Module II: Registration and Stamp Duty

- Registration of real estate ,

- Effect of non-registration ,
- Stamp duties ,
- Cancellation of stamps ,
- Effect of deficient stamping ,and remedy ,
- Development Agreement etc,
-Execution of real estate documents at different places ,
- Place of suing
The real estate sector has been one of the top-most contributors to the country's Gross Domestic Product
(GDP) and employment creation. Surprisingly, inspite of being such an important part of the economy, the
real estate sector was unregulated for numerous years. In order to regulate the aforesaid unorganized
sector, the Indian Parliament passed a legislation called as The Real Estate (Regulation and Development)
Act, 2016 ("RERA") which was made effective on May 1, 2016.

A batch of writ petitions was filed by real estate developers and individual plot owners in the Bombay
High Court. They claimed that RERA is unconstitutional as its state-wise implementation and appointing
state-level authority is arbitrary. They also challenged Section 3 of the RERA which mandates developers
to register their new and ongoing real estate projects.

The Bombay Court held that RERA is constitutional. A bench of justices consisting Rajesh Ketkar and
Naresh Patil stated that "RERA needs to be closely monitored in years to come. RERA is not a law relating
to only regulatory concerns but its object is to develop real sector particularly incomplete projects."

RERA is a central legislation though land is a state subject on which only the state government is
empowered to frame laws. Hence, RERA being a central legislation, is adopted by each state government
in India in its respective state assembly and has also framed its respective rules and regulations to
implement RERA in its territory.
REGISTRATION OF REAL ESTATE PROJECTS

One of the salient features of RERA is the requirement of registration of the real estate project by
the 'Promoter' with the Real Estate Regulatory Authority ("Authority"), which falls within the
planning areas. In the absence of such registration, the Promoter of a real estate project is not
permitted to advertise, market, book, sell or offer for sale, or invite persons to purchase in any
manner in any real estate project or part of it.

RERA defines promoter as ("Promoter"):

-Builder;
-Developer;
-Development Authority;
-Society; or
-Holder of Power of Attorney from the owner of the land on which building / apartment is
constructed or plot is developed for sale.
A "real estate project" is defined as the development of a building, converting an existing building or a
part in apartments, development of land into apartments / plots for the purpose of selling and includes
common areas, development works, all improvements and structures thereon and all easement, rights
and appurtenances belonging to such building or land or structure.

The terms "apartment" and "building" as used in the aforesaid definition which is defined under the
Act not only covers residential projects but also covers commercial projects.

In terms of Section 3 of RERA, the following real estate projects are not required to be registered:

1. Where the area of the land does not exceed 500 square meters or number of apartments does not
exceed 8 (eight);
2. Where the Promoter has received completion certificate for a real estate project prior to
commencement of RERA; and
3. Where the work involved is limited only to renovation or repair or re-development and does not
involve marketing, advertising, selling or new allotment of any apartment, plot or building.

In addition to the registration of real estate projects, every Real Estate Agent is also required to get
itself registered before facilitating the sale / purchase of any real estate project or part of it, by making
an application along with requisite information / documents and fee.
Application for registration under RERA

In terms of Section 4 of RERA, an application required to be made by every Promoter along with the
prescribed fee for registration of its real estate project and shall be inter alia accompanied with the
prescribed documents including:

1. An authenticated copy of the approvals and commencement certificate obtained from the competent
authority;

2. Sanctioned plan, layout plan and specifications of the proposed real estate project as sanctioned by the
competent authority; and

3.A declaration by the Promoter supported by an affidavit inter alia stating:

(a) that the Promoter has a legal title over the land on which development is proposed;
the details of all encumbrances on such land;

(b)the time period within which the Promoter undertakes to complete the real estate project;

(c)that the Promoter would deposit 70% of the amount realized for the real estate project from the
allottee(s) from time to time in a separate bank account.
Validity of registration under RERA

The registration granted shall be valid for a period declared by the Promoter for completion of the
real estate project or phase thereof as submitted in the affidavit along with the application for
registration.

The registration granted by the Authority may be extended by it upon receipt of application from
the Promoter in this regard in the following circumstances:

1. Force Majeure: war, flood, drought, fire, cyclone, earthquake or any other calamity caused by
nature affecting the regular development of the real estate project.

