M/S SUYOG CITY AOP THROUGH SIGNATORY/MEMBERversusSTATE OF MAHARASHTRA THROUGH MINISTRY OF REVENUE AND ORS

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                      Shabnoor
                                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                         CIVIL APPELLATE JURISDICTION

                                       WRIT PETITION NO. 11128 OF 2018

                      M/S Suyog City AOP Through
SHABNOOR
AYUB                  Signatory/Member                            … Petitioner
PATHAN                           V/s.
Digitally signed by
SHABNOOR AYUB
                      State of Maharashtra Through
PATHAN                Ministry Of Revenue And Ors.                … Respondents
Date: 2026.08.28
12:08:09 +0530

                                                     WITH
                                      CIVIL APPLICATION NO. 2129 OF 2018
                                                      IN
                                       WRIT PETITION NO. 11128 OF 2018

                      Ms. Manjiri Parasnis for the Petitioner.
                      Ms. Mamta S. Srivastava, AGP, for the State – Respondent.


                                       CORAM                 : AMIT BORKAR, J.

                                       RESERVED ON           : AUGUST 24, 2026

                                       PRONOUNCED ON         : AUGUST 28, 2026

                      JUDGMENT:

                      1.      The present Petition has been filed to challenge the
                      Judgment and Order dated 03.11.2017 passed by Respondent No.
                      2 in Appeal No. 29 of 2016. The Petitioner has challenged the
                      Order dated 07.05.2016 passed by Respondent No. 1 in Case No.
                      JK/SJL/PS/MLP/S-9/PR/No.10/13/Instrument No.3984/1790 /
                      2016.
                      2.      The property involved in the present matter is land bearing
                      Survey Nos. 101/2, 2H 49 R, admeasuring 3949.08 sq. metres,



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situated at Village Bavdhan (B.K.), Taluka Haveli, District Pune. On
27.05.2005, a Development Agreement was executed in favour of
David Koli Pillai in respect of the said property. Thereafter, on
29.04.2013, the Petitioner and David Koli Pillai entered into a
Joint Venture Agreement, which was registered at Sr. No.
3984/2013. Under this Agreement, the parties agreed to develop a
residential/commercial project on the said property and to sell the
constructed tenements to prospective purchasers. As per the terms
of the Joint Venture Agreement, the Petitioner was required to
obtain sanction to the building plans, obtain the N.A. order and
carry out the demarcation of the property. Clause No. 9 of the Joint
Venture Agreement provides for sharing of the revenue between
the parties. Under this clause, David Koli Pillai was entitled to 42%
and the Petitioner was entitled to 58%. Clause No. 12(ii) explains
what would be treated as the gross sale proceeds. Clause No. 22
provides for the tentative calculation of stamp duty on the basis of
the market value prevailing at that time and the Ready Reckoner of
the Government of Maharashtra. The calculation was made under
Section (Vibhag) 27.9, at page No. 153 of the Ready Reckoner,
2003. At the relevant time, the rate of the land was Rs.7,900/- per
sq. metre. On that basis, the value of the area covered by the
Agreement     was   calculated   slab-wise    at   Rs.2,69,39,000/-.
Accordingly, as provided under Clause 5(g)(a), stamp duty of
Rs.13,47,000/- was paid.
3.   On 16.07.2015, Respondent No. 3 issued a notice to the
Petitioner demanding additional stamp duty of Rs.16,58,410/-.
Another notice was thereafter issued on 30.07.2015. The Petitioner




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submitted its reply to the said notice on 20.08.2015. Thereafter,
the Petitioner approached this Court by filing Writ Petition No.
5084 of 2016. The said Petition was decided on 04.05.2016. This
Court directed the concerned authority to decide the matter within
a period of six weeks. After the said direction, Respondent No. 1
passed the impugned Order dated 07.05.2016. By that Order, the
value of the property was calculated at Rs.6,38,65,000/- under
Clause 5(g-a) of Schedule I. Stamp duty at the rate of 4% was
calculated at Rs.25,54,600/-. Respondent No. 1 thereafter
determined the deficit stamp duty payable by the Petitioner and
imposed penalty at the rate of 2%. The Petitioner, being
dissatisfied with the said Order, preferred Appeal No. 29 of 2016
before Respondent No. 2. Respondent No. 2 thereafter passed the
Judgment and Order dated 03.11.2017 in the said Appeal. The
Petitioner, being aggrieved by both the aforesaid Orders, has filed
the present Petition before this Court.
4.    Ms. Parasnis, learned Advocate for the Petitioner, submitted
that the basic principles of natural justice were not followed by the
Respondent Authorities. According to her, no proper hearing was
given to the Petitioner, even though this Court had passed an order
in Writ Petition No. 5079 of 2016. The learned Advocate for the
Petitioner submitted that the Respondent Authorities had wrongly
applied Article 5(g)(a) of Schedule I for calculating the stamp
duty. According to her, the calculation under the said provision had
to be made slab-wise. For the area from 0 to 500, the total amount
was   Rs.39,50,000/-     and    the   stamp   duty     payable       was
Rs.1,97,500/-. For the area from 501 to 2000, the total amount




