Adityaraj Builders v. State of Maharashtra

Case snapshot

Sections / provisions: See packaged judgment

Questions before the Court / Tribunal

• Maharashtra stamp duty on permanent alternate accommodation agreements in redevelopment where principal development agreement is already stamped.
• What factual, statutory and procedural conditions control the relief?
• How does the operative order apply to the parties and the challenged proceeding?

Material facts and procedural background

Adityaraj Builders, a Partnership firm registered under the provisions of Indian Partnership Act 1932, having its office at 101 & 102, Purnima Pride, Building No. 3, Tagore Nagar, Village Hariyalli, Vikhroli (E), Mumbai 400 083 …Petitioner

A PPEARANCES for the petitioner Mr Dharam Sharma, i/b Jayesh Jain. for respondent Mr Sachin Chowdhari. no.4-society for respondent- Mrs Jyoti Chavan, AGP. STATE Amicus Mr Samit Shukla, with Siddharth Shah, Anjali Shah & Anuj Sarla.

A PPEARANCES for the petitioner Mr Dharam Sharma, i/b Jayesh Jain. for respondent Mr Sachin Chowdhari. no.4-society for respondent- Mrs Jyoti Chavan, AGP. STATE

Plot No. 119, RSC-11, Behind Ekneera School, Charkop, Sector-1, Kandivali West, Mumbai 400 067 5. Anita Ramdas Sangle, Having an address at A/901 & 902, Brahma Niwas, Navghar Road, Near MHADA Colony, Mulund East, Mumbai 400 081 …Petitioners

for the petitioners Mr Ashraf Diamondwala, i/b Vis Legis Law Practice. for respondent- Mr Hemant Haryan, AGP. state Amicus Mr Samit Shukla, with Siddharth Shah, Anjali Shah & Anuj Sarla.

Appellant / assessee submissions

4. Other Writ Petitions raising identical challenges came to be filed. Similar interim reliefs then came to be granted in the other matters. We have today heard learned Counsel, including Mr Shukla who appears as Amicus at our request. He has given us a compilation including some judgments to which we will refer a little later in this judgment.

44. The case of Prabha Ghate is interesting. That case also related to stamp duty under Article 5(g-a), DAs and societies. The challenge dealt with an amendment that came into from 7th February 1990 and a DA of 10th April 1995. In paragraphs 3 and 4 the Division Bench speaking through FI Rebello J, as he then was, said: “3. Having heard the learned Counsel for both the parties, the real question is whether the petitioner is liable to pay tax on the agreement either under Article 5(g-a) as amended or by treating the document as a conveyance. Dealing with Article 5(g-a), it is clear that the said Article applies only in respect of those agreements which have come into effect from 7th February 1990. The amending Act though published in the official gazette on 16th January 1997, insofar as Article 5(g-a) came into force with effect from 7th February 1990. There is no dispute between the parties that the agreement in question was before that date having been entered into on 10th April 1989. It is thus clear that insofar as the agreement in question is concerned, no stamp duty was payable. Stamp duty, if at all, would be payable only in respect of those agreements as set out under…

59. We express our thanks to learned Counsels who appeared in the matter and especially Mr Shukla for his assistance and for the compilation that is being given to us.

Revenue / respondent submissions

The packaged judgment does not separately label the respondent's submissions in an independently extractable passage. No contention is inferred; read the full order.

Court / Tribunal analysis and reasoning

in dealing with third parties. A Single Judge of this Court negatived that contention: Aditya Developers v Nirmal Anand CHSL. 3 This decision has been followed consistently. A Division Bench of this Court, speaking through AM Khanwilkar J, as he then was, in Girish Mulchand Mehta & Anr v Mahesh S Mehta & Anr 4 specifically dealt with this argument where there were two sets of agreements or dealings, one with the society and the other with members, the members would have rights independent of the society. That judgment was specifically in the context of a development agreement with a society and separate agreements with members, and a situation where members had not signed the DA. The Court held that members were nonetheless bound by the terms of the DA (albeit for the purposes of the arbitration act). There is a long line of authority in this vein. We need not revisit it.