2. Other than force majeure: The Authority may extend the registration to a maximum period of
one year if it feels that the circumstances and reasons for extension of the case are reasonable.
Revocation of registration

RERA stipulates various compliances with respect to a real estate project. If the same are not complied with,
the registration of an already registered real estate project may get revoked. The Authority may revoke a
registration on the basis of a complaint received or suo motu by the Authority by giving 30 days' notice in
writing to the Promoter of such real estate project stating grounds of proposed revocation and instructing him
to show cause as to why the registration should not be revoked. On the basis of the Promoter's reply to the
show cause notice, the Authority may allow the real estate project to be registered or alternatively, may
cancel the registration.

A show cause notice proposing the revocation may be issued on the following grounds:

1)- If the Promotor defaults in doing anything required under RERA;

2)- If the Promotor violates any terms and conditions of the approval granted by the Authority;
3)- If the Promotor is involved in any kind of unfair practice or irregularities such as any misrepresentation
or false representation and / or publication of any advertisement / prospects of services that are not intended
to be offered; and / or
4)- If the Promoter indulges in any fraudulent practices.
EFFECTS OF NON- REGISTRATION

Consequences of non-registration

In case of non-registration of the real estate project, Section 59 stipulates a penalty of up to 10% of
the estimated project cost and in case of continued default, an additional fine up to 10% of the
estimated project cost or imprisonment up to 3 (Three) years or both.

In terms of the provisions of Section 31 of the RERA legislation, any aggrieved person may file a
complaint with the Authority against the Promoter for violation of the provisions. The Authority has
been entrusted with very wide powers under RERA in relation to any non-compliance on the part of
the Promoter including levy of penalty as well as taking such other remedial measures or safeguards
as may be deemed fit by the Authority. The same may include granting of interim order(s), refund of
consideration amount received by the Promoter from various allottee(s), change in the developer /
Promoter, etc., on a case to case basis.
Lending by Financial Institutions / Banks
In the event, any bank / financial institution decides to lend money to retail buyers under the real estate
project, which is not registered or registration of the same has been cancelled, such decision may be a
conscious call on the part of such bank / financial institution since such lending will involve high risk
factors and uncertainties regarding the completion of the real estate project or actions to be taken by the
Authority in relation to such real estate project / Promoter at a later stage, which may be detrimental to
the interest of such bank / financial institution or other stakeholders. Hence, the Banks / Financial
Institutions have also been insisting upon registration of real estate projects under RERA before sanction
of the loan or approval of the real estate project in order to protect their interest.
STAMP DUTIES

Stamp duty is an ad valorem tax payable on the value of an instrument used for various transactions-
commercial or otherwise. The Indian Stamp Act, 1899 ("Act") enacted to prescribe and provide for the
collection of proper stamp duty on an instrument is based on the chargeability of instrument and not of
the transactions, notwithstanding the fact that different instruments may pertain to a single transaction.

- Government tax on legal documents usually in the transfer of assets and property.

-Collected by State as per Indian Stamp Act 1899.

- It is generally 4% to 10% of property value in different states.

- Usually paid by Buyer/Transferee unless otherwise mutually agreed by parties.

- Stamp Duty paid & registered document is a proper legal document that can be submitted as
evidence in court.

- You can collect a duplicate document from Sub- Registrar office in case of loss of original document
- Stamp Duty is payable at the time of execution of the transfer agreement (eg. Sale Deed)

DOCUMENTS THAT REQUIRE STAMP DUTY

- Sale Deed

- Gift Deed

- Exchange Deed

- Partition Deed

- Lease Deed ( >12 Months registration compulsory)

- Transfer Deed/ Document

- Mortgage Deed

-Power of Attorney
CALCULATION OF STAMP DUTY AND REGISTRATION CHARGES

- Stamp Duty charges vary from State to State.

- In case of Sale Deed- Usually 4% - 10% of Property Value (Higher of Circle Rate of Actual
Transaction Value) (Circle duty is the minimum registration or stamp duty charges)

- Registration Charges @ 1% of Property Value.

Example:-

If Market Value = Rs. 1.5 Cr. And Circle Value= Rs. 1 Cr.
Stamp Duty and Registration Charges (5%) @ MV (Rs. 1.5 Cr.) = Rs. 7.5 Lakhs will be stamp duty and
registration charges

If Circle Value = Rs. 1 Cr. And Market Value= Rs. 70 Lakhs

Stamp Duty and Registration Charges (5%) @ CR (Rs. 1 Cr.) = Rs. 5 Lakhs
Stamp Duty Varies Based on:-

- Location – Urban, Rural

- Type of Property – Residential (Flat/ Independent House), Commercial, Industrial, Hotel, etc.

-Gender- Rebate for Female Owners.

- Age- Rebate for Senior Citizens.