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was   Rs.1,06,65,000/-    and   the   stamp    duty      payable      was
Rs.5,33,250/-. For the area from 2001 to 4000, the total amount
was   Rs.1,23,24,000/-    and   the   stamp    duty      payable      was
Rs.6,16,200/-. Thus, according to the Petitioner, the total stamps
duty payable was Rs.13,46,950/-.
5.    It was submitted that, under Article 47 relating to
Partnership, the words “Joint Venture” were introduced by an
amendment which came into force from 24.04.2015. According to
the Petitioner, before this amendment, an instrument of this nature
was never treated as an instrument falling under Article 5(g-a). It
was submitted that under Article 25, the valuation was required to
be made in the same manner as a Conveyance. It was submitted
that under Article 5(h)(b), an instrument which was not otherwise
covered by Schedule I was chargeable with stamp duty of
Rs.100/-. Therefore, Respondent Nos. 2 and 3 were required to
give proper reasons as to why the Joint Venture Agreement was
treated as an instrument falling under Article 5(g-a).
6.    The learned Advocate for the Petitioner submitted that the
calculation made in the impugned Orders regarding the cost of the
land and the revenue sharing was incorrect. The Respondent
Authorities had applied the formula, 3949.08 × 0.42 × 45,300 =
Rs.7,51,35,196/-. On this basis, stamp duty at the rate of 4% was
calculated at Rs.30,05,410/-. The deficit stamp duty was
accordingly determined at Rs.16,58,410/-.        According to the
learned Advocate for the Petitioner, this calculation was wrong.
The Joint Venture Agreement provided only for sharing of profit or
revenue between the parties in the ratio of 42% and 58%. It was




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not a Development Agreement. Both parties were to act as
developers of the proposed project. Therefore, according to the
Petitioner, the share of 42% could not be treated as though the
Petitioner had received 42% of the land or had acquired a separate
interest in the land to that extent.
7.    In support of this submission, the learned Advocate for the
Petitioner relied upon Paragraph No. 16(ii) at Page No. 11 of the
Joint Venture Agreement. The said clause states: “All the brochures
and other publicity materials shall show the names of both the
parties as co-ventures thereof.” According to the learned Advocate,
this clause showed that both parties were co-venturers in the
proposed project. Therefore, treating the Joint Venture Agreement
as a Development Agreement was, according to the Petitioner,
incorrect.
8.    The learned Advocate for the Petitioner submitted that the
value of consideration determined in the impugned Order had no
proper basis. It was described as baseless, without authority,
hypothetical and illogical. According to the Petitioner, the
consideration   mentioned     in   an   instrument   could     not     be
determined by taking an imaginary future value. The future
revenue which may or may not be received by the parties could
not be treated as the present consideration for the purpose of
calculating stamp duty. It was submitted that the market value of
the property had to be determined with reference to the existing
value of the land. The value of the construction which was
proposed to be made in future could not be added while
determining the stamp duty payable on the Joint Venture




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Agreement. The learned Advocate for the Petitioner challenged the
method by which the 42% share was calculated. According to her,
the Respondent Authorities had wrongly assumed that the land
could be notionally divided between the parties in the ratio of their
profit sharing and that the assumed 42% share could then be
multiplied by the new flat purchase rate of Rs.45,300/- per sq.
metre. There was, according to the Petitioner, no material to show
that 42% of the flats proposed to be constructed wouldly belong to
or be sold for the benefit of the Petitioner. The calculation was
therefore based only on an assumption.
9.    The learned Advocate for the Petitioner submitted that
several circumstances which could reduce the market value of the
property had not been considered by the Respondent Authorities.
According to her, the Ready Reckoner does not determine the
market value in every case. It is only a reference or guiding factor
for arriving at the tentative market value of a property in a
particular area. Therefore, the circumstances affecting the property
were required to be considered. It was submitted that the subject
property was landlocked and was involved in a dispute. A suit and
appeal concerning the property were pending. According to the
Petitioner, these circumstances had a direct bearing on the market
value of the property. The Respondent Authorities, therefore, ought
to have taken these factors into consideration while determining
the market value for the purpose of stamp duty.
10.   As regards the powers of the CAG, the learned Advocate for
the Petitioner submitted that the powers of the Comptroller and
Auditor General were limited and were provided under the




