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Govt. of Maharashtra Revenue & Forest Department Govt. Circular No. petition- 2013/1425/260/1
Mantralaya, Mumbai:--400032.
Date: 9th May, 2014.


As per Public Interest Litigation (PIL) bearing No. 54/2011 Chandrakant Manekar V/S Govt. of Maharashtra & Others which was filed before Bombay High Court in respect of Development Agreement of immovable property between owner and Developer, sometimes owner by way of consideration retains for himself certain Galas/Premises. On such constructed area retained by owner and on such document which will be executed between owner and Developer, the issue was for assessment of stamp duty to be payable on such document.

Honorable High Court in respect of PIL No.54/2011 has passed an Order Dated 19th March, 2014 in respect of Galas/Premises retained by the owner on the issue of assessment of stamp duty on that premises and directed Government to issue Circular clarifying the above matter and to follow order dated 29/01/2004 (Prabha Laxman Ghate V/S State of Maharashtra & others) in Writ Petition No.146/1997 passed by this Bombay High Court.

In the matter of Prabha Laxman Ghate V/s Govt. of Maharashtra matter (Writ Petition No. 146/1997)

In the said writ petition, the petitioners (original owner of land) had executed Development Agreement dated 10/4/1989 and as per the said Development Agreement, the Developer had to develop and out of total six premises, two premises had to be retained by original owner.

This Development Agreement was produced before Stamp Collector, Pune for fixation of stamp duty on the said Development Agreement. The Stamp Collector came to the conclusion that those two premises which were to be retained by the owner as per Development Agreement had the effect of an Assignment of Property and therefore he demanded Stamp Duty. Smt. Prabha Laxman Ghate, the petitioner filed a petition challenging this order passed by said Stamp Collector, Pune. Bombay High Court on 29/1/2004 issue order quashing order of Stamp Collector, Pune and clarified two issues:-

1) As per Bombay Stamp Act, 1958 dated 16/5/1997 on Development Agreement Article 5-G-, the assessment of stamp duty is calculated with effect from 7/2/1990. In the case of Smt. Prabha Laxman Ghate matter, the Development agreement was executed on 10th April, 1989. As per Bombay Stamp Act, 1958 (Now Maharashtra Stamp Act ) amended Article 5-G-A Provisions came to be implemented after 7/2/1990 and hence, the said provisions are not applicable to present Development Agreement.

2) In Smt Prabha Laxman Ghate matter, as per Development Agreement two premises had to be retained by the landowner in lieu of development rights of the owner and therefore there is no assignment in true meaning for the benefit of the owner and therefore there is no assessment of stamp duty on those retained premises for the reason of law of assignment.

Taking into account the above background clarification is issued as follows:--

1) As per the Honorable Bombay High Court Judgment in Writ Petition No. 146/1997 Prabha Laxman Ghate V/S Sub-Registrar and Stamp Collector, Pune, the Bombay High Court issued the order dated 29/04/2004 Maharashtra Stamp Act, 1958 Article 5 ( G-A ) that is prior to 7/2/1990 there will be no stamp duty on executed Development Agreement and therefore with effect from 7/2/1990, All Development Agreements executed on or after that date as per provisions of Maharashtra Stamp Act, 1958 Article 5 (G-A) stamp duty will be payable.

2) In all other matters like Prabha Laxman Ghate matter, in those situations when there is executed Development Agreement between original owner of property and the Developer, owner who retains for himself constructed area on that no assessment of stamp duty shall be done. As per that agreement when there is an assignment of constructed area to original owner, an incidental document has to be executed, and since there is no assignment of any property on executing an incidental document, on such type of documents assessment of stamp duty shall be as per the provisions of section 4 of Maharashtra Stamp Act.

Issued in the name of and order of Governor of Maharashtra.

Rajesh Narvekar
Deputy Secretary

C.C To:

1) Sub Registrar & Stamp Controller, Pune
2) Stamp Controller, Main stamp office, Fort, Mumbai
3) All Sub Registrars and Stamp Dy. Controllers.
4) Assistant Govt. pleader, Bombay High Court, Appellate Branch, (Writ Cell), Mumbai:-32
5) Office of Revenue 7 Forest Dept, Mantralaya, Mumbai:-32.