STAMP DUTY
‘Stamp duty’ means a tax payable on certain legal documents specified by statute; the duty may be
fixed or ad valorem meaning that the tax paid as a stamp duty may be a fixed amount or an amount
which varies based on the value of the products, services or property on which it is levied. It is
basically a kind of tax paid on any transaction based on exchange of documents or execution of
instruments.
What is the difference between a document and an instrument?

A document is the record of the conditions agreed upon by the parties involved in a transaction in a
proper format. A document whose stamp duty has been paid or more simply, a stamped document is
considered an authentic and legal document. It gets evidentiary value and can be admitted as evidence in
Courts under the provisions of the Indian Stamp Act, 1899. The Indian Stamp Act, 1899 is a fiscal statute
dealing with tax on transaction.

Instrument is a document by which a right or liability is created, transferred, extended, limited,

extinguished or recorded.

Adhesive stamps can be:

Adhesive stamps are labels which can be conveniently stuck on the instruments. Adhesive stamps can be
further categorized into two categories: postal and non-postal stamps. Postal stamps are used only for
transaction with the post office and related function whereas a non-postal stamp can be a court fee stamp,
revenue stamp, notarial stamp, special adhesive stamp, foreign bill stamp, brokers’ note, insurance policy
stamp or a share transfer stamp.
The most important aspect of the stamp duty is the calculation of the stamp duty. But before the
procedure of calculation itself, some basics need to be cleared.
On what kind of documents is a stamp duty levied on?

Stamp Duty, in India, is generally levied on transfer of property, shares, debentures, bill of exchange,
conveyance deed, hire purchase, promissory note and movable and immovable assets. It is also used
for partnership deed, gift deed, lease agreement, rent agreement, increase in authorized capital,
agreement of sale, buying a house, bank guarantee, commercial property, home loan, loan agreement,
mortgage, and service apartment. In real estate transaction that involves buying, selling, renting, and
leasing of a residential or commercial property, stamp duty of required value are paid before signing it
as the documents are not producible in a Court unless properly stamped.

Stamp Duty Calculator:

Usually it is easy enough to calculate the stamp duty payable as per the rates provided in the Indian
Stamp Act or the State Stamp Act and pay accordingly. But in complex cases, the person paying the
duty may not be able to ascertain the correct stamp duty and may for help apply for the opinion of the
Collector of Stamps.
First step to calculate the Stamp duty is to identify which category the document or instrument falls
under. There are three categories of transaction for the purpose of stamp duty calculation:

Under the first category, the stamp duty remains fixed no matter what value is mentioned in the
document or instrument. Examples of such instruments are Administration Bond, Affidavit, Adoption
Deed, Appointment in Execution of Power, Divorce, Apprenticeship Deed, Award, Article of Clerkship,
Cancellation Deed, Duplicate, Charter Party, Copy of Extracts, Indemnity Bond, Power of Attorney, etc.

Under the second category, Stamp duty charges are dependent upon the value mentioned in the
document. Such documents are Mortgage Deed, Lease Agreement, Title Deeds, Security Bond,
Hypothecation Deed, Article of Association, etc.

Under the third category, the Stamp duty depend either on the value mentioned in the document or on
the true market value, whichever is higher. Instruments like Conveyance, Agreement for sale, Gift
exchange, Partnership Deed, Development Agreement, Transfer of Immovable Property, Trust Deed,
Partition, and so on.
Stamp duty for property transactions:

Calculation of Stamp Duty Rates for property transactions:

The stamp duty rate varies from one kind of transaction and on the location of the transaction. Every
state in India follows a separate stamp duty rate structure. Usually the duty levied is based on the
current market value of the concerned property. The rates are determined at the beginning of every year
and made public through the stamp duty ready reckon. The concept of e-stamping has now been
introduced by the government which is able to come up with a more accurate value of duty for
immovable property. Various popular parameters are taken into account by the e-stamping procedure to
calculate the rates of stamp duty in a particular region such as debt and mortgage, distance from
conveniences, approach roads, etc.

Revenue Stamp:

It is a tax of Re. 1 in the form of revenue stamp, which should be affixed on receipt for any money or
other property, the amount or value of which exceeds Rs. 5000.
Rate of stamp duty:

Stamp duty on non-residential properties whether in a co-operative society or not is at a rate of 5%

of the market value. Stamp duty on residential flats in a housing society and building covered under
Article 25(d) of Schedule of the Bombay Stamp Act, 1958 attracts concessional rates depending
upon its market value as follows:

i. for up to Rs. 1,00,000 stamp duty is nil,

ii. between Rs. 1,00,001 to Rs, 2,50,000 it is 0.5% of the value,

iii. between Rs. 2,50,001 to Rs. 5,00,000 Stamp duty is Rs. 1,250 +3% of the value above Rs.
2,50,000

iv. Above Rs. 5,00,000 it is Rs. 8,750 + 5% of the value above Rs. 5,00,000.
CANCELLATION OF ADHESIVE STAMPS

Any person affixing any adhesive stamp to any instrument bears an adhesive stamp which is not
cancelled shall be deemed to be unstamped.

