Stamp duty, 3-party pact for Noida societies
The Supreme Court on Friday ruled that Cooperative Group Housing Society (CGHS) members in Noida would have to sign a three-party agreement and pay stamp duty when a flat or house is transferred in their name.delhi Updated: Sep 11, 2010 00:41 IST
The Supreme Court on Friday ruled that Cooperative Group Housing Society (CGHS) members in Noida would have to sign a three-party agreement and pay stamp duty when a flat or house is transferred in their name.
The three-party agreement, the bench added, would be among members, the housing society and Noida authority.
The ruling, delivered by a bench comprising Justices Dalveer Bhandari and H.S. Bedi, will impact housing societies which got land on a 99-year lease from UP government. They were exempted from paying stamp duty earlier. It will not affect societies that got land on freehold.
The bench held that it was in the interest of the sublessee (member who holds the sub-lease) to execute a registered three-party deal to safeguard the member's title on his or her property.
"A lease deed or sub-lease of immovable property would be compulsorily registered under the Registration Act and Transfer of Property Act. In the absence of such a document, there will be no legal effect or an effective transfer by way of lease or sub-lease," the bench ruled.
It gave six months time to society members to register and directed the government not to impose any penalty before the fixed period.
While reversing an Allahabad High Court judgement, the bench upheld an appeal filed by Noida and UP government against CGHS comprising retired and serving armed forces members.
Additional Advocate General Shail Dwivedi said: "This verdict states that if a society is exempted from paying stamp duty while purchasing land, it cannot retain the benefit while getting ownership of his or her property. Subsequent transfer of property is not exempted from stamp duty."
On October 14, 2004, Allahabad High Court held that flat owners need to pay stamp duty as they constitute the society that purchased land.
It had agreed with the contention placed by several societies that subsequent ownership of a flat or house did not tantamount to transfer of property.