Deficit Stamp duty – Property affected by CRZ-II and tenancy related encumbrance
By the deed dated 15.9.2009 executed by Geeta Dixit Shah in favour of the petitioner, the share of 75% in the land and building and 75% share in the leasehold rights in another property. By the notice dated 19.12.2009, the said deed was impounded under Section 33 of the Maharashtra Stamp Act, 1958, for Rs.7,75,000/- and penalty of Rs.30,000/-
Thereafter, on the audit objection to revise the valuation, another notice dated 8.12.2014 under Section 53A was given. The recitals in respect of part of the property being affected by CRZ II, the area of 1883.73 sq.mts occupied by the tenant instead of 2241.89 and FSI being “2” instead of “2.5” have not been mentioned in the instrument and therefore, not entitled to the benefit.
By the order dated 1.4.2017, the stamp duty was revised to Rs.52,44,075/- and penalty of Rs.4,19,523/-.
Three questions arose for consideration –
- Whether a recital with respect to applicability of CRZ restrictions on a part of land must form part of main sale deed or its inclusion in its annexure is sufficient;
- The impact of a recital in the sale deed that the lease of part of the land had already expired on the market value for stamp duty; and
III. The effect of considering less land occupied by tenant for market valuation of the stamp duty.
HELD that it is necessary to include all critical facts and recitals in the sale deed, that to the very essence of consider or market value. Courts and authorities cannot look beyond four corners of main text unless references to the annexures are unambiguous. A recital affecting market valuation and development potential must be clearly stated in the main document itself or unambiguously incorporated through a referenced annexure.
Sections 33 and 34 of the Stamp Act mandate that the instrument must fully and truly express the transaction. If the principal instrument is silent on CRZ restrictions and they appear solely in an annexure not incorporated explicitly in the main deed, the authorities may apply higher notional market value that the sale deed does not adequately reflect the development limitations of the property. Therefore, the benefit of reduced market value of CRZ restrictions cannot be given.
The Sale deed clarified that although the lease expired, the occupant remains in possession by holding over and this fact diminish the market value of the land. However, it was necessary for the petitioner to precisely specify in the instrument the exact area under occupation of tenants if deduction on market value is sought on the basis of such tenancy related encumbrances. The omission on the part of the petitioner to incorporate such particulars in the instrument precludes any claim for a downward revision in valuation.
Judgment dated 18.3.2025 of the High Court of Bombay in Writ Petition No.6537 of 2017 (AS) of Praman Infrastructure Private Limited Vs. The State of Maharashtra and others with connected matter.