MANNER OF CANCELLATION

1. Single Line Drawn:- A Stamp can be cancelled effectually merely by drawing a solitary or single
line across the stamps. (Mahadeo Koeri v. Sheoraj Ram Teli)

In Hafiz Allah Baksh v. Dost Mohammed, it was held that if it is possible to use the stamp even
after drawing a line, it will be considered as an effectual cancellation.

2. Diagonal Line :- In Melaram v. Brij Lal, it was held that a very effective method of cancellation
of stamps is drawing of diagonal lines across the stamp with the ends of the lines extending on to
the paper of the document.
3. If an illiterate person marks a cross on the stamp it would amount to effectual cancellation (Kolai
Sai v. Balai Hajam)

Section 35 of the Indian Stamp Act, 1899, lays down that if an instrument chargeable with stamp
duty is not duly stamped, then it shall not be admitted in evidence for any purpose, nor shall it be
acted upon, registered or authenticated by any such person having authority to receive evidence or by
any public officer. However, such instrument can be admitted in evidence on payment of the
deficient duty, together with a penalty of a sum of equal to ten times such deficiency. This section is
reproduced as under:
“35. Instruments not duly stamped inadmissible in evidence, etc.—No instrument chargeable with
duty shall be admitted in evidence for any purpose by any person having by law or consent of parties
authority to receive evidence, or shall be acted upon, registered or authenticated by any such person
or by any public officer, unless such instrument is duly stamped:

Provided that—

(a) any such instrument shall be admitted in evidence on payment of the duty with which the same is
chargeable or, in the case of an instrument insufficiently stamped, of the amount required to make up
such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or
deficient portion thereof exceeds five rupees, a sum of equal to ten times such duty or portion;
(b) where any person from whom a stamped receipt could have been demanded, has given an
unstamped receipt and such receipt, if stamped, would be admissible in evidence against him, then
such receipt shall be admitted in evidence against him on payment of a penalty of one rupee by the
person tendering it;

(c) where a contract or agreement of any kind is effected by correspondence consisting of two or
more letters and any one of the letters bears the proper stamp, the contract or agreement shall be
deemed to be duly stamped;

(d) nothing herein contained shall prevent the admission of any instrument in evidence in any
proceeding in a criminal court, other than a proceeding under Chapter XII or Chapter XXXVI of the
Code of Criminal Procedure, 1898 (5 of 1998);
(e) nothing herein contained shall prevent the admission of any instrument in any Court when such
instrument has been executed by or on behalf of the Government or where it bears the certificate of the
Collector as provided by Section 32 or any other provision of this Act.”

In this regard, it is pertinent to point out that in the case of Omprakash v. Laxminarayan, (2014) 1 SCC
618, while interpreting Section 35 of the Indian Stamp Act, Hon’ble Supreme Court held as under:

“From a plain reading of the aforesaid provision, it is evident that an authority to receive evidence shall
not admit any instrument unless it is duly stamped. An instrument not duly stamped shall be admitted
in evidence on payment of the duty with which the same is chargeable or in the case of an instrument
insufficiently stamped, of the amount required to make up such duty together with penalty. As we have
observed earlier, the deed of agreement having been insufficiently stamped, the same was inadmissible
in evidence. The court being an authority to receive a document in evidence to give effect thereto, the
agreement to sell with possession is an instrument which requires payment of the stamp duty
applicable to a deed of conveyance. Duty as required, has not been paid and, hence, the trial court
rightly held the same to be inadmissible in evidence.”
In view of what is mentioned above, an agreement or any other instrument may be of no legal value if
it is not duly stamped as required under the law. However, as pointed out above, if the deficient stamp
duty is paid for such agreement along with 10 times penalty, then such agreement may become legally
valid and may be taken in evidence by courts and other authorities.
Instrument –
“instrument” includes every document by which any right or liability is, or purports to be, created,
transferred, limited, extended, extinguished or recorded;

Duly stamped –
“duly stamped”, as applied to an instrument, means that the instrument bears an adhesive or impressed
stamp of not less than the proper amount, and that such stamp has been affixed or used in accordance
with the law for the time being in force in India.