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Constitution in relation to the affairs of the Union and the States.
According to her, the CAG could not examine the correctness of an
order passed by an authority constituted under the Maharashtra
Stamp Act for determining stamp duty. The CAG could not
undertake the exercise of determining or recomputing the stamp
duty payable on the instrument. The learned Advocate submitted
that, under the Agreement dated 29.04.2013, the consideration
was Rs.2,69,39,000/-. Stamp duty at the rate of 5% amounting to
Rs.13,47,000/- had been paid. Registration fees of Rs.30,000/- had
been paid.
11.    It was submitted that, under the impugned Order dated
07.05.2016, the consideration was taken as Rs.6,38,65,000/-.
Stamp duty at the rate of 4% was accordingly calculated at
Rs.25,54,600/-, and the balance stamp duty was determined at
Rs.12,07,600/-. However, according to the calculation referred to
as “Mahanagarpalika Nagpur”, the consideration was taken as
Rs.7,51,35,196/-. Stamp duty at the rate of 4% was then
calculated at Rs.30,05,410/-, resulting in a balance stamp duty of
Rs.16,58,410/-. According to the learned Advocate for the
Petitioner, these different calculations themselves showed that
there was no consistent or proper basis for determining the
consideration and the alleged deficit stamp duty.
12.   Ms. Srivastava, learned AGP appearing for the Respondents,
submitted that the instrument involved in the present Petition is a
Development Agreement relating to land admeasuring 3949.08 sq.
metres, bearing Survey No. 101/2, situated at Bavdhan Budruk,
Pune. The said instrument was executed on 29 April 2013.




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According to the learned AGP, Clause 12(i) and (ii) of the
instrument provides for sharing of the revenue amongst the
parties. Therefore, while determining the stamp duty, the said
clause was required to be taken into consideration. It was
submitted that the Petitioner had not submitted the instrument
before the Collector of Stamps for proper adjudication of stamp
duty. It appears that, at the time of registration of the instrument,
the fourth Respondent valued the market value of the immovable
property at Rs.2,69,39,000/-. On that basis, the Petitioner paid
stamp duty of Rs.13,47,000/-.
13.   The learned Advocate for the Respondents submitted that,
during the regular inspection of registered instruments, the Chief
Auditor noticed that, in the cases in question, including the case of
the Petitioner, the stamp duty had been determined without taking
into consideration the clause relating to revenue sharing.
According to the Respondents, this had resulted in payment of
lesser stamp duty and consequent loss to the public exchequer.
Therefore, directions were issued to the concerned authorities to
take necessary corrective steps.
14.   The learned Advocate for the Respondents submitted that the
Petitioner had contended that the amount of gross sale proceeds
could not be determined on the date on which the instrument was
executed. According to the Petitioner, the gross sale proceeds and
the revenue sharing depended upon the future market value of the
property, which could not be known on the date of registration of
the Development Agreement. The Respondents submitted that this
contention of the Petitioner was incorrect and was based on a




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misunderstanding of the manner in which the consideration was
required to be valued.
15.   It was submitted that the stamp duty could be calculated by
taking into consideration the amount of consideration which
would become receivable in future. For this purpose, the rates of
flats prevailing on the date of execution of the instrument could be
taken into consideration. According to the Respondents, it was not
necessary to apply any deferment factor to reduce the present
value of such future consideration while making the calculation.
16.   The learned Advocate for the Respondents, however,
submitted that, according to the principles of valuation, the
present value of the consideration which would be received in
future was required to be determined for the average period of the
project. For this purpose, the deferment factor was required to be
applied after considering the interest rates prevailing at the
relevant time.
17.   It was submitted that the Collector of Stamps had
accordingly applied a deferment factor of 0.85. On that basis, the
present value of the consideration represented by the agreed
percentage of revenue was determined. The calculation was made
by taking the rates of flats prevailing on the date of execution of
the instrument and not the rates which might prevail in future.
According to the Respondents, the future rates could in fact be
higher. Therefore, the valuation made by the Collector of Stamps
was based on the rates existing on the date of the instrument and
after applying the deferment factor of 0.85.




