The High Court of Madhya Pradesh, Indore Bench in a recent Order dated 12 June 2023 once again reconfirmed the position in law that RERA ought not to dismiss an application for RERA registration of document for deficit payment in stamp duty and the applicant ought to be allowed a chance to rectify the same.

Brief facts:

Accrual Realities Pvt. Ltd. (Accrual Realities) had entered into development agreement dated 11 February 2021 (Development Agreement) with one Mr Nazar Mohammed and Mr Abdul Hassan (Owners) for redevelopment of land and accordingly, paid stamp duty of Rs. 12,45,630/- (Rupees Twelve Lakhs Forty Five Thousand Six Hundred and Thirty Only) for the purpose of redevelopment of land.

The Real Estate Regulatory Authority (RERA) dismissed the application of Accrual Realities vide Order dated 19 April 2022 for deficit payment of stamp duty i.e. as per Indian Stamp Act, 1899. The stamp duty arrived at was Rs. 22,40,333/- (Rupees Twenty Two Lakhs Forty Thousand Three Hundred and Thirty Three Only) however, the Accrual Realities had paid stamp duty of Rs. 12,45,630/- (Rupees Twelve Lakhs Forty Five Thousand Six Hundred and Thirty Only).

The Accrual Realities filed a Writ Petition No. 11550 of 2022 before the High Court of Madhya Pradesh, Indore Bench (Court) as RERA Appellate Tribunal was not functioning at the time of filing of the application.

Main issue for consideration:

Whether RERA is empowered to dismiss an application for RERA registration solely on the ground deficit payment of stamp duty on a document?

High Court Judgment:

The Court held that even though the Development Agreement was insufficiently stamped, it was necessary for the RERA to refer the document to the Registrar of Stamps for impounding, adjudication and payment of actual stamp duty instead of dismissing application for RERA registration.

The Court set aside order dated 19 April 2022 passed by RERA dismissing application for RERA registration filed by Accrual Realities and the matter was remanded back to RERA to be heard afresh and in case of deficit stamp duty, the Accrual Realities ought to rectify the same as per the directions of RERA.

MHCO Comment:

It is once again repeated and reiterated that a document which is insufficiently stamped can be stamped appropriately and application for RERA registration ought not to be dismissed on that ground. The Court has taken mindful view that application for RERA registration of document ought not to be dismissed solely on ground of deficit payment of stamp duty and the same can be rectified by paying the difference in the amount of stamp duty.

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