Collector –
(a) means, within the limits of the towns of Calcutta, Madras and Bombay, the Collector of Calcutta,
Madras and Bombay, respectively, and, without those limits, the Collector of a district; and
(b) includes a Deputy Commissioner and any officer whom the State Government may, by notification in
the Official Gazette, appoint in this behalf ;

.
Penalty –
“penalty” means ‘fine and forfeiture’

Instrument not duly stamped –

From the above definition ‘instrument’ means ‘any right or liability is transferred’ and ‘duly stamped’
means ‘instrument bears an adhesive stamp of proper amount as per fixed by law’ so ‘Instrument not duly
stamped’ means ‘instrument bear a stamp which of the lower amount as per fix by law’

Penalty on instrument not duly stamped –

When proper stamp duty is not paid on the instrument at that time certain penalty is imposed by the
collector. This penalty may be of the payment of the insufficient stamp duty and fine of Rs. 500 or he may
take the fine up to 10 time of the insufficient stamp duty.

The collector has got the maximum power in context of revenue at the district level. He has got power to
punish, impose fine and forfeiture of the property
Penalty for Executing Not Duly Stamping Instrument

Whenever word penalty comes in mind of the person with regard to the stamp duty section 32A and
section 33A comes first. This section is dealing with the penalty on stamp duty which is paid less. Many
time it happens that there is a mistake in calculating the stamp duty due to which less stamp duty is paid
to the government. When less duty is paid at that time the process of registration of instrument is stopped
or if done then noticed is issued to pay the duty, in this case they have to pay certain fine which is
decided by the collector. Now let us discuss the bare provision of section 32A and section 33A.

Section 32A - Instrument of conveyance, etc. undervalued how to be dealt with.- (1) Every instrument of
conveyance, exchange, gift, certificate of sale, deed of partition or power of attorney to sell immovable
property when given for consideration, deed of settlement or transfer of lease by way of assignment,
presented for registration under the provisions of Registration Act, 1908, shall be accompanied by a true
copy thereof :

Provided that, in case of such instruments executed on or after the 4th July 1980, to the date of
commencement of the Bombay Stamp (Amendment) Act, 1985, an extract of the instrument to be taken
from the registration record shall be deemed to be the true copy accompanying the instrument, presented
for registration for the purposes of sub-section (1).
(2)(a) If any officer registering such instrument has reason to believe, on the basis of the information
available with him in this behalf, that the market value of the immovable property which is the subject
matter of such instrument has not been truly set forth therein, he may, immediately after presentation of
such instrument, give a notice to the person who is liable to pay the stamp duty under section 30, calling
upon such person to pay the deficit amount of stamp duty and a penalty at the rate of 2 per cent of the
deficient portion of the stamp duty, for every month or part thereof from the date of execution of such
instrument. If such person is willing to pay the amount of the deficit stamp duty and penalty thereon, the
registering officer shall accept the payment. The procedure laid down in sub-section (3) of section 10
shall, mutatis mutandis, apply to such payment;

(b) If such person does not make the payment within one month of receipt of the notice referred to in
clause (a), then the registering officer shall, before registering the instrument, refer the true copy of such
instrument to the Collector of the District for determination of the true market value of such property and
the proper duty payable on the instrument;
(c) It shall be lawful for the registering officer to issue similar notices in respect of the instrument presented
for registration before the date of commencement of the Maharashtra Tax Laws (Levy, Second Amendment
and Validation) Act, 1996 where the true market value of the immovable property which is subject matter of
such instrument has not been determined by the Collector of the District. On the receipt of such notice, if the
person liable to pay the stamp duty makes such payment within one month from the date of such receipt, and
also pays the fixed penalty of rupees 250, he shall not be liable to make any further payment of penalty at
the rate of 2 per cent of the deficient portion of the stamp duty, for every month or part thereof from the date
of execution and on such payment being made, the reference already made to the Collector of the District
shall abate.

