Telangana High Court Stays GO Aiming To Regularise Notarized Documents In Relation To Unregistered Sale Of Non-Agricultural Urban Properties

The Telangana High Court has passed interim orders staying a Government Order which aims at regularising notarized documents of non-agricultural urban land sales on the ground of prima facie being beyond the scope of section 9 of the Indian Stamps Act, 1899.

"G.O.Ms.No.84 dated 26.07.2023 is prima facie beyond the scope of Section 9 of the Indian Stamp Act, 1899 in as much as it seeks to regularize the notarized documents in relation to non-agricultural urban properties in the State and insofar as it directs the registering authorities in the State to accept the documents as valid link documents for further transactions."

The Division Bench of Chief Justice Alok Aradhe and Justice N.V. Shravan Kumar also observed that clause 10 of the GO is prima facie in contravention of the Transfer of Property Act, 1882 and Registration Act, 1908 apart from the Stamps Act as it stipulates that the notarized documents once regularised would act as future link documents.

Petitioner's counsel contended that the GO aims at regulation of sale transactions in urban properties, which took place on the basis of unregistered notarised documents.

He submitted that section 54 of the Transfer of property Act mandates a sale of immovable property to be made by way of a registered document and that section 17 is attracted to any property being sold, over the value of INR100.

"The state proposes to regularise sale transactions, which were entered into the parties on the basis of unregistered documents only with notary. When the Statutes themselves mandate sale through a registered document, the state now proposing to regularise such illegal transactions would be in violation of statutory provisions, Article 254 and Article 14 of the Indian Constitution," the plea said.

It was averred by the petitioner that the GO also allowed exemption of stamp duty in full to any property which had an area of 125 sq yards or below and a meagre fine of five rupees was being levied. The Counsel stated that this was violative of Articles 14 as it did not show any intelligible differentia between those benefiting under the G.O and the holders of registered deeds.

"In the counter, State has stated that they do not intent to register these notarised documents, but the effect of regularisation is deemed registration," the petitioner's counsel added.

The Special Government Pleader on behalf of the State on the other hand contended that the State was merely trying to collect stamp duty of already notarized documents in accordance with Section 9 of the Stamps Act. Further that neither Transfer of Property Act, nor Registration Act were the subject matter of the GO.

The State contended that if upon paying stamp duty, a document was entered into the regular stream, section 17 of the Registration Act would invariably be attracted, upon which a document would be considered as a link document.

The State brought to the notice of the Court that there were several sales made under section 22 of the Registration Act (where registration is prohibited) by way of notarised documents upon which stamp duty was never charged, and the GO aims at collecting stamp duty on such unauthorised transactions, where Public exchequer was put to loss.

It was also urged that the GO was passed with the aim to benefit people living below the poverty line and that the State by the power vested in them by section 9 of the Stamps Act has reduced the stamp duty payable and levied a fine instead.

The Bench opined that the GO prima facie would not fall under Section 9. "It is therefore directed that operation and effect of impugned G.O.Ms.No.84 dated 26.07.2023 shall remain stayed until further orders."

Counsel for petitioner: D NARENDAR NAIK

Counsel for respondents: D. Madhavi, G.P for Revenue. Senior Counsel Harender Pershad on behalf of Advocate General.

Case Title: Bhagyanagar Citizens Welfare Association vs State of Telangana

Case no.: WP(PIL): 68/23

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