payment of stamp for the agreement. Insofar as these averments are concerned, there is no specific denial by the petitioner. Even otherwise, at the highest, if the flat purchasers had not paid the stamp duty, it is only those other flats which have been transferred to the flat purchasers which will be assessable to stamp duty. It is clear that insofar as the petitioner is concerned, the developer has only constructed a building for the petitioner on the petitioner’s own land and there has been no transfer of interest in the property in favour of the developer nor would the agreement constitute an instrument under which any right, title or interest has been transferred from the petitioner to the developer. The very fact that Article 5(g-a) was introduced by the amendment would indicate that the legislature, in order to bring such transactions, which otherwise were not covered under the provisions of the Act, as it then stood, thought to amend the Stamp Act and bring such transactions also within the ambit of the Stamps Act and subject to duty. Considering that we find that the second contention of the respondents is also devoid of merit.” (Emphasis added)

Operative decision and relief

February 1990. This being not the case, in the present petition, the demand made by the respondents even at the petitioner’s request on that count is liable to be set aside. Even assuming that the petitioner had wrongfully applied, that, by itself, is no ground for the respondents to insist on the petitioner paying stamp duty, if the same is not due and payable according to law. The respondents, therefore, could not call upon the petitioner to pay the stamp duty on agreement. The demand by the respondents is clearly without jurisdiction. 4. The second contention of the respondents is that the Agreement dated 10th April 1989 is a conveyance. Conveyance in law would contemplate a transfer of the property or interest from one person to another. In the instant case, on a perusal of the agreement between the petitioner and the developer, it is clear that there has been no transfer of property or interest in property by the petitioner in favour of the developer. On the contrary, all that is provided is that the developer shall develop the property and reserve for the petitioner herein two flats on the said property. The developer in turn was given the right to sell FSI in respect of…

“(a) This Hon’ble Court be pleased to declare the Impugned Circulars dated 23rd June 2015 and 30th March 2017 (Exhibit- “A” & “A/1” to be ultra vires of Section 4 of the Bombay Stamp Act, 1958 and being arbitrary, unreasonable and violative of Article 14 of the Constitution of India and thus unconstitutional. (b) This Hon’ble Court may be pleased to issue a Writ of Certiorari or a Writ in the nature of certiorari or any other appropriate Writ, order or direction under Article 226 of the Constitution of India calling for the record and proceedings of the issuance of the Impugned Circulars dated 23rd June 2015 and 30th March 2017 issued by Respondent No. 2 and after going through the legality, validity and propriety thereof, quash and set aside the same; (c) This Hon’ble Court may be pleased to issue a Writ of Mandamus or a Writ in the nature of mandamus or any other appropriate writ, order or direction under Article 226 of the Constitution of directing: - (i) The Respondent No. 1 to cancel, withdraw or revoke the Impugned Circulars dated 23rd July 2015 and 30th March 2017; (ii) Directing the Respondents to correctly apply the ratio of Prabha Laxman Ghate’s case, the Notification…

60. All Writ Petitions are disposed of in these terms. In the facts and circumstances of the case, there will be no order as to costs.

61. In view of the this, all pending applications are disposed of as infructuous.

Ratio and legal principle

• The packaged judgment addresses Maharashtra stamp duty on permanent alternate accommodation agreements in redevelopment where principal development agreement is already stamped. The precise proposition must be read with the Court/Tribunal's reasoning and operative directions.
• Reliance depends on matching the statutory version, jurisdiction, procedural stage and material evidence recorded in the judgment.

Why this judgment matters

This decision is relevant to practitioners and affected parties dealing with maharashtra stamp duty on permanent alternate accommodation agreements in redevelopment where principal development agreement is already stamped. Its value lies in showing how the adjudicating forum connected the applicable rule to the proved facts and procedural posture.

Practitioner action points

• Match the statutory version, jurisdiction, procedural stage and decisive evidence before relying on the result.
• Verify current appellate, review and SLP history and any later amendment or controlling authority.
• Attach the complete judgment to the working paper or filing and cite the paragraph/page supporting the proposition.

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Section / provision impact

• See the statutory provisions identified in the packaged judgment.

Case network

Similar issue / useful comparison

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• Reetu Devi Nanecha Vs ITO TDS - Court / Tribunal to be verified

Different outcome / possible distinction

• Zainul Abedin Ghaswala v. NFAC - Operative order controls
• ITO v. Rajni D. Saini - Operative order controls

Full judgment and source control

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Source class: Sanitized local full-judgment copy; official primary replacement pending · Repository status: Later-history status: verification on hold pending source confirmation