(3) If any person referred to in section 33, before whom any such instrument is produced or comes in the
performance of his functions, has reason to believe that the market value of the immovable property which is
the subject matter of such instrument has not been truly set forth therein, he may, after performing his
function in respect of such instrument, refer the instrument along with a true copy of such instrument to the
Collector of the District for determination of the true market value of such property and the proper duty
payable on the instrument.
Provided that if the person, before whom any such instrument is produced or comes in performance of
his functions, is an officer appointed as the Collector under clause (f) of section 2, and he has reason to
believe that the market value of the immovable property which is the subject matter of such instrument
has not been truly set-forth therein, he shall, for the purpose of assessing the stamp duty, determine the
true market value of such property in the manner laid down in the Bombay Stamp (Determination of
True Market Value of Property) Rules, 1995;

4) On receipt of the instrument or the true copy of the instrument as the case may be, under sub-section
(2) or (3), the Collector of the District shall, after giving the parties concerned a reasonable opportunity
of being heard and in accordance with the rules made by the State Government in that behalf, determine
the true market value of the immovable property which is the subject matter of the instrument and the
proper duty payable thereon. Upon such determination, the Collector of the District shall require the
party liable to pay the duty, to make the payment of the amount required to make up the difference
between the amount of duty determined under this sub-section and the amount of duty already paid by
him and shall also require such party to pay in addition, a penalty of 2 per cent for every month or part
thereof from the date of execution of the instrument on differential amount of stamp duty; and on such
payment, the instrument received under sub-section (2) or (3) shall be returned to the officer or person
referred to therein :
Provided that, no such party shall be required to pay any amount to make up the difference or to pay any
penalty under this sub-section, if the difference between the amount of the market value as setforth in the
instrument and the market value as determined by the Collector of the District does not exceed ten per
cent, of the market value determined by the Collector of the District.

Provided further that, in respect of references pending with the Collector of the District, before the
commencement of the Maharashtra Tax Laws (Levy Second Amendment and Validation) Act, 1996, for
determination of true market value of the immovable property which is the subject matter of the
instrument, the person liable to pay the stamp duty under section 30 shall not be liable to pay penalty
exceeding rupees 250 if, he makes the payment of the stamp duty and penalty within one month from the
date of receipt of the order of the Collector of the District, by him.
(5) The Collector of the District, may, suo moto or on receipt of information from any source, within ten
years from the date of registration of any instrument referred to in sub-section (1), (not being the
instrument upon which an endorsement has been made under section 32 or the instrument or the
instruments in respect of which the proper duty has been determined by him under sub-section (4) or an
instrument executed before the 4th July 1980), call for the true copy or an abstract of the instrument from
the registering officer and examine it for the purpose of satisfying himself as to the correctness of the
market value of the immovable property which is the subject matter of such instrument and the duty
payable thereon; and if, after such examination, he has reason to believe that the market value of such
property has not been truly and fully setforth in the instrument he shall proceed as provided in sub-
section (4).
(6) It shall be lawful for the Chief Controlling Revenue Authority or the Collector of the District to
transfer to any other Officer, any reference received by the Collector of the District under this section,
for disposal in accordance with the Bombay Stamp (Determination of True Market Value of Property)
Rules, 1995.

Under section 33A collector has got the power to impose 10 times penalty of which the stamp is less
used. When any person pay less stamp duty on the amount which he has paid for the instrument and
shown in the deed at that collector has to exercise his power under section 33A.

Impounding of instruments after registration.- When through mistake or otherwise any instrument which
is not duly stamped is registered under the Registration Act, 1908, the registering officer may call for the
original instrument from the party and, after giving the party an opportunity of being heard and
recording the reasons in writing and furnishing a copy thereof to the party, impound it. On failure to
produce such original instrument by the party, a true copy of such instrument taken out from the
registration record shall, for the purposes of this section, be deemed to be the original of such
instrument.
Penalty for executing etc., instrument not duly stamped –

(1) Any person-

(a) drawing, making, issuing, endorsing or transferring, or signing otherwise than as a witness, or
presenting for acceptance or payment, or accepting, paying or receiving payment of, or in any manner
negotiating, any bill of exchange payable otherwise than on demand or promissory note without the same
being duly stamped, or

(b) executing or signing otherwise than as a witness any other instrument chargeable with duty without the
same being duly stamped; or voting or attempting to vote under any proxy not duly stamped ; shall for
every such offence be punishable with fine which may extend to five hundred rupees :

Provided that, when any penalty has been paid in respect of any instrument under section 35, section 40 or
section 61, the amount of such penalty shall be allowed in reduction of the fine (if any) subsequently
imposed under this section in respect of the same instrument upon the person who paid such penalty.
(2) If a share-warrant is issued without being duly stamped the company issuing the same, and also every person
who, at the time when it is issued, is the managing director or secretary or other principal officer of the company
shall be punishable with fine which may extend to five hundred rupees.

