Mere Mention Of Consideration In Partition Deed Doesn't Convert It Into Conveyance Requiring Additional Stamp Duty: Telangana High Court
The Telangana High Court has held that merely mentioning the word “consideration” instead of “market value” in a partition deed cannot by itself justify treating the instrument as a conveyance and demanding additional stamp duty.A Single Judge Bench of Justice K. Sarath observed that the registering authority cannot demand deficit stamp duty merely on the basis of such wording where...
The Telangana High Court has held that merely mentioning the word “consideration” instead of “market value” in a partition deed cannot by itself justify treating the instrument as a conveyance and demanding additional stamp duty.
A Single Judge Bench of Justice K. Sarath observed that the registering authority cannot demand deficit stamp duty merely on the basis of such wording where there is no actual transfer of consideration among co-owners.
The counsel for the authority–Stamps and Registration had submitted that there is no dispute with regard to the Joint ownership of the property, however the partition deed executed by petitioners, looses its character once consideration is introduced. It was submitted that nature of the instruments as executed and presented in which allotment is made "for consideration", the document ceases to be a pure partition and "becomes a conveyance", irrespective of family relationship.
The Court perused the material on record and noted that the petitioners had only mentioned the word consideration along with the schedule properties in Annexure I-A and taking this into account, the respondent authorities are now demanding the petitioners to pay deficit stamp duty.
It said,
"In fact, there is no dispute with regard to the joint ownership of the petitioners and there is no word in the registered partition document presented by the petitioners dated 31.10.2025 with regard to consideration for partirtion of the properties for an amount of Rs. 19,88,99 ,600 /-(in words Nineteen Crores Eighty Eight Lakhs Ninety Nine Thousand Six Hundred only). Merely on mentioning as 'consideration' instead of 'market value', the respondents cannot take into account of the same as [if] there is a consideration in executing the document of partition… There are no particulars to show that the payment of consideration by the petitioners for executing the document [actually happened].”
Allowing the writ petition, the Court set aside the notice issued by District Registrar demanding additional stamp duty and directed the registering authorities to register the partition deed without insisting on payment of deficit stamp duty, registration fee, or proof of TDS remittance.
The writ petition was filed by Sri Salguti Vishnuvardhan Reddy and two others, who are co-owners in joint possession of property at New Town, Mahabubnagar.
With a view to partition the property, the petitioners executed a Partition Deed dated 31 October 2025 and presented it before the registering authority. They paid ₹12,98,850 towards stamp duty and ₹1,00,000 as registration fee, treating the document as a partition deed under Article 40 of Schedule I-A of the Indian Stamp Act, 1899.
Article 40 of Schedule I-A of Indian Stamp Act prescribes the stamp duty payable on instruments of partition executed between co-owners dividing jointly held property.
Despite the Partition Deed, the District Registrar issued a notice on 06 November 2025, stating that the document reflected “consideration” and therefore ought to be treated as a conveyance instead and the stamp duty as applicable under Article 20(c) of Schedule I-A of the Act should be applicable. The authority consequently demanded deficit stamp duty of ₹95,40,650, following which the petitioners submitted a reply on 15 November 2025. As the partition deed was still not released, the petitioners approached the High Court under Article 226 of the Constitution.
Appearing for the petitioners, Advocate Pawan Kumar Agarwal argued that the document was a pure partition among co-owners and did not involve any transfer of consideration. The use of the word “consideration” was a clerical mistake and that the document itself contained no recital indicating payment of consideration between the parties. Counsel contended that once stamp duty applicable to a partition under Article 40 had been paid, the authorities could not reclassify the instrument as a conveyance.
Opposing the petition, Assistant Government Pleader S. Sravanthi contended that under Section 33 read with Section 47-A of the Indian Stamp Act, the registering authority is duty-bound to examine the recitals and determine the correct stamp duty, and that the authority cannot rewrite or reinterpret the contents of a document to reduce revenue.
Section 33 of the Indian Stamp Act empowers authorities to examine documents and impound those that are insufficiently stamped, while Section 47-A allows the registering authority to determine the correct market value of property and recover deficit stamp duty if the value declared in the document appears undervalued.
After examining the record, the Court found that the respondents had sought to demand deficit stamp duty solely because the petitioners used the word “consideration” instead of “market value” in the schedule of the property. The Court noted that there was no material indicating that any monetary consideration had actually passed between the co-owners.
Consequently, the Court set aside the notice demanding additional stamp duty, holding that such a demand was unsustainable and directed the registering authority to process the document as a partition deed. The authorities may refuse registration only if any other legally valid objection exists and must communicate such reasons to the petitioners.
Case Title: Salguti Vishnuvardhan Reddy & Ors. v. State of Telangana & Ors.
Case No.: Writ Petition No. 36821 of 2025
Appearance: Sri Pawan Kumar Agarwal for the Petitioners; Smt. S. Sravanthi, AGP for Stamps and Registration, for the Respondents.