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18.   The learned AGP placed reliance upon the judgment of this
Court in Kolte Patil Developers Ltd. v. Chief Controller (Revenue
Authority) and Inspector General of Registration and Controller of
Stamp & Ors., Writ Petition No.10675 of 2019, decided on 11
November 2024.

19.   The learned Advocate for the Petitioner sought to distinguish
the said judgment. It was submitted that, in Kolte Patil Developers
Ltd., the Petitioner therein was a developer. According to the
learned Advocate, the facts of the present case are different. In the
present case, the Petitioner claims to be the owner of the land in
question and not a developer. Therefore, according to the
Petitioner, the judgment in Kolte Patil Developers Ltd. cannot be
applied to the present case without considering this basic
difference in the nature and position of the parties.

Reasons and Analysis

20.   I have considered the Petition, the submissions of Ms.
Parasnis, learned Advocate for the Petitioner, the submissions of
Ms. Srivastava, learned AGP for the Respondents, the Joint Venture
Agreement, the order passed by the Collector of Stamps, the
material which was placed before the authorities and the judgment
of this Court in Kolte Patil Developers Ltd. On considering all this
material, I find that the dispute can be decided from the record
which is before the Court. Therefore, there is no necessity to send
the matter back to the authority for considering it again.

21.   First, it is necessary to see the real nature of the document.
The parties have described it as a Joint Venture Agreement.



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However, merely because this name is given to the document, the
stamp duty cannot be decided only from its title. It is necessary to
see what rights are created under the document and what
transaction has really taken place between the parties. For this
purpose, the document provides sufficient material. The property
in question is Survey No.101/2, admeasuring 3949.08 sq. metres.
The First Party had obtained development rights from the original
owners. The document records that the property was "rightfully
held and/or possessed/occupied by First Party". It is recorded that
the original owners had given development rights to the First
Party, including the right to develop the property, construct
buildings and sell the units. More importantly, the document
shows the position of the two parties. In the recital, it is recorded
that "According to the Maharashtra Ownership Fiats Act 1963 the
First Party is the "owner" of the land and the Second Party is
"Developer means Promoter of the Scheme. Each one to perform
its duties." Therefore, this clause does not support the submission
that both parties were developers in the same manner. The First
Party brought the land and development rights into the
arrangement. The Second Party is described as the Developer and
was required to carry out the development work.

22.   The document makes clear what work was to be done by the
Second Party. The responsibility of obtaining sanctions, the N.A.
order and other necessary permissions was placed upon the
Developer. The proposed buildings were to be constructed by the
Developer and the cost of construction was to be borne by the
Developer. The document states that the Second Party would bring



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all the funds required for development and would be responsible
for arranging such funds. At the same time, the First Party was
having some role in the development. The First Party was required
to make the property available to the Joint Venture. It was
responsible for maintaining clear and marketable title and for
dealing with objections relating to the title. Thus, from the whole
arrangement, it appears that the First Party brought the property
and development rights, whereas the Second Party brought the
money, management, development activity and construction work.

23.   This brings me to the important clause of the Agreement.
Clause 12 is the revenue sharing clause. It provides that the
consideration for jointly developing the property would be by
sharing the gross sale proceeds. Under this clause, 42% was to be
given to the First Party and 58% to the Second Party. The clause
says that the First Party's outlay was the property and the Second
Party was to invest the required capital and efforts. Therefore, it is
difficult to accept the submission that the 42% share was merely
an internal arrangement of profit and had no connection with the
rights obtained from the First Party. Clause 9 makes the position
more clear. It provides: "the First Party shall be entitled to receive
the 42% of the Gross sale proceeds and the Second Party i.e.
Developer shall be entitled to receive the 58% of the Gross Sale
Proceeds." This is an agreed right given to the First Party. It is not
merely an uncertain or general reference. The amount which the
First Party was to receive was connected with the sale of the
constructed premises. Clause 12(ii) explains the meaning of gross
sale proceeds. It includes the money received from sale of flats,



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shops, tenements, units and other premises, terraces and parking
spaces. Therefore, the amount which the First Party was to receive
was connected with development of the property and sale of the
constructed property. Clause 16 is relevant for this purpose. It
states that the parties "have agreed to jointly develop the said
property and construct the ownership scheme". It provides that the
Second Party would sell the units, enter into agreements for sale
and receive the sale proceeds. It states: "All the brochures and
other publicity materials shall show the names of both the parties
as co-ventures thereof." The Agreement has been made as a Joint
Venture because both parties agreed to work together for one
common project and the document uses the words "Joint Venture".
The First Party had a role in the project. It was entitled to receive a
share in the gross sale proceeds and was shown as a co-venture in
the publicity material.

