Telangana High Court
A. Sudhakar, Warangal vs Prl. Secy., Stamps And Registration, ... on 29 August, 2025
THE HONOURABLE SRI JUSTICE GADI PRAVEEN KUMAR
WRIT PETITION No.11382 OF 2013
O R D E R:
This Writ Petition is filed under Article 226 of Constitution of India seeking the following relief/s:-
"....to issue a writ order or direction and more particularly one in the nature of Writ of Mandamus by declaring the impugned order passed by the 2nd respondent in his proceedings dt.30.03.2013 whereby determining deficit stamp duty on unregistered development agreement dt.31.10.2007 and levying penalty at three times on the stamp duty is illegal, contrary to the principles of natural justice and law and set aside the same and consequently direct the 2nd respondent to determine the deficit stamp duty on unregistered development agreement as on the date of execution of such development agreement in the interest of justice and equity and pass...."
2. Heard Sri Alladi Ravinder, learned senior counsel appearing on behalf of the petitioner as well as learned Assistant Government Pleader for Revenue (Stamps & Registration) appearing on behalf of respondent Nos.1 to 4.
3. It is contended that a Development agreement for construction of commercial building was executed on 31.10.2007 in order to develop the commercial building in D.No.11-26-195 & 196, situated at MG Road, Warangal with owners Gandrathi Venkatanarayana and others. However, at the time of purchase of the developed flats, sale deed was executed between the land 2 GPK,J W.P.No.11382 of 2013 owners i.e., Gandrathi Venkatanarayana and others and the purchasers i.e., Nahid Fathima, while submitting the sale deed dated 26.10.2012 before the 3rd respondent the parties filed unregistered development agreement for construction of commercial building/complex, whereas the 3rd respondent kept the sale deed for registration pending and allotted number P/564/2012 and sent the unregistered development of agreement to the 2nd respondent for impounding duty determining the stamp duty and penalty in respect of unregistered development agreement, which was executed in favour of the petitioner.
4. It is further contended that the 2nd respondent impounded the unregistered development agreement for construction of commercial complex and determined the stamp duty under Article 6 ( c) (iii) of schedule (i)(a) at Rs.5,80,511/- and levied penalty three times duly amounting to Rs.23,22,044/- and directed the petitioner to pay the deficit stamp duty within 10 days vide notice No.G1/3511/2012, Dt.14.02.2013.
5. It is further contended that pursuant to the said notice, the petitioner submitted a representation to 2nd respondent on 3 GPK,J W.P.No.11382 of 2013 08.03.2013 requesting for indulgence for determining the stamp duty.
6. It is further contended that the 2nd respondent has not issued any notice to the petitioner before determining the deficit stamp duty and on contrary to law, determined the deficit stamp duty by taking relevant date as on the date of presentation of sale deed i.e., 26.10.2012 instead of the date of execution of development agreement dated 31.10.2007 for which the document was sought to be impounded.
7. Learned senior counsel contended that the tax imposed to be calculated on the basis of the rate when the instrument itself is executed, such instrument for the purpose of determination of deficit stamp in terms of the provisions of the Indian Stamp Act cannot relate at the time of presentation of subsequent sale deeds executed in pursuance of such instrument. Learned senior counsel further contended that 2nd respondent had not given any reason much less no specific reasons were assigned for imposing three times penalty, further, no notice was issued. Hence, the present Writ Petition is filed.
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GPK,J W.P.No.11382 of 2013
8. Learned Assistant Government Pleader for Revenue (Stamps and Registration) vehemently contended that the District Registrar, Warangal directed the party to produce original development agreement, whereas the petitioner had submitted unregistered-development agreement. Through the recitals of the Development Agreement, which was executed by Mr.G.Venkat Narayana and two others in favour of Akuthota Sudhakar on 31.10.2007, Mr.G.Venkat Narayana is the absolute owner bearing No.11-26-196 admeasuring 180 sq yards. The learned Assistant Government Pleader further contended that getting the report from stamp section, that the Sale particulars about the stamp paper is not entered in the records of concerned stamp Vendor Mr.M.Chandra Mouli, the concerned stamp Vendor whose license was suspended and then later cancelled for such notorious incident in the past. Thereby, a personal notice was issued to the parties on 14.02.2013 for payment of deficit stamp duty and penalty.