Real Estate Stamp Duty is a type of tax collected by the Government of India. The British Government
introduced Stamp Duty in India by enacting the Indian Stamp Act, 1899. Stamp Duty is paid for the transaction
performed by way of document or instrument under the provisions of Bombay Stamp Act, 1958 and Indian
Stamp Act, 1899 to the Collector of Stamps. The proceeds of the Duty go to the State in which they are levied.

Stamp Duty is expected to be paid in full and on time. Penalty involves fine or even imprisonment. Delay in
payment of property Stamp Duty will draw a penalty at the rate of 2% per month on the deficit amount of the
Stamp Duty and a maximum penalty of 200% of the deficit amount of the Stamp Duty.

In so far as the orders of the Collector are concerned, an appeal lies to the Sub-Court having jurisdiction over the
area within two months. However, the appeal shall be filed only after the entire amount of the deficit duty as
determined by the Collector has been deposited.

If we talk about the present scenario of state of Gujarat then, we can say that section 32A is almost of no use.
Now if stamp duty is not paid according to the government rate of the instrument than the registration of the deed
or any such thing will not be allowed, they will immediately ask the person to get the stamp of remaining
amount.
Development agreement

A development agreement is a legally binding contract between a property owner or developer and a local
government, often including terms not otherwise required through existing regulations.

These agreements can specify various elements of the development process ranging from phasing of a
larger master-planned community, to tax-sharing for retail development, to critical infrastructure
responsibilities.

Development agreements are sometimes used in combination with a planned unit development (PUD) in
the form of a binding PUD agreement that specifies the negotiated terms of the development, but the two
tools may also be used independently.

For hazard mitigation purposes, development agreements can be used to guarantee that a proposed
development reduces risk to hazards by requiring it meet certain use requirements, site development
standards, conservation practices, or long-term maintenance provisions not already required by land
development regulations.
Development agreements can also be used as an incentive. For example, if a developer agrees to enter into
an agreement to include defensible space elements in a large-scale development in the wild land-urban
interface, the local government might offer reduced fees, expedited review, or even density bonuses in
exchange.

To establish a development agreement, the developer and the local government both work with legal
counsel to develop and execute a contract that binds all parties.

What is the purpose of the development agreement?

Crafting the purpose and goals will solidify the reasons why a development agreement is necessary and
helps facilitate a process where the expectations for both parties are clearly articulated. This step should
also act as a screening process for whether the purpose of the development agreement is consistent with a
comprehensive plan or other policies generated by the jurisdiction.
Documents Required:

The Following Documents are Required for Development Agreement :

1. Sale Deed/Title deed /Mother deed/Conveyance Deed

Description of Property Document: A sale deed acts as the main legal property document for evidencing
sale and transfer of ownership of property in favor of the buyer, from the seller. Further, it also acts as the
main property document for further sale by the buyer as it establishes his proof of ownership on the
property.

Normally sale deed is executed after execution of sale agreement. Sale deed confirm that terms and
conditions detailed in the sale agreement as agreed upon between the buyer and the seller are complied. It
is mandatory to register the Sale Deed in Sub Registrar office in whose jurisdiction property is located. It
is mandatory to register sale deed within 4 months from the date of execution else you need to pay penalty
or it stands invalid.

Why it is required: To establish the ownership of seller on title of property

Mandatory: Yes. All previous Sale Deeds are required in original
Required in Original: Yes
Required For: Property Purchase + Home Loan
2. RTC Extracts

Description of Property Document: R.T.C is issued by the Village Accountant. It contains details of the
extent of land in a survey number or a sub-survey number, the extent of kharab land therein, the names
of the present and previous owners, their respective holdings and names of the tenants.

It also include details like the kind of soil/crop, any mortgages, charges made on the properties
contained therein, the status of land (whether Inam land or not), the conversion order number, date in
case any property converted therein from agricultural to non-agricultural use, the references to mutation
and inheritance certificates where there is any change in ownership etc.

Why it is required: To establish the Title of Land, if the property is located on converted land e.g.
converted from agricultural to non-agricultural use
Mandatory: No
Required in Original: No
Required For: Property Purchase
3. Khata Certificate and Extracts

Description of Property Document: Khata means an account and Khata is an account of a person who has
property in the city.

There are two types of Khata:

Khata Certificate and Khata Extract. In different states it is known by different names. It is basically an entry
in record of local municipal committee and indirectly confirms that apartment is constructed as per approved
plan.

Khata certificate is required for two reasons: For registration of a new property and for transfer of any property.
Khata can be obtained from the Assistant Revenue officer (of the respective area). This certificate is must have
for any property owner.