24.    For deciding the stamp duty, the question is not only
whether the parties have used the words Joint Venture. It is
necessary to see whether the document gives authority or rights to
a developer for construction, development and sale of immovable
property. From the document, the answer is yes. The Second Party
is called the Developer. It is given responsibility for obtaining
permissions, constructing the buildings and selling the units. It is
given authority to receive the sale proceeds. Therefore, Article 5(g-
a) of Schedule I is attracted when the nature of the transaction is
considered. In Kolte Patil Developers Ltd., this Court considered
Article 5(ga) and in paragraph 13 recorded that it covers an
agreement "relating to giving authority or power to a promoter or



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a developer, by whatever name called, for construction on,
development of or, sale or transfer ... of, any immovable property."
The words "by whatever name called" are important in this matter.
These words show that the stamp duty provision does not depend
upon the name or heading which the parties have given to the
document. Therefore, merely because the present document is
called a Joint Venture Agreement, it cannot be kept outside Article
5(g-a), when the document gives the Second Party the position of
Developer and gives it responsibility and rights to construct and
sell the units.

25.   The submission based upon Article 47 cannot be accepted. It
is submitted that the words "Joint Venture" were introduced in
Article 47 only from 24.04.2015, whereas the present document
was executed in 2013. Even if this submission is considered, the
Respondents have not applied Article 47 merely because the
document is called a Joint Venture Agreement. The document is
considered under Article 5(g-a) because it gives development
rights and authority to the Developer. Therefore, whether the
words "Joint Venture" were mentioned in Article 47 in the year
2013 does not decide the real issue in the present Petition.

26.   For the same reason, the reliance upon the residuary
provision under Article 5(h)(b) does not help the Petitioner. Where
there is a specific provision dealing with an agreement giving
authority for development, that provision cannot be ignored
merely because there is another entry for an instrument which is
not otherwise provided for. The present document is not without a
specific stamp duty provision. Looking at the substance of the



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document, it comes within Article 5(g-a).

27.   I now come to the submission that the revenue share cannot
be treated as consideration because the amount was to be received
only in future. This issue has been considered by this Court in
Kolte Patil Developers Ltd. In paragraph 22, this Court observed
that where the owners give development rights for consideration
on revenue sharing basis, the monetary consideration may not be
fixed immediately and may be received after the constructed units
are sold. The Court held that merely because the revenue share is
to be received later, it does not go outside the meaning of
consideration. Paragraph 23 of the said judgment is relevant. This
Court held that revenue sharing, though payable in future, is still
consideration for transfer of development rights. It was held that
where the consideration is on revenue sharing basis, the
consideration as on the date of execution is required to be worked
out by considering the development potential of the property,
available FSI and applicable ASR for the land and constructed
tenements. The same reasoning applies to the present case. The
First Party brought the property into the Joint Venture. The Second
Party agreed to develop the property, construct the buildings and
sell the units. In return, the First Party was to receive 42% of the
gross sale proceeds. Therefore, this future amount is not some
amount having no connection with the document. The right to
receive 42% comes from the Agreement. It therefore forms part of
the consideration agreed between the parties.

28.   The submission that this amounts to valuing future
construction on an imaginary basis cannot be accepted. The



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authorities have not taken some unknown future selling price
without any material. They have used the rates applicable for the
relevant year. The material before the authority shows the 2013
rate of Rs.7,900/- per sq. metre for open land and Rs.45,300/- per
sq. metre for residential flats. The Assistant Town Planner assessed
the land value on the basis of the 2013 rates and calculated the
consideration by using the 42% share and the rate applicable to
residential flats.The Petitioner's own Agreement shows that the
parties had contemplated construction and sale of units. The
Second Party was required to construct the buildings. It was to sell
the units and receive the sale proceeds. The First Party's 42% share
was to come from those sale proceeds. Therefore, it cannot be said
that the authorities have brought into consideration some
transaction which was not there in the Agreement. They have only
given a value, as on the date of the instrument, to the
consideration which the parties themselves had agreed upon.