9. It is further contended by the learned Assistant Government Pleader that the petitioner assailed the imposition of deficit stamp duty and 3 times penalty on an unregistered development 5 GPK,J W.P.No.11382 of 2013 agreement application dated 08-03-2013 stating that the penalty and stamp duty imposed are excessive, unjust and as per the law applicable, as on the date of execution 30-10-2007, the maximum stamp duty for an unregistered development agreement was Rs.20,000/- and the Authorities instead used the date of presentation 26-10-2012 to calculate market value and stamp duty, which inflated the duty and penalty.
10. It is further contended by the learned Assistant Government Pleader that the agreement was executed on stamp papers that are now untraceable due to the stamp vendor's license being cancelled for misconduct. Hence, the date of presentation i.e., 26.10.2012 is taken as criteria for calculation of Market Value and Stamp duty. Accordingly, notice was issued to the party for payment of deficit amount vide the District Registrar Warangal Procgs.No.G1/3511/2012, dated 30.03.2012 and the impugned order does not warrant any interference. He, therefore, prayed to dismiss the Writ Petition.
11. The learned senior counsel appearing for the petitioner relied on the order dated 22.11.2012 passed in W.P.No.33103 of 2012 by this Court, wherein it was held that when the statute 6 GPK,J W.P.No.11382 of 2013 vests discretion on the public authority that it should exercise such discretion reasonably and not in an arbitrary and whimsical manner. Thereby, the penalty was reduced to one time the deficit stamp duty.
12. A careful perusal of the record reveals that admittedly, no notice was issued by the respondents with respect to determining the quantum of deficit stamp duty including the penalty in terms of G.O.Ms.No.1475, dated 30.07.2005.
13. Learned counsel for the petitioner relying upon G.O.Ms.No.1475 dated 30.07.2025 contended that the stamp duty of Development Agreement of immovable property was reduced to 1% on consideration or estimated cost of construction and development as declared by the parties in the document subject to maximum of Rs.20,000/- on the condition that the stamp duty so paid shall not be adjustable, whereas as it was reported that the said G.O. was withdrawn by G.O.Ms.No.1481 dated 30.11.2007.
14. Section 40 of the Indian Stamp Act, empowers the Collector to impound an instrument, which is unstamped or insufficiently stamped. Under Clause-(b) of sub-section (1) 7 GPK,J W.P.No.11382 of 2013 thereof, if the Collector is of the opinion that an instrument is chargeable with duty and is not duly stamped, it requires payment of the proper duty or the amount required to make up the same, together with penalty of Rs.5/-; or if he thinks fit, an amount not exceeding ten times the amount of the proper duty or the deficit portion thereof, whether such amount exceeds or falls short of five rupees. The legislature vested with wide discretion in the Collector in the matter of imposition of penalty. The discretion varies from the minimum of Rs.5/- up to maximum of 10 times the proper duty or deficient portion thereof.
15. Prima-facie, this Court is satisfied that while passing the impugned order that no opportunity has been accorded nor any notice has been issued to the petitioner with respect to imposition of stamp duty and penalty.
16. Therefore, in the facts and circumstances of the case, this Court deems it appropriate to remit the matter for fresh consideration by setting aside the impugned order. Accordingly, the impugned order dated 30.03.2013 is set-aside by remitting the matter to the 2nd respondent for fresh consideration. It is needless to mention that authorities have to follow due process by 8 GPK,J W.P.No.11382 of 2013 providing opportunity to both the parties including of personal hearing and then pass a reasoned order in accordance with law. The said exercise shall be completed within 3 (three) months from the date of receipt of a copy of this order.
17. With the above observations, this Writ Petition is disposed of. There shall be no order as to costs.
Miscellaneous Petitions, pending if any, shall stand closed.
________________________ GADI PRAVEEN KUMAR, J Date: 29.08.2025 KRL