Khata Certificate is obtained for any new registration after paying the tax. Khata certificate is issued stating
that a particular property No ‘N” is in the name of person X. This certificate is required to apply for water
connection, electricity connection, trade license and building license. The Khata certificate is given only to the
owner of the property or to his family members. No one else can take it on his behalf.
Khata Extract is seeking details from the assessment register. The extract is required to get trade license,
or to buy a particular property. It is an extract from the assessment register about any particular property.
It has the details of the property in a particular format with the name, size of the property, use of the
property (commercial purpose, residential), annual value, when assessed last. An extract is the only way
to get these details of any property.

Why it is required: For transfer of property

Mandatory: Yes
Required in Original: Yes
Required For: Property Purchase + Home Loan
4. Mutation Register Extracts

Description of Property Document: Mutation Extract issued by the Village Accountant or Tahsildar
contains the extract from the mutation register or inheritance certificate with details of previous owner,
the present owner, the mode of acquisition of the property, the total extent of the property and the
order stating that the Khatha of the property may be transferred to the name of the present owner.

Why it is required: To establish the Title of Land if the property is located on converted land e.g.
converted from agricultural to non-agricultural use

Mandatory: No
Required in Original: No
Required For: Property Purchase
5. Joint Development Agreement

Description of Property Document: An individual landowner and a builder may enter into a JDA. The
key feature of a JDA is that the landowner will contribute land and the builder will undertake
development activity on it. Depending upon the land price, the joint development ratio is decided
among the parties. In most of the cases, the builder will agree to allot X no of flats to the landowner
and there is no exchange of money between landowner & builder. In consideration of this, the
landowner will part with his share of land in favor of the builder or his nominee. He also allow the
builder to construct apartment on his land and sell the agreed number of flats.

Why it is required: To establish whether original title of property rests with the Builder or with
Landowner

Mandatory: Yes
Required in Original: No
Required For: Property Purchase
6. General Power of Attorney

Description of Property Document: A “power of attorney” is a legal instrument whereby one person
gives another person the authority to act on his or her behalf as his legal representative and to make
lawful binding legal and financial decisions on his behalf including Sale or Purchase of Property on
Buyer or Seller’s behalf.

Why it is required: To establish whether the previous Sale or Purchase was carried out by authorized
person on Seller or Buyers behalf

Mandatory: Yes (If any of previous Sale/Purchase were executed through GPA)
Required in Original: Yes
Required For: Property Purchase + Home Loan
7. Building plan sanctioned by the Statutory Authority

Description of Property Document: The building plan approval process relates to the issue of permission for the
construction of buildings based on specific set of rules and regulations.

Why it is required: To establish whether the property is authorized or unauthorized

Mandatory: Yes
Required in Original: No
Required For: Property Purchase

8. NOC from Electricity Deptt/Pollution Control Board/Water Works/ Air Port Authority

Description of Property Document: Before starting the construction, builder requires NOC from all key Govt
Departments. In some states NOC from at least 19 departments are required ranging from Pollution Control
Board to Fire & Safety etc. For example If builder does not get NOC from Electricity Deptt then in all
probability, buyer will not get electricity connection thus 100% dependency on generators. It will increase
maintenance bill drastically.

Why it is required: To ensure Govt approvals are in place

Mandatory: Yes
Required in Original: No
Required For: Property Purchase
9. Supplementary agreement / Ratification Deed (if any)

Description of Property Document: Supplementary agreement captures any extension, change or

modification in certain clauses of Principal Agreement. Many a times changes are required in principal
agreement and only way to execute the same is through Supplementary agreement. Just check whether
any supplementary agreement is executed against Principal agreement.

Why it is required: To avoid any future shock on modified clauses which you might not be aware of &
is not included in property documents.
Mandatory: Yes
Required in Original: No
Required For: Property Purchase
Are the benefits to the community balanced with those to the developer?

Along with the general purpose of the agreement, a justification of the benefits of the agreement to
health, safety, and welfare of the community should be considered.

Will these requirements be consistent for similar developments?

In addition to site-specific development agreement requirements, jurisdictions may choose to require the
same standards for planned developments with similar conditions. Examples include offering incentives
for developers to maintain vegetation in riparian buffers or requiring major subdivision developments in
wild land-urban interfaces to counter the costs of fire fighting.

Who will be involved in the development agreement process?

Opportunities for public input and stakeholder feedback are often important components of an
agreement, which can help limit any negative response from the community.

How will the agreement be maintained throughout the life of the agreement?
Local governments should describe the long-term costs and maintenance requirements for both the
jurisdiction and the developer, as well as monitoring procedures and processes for amending agreement
terms in the future.