29.   The calculation requires to be considered. The Agreement
records the area as 3949.08 sq. metres. The rate for residential
flats is Rs.45,300/- per sq. metre. The First Party was entitled to
42% of the gross sale proceeds. Therefore, the calculation starts
with 3949.08 × 0.42 × 45,300. The same formula is found in the
original order. The Collector thereafter applied the deferment
factor of 0.85 and recorded the calculation as 3949.08 × 0.42 ×
45,300 × 0.85. The amount mentioned in the impugned order,
namely Rs.6,38,65,000/-, corresponds with the said formula after
applying the factor of 0.85 and rounding. Therefore, it cannot be
said that there is no calculation or that the calculation cannot be



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understood or checked.

30.    The submission that the 2015 notification cannot be applied
to the Agreement of 2013 does not give any reason for
interference. The liability to pay proper stamp duty does not arise
only because of the 2015 notification. It arises from the Stamp Act.
The question whether the consideration stated in the instrument is
to be included in the market value is governed by Section 2(na). In
the first order, the provision is quoted as follows: "Market Value",
in relation to any property which is the subject matter of an
instrument, means the price which such property would have
fetched if sold in open market on the date of execution of such
instrument or the consideration stated in the instrument whichever
is higher." Kolte Patil Developers Ltd. has considered this objection.
In paragraph 24, this Court held that merely because there was no
specific valuation guideline in 2013, the authority was not
prevented from applying the statutory test under Section 2(na). In
paragraph 25, the Court held that the consideration has to be
worked out as on the date of the instrument and revenue sharing
cannot be ignored merely because the amount is to be received in
future. I find that this reasoning applies to the present case. There
is    no   question   of   creating    a   new   stamp     duty     liability
retrospectively. The statutory liability was there when the
Agreement was executed. The later guideline may assist in
showing the method of valuation, but it is not the source of the
liability. The source is the Stamp Act and the consideration agreed
in the document.

31.    The submission that the Ready Reckoner is only a guiding



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factor is correct. The Ready Reckoner cannot change the statutory
requirement. But in the present case, the authorities have not
considered only the land rate. They have considered the 2013 land
rate, the residential flat rate, the area of the property, the agreed
42% share and the deferment factor. Therefore, the valuation
cannot be said to be based only on some arbitrary assumption.

32.   The   submission    that   future   construction    cannot      be
considered cannot be accepted in the manner in which it is made.
If the consideration under a document is a fixed amount payable at
present, the position may be different. Here, the consideration is
connected with the sale of the constructed units. Therefore, the
constructed units form part of the method for finding the value of
the consideration. Kolte Patil Developers Ltd., paragraph 23, has
held that in such a situation the development potential, FSI, land
ASR and constructed tenement rates can be considered. The
argument of the Petitioner that there was no basis to assume that
42% of the flats would be sold for its benefit overlooks the
Agreement. There is no need for the authority to make such an
assumption. The Agreement provides that 42% of the gross sale
proceeds would go to the First Party. It provides that the sale
proceeds would be received by the Second Party and the First
Party's share would be transferred to its bank account.

33.   There is one more important feature in the Agreement. The
Second Party alone was to manage the business of the Joint
Venture and the First Party was not to interfere in the day to day
management. The First Party was mainly concerned with the title
of the property, whereas the Second Party was responsible for



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development and construction. This division of duties shows that
identifiable development rights were given to the Second Party.

34.   The submission of the Petitioner regarding the CAG or
Accountant General does not make out any ground for
interference. In the present Petition, it is not necessary to decide
the constitutional limits of the CAG. What is important is to see
what happened. The Accountant General's inspection raised an
objection. Thereafter, the statutory authority issued notices, called
for the document and proceeded under Section 32A. The first
order records that the inspection objection was raised by the
Accountant General and thereafter the matter was taken under
Section 32A. Therefore, even if it is assumed that the Accountant
General could not decide the stamp duty, the record does not show
that the Accountant General finally decided the liability. The final
decision was made by the Collector of Stamps. The Collector
exercised the statutory power and passed the order. The audit
objection only gave information for examining the document. It
was not the final decision regarding the stamp duty.

