012 and thereafter applied the market value of 2012 to that fresh transaction. The material on record does not support this basic factual assumption. The Authorities were first required to consider the legal relationship between the earlier instruments and the final Conveyances. Instead, the impugned orders proceeded on the different names of the documents, the long passage of time and the later increase in market value. Such approach does not give proper effect to Section 4. 84. Consequently, the findings recorded by the Collector of Stamps and affirmed in appeal, to the extent they proceed on the basis that the Conveyances of 2012 were independent transactions liable to fresh stamp duty on the market value of 2012, cannot be sustained. The consequential demand for deficit stamp duty and the penalty based upon such alleged deficit must fail.