35.   The submission regarding double stamp duty cannot be
accepted. The stamp duty in the present matter relates to the
instrument by which the development arrangement was created
and the consideration for the rights given under that arrangement
was fixed. If stamp duty is payable on a later sale of an individual
flat or unit, that would be because another document and another
transfer are involved. This position has been explained by this
Court in paragraph 27 of Kolte Patil Developers Ltd. Merely
because another document may later require stamp duty, the



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stamp duty payable on the present document does not disappear.

36.   The submission of the Petitioner that the valuation amounts
to taxation of profit cannot be accepted. The authority is not
charging income tax upon the Petitioner. The authority is only
finding the consideration for deciding the stamp duty payable on
the document. Paragraph 26 of Kolte Patil Developers Ltd. has
rejected the argument that treating deferred gross sale proceeds as
consideration amounts to taxing profits.

37.   As regards the submission that the property was landlocked
and was involved in litigation, I do not find sufficient material in
the record before me to grant any reduction on that ground. In
fact, the Agreement contains the representation of the First Party
regarding clear and marketable title and places responsibility upon
the First Party to deal with title related claims and litigation.
Therefore, without supporting material, it cannot be assumed that
the valuation based upon the Ready Reckoner became unreliable
only because there was some pending dispute. The same reasoning
applies to the alleged bad physical condition of the property. There
is no independent valuation report in the record showing that the
market rate used by the authority could not be applied to this
property. A mere statement that the property had some
disadvantage is not enough to change the statutory method of
valuation. If there was any special physical defect which reduced
the value, the party making such submission was required to place
some material to show the same. Such material is not shown from
the record before this Court.




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38.      I have to consider the submission regarding natural justice.
The Petitioner says that no hearing was given despite the order of
this Court. But the record does not support such a broad
statement. The order under Section 32A records that notices were
issued, written statements were submitted on 20.08.2015 and
thereafter notices were issued. It records that a hearing was
requested on 16.03.2016 and during the hearing the parties made
their oral submissions. The first order records written submissions
dated 20.08.2015, 14.03.2016 and 28.01.2016. Therefore, it
cannot be said that the Petitioner was denied an opportunity to
place its case before the authority. A complaint of violation of
natural justice cannot be accepted merely because the decision has
gone against the party. There has to be denial of opportunity to
place the case. Here, the record shows that the Petitioner's case
was placed before the authority and written as well as oral
submissions were made. Therefore, the submission regarding
violation of natural justice cannot be accepted.

39.      The reliance of the Petitioner upon Clause 16(ii), which says
"All the brochures and other publicity materials shall show the
names of both the parties as co-ventures thereof", does not change
the conclusion. This clause shows that the parties wanted to show
themselves as co-ventures in the project. But it does not say that
the Second Party was not the Developer. In fact, the same
Agreement calls the Second Party the Developer and gives it
responsibility for construction, financing, permissions and sale of
units.




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40.   Similarly, the submission that the Petitioner is the owner of
the land and not the developer does not help the Petitioner. The
document says that the First Party is the owner and the Second
Party is the Developer. The 42% share is the benefit which the
owner was to receive from the development arrangement.
Therefore, the difference between owner and developer helps in
understanding the consideration. The owner brings the property
and development rights. The Developer brings the capital, carries
out construction and sells the units. The agreed return to the
owner is 42% of the gross sale proceeds.

41.   The reliance of the learned AGP upon Kolte Patil Developers
Ltd. is therefore justified to this extent. I have considered the
distinction pointed out by the learned Advocate for the Petitioner.
In Kolte Patil Developers Ltd., the owners had given development
rights to a developer under a document described as a
Development Agreement. In the present case, the parties have used
the words Joint Venture and have described themselves as co-
ventures. This difference is there and has been considered. But it
does not change the important feature for stamp duty. In both
situations, development rights are given, construction is to be
carried out, units are to be sold, and the owner is to receive a fixed
percentage of gross sale proceeds as consideration. In Kolte Patil
Developers Ltd., paragraph 22 described that transaction as a
"typical Development Agreement" because the owners had
transferred development rights for consideration on revenue
sharing basis. Thereafter, in paragraph 25, the Court held that
merely because the consideration is to be received later, it does not



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become incapable of being valued under Section 2(na). In the
present matter, the name "Joint Venture" cannot provide protection
from Article 5(g-a). Stamp duty cannot be decided only from the
title of the document when the rights and obligations show that
one party is acting as Developer and the other party is receiving
42% of the gross sale proceeds for bringing the property and
development rights into the project.

42.   The original stamp duty calculation requires to be noticed.
Clause 23 of the Agreement records the area as 3949.08 sq.
metres, the 2013 land rate as Rs.7,900/- per sq. metre and the
slab-wise value of the property as Rs.2,69,39,000/-. It records
payment of stamp duty of Rs.13,47,000/-. Therefore, the original
stamp duty was calculated on the land value. In the later
proceedings, the amount paid was not ignored. Credit was given
for the stamp duty paid. The Collector calculated the deficit by
taking the consideration arising from the agreed revenue share,
with reference to the development potential and applicable rates,
and thereafter deducted the amount paid. The impugned order
records the balance stamp duty as Rs.12,07,600/- and imposes
penalty under Section 39. Therefore, the criticism of the Petitioner
that the calculation has no basis cannot be accepted. It is true that
the calculation involves an estimate because the consideration is to
be received in future. But merely because it is an estimate, it does
not become imaginary. It is based upon the area of the property,
the agreed 42% share, the 2013 rate of constructed tenements and
the nature of the project stated in the Agreement.




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43.   The principles applicable to a fiscal statute do not help the
Petitioner. In paragraph 28 of Kolte Patil Developers Ltd., this
Court referred to the settled position that the Stamp Act has to be
understood according to the words used in the statute. The
decision records that something which is not contained in the
statute cannot be added. The Court applied this principle in
paragraph 30 and found that there was no ambiguity which could
benefit the Petitioner. Applying the same approach in the present
case, the statutory words show that the consideration agreed by
the parties cannot be ignored. Section 2(na) requires the market
value to be considered by comparing the price which the property
would have fetched in the open market with the consideration
stated in the instrument and taking whichever is higher. Article
5(g-a) then provides for stamp duty where the agreement gives
authority   to   a   promoter    or   developer   for   construction,
development or sale of immovable property. The present document
comes within that description.

44.   I therefore hold that the 42% share of gross sale proceeds
payable to the First Party is consideration arising from the Joint
Venture Agreement. I hold that merely calling the document a
Joint Venture Agreement does not prevent application of Article
5(g-a), because the Second Party is made the Developer and is
given rights and duties regarding development and sale of the
project. I hold that the consideration could be valued as on the
date of execution by considering the development potential and
applicable rates, instead of waiting for the future sales. I hold that
merely because there was no special revenue sharing guideline in



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2013, the valuation does not become without authority. The
statutory basis was there in Section 2(na). The 2015 guideline
cannot be treated as creating the substantive liability. It was used
as a part of the method for working out the statutory concept of
consideration. The deferment factor was applied, which reduced
the amount of consideration compared with a calculation without
such factor. There is no material shown to hold that the use of the
factor caused prejudice to the Petitioner. The audit objection does
not invalidate the proceedings. The objection only resulted in
examination of the document. Thereafter, the Collector of Stamps
exercised the statutory power under Section 32A. Notices were
given to the Petitioner. Written submissions were filed, and oral
submissions were made. Therefore, the order came to be passed
after giving an opportunity of hearing.

45.   Therefore, I find no perversity, jurisdictional error or failure
to consider the important terms of the Agreement in the
determination of deficit stamp duty. The challenge to the valuation
therefore fails. The challenge to applicability of Article 5(g-a) fails.
The challenge on the ground of natural justice fails. The challenge
based upon the 2015 valuation guideline fails. The submissions
regarding future construction, future revenue, alleged taxation of
profits and double stamp duty fail for the reasons stated above.

46.   The    impugned       Order   dated   07.05.2016     passed       by
Respondent No.1 and the Judgment and Order dated 03.11.2017
passed by Respondent No.2 in Appeal No.29 of 2016 therefore do
not require interference.




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47.   In view of the foregoing discussion and for the reasons
recorded hereinabove, the following order is passed:

      i.     The Writ Petition is dismissed.

      ii.    The impugned Order dated 07.05.2016 passed by
      Respondent            No.1          in        Case              No.
      JK/SJL/PS/MLP/S-9/PR/No.10/13/Instrument
      No.3984/1790/2016 is upheld.

      iii.   The Judgment and Order dated 03.11.2017 passed by
      Respondent No.2 in Appeal No.29 of 2016 is upheld.

      iv.    Rule is discharged.

      v.     There shall be no order as to costs.

48.   In view of the dismissal of the Writ Petition, all pending
interlocutory application(s), if any, stand disposed of as having
become infructuous.




                                               (AMIT BORKAR, J.)




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